Federal student loan repayments start soon; How people can get ahead, ease debt burden

DAYTON — Federal student loan repayments will start again on Sunday after a three-year pandemic pause.

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Nearly 44 million Americans have racked up more than $1 trillion in student loan debt.

News Center 7′s Consumer Reporter Xavier Hershovitz has previously reported on how people can get ready to start paying those loans again.

Whether students attend the University of Dayton, Wright State University, or any college, most of the student loan debt is from federal student loans.

Many borrowers have adjusted their budgets without those repayments for the last three years.

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Hershovitz reports the average student loan borrower owes over $37,000, according to federal education data.

That is costing an average of up to $300 a month.

Nealy 25% of Americans with student loan debt say borrowing too much for their education is their biggest financial regret.

“The numbers are so unreal and astronomical that I can’t even fathom making a payment,” said Angela Bolt, a student loan borrower.

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One borrower says her loans have affected her finances for 20 years.

“If I had that ability to talk to my younger self, I would have never ever gone for that law degree,” said Tereina Stidd. “These student loans have been a noose around my neck for 20 years.”

Hershovitz has spoken with financial experts, and they say people should take advantage of the new programs available to help borrowers.

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The first program is the SAVE program. It lowers monthly payments based on people’s income and eliminates 100% of the remaining interest after a scheduled payment is made.

There is also the on-ramp payment. Hershovitz says for the next year, borrowers are not reported to the credit bureaus for a late or missed payment. Loans are not considered in default or sent to collections. But payments are still due and interest with accrue.

Financial experts say that does not mean people should just avoid paying for the next year.

“If you have debt, you really want to face it head-on, and figure out a plan for it,” said Jully-Alma Taveras, Personal Finance Expert of InvestingLatina.com.

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For more information about these programs, visit the Federal Student Aid website.

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