When student loan payments resume in October, half of borrowers will have to make payments of at least $200, according to a new study by TransUnion, a leading lending bureau.
According to the agency, 1 in 5 people are considering making a monthly payment of $500 or more.
According to TransUnion’s findings, just over 40 million Americans owe a total of $1.6 trillion in educational debt. Two-thirds of them, about 27 million, have federal student loans and will be making payments for the first time since the suspension at the beginning of the pandemic in March 2020 — or for the first time ever if they were previously out of repayment. (Most personal borrowers have not had a payment break.)
Continue reading: What is a credit bureau? Equifax, Experian and TransUnion, explained
Borrowers “should begin evaluating their monthly budgets and make any necessary adjustments as soon as possible to mitigate the impact of these payments,” Margaret Poe, TransUnion’s head of consumer credit intelligence, said in a statement.
That’s even more true when you consider how many have taken on additional debt over the past three years: According to TransUnion, 36% of student borrowers have taken out auto loans, 15% have taken out a mortgage, and 15% have unsecured personal loans.
Continue reading: What should you do with your student loans? We asked the experts
“These additional credit products mean additional monthly payments, the accumulation of which can pose an additional challenge for households trying to fit student loan payments back into their monthly budget,” said Liz Page, head of TransUnion’s consumer credit business, in a statement.
According to TransUnion, the average borrower currently has about $35,000 in student loans.
The company said its May 2023 data did not take into account the Department of Education’s July 14 announcement that adjustments to earnings-related repayment schedules will result in 804,000 borrowers having their loans automatically forgiven.
For those who will not benefit from the adjustment, the Biden administration has announced a one-year “on-ramp” grace period during which borrowers who miss monthly payments are not considered delinquent, delinquent, reported to credit bureaus such as TransUnion, or referred to collection agencies.
However, interest accrues during the period running from October 1, 2023 to September 30, 2024.
Continue reading: Everything we know about Biden’s new student loan relief plan
Not all messages on the site express the site’s point of view, but we automatically transmit and translate these messages through programmatic technology on the site and not by a human editor
2023-07-19 22:22:33
#student #loan #borrowers #face #monthly #payments #excess
