SCHUMER: STUDENT LOAN PAYMENT ‘PAUSE’ EXPIRES IN JUST 57 DAYS—BUT CITING PANDEMIC & NEW DATA ON BORROWERS, SENATOR PUSHES BIDEN ADMIN TO EXTEND THE PAUSE; NOW IS NOT THE TIME FOR FEDS TO RESTART INTEREST & PAYMENTS
Before Heading To DC, Schumer Reveals New Survey Data Showing That—Because Of Pandemic—89% Of Borrowers Are Not Financially Secure Enough To Begin Making Payments On Feb 1st; Omicron Casts More Uncertainty
Senator Says He’ll Make The Push This Week In DC To Extend Loan Repayment Freeze For More Than 45 Million Borrowers Who Would Owe Avg Of $393 More A Month Come February;
$91.6B In Debt & 2,404,100 Borrowers In NYS
Schumer: Burden Of Student Loan Payment Is Still Too Much For Too Many Right Now
With the student loan payment pause set to expire in just 57 days, U.S. Senator Charles Schumer cited new data from the Student Debt Crisis Center and Savi that says even among borrowers who are fully employed, 89% are not financially secure enough to begin making student loan payments on February 1st. Schumer said, amid the uncertainty of the Omicron variant, now is not the time for the feds to restart the student loan collection process. He announced he supports—and will push for—another extension of this repayment pandemic relief for those who currently hold student loans.
“The student loan payment pause expires in just 57 days, but we are still in the pandemic, and the borrowers were saving an average of $393 a month, which has been critical amid COVID,” said U.S. Senator Charles Schumer. “If we don’t extend the pause on payments, then that horrendous interest will pile up at a time when too many are still not financially prepared to shoulder a giant monthly bill. Moreover, with Omicron spreading, the uncertainty with what happens next demands at least one more extension of the student loan payment pause."
Schumer said the Department of Education should also take into account the impact that reinstating these payments will have on borrowers who were in default before the pause on payments began. Those borrowers can potentially have their wages garnished and tax refunds withheld if the payments now resume, further complicating the economic hardships of COVID. Most federal student loan payments have been on pause since March of last year under the CARES Act. Schumer said that bill also stopped all collection efforts on defaulted federal student loans and froze interest. President Biden extended the pause to early 2022, but citing new data, Schumer wants it extended again.
The new data shows that “Americans are back to work in a recovering economy, but 89% of full-time employed student loan borrowers say they’re not financially secure enough to begin making payments after Feb 1.”
Student Debt Crisis Center (SDCC), the nation’s largest student debt advocacy organization, and Savi, a social impact technology company working to help solve the crisis, recently completed a nationwide survey of 33,703 student loan borrowers. The survey is the fourth installment of the Student Debt x COVID-19 series looking at the impact the pandemic continues to have on student loan borrowers.
According to the survey, borrowers are living through an unprecedented economic time period. Even though over 68% of respondents are fully employed, nine-out-of-ten student loan borrowers are not ready to resume payments in February. Respondents of this survey say that student loan payments will eat a large portion of their income and prevent them from affording other bills like rent, car loans and medicine. These findings are doubly concerning within the context of the nation’s rising inflation and cost of living.
Among fully-employed student loan borrowers, 89% say they are not financially secure enough to resume payments on February 1. One-in-five say (21%) they will never be financially secure enough to resume payments again. More than half (57%) of borrowers surveyed were notified about payments resuming on February 1 by their loan servicer and one-third (33%) heard this news directly from the Department of Education. These are significant increases compared to the last survey in June that showed only 30% and 22% had heard from their servicer and the Department respectively. Over a quarter (27%) of respondents say that one-third of their income or more will go toward student loans when payments resume in February. And, one-in-ten say that half of their income will go toward student loan payments.
Schumer says the findings in this latest survey mirror the challenges he hears when talking to people who hold student loans. There’s $91.6B in debt and more than 2.4M borrowers across New York.
“This is exactly what I hear across New York—that we need to keep the pause in place because the pandemic isn’t over and the relief has been a godsend, so that’s what I am fighting for,” Schumer said.