The White House says it's time to pay up on your student loans again starting February 1, but they're watching to see how much Omicron could hit the economy
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- The current pause on student-loan payments expires on February 1, 2022.
- The White House said last week that is still the plan, but it's reviewing the impact of the Omicron variant.
- Some lawmakers say given the uncertainty from Omicron, the pause should be extended now.
President Joe Biden in August announced the "final" extension of the pandemic pause on student-loan payments through the end of January. That's still the plan, and the Omicron variant appears to be the only thing that might change that.
Last week, White House Press Secretary Jen Psaki responded to a question on a potential further extension of the payment pause during a press briefing. She said that in the coming weeks, the administration will release more details on how it plans to transition millions of borrowers back into repayment and is "making a range of preparations."
"We're still assessing the impact of the Omicron variant," Psaki said. "But a smooth transition back into repayment is a high priority for the administration. The Department of Education is already communicating with borrowers to help them to prepare for return to repayment on February 1st and has secured contract extensions with loan servicers."
The Education Department said the same thing to Politico regarding a potential further extension last week and did not respond to Insider's request for comment.
It's still unclear how, or if, the Omicron variant will impact economic recovery. But as Axios reported on Tuesday, new data from South Africa and Europe hint that COVID-19 cases are likely to surge in the US, with a senior Biden official telling Axios that "a large wave is coming."
"It will be fast," the official added. "It won't be as severe, but regrettably, there will be plenty of hospitalizations."
Even so, 43 million federal borrowers are still awaiting further details on the student-loan payment resumption in 49 days.
Some lawmakers have argued that more data on Omicron isn't needed and that President Joe Biden should extend the pause now.
"This debt is just overwhelming for people," Senate Majority Leader Chuck Schumer said last week. "If we don't extend the pause, interest rates just pile up. Students owe a fortune. And with Omicron here, we're not getting out of this as quickly as we'd like."
Some of his Democratic colleagues agree. Schumer, along with Massachusetts Sen. Elizabeth Warren and Rep. Ayanna Pressley, urged Biden in a letter to extend the pause, citing data from the Roosevelt Institute that found restarting payments will strip $85 billion from 18 million borrowers over the next year.
Insider has also spoken with borrowers who have expressed concerns with looming student-loan bills in less than two months. Melissa Andretta, a 53-year-old borrower with $163,000 in student debt, recently said she's "had more anxiety than I've had in years" with her upcoming payments.
For now, the Biden administration has made clear borrowers should prepare to resume paying off their student debt next year, despite opposition from lawmakers and advocates.
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