With the two-year pause of federal student loan payments potentially coming to an end in May 2022, students are now concerned about what plans are to come for student loan payments and what actions they need to take.
The CARES Act that was signed in March 2020 by former President Donald Trump froze nearly 42 million borrower payments. The relief was then extended to January 3, 2022.
On Joe Biden’s first day of office, he signed an executive order to continue the pause of student loan payments and in December he extended the relief payments to May 1, 2022.
The COVID-19 emergency relief for federal student loans might be coming to an end. Therefore, borrowers will start repaying federal student loans, have an interest, and have debt collection.
Community members speak about the struggles that they have faced when it comes to repaying student loans.
“I have a student loan. The good thing is that we do not have to pay until May. I recently got an email about student loan payments possibly continuing, but when you’re going to school you don’t really think about it until after you finish,” says Evelin Moreno. “It is kind of hard if you don’t have a stable job because your working and money goes towards the loan, rent, bills, and among other things. I think we should have an education but student loans are overboard because we are partially working for them. They take medical taxes and other benefits from our check which also decreases the amount of money we have left.”
Federal student borrowers are being indicated to use a loan simulator to find a repayment plan that will work best for them once payments start again.
After having a zero percent interest rate and paused loan payments, students are concerned about the COVID-19 emergency relief possibly coming to an end.
One of the biggest struggles is that students find it difficult to balance loan payments and savings.
“I think that student loans are a good option for a long-term career. It affected me to pay it because I could not work the places I wanted. More experience in work was needed and then my family grew. Students should be helped with scholarships. Students loans are good if you are thinking about working right after the career you get,” said Gabriela Duran.
Other reasons why students struggle to pay back their debt is not knowing borrower rights and options to make their payments more affordable.
Students are able to reach out for help at studentaid.gov. It is recommended for students to update their personal information before loan payments start again. Students can also apply for an IDR plan to make payments more affordable.