How to save money with student loan payments returning
The pandemic-era payment pause ended over the weekend.
NASHVILLE, Tenn. (WSMV) - People with student loans are facing a bill for the first time this month in nearly three years. The pandemic-era payment pause ended over the weekend.
Jacquelyn Ruiz-Mesa is having to think about her student loans for the first time and prepare to pay around $400 per month. The mother of two said she’ll have to set aside money in her already tight budget to cover her bills and is concerned her credit score will be hurt because of the payments restarting.
“I was under the impression that we were going to have lower payments and deferred payments, and all of a sudden this is stopping,” Ruiz-Mesa said. “It is really going to impact how I am able to take care of my children.”
Ruiz-Mesa said she was shocked when President Biden’s student loan forgiveness plan was struck down by the Supreme Court earlier this year. She is now trying to figure out how to cover her monthly loan bill while also paying nearly $1,400 per month in childcare.
Myles Zueger, with Adams Wealth Partners, said there is a 12-month grace period, but interest will continue to grow on your loan. He is recommending everyone review their budgets now to figure out how much they can pay.
“It’s all about just getting back to that norm and maybe having to dip into savings a little bit to pay some of that if you are able to,” Zueger said. “Finding a piece of the budget that you can cut back on. Maybe it’s travel, maybe it’s eating out, going out with friends, something like that. You are going to have to find a place to pick those payments back up.”
Zueger said many people continued to pay their student loans during the pause and were able to take advantage of what was essentially an interest-free loan. For people who did not continue to chip away at their debt, they need to begin payments as soon as possible to keep interest from piling up.
“There is probably going to be a little bit of lifestyle changes that come in so that they can start paying on that student debt,” Zueger said. “I know there is the 12-month thing, but that in the long run is only going to affect you for the worse. The more you can start paying towards these loans now, the better.”
Gabe Currier is trying to enjoy some time off with friends before starting his new job but is concerned about being able to cover his loan payments for a degree that does not apply to his career anymore. He said his monthly payments are about half a paycheck.
“Just being able to work, get on my feet, and be able to focus on the things that I want to focus on,” Currier said. “I am not going to have as much money to be able to afford the things I’ve been doing for the past couple of months.”
There are several new programs designed to help borrowers, like Currier and Ruiz-Mesa, including an income-driven repayment plan. People are also encouraged to look up their loan information online because their lending company likely changed during the pandemic.
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