Learn from Experience: Tips from a 38-Year-Old Borrower
As October approaches, millions of Americans find themselves on the brink of resuming federal student loan payments. After a more than three-year hiatus due to the pandemic, borrowers are grappling with the imminent return of monthly payments, which, for some, can amount to hundreds of dollars each month.
In this article, we’ll explore the challenges that borrowers like Megan McClelland and Justin Cole are facing as they prepare to navigate the world of student loan repayment once again.
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The Financial Burden Returns
Megan McClelland, a 38-year-old counselor at Petaluma High School in California, is among the many borrowers who had temporarily found relief from student loan payments during the pandemic. She managed to pay off her car loan and even save some money during this time. However, with the resumption of her $235 monthly student loan payments looming, she is now searching for ways to make ends meet. McClelland plans to redirect her former car payment towards her student loan, but she still needs to find an additional $270 to cover her monthly obligation.
“It had been a huge relief the past few years to not have that financial burden,” she said. “In the next months, I’m looking to see where I can scale back in my budget. Probably less going out to eat, and more picking up side gigs.”
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A Daunting Dilemma for Borrowers
Justin Cole, a 35-year-old from Little Rock, Arkansas, faces a similar predicament. He's uncertain about how he'll come up with the $166 a month required to cover his roughly $19,000 in student loans from over a decade ago. Despite a recent raise at his job in a family practice clinic, his increased income won't kick in until the clinic is fully staffed. Cole's financial woes also stem from medical expenses incurred during a car accident early in the pandemic.
"If those loans were forgiven, I could finally work on getting my credit up and actually saving money for once," he said. "If they were forgiven out of the blue, I'd be ecstatic."
Pursuing Loan Forgiveness
Some borrowers like Megan McClelland qualify for Public Service Loan Forgiveness, which erases remaining debts for federal student loan holders who work in public service after making ten years of payments. However, the process can still be stressful, as McClelland must find about $500 a month starting next month towards payments she hasn’t had to make in years.
FAQs
Student loan forgiveness and discharge are ideas that are connected but have major differences:
What is the SAVE plan mentioned in the article?
What are some alternative options for student loan relief?
What is Public Service Loan Forgiveness?
How has the resumption of student loan payments affected the economy?
Why is financial education important for borrowers?
Financial education is crucial because it helps borrowers make informed decisions about managing their finances, including student loans, and avoid taking on excessive debt.
You can find additional information on student loan forgiveness and related issues at the following websites:
The student loan landscape is always changing, and borrowers are encouraged to be knowledgeable about their options and rights regarding student debt repayment and forgiveness.
