As the clock continues to count down toward the restart of individuals having to make payments on their student loans, lawmakers are pulling out all the stops to keep that from crippling the financial situations of millions of borrowers as the country deals with record inflation and a rising number of COVID-19 cases across the country.
A trio of Democratic lawmakers — Sen. Chuck Schumer [D-N.Y.], Sen. Elizabeth Warren [D-Mass.], and Rep. Ayanna Pressley [D-Mass.] — requested an analysis of the impact of the restart of student loan payments and The Roosevelt Institute’s report concluded that 18 million individuals are going to be “strip”ped of $85 billion in the 12-month period starting January 31, when individuals are scheduled to resume making their student loan payments. That figure was the centerpiece of the lawmakers’ argument to President Biden that the pause on student loan payments needs to be extended and that debt cancellation must be considered.
“If we don’t extend the pause, interest rates just pile up. Students owe a fortune,” Schumer said, according to a published report. “And with omicron here, we’re not getting out of this as quickly as we’d like.”
Meanwhile, another group of 14 Senators — all of them Democrats — sent a separate letter to President Biden this week, asking for administration to continue to waive interest on federal student loans until the public health emergency related to the pandemic is declared over.
“Continuing to waive student loan interest will provide borrowers with vital financial support during a time when students, borrowers, and higher education institutions are still recovering from economic and academic disruptions caused by the pandemic, including rising costs,” the Senators wrote. “The U.S. Department of Education (“Department”) notes the waiver of student loan interest is saving borrowers an additional $5 billion each month. This is money that is now available for housing, food, and other daily necessities to help borrowers support themselves, their families, and their communities during this pandemic.”
The Biden administration has said that its extension of the moratorium on student loan payments until January 31 was the last extension that would be given.
Yesterday, more than 200 organizations sent a third letter to the President, calling on him to extend the moratorium on student loan payments until he makes good on promises made during his campaign that called for fixing student loan forgiveness programs and cancelling student loan debt.
On top of working with millions of individuals to start making student loan payments again, the Department of Education is also dealing with the transition of accounts within a number of servicers and the decision to recall accounts that were placed with private collection agencies
