Loans – Student financial aid moratorium extended, but what does that mean for UC students? | News
The U.S. Department of Education has extended a pause on student loan payments that was set to expire at the end of the month.
The forbearance period, which was set to end on Jan. 31, has been extended through Sept. 30 following a request from President Joseph R. Biden Jr.
Under the forbearance, federal student loan interest rates are set at zero and student loan payments and collections have been paused.
“Too many Americans are struggling to pay for basic necessities and to provide for their families,” the department said in a statement announcing the extension. “They should not be forced to choose between paying their student loans and putting food on the table.”
Though the forbearance matters more for graduates and former students who have already begun repaying their financial aid, current UC students can still enjoy some benefits.
“Student loan borrowers can now continue to enjoy an automatic interest-free pause on payments through September 30, 2021 on federal student loans,” Dave Peterson, assistant vice provost overseeing student financial aid, said in an emailed statement to The News Record.
“This relief does not extend to private student loans,” he added.
According to data from the Department of Education, as many as 55% of undergraduate students receive federal student aid.
Students attending four-year public universities took out an average of $7,500 in student loans, data shows. Full-time, financially independent students take out more in loans – an average of $10,200 – than students who still rely on their parent or guardian’s income.
But just because UC students who have accepted federal aid and are still enrolled in classes may be getting a break on their interest rates, that doesn’t mean they should put off paying their balance, according to Peterson.
“My recommendation is for federal student loan borrowers to continue to pay their student loans to reduce the principal balance and save money on interest,” he said. “Additionally, federal student loan borrowers should contact their student loan servicers and review the existing student loan repayment options for after September 30, 2021.”
According to a report from the Washington Post, Democrats at the Capitol are seeking to cancel up to $10,000 in student loan debt through congressional legislation.
Given the party’s razor thin majority in the Senate, it is unclear whether such legislation will be successful.