Financial Tips as Student-Loan Payments Set to Resume Soon
Wednesday, December 1, 2021
GREAT FALLS, Mont. - Student-loan borrowers have had a reprieve from making payments during the pandemic, but that's set to end in 2022. Starting in February, the pause on federal student-loan payments will be lifted for the first time since the pandemic began in March 2020.
Greg Harper, a financial capabilities counselor at Rural Dynamics, a Great-Falls-based financial nonprofit, has a plan of action for anyone with student debt.
"I recommend that they reach out to their loan servicer, online or by phone, to discuss options right away," he said. "Find out what payment that they will be responsible for and when will it be due. So, first of all, I don't want them caught off guard."
Nearly nine in 10 fully employed student-loan borrowers have said they don't feel financially secure enough to start paying off their loans again, according to the Student Debt Crisis Center. An estimated 100,000 Montana borrowers owe an average of about $30,000, both in federal and private loans.
Harper broke down how much of someone's budget should go toward student-loan debt.
"Debt service, minimum payments combined, should be no more than about 15% of your net spendable income," he said.
Harper added that each person's plan for tackling student loans should be based on their individual circumstances.
"That's the big question, right? It's not a black-and-white issue," he said. "So, it really is to cater to their specific situation, make the proper recommendations based on that."
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