Financial advisor shares prep for student loan repayment

Published: Aug. 31, 2023 at 9:27 PM CDT
Email This Link
Share on Pinterest
Share on LinkedIn

JONESBORO, Ark. (KAIT) - For the first time in about three years, many student loan borrowers will restart paying off their student loans.

For around 44 million borrowers, the pandemic-related pause that started in March 2020 on student loans created relief.

“It’s normal for people to, they don’t have a bill so money goes elsewhere,” said Lori Norris, a financial advisor.

A financial advisor said the time is now to prepare for the restart of payments because time is winding down for that relief to go away.

“I would say, most probably, people are not prepared,” said Norris.

Interest will start back accruing on Sept. 1, and payments will restart on Oct. 1.

“Do I need to cut back here or do I have extra there,” she said. “Because they are going to want their money, so it’s got to come from somewhere.”

Norris said it’s important to start budgeting now to figure out how to repay those loans, but there are other options if the money is not adding up.

“You’ll refinance, but the problem with that is rates are much higher now,” she said.

There are also income-driven repayment plans and a repayment plan named SAVE that launched this summer.

“If you don’t understand something ask questions. Don’t just jump into something without knowing exactly what you are doing because this is something you could be paying off for a long time,” said Norris.

The important things to know ahead of the October restart are the different types of repayment plans, how to make payments, how to contact a loan servicer, and what to do if you are struggling with payments.

Norris said it may seem simple but simply sitting down with a pen and paper and writing down what expenses you can cut back on will help during this next month.