VIRGINIA BEACH, Va. — Student loan payments are back after a three year hiatus. Now millions of families across the nation and thousands in Hampton Roads are expected to keep up with their payments again.
Loans differ household to household, but were put on pause back in 2020 at the beginning of the COVID-19 Pandemic.
Now, experts say the financial landscape has changed dramatically, and families could find it harder to pay their debts with rising interest rates and high inflation.
"It is truly a crisis in this country," said Sabrina Calazans, Student Debt Crisis Center. "The amount is only second to mortgage debt."
Calazans said interest should have started accruing in September. Borrowers should have received a notification 21 days in advance, but some might not know who their loan servicer is at this point.
"The pandemic changed a lot of things, and one of them is the loan service business," said Calazans. "Some of them went out of business and were bought by others, so it's possible some people out there don't even know who they are paying."
According to the Federal Student Aid Office borrowers owe $1.7 trillion to loaners.
Karen Orie, the CEO of Hampton Roads Credit Union, said our area is no exception. She warned borrowers against giving any late payments and encouraged them to take a look at their budget.
"A lot can change in three years, you could get a car or a new house," said Orie. "I'd recommend sitting down with your family and going over the budget, take a look at your debt to income ratio."
If borrowers do miss a payment, they will not be at risk at immediately defaulting and it should not impact any credit scores.
However, interest will continue to grow on a borrower's account.
The Federal Student Aid website offers a "loan simulator," borrowers are encouraged to check this tool if payments become too much.