COLUMBIA, S.C. — Millions of student loan borrowers are relieved after President Biden on Wednesday extended the pause of student loan payments and interest until May 1, 2022.
The payments, which were originally expected to start on January 1, have been paused for nearly two years since the start of the pandemic.
“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” the President said in a statement.
According to the U.S. Department of Education, 690,000 South Carolinians have student loans. The average amount of debt is $36,000 per person.
For borrowers like Kim, this extension is a blessing. She said her goal is to pay off $18,000 of student loan debt by July and the 0% interest rate is allowing her to do that.
“I'm just like, thank god, keep it at zero just for a little bit. Just let me get one more [loan] paid off,” said Kim.
Financial Advisor from Capital City Financial Partners said just because you don't have to make payments, doesn't mean you shouldn't. With interest rates at 0%, he says it's the perfect time to get ahead.
“They're incentivizing you to spend your money versus pay down debt. So they're, they're incentivizing you to do bad things, to be honest with you," said Norris. "So, you know, it's still an incentive. So paying down debt while at zero is not a bad idea.”
According to the federal reserve, the average American pays $222 a month towards student loans. For many, it can be tempting to spend this extra cash.
"I would much rather go spend my money on stuff that I enjoy," said Kim. "Right now I have $2,500 that I shell out every month towards something that’s going away. You know, I don't get to go use it for what I want."
But Norris encourages everyone to save their money instead of spending it. He said it's because its not a matter of if student loans will return, but when they will return.
“Take advantage of that extra cash flow and build up that rainy day fund if you're going to need some savings, you're going to need a cushion. Especially if things get harder when these student loans come back into effect.”
Biden has previously said he supports canceling up to $10,000 in student debt, but he has argued it should be done by Congress.