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| Trump’s Student Loan Interest Waiver Isn’t What You May Think | Trump’s Student Loan Interest Waiver Isn’t What You May Think |
| (about 4 hours later) | |
| At the end of a week full of talk about bailouts and stimulus, President Trump said Friday afternoon that he was waiving interest on all student loans held by federal government agencies. Right away, the most obvious question was this: How much would monthly payments fall for the tens of millions of borrowers? | At the end of a week full of talk about bailouts and stimulus, President Trump said Friday afternoon that he was waiving interest on all student loans held by federal government agencies. Right away, the most obvious question was this: How much would monthly payments fall for the tens of millions of borrowers? |
| By nightfall, the Department of Education had a surprising answer. Monthly payments aren’t going to go down at all. Instead, the entire payment will go toward paying down the principal amount on the loan. | By nightfall, the Department of Education had a surprising answer. Monthly payments aren’t going to go down at all. Instead, the entire payment will go toward paying down the principal amount on the loan. |
| The result will be little short-term relief for many of the borrowers who celebrated the announcement. Instead, they will benefit later — say, if they pay enough principal during the waiver period to shorten the scheduled term of their loans. | The result will be little short-term relief for many of the borrowers who celebrated the announcement. Instead, they will benefit later — say, if they pay enough principal during the waiver period to shorten the scheduled term of their loans. |
| There is a group of borrowers who could benefit a great deal: those whose incomes have fallen, or might fall soon, because of the economic contagion of the coronavirus. | There is a group of borrowers who could benefit a great deal: those whose incomes have fallen, or might fall soon, because of the economic contagion of the coronavirus. |
| When borrowers pause their monthly payments because of a hardship — a status known as forbearance — the interest normally continues to pile up until they can start paying again. Now, no interest will accrue as long as the waiver is in effect. This is true both for people already in forbearance and for those who may be soon. | When borrowers pause their monthly payments because of a hardship — a status known as forbearance — the interest normally continues to pile up until they can start paying again. Now, no interest will accrue as long as the waiver is in effect. This is true both for people already in forbearance and for those who may be soon. |
| It’s not clear who decided to do things this way and why, or even if any of this was the initial intention of the White House. Establishing an interest-rate waiver that lowered bills would have been enormously complicated: The federal government relies on several outside servicers to bill borrowers and collect their payments, and many have committed errors in recent years. | It’s not clear who decided to do things this way and why, or even if any of this was the initial intention of the White House. Establishing an interest-rate waiver that lowered bills would have been enormously complicated: The federal government relies on several outside servicers to bill borrowers and collect their payments, and many have committed errors in recent years. |
| So there’s a lot we don’t know, and there are many questions the Department of Education could not immediately answer. We’ll get to those, but first, a bit more about what we do know. | So there’s a lot we don’t know, and there are many questions the Department of Education could not immediately answer. We’ll get to those, but first, a bit more about what we do know. |
| The waiver will cover plenty of borrowers. The federal government is the biggest holder of student debt, with $1.2 trillion in direct loans to more than 35 million borrowers. | The waiver will cover plenty of borrowers. The federal government is the biggest holder of student debt, with $1.2 trillion in direct loans to more than 35 million borrowers. |
| But it doesn’t apply to every student loan out there. Loans issued through state agencies and others, including from big private lenders like Sallie Mae, are not covered. Other loans that are not part of the waiver program include the majority of Federal Family Education Loans, which are mostly held by commercial lenders, and school-held Perkins loans. | But it doesn’t apply to every student loan out there. Loans issued through state agencies and others, including from big private lenders like Sallie Mae, are not covered. Other loans that are not part of the waiver program include the majority of Federal Family Education Loans, which are mostly held by commercial lenders, and school-held Perkins loans. |
| The waiver is automatic; you don’t have to contact your loan servicer to be eligible. And the Education Department said that it expected servicers to have “operationalized” the change in about a week and that the waiver would be retroactive to Friday. | The waiver is automatic; you don’t have to contact your loan servicer to be eligible. And the Education Department said that it expected servicers to have “operationalized” the change in about a week and that the waiver would be retroactive to Friday. |
| Interest will be waived for borrowers who are in income-driven repayment plans, which includes everyone seeking to have their loans erased by the public service loan forgiveness program. People in that program, which covers all sorts of workers, including health care professionals and emergency medical workers, will still have their monthly payments count toward their 120-payment goal, even if they aren’t required to pay anything at all because their income is very low. | Interest will be waived for borrowers who are in income-driven repayment plans, which includes everyone seeking to have their loans erased by the public service loan forgiveness program. People in that program, which covers all sorts of workers, including health care professionals and emergency medical workers, will still have their monthly payments count toward their 120-payment goal, even if they aren’t required to pay anything at all because their income is very low. |
| But many questions are still unanswered. | But many questions are still unanswered. |
| Most important: Will the waived interest be tacked on to the principal once the waiver period ends? I asked about this repeatedly, but the Department of Education did not offer an answer. This is crucial: If the waived interest is added back later — a process known as capitalization of unpaid interest — it could be costly for borrowers. | Most important: Will the waived interest be tacked on to the principal once the waiver period ends? I asked about this repeatedly, but the Department of Education did not offer an answer. This is crucial: If the waived interest is added back later — a process known as capitalization of unpaid interest — it could be costly for borrowers. |
| Are federal PLUS loans, which graduate students and parents use, part of the waiver? There is no reason they wouldn’t be, but I could not get confirmation on this. | Are federal PLUS loans, which graduate students and parents use, part of the waiver? There is no reason they wouldn’t be, but I could not get confirmation on this. |
| Does the Department of Education really have confidence that its loan servicers can handle these changes on the fly, in a week or so? I don’t. | Does the Department of Education really have confidence that its loan servicers can handle these changes on the fly, in a week or so? I don’t. |
| The entire federal student loan system has grown more complex over time, so making a substantive change poses a serious challenge. On top of that, many servicers have sown confusion among borrowers, especially those in the public service loan forgiveness program. | The entire federal student loan system has grown more complex over time, so making a substantive change poses a serious challenge. On top of that, many servicers have sown confusion among borrowers, especially those in the public service loan forgiveness program. |
| Servicers are likely already experiencing high call volumes, as restaurant workers and others lose their jobs or see their incomes fall. And there’s no telling what might happen if they need to send their call center employees home. | Servicers are likely already experiencing high call volumes, as restaurant workers and others lose their jobs or see their incomes fall. And there’s no telling what might happen if they need to send their call center employees home. |
| Updated June 16, 2020 | Updated June 16, 2020 |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Travis Hornsby, the founder of Student Loan Planner, which makes money through courses, personalized advice and refinancing commissions, had his own questions when we talked on Saturday. First, what happens to students whose payments are deferred while they are still in school but whose interest is still supposed to pile up? | Travis Hornsby, the founder of Student Loan Planner, which makes money through courses, personalized advice and refinancing commissions, had his own questions when we talked on Saturday. First, what happens to students whose payments are deferred while they are still in school but whose interest is still supposed to pile up? |
| Here’s another scenario, which begins with the fact that there are many different kinds of repayment plans. Plenty of borrowers are in repayment plans with monthly bills so low that additional interest accrues and piles up over time. According to Mr. Hornsby, any extra money that borrowers repay is supposed to go toward lowering the volume of dollars in that accrued interest bucket first. Will this new waiver change that and cause monthly payments to go toward principal instead? | Here’s another scenario, which begins with the fact that there are many different kinds of repayment plans. Plenty of borrowers are in repayment plans with monthly bills so low that additional interest accrues and piles up over time. According to Mr. Hornsby, any extra money that borrowers repay is supposed to go toward lowering the volume of dollars in that accrued interest bucket first. Will this new waiver change that and cause monthly payments to go toward principal instead? |
| In response to some of my questions, a Department of Education spokesman sent an email saying the following: “We are finalizing the details and will share them as soon as they are available.” | In response to some of my questions, a Department of Education spokesman sent an email saying the following: “We are finalizing the details and will share them as soon as they are available.” |
| I’ll be putting the rest of these questions to them immediately. And I’ll pass the answers on to you once I have them. | I’ll be putting the rest of these questions to them immediately. And I’ll pass the answers on to you once I have them. |
| Tara Siegel Bernard contributed reporting. | Tara Siegel Bernard contributed reporting. |