COLUMBUS, Ohio — Since March 2020, most federal school loan payments have been on hold because of COVID-19 emergency relief. But that may soon be up, and borrowers might have to start paying again.
What You Need To Know
- Forty-three million Americans with Federal Student Loan debt have benefitted from the COVID-19 Emergency Relief, according to the Education Data Initiative
- Most Federal school loan payments have been on hold since March 2020
- The relief is scheduled to expire Aug. 31, but the Biden administration may extend it
- The Biden administration is also considering forgiving as much as $10,000 in debt for people who make less than $125,000 a year
In 2019, Columbus resident Akii Butler graduated from Kent State University with a bachelor’s degree in journalism, accruing nearly $32,000 in school debt. He hoped to land a job as a reporter and begin paying off his loans.
“I had this dream of starting my own magazine and focusing on all R&B music and different things like that,” said Butler. “So that sort of pushed me to sort of go into that field.”
But he said finding a job in his field became a challenge because of where he lived and the limited opportunities available. So he started working at fast-food restaurants like McDonalds.
“I had to defer my loans because I can’t pay these loans back on a McDonalds salary,” he said. “Like my whole check would go to one loan payment.”
He said trying to pay his car loan, car insurance and other bills was enough alone.
“I’m going to prioritize me having a car and car insurance, over paying back a student loan,” he said. “Because I don’t have a car to get to and from work, then you’re really not going to see the money.”
Butler is one of nearly 43 million Americans with Federal Student Loan debt to benefit from the COVID-19 Emergency Relief, according to the Education Data Initiative. The relief is scheduled to expire Aug. 31, but there’s a possibility the Biden administration may extend it.
Even with Butler now making more than $50,000 per year, he said an extension is something he desperately needs.
“My biggest fear is that I’m probably just going to default, which then makes me feel like, well maybe I need to put these in forbearance and defer them again until I make enough money or be able to pay it,” he said.
Not only is the Biden administration considering an extension but also forgiving as much as $10,000 in debt for people who make less than $125,000 a year.
“I do appreciate the $10,000, don’t get me wrong, I do,” he said. “Because it helps. But I don’t want them to just cancel $10,000 and then there’s nothing done, or nothing set in place to deal with interest rates and things like that.”
The Biden administration is expected to address the loan situation during an announcement Wednesday.
