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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.

A former CEO of the student loan lender Sallie Mae says the cost of tuition at U.S. universities is “criminal,” but acknowledges that he played a role in their rising, according to a forthcoming book, The Hill reported. In an adaption of Wall Street Journal reporter Josh Mitchell’s “The Debt Trap,” set to be published on Aug. 3, Al Lord, who joined Sallie Mae in 1981, said that he first felt the impact of tuition costs when he started paying those of one of his grandchildren. Lord said that he paid $175 a semester during the 1960s when he attended Pennsylvania State University, a stark difference to the tuition he paid for his grandson, who enrolled at the University of Miami several years ago. The college currently charges $75,230 for an undergraduate on campus, which includes tuition, fees, housing and meals, transportation and other expenses. He reportedly acknowledges in the book that he understands he played a role in encouraging colleges to increase their rates. According to "The Debt Trap," after Lord started his first run as CEO for Sallie Mae in 1997, he started a series of incentives to allow students to take out more loans so that colleges could charge more. Sallie Mae started bundling packages of student loans that were then sold to investors.