House extends CARES protections to private student loans

The House of Representatives passed an amendment to extend the protection of student loans granted under the CARES Act to those whose debt is held privately.

The actions taken under the CARES Act were to suspend student loan repayments and suspend interest until September 30, but this only applied to federal student loans held by the government.

This left those who had private loans without such protections, leading Rep. Alma Adams (D-NC) to offer them an extension. The amendment to extend protections for CARES student loans was passed out loud on Monday.

“The language suspends the borrower’s payment obligations, interest accumulation, negative credit reports and debt collection,” Rep. Adams said in a tweet.

Additionally, since CARES student loan protections expire on September 30 of this year, the amendment extends private student loan protections for an additional year until September 30, 2021.

Speaking in the House, Adams described the amendment, which applies to the William M. (Mac) Thornberry National Defense Authorization Act for fiscal year 2021, and spoke of those struggling with student loans amid the coronavirus pandemic. She said the amendment was “simple and fair”, extending loan protections to private borrowers.

House Education and Labor Committee worker protection subcommittee chair Rep. Alma Adams (D-NC) wears a face mask to prevent the risk of coronavirus transmission during a hearing on the role of the federal government in protecting workers during the pandemic on Capitol Hill on May 28, 2020. She proposed an amendment to extend the student loan protection of the CARES Act to those with private loans.
Chip Somodevilla / Getty Images

“A lot of Americans struggled to repay their student loans before the pandemic and now it’s only getting worse,” she said.

Adams spoke of private borrowers who found themselves with “very few options for relief.”

“We have left millions of Americans uncovered and without necessary protections,” she said.

Representative Virginia Foxx (R-NC) spoke against the amendment, saying it “engages the federal government in private deals in which neither party has asked for help.”

Foxx said borrowers “benefit from making consistent payments and paying off debts as soon as possible”, describing it as “ill-advised policy.”

Adams said: “These are unprecedented times so we need an unprecedented response. Let’s find the courage and have a little compassion to provide the financial support that student loan relief could bring, which they have. urgently needed. “

Foxx argued that “the people who borrowed this money agreed to pay it back, they are not victims.”

Adams said the amendment “gives us the opportunity to help those in need.”

Following this, the amendment was approved orally.

News week contacted Adams and Foxx for further comment.

The amendment comes as another relief bill to help Americans battling the pandemic is being considered.

Republican leaders met on Monday to discuss the kind of provisions a new package is expected to deliver, with some of the CARES law expiring in the near future and bipartisan calls for further action to be taken.

COVID-19 cases continue to rise in the United States, with more than 3.8 million confirmed across the country.

The graph below, from Statistical, shows the states with the highest number of confirmed cases.

States with most cases of COVID-19
U.S. states with the most confirmed COVID-19 cases.