Financial advisor and author Suze Orman has written bestsellers and provided financial advice for years.
She recently weighed in on one coming challenge many people will soon face, for very real reasons.
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Since March 2020, when the Covid pandemic wreaked havoc on the world economy, the U.S. federal government took several actions to relieve financial pressures.
One important measure taken was to allow student loan borrowers to halt monthly payments. Interest rates were frozen at 0%.
Orman has a warning about dealing with the money realities that are coming on Oct. 1, when the repayments will start again.
"Please don’t ignore this looming big change to your cash flow," she wrote on her website.
Orman offered advice on dealing with the situation many will confront.
"Now is the time to look at your finances and make sure you can afford to cover your loan payment. You have a few months to readjust your spending so you won’t fall behind on your student loans," she urged. "Don’t squander this time. If you are worried about covering your payments, focus on wants vs. needs."
Lifestyle Changes Will Need to Be Made
Orman expressed sympathy for those affected, but did not mince words about the changes people will need to make.
"I so want you to be able to take the more expensive vacation or shell out money for concerts," she wrote. "Or get your own place. But those are wants, not needs. Sharing a place with friends, or living back at home are options to consider."
The reason for the sudden change on student loan payments was the Supreme Court's decision, handed down on June 30, to strike down the Biden Administration's plan to forgive $10,000 in federal student loans for qualified borrowers.
Pell Grant recipients would have been eligible for up to $20,000 worth of loan relief.
The court ruled that the Secretary of Education did not have the authority to waive the loans.
"I understand how frustrating the Supreme Court’s decision is. But that's the law, for now," Orman wrote. "So right now it's all about standing in your financial truth and getting ready to restart your student loan repayments this fall."
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