Schumer Says Ending Student-Loan Pause Would Risk U.S. Recovery
Senate Majority Leader Chuck Schumer and progressive Senator Elizabeth Warren warned that 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.
“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.
Warren similarly said in a Tuesday subcommittee hearing that “this student-loan time bomb could drag down our entire economic recovery when it explodes.” She said that loan servicers are not prepared to restart payments and have not done adequate outreach to borrowers.
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.