Americans are concerned about student loan debt and how they are going to pay for it.
“October is coming,” personal finance expert Dave Ramsey warned about the restart of student loan payments on “Fox & Friends,” Thursday. “I’m sorry. It’s hard, but you’re going to have to face this.”
For more than three years, federal student loan borrowers have not had to make monthly payments. But that pandemic-era pause is coming to an end this fall, setting up a financial shock for millions of Americans.
Ramsey addressed how borrowers can prepare for the end of the payment pause as they grapple with inflation.
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He began by offering advice that his father once shared with him.
“You know, my daddy used to say 90% of solving a problem is realizing there is one,” he said. “Becoming problem aware is a big deal.”
And despite economic hardships, the payments need to be made, he stressed.
“I’m sorry. You’ve got to face this,” he stressed. “Children do what feels good. Adults devise a plan and follow it.”
Noting a “symptom” of constant spending, Ramsey pointed out that Americans are pulling from the 401(K)s to handle expenses in addition to collectively racking up trillions in credit card debt.
“All of these things are converging, but they’re really the symptom of people saying, hey, I am going to continue to spend like I always have, but my life has changed.”
He reiterated that people have to “face this reality” or they will “make it worse.”
“You can’t keep pushing the Amazon Prime button like a monkey on crack and this thing going to not fall apart on you. It’s a problem,” he added.
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The “Ramsey Show” host then explained how one can cut spending.
“We’ve got to address where we are. Sit down and look at exactly what is going on in a detailed budget and say, all right, we’re going to list out these student loans.”
He also suggested getting on a detailed plan, listing your smallest to largest debts and tackling them in order.
“The calvary’s not coming. You got to do it for yourself, folks,”Ramsey said. “That’s the only way it works.”
FOX Business’ Megan Henney contributed to this report.
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