WASHINGTON — The holidays can get expensive quickly. However, for many Americans, the real impact on wallets may not come until after the new year, when several pandemic-related government programs are set to end.
WHAT WAS GIVEN IN 2021
The past year saw a lot of government assistance given to most Americans.
$2,000 stimulus checks were sent out, and expanded child tax credit put anywhere from $1,500-1,800 per child in the pockets of parents. In addition, student loan payments were suspended in 2021 — the Federal Reserve estimates the typical student loan payment is around $393/month.
ENDING ASSISTANCE
The reality is that a lot of the government assistance instituted at the peak of the pandemic will end soon.
Stimulus checks have long been spent, and no more are coming.
The expanded child tax credit expires this year too. Efforts to extend the tax credits into next year have stalled in Congress, which means for the moment, no checks are set to go out in January.
Student loan relief is set to expire in January, too. White House press secretary Jen Psaki all but confirmed last week that President Joe Biden doesn't plan on extending the moratorium on payments.
"It expires February 1st, but right now, we are making a range of preparations," Psaki said during a recent briefing.
PREPARE NOW
So, what should families do right now to get ready?
"You should create a descriptive budget of your spending patterns," said Mark Kantrowitz, a student loan financial expert.
Kantrowitz says it may sound obvious, but tracking expenses may save families a couple of hundred bucks by revealing unnecessary spending patterns that may be enough to resume student loan payments.
Next, Kantrowitz says borrowers should contact their student loan lender right now to make sure their contact information and bank account information is still accurate.
Those who are really struggling can also inquire about financial hardship programs.
"Log in now because at the end of January, there is going to be a rush of people seeking to call the lender, and you don't want to be on infinite hold," Kantrowitz said.
One piece of good news is that the Biden administration has enacted several waivers in the past year that will make it easier for those who have participated in public service to get their student loans forgiven. Borrowers need to have worked for the government or a nonprofit to qualify, but many had been denied over technicalities in years past. Kantrowitz says that has changed.
"There have already been reports of borrowers getting not just qualifying loan forgiveness based on prior payments but even getting refunds for excess payments they have made," Kantrowitz said.
