Student loan payments set to resume on Feb. 1
“… A smooth transition back into repayment is a high priority for the administration.” White House press secretary Jen Psaki
President Joe Biden plans to restart federal student loan payments in February after they were paused for nearly two years to address the financial strain of the COVID-19 pandemic.
The federal government suspended payments on most student loans, as well as interest and collections on defaulted loans, in March 2020. Earlier this year, the U.S. Department of Education extended the payment restart date from Sept. 30 to Jan. 31 to give borrowers time to “plan for restart and ensure a smooth pathway back to repayment.”
White House press secretary Jen Psaki said during a briefing Friday that the plan was still to allow the pause to expire Feb. 1 despite calls from progressives to extend it. When payments restart, millions of people will have to start repaying tens of thousands of dollars even as the COVID-19 pandemic continues to affect people’s finances.
Psaki said that the Biden administration will release more details about the plans in the coming weeks, and officials also will be engaging with federal student loan borrowers about providing resources.
“We’re still assessing the impact of the omicron variant, but a smooth transition back into repayment is a high priority for the administration,” Psaki said. “The Department of Education is already communicating with borrowers to help them to prepare for 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 borrowers live in Texas, with an average of $33,123 in federal student loan debt each. According to federal data, Americans owed a combined total of at least $1.59 trillion in federal loans in the third quarter of 2021.
‘We’re not being heard’
T’Jae Freeman, a recent graduate of the University of Texas, said without the pause of student loan payments during the pandemic, she might not have been able to balance her other financial obligations, such as rent, utilities and groceries.
Freeman, who is a market research associate, said the pause allowed her to save some money, but now she’ll have to readjust her finances in February when payments resume.
“It’s just another reminder that we’re not being heard and our concerns are not being taken into consideration,” Freeman said. “It also is stressinducing, 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 really have time to get everything in order and plan to start paying for loans.”
Freeman, who has at least $25,000 in student loans, said it feels like the Biden administration is not taking her concerns and the concerns of the people who voted for Biden into consideration. She said Biden should cancel some of the student debt, or continue to pause the payments until the pandemic ends.
“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.”
Campaign promise
Biden said during his campaign for president that he supported canceling up to $10,000 in student loans per borrower, according to CNN, but he has not done so during his presidency. He also has said that he disagrees with calls to go further and cancel up to $50,000 of student loan debt per borrower.
Biden has canceled more than $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, but the amount he forgave is just a fraction of the total amount of student loans held by people in the U.S.
Amber Bradshaw, a student at Austin Community College, said she’s confused with Biden’s decision to let the pause expire and doesn’t know how she’ll be able to start paying her student loans back once she graduates from school in the spring. She said having to repay loans is really going to set her back financially.
“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,” Bradshaw said. “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 really going to set us back even more.”
She said she planned to attend Huston-Tillotson University after she graduated with her associate degree, but she might have to move home and delay her plans for future schooling until she can pay off thousands of dollars in loans. She said wishes Biden would further extend the pause on the loan repayments or cancel people’s debt.
“I’m one of the people who were excited to vote for him,” Bradshaw said. “I just thought that was one of the things that we would surely get out of this presidency, but it’s not.”