Each week, we are sharing a financial wellness tip to help you make the connection between financial management decisions, your overall wellness, and student success. Money touches every aspect of our lives, and a lack of financial literacy can cause unnecessary stress and negatively impact our mental and physical health.
Student Loan Repayment
Although pursuing higher education and attaining a degree is a great accomplishment, it can be financially difficult - especially the first few years. After graduation, you might be starting out in a new job and a new place to live, all while beginning to pay off your student loan debt.
As you may be aware, there have been efforts to alleviate the burden of student loan repayment by the federal government, such as the relief program
that launched in August 2022. The Student Loan Debt Plan is currently being challenged in the Supreme Court, but if it is allowed to move forward it could forgive up to $20,000 in student loans.
Due to the COVID-19 pandemic, student loan payments and interest were suspended in March 2020 (federal loans only). This pause
has been continued and is scheduled to be in effect until at least June 2023. As we wait for the Supreme Court to make a decision about the Student Loan Debt Plan, we recommend preparing yourself financially just in case you have to begin repayment after your 6 month grace period.
Here are some ways to start preparing for student loan repayment:
- Budget, budget, budget - Budgeting is key to ensuring you don’t overspend. Start by listing all your monthly expenses and compare them against your monthly take home pay. Even if you don’t have a job yet, or if you work part time, getting in the habit of knowing what your expenses are on a daily, weekly, and monthly basis as compared to what income you have is important so you can see if you need to cut back or reduce expenses, and how much you will have to contribute towards savings and debt repayment.
- Start saving what you can - Putting away some money each month is critical. Start small and do what you can. A great idea is to start saving the amount of your student loan payment now before repayment begins so that you get used to having that expense.
If you are unsure what you will owe, you can utilize the Loan Simulator
to help calculate your federal student loan payments, and choose a repayment option that best meets your needs and goals. Don’t forget to check out the Financial Literacy website,
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