With tens of millions of people becoming eligible for student loan forgiveness under President Joe Biden’s recently announced plan, loan providers nationwide need to staff up to handle the influx of paperwork, Senate Majority Leader Chuck Schumer said.
He called on the companies to add “thousands” of staff to process loan forgiveness applications and answer questions.
“We need our loan processors to get with it and inform students how to do this,” Schumer said at a Midtown Manhattan news conference, adding that loan providers are currently understaffed.
“Right now, because of the overwhelming interest, you call up these loan processors and either no one answers or you have to wait on the phone for three, four hours and a lot of them don’t know the answers,” he said.
Under the plan Biden announced on Wednesday, more than 40 million Americans are eligible for student loan forgiveness — up to $10,000 for individuals making less than $125,000 per year or less than $250,000 if they’re married or heads of households. Eligible people with federal Pell grants can get up to $20,000 in debt eliminated.
In New York state, 2.25 million people qualify for forgiveness of $16.53 billion total in federal student loans according to Schumer, with half of them poised to see their student debt completely eliminated.
He noted that along with processing loan forgiveness forms — which Biden promised to be “short and simple” — providers will start accepting payments again too.
The president extended the freeze on student loan payments, which began during the pandemic, to the end of this year.
“People have to do their planning … because loan payments will resume in January,” Schumer said.
“They need to hire new people, train new people,” he said of loan providers.
Payment to make the hires will come from Department of Education funds in the federal appropriations budget that lawmakers will debate this fall, according to Schumer’s office.
The White House promised that debtors for whom the feds have the relevant income information will get their debt relieved automatically.
Others can expect details on how to get loan forgiveness in the coming weeks, the president promised — with the form becoming available no later than the Dec. 31 end of the loan payment freeze.
Progressives have been clamoring for years for relief for student loans, one of the biggest sources of personal debt in the U.S.
Many left-leaning lawmakers wanted the feds to forgive more debt, and Schumer said he’d keep pushing for additional relief.
“This is a huge first step and it makes it easier now to increase the amount of debt relief that students will get,” he told reporters.
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