Student rates

Should you skip or keep paying your student loans during the federal break?

High school students in metro Atlanta and across the country are evaluating their final college options for the May 1 deadline.

However, for those who are already paying student loans, they are considering a different maturity.

We are talking about the moratorium on the repayment of student loans. Weeks after the Biden administration extended the deadline, economists are looking at how consumers should protect themselves as the August 31 deadline approaches.

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Channel 2’s Ashli ​​Lincoln reviewed reports from economists who question whether consumers should skip or make the payments.

This is the sixth extension since the start of the pandemic.

Olivia Mudd is one of millions of Americans who do a balancing act when budgeting for student loan repayment.

“Loans have been applied, so I’ll just say it’s a big number,” she said.

Mudd took loans not only for his own education, but also for his children.

“I have a law student, I myself have a master’s degree in counseling, and I have a student at Clark University in Atlanta,” she said.

She took advantage of the suspension of payments during the student loan moratoriums, but after President Biden announced the extension of the student loan moratorium until August, consumer experts said that if borrowers were able to pay, they should.

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Consumer Advisor Clark Howard said borrowers should continue to repay loan debt during the payment break as long as it is interest-free, which means more money will flow towards the principal, leading to faster loan repayment.

“The balance you have will have no interest charges and you will automatically be considered on time,” he said.

The Washington Post reports that only 500,000 out of 43 million borrowers were still making payments a year after the freeze began in March 2020.

Economists said that during the moratoriums, many borrowers took out loans for high-priced items like mortgages or car purchases.

They said when payments resume on September 1, some people may find their budgets tight, especially with record inflation rates.

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“The days of working one job are over in some ways, so I think we really need to be more proactive when it comes to providing support and relief to people in need. and not just those who are able to pay their student loans to go to school,” Mudd said.

Borrowers can also prepare by putting money in an interest-bearing account. So when payments resume, they will have money set aside in preparation.

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