TAMPA, Fla. — In May, the moratorium on student loans will be over after more than a two-year pause on federal student loan repayments.
This means millions of people will have to start paying back those loans every month.
Despite promises from President Joe Biden about $10,000 in student loan relief, the issue has reached a stalemate in Washington, and now the clock is ticking for students fresh out of college that may not be able to afford to pay the loans back.
What You Need To Know
- The moratorium on student loans will end in May, meaning millions of people will have to start paying back those loans every month
- Despite promises from President Joe Biden about $10,000 in student loan relief, the issue has reached a stalemate in Washington
- As payments resume soon, one student says she is worried as her income will make it difficult to start paying back her loans
“My mom always says you can't bleed a rock,” said Hillsborough Community College Student Nicole Hoffer.
Hoffer is in her final semester at HCC and majored in music. Currently working at the HCC Campus, Hoffer says her income will make it difficult to start paying back her $11,000 in loans.
“I don’t have money for them to take, so am I worried? Absolutely, yes. Am I going to let it stop me from pursuing my career goals? Absolutely not.”
If payments are not made on time, many loans are structured for substantial interest rate increases that can add to the length of time it takes for students to pay them off.
Some congressional leaders have pitched loan forgiveness of up to $50,000, but have provided little details on who would pay for those loans if they are forgiven. Tax payers would likely have to pay the tab on U.S. Government backed student loans.
Hoffer says if the government can approve student loan forgiveness, at least for some students, that money would get put back into the economy and help boost businesses and jobs.
“That would be the first thing we did, was like get a car. Probably get apartments that aren’t like poop piles that are depreciating all the time. I know for a fact that during the pandemic, when we were getting those $1,000 payments, all of that went back into, like, re-investing into my life and my future, which is what they want, I think. It seems like that’s what they want.”
Hoffer is right about the idea behind those pandemic stimulus checks.
However, some experts say infusing more money into the economy can create a breeding ground for more inflation, at a time when inflation is already spiking.
And any student loans forgiven that taxpayers would be responsible for, politically, may be an extremely tough sell to the American people.