Student loan repayments loom as recent graduates continue to struggle through recession – The Simmons Voice
Pause on federal student loan payments set to expire soon
Six months have passed since the Class of 2020 graduated from Simmons, which means the time has come for many recent graduates to start paying off their student loans.
Although the Department of Education suspended student loan debt payments under the CARES Act in March, payments are currently expected to resume in January, according to POLITICO. It is not known whether the pause on repayments will be extended by the Trump or Biden administrations.
With a recession looming and no clear end to the pandemic in sight, some recent graduates are concerned about their ability to repay their loans.
Mackenzie Farkus, a Simmons alumnus and former editor of The Voice, described how her student loans could impact many areas of her life.
“I don’t know how I’m going to be able to pay my loans,” Farkus said. “I don’t get paid as much in my current job, which is only part-time and contracted.”
Farkus lives with his parents and wants to move, but covering the bills and incoming student loan payments makes it difficult.
Now that Farkus is getting ready to pay off his loans, she says she wants Simmons to do more to help him prepare for the repayment.
Amy Staffier, director of student financial services, says her office has made progress since starting at Simmons in 2018 to improve student repayment readiness before they leave Simmons. Through a partnership with Inceptia, a nonprofit organization that helps understand student loan information, tools and resources, students receive letters regarding their loans twice a year.
Going forward, Ms Staffier says she would like to offer more in-person exit advice to students before graduation.
While there are plenty of student loan tools and resources available online, Staffier says it’s easy to “go through it and not absorb it.”
Staffier says that sometimes recent graduates have a looming fear of their loans, and as a result, they pull out instead of asking for help.
Instead of avoiding loan repayments, Staffier says graduates should familiarize themselves with their debt in order to understand the types of repayment options available to them. She recommends that they contact their lenders directly
Failure by borrowers to repay their loans on time could have consequences for both the borrower and the University.
When a borrower is more than 270 days late in making a payment, they default on their loans. For the borrower, a default can ruin their credit rating. Schools that have average default rates of around 30% for three consecutive years risk losing their eligibility for the Federal Direct Loans Program and / or the Federal Pell Grants Program.
The most recent federal loan default rate available for Simmons is from 2017 and is 2.00%, according to LendEdu. Simmons’ rate was lower than all other colleges in Fenway and some nearby schools like Northeastern University and Emerson College.