by ZeroHedge News Staff at ZeroHedge
On Sunday the Trump administration’s pandemic-era student loan pause officially ended, re-saddling more than 28 million borrowers with the consequences of their own actions (granted, colleges virtually assured 18-year-olds six-figure salaries amid ridiculous tuition hikes before ‘bidenomics’ and the Ukraine war resulted in scorching inflation).
Despite pleadings from advocates, the Biden administration has reactivated payment requirements, The Hill reports.
“It’s a sad day for student loan borrowers and for the country that student loans have to come back on, especially with the threat of a looming government shutdown, potentially on the same day. It’s just wild,” said the president and founder of the Student Debt Crisis Center, Natalia Abrams, apparently unaware that nobody forced anyone to take on all that debt.
According to a July survey by Life and My Finances, half of borrowers don’t make enough to afford their student loan payments, while 22% had a plan on how they would make ends meet once payments resume.
Some borrowers are going on a “student debt strike” and refusing to make payments as a way to show their discontent with the system.
Meanwhile, President Biden, who had made relief a key pledge of his 2020 campaign, has released an “on-ramp” repayment plan that allows borrowers to miss their monthly payments for the next year with fewer consequences than before. The Department of Education will not put borrowers in delinquent status if they miss payments, garnish their wages or send them to debt collectors.
But borrowers will still see interest accrue on their loans, and their credit score could be affected, despite the department saying they won’t report the missed payments to credit card companies. -The Hill
“There could be situations where potentially because you’re not making your payments, the value of your loan is increasing because it’s collecting interest, so you will owe more money. The credit bureau takes that into account, and maybe your credit score gets dinged a little bit,” said Lending Tree senior economist and student loan repayment expert, Jacob Channel.
As we’ve noted for years,…
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