Money

Actions

Millions will be affected when student loan payments resume

Posted at 12:42 PM, Dec 07, 2021
and last updated 2021-12-07 13:52:12-05

CORPUS CHRISTI, Texas — Millions of Americans will now have to watch how they spend their money a little closer.

Federal student loan payments have been on hold for the past two years.

That edict is helping nearly 43 million Americans save hundreds of dollars a month.

But on Feb. 1, those payments start again.

A survey released earlier this week from the Bankrate Co. shows nearly 70 percent of borrowers will need to make major life changes to afford those payments again.

And this could impact the country's pandemic economic recovery.

"Economists have been very impressed with the resiliency of consumer spending and I think you know when these payments resume back up that's going to be pretty expensive for a lot of borrowers," said Sarah Foster, a Bankrate analyst. "That data shows that the median of federal student loan payment is around $222 a month, so that's really absorbing a lot of cash that a lot of Americans could have been putting toward other things."

More than a quarter of those surveyed say they'll get a second job. Others say this will impact their ability to save for emergencies or retirement, and that it'll be tough to even pay for day-to-day essentials.

And 25 percent say they will have trouble paying for their homes.

Experts at Bankrate suggest adjusting your spending now, to be better prepared for that Feb. 1 payment.