Restarting student loan payments in 55 days will “rob” $ 85 billion of 18 million borrowers next year, say 3 Democrats

Senator Elizabeth Warren.Evelyn Hockstein-Pool / Getty Image

  • 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 to 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 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.

“If we don’t extend the break, interest rates will pile up. Students owe a fortune,” 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 keep giving up interest on these loans to prevent debt from accumulating even faster.

And Thursday, more than 200 organizations, run by the Student Borrower Protection Center, sent another letter to Biden asking him to extend the break until he completed his campaign promises repair loan cancellation programs and cancel 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 89% of salaried borrowers don’t feel financially secure enough to face payments next year, and Insider has spoken to borrowers who feel the same way.

“Restarting the 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, previously Recount Initiated. “I just don’t have it.”

The Education Ministry has yet to comment on a further extension of the suspension of student loan payments.

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