Student loan repayment freeze extension helps borrowers
The decision was made weeks prior to when the moratorium was suppose to end.
WICHITA FALLS, Texas (KAUZ) - President Joe Biden and the White House announced the current moratorium on student loan payments is being extended until May 1. The decision was made weeks prior to when the original moratorium was set to expire.
A student loan borrower was worried before this latest decision was made.
“Then you start thinking, ‘oh jeez how much did I put myself in the hole for?’,” Connor Whitten, a student loan borrower, said. “‘How much are my payments going to be when I get out?’”
Thanks to the freeze being extended, he has a chance to get his finances in order.
“Having the freeze has let me take a little bit of time off, get use to being graduated, trying to take a breath, get my affairs in order, get my resume updated, make sure all that is taken care of,” Whitten said.
Officials believe there was more than one factor into making this decision, with the big one involving federal loan servicers.
“Effective January 1, a lot of the servicers were cancelling their contracts with the federal government and I think that also went into the decision to extend the pause on federal student loan payments,” Michelle Wells, associate director for financial aid at MSU Texas, said.
Once the student loan freeze is over, officials believe many people will still be struggling to be able to pay off their student debt.
“I think we are going to see a big influx of phone calls from students needing help working with their student loan servicers to try and get into some other type of deferment or forbearance, which are both avenues to keep from making student loan payments,” Wells said.
She said for people who are not having financial constraints, they should be taking advantage of this opportunity.
“If they are making payments voluntarily then all of their payments are going to principle because there is no interest occurring on these student loans, and so students who have the means should take advantage of this time,” Wells said.
For people who are not able to, the freeze on payments is giving them less stress and more time to come up with a plan.
“Just having the freeze and having a few months to really lock something down, that is a lot less stressful on someone than you just graduated college, your payments are due and you have to find something as quick as you can,” Whitten said.
Officials say Biden’s campaign promise to end student loan debt is still being talked about within the White House walls and has not been ruled out. The main issue is reportedly if he has the legal authority under the Constitution to do it under executive power or not.
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