FORT WAYNE, Ind. (WPTA21) - President Joe Biden hit the ground running by signing more than a dozen executive orders. At the request of President Biden, the Acting Secretary of Education has extended the freeze on federal student loan payments and collections and keep the interest rate at 0% until September 30th.
What this means is that for people with government-held student loans, there will be no required payments through the relief period, and no interest will be charged to balances during this period. In the past, loan providers notified individual borrowers after the extensions were made.
The typical borrower graduates with about $40,000 of debt.
ABC21 spoke with a graduate of Indiana Tech who owes just under that 40,000 average. Cortne Benford told us that he originally planned to keep paying on his loans even during the first extension, but after moving into a new place, he began to feel the pressure during 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 funds helped me with my residential stay and also, I didn’t have to worry about paying right now." Benford says.
We also spoke with a local financial expert and certified financial planner with Ameriprise Financial, Todd Larson, who told us that the freeze applies to all federally issued student loans not to private loans.
Larson says, "A wise thing to do during this freeze time is to go ahead and make payments. The student loans do not go away, we’re just postponing the inevitable."
After the signing the order, President Biden said "Too many Americans are struggling to pay for basic necessities and to provide for their families. They should not be forced to choose between paying their student loans and putting food on the table."
Biden's plan to help ease the student loan burden on many Americans includes a proposal to forgive at least $10,000 of it.
Although the proposal was part of Biden's presidential campaign, all the details haven't been released.