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The impact that one year of student loan relief has had amid pandemic

student loan savings
Posted at 1:37 PM, Mar 24, 2021
and last updated 2021-03-24 16:38:21-04

Millions of Americans have had their student loan payments paused for the past year after Congress passed several stimulus bills, allowing the pause on payments with no interest accruing. The pause has allowed many people, like Anna Garcia, to save hundreds of dollars a month and put it towards other needs during this pandemic.

“This past year really tested us in terms of finances,” said Garcia.

Garcia owes just over $99,000 in student loan debt. For the past few years, she has paid $250 a month under her repayment plan that’s based on her income. Just before the pandemic, her payments were going to nearly double as she moved into a new job role.

“I was looking at making an additional $350 per month as the pandemic was about to start and then they stopped those payment,” said Garcia. "So, that actually really saved me.”

Garcia put the $600 a month that was earmarked for student loans into saving instead, and after a few months, her fiancé had an idea for that money.

“He just kind of threw it out there like, ‘Why don’t we just go ahead and start planning the wedding?,’” Garcia recalled.

The couple had been engaged since 2019 but they didn’t have a timeline to wed because they didn't have any extra money to put towards it. However, with the $600 savings a month, in addition to their stimulus checks, they could now afford a small wedding.

“Quite frankly, with the coronavirus and all the restrictions, we wanted to keep it small. We wanted to keep it intimate,” said Garcia. "So, we saw that opportunity and we just decided to go for it.”

The couple got married on November 25, 2020, with just their closest friends and family. The wedding cost them around $8,000, almost exactly what she would’ve paid this past year in student loan repayment.

“We were able to get everything that we wanted in that wedding and everything came together so beautifully that day,” said Garcia.

After the wedding, Garcia has still been putting aside the $600 each month and continues to strategize on how to better use those dollars. She recently decided to invest the money in the stock market to hopefully grow it, and then use it to repay her student loan debt when she has to pay that again.

“Our conversation with money has definitely changed over the past year,” she said. "It’s not just about saving but making that money work for us."

Student loan debt relief over the past year gave Garcia the opportunity to marry the love of her life and potentially a better shot at paying down her student loan debt faster. For others, it’s been a lifeline to buy food or keep the lights on when jobs have been lost and new ones are hard to come by.

The student loan relief has been extended by Congress until at least Sept. 30.