According to the Education Data Initiative, more than 43 million borrowers have federal student loan debt. On Oct. 1, people nationwide started repaying their student loans after nearly four years of a pause from the COVID-19 pandemic. Cierra Brownell, Assistant Vice President and Financial Wellness Coach at Workers Credit Union, works with community members to set their financial goals, clear up questions, and advise on how they can move in the right direction to be successful with their finances. Most of the members she sees have student loans. If that is you, here are her tips on how to manage your financial situation as federal student loans resume.
- Understand your situation. Student loans can be confusing as people may have a variety of federal, private, subsidized and/or unsubsidized loans. It’s important that you know what kind of loans you have and who your loan service provider is, and to set up a username and password to access your account. This will allow you to also make changes to your information. Since loans were paused at the start of the pandemic in March of 2020, many people have changed addresses, jobs, or email addresses. By ensuring your loan provider knows your current information, it will ensure you receive proper and timely communications. Once you understand your personal situation, it may help you feel more confident as you repay.
- Examine your current expenses. Federal student loans have not been in people’s monthly budgets for years. This can be stressful as it may require some changes in your expenses. It’s a good idea to look at your current budget, which you may not have revisited in a while, to see if there are cheaper solutions to your expenses. You might not even be aware of recurring payments that you don’t need, like a gym membership you don’t use or your multiple streaming platforms. There are many options out there for better deals on your insurance, phone, or internet. Any place you can free up money will help you handle student loan payments without throwing off your budget too much.
- Seek assistance to set yourself up for success. Financial coaches can help you navigate this change in your budget. They also are knowledgeable about loans and can offer information that may be difficult to find online. Since call volumes at loan providers can be high, and it’s easy to get mixed answers on the internet, it’s more important than ever to seek help from an expert that can work with you one-on-one. Asking for advice will help you decide on the best course of action for your overall financial success. The Department of Education also offers different programs and initiatives to help people in various stages of their lives.
While it may seem like a daunting time, financial coaches make people feel comfortable and confident. Workers Credit Union Workers Way certified financial coaches can help you to examine your current budget and expenses to free up some money that can be used to pay off your loans without diminishing your quality of life.
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