House Democrats passed a new stimulus bill with extended loan deferral and up to $10k in loan forgiveness, but it's unlikely to pass in the Senate.

HEROES Act Would Extend Student Aid, Loan Suspension


  • If made into law, the HEROES Act would include more relief for college students.
  • The bill would extend the suspension of student loan payments through Sept. 2021.
  • College students would be eligible for federal stimulus checks and loan forgiveness.

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act recently passed in the House of Representatives, 208 to 199. The $3 trillion HEROES Act would include broad relief for college students, with stimulus checks for adult dependents and immigrants, suspended student loan interest and payments, and up to $10,000 in student loan forgiveness.

House Democrats call the stimulus package "Rooseveltian," recalling the public New Deal programs put in place by President Franklin D. Roosevelt that helped pull the U.S. out of the Great Depression.

The HEROES Act, which extends and amends the existing CARES Act, looks to mitigate an economic recession due to coronavirus. The bill would expand the number of individuals eligible for a stimulus check and the amounts disbursed to those in need, while providing extra relief to college students.

United States House Speaker Nancy Pelosi, D-CA, delivers a statement in the Capitol.
House Speaker Nancy Pelosi, D-CA, delivers a statement on the HEROES Act aid package introduced by House Democrats.

The HEROES Act vs. the CARES Act for College Students

The CARES Act directed over $14 billion to colleges and universities and mandated that at least half of the money received by each school go directly to students. Still, that money only helped some. Undocumented students, international students, and online students were excluded from receiving emergency relief.

Currently, only students eligible for federal student aid can receive funds through the CARES Act. Eligibility requirements include students' citizenship status, academic standing, and whether they are up to date on loan payments. The proposed HEROES Act casts a wider net, offering loan relief for both federal and private student loan borrowers.

In addition to stimulus checks, the HEROES Act offers loan debt relief to college students.

The HEROES Act would see Americans who qualify for a stimulus check receive $1,200 plus another $1,200 for every dependent with taxpayer identification numbers (TINs), up to $3,600.

Under the CARES Act, stimulus checks were not disbursed to immigrants or adult dependents, excluding many college students. Both immigrants and adult dependents with TINs would receive the $1,200 payment, and immigrants would also receive the earlier distribution they were denied under the CARES Act.

In addition to stimulus checks, the HEROES Act offers loan debt relief to college students. The CARES Act put federal loans into forbearance until the fall; the HEROES Act would extend forbearance through September 2021. For private education loans, the bill directs the Secretary of Treasury to suspend monthly payments for the same duration.

Students behind in their loan payments would be protected against wage garnishment, Social Security offsets, and tax refund offsets.

HEROES Act Pushes for Student Loan Forgiveness

The HEROES Act would also forgive up to $10,000 of federal and private student loan debt for "economically distressed borrowers."

The following criteria must be met to be considered an economically distressed borrower:

  • Paying $0 a month on their federal student loans through an income-contingent repayment plan or an income-based repayment plan; or
  • Be in default on their private and/or federal student loans (270 days past due); or
  • Be delinquent on private and/or federal student loan, or 90 days past due; or
  • The student loans are in forbearance or deferment

Source: Yahoo Finance

Student loan debt forgiveness has been a core campaign issue for Democratic presidential candidates. The provision in the HEROES Act for education debt forgiveness for economically distressed borrowers falls short of the goals of inclusive debt forgiveness put forward by Senators Elizabeth Warren and Bernie Sanders.

However, the bill is more in line with the suggestions of presumptive Democratic nominee Joe Biden, who suggests cancelling the tuition-related undergraduate debt of borrowers earning less than $125,000 per year.

Republicans Call HEROES Act a Non-Starter

The HEROES Act is the most expensive of recently proposed stimulus bills, but House Speaker Nancy Pelosi says, “Not acting is the most expensive course.” No action is a likely scenario, however.

The HEROES Act is unlikely to pass the Republican-controlled Senate, where many want to re-open the country to stimulate the economy before spending more in public funds. Several Republican senators say that any future stimulus packages won't be seriously considered until after the Memorial Day recess. Meanwhile, President Trump called the HEROES Act, "dead on arrival."