Student loan payments have been paused for over two years. Payments are set to resume on September 1. The deadline has been pushed back before, but there’s no word on whether President Biden will extend it again.
About 800,000 Coloradans still owe on their federal student loans.
According to Student Loan Hero, the average balance is around $34,000.
The average borrower’s payment in the state is about $307 every month.
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Recent grads like Callie Glidden have appreciated the break from paying, and the financial security that comes with having extra money in her wallet.
“It’s like $250 a month and I’m not used to paying that,” said Glidden. “I just don’t think we’re necessarily through the break of recovering from what Covid took from us, financially, emotionally, physically,” said Glidden.
The payment pause is scheduled to end as inflation blows up the budgets of borrowers.
“Most of us have taken that money and allocated it elsewhere. Some of it’s simply your normal household expenses like food, gas, childcare,” said Mary Jo Terry, managing partner at Yrefy.
In addition to inflation, student loan interest rates increased on July 1.
Interest hasn’t been accruing on accounts since payments were paused in 2020.
Terry says the latest increase won’t impact current borrowers.
“If you’re going back into school and you’re getting a new loan, that will affect it, whether you’re getting a subsidized loan, unsubsidized loan or a grad plus loan. You’re going to start to see the increase associated with that,” said Terry. “It’s bad news if you’re going into school, but if you already have loans, they’ll stay where they’re at.”
There’s an ongoing discussion in the Biden administration about offering some amount of federal student loan forgiveness. Senators like Elizabeth Warren are urging the president to cancel loans up to $50,000.
“They key is, they want you to be in good standing,” said Terry. “There’s lots of resources. They want to keep you out of delinquency, out of default, out of having to pay those expensive collection fees.”
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Many who paid off their loans say forgiveness isn’t fair.
It took Sara Crawford decades.
“I was paying $800 a month for 20 years. It was just crazy,” said Crawford. “When I paid them off, I felt like life just started again, because I didn’t have that burden of that.”
Despite spending years paying off her debt, the retired teacher isn’t bitter about potential perks for borrowers.
“I think that would be amazing. I would be so happy for all those people because I don’t want them to have to go through what I did just to do your job and to get educated,” said Crawford.
