30% of Americans Say This Is How They’ll Use Their Student Loan Forgiveness Payments
Written by
Ashleigh Ray
Edited by
Levi Leidy
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President Biden is making headlines with his student debt relief plan. Even though the application is now open for those interested in loan forgiveness, the appeals court has put a pause on the plan while they consider the challenges put forth against it. Still, millions of college graduates across the nation are completing the application in the hopes that they’ll soon see a decrease in their loan amount.
In a recent survey, GOBankingRates asked what people would use their student loan forgiveness payments for, and the results speak volumes. While the majority of respondents either don’t have student loans or don’t have loans that qualify, 30% of them said that they would put that money toward other bills and expenses. Ten percent of Americans would invest it, while another 10% would put it into a savings account. And the minority of people (4%) would spend the money on themselves.
Taking care of monthly bills has become a lot harder lately with inflation greatly increasing everyday costs. A recent report from the LendingClub has revealed that a whopping 63% of Americans are currently living paycheck to paycheck. Compare that to last year where only 57% of Americans felt that financial strain. This new report also shows that high earners aren’t immune to inflation. Of those earning more than six figures, 49% reported that they were living paycheck to paycheck, which is quite the increase from the previous year’s 38%. Within just the last 12 months, more and more Americans are having to cut back and look for ways to loosen their budgets.
To prepare yourself for those relief payments, here are a few ideas to make the most of the extra money.
Pay Down Debt
If you have any other loans or outstanding credit card debt, take this opportunity to cut it down. This not only helps relieve you of financial stress, but it also helps raise your credit score. If you’re looking to be financially independent, the first step is to work at lowering your debt.
Boost Your Emergency Fund
The onset of the pandemic made it very clear that not all Americans are prepared should an unexpected incident happen. If you don’t already have an emergency fund, this should be your next focus. Start with a goal of $1,000 and keep going until you’ve put away at least three months of expenses.
Save For Retirement
A healthy retirement fund takes a long time to build which is why most experts recommend starting as early as you can. If you have extra money in your budget after paying off debts and establishing your emergency fund, invest in your retirement. The more money you’re able to save, the better off you’ll be when it comes time to enjoy your golden years.
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