NewsCovering Colorado

Actions

Expert: Student loan borrowers should still prepare for payment resumption

student loan savings
Posted at 5:48 PM, Apr 06, 2022

COLORADO SPRINGS — The Biden Administration is extending the pause on federal student loans through August 31.

"I think it will allow people to take and spend those that extra funds on things that are needed," said Melissa Hall.

The pause is going to make a big difference for her family. Her son still lives with her, and just graduated from trade school.

"This will be great for him to redirect that money every month," said Hall.

Hall says he will either save those extra funds or help with household bills.

"For me, I've noticed a significant increase compared to last year. It's tripled," said Hall.

Jevita Rogers with the University of Colorado Colorado Springs Financial Aid Office says borrowers should be making payments or paying off other debts.

"You always want to pay off student loans as fast as possible. However, if you have a high interest credit card, that is the one you want to pay off because it's a higher interest rate," said Rogers.

She recommends borrowers come up with a budget to help prepare for the pause to end.

"You want to start your budget with your needs versus your wants. We have certain needs, we need a place to live, a car, and to be able to eat and live. Those are going to be your needs. Your wants are going to be the things you have options about," said Rogers.

Rogers says to talk with your federal loan servicer about options.

"You can call the servicer and say this is my situation, I was laid off and just getting back on my feet. There are a lot of options to pause or reduce payments," said Rogers.

"My son is a pretty dope human being so I know he would have pulled it off but it's a struggle for a lot of people," said Hall.

For more information on federal student loans, visit this website.