LAFAYETTE, La. (KLFY)– Student loan repayments are resuming in a couple of months and many borrowers are wondering how to pay those loans back.
The pandemic-related pause provided relief to nearly 44 million Americans, but now that student loan payments have restarted, many are wondering what’s next. E’Jjln Brown, a senior at the University of Louisiana at Lafayette, plans to go to graduate school but worries about how much time he will have left to pay back the loans.
“I’ll be done like sometime within the next year or two,” Brown said. “I do have some concerns. It’s just really how quick the process is cause I plan on going to graduate school afterwards. Let’s just say I go unemployed or let’s just say I get evicted or something and then ‘oh you have to start making the payment back’, and I don’t have any money, and I don’t come from a rich family.”
Noah Alrashidi, a sophomore at UL Lafayette, said college would not be possible for him if not for the loans.
“If I didn’t have all this aid like TOPS, and all these grants, college probably would not have been an idea in my mind, and I think they make it really easy for students who come from single-parent homes or homes that really don’t have a lot of funding behind it,” Alrashidi said. “They make it really easy for you to pursue an education.”
John Blanchard, a financial advisor with the Matthew James Financial Group in Lafayette, said eliminating expenses you do not need will help save money.
“I would go through your expenses and find areas of expenditures that you have of things that you don’t need,” Blanchard said. “Maybe doing something on the side. Maybe finding part time work. Try to get overtime at your job if you could. There’s numerous amounts of things that can be done to find extra money to use to make that payment.”
Blanchard said recent college graduates need to reduce their spending so the debt will not be as huge. If they can, pay the debt back immediately.
“We see most people when they get out of college, they’re rushing to get a new car or maybe upgrade their living status with a new house or something like that,” Blanchard said. “Maybe upgrade the apartment. I would look at cutting back as much expenses as possible to surface the debt. Payoff the debt as soon as possible.”
Blanchard said paying your loans on time will increase your credit and lower your interest rate, leading you to have lower monthly payments and more saved money.