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Student Loan Repayment freeze extended

What does this mean for Nebraskan borrowers?
Published: Jan. 10, 2022 at 8:13 PM CST
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NORTH PLATTE, Neb. (KNOP) -On Dec. 22, 2021, the U.S. Department of Education extended the student loan payment pause through May 1, 2022. This pause includes relief measures for eligible loans such as a suspension of payments, zero percent interest rate, and halted collections on defaulted loans. There is a combined $1.58 trillion in student loan debt divide between tens of millions of Americans.

In Nebraska, the average student debt balance is $28,684 which is 22% lower than the national average. Of the Nebraskans who have student loans, 5.9% of borrowers have $100,000 or more in outstanding student loan debt.

“Nebraska borrowers are not immune to the COVID-19 pandemic as it relates to their student loans,” said Andrew Pentis, Certified Student Loan Counselor. “For example, Lincoln’s student loan debt averages around $31,000.”

Students and families are reevaluating what it means to go to college. In recent years, student loan borrowing is decreasing. With shifts in students attending trade school and other education alternatives, and fewer student loans are being borrowed.

“We are seeing parents and students evaluate career paths as high school seniors or college freshmen,” said Pentis. “They are making decisions like attending a technology boot camp and gain certification which then allows them to borrow less in loans and enter the job market much faster.”

When an individual borrows federal loans, they are on a 10-year plan. A vast majority of borrowers do not pay in that period, and the payments can stretch into two decades. Student loan debt correlates with economic inequality.

“You will see borrowers with lower income take on more loans to afford higher education,” said Pentis. “They and their families saw that higher education as a pathway to break out the cycle to qualify for a higher paying job.”

There is assistance and various programs for those working to pay their student loans. The federal menu assistance options include changing payment plans, applying for forbearance (interest would still accrue) and state-based assistance programs.

For more information about Nebraskan borrowers:

https://studentloanhero.com/featured/nebraska-student-loans-refinance/

For more information about assistance programs:

https://thecollegeinvestor.com/student-loan-financial-aid-by-state/nebraska/

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