Joe Biden reacts to Democrats urging him to avert student loan Cliff next year

Majority Leader Chuck Schumer, Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.), are urging president Joe Biden to again extend the freeze on federal student loan payments before it expires next month, warning that requiring tens of millions of Americans to resume paying their debt will drag down the economic recovery.

At a minimum, the lawmakers said in a letter this month to Biden, the administration should continue the freeze on student loans “until the economy reaches pre-pandemic employment levels.”

The letter comes amid growing calls on the left for the Biden administration to continue the relief for borrowers as the White House decides the broader question of whether to outright cancel student loan debt, which it has publicly said it continues to review.

Monthly student loan payments and interest are set to resume on Feb. 1 for the first time since the beginning of the pandemic when the federal government took emergency action to freeze the debt as the economy cratered in March 2020.

The Education Department has estimated that the waiver of interest on federal student loans alone saves borrowers about $5 billion each month.

A wide coalition of mostly left-leaning organizations, consumer advocacy groups and unions last week also called on the Biden administration to extend the payment pause.

The lawmakers also released a new analysis by the progressive Roosevelt Institute, which estimates that some 18 million American families would have to collectively pay more than $85 billion next year if the Biden administration restarts payments as scheduled.

Those payments would “hurt individual families and the economy as a whole,” the lawmakers wrote to Biden, adding that the emergence of the Omicron “variant is a reminder the virus is still impacting parts of the economy and public health.”
White House press secretary Jen Psaki said Friday that the administration would release more details about its plans in the coming weeks and is “preparing for a range of steps” ahead of the Feb. 1 expiration.

“We’re still assessing the impact of the Omicron variant,” she said. “But a smooth transition back into repayment is a high priority for the administration.”

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