Some Student Loan Borrowers Were Left Out Of The CARES Act — A Bipartisan Bill Could Help

because the novel coronavirus spreads across the nation, unemployment numbers are at record highs and people have been struggling to pay for generic necessities like rent groceries — say and not to mention the monthly cost of student cash advances. Millions of borrowers In America owe nearly $1.6 trillion in student cash advance debt, and experts predict that debt might reach $2 trillion by 2021. That’s why the CARES Act — a $2 trillion stimulus package aimed at supporting individuals and organizations alike by means of the financial crisis that was exacerbated by the pandemic — included an automatic suspension of all principal and interest payments on federally contained student cash advances through Sept. 30.


According to a survey from Lend Edu, the help couldn’t come soon enough — 68 percent of respondents who identified as federal student cash advance borrowers announced that they were unsure if they should make their federal student cash advance payments before the CARES Act was implemented. Half of these also mentioned they wouldn’t have been able to pay their next federal cash advance payment in the aftermath of the economic ruin as a result of the COVID-19 pandemic.


And several student cash advance borrowers were left out of the CARES Act, including anyone who didn’t hold cash advances contained by the U.S. Department of Education. According to the Lend Edu survey, 78 percent of respondents who identified as private student cash advance borrowers are unsure if they’ll have the ability to prepare payments on their private student cash advance debt.


That’s why a bipartisan team of legislators is attempting to pass a new bill — the Equity in Student Cash advance Relief Act — that could potentially help some of these borrowers. On April 22, Representatives Elise Stefanik (R-NY), Lori Trahan (D-MA), Lloyd Smucker (R-PA), Alma Adams (D-NC), and Susie Lee (D-NV) introduced the bill which calls for short-term student cash advance relief up until the end of September for borrowers who participated in the Federal Family member Education Cash advance program (FFEL). The now-defunct program wasn’t covered in the CARES Act as the cash advances were not technically from the Department of Education.


“While the CARES Act lifted the weight of student cash advance payments from millions of Residents of the
U.S. Whose lives have been disrupted by the COVID-19 crisis, also several borrowers are still being left behind,” Rep. Stefanik mentioned in a statement. “All students who have federal student cash advances should have their monthly payments suspended, no matter which kind of cash advance have or as soon as they borrowed the money.”


According to Rep. Adams, 7.2 million borrowers took out cash advances under the FFEL program, which ended in 2010. If this bill passes, the U.S. Department of Education would cover payments to FFEL lenders through September 30.


“Student cash advance debt isn’t a partisan allocate, yet it is a kitchen table supply for several American families,” Rep. Adams mentioned. “It’s essential that all borrowers, including people with FFEL cash advances, get help throughout the COVID-19 crisis. For decades, our nation has made the promise that a college education leads to greater possibility, and we have to create ensure that the burden of student cash advance debt doesn’t break that promise. This bill brings us one step closer to treating all borrowers fairly and equitably.”


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