Despite both of them having been fired at various points over the previous three years, Shanna Hayes and her partner made some significant financial progress during the pandemic.
US borrowers in their millions prepare as Student loan payments resume. (Photo: ABC News)
According to the Daily Journal, they managed to relocate from cheaper New Hampshire to more expensive Washington, D.C. after paying off both of their cars and lowering their credit card debt.
Since the Covid-19 loan payment pause went into effect in March 2020, Hayes wasn’t required to make any payments on her federal student loans, making the whole thing possible.
Now that that reprieve is coming to an end and student loan payments resume in October, Hayes and many other borrowers are once more concerned about their ability to keep up as monthly student loan payments resume.
The Biden administration has proposed several measures to lessen the impact as student loan payments resume, but some may not benefit from these initiatives.
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“The payment pause was a life vest, and repayment is the wave that pulls you back out,” said Hayes, a first-generation college graduate and former high school teacher who was fired earlier this year, according to Yahoo Finance. “Real people are behind the numbers, which is the human aspect.”
According to the article posted by Yahoo! Finance, most of the 40 million borrowers who were eligible to defer their federal student loan payments during the pandemic took advantage of the opportunity to save big money.
Some borrowers, like Hayes, were able to handle hardships and pay off other debts as student loan payments resumed. Other borrowers made different advancements.
According to a recent US News & World Report survey of 1,202 borrowers with federal student loans, 79% of borrowers used the money that would have gone toward student loan payments to meet other financial goals, such as paying off other debts (40%), growing their savings (37%), increasing their investments (28%), or saving up to buy a home (24%).
According to a recent TransUnion study, roughly half of the borrowers will be required to pay more than $200 per month when student loan payments resume and roughly one in five will have to make payments of more than $500.
