The CARES Act includes forbearance for those with federal student loans. But there are many millions of people who have loans taken out for education that are not federally owned, and these are excluded from forbearance. This if problematic and potentially confusing for many, and leaves a lot of people in precarious financial positions. How did this come about?
The CARES Act Leaves Behind Millions of Student Loan Borrowers (Protect Borrowers)
This piece is structured sort of like a Q&A piece, explaining what types of loans are excluded and how those decisions were made. It's helpful not only for a broad explanation of what borrowers are missing help, but also for this graphic on just how much money this is - approximately $300 billion owed.
What can be done? One idea, below.
New Student Loan Proposal Helps Borrowers Left Out Of The CARES Act (Forbes)
From the first link posted, you can find how certain loan types were excised from the law. This proposal posits a change to include FFEL loans and benefit over 12 million borrowers. From the article: "The Equity in Student Loan Relief Act [...] works like this:
- "the U.S. Department of Education, led by Betsy DeVos, would enter into agreements with the owners of the FFEL Loans.
- "The agreements would stipulate that all student loan payments would be suspended through September 30, 2020.
- "The Education Department would pay any interest payments during this period.
- "All involuntary student loan debt collection also would cease during this period."
The CARES Act blog is intended to provide information and is accurate and true to the best of the author's knowledge. The author is not a legal, medical or financial professional and the information presented should not be considered advice and is for reference only. Lehigh Valley Public Media and its employees claim no liability for any actions taken by readers based on the information provided here.