College graduates will soon be hit with their first student loan bill
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When Democratic presidential candidates Bernie Sanders and Elizabeth Warren dropped out of the race, it seemed that proposals to tackle student loan debt would go away, too.
They haven’t. Between the impact of the coronavirus pandemic and a growing sense that there’s something broken with how the U.S. finances higher education, plans to deliver relief to borrowers are taking off.
The U.S. Department of Education already has said that due to the public health crisis, federal student loan borrowers don’t need to make payments on their loans until at least October. And during that time, no interest will accrue.
House Democrats, in their $3 trillion HEROES Act, are pushing to extend that break for another year, until Sept. 30, 2021.
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It’s unclear if Republicans in the Senate will support that long of a reprieve, said Mark Kantrowitz, a higher-education expert. “But, given that 2020 college graduates are graduating into the worst job market ever, I think an extension is likely,” he said.
Meanwhile, new federal student loans will come with historic-low interest rates – 2.75% for those disbursed after July 2020. Currently, rates are between 4% and 6%.
Under the HEROES Act, people with private student…
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