UTAH (ABC4) – President Biden is extending the pause on most federal student loan payments from the initial May 1 to now August 31.
Students are grateful for the extra months they get to pay back their loans, but financial experts are saying getting into the habit of not paying your loan debt can be harmful.
President Biden is giving college students a lifeline, giving them a couple more months of 0% interest before students need to pay back their loans.
“I have $7,000 of public debt and 25,000 of private debt,” University of Utah student Charlie Halbert said.
“I have about 6.5k in student loans,” University of Utah Student Mickey Gough said.
“I have $15,000 of debt,” University of Utah Student, Abbie Darling said.
These students say they are happy to have the extra time, adding that it can be difficult to pay back the loans when going to school and being paid a lower wage without their degree.
“It’s stressful, it’s a lot to figure just being straight out of high school it’s hard to take on these financial decisions,” Halbert said.
Some said it gives them time to focus on their education, rather than the daunting task of paying loans.
“Just having the security to know I don’t have to work towards paying off that interest is making going to school a little bit easier,” Darling said.
Others even hoping for more help in the future.
“More needs to be done because all of us are expected to get a college degree right now and it’s getting harder and harder to do that,” Gough said,
But some say waiting to pay your debt can have a negative impact.
“You could get used to the bump in income or seemingly bump in income,” Laura Ricaldi, an assistant professor at Utah Valley University said.
She said getting used to a certain standard of living can make it more difficult to pay in the future.
“You’re emotionally attached to that higher standard of living and now it’s gone,” Ricaldi said.
And though students don’t have to make these payments now, being late to those payments in the future can hurt more than their bank account
“It has a significant role in your FICO score,” Vance Dotson, a credit debt counselor said.
Late payments can lead to lower cards, making it difficult to get loans in the future. But for now, students still have some breathing room before they pay.
These are only for a select group of federal loans, which you can find here.