Borrowers fear balancing inflation and student loan payments

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Posted at 10:29 AM, Apr 03, 2022
and last updated 2022-04-03 10:29:34-04

LEXINGTON, Ky. (LEX 18) — There's a good chance you have felt the effects of inflation in one way or another.

In the next few weeks, college graduates could feel an even tighter pinch with inflation. Student loan payments are expected to begin again on May 1.

"My rent is going up," said Jennifer Branscum, who is a UK and UofL graduate. "Gas prices are more expensive. It's more expensive to pay for some of the basic things I need to take care of."

Branscum has her undergrad degree from UK. She got her graduate degree from the UofL. Nationwide, 43 million borrowers have taken out student loans. For the last two years due to the pandemic, there has been a freeze on payments and interest.

"Having it paused, I've been able to pay off all the interest that accumulated on both my undergraduate and grad loans," Branscum said.

She says she has paid off the interest that was owed before the freeze. The Biden Administration has said the pause will end at the end of the month. Branscum is another Kentuckian who feels the effects of inflation but fears what she will do with the pause possibly ending.

"I've considered second jobs," Branscum said. "I have experience as a barista, so going back to Starbucks on the weekends, I've thought about that."

According to the Kentucky Center for Economic Policy, more than 600,000 Kentucky residents have outstanding federal student loans. The median amount owed in federal student loan debt is about $18,000.

"If I get a second job, what is that going to do to my personal life?," Branscum said. "Am I going to have time to see my family anymore?"

Several sources have indicated that the Biden Administration could extend the pause. With a little more than four weeks until that expires, millions of borrowers will anxiously await to see if that comes true.