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Federal student loan pause expires this month: How to financially prepare

Student loan payments are slated to resume on September 1.

GREENSBORO, N.C. — The pause on student loan payments is set to expire at the end of the month. With payments slated to resume on September 1, borrowers are already starting to feel the pinch.  Several took to WFMY’s Lauren Coleman’s Facebook page:

“I know personally it’s not looking good for another extension, but hopefully they will announce some form of forgiveness for any amount at this point,” Cynthia Miller said. “In this economy, on the verge of another pandemic, high prices everywhere, this is the wrong time to have them start back up with zero plans on how to make them affordable without impacting people’s everyday lives.”

“I willingly took on the debt for my kids and don’t expect any forgiveness,” Sean Brookins wrote. “I do appreciate this period as the zero percent interest during this period has allowed me to make headway. Wouldn’t mind the extension again for those reasons.”

“I’m not ready,” Brittany Wall said.

Federal student loan payments have been on pause for roughly 40 million Americans since the start of the coronavirus pandemic. In April, The Biden administration extended the pause through August 31. This month the president is expected to make a decision about canceling student loan debt before the pause expiration or offer another extension.

Money Expert Ja’Net Adams is the owner of Debt Sucks University. She said there are several things borrowers can do now as they wait for a decision to be made.

“Start saving your money,” Adams said. “Start building up your treasure chest because since we did the student loan pause, guess what, living life is a lot more expensive, inflation is here, you're spending  a lot more money in your monthly budget already and now you're about to add a student loan to it."

She said making simple adjustments to your spending plan or budget can make a big difference in the long run.

“Many of us, we may not have cable, we have about five streaming services,” Adams said. “Let’s cut down two of those and maybe save $20-$30 a month. Cut down on eating out. I know we have busy lives, but instead of eating out maybe three times a week like you already do, let’s cut that down to one and that will probably save you $40-$50."

Recent data shows student loan borrowers in the United States owe a collective nearly $1.75 trillion in federal and private loans. Adams said the student loan debt crisis must be tackled from the beginning-- starting with high school students preparing for college.

“For those parents out there or those guardians if a college takes a Parent PLUS Loan, you cannot afford to go there and you all need to pick something else,” Adams said.  “It's one thing to go to a dream school, but those student loans that you'll have after it could make it a nightmare. So, make the right choices this upcoming school year." 

The average student loan borrower in North Carolina owes more than $25,000 dollars. 

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