University dean weighs in on pros and cons of paused student loan payments
LEXINGTON, Ky. (WKYT) - The White House plans to extend the pause on student loan payments.
The extension was announced after Democrats urged the president to extend the moratorium from May 1 to August 31.
“Roughly 70% of college graduates take on student loan debt. So it’s a real challenge for students. Delaying these debt payments really is an economic investment,” said Julian Vasques Heilig, the dean of College of Education at the University of Kentucky.
Heilig said we’re seeing this major increase in economic challenges right now, especially with inflation. So, he says, hearing the Biden Administration is extending the moratorium on federal student loan payments through August 31 is a good thing for the college graduates, and ultimately the economy.
“It allows those individuals to be able to put resources towards lots of other things that are expensive,” Heilig said.
Payments were scheduled to resume May 1 after being paused at the start of the pandemic. But the White House announced Tuesday, it’s giving borrowers more time to prepare for payments.
“But over the long term, if you really want to see the benefits, the loan forgiveness, either for educators, like we’ve seen talked about here in Kentucky, or at the national level, that’s where you’re going to see the most benefit,” Heilig said.
Heilig says loan forgiveness would especially benefit educators, nurses, and those with similar degrees with immense debt. He says it’s also an equity issue.
“Because of the wealth gaps in the United States, African American college graduates and college attendees have about double the amount of debt,” Heilig said.
While Heilig says if you can continue to pay back your loans, to do so. But he says it is a small percentage that’s able to do so.
The pause applies to more than 43 million Americans who owe a combined $1.6 trillion in student debt. Interest rates are expected to remain at zero percent during this period.
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