Roanoke, Virginia – The agreement on debt relief between Congress and President Biden signals the cessation of temporary deferments on student loan repayments.
The potential forgiveness of up to $20,000 is dependent on the Supreme Court’s verdict concerning the constitutionality of the president’s bill. If approved, approximately 40 million borrowers, who have been exempted from repayments for over three years, will be required to recommence their loan settlements by the end of August.
Rory Croke, a Bachelor of Science in Nursing (BSN) graduate, expressed concerns: “I do worry about not being able to afford groceries and gas and even though I will have a full-time job.”
The anticipation of resuming payments has created a sense of unease among students about their imminent financial commitments. Even for those who have consistently managed their finances effectively, the impact of this transition is expected to be significant.
“Once that is lifted, I am going to have to start paying the interest plus principle if I want to get my loans out quicker. So, financially it’s going to be kind of tough considering I haven’t started working yet and still have to take boards as a nursing student,” Croke commented.
Croke also pointed out the challenges that students who have yet to secure full-time employment will face.
“They are going to be struggling a lot too because their current jobs kind of just got them through college, food just basic needs type thing, so it will be a little difficult,” Croke observed.
However, for individuals concerned about their financial strategy, there are proactive measures that can be adopted to maintain fiscal stability.
“Establish a budget that works for you, make your payments on time, and update your paperwork with your service provider on a yearly basis,” advised Kevin McFarland, an Independent Branch Leader and Financial Consultant at Charles Schwab in Roanoke.
McFarland also predicted a harsh reality check for many individuals who have not had to worry about repayments since the pandemic’s onset.
“You may want to consider participating in a 401k plan or a 403b retirement plan because that will lower your adjusted gross income if you are going to look into an income-based repayment plan,” McFarland suggested.
Those anticipating the Supreme Court’s approval of student loan forgiveness should expect a decision by early July.
