Student loan payments will come due soon as grace period is set to end
Aug 17, 2023, 4:23 PM
(Photo: Steven Senne, AP)
After more than three years, the COVID-19 pandemic grace period for student loans is ending.
Payments will be due starting Oct. 1st and interest will resume Sept. 1. That’s about two weeks from now.
This comes as a new survey from Bankrate is shedding light on how Americans feel about student loans.
Nearly half of those who have student loan debt (48%) believe it’s a national crisis and nearly one-third of all Americans (32%) agree with them.
Going to college? Here’s what you should know about student loans
“Only 30% of Americans, overall say that student loan borrowers should be fully responsible for their debt, and given just how politicized this issue is, I would have expected that number to be a little bit higher,” Sarah Foster, an analyst with Bankrate, told KIRO Newsradio.
That may be due to a couple of other factors the Bankrate survey found:
- More than 2 in 5 of Americans (44%) said students are not being educated about the financial implications of taking out student loans.
- Over half of Americans (56%) said the increasing costs of higher education are also to blame.
“In the 30 school years between 1992 and 2023, average tuition at public 2-year schools (is) up 65% and average tuition and fees at public 4-year universities are up 125%,” Foster said.
All of that is adjusted for inflation.
It creates a financial double-edged sword because a college education should improve your financial future.
“We want to be able to attend college to further our opportunities in the workforce, but it’s also an incredibly difficult endeavor to finance,” Foster said.
More student loan advice: How to prepare to start paying back your student loans when the pandemic payment freeze ends
According to the Education Data Initiative, the average interest rate on a student loan is 5.8%.
Before the pandemic pause, borrowers were spending on average between $200 and $300 per month on loans.
There’s continued “talk” of government relief even though the U.S. Supreme Court struck down President Joe Biden’s sweeping plan to help borrowers in June, but Foster said people should not wait to pay off their loans.
Borrowers should visit the Department of Education’s website and log into their federal student loan servicer.
“Make sure you know all of your options, what payment plan is right for you, what payment plan works best for your finances, and if you are eligible for some sort of forgiveness program — that has already been out there — make sure you’re taking advantage of it,” Foster explained.
The total student loan debt owed in the U.S. is nearly $1.8 trillion.
Heather Bosch is an anchor and reporter for KIRO Newsradio.