The pause on student loan payments is set to expire on Aug. 31, which is also the day that President Joe Biden will decide on broader federal student loan forgiveness, according to White House press secretary Karine Jean-Pierre.
What You Need To Know
- The pause on student loan payments is set to expire at the end of August
- President Joe Biden is expected to make decision on student loan forgiveness soon
- A local college graduate said student loan forgiveness would be a relief
For many of the nearly 40 million Americans with student loan debt, this decision can be life-changing.
Andrew McConell graduated from Cleveland State with a Master of Arts in History. He explained that paying off his student loans has been a challenge for many years.
“You’re talking about the decision between paying rent and one or two utilities or paying your student loans,” McConell said. “For several years after grad school, I just didn’t make enough money to pay anything.”
McConell said he now has a better grip on his student loans than he did when he first graduated.
“So in total, I have about $88,000 in student loans,” he said.
The pause on student loan repayment, interest and collections that was first enacted in march of 2020 is set to expire at the end of this month.
There are some reports that President Joe Biden is considering forgiving $10,000 in federal student loan debt for most borrowers, along with another extension.
Summer Anderson is a certified financial planner. She said she's keeping a close eye on the potential for a student loan pause. "There are talks right now that there is the potential that $10,000 can be forgiven and it seems there might be an income limit associated with that," she said.
She said her advice is to make a budget now in case student loan payments resume. "You have to go back to your original budget and figure out what your non-discretionary expenses are, which are your expenses that keep a roof over your head, your family fed, your family going. It needs to be assumed that your student loan payment is one of those non-discretionary expenses and how are you going to fit that back into your budget," she said.
McConnell said $10,0000 in student loan forgiveness would make a huge financial impact.
“A lot of people I know, we all have these loans, unless you were in the military or something.” McConell said. “That would change the game of the money I get to keep off of my paychecks.”