BIRMINGHAM, Ala. (WBRC) – If you have student loan debt, your due date has just been pushed back. The Biden administration announced on Tuesday that student loan repayments would not resume until the end of August.
More than 43 million Americans owe a total of $1.6 trillion in student loan debt, according to the Department of Education, so for those who need a little financial relief, that’s a huge sigh of relief.
But if you have money to make payments right now, should you?
Marshall Clay, senior adviser to the Welch Group, recommends not paying off student loans at this time, even if you have money. Instead, put the money you would give your loan company into another account that can grow over time.
To make this easily understandable, Clay put it in simple terms: “Let’s say you have $100,000 in student debt, but I could put $100,000 in a savings account and earn 1% which is essentially free. risk. Well, I hang on to that, I make 1% and then when I get to August I might pay $100,000 and I get the 1%.”
This advice is only for those who have no other debts. If you have debt that’s earning interest right now, Clay recommends throwing money at those bills for now.
Student loan repayments are expected to resume on September 1.
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