Millions of Americans have begun paying off their debts Federal student loans And again last October, with monthly payments averaging hundreds of dollars a month. Borrowers had to start cutting expenses, taking on additional work, and looking for options to reduce their monthly payments.
Megan McClelland, 38, said last year she started asking for more shifts with a catering company and winery to help supplement her income.
McClelland’s main job is as a counselor at Petaluma High School in California. During more than three years the payments were made Suspended due to the epidemicI paid off my car loan and was able to save for the first time. She would put the $235 she was spending on her car payments toward her student loan, but that still left another $270 or so in her budget that she had to reallocate or earn back.
“It’s been a huge relief the last few years to not have that financial burden,” she said. “In the coming months, I’m looking to see where I can cut back on my budget. Maybe going out to eat less, and doing more side parties.
Justin Cole, 35, of Little Rock, Arkansas, said he doesn’t know how he’ll be able to come up with the $166 a month once payments resume. That’s the estimated $19,000 he owed to pay for college more than 10 years ago.
“I’m already in a mountain of debt, and even though I just got a raise, it won’t take effect until we’re fully staffed at my family practice,” he said.
Cole works in the front office of a medical practice, where he sees patients, handles records and manages payment collection. Some of his other debt comes from medical expenses after he was in a car accident early in the pandemic.
“If those loans are forgiven, I can finally work on increasing my credit and actually save money for once,” he said. “If they were suddenly pardoned, I would be ecstatic.”
Unfortunately for borrowers, the Supreme Court rejected a plan by President Joe Biden’s administration Survey of $400 billion In student loan debt.
How to Get Student Loan Forgiveness or Forgiveness
The Public Service Loan Forgiveness Program is one of many avenues of relief still available to many struggling with student debt. After the Supreme Court invalidated Biden’s original pardon plan last July, the White House said it would use the Higher Education Act to achieve justice. Cancellation for more borrowers. It is currently undergoing a process known as “negotiated rulemaking” to determine the details of that plan.
Other sources of relief for borrowers include: False testimony, Borrower defense, Closed school, Total/permanent disability dischargesAlternative payment programs such as: Payment based on income.
For her part, McClelland said she now spends a lot of time advising high school students on how to avoid taking out stressful loans.
“I didn’t receive any financial guidance when I was younger, either from my parents or from school,” she said. “I never understood the long-term impact.”
Despite her work while in school and since — moonlighting at Starbucks, wineries and restaurants as well as counseling — McClelland still has a balance of about $38,000 in debt, from the original $10,000 in loans toward her college studies and $40,000 toward her degree. Master’s in Counseling at Sonoma State. .
“I knew I wanted to go to college, and my parents didn’t have any money,” McClelland said. “I tell kids all the time, frankly, ‘As someone who was once in your shoes, I highly recommend finding a way to avoid taking out loans.’ When you’re 17 or 18, you think, ‘Oh, sure, I’ll figure it out.’ And then it’s… It’s frustrating to still be in this financial situation.
___
The Associated Press receives support from the Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent organization is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
This story was originally published on September 30, 2023.
Next to the lead: Get the strategies and insights you need to get to the corner office, delivered to your inbox every week.
Register here.