Borrowers fear balancing inflation and student loan repayments
LEXINGTON, Ky. (LEX 18) — Chances are you’ve felt the effects of inflation in one way or another.
In the coming weeks, university graduates could feel an even sharper pinch with inflation. Student loan repayments are expected to resume on May 1.
“My rent is going up,” said UK and UofL graduate Jennifer Branscum. “Petrol prices are more expensive. It’s more expensive to pay for some of the basic things I have to take care of.”
Branscum has her undergraduate degree from the UK. She earned her graduate degree from UofL. Nationally, 43 million borrowers have taken out student loans. For two years, due to the pandemic, there has been a freeze on payments and interest.
“Having taken a break, I was able to pay off all the interest accrued on my undergraduate and graduate loans,” Branscum said.
She says she paid the interest that was due before the freeze. The Biden administration has said the hiatus will end at the end of the month. Branscum is another Kentuckian who is feeling the effects of inflation but fears what she will do if the hiatus can end.
“I considered a second job,” Branscum said. “I have experience as a barista, so going back to Starbucks on the weekends, I thought about that.”
According to the Kentucky Center for Economic Policy, more than 600,000 Kentucky residents have outstanding federal student loans. The median amount owed under federal student loans is around $18,000.
“If I get a second job, what will that do to my personal life?” Branscum said. “Will I still have time to see my family?
Multiple sources have indicated that the Biden administration may extend the hiatus. With just over four weeks until that expires, millions of borrowers will be eagerly waiting to see if it comes to fruition.