- Elizabeth Warren led her colleagues in requesting information on the student-loan payment restart.
- She expressed concern with the lack of clarity surrounding the timeline for the payment resumption.
- The student-loan pause lifts on May 1, and many borrowers are worried about another monthly bill.
Massachusetts Sen. Elizabeth Warren is worried 43 million federal student-loan borrowers don’t have the information they need to resume payments in just over two months.
On Wednesday, Warren, along with Reps. Lauren Underwood of Illinois and Colin Allred of Texas, led five of their Democratic colleagues in sending a letter to Education Secretary Miguel Cardona regarding the student-loan payment restart date on May 1. They wrote that they were “concerned” with the lack of clarity surrounding the timeline to resume payments, saying that “millions of borrowers appear to be at risk of missing out on vital information about the payment restart.”
The lawmakers wrote in the letter that borrowers need timely and detailed information regarding their loan payments. Specifically, they want to know the first date payments will be due, and if that date will be the same for every borrower, along with information surrounding defaulting on payments and the first date missing a payment will reflect on a borrower’s credit score.
“Providing this detail is critical to ensure that borrowers are adequately informed about the restart and that borrower harm is minimized during the transition,” they wrote.
They gave the Education Department until March 9 to respond to their inquiries.
President Joe Biden extended the pause on student-loan payments a third time, through May 1, marking a continuation of pandemic relief measures for federal borrowers burdened by the $1.7 trillion student debt crisis. But as that restart date is quickly approaching, lawmakers like Warren not only want to ensure borrowers are equipped to foot another monthly bill — they want Biden to fulfill his campaign pledge and cancel student debt broadly.
Insider reported in January that, according to the Government Accountability Office (GAO), 50% of federal student-loan borrowers were identified as “at-risk” of falling behind on payments in May. The Education Department even acknowledged to GAO that it will be “a challenge to motivate” student-loan borrowers to pay off their debt after a two year pause, and it said that it will address that challenge by increasing communications and outreach.
Still, Warren and her colleagues believe that outreach isn’t enough, and as the payment resumption approaches, many borrowers are worried about their financial ability to pay off their debt. For example, the Student Debt Crisis Center found in a new survey that 93% of student-loan borrowers aren’t prepared to resume payments, and 61% of borrowers who could easily afford payments prior to the pandemic are now struggling.
“Our findings show that the ongoing pandemic combined with unprecedented inflation are huge obstacles for borrowers who are, by and large, not ready to resume payments, struggling to afford basic needs, and confused about their options moving forward,” Natalia Abrams, president and founder of SDCC, said.