INDIANAPOLIS — Jay Grothause has used the pause on federal student loan payments, which was extended on Wednesday until May 1, 2022, to get ahead on loans he owes from his undergrad and graduate school programs.
His grand total?
"$70,000," he said. "That was after interest capitalized, though, so it was $10,000 in interest from the time I was in school. For me, I was very lucky during the pandemic that I was able to keep my job, I had no break in work. I've been able to pay down those student loans."
Grothause, however, is in the minority of the nearly 43 million Americans with student loans.
A survey from Bankrate.com found only 22% of federal student loan borrowers kept up with payments during this forbearance period. Many opted instead to use the extra money on other things. Everyday expenses, other debts, and paying for a place to live were the top three uses for that money.
Drew Anderson, communications director for the Indiana Democratic Party, shared how he thinks this is helping Hoosier families.
"It helps Hoosier families pay for groceries, pay for utility bills, other bill that are essential that help keep the lights on, that help deliver for their kids, that keeps a warm meal on the table," Anderson said.
The Indiana GOP did not respond to our request for an interview about the pause on federal student loan payments.
However, Republican Representative Jim Banks tweeted about it. He questioned how the White House can justify reports of a strong economy while pausing student loans to help Americans deal with the financial impacts of the pandemic.
"For folks that are criticizing something as great as being able to have that extra cushion or pay those bills on time. I don't know why they're rooting against that," Anderson said.
Grothause hopes this isn't the end of the Biden-Harris Administration's action on federal student loans. The administration cited the pandemic as the reason for the extension.
"When I think back to the lack of education that students receive when taking student loans, that lack of education I think is part of why we need some student loan reform and forgiveness," Grothause said. "It's easier to take out a $60,000 student loan at 18 than to get mortgage when you have an income."
