TAMPA, Fla. — President Joe Biden announced Wednesday that his administration is extending the pause of federal student loan repayments.
“I think it’s a reasonable thing for them to do, to extend it,” said Jacqueline Rodriguez.
Rodriguez’s daughter is A freshman at HCC. She didn't have to take out student loans. But they know folks who did, and they know the struggle they went through.
She was happy to hear about the president’s decision to extend the student loan payment freeze.
“Anything you can do to help them for a little bit longer, just to give them a little time to catch up, to get their finances in order. I think it’s a plus,” said Rodriguez.
The pause will now end on August 31 instead of May.
Biden says while the economy is recovering from the pandemic, people still need help.
"If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability," a statement from the president said.
"I’m asking all student loan borrowers to work with the Department of Education to prepare for a return to repayment, look into Public Service Loan Forgiveness, and explore other options to lower their payments," Biden said.
The pause in student loan payments was first put into place in March 2020 under former President Donald Trump.
While this is good news for many, financial experts warn folks not to get too comfortable.
“It’s a band-aid on the problem,” Jon Wax, CFP said. “ The problem is people’s spending habits aren’t in line with their finances.”
Financial advisers like Wax suggest saving the money you have leftover from not paying the loans now, that way you are prepared when August 31 gets here.
“If they don’t have a plan and prepare, people will find themselves in some real trouble,” he said.