The Biden administration says student loan relief will not be extended, with payments restarting Feb. 1, Forbes reports.
Progressive Democrats had asked President Joe Biden to extend the pandemic-related pause on student loan payments that is set to expire Jan. 31.
Nearly 90% of student loan borrowers accepted the president's March 2020 COVID-19 pandemic offer to pause repayments, according to a new analysis from The Roosevelt Institute.
The resumption of federal student loans will mean that approximately $7 billion per month and $85 billion annually will be stripped from more than 18 million student loan borrowers' budgets, according to the institute.
White House press secretary Jen Psaki was asked whether the administration was considering extending that student loan payment pause.
"So, in the coming weeks, we will release more details about our plans and will engage directly with federal student loan borrowers to ensure they have the resources they need and are in the appropriate repayment plan," Psaki said Friday.
"We’re still assessing the impact of the Omicron variant. But a smooth transition back into repayment is a high priority for the administration. The Department of Education is already communicating with borrowers to help them to prepare for return to repayment on Feb. 1 and has secured contract extensions with loan servicers.
"So, we are preparing for a range of steps here. These steps have provided, I would just note, more than $12.5 billion in discharges to nearly 640,000 borrowers, plus tens of billions more saved by the 41 million borrowers who have benefited from the extended student loan payment pause. But it expires Feb. 1, so, right now, we’re just making a range of preparations."
But not everyone agrees. Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., claimed that 89% of student loan borrowers feel financially unprepared to restart student loan payments.
The two Democrats also argued that 9 million student loan borrowers in default will suffer further financial detriment, Forbes reported.
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