WILMINGTON, N.C. (WECT) – The pandemic hasn’t been easy on anyone, but for recent college graduates it can be an even bigger challenge.
“I didn’t get a stimulus check, my mom didn’t get a stimulus check for me in order to help cover some of my costs and expenses,” said Shannon Murray. She graduated from college in 2019 and says she just can’t seem to catch a break. Murray says she didn’t get a either stimulus checks because she was claimed as a dependent last tax season.
“For our age bracket, it’s already hard to start your life with student debt, trying to get into the work field, that’s more than an entry level job, because you don’t have the experience,” said Murray.
Murray lives and works in the Wilmington area. She would like to buy a house but can’t get caught up on bills to make the move.
“It’s just a vicious cycle for our age group more than it already has been,” said Murray.
She has a degree in psychology but with only a bachelors, she can’t find a job in the field that pays more than $12 an hour.
“I know I need to get my master’s, but especially with everything going on and like I can’t afford to,” said Murray.
After getting behind on rent, her apartment complex is now raising rent before she even has a chance to catch up.
“Someone like my age, I should be going out able to like have fun and create a life for myself and do this,” said Murray. “It’s nearly impossible to live any life.”
The student loan moratorium is set to expire Jan. 31, but on his first day in office, President-elect Joe Biden is asking the Education Department to extend the suspension of federal student loan payments through Sept. 30. That would bring relief to millions of Americans, like Murray, who could use the extended relief to catch up.
“This moratorium has been hugely beneficial to those borrowers,” said Andrew Pentis, a Certified Student Loan Counselor. Pentis says if the moratorium is extended, people should use the time given wisely.
“You can also prepare for the end of the moratorium because it will end at some point no matter what,” said Pentis. “Fortunately, there are some great options for handling your federal student loans.”
Pentis says you can pause or decrease your monthly payments using a variety of strategies.
“Income driven repayment plans that capture monthly payments at a percentage of your income, as well as those deferment or forbearance’s,” said Pentis. He said if you lose income during the pandemic, you could apply for a unemployment deferment that would pause your repayment for up to three years while you’re searching for new work.
“The only downside of these things, unlike the moratorium, is that interest would continue to accrue on your balance so that if you do take a brief from your payment, your balance would have grown in that time,” said Pentis.
During the moratorium, Pentis says its a good idea to make a budget and stick to it to help get out of debt.
“The goal there is to analyze and know how much income you have coming in every month,” said Pentis. “See how much income you have going out, you know, estimate, are there are there certain bills that you can do without, and then eventually, you know, maybe after a couple months few months of doing this, you’ll have a better idea of how much room you have in your budget for those other personal finance priorities such as student loan repayment, or other debt repayment.”
Pentis says you can still make payments on your loans during the moratorium.
“It can be a great strategy, because interest rates were set to zero during the moratorium,” said Pentis. “So what that means is that if you make a monthly payment, even if it’s a partial one 100% of that payment will go towards your principal, because no interest is accruing.”
But there is a catch with that strategy: if you have money accrued in interest and fees on your debt already, your voluntary payments would first go towards that, but once that is zeroed, 100% of your voluntary payments would go towards that principle.
“By the time the moratorium is over, your balance, ideally would be even smaller than when you began back in March,” said Pentis.
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