Page 14 - September 2023 Issue.indd

DOLLARS AND SENSE by Tolbert Rowe

Student loan debt and credit reports

ast month we talked about inflation has increased 11.7% in two to support American’s lifestyles. But
student loan payments years. what do we have to look forward to
resuming in October and the down the road, so to speak.
During this time of rising costs over the
options available to soften
last 1.5 to two years, those with student Many American households will not
Lthe impact on your monthly
loan debt have had the luxury of not be directly affected by student loan
budget. Those eligible, either by the job

having to make those payments. Recent payments, but they will be affected
they have or the income they make,
graduates of the past three years have no indirectly, through their spouses,
can reduce or in some cases eliminate

experience making these payments and children, or significant other’s student
the monthly payment. It is critical that
could be forced to cut back spending loans. Families may be called up to
anyone with a student loan needs to
on other things. For those who refuse “help”. Making payments that have not
reach out to their student loan servicer
to adjust their lifestyle, credit cards will been made in over three years, and in
and the federal student aid website at
become easy access to funds to support some cases ever, will have ripple eff ects
www.studentaid.gov/DR to determine
their way of life. throughout the economy. Seeing the
what if any payment relief they may be
proverbial “writing on the wall”, this is a
qualifi ed for.
The New York Fed estimates that wakeup call to get a solid handle where
It is projected that the average student currently 61% of American’s are living you are from a credit report standpoint.
loan payment will be $300 -$400 per paycheck to paycheck with marginal Annualcreditreport.com is the only site

month when payments resume in savings. Th is after receiving the windfall authorized by Federal law to provide
October and could not come at a worse of COVID monies that put thousands of credit reports from all three repositories,
time for most borrowers. Although the additional dollars back into American’s TransUnion, Equifax, and Experian.
rate of inflation has been dropping in the budgets and savings accounts. Those Other sites will provide your credit

last several months, prices are still high additional funds were not sustainable, report for a fee, that you don’t fi nd out
in relation to where they were two years and the funds put aside in savings have about until you are well into the process.

ago. Remember, the most “popular” become depleted. The current savings

inflation rate is reported as a monthly rate has dropped to 4.2% of disposable It takes all of about three minutes to
number in relation to the same month income as reported by the New York Fed, input your information and receive
in the prior year. from a high in April 2020 of 33%, the a text or phone call confirming your
beginning of the pandemic shutdown. identity. You will not be provided with
July 2023 inflation was up 3.2% from It was very hard to spend money when your credit score from the repository for
July 2022. But in July of 2022 the you couldn’t go anywhere. free. Pay the fee and get your score if you
inflation rate was 8.5% higher than July would like to.

of 2021. Although the “rate” of infl ation The savings rate remained over 15% for
is lower in July 2023 than it was in 2022 most of the pandemic as government Once you access your report, get familiar
it is actually an increase of an increase, “stimulus” funds pumped up savings, with the information it provides such as
whereby adding the two, (8.5% + 3.2%) and now those savings are being drained your personal information, employers
and addresses for what may be your
entire life, and your credit accounts,
open and closed. You may be surprised
“Your Mortgage Consultant Since 1985”
how many accounts show up and how
Purchase or Refinance far back the report goes. Depending on
how long you have had credit, you may
have forgotten about that car loan you

paid off in 1995, or similar old accounts.
If you have student loan debt pay
115 E Dover St. Ste 3 - Easton, MD particular attention. You may have fi ve
showing on the credit report that have
tolbert@baycapitalmortgage.com C. Tolbert Rowe,
www.baycapitalmortgage.com NMLS Vice President/Lending been consolidated into one payment. It
182844 is a common practice for student loan
servicing companies to continue to show
410-819-3005 / cell 410-310-3520
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