Managing college debt after loan forgiveness is lifted
MILWAUKEE - While the coronavirus pandemic brought student loan forgiveness for some, reality will soon set in, as many students are trying to manage college debt. Finances are being affected, and there are ways to rebound and save.
Graduation and the excitement of achievement sometimes comes with trepidation regarding the future.
"Unfortunately, the student debt crisis is actively keeping them from doing that, keeping them from building long-term wealth, but also keeping them from spending money on things they love," said Tori Dunlap, a money educator.
Tori Dunlap
Dunlap said the pandemic has those in college proceeding with financial caution and dealing with a balancing act.
"Unfortunately, a lot of folks who ended up struggling with a pandemic were probably struggling before, and so they weren’t able to pay off their student loans," she said. "They maybe weren’t able to take advantage of this time. It’s a larger issue just around the student debt crisis – $1.7 trillion for recent grads."
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She said that’s an average payment of nearly $400 per month, leaving many spending the summer trying to figure out how to meet financial goals.
"It depends on an individual, depends on private versus public schools," said Dunlap. "Unfortunately, women are bearing the brunt of student debt. Women are carrying two-thirds of student debt in the United States, which is the largest systemic issue around education, around accessibility."
She suggests mindful spending and managing money in a responsible way as interest can accrue quickly.
"In addition to your monthly payment, you want to send in any extra money you have towards the principal," said Dunlap. "That’s the original amount of money that they took out as part of your student loan. Contributing any extra money you have, even if it's $50, put it toward the principal -- can help you get out of debt that much faster."
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