Student loan payments are set to resume after they were suspended during the COVID-19 pandemic. For many people, the pause in payments was a big relief when they needed it most. Now that life has mostly returned to normal, people have to start making payments on their student loans again.
For some, this could mean having their finances overloaded with expensive payments. Now is the time to start planning for the return of student loan payments and adjusting your budget accordingly. If it is too much for your finances, you may want to discuss the situation with a Minnesota bankruptcy lawyer to see your options.
The biggest reason many struggle with student loans is that family finances are very different from previous generations. Students are borrowing significantly more money to go to school, hoping it will help them earn more over their lifetime. Unfortunately, many factors are working against them.
Jobs are more challenging to find, and wages have not kept up with inflation over the decades. Many young people are single, struggling to find affordable housing, and fighting a much higher cost of living. All of this combined means tight margins on their finances, and student loans have such a lengthy repayment plan that it is the same as having a second, smaller mortgage in their finances.
To address this problem, the government forgave the loans of some students but not all. While many ask why some students had their loans canceled and others did not, it depends on who the loan was held by. The government canceled student loans for government workers who had loans from the government rather than private institutions. Since they were getting paid by the government, giving that money back to the government in a loan payment didn’t make much sense.
Additionally, the loans of other people held through the government were canceled. This was a relief measure to help as many people as possible survive economic uncertainty.
If your student loan payments are about to resume, then adjusting your budget as best you can is a prudent decision. That may mean cutting necessary expenses and other things. The fact is that you are going to have to find a way to make the payments unless you can have your debt canceled.
If you cannot afford the payments, you must cancel this debt. The way to do this is bankruptcy. It seems like a scary option and should not be taken lightly, but it can provide relief when it comes to student loans and other debt.
Before you make any decisions, discuss your case with a Minnesota bankruptcy lawyer. Bankruptcy can help you, but it is not a process you want to manage alone or without legal expertise.
If making payments on your student loans will cause you hardship, it might be time to discuss your options. Bankruptcy might help. If you’re considering bankruptcy, contact Kain + Henehan by calling (612) 438-8006 or completing the online form.