ORLANDO, Florida. – A Florida professor is sounding the alarm, saying students and college graduates should pay attention to their student loans before repayments resume.
“There will be all sorts of economic consequences. We’re starting to see it already,” said F. King Alexander, professor of leadership in education at the University of Florida Gulf Coast.
Alexander told News 6 it’s time to urge students and borrowers to pay attention to their student loans.
The move comes after students protested a U.S. Supreme Court decision earlier this month to overturn President Biden’s “loan forgiveness” plan.
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“This is the housing market, this is the car market, they don’t buy new cars,” Alexander said. “It’s a consumer spending market that’s affecting pretty much everywhere, and it’s all just repercussions that will continue.”
On Tuesday, the Department of Education released data showing more than 56,000 borrower loans were forgiven in Florida under the administration’s $39 billion repayment authorization for more than 800,000 people.
Those who were eligible paid over 20 or 25 years in over 240 installments.
“The critics of this plan number one say it could lead to even more inflation. Well, the same was said about the bill for a soldier, and about social insurance, – said Alexander.
It should be noted that a common complaint about the US welfare system is that the federal government continues to borrow from the fund, increasing the national debt. As more currency is issued to pay off outstanding debts – as was the case during the COVID-19 pandemic – this increases the amount of money in the economy and devalues the 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 due to resume in just over 70 days in October.
“Pay something monthly to create a record, because in a year this problem may return,” Alexander said.
Alexander is referring to the Biden administration’s Plan B, the Higher Education Act, which was first passed in 1965. However, this plan may take some time.
As for borrowers, Biden said those who fail to start repayments this fall will not face default and will not be reported to credit bureaus or debt collection agencies for one year.
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