- Federal student loan payments have been on pause
since early 2020, but that's about to come to an end,
so let's go through what that means
for all of you who haven't had to make any payments
over the past couple of years.
Then I'll give you my thoughts
on how to move forward from the perspective
of someone who paid off $70,000 of student loans
in less than four years, starting with a $30,000 salary.
Why do I get the feeling
that this video was out of focus for parts of it?
If it was, then I'm gonna insert this clip right there.
I apologize.
There's two topics that we need to keep separate
when it comes to student loan borrowers.
The first is when payments will be resumed,
which we'll talk about in just a minute.
The second is the one time student loan forgiveness program
for federal student loans.
This includes up to $10,000 of forgiveness for individuals
earning less than $125,000
or households earning less than $250,000
in either 2020 or 2021.
If you received a Pell Grant
then you could be eligible for up to $20,000 forgiven.
This student loan forgiveness program is still on the table.
A decision is not expected to be made
by the Supreme Court until late June or early July.
I'll give you my thoughts on how to handle this
in just a minute.
So let's push that topic to the side for a second
so that we can focus
on when student loan payments will resume.
The debt ceiling either has passed
by the time this video is released or will pass
at some point, which also includes resuming
student loan payments that have been paused since 2020.
According to the bill,
the pause on student loan payments
will cease to be effective 60 days after June 30th.
This would bring us to August 29th.
So until you talk to your student loan servicer,
I would assume your first payment is going to be due
at the beginning of September.
Before I give you my thoughts on how to handle all of this
going forward, please help support my little dog, Molly,
as well as this channel by hitting that thumbs up button
and sharing the video with someone
you think needs to see it.
When it comes to the student loan forgiveness
side of things, if I were you
I would just assume that it is not going to pass.
I'm sure that's not what some of you wanna hear,
but from my limited understanding,
the President doesn't even have the legal authority
to forgive student loans,
so it was crazy for him to even promise it to begin with.
To be honest, even if they did forgive those amounts,
it would still be an issue because the actual problem
is with the higher education system in general.
It would be a $305 billion bandaid on a broken system.
The good news is that I am proof
that it's possible to get your student loans
paid off completely in a decent amount of time
with a little bit of focus and effort.
Knowing that payments will come due again soon,
you've got a little over two and a half months
to get your finances in order to make sure
that everything is covered.
If some of you have already been putting money aside
like the payment still existed, then nice job.
This shouldn't be much of an adjustment for you
because you're already ahead of the game.
For those of you who haven't been doing that,
then I would highly recommend
getting all of your income and expenses written down
so that we can assess where your finances are at.
This is going to give you a good idea of what changes
need to be made so that this student loan payment
does not destroy you.
It's better to have the problem
laid out in front of you so that you can figure out
a good plan of attack
as opposed to going into this whole thing blind.
I worked with a couple and going into it,
they thought that they were going to be absolutely screwed
by adding this student loan payment
back into their expenses.
Once we worked through the numbers,
they realized that there were levers
that they could pull within their income and spending
to where this wasn't going to be an issue at all.
Seneca, my favorite stoic philosopher, said it best.
"There are more things, Lucilius,
likely to frighten us than there are to crush us;
we suffer more often in imagination than in reality."
If you need help with this,
I do have a free spending spreadsheet
where you can do a little financial audit on yourself.
Now, later in the video
I will give you the website so that you can go download it.
This is also a great time
to start thinking about how you can increase your income
between now and then
so that you can start affording these payments again.
You can also start thinking about things around your house
that you are willing to sell
to almost buy yourself some more time.
And of course, don't forget to look through areas
of your life where you can potentially cut out
some of your spending
that you've maybe accumulated since 2020.
I understand that life in general
has gotten a lot more expensive
since payments were put on hold back in 2020.
So that's why focusing on increasing your income
is probably going to be the highest return on your time.
I would also suggest reaching out
to whoever services your student loans
to make sure that all of your personal info
is up to date and you know how much your monthly payment
is actually going to be when the pause is lifted.
From what I've read,
a few of these student loan servicers have cut back
on customer service reps and customer service hours,
so they're expecting some sort of bottleneck
when payments resume again.
It's going to be in your best interest to contact them
as soon as possible.
Do not wait until the last minute
because we all know that most people will be doing that.
Just assume that you won't be able to get through to them
as we move closer to the end of August.
If you have other debts, then the debt snowball
or debt avalanche method work very well.
I did a little hybrid between the two
when I paid off my debts, so I like them both equally.
Don't be like these people
who are thinking about refusing to pay their student loans
when the payment pause ends.
This is such a stupid idea.
You'll end up taking an already terrible situation
and make it worse.
There's this thing called wage garnishment,
so they're gonna get their money one way or another.
Gotta accept responsibility for the debts that you took on,
and finally admit to yourself that daddy government
isn't ever gonna bail you out.
If you are someone
who is ready to focus on increasing your income,
then I go through different ways to do that
in this video to your left.
I'll have a link in the description
to get your free copy of my spending spreadsheet.
I'll see you in the next one, friends.
Done. Oh, it wasn't focused.
Definitely wasn't focused.