Expert warns restarting student loan payments won’t be easy after another extension

News

KANSAS CITY, Mo. — After nearly two years, an expert in higher education is warning that restarting federal student loan payments won’t be easy.

Today the Biden Administration gave federal borrowers a reprieve from payments until May 1. They had been set to resume at the end of January.

“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” President Biden said in a statement.

Easing borrowers back into making payments that have been on hold for nearly two years is easier said than done, according to Robert Kelchen, professor and head of the Department of Education Leadership and Policy Studies at the University of Tennessee, Knoxville.

“There are going to be a lot of people, once payments start that just say, ‘I’m not paying this thing,’ because they’re frustrated by what’s happened. They wanted forgiveness and it’s going to be an administrative nightmare trying to get those people to pay,” he said.

The policy applies to more than 36 million Americans who have student loans that are held by the federal government. Their collective debt totals more than $1.37 trillion, according to the latest Education Department data. About a third of borrowers are in default or delinquency and the average monthly payment is $400 a month.

Kelchen said pressing the pause button as the omicron variant rages gives the Biden Administration some cover with progressive Democrats, who want debt forgiveness.

“It gives them an economic reason to do it and it gives them cover to support what is incredibly popular among the liberal wing of the Democratic party, which is student debt forgiveness. Even a three month pause is a step toward debt forgiveness for some people.”

Biden has previously said he supports debt forgiveness of up to $10,000, but that he thought Congress should pass legislation.

Kelchen says even if some form of student loan debt is forgiven, borrowers should budget and make a plan to start repaying in the coming months.

“Let’s say you have $20,000 in student loan debt and somehow $10,000 gets forgiven. You still have to pay back the rest,” he said.

In order to do that, Kelchen says there are a number of income-driven repayment plans that borrowers can use if they qualify.

“If you have student debt, I would still be preparing to pay, even if you’re hoping you don’t have to,” he said. “If your income is fairly low you can go into income-driven repayment plans and get help paying your loans.”

Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Trending Stories

Latest

More News

Digital First

More digital first