## [# Student Loans Restart an Opportunity for Financial Pros](/sections/features/student-loans-restart-opportunity-financial-pros)
# Student Loans Restart an Opportunity for Financial Pros
Nearly 44 million borrowers will have to start budgeting for resumed payments.
[](/authors/jeff-benjamin)
[By Jeff Benjamin](/authors/jeff-benjamin)
Sep 05, 2023
Edited by: Lisa Barr
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Stocks are up, the outlook for a [recession is falling](https://www.bloomberg.com/news/articles/2023-09-05/goldman-cuts-us-recession-chances-to-15-on-improved-inflation?sref=MAODZZNF) and U.S. consumers appear flush with cash, which is all good news for some corners of the financial markets.
However, on top of being one of the worst months, historically, for the equity markets, this September comes with the added weight of resumed student loan interest and payments.
After more than three years of deferments that were carried over from the COVID-related aid packages, the nearly 44 million federal student loan borrowers will have to resume paying down their debt on Oct. 1, with interest on those loans having restarted on Sept. 1.
Add to that cold new reality the fact that consumer credit card debt has reached a [record $1.03 trillion](https://ycharts.com/indicators/us_credit_card_debt), the outlook starts to look dicey for the red-hot consumer discretionary sector.
This year, through Friday, the [**Consumer Discretionary Select SPDR ETF (XLY)**](/XLY) was up 32.84%, which compares to an 18.66% gain by the [**SPDR S&P 500 ETF Trust (SPY)**](/SPY) over the same period.
By stark contrast, the [**Consumer Staples Select Sector SPDR ETF (XLP)**](/XLP) is down 1.24% this year.
Financial advisors are already preparing strategies to help their clients who are directly or indirectly managing student loans to navigate the renewed hit to household budgets.
Mike Hunsberger, owner of Next Mission Financial Planning, is steering clients toward the new [Saving on A Valuable Education](https://bysavi.zendesk.com/hc/en-us/articles/17097566879891-What-is-the-Saving-on-a-Valuable-Education-SAVE-plan-) income-driven repayment plan.
## **Student Loan Payments Could Be Halved**
“For undergraduate loans, this plan cuts the amount of discretionary income that will be applied to student loans from 10% to 5%,” he said. “This could cut required payments in half for some borrowers.”
Hunsberger is also advising clients to ask their employers about a feature of the Secure Act 2.0 legislation that includes matching an employee’s student loan payments in the form of 401(k) plan contributions.
While student loan debt is one of the few forms of debt that can’t be eliminated through personal bankruptcy, there are multiple programs available to help borrowers manage and reduce their debt.
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## **Student Loans Top of Mind**
Drew Schlotter, director of college planning at Woodson Wealth Management, said the resumption of student loan payments has been top of mind for many of his clients.
“I’ve been answering a lot of questions from clients about what steps they need to take to prepare,” he said.
Schlotter even created a [YouTube series](https://www.youtube.com/watch?v=qcUXlIOOVdQ) designed to address the resumption of payments.
For some financial advisors, helping clients manage student debt represents a unique crossover challenge of factoring in both financial planning and investment management.
“Investors with student loans should first consider their goals with regard to their student loan payments,” said Jesse Carlucci, chief investment officer at Arrow Investment Management.
Jarrod Sandra, owner of Chisholm Wealth Management, sees the student debt challenge as an ideal opportunity to preach the importance of budgeting.
“The No. 1 thing people need to do is budget,” he said. “I know that sounds simple, but people need to know where their money is going and realize they’ve been able to have a slush fund for the past three years with the lack of payments.”
*Contact Jeff Benjamin at* [*jeffrey.benjamin@etf.com* ](mailto:jeffrey.benjamin@etf.com )
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Jeff Benjamin is the wealth management editor at etf.com, responsible for coverage related to the financial planning industry. This includes writing,… [View Bio](/authors/jeff-benjamin)
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