ORLANDO, Fla. – A Florida professor is sounding the alarm, saying college students and graduates need to pay attention to their student loans ahead of payments resuming.
“There are going to be all kinds of economic consequences. We’re already starting to see it,” said F. King Alexander, who is an educational leadership professor at Florida Gulf Coast University.
Alexander told News 6 that it’s now time for a call to action for students and borrowers to pay attention to their student loans.
This comes after students protested the U.S. Supreme Court’s decision earlier this month to strike down President Biden’s “loan forgiveness” plan.
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“It’s the housing market, it’s the automobile market, they’re not buying new cars,” Alexander said. “It’s the consumer spending market, which impacts just about everywhere, and these are all just consequences that are just going to continue.”
Tuesday, the Department of Education released data saying over 56,000 borrowers’ loans were forgiven in Florida under the administration’s $39 billion discharge approval for more than 800,000 people.
Those eligible had been paying for 20 or 25 years with more than 240 payments.
“The critics of this plan number one have said that it might lead to more inflation. Well, they said the same thing about the G.I. bill and Social Security,” Alexander said.
It should be noted that a common complaint regarding Social Security in the U.S. is that the federal government has continued to borrow from the fund, increasing the national debt. As more currency is issued to address outstanding debts — such as was seen during the COVID-19 pandemic — it increases the amount of money in the economy and devalues existing currency, leading to inflation.
Alexander said people should make sure their information is up to date with the Department of Education, check to see if their lender has changed, and make a plan after payments are set to resume in a little more than 70 days in October.
“Pay something monthly so you develop a record because it could be in a year from now that this issue could come back up,” Alexander said.
Alexander is referring to the Biden Administration’s plan B, the Higher Education Act, which was first passed in 1965. That plan, however, may take some time.
For borrowers, Biden has stated those who cannot begin making payments this fall won’t face default, nor would they be reported to credit bureaus or debt collection agencies for one year.
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