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

METRO ATLANTA — High school seniors across the metro Atlanta area and country are weighing their final collegiate options for the May 1 college deadline.

However, for those already paying student loans, they are looking ahead to a different deadline.

We are talking about the moratorium on student loan payments. Weeks after the Biden administration extended the deadline, economists are weighing in on how consumers need to protect themselves as an Aug. 31 deadline approaches.

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Channel 2′s Ashli Lincoln reviewed reports from economists who are weighing in on if consumers should skip or make the payments.

This is the sixth extension since the pandemic began.

Olivia Mudd is one of millions of Americans doing a financial balancing act when budgeting paying back student loans.

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

Mudd has loans out not just for her own education, but also for her children.

“I have a law student, I have a masters in counseling myself, and I have a student at Clark Atlanta University,” she said.

She took advantage of putting a pause on payments during the student loan moratoriums, but after President Biden announced extending the student loan moratorium through August, consumer experts said if borrowers are able to pay, they should.


Consumer advisor Clark Howard said borrowers should continue to pay off loan debt during the payment pause while it is interest free, meaning more money will go towards the principal, resulting in the loan being paid off faster.

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

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

Economists said during the moratoriums many borrowers took loans out for high price items like mortgages or car purchases.

They said when the payments resume on Sept. 1, some people might find their budgets being stretched thin, especially with record setting inflation rates.

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“The days of working one job is gone in some aspects, that is why I think that we have to be really more proactive when it comes down to supplying the support and relief when it comes to people who are in need and not just those who are able to pay for their students 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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