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.
Freeze of Repayment of Student Loan
Due to the Covid Pandemic, on March 13, 2020; Former President Donald Trump initiated a pause to the repayment of Student Loan Interest. 2 weeks later, Congress extended it for another six months in the CARES Act. Then-President Joe Biden using executive order extended it till the last day in January 2022.
No more Repayment Extension.
Almost everyone wanted the extension but President Joe Biden announced that what has been frozen will continue as from the 1st of February 2022. And this has got a lot of relations from Americans who have been relieved greatly with the freeze and were able to divert their funds into other things. Nothing lasts forever, we should have known.
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.”
Reactions from a Student Loan Debtor.
T’Jae Freeman, a recent graduate of the University of Texas has her 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 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.”
The promise from the Presidential Campaign.
President Joe Biden during his presidential campaign said he’d sign legislation that wiped out $10,000 worth of student loan debt for every student loan debtor. The power is with Congress to make this possible. He will sign it if Congress approves it first.
Although he has cleared up to $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.