Trump executive orders: what will happen with student loan payments?
US President Donald Trump’s executive orders will continue the suspension of monthly payments and interest on all federally-held student loans until 31 December.
On Saturday, United States President Donald Trump decided to sign an executive order because Congress failed to reach an agreement on 7 August about the fourth and final stimulus relief package amid the pandemic. This new order is going to help the Education Department and it will extend the suspension of student loan payments and interest until 31 December.
“Currently, many Americans remain unemployed due to the Covid-19 pandemic, and many more have accepted lower wages and reduced hours while States and localities continue to impose social distancing measures," stated the executive order.
"It is therefore appropriate to extend this policy until such time that the economy has stabilized, schools have reopened, and the crisis brought on by the Covid-19 pandemic has subsided."
Challenge in court
The suspension of federally-held student loan payments and interest was first approved in March when President Trump signed the CARES Act amid the coronavirus pandemic and it was set to expire on 30 September. It is expected that Trump’s executive order will be challenged in court by Congress because it will affect negotiations over the next stimulus relief package.
As a result of President Trump’s executive order on student loans, roughly more than 35 million people with federal student loans won’t have to pay until January 2021. According to CNBC, Americans were already struggling to pay their loans prior to the pandemic, with the student loan debt adding up to $1.6 trillion in the country.