DAYTON — Federal student loan repayments will resume Sunday after a three-year hiatus due to the pandemic.
Nearly 44 million Americans have more than $1 trillion in student loan debt.
News Center 7 consumer reporter Xavier Hershovitz previously reported on how people can prepare to start making payments on these loans again.
Whether a student attends the University of Dayton, Wright State University, or another university, most student loan debt comes from federal student loans.
Many borrowers have adjusted their budgets without making these payments for the past three years.
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Professor Hershowitz reports that federal education data shows that the average student loan borrower owes more than $37,000.
It costs an average of up to $300 per month.
Almost 25% of Americans with student loan debt say their biggest financial regret is borrowing too much for their education.
“The numbers are so unrealistic and astronomical that I have no idea how to pay them back,” said Angela Bolt, who has student loans.
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One borrower said the loan had affected his household finances for 20 years.
“If I had the ability to talk to my younger self, I never would have gotten a law degree,” Telayna Steed said. “These student loans have been a noose around my neck for 20 years.”
Hershowitz spoke with financial experts and said people should take advantage of new programs available to assist borrowers.
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The first program is the SAVE program. It lowers monthly payments based on people’s income and eliminates 100% of interest remaining after scheduled payments are made.
Lump-sum payments are also available. For the next year, Hershowitz said, no late or missed payments by borrowers will be reported to the credit bureaus. Loans are not considered in default and are not sent to collections. However, the payment is still due and interest will accrue.
Financial experts say that doesn’t mean people should avoid next year’s payments.
“If you have debt, you want to face it head-on and come up with a plan,” says personal finance expert Julie Alma Taveras. InvestingLatina.com.
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For more information about these programs, please visit: Federal Student Aid Website.
