When student loan payments resume in October, half of all borrowers will have to start making payments of at least $200, according to a A new study from TransUnionA leading credit bureau.
The agency said one in five is looking forward to making a monthly payment of $500 or more.
Just over 40 million Americans carry education debt, which, according to TransUnion’s findings, totals $1.6 trillion. Two-thirds of them, or about 27 million, have federal student loans and will be making payments for the first time since pausing them at the start of the pandemic in March 2020 — or making them for the first time ever if that doesn’t happen. t in payment previously. (Most individuals with private loans never had a break in their payment schedule.)
Read on: What is a credit bureau? Equifax, Experian, and TransUnion explained
Borrowers “should begin assessing their monthly budgets, and make any needed adjustments as soon as possible to help mitigate the impact of these payments,” Margaret Poe, president of Consumer Credit Education at TransUnion, said in a statement.
This is especially true given how many people have taken out additional debt over the past three years: According to TransUnion, 36% of student loan borrowers added auto loans, 15% took out a mortgage and 15% took on unsecured personal loans.
Read on: What should you do about your student loans? We asked the experts
“These additional credit products mean additional monthly payments, the accumulation of which may present additional challenges for families trying to reintegrate student loan payments into their monthly budget,” Liz Page, TransUnion’s head of consumer lending, said in a statement.
TransUnion reports that the average borrower’s student loans are currently around $35,000.
The company said its data, taken from May 2023, was not merged Announcement July 14th The Department of Education reported that modifications to income-driven repayment plans would automatically cancel the loans of 804,000 borrowers.
The Biden administration announced for those who would not benefit from the amendment A transition period of one yearBorrowers who default on monthly installments will not be deemed to be in arrears, or in default, reported to credit agencies such as TransUnion or referred to debt collection agencies.
However, the interest will accrue during the period which will start from October 1, 2023 to September 30, 2024.
Read on: Everything we know about Biden’s new student loan relief plan
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