25% of borrowers think they'll need to work a second job to repay their student loans

"Do a descriptive budget where you track your spending per month, so you know how [loan payments will] fit."


Nearly 7 in 10 student loan borrowers say they'll need to make financial changes in order to afford monthly payments when they resume next year, according to a new Bankrate poll. Federal loans have been on pause since March 2020 due to the pandemic, but that break is set to expire on January 31, 2022. Borrowers can expect payments to resume in February.

Some people are considering dramatic strategies to adjust, according to a Bankrate and survey of 4,773 federal student loan borrowers. One in four anticipate picking up a second job or side hustle, while 15% plan to find cheaper living arrangements and 13% expect to borrow money.

An overwhelming majority, 75%, expect that having loan payments resume will have a negative impact on their finances. What does that mean in practice? Well, 43% say they won't be able to contribute as much to an emergency or retirement fund, while 36% say they'll struggle paying for everyday items like groceries.

'Don't panic,' expert says: 'You have a variety of options'

You may not need to take dramatic steps to prepare for loan repayment, says education expert Mark Kantrowitz: "Don't panic. If you have a shortfall between your income and your spending, you have a variety of options."

  • Request an income-driven repayment plan. Switching into an income-based repayment plan could lower monthly payments based on the amount of discretionary income you have. If your income is less than 150% of the poverty line, then your monthly loan payment would be 0, Kantrowitz explains. Keep in mind that going with this strategy will lengthen the life of your loan, meaning you'll pay more overall. If you were on such a plan already, some loan servicers are extending the deadline to recertify until 2023, so when payments resume in February, your loan payment will be the same as it was before the pandemic.
  • Consider an unemployment deferment. With a deferment, student debt payments can be suspended for up to 36 months for people who have lost a job and are in financial distress. It requires you to reapply every six months and show proof that you're out of work. Experts warn this isn't the best long-term option since interest will still accumulate during the time you aren't paying. Think about some other alternatives before you opt to defer, "such as cutting back even further on expenses, or asking a family member for help," Kevin Mahoney, CFP, founder of Illumint in Washington, D.C., previously told Grow.
  • Weigh the benefits and risks of refinancing. It could pay to refinance some or all of your loans with a private lender. Doing so combines those debts into one new, private loan, ideally at a lower interest rate. That could lower your monthly payment and speed up your repayment timeline. But before you rush to refinance, keep in mind that the best rates go to borrowers with excellent credit. Plus, you lose any protections associated with federal loans, including income-based repayment and forgiveness plans. 

President Joe Biden recently asked the U.S. Department of Justice and the U.S. Department of Education to review his legal authority to forgive student debt through executive action. Other lawmakers have lobbied for a longer forbearance period as well.

For now, though, getting back on track with student loans is in the hands of the borrower, so it's important to get ready. "Find out what your monthly payments will be … and do a descriptive budget where you track your spending per month, so you know how [loan payments will] fit," Kantrowitz says. Seeing that information laid out on the same page can make it easier to plan. 

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