The Biden administration is expected to extend its pause on federal student loan payments through the end of August, according to sources familiar with White House’s decision-making.
This will be the sixth time the government extends this break.
“It’s going good so far, [but] financially not so great,” admitted Alyssa Rodriguez.
Rodriguez is a biology major finishing her second semester at Suffolk University in Boston. She is looking to pull out a second $10,000 unsubsidized federal student loan.
“It is a lot of pressure on me because, you know, I have to get a good paying job that’s going to help me out throughout these years,” she said.
For nearly two years, both subsidized and unsubsidized loan payments have been on pause during the pandemic.
That means Rodriguez has not accrued interest on her loans thus far.
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The White House is now expected to push that deadline back an additional four months to help those already dealing with debt.
“If it were to extend until when I graduate, then yeah, I’d love it, but I guess we’ll see,” said freshman Arthur Almeda.
The 18-year-old business economics major at Suffolk University felt compelled to get a student loan to help his parent with tuition.
“My parents both work two jobs — sometimes three — and my older sister just went to college, so they need to pay for both of our colleges, so they couldn’t do it like that. So we needed to take a loan,” said Almeda.
If the Biden administration moves forward with the extension, borrowers will not be asked to make payments on student loans until after Aug. 31 and interest will remain at zero percent.
But continuing the pause means the government is losing on billions in revenue.
“The government is not making that money, right? They are not making any interest on that debt and it’s just sitting there,” noted Certified Financial Planner at Peterkin Financial Nicole Morong.
Meanwhile, the moratorium has given relief to millions of Americans with student debt.
“No matter who you’re talking to, having the extra cash flow to either pay down the debt faster or to be able to accomplish their other financial goals, has been really helpful,” said Morong.
An estimated 43 million Americans owe about $1.6 trillion in student loan debt.
