By Hannah Reynolds
On his first day in office, President Joe Biden signed an executive order extending the pause on federal student loan payments until September of 2021.
In an attempt to aid students struggling to make ends meet while still tackling the COVID-19 pandemic, Biden extended the pause of payments first introduced in March of 2020 under former President Donald Trump. This means federal student loans will not enforce collection and interest rates remain at 0%.
It must be noted this order doesn’t extend to all students such as those not yet paying off their debts nor does it cover all loans. In an interview with David Deboer, Executive Director of Financial Aid here at Grand Rapids Community College, he reassured that “The current order is going to cover a vast majority of students in terms of the bulk of their student loans.”
Job losses, reduced hours and pay cuts are among many of the consequences of this pandemic that worsen the state of many individuals’ financial status. David Kamin, the newly appointed deputy director of the National Economic Council in the White House, explained how student loans are a financial burden to not only families but to the economy as a whole. This order serves to stimulate our economy while also providing much-needed relief to millions of Americans.
This executive order follows the relief provided by the CARES Act along with many other implements that the new administration has imposed in an effort to assist Americans during these uncertain and troubling times. This grace period was set to expire at the end of January, and this order allowed for the newly elected administration to make headway on their campaign promise to promote students and aid education.
The extension to the grace period allows many to use their paychecks to cover insurance costs, food, and other necessities while balancing school without the daunting repayment of their loans.
“Too many Americans are struggling to pay for basic necessities and to provide for their families,” the Education Department said in a statement. “They should not be forced to choose between paying their student loans and putting food on the table.”
Tara Truskoski, a teacher at Grand River Preparatory High School currently benefits from this extension as she explains how it has been “incredibly helpful during the pandemic.” The money she would usually pay towards the federal loans she used to further her education at Michigan State University then Grand Valley State University is helping her pay for other essentials: “I am using that money … for paying off my car, helping with medical bills, and paying for necessities while my side jobs are put on hold.”
With the pandemic still ongoing, many individuals have expressed apprehension in regard to the extended time frame claiming it is too long or isn’t enough time for a family to stabilize their financial status to take on the loan payments.
“It’s long enough for a plan … it gives families and even individuals time to get back on their feet financially and be able to then go back into repayment.” If the pandemic doesn’t see improvement, it also “gives time for the government to review and potentially extend it even further,” Deboer said.
President Joe Biden has a long list of major issues to improve and resolve with the time he has in office. With no time to waste, Biden began his first day with Americans in mind, as he signed 17 executive orders. In an attempt to aid struggling families and individuals with student loans, he extended the grace period to this September to allow those to prioritize their needs.