House Scales Back Student Loan Forgiveness as HEROES Act Passes

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Mark Kantrowitz

By Mark Kantrowitz

May 18, 2020

The U.S. House of Representatives passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act (The Heroes Act) on Friday, May 15, 2020 by a vote of 208 to 199 with some bipartisan support. However, a manager’s amendment reduces the number of borrowers who are eligible for student loan forgiveness.

The manager’s amendment limits the $10,000 in loan forgiveness for federal and private student loans to just economically-distressed borrowers.

An economically-distressed borrower is defined as a borrower who, as of March 12, 2020, satisfied any of these criteria:

A borrower whose income is less than 150% of the poverty line has a monthly payment of zero under the income-driven repayment plans. In 2020, 150% of the poverty line is $19,140 for a family of one in the continental U.S., $25,860 for a family of two and $39,300 for a family of four.

The manager’s amendment significantly cuts the number of eligible borrowers, reducing the cost of the loan forgiveness legislation by about half.

The manager’s amendment also changed the retroactive payments for borrowers of FFELP loans not held by the U.S. Department of Education to the amount paid by the borrower during the period or the amount that was due during the period, whichever is less. (The period runs from March 13, 2020 to the date of enactment of The Heroes Act.)

It is unclear whether the U.S. Senate will pass The Heroes Act.

A good place to start:

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