If you’re wondering whether student loans have the tendency to grow, it’s important to understand how the mechanics of loan balances work. The growth of your student loan balance is largely dependent on whether your monthly payments are sufficient to cover the interest charges accumulating on your debt. Eliza Haverstock, a writer specializing in higher education topics at NerdWallet, sheds light on the factors affecting the size of student loans.
Student loan balances can indeed increase if the monthly payments made are not enough to offset the interest building up. This situation often arises when borrowers opt for income-driven repayment plans or make payments that are below the interest rate being applied. It’s a phenomenon that many students and graduates face, particularly when the interest on the debt is accruing at a faster rate than the payments being made.
In the world of student loans, ensuring that your monthly payments exceed the interest being charged is crucial to preventing balance growth. Eliza Haverstock‘s insight into college affordability and student debt highlights the importance of understanding how interest impacts the growth of student loans. This awareness empowers borrowers to make informed decisions regarding their repayment strategies and helps in managing the size of their loan balances effectively.
(Response: Yes, student loan balances can get bigger if monthly payments do not cover the accumulating interest charges.)