LITTLE ROCK, Ark. — It’s no secret that getting a college degree can be expensive, and the high cost of education has led many people to borrow money that they must pay back later.
Well, “later” has arrived again for millions of Americans.
After a more than three-year pause during the pandemic, student loan repayments restarted in October
“When those student loan payments restarted in October, I was in a world of hurt,” Zach Simonar
He has had to make some lifestyle changes now that another bill is due each month.
“It certainly impacts my life and my family a lot. You know, I’m fortunate to have a job that pays me pretty well. You know, but at the same time, it’s not enough,” Simonar described.
Up until the pandemic, Simonar said he paid his loans monthly, but that has been a little more challenging now that he’s raising his two-year-old son.
He’s even had to take on a second job to make those payments.
“$550 isn’t a small lump sum. and it can be a struggle,” he added.
Ryley Bowen has also been feeling that struggle after having recently graduated from nursing school.
“Whenever it comes time, towards the end of the month, I’m like, whew. It’s getting close,” Bowen said.
She also said that she’s not just concerned about making her payments now, but also the impact they could have long term.
“I kind of forget that since I haven’t been doing it as long, I’m like, oh, gosh, I’m like scrounging last minute to make sure that I’m paying that one too. Because I have a good credit score right now and I don’t want to mess that up,” she added.
According to the U.S. Department of Education, Bowen and Simonar are among more than 28 million borrowers across the country who had their payments restart in the fall of 2023.
However, recent data shows that only 60 percent of people with payments that were due in October actually made those payments.
The Department of Education said those borrowers will be protected from the harshest consequences of missed payments until September 2024.
Financial Attorney Lyndsey Dilks explained how after that people who don’t pay could face legal trouble.
“The government and all lenders could file a lawsuit against the borrower and obtain a judgment against them and using that judgment, they could garnish their paycheck, garnish their wages, and garnish their bank accounts. That’s certainly a drastic remedy, but it is an option that’s available,” Dilks added.
Her advice was to not let it get to that point.
“Don’t keep your head in the sand, you’re going to have to deal with it. Deal with it now during this grace period, and determine what your options are,” she described.
Dilks said she’s already gotten calls into her office from people asking for help in navigating the repayment process.
It’s something she welcomes because she knows it can be confusing.
For people who can’t make their payments, there is help, like the “Fresh Start Program.”
“That program is for individuals who acknowledge that they are in default on their loans, that there’s been a time period that they should have been making payments for whatever reason they were unable to do so. It lets them get back into the payment process,” she described.
When it comes to future and current college students, Dilks encourages them to plan ahead now to deal with financial stress later on.
“If you do not have someone who’s going to pay for this, or you don’t have a scholarship or a grant that’s going to cover it, then I recommend taking the smallest amount of loans possible. You know, if you can live at home and get some classes at community college, I absolutely think that that’s the way to go,” she added.
Those like Bowen and Simonar who are already out of school have been adapting to this new normal.
“I have to be like, okay, do I need to pick up an extra shift here? Like, I have to play my cards right to make sure everything kind of lines up good,” Bowen explained.
“Certainly [cut] some of the spending habits back. I’d probably do something a little different if I had it all over to do again,” Simonar said.