Rep. Mary Jane Wallner represents Concord Ward 5 and Hopkinton.
At the beginning of the pandemic, with tons of economic uncertainty, the federal government put a moratorium on all student loan payments. In March of 2020, the economy was shutting down and American workers were losing their jobs in massive numbers. Borrowers with student loans in repayment desperately needed debt relief in order to keep a roof overhead and food on their table. It was a bold, unprecedented response to an economic and public health crisis, but instrumental in helping to buoy a floundering economy.
Since 2020 the moratorium has been extended numerous times and has been a buffer to borrowers now dealing with dramatic inflation brought on by the war in Ukraine and constricting fuel and food production. It’s a fair assessment to say the moratorium has worked and borrowers’ budgets have benefited. It’s highly unlikely all student loan debt will be forgiven and at some point repayment of these loans will start again.
The next deadline to end the moratorium is August 31st and it’s unclear whether it will be extended and for how long. What is clear is that borrowers should not be unprepared when loan repayments resume. It’s imperative that the federal Department of Education and loan servicers work with Granite State borrowers so they can plan for the added stress to their budgets and not jeopardize their ability to pay for other essentials like housing, food and transportation.
In all likelihood, interest rates will continue to climb. Unfortunately, the current moratorium is set to expire on August 31st and a new school year is about to start. Most household budgets are already set. It’s not fair to these borrowers to drop another financial surprise on them at this late date. The federal government cannot forget those who would be impacted by the end of the student loan payment freeze — hardworking Granite Staters trying to make ends meet.
At this point, it’s critical for President Biden and his team to commit to a payment restart date later this year and develop a plan so that borrowers and the market have certainty on the next steps that will follow. Setting a date certain that student loan repayments will begin will give Granite Staters time to figure out how to work that payment back into their budgets and will give time for the Department of Education to make sure that as student loan payments restart, borrowers have the necessary protections and are not caught off guard by a sudden restart date.