From Your Lobbyist: Covid-19 Relief, Loan Freeze Extension, and Bankruptcy Reform
December 11, 2020
Week of Dec 7-11
Federal Funding & COVID-19 Relief Package: Congressional leaders are currently ironing out a final fiscal year 21 spending package which contains funding for all federal programs, including higher education. The funding deadline is December 11th at midnight but in order to buy itself more time, the House passed a one-week stopgap Wednesday, which would extend the deadline to December 18th. The Senate is expected to pass and the President is expected to sign the funding extension, with the hope that government funding will be finalized by next week.
More controversial than the regular appropriations bills for fiscal year 21 is the COVID-19 relief package, which has endured a rollercoaster of ups and downs during negotiations between House Speaker Pelosi, Treasury Secretary Mnuchin, and Senate Majority Leader McConnell. ast week, a group of bipartisan members of Congress in both chambers put forth a $908 billion proposal that would provide emergency relief to the American people in the form of state and local aid, education funding, and payroll protection funds. Speaker Pelosi and Minority Leader Schumer endorsed this bill, while McConnell refused to support it because it lacked sufficient liability protections for businesses.
This week the White House introduced its own $918 billion package, which McConnell said the Senate could likely support. The differences between the bills comes down to the details around liability protection, state and local aid, and a few other issues.he good news is that the parties are aligned on the price tag One thing is clear, Congress and the White House know that Americans need this money now and have made a commitment to getting this money out to the nation’s people before recessing for the Holidays.
Extension on Loan Repayment Freezes: One piece of good news for struggling borrowers is that the Trump Administration last week extended loan repayment deferments through January.
By then, President-elect Joe Biden will have been sworn in and very likely that the new administration will further extend deferment and possibly cancel between $10,000-$50,000 in student debt via executive action. Student loan cancellation is a topic that Biden has openly considered supporting but has not yet specifically endorsed despite Senate Leader Schumer and Senator Warren pressuring him to use his executive authority to cancel $50,000 of student debt on day one in office.
Consumer Bankruptcy Reform Act: This week, AYA proudly endorsed the Consumer Bankruptcy Reform Act introduced by Senator Warren and Representative Nadler, which would help young Americans forced into bankruptcy get back on their feet. This bill would create a less hostile financial relief environment for people struggling financially, especially at a time when millions of young people are being crushed by student debt, dealing with economic fallout from COVID-19, and experiencing intense job insecurity. The legislation is commendable as it would make it easier for people to obtain relief by streamlining the bankruptcy filing process, ensuring rent protections, making student loans dischargeable in bankruptcy, and protecting filers from predatory practices and exploitation.