This article contains all the information related to Biden’s idea of restarting federal student loan payments. It also includes the student borrowers’ reactions and how they would impact them.
A restart of Student Loan Payments
US President Joe Biden is considering restarting federal student loan payments in February after they were stopped for about two years due to the financial problems posed by the pandemic.
The federal government debarred payments on most student loans along with the interest and collections on loans that were defaulted in March 2020. Previously this year, the US Department of Education increased the payment resumption date from Sept. 30 to Jan. 31 to give the debtors sufficient window to “plan for the restart and ensure a smooth pathway back to repayment.”
What the White House Staff Had to Say
White House press secretary Jen Psaki said on Frida that the idea was still to let the pause expire on Feb. 1 despite requests from progressives to stretch it. When the payments resume, millions of people, including many in Central Texas, will have to start repaying several thousands of dollars amidst the financial difficulties faced by the people due to the Covid-19 pandemic.
Psaki also said that the administration of Biden will communicate more details about the plans in the weeks ahead and officials will also engage with the loanees about helping with financial means. Psaki said, “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.”
According to the Education Data Initiative, more than 3.53 million student debtors are from Texas, with each having an average of $33,123. According to federal data, Americans owed a total amount of at least $1.59 trillion in federal loans in the third quarter of 2021.
Responses of the Borrowers and Difficulties Faced by Them
Jae Freeman, a current graduate of the University of Texas, said except for the halt of student loan payments amid the pandemic, she might not have been able to regulate her other financial needs like rent, utilities, and groceries. Now a market research associate, Freeman said the period gave her time for savings, but now she will have to adjust her finances again in February when the payments restart.
She added, “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.”
Freeman, who has at least $25,000 in loans, said it feels like the Biden administration is not considering the concerns of people who voted for him. She suggested that Biden should cut down some of the student loans or continue to halt the payment till the end of the pandemic. “We’re still in a pandemic. The pandemic has not ended.
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.”
During his campaign, Biden had said that he was in favor of waiving student loans per borrower up to $10,000 but he has not taken any steps to ensure that during his presidency. Rather he has voiced that he opposes calls to go farther and omit up to $50,000 of student loan per loanee.
Biden has canceled more than $11 billion in student loans in the country for people with disabilities, borrowers who were cheated by their educational institutions, and people wanting public service loan forgiveness, but the amount waived is merely a portion of the total amount of student loans taken by the people.
Amber Bradshaw, an Austin Community College student, said she is perplexed with the decision of Biden to let the pause expire and is clueless about how she will be able to start repaying her student loans after graduating in the spring. She said having loans to repay is going to be a setback for her financially. Bradshaw 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 going to set us back even more.”
She had planned to attend Huston-Tillotson University after her graduation but she might have to postpone her plans of further schooling and move home till she can pay off thousands of dollars in loans. She wished Biden would extend the pause on loan repayments or waive people’s debt.
She added, “I’m one of the people who were excited to vote for him. I just thought that was one of the things that we would surely get out of this presidency, but it’s not.”