RICHMOND, Va. -- Nick Williams said his parent were on grind for years, working multiple jobs, to send him to a private high school in D.C. His path and ambitions in life led him to an undergraduate and masters degree from UVA and now a doctoral program at VCU.
"I know what my parents sacrificed to even get me here," Williams said. "Eventually, I do want to become the president of a university, and I also want to have multiple businesses.”
"I worked all throughout undergrad; I was a R.A. to help cut my housing cost. My dad and mom would hustle to try to figure out how to fill in the rest," he said.
Despite those efforts and completing his masters in one year to help lower cost, you likely know what's next: Williams is one of more than one million Virginians who have federal student loans.
His sum is significant, and depending on what happens with the debt ceiling negotiations in D.C., Williams and other student borrowers will soon have to begin repayment once again.
“I said, well, I’m going to bite the bullet and hustle my way through and hopefully pay all this off," Williams said. "It always impacts what jobs I look at because, while I love the work that I do, I got to pay my bills. Student loans are a big factor in that.”
How to prepare to start paying back student loans when payment freeze ends
Part of the federal debt limit deal that Congress is currently debating includes an end to the pandemic era suspension of student loan payments. They had been paused for three years, since March 2020, as the pandemic unleashed a wave of economic uncertainty.
The federal COVID-19 public health emergency ended last month. Under the plan, student borrowers will likely have to begin repayment later this summer.
Scott Kemp is the student loan advocate for the State Council of Higher Education of Virginia. Based on their data, it is safe to assume that almost every Virginian knows someone who will be impacted by the continuation of student loan payments.
"When you look at Virginia, there’s over one million borrowers who have some amount of student loan debt," Kemp said. "[It's] about one-eighth of our population, and the total amount is about $400 billion of student loans."
Although an exact date is not set, Kemp said it is pretty clear that repayments will begin in the coming months. Since the scope of Virginia's debt is enormous, it is important to remember this will impact every student borrower in the U.S.
"The key is preparation. Now is the time to prepare, rather than wait to the last minute. We’re not sure the loan services are going to be able to handle the call volume," Kemp said.
Student borrowers in Virginia should make sure their information is updated with their loan servicing provider, begin budgeting now for monthly payments once they resume, and check their payment plans and loan balance.
The average student loan balance in Virginia is nearly $40,000, Kemp said, so monthly payments are typically in the hundreds of dollars. It's one reason he's urging borrowers to visit the Virginia Student Loan Help site for detailed information on income based plans and other options for borrowers.
"I don’t want borrowers to think that the only option is to not start paying because the consequences of default are pretty significant, including wage garnishment, tax refund garnishment. So, just let borrowers know they do have options, income based options, available to them," Kemp said. "I'm here to help guide them through the maze that is student loans. There are many options, repayment options, different kinds of loans. This position was created by the Virginia General Assembly to give Virginia borrowers somebody who can help them understand what their options are and make good, informed decisions."
"I get a lot of borrowers that have a certain amount of shame because of the situation they've gotten themselves into," he said. "My background is in counseling, and I do a lot of phone counseling with borrowers to try to help get them back on track and realize what happened is the past and now we look forward."
President Biden's student loan forgiveness program is currently on hold, awaiting a ruling by the U.S. Supreme Court. Kemp said borrowers should not rely on that program at this point.
"The one certain thing we know is the payments are going to restart. We don't know if an amount is going to get canceled or not, so the best thing to do is plan for whatever your loan balance is. That's what you're going to have to start paying. Anything above and beyond that would help your situation," Kemp said.
Williams said he has been planning ahead for the repayments to begin again.
"[The repayment pause] allowed me to focus on my finances and things I can invest in and build, so when the repayments do come back, I can effectively pour money in to get rid of it faster," Williams said.
Currently, Williams works full time at the VCU School of Business while pursuing his doctorate. In his role, he works directly with students, and many are very much concerned about whether taking on large sums of debt to pay for school will be worth it in the long run.
Although he believes higher education truly benefits most students, Williams said institutions — both the schools and government — need to find ways to revamp a system that puts a financial weight on many students just looking to better their prospects in life. He likes the idea of eliminating student debt from an individual's credit score.
"I think college is worth it, but it goes back to it does need to evolve. It can’t function in the same ‘ivory tower' mindset that it used to," he said. "Whether it’s businesses to help scale the economy, revamping some of the institutions we currently see, building new technologies and innovating, I really think [students] really need a breather, and we have to think creatively on how to do that.”
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