MINNEAPOLIS — It's been nearly 22 months since the Trump Administration placed a temporary pause on student loan repayments, but the Biden Administration will end the forbearance on Jan. 31, 2022 with payments resuming Feb. 1, 2022.
"It's going to take some adjusting to be able to get back into repayment I think for quite a few people's budgets," said Dan Park, a certified financial counselor with Lutheran Social Services.
The budgets of more than 40 million borrowers, to be exact, and with this payment restart comes a few changes.
Specifically for those in the public service loan forgiveness program.
"There is a short period of time now kind of a what they call the PSLF waiver where people that historically have not been able to qualify for loans or not have their loans setup the right way, are now able to temporarily qualify," explained Park.
For those who don't think they'd be able to afford repayments…
"There is the option there of the income driven plan that you can move your loans to, to be able to have the payments potentially more affordable," said Park.
This payment restart is coming at a time when progressive Democrats have been pressuring the Biden Administration to cancel all student loan debt or forgive $50,000 per borrower.
Arguing that the restart of loan payments would hurt local businesses and COVID-19 economic recovery, essentially removing $85 billion in spending.
"They have been extremely open to listening to us. Senator (Elizabeth) Warren and I had a 45-minute conversation with the president and his advisers just a few weeks ago," said Senate Majority Leader, Chuck Schumer. He went on to say, "we, on the inside, continue to push. This is going to happen."
"There's a big major amount of student loan debt that is out there that really kind of holds a lot of people back from being able to achieve what they want economically and financially," said Park.
But one major issue with this idea is for those who've already paid their loans off, Park says.
"There’s sort of this jealous factor of, 'Well these people are now going to get their loans forgiven, why didn’t I get that chance?'" explained Park.
President Biden says he supports forgiving $10,000 per borrower through traditional legislation and says if Congress sends him a bill, he'll sign it.
According to the Federal Reserve, Americans owe more than $1.7 trillion dollars in student loans as of the 3rd quarter of 2021.
For information on free financial and credit advising, including student loan counseling through Lutheran Social Services click here.