They graduated during the pandemic. Now they face their first student loan payments

A grace period that let people who graduated college during the coronavirus pandemic avoid paying back their federal loans is about to end, meaning millions of young people are about to take a serious financial hit. 

Graduates for the last three years all had the grace period, as the Trump and Biden administrations extended a pause on student loan payments amid the national health emergency. Now things are about to change: Payments will begin either 60 days after the Supreme Court rules on President Biden’s student debt forgiveness program or 60 days after June 30, whichever comes first. 

“It’s just a lot of anxiety, I think that’s the best way I would describe it. It’s something that every time I think about it … I try to push it away, because I feel like getting worried about it is just going to make me more anxious,” Laura Esteban, who graduated with debt during the pandemic, told The Hill. 

The payment pause has been extended nine times over the course of two presidencies, with Biden previously saying the period would end and then backpedaling on that plan.  

Borrowers have also been tugged around on Biden’s plan that would give up to $20,000 in relief for the 44 million federal borrowers. In October, borrowers were filling out applications to receive the historic debt forgiveness. Now, they wait on a decision from the Supreme Court on if Biden’s program can move forward at all. 

The pause has put a halt on both the payment a borrower owes each month but also the interest that accrues on the student loans. 

Dorien Rogers, who graduated during the pandemic and went on to graduate school, says he is going to start making the monthly payments as soon the pause ends. 

“My philosophy is to pay early as possible because interest rates do exist,” Rogers said. “It is hard to balance the finances between paying off your loan and living life, given our economy and given what’s going on in our world.”

Rogers works as a teacher during the day and does DoorDash at night, saying he is “trying to save up as much money before the pause is expired.”

The transition to payments is not expected to be easy for graduates who have only known a life without them.

“The next generation of student loan borrowers are facing a financial cliff like never before. Not only have they graduated into an unprecedented economy marred by the pandemic, inflation, and uncertainty, they are also entering the student loan system when there are many policy changes and unanswered questions about the future of federal programs,” said Cody Hounanian, executive director of the Student Debt Crisis Center.

Before the pandemic, real estate site Clever in 2019 did a survey that found almost half of borrowers held off investing in a home because of their student loan debt. 

Such postponements could take a while for those with large debts to carry. 

And not everyone during the pandemic had no student loans to pay: Private loans weren’t subject to the federal pandemic pause. 

Kara Wozniak, who graduated last year from Washington & Jefferson College, says her student debt spurred her decision to live somewhere with cheaper rent so she could start putting money away. Wozniak says she has already been making payments on her private student loans, which are much higher than her federal ones. 

“Having my private student loans be put on pause would have made a huge difference for me as well as almost everyone I know that also has student loans to pay back,” Wozniak said. “My government loans, although it was nice to have them be put on pause, are not a game changer in my eyes.”

Student loan advocates have not given up hope for another pause extension as they argue to the administration that borrowers will not be ready to begin payments by the end of this summer, especially if the Supreme Court denies Biden’s relief plan.

Though the pause has been a great relief for borrowers who were laid off or had trouble finding work over the pandemic, it has also created its own form of limbo. 

“I would love for [the pause] to continue, you know, but also at the same time, I think consistently leaves us in this such weird in-between place. It comes to a point where it starts to become its own anxiety,” Esteban said. 

Advocates, meanwhile, continue to push for sweeping relief for student borrowers.

“We must cancel student debt to repair the financial harm caused by these disruptions, and doing so would shrink the federal student loan system to allow the Department of Education and loan servicers to better reach borrowers in need of critical information,” said Hounanian of the Student Debt Crisis Center. 

The Biden administration argued to the Supreme Court that without the relief, borrowers are more likely to default on student loan repayments when they begin. 

The conservative-leaning court seemed skeptical of the plan during arguments, and the White House has not put forward an alternative plan to forgive student loans if this one fails. 

“It’s very important that we recognize that canceling student debt for millions of borrowers — it’s an investment in them so that they can become homeowners, so they can start a family, so that they can push our country in the direction where we advance rather than regret,” Rogers said.