One of the benefits enjoyed due to the start of the Pandemic is how payments, interest accruals, and collections of defaulted federal student loans have been frozen. This hold started with the CARES Act, then due to extensions from former President Donald Trump, former Education Secretary Betsy DeVos, and President Biden. by Executive order, President places repayment on hold till the end of January 2022.
About Student Loan
According to reports from the Federal Reserve Bank of New York, the average student loan debt in 2020 has reached an all-time high of $38,792 and collectively has reached $1.6 Trillion. Over 32% of American Students will go into debt to get through college.
Betsy DeVos, a former Secretary of Education said that “the Federal Student Aid’s portfolio is nearly 10 percent of our nation’s debt.” There are students loans in almost every age bracket. According to reports from the U.S. Department of Education. Borrowers ages 25 and 34 had over $500 billion, Adults ages 35 to 49 had debts totaling $613 billion, even older ones (retirees) ages 50 to 61 owe about $273.7 billion in student loan debt.
Student Loan Repayment Reopened
By February 2022, President Joe Biden plans to restart federal student loan payments. After it had been Freezed for nearly 2 years due to the Pandemic.
White House press secretary Jen Psaki said during a briefing Friday said that the Biden administration will release more details about the plans in the coming weeks.
“We’re still assessing the impact of the omicron variant, but a smooth transition back into repayment is a high priority for the administration. The Department of Education is already communicating with borrowers to help them to prepare for a return to repayment on Feb. 1 and has secured contract extensions with loan servicers.”
What people are saying.
T’Jae Freeman, a recent graduate of the University of Texas has his opinion about restating the repayment of the loan. She believes that the freeze has really aided his finance, but the freeze should not be lifted yet because the Pandemic is still here.
“It’s just another reminder that we’re not being heard and our concerns are not being taken into consideration, it also is stress-inducing, because a lot of people are in the same situation (as me) with being a graduate and also just now working. So we don’t really have time to get everything in order and plan to start paying for loans.”
“We’re still in a pandemic. The pandemic has not ended,” Freeman said. “For a lot of people, it’s been harder for them to find jobs or even work, so I feel like the payments should not restart until the pandemic is over with, and we have that pressure off.”
Another person Amber Bradshaw, a student at Austin Community College, said
“I’m a single mom. I’m also working part-time and having to go to school. It was our relief, not having to pay those (loans) back because we got to use that money to do other things, I’ve had to put that money towards other bills, like electricity and more food for the house and … having to dip into (the money) is really going to set us back even more.”
According to Campaign Promises.
During his campaign for president, Biden said he supported canceling up to $10,000 in student loans; and has since canceled more than $11 billion in student loan debt nationwide for people with disabilities, borrowers who were defrauded by their college or university, and people seeking public service loan forgiveness.
Is this all he is going to do or is he still going to cancel up to $10,000 in student loan debt for each borrower?