The New York State Bar Association’s Executive Committee has voted overwhelmingly in support of a resolution urging the United States Senate to pass – and President Donald Trump to sign – legislation for student debt relief as provided in Title V of the House’s proposed Heroes Act.
“It is imperative during these difficult times that our elected officials support student debt relief,” said Karson. “The coronavirus pandemic has impacted every aspect of life and unemployment has reached levels not seen since the Great Depression. More than 40 million Americans, mostly people under 35 years of age, have student loan debt and measures must be put in place to protect them.”
NYSBA’s Young Lawyers Section, the Committee on Legal Education and Admission to the Bar, and the Task Force on the NY Bar Exam have announced that they support the measure.
In response to the pandemic, Congress enacted legislation in early March 2020 to provide funding for health care, states and businesses. On March 27, the President signed the Coronavirus Aid, Relief, & Economic Security (CARES) Act, a $2 trillion package passed with overwhelming bipartisan support.
Section 3513 of the CARES Act, which provides temporary relief for federal student loan borrowers, requires the Secretary of the Treasury to defer student loan payments, principal and interest for six months through Sept. 30 without penalty to the borrower for all federally owned loans. This provides relief for over 95 percent of student loan borrowers.
In May 2020, the U.S. House of Representatives passed the HEROES Act, a $3 trillion stimulus package, which contains in Title V thereof, expanded provisions regarding student loan forgiveness, including certain relief from payments for private education loan borrowers as a result of the COVID-19 pandemic.
It would also extend existing CARES Act student loan payment and consumer protections, such as debt collection prohibitions, to private loan borrowers who are currently not covered by the CARES Act, and provides up to $10,000 in debt relief to be applied to a private student loan, with the Treasury Department making monthly payments on behalf of the borrower up to $10,000 until September 2021.
The HEROES Act would also provide additional protections for private student loan borrowers, as the Treasury Department would make payments on behalf of borrowers under Title V. This section would require private student servicing companies that receive funds to offer income driven repayment plans, and payments or forbearance under this title will not impact applicable state statutes of limitation.
Additionally, this section instructs the Treasury Department to apply any unused portion of the up to $10,000 forgiveness amount to any remaining outstanding private loan balance when borrower payments resume.
The U.S. Senate has yet to consider the HEROES Act.