00:00 Speaker A
Student loan debt in the United States reached a staggering $1.77 trillion in 2024. As part of our theme week, the class of 2025’s financial playbook, we’re covering the basics of paying off those loans, whether you’re a new grad, recent grad, or parents of one. Joining me now, we’ve got Amanda Hainault, who is the Fidelity Investments VP of Emerging Products Student Debt. Amanda, great to have you here with us. So, let’s just start simple here. How do you find out how much you owe?
00:42 Amanda Hainault
Great question, and it can be a little confusing. So, the first step is to actually go through and understand who your loan servicers might be. If you don’t know, you can go to the Federal Student Aid website and look for all of those loan servicers. Then you can log on to their sites, and they’ll tell you what actually you owe, what the amount, the due date, and your interest rate is for all of your loans.
01:14 Speaker A
So, when do graduates need to start paying loans back?
01:20 Amanda Hainault
Yeah, so it depends on what kind of loan you have and if you’re in a period of forbearance. You have a little bit of time after you first graduate to catch up and get, you know, a little bit settled in your new career. But after a couple of months, those loans will start being due. For a lot of people who are not new grads, but are starting to repay them after a period of time of uncertainty and when student loans were paused, they may not realize that they actually owe student loans today as well. And so, your, again, your student loan provider will have all of that information with all of the information for your particular loan in your individual situation.
02:20 Speaker A
Okay, and so speaking of and thinking through what your situation may look like, let’s say you miss a payment or, you know, a few. What are the consequences there?
02:37 Amanda Hainault
There’s a few consequences. So, the most immediate one is if you stray going from delinquency into default, you’ll see your credit scores impacted, and that can make it harder to take out debt, to get any kind of loans, even employment history. Once you’re in default, you can also start having wages garnished. So, you can be in a situation where all of a sudden you have a little bit less coming in from any kind of federal payments or even from your job.
03:15 Speaker A
So, though there are minimum monthly payments, it’s always an option to pay off more. What are the benefits to paying off student debt early?
03:30 Amanda Hainault
First one is it just feels better to not have that weight and that burden as you’re coming through. A lot of people are very stressed about their student loans, and so that mental impact can’t be understated. In addition to that, you’re going to save money on interest payments. So, if you pay back faster, you won’t have as much accrued interest, and then you’ll be able to free up your finances to be able to do other things, to be able to, you know, buy that house or get married, or have a kid. Things that a lot of folks delay as they’re trying to manage their student loan debt.
04:11 Speaker A
And so for households that are trying to figure out how their students can best position themselves, especially knowing that there’s kind of a range of different expenses that are also going to start coming your way, and these are early earnings years as well. You’re trying to get a job, you’re trying to get set up, and you don’t know if you’ll have to move for that job or what other expenses you’ll take on. Where do these student loans kind of prioritize or get prioritized in that range of expenses that could start to come forward fast and furious?
05:02 Amanda Hainault
It’s a great question for a lot of different people. It’s going to be after emergency savings that they’re coming through, but you should look at your own individual situation, go to fidelity.com/studentdebthelp to get additional personalized guidance about what your priorities are. See your student loans in context of your broader financial picture, and to think about how you can manage your expenses that are day-to-day, your long-term savings, and your student debt liabilities as you’re coming in, to make sure that you have the best financial solutions for your situation.
05:46 Speaker A
Amanda, thanks so much for taking the time to be here with us today. Appreciate it.
05:52 Amanda Hainault
Thank you so much.
