The U.S. economic recovery could take a major hit if the Biden administration fails to extend the federal government’s pandemic moratorium on student-loan payments past September, Senate Majority Leader Chuck Schumer said.
“Resuming these payments could stall our country’s economic recovery. It could bring millions of loan borrowers to the edge of financial crisis,” Schumer said during a press conference in Washington on Tuesday.
Student-loan debt has almost doubled over the past decade, reaching $1.58 trillion in the first quarter, according to the Federal Reserve Bank of New York, and the payment moratorium has helped people reduce other debt, such as credit-card balances. Ending the pause threatens to be a drag on an otherwise brisk economic rebound.
Senate Democrats, led by Schumer of New York and Elizabeth Warren of Massachusetts, are pressing President Joe Biden’s administration to extend the pause until the spring, and to cancel up to $50,000 in student debt. Warren cited a Pew Charitable Trusts survey showing two-thirds of borrowers saying it would be difficult to afford payments if they resumed the following month.
Warren is leading a Senate Banking subcommittee hearing on the topic later on Tuesday. Schumer spoke on the Senate floor shortly before the press briefing, saying, “With the flick of a pen, President Biden could give a fresh start to tens of millions of borrowers drowning in debt.”
White House Press Secretary Jen Psaki said at a briefing this month that she had nothing to announce on extending the payment pause and that she wanted to give the president the “space to make a decision.”
This article was provided by Bloomberg News.