Senate Majority Leader Chuck Schumer said yesterday 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, Bloomberg News reported. “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 yesterday. 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. Read more.
The Senate Judiciary Committee will hold a hearing on August 3 at 10 a.m. EDT titled, “Student Loan Bankruptcy Reform.” More details forthcoming.
