Elizabeth Warren Says Student Loan Servicers Aren’t Prepared For Student Loan Repayment On October 1, But That’s Not What They Said

Senator Elizabeth Warren (Getty Images/Ethan Miller)
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Are your student loan servicers prepared for you to begin making payments on your loans on October 1?
Here’s everything you need to know about it.
If you’re wondering if your student loan servicer is ready for you to start making payments on October 1, the answer is that it depends on who you ask. Senator Elizabeth Warren’s response is an emphatic “no.” During the Covid-19 pandemic, Warren, together with Senators Edward Markey (D-MA) and Tina Smith (D-MA), asked many top student loan servicers extensive questions concerning student loans and student loan repayment. Senators addressed letters to student loan services, inquiring whether they are ready to resume student loan payments, among other things. Each of the student loan servicers replied in writing.

According to the senators, they’re not ready for student loan payments to restart based on the responses from the student loan servicers. This comes after a previous investigation claimed that during the Covid-19 outbreak, student loan servicers failed borrowers. As a result, Warren and her colleagues argue that President Joe Biden should extend temporary student debt relief, which is set to expire on September 30, 2021, until at least March 31, 2022. Warren is a passionate supporter of student loan cancellation and borrower rights. The senators wrote to Biden in a letter:
ADDITIONAL INFORMATION FOR YOU
“The responses to our inquiry indicate that neither student loan borrowers nor student loan servicers are prepared for payments to resume,” the senators wrote. “Servicers will require significant time to ensure that staffing and procedures are ready to provide borrowers with a high level of support.” “We got replies from each of the servicers, and…these responses overwhelmingly indicate that extra time is required to guarantee that borrowers are assisted upon reentering student loan repayment.”

Most student loan servicers immediately responded to the senators’ questions in their written responses to the three senators. They emphasized their track record, dedication to student loan borrowers, continuing training and preparedness, and other efforts to make the transition from October 1, 2021, as easy as possible. While some student loan servicers stated that they planned to hire additional staff when student loan payments resumed, the majority hinted that they would be able to handle them. The bigger concern, according to the servicers, is the uncertainty around whether or not student loan forgiveness will be extended by the Biden administration. With less than 90 days until this student loan relief expires, student loan servicers say they’re in limbo until the Education Department notifies the start date to them and to student loan borrowers.
Several student loan servicers answered that during the Covid-19 epidemic, student loan debtors successfully paid off all of their student debts. (This student loan payback could be in the normal order of things, with student loan debtors taking advantage of the Covid-19 pandemic’s no-interest period.) Consider the following scenario:
FedLoan: 1,785,367 Edfinancial: 57,711
105,887 people live in the Granite State.
MOHELA has a population of 476,342 people.
Navient: I didn’t get a response.
Nelnet: I didn’t get a response.
73,552 OSLA

Will Biden continue to offer student loan forgiveness after September 30? While Biden has previously extended this student loan relief for another eight months, it’s possible that he will do so again if unemployment benefits and the eviction moratorium expire. According to a recent survey, 90% of student loan debtors are not prepared to begin repaying their debts on October 1st. “Can’t afford student loan student loan payments” or “not psychology ready,” for example, are two examples of the term “ready.” Nonetheless, there have been various suggestions to extend student loan relief until 2022, including until employment levels prior to the Covid-19 outbreak are regained. Biden will ultimately decide whether or not to extend student loan relief. This comes on the heels of Biden’s cancellation of more than $40 billion in student debt. Giving student loan borrowers extra time may reduce the amount of default and delinquency on their loans. However, Biden faces another conundrum: he is advocating for an economic recovery from the Covid-19 pandemic. Additional student loan relief to aid millions of struggling borrowers could be seen as counterproductive to the recovery of the economy.
Any extension of student debt relief should have no impact on your overall game plan if you’re paying off student loans. Student loans will come due at some point, so be sure you have a plan in place. Make preparations to pay off your school loans as soon as possible. Here are a few popular alternatives:

As a result of Biden’s actions, $40 billion in student loans have been annulled.
Even if unemployment benefits and the eviction embargo expire, Biden may extend student loan relief beyond September 30, 2021.
As a result of Biden’s actions, $1.5 billion in student loans have been cancelled.
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