Mizzou’s economics professor and his students discuss U.S. Department of Education hints at extending student loan payment pause
COLUMBIA, MO (KMIZ)
Federal student loan repayments are set to resume in May after being paused for more than two years due to the pandemic, but US Department of Education guidelines appear to suggest the pause will be extended.
The department recently emailed advice to companies that service its $1.6 trillion student loan portfolio saying, “Do not contact borrowers about this May 1 deadline.”
The email did not explain why repairers should be quiet about the deadline, nor did it say that the deadline would change. However, the order suggests the Biden administration is considering another extension of the student loan payment freeze.
Mizzou economics professor Joseph Haslag said the extended break would not have an immediate impact across the country. “Immediate and recognizable identifiable impacts are almost nil right now because we have been in this situation before. The bigger question is whether there will be debt cancellation and how big will that cancellation be” , Haslag said.
Biden has previously promised to offer tuition-free community college to students across the country.
Haslag says he fears what this would mean for higher education. “If the federal government were to decide to make tuition free, what we would essentially be doing is reducing the average quality of higher education that will be offered to students.”
You start paying off most federal student loans six months after leaving college, but some Mizzou students say they’re already thinking about when their loans will arrive.
Junior student Hank Pelter said he would leave college nearly $25,000 in debt and said a lot of people are in the same boat or worse.
“Some of my friends are taking out loans right now and extra loans just to pay the rent, so yeah, everyone’s a little nervous right now and everyone’s just trying to find a job outside of school “Pelter said.
Senior, Tucker Jones, says the effects of the pandemic are not over. “I’m leaving school currently debt-free and I’m still stressed about money and how it’s going to work out, so imagining adding student loan debt on top of that would be really tough.”
Freshman Iris Heng says she doesn’t have a lot of debt and plans to rack up a lot of debt over her next few years at college. “We’re college kids, it’s not like I make six figures a year, so I know it would definitely benefit me if I could push it back a bit.”
Freshman Marissa Moore says many students hope to continue their education after a four-year bachelor’s degree, which would mean it would take longer for the debt to be paid off.
“I have a high school teacher who has been teaching for 40 years and she just paid off her student loans a year ago,” Moore said.
Earlier this month, White House Chief of Staff Ron Klain hinted the hiatus could be extended.
The president has made earlier promises to forgive $10,000 in student loan debt per borrower, but has yet to do so, and now faces mounting pressure from the left to follow through.
Senate Majority Leader Chuck Schumer (DN.Y.) tweeted March 4 in response to Klain’s comments that “today would be a great day for President Biden and Vice President Harris for #CancelStudentDebt.”