WAUSAU, Wis. (WSAW) – Federal student loan payments will resume on Feb. 1, 2022, a Wausau financial advisor advises people to enjoy the break if they have to.
President Joe Biden extended the pause on federal student loan payments on Aug. 6. The pause is expected to end on Jan. 31.
It includes a suspension of loan payments, zero-percent interest rate and stopped collections on defaulted loans, according to the U.S. Department of Education.
Private Wealth Advisor of Hermening Financial Group, Kevin Hermening suggests people enjoy the break if they have no other choice.
“Maybe they have other debt they could consider, but because it’s not going to compound during this period of time,” Hermening explained. “It’s okay to simply wait until that time frame.”
If people are not in a financial bind during the pandemic and can afford to continue to pay their student loans, he suggests doing so.
“The idea of getting rid of debt is always a good idea,” Hermening expressed.
As the new year approaches, Hermening advises people to have a plan for when payments resume.
“When it comes to paying off student loan debt, it’s the same with credit cards,” he explained. “You have to pay all of the interest for that month. Plus, you should be trying to pay some of the principle every month as well.”
He also suggests people save money while paying off their debt, no matter how big or small the debt is.
“I also recommend that people simultaneously do some saving for the long term because you can never get back the time that is necessary,” Hermening explained. “We believe that you cannot really wait until your debt is done and then start saving.”
Copyright 2021 WSAW. All rights reserved.