Student loan payments to resume soon
Student loan payments have been paused for three years. Some college graduates have not even started paying off their debt.
According to one expert, there are different ways to start.
“If you're really concerned about where you are in your ability to pay, there is a series of income-driven repayment plans that limit the amount that you have to spend to about 10 to 20% of your discretionary income on your loans,” University of New Mexico associate professor Reilly White said.
For some who have paused their normal payments, White suggests paying off the highest balances first.
“It makes more sense for you to pay off those loans in a short amount of time, pay less interest, pay down those higher-interest loans first. Or look at the potential. If you've developed a high enough credit score to get a consolidated loan,” White said.
Another option? How often you make payments. White said, “Think about making your student loan payments biweekly rather than monthly. This helps shave off some of those extra interest payments that you can use as well.”
White said the resumption of student loan payments will leave more people on a tighter budget.
“It's a huge human impact, and I don't want to understate that. But it does shift fundamentally the way people will be spending money going forward,” White said.