President Biden extends student loan freeze by 8 months – what it means for student loan borrowers
FORT WAYNE, Ind. (WPTA21) – President Joe Biden has taken the lead by signing more than a dozen executive orders. At the behest of President Biden, the acting Secretary of Education extended the freeze on federal student loan payments and collections and kept the interest rate at 0% until September 30.
This means that for people on government-held student loans, no payment is required during the relief period and no interest will be charged on balances during this period. In the past, loan providers informed individual borrowers after extensions.
The typical borrower graduates with approximately $ 40,000 in debt.
ABC21 spoke to an Indiana Tech graduate who owes just under 40,000 on average. Cortne Benford told us he initially planned to continue paying off his loans even during the first extension, but after moving to a new location he started to feel the pressure during the pandemic and decided to take advantage of the extension. .
“I was like, hey, I’m just going to keep the extra money to myself and the extra money helped me with my residential stay and also, I didn’t have to worry about paying yet.” said Benford.
We also spoke with local financial expert and Ameriprise Financial Certified Financial Planner Todd Larson, who told us that the freeze applies to all federally issued student loans, not private loans.
Larson says, “A wise thing to do during this time of freezing is to go ahead and make payments. Student loans aren’t going away, we’re just postponing the inevitable.”
After signing the order, President Biden said: “Too many Americans are struggling to afford basic necessities and provide for their families. They should not be forced to choose between paying their loans. students and put food on the table. “
Biden’s plan to help ease the burden of student loans for many Americans includes a proposal to forgive at least $ 10,000.
Although the proposal is part of Biden’s presidential campaign, full details were not disclosed.