Congress adopted the CARES law in April. The massive stimulus package, adopted in response to the growing coronavirus pandemic and economic downturn, has provided borrowers with student loans critical relief. The CARES Act suspended all payments and interest on federal student loans held by the government and also ended all collection activity on delinquent federal loans held by the government. Deployment and implementation of the CARES law student loan programs was problematic, but millions of student loan borrowers have benefited anyway.

The CARES Act’s student loan relief provisions expire after September 30, 2020 – unless Congress approves additional relief. That means more than 40 million student loan borrowers will be forced to start repaying by October. However, there is reason to believe that the student loan relief provisions of the CARES Act could be extended through new legislation. Here’s why.

The economy does not improve significantly

Unemployment remains at record levels, even as many states gradually begin to reopen their economies. And there is no indication the economy will be much better off by October, when millions of student loan borrowers will be forced to repay their federal student loans again. Indeed, the Federal Reserve announced earlier this month that it expects unemployment stay high until the end of the year and until 2021.

The pandemic is not slowing down

Despite some statements from administration officials, coronavirus cases continues to increase in many states across the country, indicating that the pandemic is far from over. This week, several states and localities including California, Arizona, and parts of florida announced new measures to try to contain the skyrocketing cases. Hospitalizations are also on the rise in several states. The pandemic is not over and there is little evidence the country will be Covid-free by October.

There is an election in November

The presidential election is scheduled for November 3. But it is not just the president who is a candidate for re-election. The 435 members of the House of Representatives are eligible for re-election, as are 35 senators. If the CARES student loan provisions expire, more than 40 million student loan borrowers will be billed on their student loans for the first time in six months, just days before the election is held. As a result, there may be a broad political appetite in both Congress and the White House to extend the suspension of payments, interest, and collections on federal student loans until after the election, so that voters do not withdraw. not their anger and frustration with the polls.

Increase congressional support

In May, the House of Representatives adopted the HEROES law, a second massive stimulus bill, which extends the student loan relief provisions of the CARES Act for a full year until September 2021. While the GOP Senate leadership rejected the HEROES Act, members recently suggested that they might adopt their own new stimulus package someday in July.

At the same time, Treasury Secretary Steve Mnuchin recently suggested in testimony to Congress that the administration would also consider additional stimulus measures.

Although general student loan relief in the form of student loan forgiveness and debt cancellation does not currently enjoy bipartisan support, extending temporary student loan relief programs until the end of this year or even until 2021 may be much more acceptable, and it may gain broad enough support to pass Congress, given the relatively low cost of these measures.

Further reading

NAACP and 60 other groups call on Congress to write off student debt

The CARES Act was supposed to help student loan borrowers, but for many it failed

Veterans and consumer groups are heartbroken after Trump vetoed student loan relief bill

Home Passes HEROES Law With Limits On Student Loan Relief – What’s Next?

Here’s what the new stimulus bill does for student loan borrowers