After a three-year pause, payments return this weekend, and the Biden administration is hoping to provide some relief to borrowers with a new income-driven repayment plan and an “on-ramp” repayment program.
But the on-switch also comes as Congress is struggling to keep the government funded.
The White House was asked if it considered pushing back the start date for resuming payments in light of the looming government closure. And while press secretary Karine Jean-Pierre said student loans are a “top priority,” she did not indicate they would push back the date.
“So, you know, if this happens, if Republicans in Congress, you know, go down this road of shutting down the government, we anticipate that key activities at Federal Student Aid will continue for a couple of weeks,” Jean-Pierre said.
“But, however, if it is a prolonged shutdown lasting more than a few weeks, could substantially disrupt the return to repayment effort and long-term servicing support for borrowers,” she added.
A shutdown could hurt student loan servicers already having a hard time handling more than 45 million accounts getting turned on at once after a break that began in the early days of the coronavirus pandemic.
The crush also comes after student loan servicers failed to receive a requested budget increase from Congress. The Department of Education previously said the allotted funding would not be enough for a smooth transition.
“As the Department has repeatedly made clear, restarting repayment requires significant resources to avoid unnecessary harm to borrowers, such as cuts to servicing,” a spokesperson said.
Others have argued the department could have allocated money better to help loan servicers as they prepared to take on this task.
The cuts have hit the customer service sector of student loan servicers, threatening to cause long wait times for borrowers who may need help once payments resume.
The Hill’s Lexi Lonas has more here.
