28 August 2023
WICHITA, Kan. (KSNW) — The pause on student loan interest and payments will soon expire. Interest will start accumulating again on Friday, Sept. 1.
New, unsubsidized loans taken out by undergraduate students this school year will be charged 5.5% interest. Payments will resume in October.
The Biden Administration will have a transitional year where people can begin making student loan payments any time by September 2024. The missed payments will not be marked as missing to credit bureaus or reported as delinquency. However, they will still be accumulating interest during the time period.
Dr. Larry Straub is the Associate Professor of Management at Newman University. He says students should begin budgeting now in preparation for resuming payments.
“Start gradually reigning their budgets back in. I know it’s been tempting to take those dollars and utilize those for other purposes, but with this payment program restarting, it’s going to compete again for their cash that they have,” explained Straub.
Some students explain paying off loans is challenging while enrolled in school.
“With inflation, it’s been a hard time just saving up money to pay off those loans. It’s kind of hard to just get gas at this point,” said Wichita State student Kyle Lever.
“I want to live out my college years. I don’t really want to have to worry about having to pay things off, and I want to use as much money for me as I can, but at the same time, you can’t just pay everything off by yourself. You’re going to need those loans,” added Shocker Lirio Izazaga.
They are two of many people who are dealing with the burden of their loans.
“There is like $1.8 trillion in student loan debt right now, so this is a very widespread issue,” explained Straub.
While it is difficult, he says there are many resources that can help.
“There are places to get free budget counseling. There are places to get help. Talk to their actual academic advisors. And then we have student support services and student account services, also, that are available to help and assist students with that as well,” added Straub.
Lever says he finds the Financial Aid Office a useful tool in getting information about loans. Izazaga says the preparation can begin even before college. She says programs like Gear Up can helped her prepare for the task of taking out loans.