Biden Administration may extend federal student loan pause for 5th time
SPRINGFIELD, Mass. (WGGB/WSHM) - The White House is expected to extend the current pause of federal student loan repayment through the end of August, impacting tens of millions of Americans.
This will mark the fifth time this pause has been extended. It is currently set to expire on May 1st, but if extended, people will have until August 31st before they have to start making payments, something one graduate we spoke with is grateful for.
“I’m so happy about it,” said Katie Fitzpatrick of Belchertown. “I feel like it’s great for somebody like me.”
It’s a sigh of relief for some college graduates as a Biden Administration official said the government plans to extend the moratorium on federal student loan payments through August 31st, marking the fifth time the pause has been extended since March of 2020.
Katie Fitzpatrick graduated from SUNY Fredonia in 2020 and was laid off during the pandemic. She said it will be nice to have some extra time.
“I graduated college right into the pandemic, lost my jobs, and I haven’t really had the chance to work in the field that I studied in,” she said. “So, I’ve been using this time to save up all this money so I can eventually pay those back.”
She is not alone. Associate Professor of Economics at Western New England University Dr. Karl Petrick told Western Mass News that people have been using this break to help themselves in a variety of other ways.
“About 37 million people altogether, different ages, have benefitted from the fact that they haven’t had to pay, raises the amount of income available about $400 per person,” Dr. Petrick told us. “People were using it initially, paying down other debt, paying mortgages and car loans faster, reducing their use of credit cards.”
Now, with climbing inflation, that money is needed elsewhere.
“They’re using that extra money to put gas in the car, to put food on the table, really, a way of keeping themselves afloat,” Dr. Petrick said.
Even with the extra time, Dr. Petrick said that once those payments start again, many will still be struggling.
“About one third of people that currently have their student loans in forbearance would face severe difficulty making a payment if we stopped it, and about half would face difficulty,” he said.
Some lawmakers are still pushing for the Biden Administration to forgive a portion of student loan debt. Senator Elizabeth Warren has advocated for canceling up to $50,000 per borrower, whereas President Biden proposed $10,000 while he was campaigning.
Fitzpatrick said that she is hoping the government works out some type of debt cancellation to help people out.
“I think any kind of student loan forgiveness would be great,” she said. “I think that’s a conversation that’s been happening long before this pandemic happened, and I think that the pandemic is really just a catalyst to having that conversation.”
An official announcement of the extension is expected to come Wednesday.
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