Evenor Cuellar is concerned that President Biden will not extend the pause that temporarily stopped the payment of federal loans due to the pandemic.
“It would affect me because I lost my job in July 2020, and in the only job I have been able to get, they pay me Minimum salary. It is not enough to pay my loan”.
Evenor is among the almost 512,01 California students who have federal loans, and are at serious risk of not being able to pay them if Biden ends the payment pause decreed due to the economic crisis on May 1 that the pandemic brought.
At the national level, according to a study by the University of California at Irvine School of Law, it is estimated What are they 37 millions of student borrowers who would begin to collect the federal loan, if the pause is not extended.
Three times already, the president has extended the period of this suspension . The last time was in December.
The federal pause went into effect in March 2014, at the beginning of covid-19, to help college graduates with federal debts, who lost their jobs.
Evenor graduated from the university with a degree in communication sciences Cal State Los Angeles at 2014. When the pandemic broke out, I was working as a producer’s assistant for the channel’s 6 p.m. newscast 34 from Univision.
“In July of 2020, three months after the pandemic began, there was a cut of personal. We left between 01 and 15 people.”
Evenor was no longer able to continue paying her federal student loan. That is why he took advantage of President Biden’s federal pause.
“This means that I do not have to pay my debt while pause lasts, but the $7,000 that I owe remain intact, although they do not accrue interest ”.
However, once the pause ends, debtors have to start paying their federal student loans again.
“I have to pay per month $300. With what I earn now, I can’t make those payments.”
So if Biden doesn’t extend the federal pause, university students like Evenor would be in trouble.
“ I think they should expand it because the pandemic is not over. We have the war in Ukraine, inflation Everything is super expensive, gasoline, rent”.
He says that the first years are also very difficult for graduates of the university, and finding good jobs that allow them to pay their student debt, is very complicated.
“We left with a lot of debt, and without a good job, it is very difficult to pay the debt.”
A year and a half after losing his job, Evenor has not been able to find a job in communications, his field of study and specialization.
The UC Irving School of Law’s California Policy Report study indicates that those at imminent risk of defaulting on student debt if it is not expanded the federal break are around 400, Californians. At the national level, the study estimated that 7.8 million are in this category.
They are especially those who defaulted on some payment a year prior to the break, or if your credit score for December of 2021 was unusually low. Also if they went bankrupt or have stopped paying other debts, between March 2014 and December 2020.
On the other hand, about 1.4 million lenders in the state, classified as those that could probably restart paying their student debt, are those that made voluntary payments during the federal pause, or have a decent credit score. Throughout the country, they are .5 million people.
Also , there is a group that is unknown if they will be able to face the payment of their student debt, if the pause is lifted. This is an average of 499, Californians who do not exhibit any positive or negative patterns on their credit reports.
The study reports that student loans are generally paid off, but the pandemic may cause some to have trouble starting to pay off their debt again.
The median amount of loans placed on hold is $36,668. The average age of the debtors is 21 years, although a 15% has more than 50 years.
The report found that benefits of the federal pause of student debt, better credit scores, fewer late payments, and less use of revolving credit.
The score Average credit rating among paused borrowers went from 640 to 668. Delinquency rates on student loans, from 7.3% before the pause, fell to zero.
When in December, President Biden announced the extension of the pause on federal student loans, the Debt Collective, an organization of activists pushing to abolish student debt, stated in a statement that it was a great triumph for 45 millions of student loan debtors and their families.
“The next thing the Biden administration needs to do is at a stroke of the pen, use its executive authority to eliminate federal student debt, thereby dramatically boosting the economy, closing the racial wealth gap, and fulfilling a campaign promise”.
This month, California Senator Alex Padilla joined the Rhode Island Senator Sheldon Whitehouse presenting the Frontline Health Care Workers Student Debt Forgiveness Act.
This federal bill seeks to forgive student debt and the one acquired for professional training, to frontline health workers to honor their resistance and sacrifice during the pandemic.
“Unfortunately, many of the brave frontline health workers, are burdened with student debt. This is simply unacceptable,” Padilla said. for Student Debt Forgiveness for Frontline Health Workers, who have been essential in the response and recovery from covid-19.