Some New Mexicans expressed relief after the Biden administration last week extended the federal student loan repayment moratorium from January to May.

For Emily Withnall in Santa Fe, that’s 90 extra days to pay down other debts before facing “startling” monthly payments.

The editorial assistant for New Mexico Highlands University and single mother of two owes more than $80,000 in federal student loan debt after heading to graduate school in Montana several years ago.

For occupational therapist Celestina Martinez in Albuquerque, it’s an extension of hope that the Biden administration could cancel at least some of her $85,000 in debt from graduate school at the University of New Mexico.

On the campaign trail, President Joe Biden made a commitment to canceling up to $10,000 in federal student loan debt per person.

He since has questioned the legality of using his executive power to make the move.

Washington, D.C-based think tank Brookings Institute estimates forgiving $10,000 in federal loan debt per borrower would cost roughly $373 billion — a bill that would be footed by a majority of taxpayers who never attained a bachelor’s degree themselves.

Martinez said she applied for more than 40 scholarships before pursuing her undergraduate degree, winning nine — enough to pay all of her tuition at the University of New Mexico.

But graduate studies at the same school left little time for hunting down funding, she said.

Although she lived independently, Martinez said, having to list her parents’ financial information on the federal aid application left her ineligible for work-study or grant funding from the government.

So she took out federal loans.

Martinez’s first day as an occupational therapist was the same day the state issued pandemic stay-at-home orders in 2020.

She has been working in the medical field since, and her annual salary is less than her total debt.

“I’ve been saving money that would go toward payments, but I haven’t been making payments in the hopes they’re forgiven,” she said in a recent interview.

For Trey Pereyra, human resources specialist and union co-president for school staff at Los Alamos Public Schools, the moratorium extension is not enough.

He’s not graduating with his legal studies degree until 2023 and is already thinking about how he’ll pay back the $20,000-plus in debt he has accumulated at Phoenix-based private school Grand Canyon University.

“I just can’t afford to be picky,” he said in a recent interview, regarding his reliance on student loans. “In the education field, we don’t make a whole lot of money.”

For American Federation of Teachers New Mexico President Whitney Holland, the freeze was a chance for her husband and her to divert their collective $700 in monthly loan payments toward a looming medical debt.

“It helped us get ahead in a way we couldn’t before,” she said.

The moratorium extension scuttled a planned Jan. 31 end to the freeze on federal loan payments, which began under the Trump administration in March 2020 to ease financial burdens amid the pandemic.

It has meant the roughly 225,000 New Mexicans carrying a collective $7.7 billion in federal loan debt haven’t had to make their monthly payments, unless they elect to pay down their debts to prevent high interest from accruing when the freeze ends.

Forbes estimates the moratorium, which also freezes interest rates on the loans issued through the U.S. Department of Education, had erased $90 billion in federal loan interest as of April.

New Mexicans who’ve attended or graduated from college carry an average of $33,000 in student loan debt per person, said Higher Education Department Secretary Stephanie Rodriguez.

“It’s rather low compared to the rest of the country, but still that’s a lot of debt on a person,” she said.

And many New Mexicans might be unable to pay up; the state has the nation’s second-highest loan default rate, according to a 2019 analysis by the Student Borrower Protection Center.

Earlier this year, Withnall, 40, detailed her experience defaulting on undergraduate student loans accrued while studying English at New Mexico Highlands University in an article for Business Insider. She’s a writing fellow for the low-income advocacy organization Common Change.

Withnall said she left an abusive marriage and was getting hit with legal fees as her ex took her to court.

Her oldest child, at 18, is considering college but is hesitant.

“They don’t want to be in the situation I was in, and I don’t blame them for that,” she said.

Withnall took out loans from the federal government, but AFT New Mexico organizer John Dyrcz thinks the high rate of default might result partly from New Mexico having so few restrictions on privately issued loans, which he said students might opt for if they’re ineligible for federal aid.

People with private student loan debt haven’t received a break from making payments.

The union has approached Gov. Michelle Lujan Grisham about a possible bill for the upcoming session that would establish a Student Loan Bill of Rights.

Such a document would prevent “deceptive” practices and carve out funding for an ombud who would advocate for students navigating loans largely from out-of-state lenders.

A similar bill sponsored by Sen. Katy Duhigg and Rep. Patricia Roybal Caballero, both D-Albuquerque, died in the judicial committee last year.

Duhigg, a former consumer protections attorney, said she would sponsor similar legislation if it were on the table again in 2022.

She said the bill likely failed because it was too large.

“In New Mexico, you have more protection taking out a predatory loan than a student loan, which is crazy,” she said.

Dyrcz and Holland both hope increased attention on debt issues sparked by the moratorium could make it a good time to reintroduce the bill.

“It’s a perfect storm of opportunity for New Mexico,” Dyrcz said.

“The state can’t ignore this issue any longer.”

Rodriguez, the Higher Education Department secretary, said she also wants to nip the issue in the bud by emphasizing “free college” across the state.

In September, the Higher Education Department announced budget priorities for the 2022 legislative session, including an additional $48 million request to expand the New Mexico Opportunity Scholarship.

Approval of the request would double funding for the initiative, which covers tuition costs after state financial aid is applied for two-year college programs.

In an interview this month, Rodriguez also emphasized the importance of state-funded loan repayment programs. The department’s 2023 request includes an additional $3 million toward a teacher debt relief program that pays up to $6,000 of outstanding federal debt for two years for teachers who attended school in New Mexico.

The average student debt of this year’s more than 600 program participants is $48,000, according to the department.

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