Trump Signals Aid for Student Loan Borrowers

In a tweet, the president said he might use his executive powers to provide relief.

August 7, 2020
 
The White House
President Trump is considering using his executive powers to aid student loan borrowers.

President Trump said in a tweet Thursday that he is looking into using his executive powers to continue providing help for those with student loans during the pandemic. It’s unclear if he has the authority or if it was simply a move to try to break the logjam in congressional negotiations over another coronavirus relief bill.

As congressional leaders have struggled in recent days to resolve differences over unemployment benefits in the next aid package, the president had signaled that he is considering using his executive powers to continue providing help for those without jobs, delay collecting payroll taxes and continue a moratorium on evictions. But he hadn’t mentioned student loan borrowers.

Trump, however, didn’t explicitly say he’d continue to excuse borrowers from making federal student loan payments. The moratorium, created in Congress’s last coronavirus aid package, the CARES Act, is set to expire Oct. 1.

Instead, Trump, on his way to a giving a speech in Cleveland and visiting a Whirlpool plant, tweeted, “Upon departing the Oval Office for Ohio, I’ve notified my staff to continue working on an Executive Order with respect to Payroll Tax Cut, Eviction Protections, Unemployment Extensions, and Student Loan Repayment Options.”

It was also unclear if Trump would continue to excuse student loan repayments for all borrowers as the CARES Act does. If so, that would put him in conflict with Senate Republicans and Senator Lamar Alexander, the top Republican on the Senate’s education committee, who only want to excuse borrowers with no incomes from making payments when the current moratorium runs out. All others would resume making payments, though only up to 10 percent of their discretionary income after paying for essentials like food and housing. A spokesman for Alexander declined comment.

It’s also unclear if the tweet was a political ploy to take the pressure off Republicans in Congress to agree to a larger package as Democrats want, or be accused of hurting those without jobs during the pandemic.

In a statement, White House spokesman Judd Deere said, "A legislative solution is the priority, but negotiations are a two-way street and Democrats are unfortunately playing politics, which is why President Trump is fully prepared to use his executive authority to help those who continue to be impacted by this virus from China."

But an executive order could have wider political ramifications. Higher education lobbyists have been privately concerned a short-term deal or an executive order that resolves the unemployment issue will take away the momentum to pass a comprehensive relief bill that includes additional federal aid to struggling colleges and universities.

Some higher education experts said they believe Trump or Education Secretary Betsy DeVos could continue the moratorium on student loan payments, at least during the federal emergency over the pandemic, without running into the same legal questions that would apply to extending the additional $600 a week the unemployed have been receiving.

Ben Miller, vice president for postsecondary education at the left-leaning Center for American Progress, noted that DeVos in March unilaterally waived student loan payments for 60 days without interest, before the CARES Act excused borrowers from making payments for a longer period of time, through Sept. 30.

Student loan ombudspeople from seven states and the District of Columbia urged DeVos on Thursday to extend the current moratorium and to expand it to those holding federal Perkins and Federal Family Education Loan program debt, who are not included in the current moratorium, using her “extraordinary control over federal student loan repayment terms.”

Alexis Goldstein, an advocate for debt relief and senior policy analyst for Americans for Financial Reform, said, “If Trump were serious about helping student loan borrowers, he could direct the education secretary to cancel federal student debt, using the power Congress already gave her under the [Higher Education Act].” She noted that Senator Elizabeth Warren, a Democrat from Massachusetts, had pledged during her presidential run to use the Education Department’s powers to excuse all student debt.

An executive order extending the help for borrowers would be "welcome," but Congress should put it into law in the next package, said Michele Streeter, an Institute for College Access and Success policy analyst. She also said borrowers excluded from the moratorium in the CARES Act should be added.

Meanwhile, as Democratic leaders continued to meet with the White House, an anonymous coalition called ProtectUS said it has begun a six-figure digital ad campaign in the District of Columbia and several states, including Iowa, Virginia and Arizona, over one sticking point in the negotiations over the next aid package.

Republicans are insisting that any bill include a provision making it more difficult for people who contract the coronavirus at work or school to sue businesses, schools, colleges and charities that are negligent.

The campaign includes ads aimed at nonprofits and health care and one on schools, which says, “America, we need to get back on our feet. Which means safely reopening college campuses. But frivolous lawsuits are threatening colleges’ ability to do so.”

Zack Roday, former spokesman for Republican former House Speaker Paul Ryan, declined to identify the members of the coalition, but he said the ads were put together by members of Pathway Public Affairs, a public relations firm employing a number of Republican operatives, including Roday. The same group was involved in another anonymous effort, Trade Works for America, which pushed for Trump’s trade deals with Mexico and Canada.

Pathway is the public relations arm of the lobbying firm GuidePost Strategies, which, according to the Center for Responsive Politics, lobbies for companies like BMW, Eli Lilly and Honeywell International.

However, four national unions, including those representing faculty and teachers, wrote congressional leaders opposing a liability shield.

The American Council on Education and 71 other education groups, including those representing colleges and universities, also wrote congressional leaders on Thursday asking again for more help in the aid package. "No school, university, healthcare facility, state or local government, nonprofit, or other employer should be freed of the obligation to take necessary care to ensure health and safety," wrote the American Federation of Teachers; the National Education Association; the American Federation of State, County, and Municipal Employees; and Service Employees International Union. "Unprepared school districts and college campuses could resume in-person instruction, despite public health advice to the contrary, or fail to put all the necessary safety precautions in place upon reopening."

The $46 billion for higher education in the House’s proposal for the package and the $29 billion in the Senate Republican package “fall far short” of what’s needed to help institutions deal with the economic fallout of the pandemic and the cost of reopening safely, the letter said.

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