MYRTLE BEACH, S.C. (WBTW) — The Biden administration’s extension of a pause on student-loan payments until May 1 should not be viewed as a “get-out-of-loan-free card,” according to one Pee Dee college administrator.
The administration announced the three-month extension on Wednesday, but Patrick Riccards, vice president of college experience at Coker University in Hartsville, said students should not bank on their debt being eliminated entirely.
“This is a wonderful gift, particularly to those that have been struggling for the last few years, but this should not be seen as a get-out-of-loan-free card,” said Riccards, who oversees the university’s financial aid office.
Choosing not to pay the debt will have consequences down the road, he said.
“If you’re a recent college graduate and you decide ‘I’m just not going to pay, I’m going to default on the loans, nobody’s going to mind.’ They’re going to mind when you want to buy a car. They’re going to mind when you want to buy your first house with your spouse.”
More than 36 million borrowers haven’t had to make payments on their federal student loans since March 2020 because of the COVID-19 pandemic, and while payments are paused, so is the accrual of interest.
“Kind of feels like I’m going to be stuck with this for the rest of my life,” said Noah Carralero, who like millions of others is mired in debt after attending Full Sail University in Florida.
He said he began repaying his loans in March 2019 and has taken advantage of the opportunity to catch up by to paying on them during the moratorium.
“It’s a lot of stress carrying around the fact that I have $25,000 in debt but with interest and after five years, that $25,000 could turn into $50,000 or $60,000.”
He said the fact that his loans aren’t accruing interest during the moratorium will be a big help for him.
“It’s only a couple months, and for me, since my payments are about $400 a month, that’s only like $800 to $1,200,” he said. “But I have to look at it on the positive side and realize that’s $1,200 I paid that doesn’t gain interest or anything like that.”