Restarting student loan payments will take $ 85 billion out of families
- A Roosevelt Institute analysis found that restarting student loan payments would take $ 85 billion out of $ 18 billion borrowers next year.
- Elizabeth Warren, Chuck Schumer and Ayanna Pressley cited the data as urging Biden to extend the hiatus.
- Calls are mounting for a further extension, as payments are expected to resume in 55 days.
In President Joe Biden’s latest push to further extend the pandemic pause on student loan payments, three Democratic lawmakers received data showing how hard millions of borrowers will be hit.
The Roosevelt Institute – a progressive think tank – published a To analyse at the request of Massachusetts Senator Elizabeth Warren, Senate Majority Leader Chuck Schumer and Massachusetts Representative Ayanna Pressley, who details how the reboot in payments will affect the economy. He found that resuming student loan payments on Feb. 1 would “rob” 18 million borrowers of $ 7.12 billion per month and $ 85.48 billion per year over the next year. This is money that was used during the pandemic to cover basic needs and pay off other forms of debt.
Lawmakers wrote on a Wednesday letter to Biden that “to prevent the student debt crisis from hampering our economic recovery, jeopardizing the effectiveness of the US bailout, and causing unnecessary pain and stress to American families, we urge you to extend the pause on student loan and interest payments and take action to write off student debt.
The analysis looked at the 60% of the 43 million total borrowers in the United States affected by the payment break, then factored in the 7.7 million overdue. There were 18 million left who, before the pandemic break, were paying an average of $ 393 per month for their loans.
In recent days, there have been increased calls for Biden to extend the student loan pandemic relief measures. Schumer urged Biden on Monday to extend the break after February 1, citing the uncertainty the new Omicron variant brings.
âIf we don’t extend the break, interest rates will pile up. Students owe a fortune,â Schumer said. “And with omicron here, we’re not getting off as fast as we would like.”
On the same day, 14 Democratic Senators, including Georgia Senator Raphael Warnock and Oregon Senator Ron Wyden, sent a letter to Biden saying that if payments resume, the president should continue to waive interest on those loans for prevent debt from accumulating even faster. .
And on Thursday, more than 200 organizations, led by the Student Borrower Protection Center, sent Biden another letter calling on him to extend the hiatus until he fulfills his campaign pledges to fix the cancellation programs of loan and write off student debt.
With payments resuming in 55 days, many borrowers worry that they won’t be able to pay their monthly student loan bills. The Student Debt Crisis Center recently released a survey that found that 89% of fully employed borrowers don’t feel financially secure enough to meet payments next year, and Insider spoke to borrowers who feel the same. thing.
“The restart of payments makes me very anxious because I somehow have to find that extra $ 200,” Gwen Carney, a single grandmother with $ 75,000 in student debt, told Insider. “I just don’t have it.”
The Education Ministry has yet to comment on a further extension of the suspension of student loan payments.