Trump's extension of student-loan relief may help some people, but it's so vague even his own education department is awaiting more guidance

• President Donald Trump's executive action extending student loan relief until December 31 is both good and bad news.
• Borrowers with a federal government-owned federal student won't have to make payments and will keep a 0% interest rate.
• But the relief leaves out 9 million student-loan borrowers, the Student Borrower Protection Center told Business Insider, and it doesn't extend all the student-loan provisions of the CARES Act.
• "There's too much that we don't know," Kyra Taylor, attorney at National Consumer Law Center, told Business Insider of the memorandum's details.

President Donald Trump's recent student-loan debt relief extension has left borrowers confused.

On August 8, he issued a memorandum ordering an extension of the current 0% interest rate and payment pause for federal student-loan debt borrowers until December 31. It was one of four executive actions (only one of which was a full-fledged executive order) that Trump signed as talks collapsed for another congressional stimulus package.

The CARES Act, the $2.2 trillion stimulus package passed in March, provided student-loan relief until September 30. Under the CARES Act, payments, interest, and collections on government-held student loans were suspended.

Trump's presidential memorandum is similar, but "the devil is in the details," Kyra Taylor, attorney at National Consumer Law Center, told Business Insider. The move is potentially good for some borrowers, she said, but it doesn't extend all of the CARES Act relief and leaves many unanswered questions.

"Currently, many Americans remain unemployed due to the COVID-19 pandemic, and many more have accepted lower wages and reduced hours while states and localities continue to impose social distancing measures," Trump wrote in the memo. "It is therefore appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID-19 pandemic has subsided."

Here's what we know

• The memorandum leaves out relief for 9 million student-loan borrowers, Seth Frotman, executive director of Student Borrower Protection Center (SBPC) and former student loan regulator, told Business Insider.
• If you're a borrower with a federal government-owned federal student loan, you won't need to make payments and won't accrue interest until the extension expires.
• If you're a borrower with a private student loan, commercially held federal student loan, or federal Perkins loan, you will have to make payments as normal, per the SBPC. (The CARES Act also withheld relief from borrowers with loans not held by the Department of Education.)
• The extension kicks in on October 1. All borrowers covered by the CARES Act can continue with paused payments until September 3o.

Here's what we don't know

• Will this extension relief be automatic?
  Taylor said it's unclear whether this relief will be opt-in or opt-out.
• How will this impact protections for defaulted borrowers?
  The CARES Act paused payments for defaulted borrowers, but the memorandum doesn't refer to that suspension.
• How will this impact borrowers experiencing financial hardship?
  Borrowers experiencing financial hardship (such as extended unemployment) can pause loan payments without interest accrual for up to three years, Taylor explains in a blog post. But the memorandum doesn't specify whether borrowers who have met the three-year limit will see extended relief or whether whether this emergency deferment will count toward the three-year limit.
• Will this emergency deferment count as eligible time for borrowers under the Public Service Loan Forgiveness (PSLF) plan?
  Under the CARES Act, the non-payment months for PSLF borrowers counted toward the 120 monthly payment requirement for public service loan forgiveness. The memorandum doesn't specify whether this will continue.
• How will this be implemented?
  When Business Insider asked the Department of Education how the extension will be implemented, a spokesperson said, "We're awaiting information to be able to share with you."

What it all means

Many student-loan advocates have criticized the memorandum for being vague and not making enough of a long-term difference. Business Insider's Rebecca Harrington reported that Trump's executive action, along with the three other executive actions he took, might not do all that much because they will be so hard to implement.

Attorney Adam S. Minsky wrote that this action rejected the Democrats' proposal for a 12-month extension of the CARES Act's student loan provisions, as well as expanded provisions for the borrowers left out of this relief and loan forgiveness for financially distressed borrowers.

A better action, Taylor said, would have been broad-based debt cancellation. "At a bare minimum, [we] should have been extending all of the relief that the CARES Act provided to all federal student loan borrowers," she said.

Frotman, of the SBPC, also said the move wasn't enough. "The president's action on student debt falls short of what Americans need to stay afloat through this unprecedented health and economic crisis," he said. "Pausing payments will only kick the can down the road for borrowers facing job loss and financial upheaval — including millions who were in distress before the pandemic."

Taylor advises borrowers to keep an eye out for more details on the DOE website to see if they have to opt in for the relief and to verify that their interest won't accrue during the suspension period.

"There's too much that we don't know," Taylor said. "So folks can't assume what's coming next in terms of their student loans."