The head of the federal government's massive student loan portfolio recently described the pandemic payment pause as "an unprecedented challenge," adding that restarting payments for tens of millions Americans after January 2022 will be "a defining moment."

Federal Student Aid (FSA) Chief Operating Officer Richard Cordray made the remarks in a Sept. 16 speech to the Education Finance Council, a national trade association representing non-profit and state-based higher education finance organizations.

The "unprecedented challenge" of the interest-free payment pause "may seem that it would be easy just to stop doing something, akin to taking a rest, but that surmise would badly misunderstand the complexities of the financial aid world," Cordray wrote in prepared remarks obtained by Politico.

"This is a defining moment, and it is important that we get it right," Cordray said at another point. "At a time when so many have been struggling — with their health, their employment, their finances — we cannot burden them with poor execution on the return to repayment."

Federal actions amid the pandemic led to roughly $100 billion in total student loan forgiveness between March 2020 and September 2021, according to Education Department (ED) data and analysis from experts, providing a financial lifeline to the roughly 45 million student loan borrowers owing more than $1.7 trillion in outstanding federally-backed debt.

Millions of borrowers have been able to allocate money elsewhere to bolster their financial security amid the coronavirus pandemic, and borrowers who had defaulted on their loans also saw a pause on wage garnishments and other methods the federal government uses to recover funds.

"FSA has had multiple periods where it had to plan and prepare for return to repayment, only to reverse course, often at the last minute," he added, referring to the various extensions that have been enacted from the Trump to the Biden administrations. "The dilemma of how to communicate these mixed messages to borrowers has also been severe, with so many false starts no doubt sowing tremendous confusion about what even the immediate future may hold."

Student loan forgiveness debates rages on

Cordray noted that he anticipates a "psychological hurdle" for borrowers to resume payments after nearly a year of Democrats pushing for debt forgiveness.

"The old saying is that 'the wish is father of the thought,'" he said, "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. Getting over that psychological hurdle with millions of Americans may be a much harder job than we know."