Needed Relief
The refund checks are arriving at a time of rising prices for everyday necessities, and fears that student debt payments will squeeze already strained budgets when they resume next year. Katelin Boykin in Atlanta just received a $300 refund check that she plans to put toward rent and groceries. The 29-year-old social worker graduated college during the pandemic with $5,000 in loans.
“With everything being so expensive, it’s nice to have this relief,” she said. “Getting those checks in the mail felt like a small victory.”
The average monthly student loan payment was $300 prior to the payment freeze, and 5 million borrowers have defaulted on a federal loan. (Those who attend for-profit schools default at even greater rates than their peers.)
There is concern among borrowers that Republican opposition will imperil the forgiveness plan altogether, particularly if Democrats lose control of Congress in the midterm elections. And if the plan is blocked for good, borrowers who requested refunds assuming that their balance would be forgiven will likely have to pay the refund back.
Biden called the legal challenge to the program “hypocritical,” and White House Press Secretary Karine Jean-Pierre urged borrowers to continue to apply for forgiveness through the portal.
Maura McBride, a 25-year-old in Milwaukee, graduated with $15,000 in student debt, and paid $10,000 off during the pandemic. When Biden announced the relief plan, she was worried she wouldn’t qualify. She’s applied for a refund and has so far received two checks totaling about $6,000 — a windfall she said “doesn’t feel real yet.” She plans to put the funds toward a down payment for a house.
“I haven't spent any of the money, I just deposited it,” she said.
This article was provided by Bloomberg News.