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Student debt emerges as sticking point in stimulus debate


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— Student debt relief is among the points of contention as Congress negotiates a massive economic rescue package.

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— Senate Republicans’ latest version of the stimulus bill calls more than $20 billion in emergency assistance to colleges and schools. But that’s far short of what key education groups want.

— The American Federation of Teachers, one of the nation’s largest teachers unions, endorsed former Vice President Joe Biden in the 2020 race.

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REPUBLICANS, DEMOCRATS SPAR OVER STUDENT DEBT RELIEF IN STIMULUS BILL: Republicans and Democrats are fighting over how to structure relief for the nation’s tens of millions of student loan borrowers as part of the massive stimulus plan to address the economic havoc caused by the coronavirus outbreak.

— At the core of the student debt dispute: Republicans have largely embraced the idea that borrowers should immediately be able to put their payments on hold without accruing interest; Democrats say that’s an insufficient half-measure and want to see some amount of debt cancellation.

— The latest Senate GOP stimulus bill circulated on Sunday would require the Education Department to suspend payments on federally held student loans for six months without interest accruing — a modest expansion from an earlier bill that called for a three-month mandatory suspension with an additional three-month pause at the discretion of the department.

— Majority Leader Mitch McConnell was unable to advance the bill through a procedural vote on Sunday evening as Democrats objected. Among the many “major problems” with the bill, according to a senior Democratic aide, was that it doesn’t “provide adequate relief for the 44 million federal student loan borrowers.”

— The GOP plan follows the Trump administration’s executive actions to halt interest on federally held student loans and give borrowers a new forbearance option to pause their payments for the next two months. (Sen. Mitt Romney on Friday also proposed a longer forbearance of up to three years for recent graduates entering the job market.)

— But Senate Democrats, led by Chuck Schumer, are pushing a counter proposal: They want to cancel the monthly payments owed during the national emergency and guarantee each borrower receive at least $10,000 in loan forgiveness. Sen. Elizabeth Warren, who campaigned on sweeping student debt cancellation, has pressed the issue with Schumer personally, including during phone calls last week, according to a Huffington Post report on Sunday.

Biden, who has resisted calling for widespread student debt cancellation in his education plans, on Sunday backed the plan to forgive at least $10,000 in debt per borrower as part of the stimulus bill. “Young people and other student debt holders bore the brunt of the last crisis,” Biden tweeted. “It shouldn’t happen again.”

— In the House, where Speaker Nancy Pelosi has indicated she may start drafting her own stimulus bill, there’s growing pressure from progressives to include student loan forgiveness. A group of progressive lawmakers, led by Reps. Ayanna Pressley and Ilhan Omar, urged House leadership to include loan forgiveness in the bill. The letter was signed by Rep. Jim Clyburn, the No. 3 Democrat in the House, and Rep. Alexandria Ocasio-Cortez (D-N.Y.). Rep. Maxine Waters, the chair of the House Financial Services Committee, has also separately called for including $10,000 in student debt forgiveness in a coronavirus stimulus plan.

— Rep. Bobby Scott, the chair of the House education committee, hasn’t publicly backed any student loan forgiveness plan and it wasn’t included as part of his $3 billion coronavirus bill to address education rolled out last week. But a Democratic committee aide told POLITICO: “The Senate Democrats proposal is a step in the right direction.”

— Republicans, meanwhile, say Democrats are exploiting a crisis to enact their policy agenda. “Democrats are trying to reduce student loans by $10,000. What the hell has that got to do with the virus,” Sen. Lindsey Graham (R-S.C.) said on Fox News on Sunday. “I’m sure everybody could use more money, but I don’t want to give money to people who have a paycheck. I want to give money to people who have lost their jobs.”

SENATE GOP PROPOSES $20B FOR EDUCATION IN STIMULUS: The latest Senate Republican stimulus plan circulated on Sunday also attached emergency appropriations that include new funding for the Education Department. The plan is still being negotiated, but here’s how the GOP’s $20 billion for education breaks down:

— $2 billion in grants to governors: The department would dole out money, based on population, to governors, who would have discretion to allocate money to school districts or colleges that have been “most significantly impacted by coronavirus.”

$12 billion for K-12 schools: The funding would be provided to school districts based on the share of low-income students. It could be used for a wide range of purposes, including technology and professional development, cleaning supplies and planning for long-term school closures.

$6 billion for higher education: The department would allocate money to colleges and universities based on enrollment and heavily weighted toward the share of Pell Grant recipients. At least half of the money would have to go toward emergency grants to students “for expenses directly related to coronavirus and the disruption of campus operations.”

— $13 million for Howard University and $7 million for Gallaudet University, to help both institutions, which have their own line item in the federal budget, to address the coronavirus.

$40 million that was requested by the Trump administration to implement suspension of interest and payments on federal student loans and conduct borrower outreach. Another $8 million would go toward program administration at the Education Department; and $4 million to the Office of Inspector General for oversight of the funds.

— $3 billion in “immediate assistance” to child care providers through the Child Care and Development Block Grant program; and another $250 million to help Head Start address the coronavirus-related needs.

— Higher education groups slammed the funding levels as too low. The amount of money in the bill is “woefully inadequate to meet this financial crisis,” tweeted the American Council on Education, which had called for $58 billion for higher education alone. And the Association of Public and Land-grant Universities, which also called for billions more in funding, tweeted: “The bill provides support but nothing close to what’s needed.”

— Advocates for K-12 education had also asked for far more. A coalition of major school groups and the nation’s two largest unions had asked lawmakers to back at least $75 billion in stimulus money to states for schools.

If you haven’t already, sign up for POLITICO Nightly: Coronavirus Special Edition, your daily update on how the illness is affecting politics, markets, public health and more.

AMERICAN FEDERATION OF TEACHERS ENDORSES BIDEN: The 1.7-million member union on Sunday said it’s backing Biden for president, coalescing support from educators while the nation’s presidential campaign reels from the novel coronavirus pandemic.

— The announcement means Biden has the nod from the nation’s two largest teachers unions. The 3-million member National Education Association, the nation’s largest union overall, endorsed him last week.

SENATE REPUBLICANS SCALE BACK BROAD EDUCATION WAIVERS: The revised bill significantly curtails an earlier plan to allow Education Secretary Betsy DeVos to waive any provision of the main federal laws governing higher education, K-12 education and career and technical education. That proposal alarmed many Democrats and civil rights advocacy groups, who said it would allow the Trump administration to potentially suspend important protections for students.

— Under the new version, the Education Department would be allowed to waive only certain provisions of the Elementary and Secondary Education Act, including those dealing with required assessments, state education plans and the allocation of funding. The bill separately provides some new waivers for the federal requirements governing aid that goes directly to colleges and universities.

— The GOP bill keeps a requirement that the department make legislative recommendations on waiving provisions of the Individuals with Disabilities Education Act, a proposal that’s drawn the ire of some special education advocates.

— DeVos over the weekend blasted school districts that she said have been “using information from the Department of Education as an excuse not to educate kids” while schools have been shuttered because of the coronavirus.

The Education Department released a new fact sheet to address a “serious misunderstanding” circulated among educators, as many school districts move to virtual or online education. The fact sheet says that some school districts “have been reluctant to provide any distance instruction because they believe that federal disability law presents insurmountable barriers to remote education. This is simply not true.” Nicole Gaudiano has more here.

— Today: Will DeVos answer questions about her agency’s coronavirus response? Vice President Mike Pence said over the weekend that he’d bring DeVos to brief reporters at the White House about the Education Department’s decision to waive federal standardized testing requirements for schools that had to close because of the coronavirus.

— Schools are shut, so how will kids learn amid the covid-19 pandemic? The Washington Post.

— Parents of students with special needs face acute challenges during pandemic: NPR.

— Western universities rely on China. After the virus, that may not last: The New York Times.



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