Extension will give students extra month payment free
MORGANTOWN — Education Secretary Betsy Devos extended the existing student loan moratorium through Jan. 31, 2021 — exactly one month beyond the date on which it was initially set to end.
The student loan moratorium, enacted in March due to the COVID-19 pandemic, was previously scheduled to close on Dec. 31.
Those affected by the resumption of student loan payments expressed concern and frustration toward the situation despite the one-month extension of loan forbearance.
Madison Stout, who attended Alderson Broaddus University, said the reinstatement of student loan repayments in addition to the costs of caring for her infant son has resulted in anxiety.
“[The student loan moratorium] allowed some breathing room to try to stay afloat, especially after we had our son in September and a fair amount of my maternity leave was unpaid,” Stout said.
Stout said the COVID-19 pandemic has created uncertainty regarding daily living, employment, and daycare for her son. The reinstitution of federal student loan payments adds to the uncertainty of her family’s financial situation.
“… It’s hard to know whether there will be a month where we just won’t have all the money we need to stretch in every direction,” Stout said.
During his campaign, President-elect Joe Biden presented his administration’s plan for student loan forgiveness. Biden said $10,000 in student debt would be forgiven for all borrowers. For those who attended public universities or minority-driven universities and earn less than $125,000 per year, Biden intends to forgive the remainder of their debt even after the initial $10,000.
Joshua Coombs, a 2008 graduate of Fairmont State University, said he accumulated $18,000 in student debt, and still makes payments of $288 per month. Coombs expressed gratitude for his stable financial situation as a result of steady employment.
“But if I were to lose my job, I’d be in trouble financially,” Coombs said.
Coombs also addressed Biden’s student loan forgiveness plan.
“[I know] he wants to forgive up to $10,000 per person, and I think that would be a good start,” Coombs said.
Chelsea Terrell attended Mount Holyoke College and Duke University, though she only accrued student debt from Duke — totaling around $14,000. Her husband’s debt has them looking at $37,000 in student debt.
Terrell said the COVID-19 pandemic resulted in her family’s income reducing by half. Had she been responsible for student loan repayment, Terrell said her family would have been forced to seek out unemployment benefits or other federal assistance.
“Since our income has returned to where it was prior to COVID, it will not put a financial strain on my family,” Terrell said of the reinstatement of federal student loan repayment. “However, delaying payments [further] would allow us to build our savings back up, which would reduce our stress significantly.”
Jacqueline Hellen, assistant director under Mountaineer Hub at West Virginia University, said while it is a common misconception that students completing degrees will be affected by the resumption of student loan payments, this is not the case.
“The student loan moratorium essentially … put a hold, they refer to it as an administrative forbearance, for any students who were already in repayment, so that includes any students who were not attending, any students who had federal student loans that were below half-time … or students who have graduated previously,” Hellen said.
Hellen said students who are in school at least half-time (with 6 or more credit hours per semester) are considered automatic in-school deferments when it comes to student loan repayment, meaning that as long as they are enrolled as a student at a university, they do not have to begin the loan repayment process.
“So if you’re already attending school, you’re a current student, it didn’t affect you in the first place,” Hellen said.
Andrew Pentis, senior writer at Student Loan Hero and certified student loan counselor, said Student Loan Hero estimates approximately 22 million Americans will have to resume student loan payments after Jan. 31.
“A lot of people who haven’t been staying up to date on their student loan repayment, they’ll need to take some steps to make sure that they can have a nice on-ramp toward resuming their repayment,” Pentis said.
He said federal student loan borrowers should contact their federal loan servicers to ask about options regarding their student loan repayment, including the possibility of enrolling in payment plans that could lower monthly payments, or applying for additional deferments or forbearances.