MINNEAPOLIS — When President Biden extended the student loan payment freeze to May 1, many people breathed a sigh of relief. And what borrower wouldn't?
Experts say there are over 40 million U.S. borrowers who have federal student loan debt. And that debt totals more than $1.7 trillion. It's a daunting number.
With many of us getting a piece of the student debt pie, we should at least be able to relish this payment break, right?
Nick Foulks, a financial expert at Great Waters Financial, says no.
"Reprioritize your money. With more and more people who switched from working in an office to working remotely, or maybe some type of hybrid, they're probably saving money in some fashion," said Foulks. "So the question becomes, where did that extra cash go, and how could you reprioritize it towards paying your student loans?"
Along with making budget adjustments, Foulks says now is also good to look into the different types of repayment programs available.
"Things like the income-based repayments, which are gonna lower your payments on the front-end, and then it will increase as your income increases over time," said Foulks.
While Foulks is encouraging us to be responsible, it's hard to miss the calls on social media and Capitol Hill to end student loan debt.
Some lawmakers want President Biden to cancel up to $50,000 of student loan debt per borrower. Biden has proposed canceling $10,000 per borrower regardless of income.
"All of that sounds great, right but, there's really been no forward movement on it. So here's what I would tell people: don't get caught on hope island," said Foulks. "Don't get caught looking for someone to send you a financial life raft when in reality you have to plan to pay that back."
Foulks went on to say: he doesn't anticipate another student loan payment freeze, especially with inflation going up and society trying to adjust to our new normal.
But it's fun to dream, isn't it?
Great Waters Financial has a more in-depth look at how to prepare for repayment. You can find that information here.
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