What exactly is "student loan payment shock" and why are so many people experiencing it right now? We turn to Mountain America Credit Union for answers.
Jeremy Blair, Senior Vice President of Finance and Chief Investment Officer, explained that payment shock happens when borrowers must suddenly resume payments after a long pause - in this case more than three years.
Many had used that extra cash for daily expenses, housing or even lifestyle upgrades.
Now, $200 to $500 or more a month is going back toward loans, which feels like an overnight budget cut.
If you're struggling to fit student loan payments back into your budget, Jeremy suggests to start by reviewing your monthly budget and separating essentials from wants.
If you don't already track your spending, use a free app or your bank's digital budgeting tool.
Even small adjustments—like cutting one subscription service or reducing takeout meals—can free up cash for loan payments.
Jeremy also recommends to treat student loan payments as a priority alongside housing and transportation.
If you think you'll miss a payment, reach out to your servicer right away.
Income-driven repayment plans, consolidation or temporary forbearance are designed to help and can keep your credit intact.
Credit cards and buy now, pay later services are on the rise. And, while they can provide short-term relief, Jeremy says they come with risks.
Credit cards carry high interest, and stacking buy now, pay later on top of existing debt can quickly snowball.
A safer option is to consolidate or refinance higher-interest balances, or work with your financial institution on a hardship program.
Jeremy says his best advice is to focus on progress, not perfection.
Automate payments to avoid late fees.
Try to set aside even a small emergency cushion—$20 to $30 a week adds up.
And most importantly, don't go it alone.
At Mountain America, members are encouraged to sit down with a financial expert to create a plan that reduces stress and builds confidence.
You can learn more at macu.com.
