Loan payment

AOC denounces “the danger and the risk” of the resumption of payment of student loans

  • AOC told Yahoo Finance that the resumption of student loan payments is a major risk for borrowers and the United States.
  • She added that the argument that Biden can’t write off student debt “isn’t a legitimate argument.”
  • Progressives continue to call on Biden to cancel student debt as he remains silent on the issue.

Student loan payments are set to resume on May 1, and New York Rep. Alexandria Ocasio-Cortez disagrees with that plan.

President Joe Biden just extended the student loan payment break for the third time, and while Ocasio-Cortez was one of the lawmakers to welcome the additional relief, she told Yahoo Finance’s Andy Serwer, in an interview to be published this week, that resuming these payments in a few months is a bad idea not only for borrowers, but also for the American economy.

“I cannot underestimate the danger and risk — economically, politically, and where we are now as a country — of letting the moratorium on student loan repayments expire in May,” Ocasio-Cortez said.

“We are at such a delicate time in the general financial and fair economic recovery post-COVID that to then reinitiate payments that are essentially the size of a mortgage payment, sometimes even larger, on a generation that was already so devastated . . This could already unbalance what is a very fragile recovery,” she added.

Student loan payments have been suspended for the duration of the pandemic to give a temporary reprieve to 43 million borrowers with federal student debt. But the nation’s $1.7 trillion student debt crisis continues to grow, and Ocasio-Cortez is one of the Democratic lawmakers who have consistently pushed Biden to keep his campaign promise and cancel student debt. each borrower.

Ocasio-Cortez added that the idea that Biden may not have the power to write off broader student debt “isn’t a legitimate argument” – something Biden himself has questioned , prompting him to ask the Department of Education to prepare a memo on his legal ability to forgive student debt at large.

However, documents released in November said the Department of Education completed the memo in April 2021 and chose not to release whether it concluded Biden could legally cancel student debt. Some lawmakers and advocates are growing increasingly frustrated.

More recently, 85 Democratic lawmakers, including Ocasio-Cortez and Massachusetts Sen. Elizabeth Warren — who championed a proposed $50,000 loan cancellation — called on Biden not just to release the memo, but to cancel until $50,000 in student debt before payments resume in May. 1.

But as of now, Biden has not commented on when, or if, he plans to write off student debt globally and said in December that borrowers should “do their part” to prepare for the resumption of loan repayments. .