WINOOSKI, Vt. (WFFF) — The Biden Administration has extended a moratorium on federal student loan payments through January, allowing for borrowers to prepare, according to the Department of Education.
But how should they?
Scott Giles, president of the Vermont Student Assistance Corporation (VSAC), said borrowers will want to get a good grasp on their debt situation, as well as the tools that can help keep payments low. He said payment programs are available for some borrowers that will allow them to continue the pause. “A borrower who is really struggling or worrying about this should reach out, either to their servicer or VSAC for advice and counsel on how they can get into that program.”
On the flip side, if you’ve been doing well for yourself but still took advantage of not having to make payments, Giles said there’s good reason to get back in the habit before the moratorium is over.
“For those borrowers who continue to be able to work, they’ll be able to use the next five months, if they choose, to make payments,” Giles said. “It’s a period where there’s no interest, so it almost counts as a loan forgiveness for them.”
Giles said the fact we know a firm end date for the moratorium is helpful because even though people haven’t had to pay their loans for well over a year, communication from the education department wasn’t exactly clear.
“We were very concerned that if they had just gone ahead and turned on reinstated billing for these student loans on September 30 without any prep time, a number of borrowers would end up falling delinquent simply because they didn’t know that they were supposed to make payments.”
It’s estimated that Americans owe a combined $1.7 trillion in student loans. Some lawmakers, including Sen. Chuck Schumer, wanted to see the Biden Administration go further and work to address the broader crisis of student debt.
More from NEWS10
- Battle of rookie QBs as Patriots, Jets seek 1st win Sunday
- Vermont State Police investigate death of woman found in Lake Champlain
- Albany Police Pine Hills details arrest two men for robbery, handgun possession
- St. Clare’s pensioners ask Gov. Hochul to advocate for their financial relief
- Federal judge rules US can’t expel families via Title 42