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Pause on student loan repayments set to expire in May - YouTube
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a recent analysis estimates 7.8 million
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people will struggle to repay student
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loans if a federal pause on payments
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ends as planned in may that's according
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to the california policy lab and student
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loan law initiative
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payments were halted at the beginning of
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the coronavirus pandemic as the nation
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dealt with an economic crisis the pause
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was extended several times with payments
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set to resume on may 1st many people are
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calling on the biden administration to
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extend the pause again
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cbs news reporter sarah ewa weiss has
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been looking into this and joins me now
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with more hi there sarah so as we
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spelled out this really affects millions
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of americans across the country what
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kinds of ripple effects could we see
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once this pause on federal student loan
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repayments ends
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hi elaine yeah keep in mind that we've
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seen more than 37 million people not
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have to pay student loans
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since the beginning of the pandemic so
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if this does restart in may it could be
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the first time millions of people have
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had to pay their student loans in more
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than two years and you know we have seen
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this pause extended multiple times under
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the trump administration and then again
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under the biden administration uh so
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there are still questions on whether
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we'll it will actually end in may but
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there have been a number of different
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advocates who have warned that this
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could be a serious challenge
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for borrowers a recent survey found that
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more than 90 percent of borrowers that
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they spoke to
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had said they were concerned about
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paying student loans
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as well as other costs when we see that
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inflation is on the rise so while the
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pandemic might be easing in some cases
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for many people we have seen costs go up
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across the board across the united
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states inflation hitting 7.9 percent
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year over year uh so it has raised
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concerns and some borrowers have said
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they've had to start looking at their
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expenses and seeing what they can cut
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down on including things that are very
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basic like trying to figure out how they
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can cut down on some of their utilities
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how they can cut down on other things to
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make sure that they can make these
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payments should they resume in about a
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month from now another thing that we
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know is the federal reserve bank of new
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york has been looking at this they said
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that the student loan payment pause has
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saved uh borrowers about 195 billion
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dollars over the past two years uh when
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those payments start
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uh come may they expect that the number
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of delinquencies uh those who have are
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behind on their payments will rise
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substantially moving forward so that is
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something to keep in mind of course some
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people do say
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we're expecting no matter what whether
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there is a lot or very few there's
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always going to be some people who are
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behind on student loan payments so sarah
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what should people be doing now to
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prepare should payments restart as
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scheduled may 1st
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yeah so there's a number of steps that
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student loan experts have been talking
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to me about that people should be taking
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now uh whether they are expecting those
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loan payments to start a month from now
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or for there to be another
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extension of that pause and the first
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thing that everyone has said to me is
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that borrowers should be reaching out
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and making sure that their student loan
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servicers have their updated contact
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information uh if they haven't had to
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pay loans in two years uh they could
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have moved during the pandemic there's a
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lot of changes that could have happened
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so they want to make sure that people
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have their updated contact information
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with their student loan servicers so
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that they can get the most up-to-date
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information uh because these services
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are required to make uh send out a
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number of notices before payments resume
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so that is step one uh that i've been
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told should happen and people should be
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looking at the other thing i've been
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told is even if we're not quite sure if
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this will happen a month from now
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people should start looking at their
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budgets and seeing
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how they can make sure that they're able
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to make these payments something to keep
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in mind even if the pause ends on may
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1st it'll be several weeks before these
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payments actually resume it's not like
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we're going to see 30 plus million
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student payments student loan payments
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start on the 1st of may those will
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happen over a number of weeks after the
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pause ends but what we do know is that
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the average student loan payment is
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about 400 a month so that is a
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substantial chunk of money and people
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should start preparing even if they see
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an extension for their budgets to
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accommodate that come may yeah first
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step though really important as you say
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make sure that contact info is updated
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because you know we know a lot of people
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have moved around with remote work
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conditions especially so um really
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starts there um so we know that a group
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of democratic lawmakers sent the letter
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to the biden administration thursday
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calling for an extension on the pause
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they also want to see a cancellation of
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student debt
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where does the white house currently
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stand on this issue
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you know there have been some mixed
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signals on extending the pause uh one of
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the reasons is is the servicers have not
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been sending out notices about student
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loan payments resuming when we've had
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the payment resuming originally in
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february but before about two months
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before there had been multiple notices
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going out to borrowers telling them so
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that's one signal that makes people
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think maybe they're going to extend this
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another thing that we know is that the
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white house chief of staff said at a in
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an interview at the beginning of march
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that they're still trying to figure out
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if there's some kind of executive action
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that can be taken on student loans uh on
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student debt as we know a number of
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democrats have called for the
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cancellation of student debt and so he
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said should they not make the
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announcement on what that is between now
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and payments resuming they would extend
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the pause further so that has also led
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people to believe that we'll actually
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see an extension what we don't know is
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actually what they're going to do in
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terms of canceling student debt what we
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do know is that the president has called
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for congress to take action in terms of
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canceling student debt uh he's also
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talked about ten thousand dollars of
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student debt being cancelled uh but you
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know when we look at the congress and
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the makeup right up makeup of it right
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now uh it's very closely divided between
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democrats and republicans so the
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actual reality is there's really not a
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lot that can actually pass in congress
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in terms of cancelling student debt and
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that's why a number of democrats have
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called on the president to cancel
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student debt and they're calling for a
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much larger amount about 50 000
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when you talk to senator chuck schumer
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or someone like senator elizabeth warren
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that's how much they want the president
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to cancel um the white house says
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they're still examining that really uh
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but haven't come down definitively
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either way for or against whether they
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can take action um in terms of the white
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house taking action unilaterally all
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right a lot of folks paying very close
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attention to this sarah ewa why sarah
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thanks for sharing your reporting with
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us
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thank you
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