Will Minnesotans Have to Start Paying Back Student Loans in August?
Short answer: yes. Long answer: maybe not?
Since March 13th of 2020, federal student loans have had 0% interest rates due to the economic strain of the COVID-19 pandemic. This 0% interest rate was supposed to end a couple of times, and every time it was set to expire, it would get extended. The latest extension runs through August 31st, 2022.
As someone with student loan debt, I've very much been enjoying this 0% interest. After years of funneling money into these loans, I have finally gotten ahead on them over the past two years and even managed to pay a couple off entirely. It's amazing what can happen when all your money isn't going to interest.
But is this 0% interest going to get extended again?
We are seeing major inflation right now, and it's leaving a lot of us strapped for extra cash:
The annual inflation rate for the United States is 9.1% for the 12 months ended June 2022, the largest annual increase since November 1981 and after rising 8.6% previously, according to U.S. Labor Department data published July 13.
At this point, tacking interest back on to student loans would feel like pouring salt into a wound.
According to an article published on July 26th by CNET, The Department of Education is continually assessing the impacts of the COVID-19 pandemic and the economy on student loan borrowers. And according to Bloomberg, President Biden is considering extending the pause through the end of the year or even until next summer.
For now, plan to start paying back your federal student loans on September 1st, and keep your eyes peeled for a possible pause extension.
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