The CEO of a major student-loan company says 'it's hard for us to believe' Biden won't extend the debt payment pause 'given where we are in the calendar'
- Navient CEO Jack Remondi said in an earnings call he thinks Biden will extend the payment pause.
- Student-loan payments are set to resume on September 1, and Biden has yet to give an update.
Leadership of a prominent student-loan company doesn't see borrowers resuming payments anytime soon.
During a second quarter earnings call on July 27, Jack Remondi, the CEO of Navient, a Delaware-based corporation that services private student loans, said he thinks it's unlikely President Joe Biden will choose to restart payments on September 1.
In April, Biden extended the pandemic-era student-loan payment pause — for the fourth time — through August 31. Now, with with that date just over two weeks away and with no update on whether borrowers should prepare to account for another monthly bill, Remondi said Navient is anticipating further relief.
"I guess our sources are the same as yours, what we read in the press and what our — some of our former colleagues in the direct-loan servicing business talked to us about," Remondi said to an analyst on the earnings call. "And that has just been that the department has said don't communicate with customers yet. I think given where we are in the calendar and the end date of Aug. 31, it's hard for us to believe that it does not get extended."
"Our working assumptions is that the 0% interest in the payment waiver will extend through all of 2022," Remondi added.
He was referring to recent guidance the Education Department directed toward federal loan companies instructing them to halt messaging surrounding the payment restart — an action the department took prior to the most recent payment pause extension in April.
Navient received approval from the Education Department to shut down its federal loan-servicing operations in October, transferring 6 million of its federal borrowers to a new student-loan company, Maximus. It continues to manage private student loans and borrowers within Federal Family Education Loan program, a portion of which have been included in the payment pause.
Remondi is not the only student-loan CEO who sees an extension on the horizon. Anthony Noto, the CEO of SoFi — one of the largest student-loan-refinancing companies — said during the company's second-quarter earnings call in early August that he believes the student-loan payment pause will be extended through January 2023. SoFi was among several lenders who lobbied Congress in March to restart payments.
As Insider previously reported, this is now the closest it has ever been to a student-loan payment resumption without an update from Biden, and it has borrowers and loan companies awaiting guidance on any upcoming relief. Additionally, Biden is in the process of making a decision on broad loan forgiveness, reportedly considering $10,000 in relief for borrowers making under $150,000 a year, and he has said himself that he will announce that relief before August 31.
Given Biden has yet to announce a decision on both a payment-pause extension and broad debt cancellation, though, both Democratic and Republican lawmakers are using the time to sway the president's final decision. A group of Republicans recently introduced legislation to end targeted loan-forgiveness programs and resume student-loan payments, while over 100 Democrats wrote a letter to Biden urging him to extend the student-loan payment pause and cancel debt.
"Resuming student-loan payments would force millions of borrowers to choose between paying their federal student loans or putting a roof over their heads, food on the table, or paying for childcare and health care — while costs continue to rise and while yet another COVID-19 variant increases hospitalizations nationwide," the Democrats wrote.
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