June 15, 2023
Many Americans are worried about having to start paying their student loans again. For some, it might mean getting a second job and cutbacks on their spending, including dining out less or not buying name-brand goods and foods when shopping.
The Consumer Financial Protection Bureau recently warned that about 1 in 5 student loan borrowers have risk factors that mean they will struggle when repayments resume.
The fretting comes as part of the bipartisan agreement to raise the federal debt ceiling President Joe Biden signed into law includes a provision officially ending the more than three-year pause on student loan payments. This means about 45 million Americans with loans amounting to more than $1.6 trillion, might start repaying as soon as September as a Supreme Court decision on Biden’s forgiveness plan is expected any day now.
“We can’t afford to live as it is and making those payments will be that much harder,” said Richelle Brooks, an administrator at a Los Angeles charter high school and a mother of two teens. “I’m already overextended. There can’t be any more cuts in my household.”
‘My student loan debt outweighs my income’
Brooks, a principal at Matrix for Success Academy in South L.A. for three years, said her love for teaching others has come at a steep cost. She borrowed about $203,000 in student loans for her undergrad, graduate and doctoral studies. Add more than $30,000 in interest and counting.
The pause in payments during the COVID-19 pandemic was a blessing for Brooks. And it gave her a sense of relief and hope, she said.
“I wish I could’ve made some payments,” Brooks said. “But I don’t have any extra money; Things are very expensive.”