Borrowers concerned as student loan interest kicks back in
LEXINGTON, Ky. (WKYT) - Starting Friday, interest on student loan payments kicked back in, and monthly payments will be due soon.
Many recent graduates are concerned about making their loan payments while still paying rent.
“We know the cost of everything has gone up, including housing, apartments, food,” said Courtney Wheeler, UK’s former student body president and spring 2021 graduate. “Everything has gone up in price, so the cost of living is very expensive.”
Wheeler likened student loan payments to paying for a second apartment or car.
“There’s a reason why you only want to have one apartment, because you don’t want to have to pay two rents. In some cases, it’s almost like paying two rents,” said Wheeler.
While current students have some time before they have to start paying their loans, it is still an inevitable payment many dread.
“You’re giving money to these people, and you’re like, ‘ok, you can pay it back after you graduate,’ but when they start paying back, you’re charging more and more money just because they don’t have the money to pay it back right now,” said Salethia Byrd, a UK student. “I think that’s just unfair to the people of our society.”
Federal loan forgiveness, which President Joe Biden spearheaded, was struck down by the Supreme Court earlier this year. However, President Biden announced his administration will continue fighting for other forms of forgiveness for borrowers.
“It’s the most affordable student-loan plan ever,” said President Biden.
The SAVE Plan is a new form of income-based repayment that allows undergraduate borrowers to put only five percent of their discretionary spending to their loans instead of 10 percent.
For those who borrowed for a higher degree, it will still be 10 percent of their discretionary spending.
Biden said the plan, which forgives loans after 20 to 25 years, prevents borrowers from seeing their total money owed from increasing. It is an option that could help borrowers save money as they aim for long-term plans.
“I always tell myself I’m budgeting on the low-end, so I always try to make sure I’m saving for the future because it’s not going to be easy to retire in the future,” said Wheeler.
Many who recently graduated, particularly the class of spring 2023, are still within their six-month grace period.
For more information about repayment options, visit the Federal Student Aid website.
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