February's student-loan payment restart will run into a 'psychological hurdle' as many borrowers thought their debt would be forgiven, Biden official says

© Provided by Business Insider Richard Cordray. Alex Wong/Getty Images

  • Federal Student Aid Director Richard Cordray noted the challenges of restarting student-loan payments.
  • He warned of the “psychological hurdle” for borrowers who thought their debt might’ve been forgiven.
  • The final extension of the payment pause will lift in February, and many borrowers aren’t ready.
  • See more stories on Insider’s business page.

In February, student-loan borrowers will once again have to start making regular payments on their debt – and they are not ready.

The student-loan payment freeze during the pandemic has been extended three times to give borrowers additional financial relief. But the most recent extension through February is final, and a top Education Department official warned the payment resumption will be especially challenging for borrowers who were led to believe their debt would be forgiven.

Richard Cordray, director of the Education Department’s Federal Student Aid (FSA) office, spoke to the Education Finance Council last week about challenges the department is facing in higher education. He said, in remarks obtained by Politico, that transitioning tens of millions of student-loan borrowers back into repayment will be a significant challenge, and the multiple extensions of the payment pause sowed “tremendous confusion about what even the immediate future may hold.”

“At the same time, borrowers have been hearing a steady drumbeat about the possibility of loan forgiveness, either wholesale or piecemeal,” Cordray said. “The old saying is that ‘the wish is father of the thought,’ and we can expect that many, many borrowers will not be eager to return to repayment when they have been led to believe, or even to hope, that was never going to happen. Getting over that psychological hurdle with millions of Americans may be a much harder job than we know.”

The payment pause was first extended under President Donald Trump’s CARES Act last March, and President Joe Biden extended it two more times since he took office, accompanied by a campaign promise that he would cancel $10,000 in student debt per person. Since then, he has canceled about $9.5 billion in student debt – less than 1% of the $1.7 trillion student debt crisis – for targeted groups of borrowers, with no word on where widescale debt cancellation stands.

Cordray stressed that borrowers have “grown accustomed” to not making payments on their student debt for nearly two years, and many are still unprepared to jump back into monthly payments with the pandemic still in effect.

“The stakes are extremely high as we now proceed to change everything once again – for borrowers who may not like what they are hearing from us, may not believe what they are hearing from us, and may not be prepared to cope with what they are hearing from us,” Cordray said.

FSA will be launching a communications campaign, Cordray said, to help ease borrowers back into repayment, including outreach via email and social media and updated sections to the student aid website.

But even with FSA’s acknowledgment of repayment challenges, many borrowers know they will not be able to pay off their debt come February. Insider previously spoke to Gwen Carney, a 61-year-old single grandmother raising three grandchildren, who said she’s “really not looking forward to February at all.”

“Restarting payments makes me very anxious because I somehow have to find that extra $200,” Carney told Insider. “I just don’t have it.”

And Alexandria Mavin, another student-loan borrower, told Insider the pandemic payment pause allowed her to pay off her medical bills from giving birth in full, and she sees student-debt cancellation as the only way out of the “never-ending cycle” of repayment.

Massachusetts Sen. Elizabeth Warren and Senate Majority Leader Chuck Schumer are leading the push for Biden to cancel $50,000 in student debt per person, remaining adamant he can do so immediately by executive action.

“The president has the power to cancel $50,000 in student loan debt right now,” Warren previously told Insider. “Senator Schumer and I are going to continue to push for this, but Biden doesn’t need any authorization from Congress. He needs to pick up the pen and do it himself.”

Read the original article on Business Insider

Internet Explorer Channel Network
News Related

OTHER NEWS

Man arrested over threats to deputy Labour leader Angela Rayner

© Justin Tallis/AFP via Getty Images Angela Rayner has been targeted with phone calls, emails and letters – Justin Tallis/AFP via Getty Images A man has been arrested over threats ... Read more »

Bank of Canada warns on prolonged inflation, ends bond-buying program

OTTAWA — The Bank of Canada is warning inflation will stay higher for longer than it previously forecast and signalled that an interest rate hike may be coming sooner than ... Read more »

Third of new students in England show signs of depression, survey suggests

© Provided by The Guardian Photograph: Guerilla/Alamy More than a third of first-year students in England who started university this autumn have shown symptoms of depression and anxiety, a survey ... Read more »

Vacancy gives Inslee pick of Washington's next secretary of state

Washington state Secretary of State Kim Wyman announced Tuesday she is resigning her position to join the Biden administration. © Provided by Washington Examiner That means Gov. Jay Inslee will ... Read more »

No Time To Die ending was ‘surprising' for one of Daniel Craig's James Bond co-stars

WARNING: SPOILERS AHEAD FOR NO TIME TO DIE. Daniel Craig’s fifth and final James Bond movie has been out in cinemas for a month now. And interestingly one of his ... Read more »

Burglar admits plot to have £26m of cash and jewellery stolen from celebrities including Tamara Ecclestone

© Getty Images Tamara Ecclestone had around £25 million worth of property stolen by organised crime gang. – Getty Images A burglar has confessed to a plot to have £26 ... Read more »

Range Rover 2022 gets a grand global reveal

© Provided by The National Range Rover 2022’s looks are certainly modern, with the outline being a jumble of smooth curves and lines The all-new Range Rover 2022 was revealed ... Read more »

Tiger King 2 trailer: Netflix releases first look at Joe Exotic documentary follow-up

© Provided by The Independent Netflix have released the first trailer for Tiger King 2. Released on Wednesday (27 October), the trailer offers a first glimpse at the follow-up to ... Read more »

Robbie Williams' new video with daughter Coco has fans in stitches

© Provided by Hello! robbie-williams-ayda-field Ayda Field just shared the sweetest video of husband Robbie Williams reading to their daughter Coco – and fans are in disbelief at the doting ... Read more »

These are the 10 key points in Rishi Sunak's Budget that you need to know about

© These are the 10 key points in Rishi Sunak’s Budget that you need to know about (Photo by Dan Kitwo… Rishi Sunak has delivered a post-Covid budget full of ... Read more »

California man arrested in alleged Gaetz death threat

PENSACOLA, Fla. (AP) — A California man has been arrested for allegedly threatening to kill Rep. Matt Gaetz days after the Capitol riot in January, court records show. © Provided ... Read more »

Venice sees its first ever gondolier doping scandal

© Provided by Daily Mail MailOnline logo A gondolier in Venice found with marijuana in his system during a regatta last month was stripped of his second-place win today and ... Read more »

Lightyear Teaser Trailer: Chris Evans as Buzz aims for 'infinity and beyond' in his sci fi origin story

© Provided by Pinkvilla Yes, the sci-fi adventure movie starring Chris Evans as Buzz Lightyear has released its official teaser trailer, and it’s more than what fans had expected. For ... Read more »

Sicily floods: Two dead as storm turns roads into rivers

© ANSA/AFP via Getty Images TOPSHOT-ITALY-WEATHER-FLOODS Sicily was hit by a powerful cyclonic storm causing widespread flooding around the city of Catania. Streets transformed into rivers and squares turned into ... Read more »

Jasmin Bhasin says she's fine with women flirting with Aly Goni; Fans call latter ‘luckiest man'

© Provided by Pinkvilla Jasmin Bhasin and Aly Goni have been winning hearts with their adorable chemistry. The couple is loved by fans and have a massive following on social ... Read more »

Authorities to hold press conference on Alec Baldwin ‘Rust' shooting

The Santa Fe Sheriff’s Office will hold a press conference Wednesday – nearly a week after Alec Baldwin accidentally shot dead his cinematographer and injured his director on the set ... Read more »

From genetics to allyship: how queer culture changed the family portrait

In a two-minute video produced by the artist Jamie Diamond in 2008, four women and one man gather to pose for what looks like a family portrait. They stand in ... Read more »

Military base accidentally gives COVID shots to 3 people seeking other vaccines

The Army did not identify the trio who were accidentally jabbed. USGOV-PD Three people at a military base in Tacoma, Washington, were accidentally given COVID-19 vaccines while trying to get ... Read more »

Rishi Sunak's autumn budget 2021 – the panel verdict

Miatta Fahnbulleh: ‘The chancellor has picked ideology over people’ The chancellor came into the chamber with great optimism, but he needed to do three things to ensure this was based ... Read more »

UK Covid deaths pass 140,000 since pandemic began with 207 fatalities recorded in a day and 43,941 infections

THE UK's Covid death toll today passed 140,000 as another 207 people lost their lives to the virus. A further 43,941 virus cases were also reported in the latest 24-hour ... Read more »

Nicole Kidman shares a loved up photo with husband Keith Urban on his 54th birthday; SEE PIC

© Provided by Pinkvilla Nicole Kidman took to Instagram to give a glimpse of her husband Keith Urban‘s 54th birthday celebrations. The actress shared an adorable birthday tribute for him ... Read more »

Princess Charlene's dog dies after being run over

© Provided by Independent Online (IOL) As if being away from her family and recovering from a months-long ENT infection was not enough, Her Serene Highness Princess Charlene of Monaco’s ... Read more »

Macron opens museum dedicated to the the 'Dreyfus affair' and anti-Semitism

French president Emmanuel Macron on Tuesday inaugurated the first museum dedicated to the Dreyfus affair, a dark chapter of France's history when anti-Semitism led to the wrongful conviction of army ... Read more »

Tembisa 10 report: Gosiame Sithole had a C-section, two of the babies died

© screengrab Gosiame Thamara Sithole from Tembisa. JOHANNESBURG – Independent media has yet again defended the story about the alleged decuplets – known as the Tembisa 10. The media house ... Read more »

Trump loses bid to keep lawsuit against Twitter in Florida

FILE PHOTO: A photo illustration shows the suspended Twitter account of U.S. President Donald Trump on a smartphone and the White House in Washington By Jan Wolfe WASHINGTON (Reuters) – ... Read more »

Budget 2021: Chancellor Rishi Sunak's address a case of the good, the bad and the bubbly

The teetotal chancellor - who drank water during his speech 63-minute speech - presented himself as the boozer's friend, with cheaper beer and fizz and a business rate handout to pubs. Read more »

Gang facing jail after targeting celebrity homes in £26m burglary spree

The gang behind the UK’s biggest burglary is facing jail after stealing £26 million of cash and jewellery from celebrity homes – but the loot has never been recovered. Socialite ... Read more »

Was jedes Sternzeichen 2021 hinter sich lassen muss, um zu wachsen

2022 birgt für alle Sternzeichen jede Menge Möglichkeiten für Wachstum. Dafür müssen sie laut Horoskop aber einige Dinge hinter sich lassen © Getty Images Was jedes Sternzeichen endlich hinter sich ... Read more »

Israel treibt Siedlungsbau auch nach Kritik der USA voran

© Keystone/AP/Ariel Schalit Trotz deutlicher Kritik der USA an der Fortsetzung des israelischen Siedlungsbaus im besetzten Westjordanland hat Israel den Bau Tausender Wohneinheiten abschliessend genehmigt. 3130 Wohneinheiten in Siedlungen seien ... Read more »

New Jersey Is the Best-Run State in America. Really!

It’s not a golden era for America’s state governments. © Provided by Slate Like what you see? Phebe Khalil/iStock/Getty Images Plus The governor of New York, regardless of who it ... Read more »

Questions Swirl Around Death of Jelani Day, 'Avid Swimmer' Who Mom Believes 'Was Drowned Against His Will'

© Provided by People Justice for Jelani Day Facebook Jelani Day Jelani Day‘s mother is having a hard time accepting the findings of medical examiners in Illinois. On Tuesday, Carmen ... Read more »

Wyden fills in details for 'Billionaires Income Tax'

The Senate’s top tax writer unveiled plans to create a special new tax on the uber wealthy that he hopes Democrats will use to help pay for their next big ... Read more »

Who Is Kim Wyman? Republican Official Tapped By Biden Admin to Lead Election Security

As part of the president’s commitment to deliver bipartisanship, the Biden administration announced on Tuesday that Republican official Kim Wyman will lead the Department of Homeland Security‘s efforts to protect ... Read more »

A Third of Voters Think 2020 Election Should Be Overturned, but Fewer Think It Will Be

Nearly a year after the presidential election, former President Donald Trump continues his calls for its results to be investigated while a third of voters back his belief that he ... Read more »

Spotify CEO says COVID slump ‘behind us' as podcasts fuel ad rebound

Spotify‘s CEO Daniel Ek said the company’s advertising and subscriber growth is on the rebound as the pandemic has waned. Bloomberg via Getty Images Music streaming giant Spotify said it ... Read more »

'Strange take' - Aston Villa fans fire blunt Morgan Sanson message after Arsenal reaction

Aston Villa midfielder Morgan Sanson has endured a disappointing start to his career in the Premier League following his switch to the club last year. His frustrations seemingly got the ... Read more »

Carli Lloyd's final, emotional USWNT moment

Head coach Vlatko Andonovski greets forward Carli Lloyd as she exits the game for USWNT for the final time. USA TODAY Sports Soccer legend Carli Lloyd is hanging up her ... Read more »

Fed officials face fines for ethics breaches under proposed Senate bill -WSJ

(Reuters) – U.S. Federal Reserve officials who break proposed laws limiting their trading activities would face fines of at least 10% of the value of the banned investment that was ... Read more »

U.S. consumer watchdog lays out ambitious agenda to eye Big Tech, lending competition

By Katanga Johnson and Pete Schroeder © Reuters/ANDREW KELLY FILE PHOTO: The seal of the Consumer Financial Protection Bureau (CFPB) is seen at their headquarters in Washington, D.C. WASHINGTON (Reuters) ... Read more »

Minimum wage POLL: Is the rise from £8.91 to £9.50 enough amid rising cost of living?

Making his Budget speech in Parliament on Wednesday afternoon, the Chancellor said the hike amounted to a pay rise of over £1,000 per year for those working full time on ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic