Student loan payments will resume if debt ceiling deal is made
BIRMINGHAM, Ala. (WBRC) - The House is set to vote on the debt ceiling legislation on Wednesday. If passed, the deal would terminate the pause on student loan payments.
Marshall Clay is a partner and senior advisor for the Welsh Group. He said the average payment delayed each month was $400.
“The student loan forbearance was intended to be a short-term COVID stimulus as a result of everything going on two or three years ago,” said Clay.
Clay said now is a good time for borrowers to start saving money and adjusting their budgets for when payments restart in September.
“Don’t go out to eat as much every week between now and then. Maybe cut out a trip between now and then if your student loans are going to be that much. Those are the kinds of decisions people are going to have to make,” said Clay.
Clay said most payment plans are based on your income and encourage borrowers to use that to their advantage.
He also said when tackling debt, look at the interest payments.
“If you’ve got $20,000 of credit card debt that’s charging you 21 percent, and you’ve got student loan debt that is charging you 5 percent, you definitely want to make your minimum payment, but you’ll want to allocate your capital towards the credit card debt,” said Clay.
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