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Debt borrowers relieved after President Biden pauses federal student loans

Student loan interest freeze: Check if your loan is eligible
Posted at 5:58 PM, Dec 23, 2021
and last updated 2021-12-23 19:29:48-05

KANSAS CITY, Mo. — People who owe federal student loans are expressing relief after President Joe Biden announced he would pause repayments until May 1st, 2022.

There's $1.6 trillion in federal student loan debt nationwide, according to the U.S. Department of Education.

In a state-by-state breakdown, the agency reports 384,000 borrowers with $12.6 billion in federal student loans in Kansas. Meanwhile, Missouri has 834,000 borrowers with $29.6 billion in federal student loans.

Katie Camlin is one of the Americans impacted by President Biden's decision.

“I sent a screenshot immediately to my partner, and I was just like thank God! I think he sent me like a gif of somebody dancing afterwards. We were very relieved," Camlin said.

Camlin said her federal student loan debt total is $26,000, and it impacts how she spends her income.

“I have my car payment and our rent and food and a little tiny fraction of fun money and that’s about it," Camlin said. "I’m not traveling. I don’t buy myself a ton of stuff. So, it would be nice to be able to save more and hopefully buy a house, that’s probably what I would do if they were canceled.”

President Biden's decision brought mixed reactions. On Twitter, U.S. Senator Bernie Sanders applauded the president's decision, but called on Biden to cancel student debt. However, U.S. Senator Tom Cotton argued canceling student loan debt is unfair to people who paid their debt or never took out a loan.

Camlin said she recognizes the responsibility that came with taking out her loans.

“It’s tough because we all agreed to the loans. I signed up for it," Camlin said. "But, I really feel like when I was 18, I didn’t quite understand the scope of what it means to have multiple thousands dollars in debt, and so cancelling it would be, I’d probably throw a party. It would be amazing.”

People saddled with thousands of student loan debt have sought help from Stephan Skepnek, an attorney with the Sader Law Firm in Kansas City, Missouri.

"Nothing would make me happier than to have student loan debt go away," Skepnek said. "I can find a different area of law to practice."

Aside from debt cancellation, the attorney argues there are realistic options the Biden administration should consider.

“Lowering interest on outstanding federal student loans, allowing for the availability of looser restrictions on public service loan forgiveness or allowing for people to obtain an additional discharge of their student loan debt through bankruptcy,” Skepnek suggested.

Skepnek said there are many resources available to help people struggling with student loan debt, and the Biden administration as well as the Department of Education should educate borrowers about income-driven repayments plans.

Skepnek explained that under an income-driven repayment plan, payments are permitted on federal student loans that allow borrowers to pay a portion of their discretionary income.

President Biden's decision does not apply to private student loans.

“Private student loans don’t permit borrowers to get out of default," Skepnek said. "There’s no right under federal law for a borrower with private student loan debt to get out of default or to renegotiate the terms of payment. It’s entirely up to the lender."

Skepnek said the bottom line is for people to educate themselves on student loan debt or any debt and understand the problem.