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Student loan reform: Will Biden wipe out interest for borrowers?

Millions of Americans feel trapped by student loan debt. Recent delays to repayment have some financial experts convinced major changes are coming for borrowers.

CHARLOTTE, N.C. — Millions of people struggle under the weight of students loans but the recent push to again extend the grace period for borrowers has some experts suggesting that even bigger relief could be coming down the pike. 

Student loans have long been frustrating, confusing and controversial but the latest twist could mean big changes for a lot of people. 

"We just have to see how it goes and roll with it," Dr. Stacy Goldbaum said. 

Goldbaum and her husband are constantly changing their budget while they navigate the challenges that come with student loan repayment. 

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"We were ready to roll and then all of a sudden they're like, just kidding and pause you for three more months, which I'm extremely grateful for, but it's always this one step forward, two steps back," Goldbaum said. "Are we or aren't we, and kind of a mental shuffle back and forth."

The federal government has been helping people since the start of the COVID-19 pandemic by freezing payments and not charging interest. The relief was originally part of the CARES Act but it's been extended several times, most recently this month. Now, student loan payments aren't expected to start back until April at the earliest. 

"This is definitely more of a surprise because the Department of Education and Biden administration, when they extended it last time, specified it would be the final extension," said student loan expert Will Koster. 

WCNC Charlotte is always asking "where's the money?" If you need help, reach out to the Defenders team by emailing money@wcnc.com.

Koster says some people in his field believe it could be a sign that student loans or simply the interest rates go away entirely

"Interest rates have been historically low for a long time," Koster said. "People are refinancing mortgages. Even with inflation being high, that would be a case where the federal government could do this where they just waive all interest rates because interest rates are low in general."

There's a lot at stake for people on both sides with more than $1.8 trillion in outstanding loans

"It's becoming a bigger and bigger issue that seems to be crippling the saving ability of millennials, the generation that came out with a lot of student debt," Koster said. "The argument is to infuse the economy by having borrowers relieved of student loan burden." 

For now, Goldbaum, who is a new mom, is grateful to get a break. Sort of. She says the money that was designated for student loans has been shifted to day care. 

Contact Michelle at mboudin@wcnc.com and follow her on FacebookTwitter and Instagram.

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