CHARLOTTE, N.C. — It's been about two months since federal student loan payments resumed and now those paying bills are getting a better idea of exactly how they have to adjust their budgets.
A recent article from Money.com dug into a MassMutual report that found student loan borrowers are cutting corners to keep up with payments. The findings say among Americans with student loans, 80% have reduced their spending due to the debt.
As for where they're cutting corners, many people said luxuries are the first to go. We're talking about dining out, entertainment, things like that. But it's not a matter of spending less at Starbucks for many borrowers.
About 37% of people said they're cutting back on essential purchases. MassMutual adds that about three-quarters of Americans with students loans say the payment restart has had a "negative impact" on their day-to-day financial health.
Numbers like those have some people thinking about skipping out on loan payments entirely. And while there are programs designed to help those struggling to pay their bills, you can't just stop paying without penalty.
President Biden's on-ramp gives people an entire year before they're considered delinquent on their loans and there are penalties for people who just don't pay. Even if the on-ramp keeps delinquencies from being reported, credit-scoring companies may still be able to see your missed payments and count them against you.
Contact Kia Murray at kmurray@wcnc.com and follow her on Facebook, X and Instagram.
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