Over 5 million Americans will resume student loan payments, which have been in default since the Covid-19 pandemic, starting on May 5.
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For Emma Schreiner, the restart of student loan payments is concerning.
“It’s really upsetting,” Schreiner said to our news partner WBNS 10 TV. “I have to take on a lot of debt to do what I want to do.”
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Schreiner completed her undergraduate degree debt-free but is taking out loans to pay for grad school in the fall, WBNS says.
“The loans I was offered—while it’s not enough—they are unsubsidized, so I’ll have to start paying them while I’m in school,” Schreiner said to WBNS.
Schreiner is not in default yet but millions are. The Department of Education says people who don’t make their payments starting next month could have their wages garnished, tax refunds withheld or reduced Social Security benefits.
Education Secretary Linda McMahon responded to calls for continued forgiveness, stating, “The executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear.”
People advocating for borrowers say there are affordable payment options.
“So many folks with student loans are also the same families that are navigating the unprecedented economic uncertainty, rising costs of food, rent and child care,” Aissa Canchola Banez, policy director at the Student Borrower Protection Center, said according to WBNS.
Experts recommend that borrowers in default contact the Default Resolution Group to begin monthly payments, apply for an income-driven payment plan and sign up for loan rehabilitation to avoid having your wages garnished, WBNS says.
Finance Professor at Cedarville University Jeff Guernsey says that while the five-year break was helpful for many, it’s time for a reset.
“If they can stay out of debt, stay out of debt,” Guernsey said to WBNS. “If they have debt, get it paid back as quickly as they can because debt is kind of like an anchor in our personal finances.”
Schreiner says she is not going to let the debt, or the pressure of repaying it, derail her future.
“It’s hard,” Schreiner said. “I really want to keep going after my dreams.”
The Department of Education reports that less than 40 percent of borrowers are current on their payments.
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