United States President Joe Biden is expected to continue the restart of federal student loan payments in February despite pressure from fellow Democrats who are urging for the extension of coronavirus pandemic relief benefits.
On Friday, White House Press Secretary Jen Psaki was asked whether or not the administration was considering an extension of the student loan payment pause. The official said that Biden's administration was still assessing the impacts of the new Omicron coronavirus variant but noted that a smooth transition back into repayment was the Democrat's priority.
Student Loan Repayment
Psaki added that in the coming weeks, the Biden administration will release more details regarding their plans and will directly work with student loan borrowers. They plan to ensure that they have enough resources and are placed in the appropriate repayment plans they need and can sustain.
For nearly two years, borrower balances have been effectively frozen, requiring no payments on the majority of federal student loans since March 2020. Since then, there has been no interest racking up and collections on defaulted debt have been put on hold, CNN reported.
Psaki's announcement also included the end date of the student loan payment pause, which is expected to be on Jan. 31, 2022. She added that there were roughly 41 million borrowers who benefited from the extended student loan payment pause.
However, Biden's decision would most likely receive widespread criticism from progressive members of Congress, leading advocacy groups, and various student loan borrowers after they have lobbied the Democratic leader to extend the pause beyond the initial Jan. 31, 2022 deadline.
They argue that the restart of the student loan repayment will trigger massive financial devastation for millions of borrowers. Additionally, Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren argued that 89% of student loan borrowers felt they were financially unprepared to start paying their loans, Forbes reported.
Severe Financial Detriment
The officials also said nine million student loan borrowers, who were currently in default, will suffer severe financial detriment. Schumer and Warren have banded with other U.S. senators to pressure Biden into extending the student loan payment pause.
Under Secretary of Education, James Kvaal, said that the announcement to restart the student loan repayments was a "major endeavor." The official noted they were working to help inform borrowers to help them become prepared for the restart of the payments in February. Currently, the Education Department is working to reach out to more than 30 million borrowers regarding the new information.
Experts and officials are urging borrowers to make sure that their contact information is up to date ahead of the end of the pause's deadline. Between now and January, borrowers should also examine their current budgets and determine whether or not they have enough to pay for the loans.
While Psaki announced the restart of the repayments on Feb. 1, 2022, not all loans will be required to be paid on the same day. Millions of borrowers will most likely receive a billing statement or notice at least 21 days, or three weeks, before their first payment is due, CBS News reported.
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