It will be 'a challenge to motivate' student-loan borrowers to pay off their debt after a 2-year pause, the Education Department tells government watchdog

• Student-loan payments are resuming in 90 days after a two-year pause.
• The Education Department said it would be "a challenge" to get borrowers to pay their bills again.

It's no secret that restarting student-loan payments after a two-year pause will be difficult — and the Education Department said that was the reality for both itself and borrowers.

The Government Accountability Office, a government watchdog that oversees federal spending and performance, released a report last week analyzing the effects of restarting student-loan payments on May 1.

President Joe Biden extended the pause on payments for the third time in December. While he did not explicitly say it would be the "final" extension, as he did in August, he said borrowers should "do their part" in preparing to resume their debt payments.

The GAO said Education Department officials "expect it will still be a challenge to motivate borrowers to resume repaying their loans after over two years of payment inactivity."

"In addition, after months of informing borrowers that payments would resume in February 2022, Education's outreach efforts must now shift towards preparing borrowers for the new May 2, 2022, start date after the most recent extension of loan relief," the GAO added.

To address the "challenge" of transitioning 43 million federal borrowers back into repayment, the GAO said the Education Department emailed a total of 125.6 million monthly messages to about 34.9 million borrowers from August to November. As of December, it had valid email addresses for 87% of borrowers affected by the payment pause. It plans to continue email outreach to ensure borrowers are aware of the May 1 restart date.

It will also reach out to certain borrowers, including those at increased risk of falling behind on payments, those in default on their loans, and those who had automatically paid their bills before the payment pause. Insider reported last week that the GAO found 50% of federal-student-loan borrowers were identified as at risk of falling behind when payments resume.

Before the third payment-pause extension, Richard Cordray, the Education Department's head of federal student aid, said challenges would arise when payments were set to resume on February 1. He said in September that transitioning tens of millions of student-loan borrowers back into repayment would be a significant challenge and that the multiple extensions of the payment pause sowed "tremendous confusion about what even the immediate future may hold."

"The old saying is that 'the wish is father of the thought,' and we can expect that many, many borrowers will not be eager to return to repayment when they have been led to believe, or even to hope, that was never going to happen," Cordray said. "Getting over that psychological hurdle with millions of Americans may be a much harder job than we know."

Even so, the Biden administration has been clear in its messaging that borrowers should plan to restart payments in 90 days, while lawmakers and advocates say that if the pause can keep being extended, there's no reason student debt cannot be canceled altogether.