President Trump has suspended federal student loan payments for six months because of the coronavirus pandemic.
The measure was passed as part of a $2 trillion emergency relief bill Congress passed and Trump signed on Friday afternoon, according to the Hill. Student loan payments will not accrue interest during the time payments are frozen. Borrowers may continue to pay down their principal debt over the next six months.
The action is one of many the federal government took to reduce the overwhelming amount of economic and financial damage the coronavirus and subsequent government regulations have done to millions of people. On Thursday, Federal Reserve Bank of Minneapolis President Neel Kashkari said the economic shock of heavy regulations on business is equivalent to a natural disaster “hitting the whole economy at once.”
“Except for food and grocery stores, most other sectors are all being squeezed at the same time, across industries,” Kashkari said. “All these firms are drawing down bank lines of credit because they’re scared. That’s the mechanism by which this natural disaster is going into the financial system.”
U.S. workers applied for unemployment insurance in record numbers last week. The Labor Department reported on Thursday that 3.3 million workers sent in new claims, the largest number of claims in U.S. history.
