SIOUX FALLS, S.D. (KELO) – On his first day in office, President Joe Biden signed 16 executive orders. One of them being to freeze federal student loan payments.
Andrew Bade has been attending the University of South Dakota since the fall of 2016. In late 2019, he was taking enough credits to put him just below full-time enrollment. Being at this level required him to start paying back his federal student loans.
As Bade’s 6-month grace period with his loans were coming to an end in March of 2020, the COVID-19 pandemic was only beginning in the United States. In reaction to this, former President Donald Trump signed an executive order to freeze federal student loan payments until the fall of 2020.
“It came at an important time during all of the uncertainty,” Bade said.
However, having this extension created some uneasiness itself.
“My biggest complaint with that was kind of the ‘piece by piece’ they were extending it. Like, it expired in September initially, and then Trump extended it only for Betsy DeVos to extend it another month. With so many different extensions it was hard to rely on,” Bade said.
With President Biden signing an executive order to extend the freeze till September 30th, Bade says this comes at an important time as he’s not only going to school but has other finances to keep up on.
“Being out of school, you live paycheck to paycheck more often than not. So, you know, having a few extra hundred makes a huge difference when it comes to utilities, rent, clothing and food,” Bade said.
“Especially with students who maybe, recently graduated and are struggling to find jobs or who are underemployed during the pandemic. I think this is going to allow them to focus on paying their bills, buying food, other things without any penalties,” Director of Financial Aid Office at South Dakota State University Beth Vollan said.
While some can still choose to make payments, Vollan says that there’s no benefit to this.
“Any time an individual were in a potential crisis – if they can save some of those funds for an emergency, that’s always a great idea,” Vollan said.
She says that full-time students will not have to make up any of the interest down the road. Bade says he’s hoping this freeze will pay off in the long run.
“I wish I could… set it aside or pay down loans but it’s going to go to what it’s needed,” Bade said.
Bade says holding off on paying loans will help him save up for his last few college courses that he has to take which he is paying out of pocket.