Loan payment

Biden must extend student loan payment hiatus given uncertainty with Omicron, Chuck Schumer said: “We are not doing as quickly as we would like”

Senate Majority Leader Chuck Schumer (D-NY) speaks during a climate change press conference outside the United States Capitol on July 28, 2021 in Washington, DC.
  • Senator Chuck Schumer called on President Biden to extend the student loan payment hiatus after February 1.
  • He cited the uncertainty with the new Omicron variant as the reason for extending the break.
  • Many borrowers don’t feel financially secure enough to pay off in just 2 months.

Although data is limited on the impact of the new Omicron variant, Senate Majority Leader Chuck Schumer wants to ensure that 43 million borrowers on federal student loans do not suffer the consequences of having to start over. to make payments in two months.

President Joe Biden’s Education Department announcement in August that he would extend the hiatus on student loan payments until February 1, but he made it clear that this was the “final” extension and that borrowers should be prepared to repay their debt. next year, regardless of the state of the pandemic. At a press conference in New York on Monday, Schumer urged Biden to change his mind.

“We want the country to finally write off student debt, but in the meantime, extend the hiatus,” Schumer said. “The break must prevail.”

The pause on student loan payments that President Donald Trump and Biden oversaw was aimed at alleviating the pandemic, and Schumer noted that the pandemic is still here, especially with the introduction of a new variant.

“This debt is just overwhelming for the people,” added Schumer. “If we don’t extend the hiatus, interest rates will pile up. Students owe a fortune. And with omicron here, we’re not doing as quickly as we would like.”

The Education Department has yet to comment on whether there are any changes to the student loan repayment schedule.

Schumer also cited the recent Student Debt Crisis Center study investigation which found that 89% of fully employed borrowers do not feel financially secure enough to resume their payments in just two months. The survey found that for 27% of those borrowers, a third of their income will go towards paying off student debt next year – money that was chased during the hiatus to pay off other forms of debt and obtain basic necessities.

Along with affordability issues, Insider reported other issues borrowers face as they approach the restart of payments. According to a new Bankrate investigation, one in five borrowers still don’t know what their monthly payments will look like next year, and 75% of those surveyed said that some aspect of their finances would be negatively affected once payments resumed.

To prevent these problems from escalating and potentially causing a wave of defaults, Schumer is telling Biden to continue to ease the pandemic for millions of student loan borrowers nationwide.

“If we don’t extend the break on payments, then this appalling interest will accumulate at a time when too many people are still not financially ready to shoulder a giant monthly bill,” Schumer said. Recount amNY news site in a press release. “Plus, with the spread of Omicron, the uncertainty as to what will happen next requires at least one further extension of the student loan payment hiatus.”