Brand new action from the Department
of Education likely cancels federal
student loan debt for 40,000 people.
That's the headline you probably heard,
but the bigger picture is this.
That move also helps more than 350 million
borrowers move towards getting their loans
actually paid off and forgiven sooner.
The biggest piece of context
you should know though.
More than 43 million Americans have
federal student loans to pay off so.
What happens to those people?
Everyone who doesn't qualify
for the new changes?
I'm Ben Briscoe.
Let's dig into it.
Starting with Natalie Brand answering
who qualifies for the new plan.
The system is was rigged for people like me,
adjunct Professor Justine Hope Blau,
who graduated film school in 1991, says
she borrowed $39,000 but now faces around
$260,000 of debt.
I'm 66 and it keeps growing. She's
among the millions of Americans still
struggling to pay off student loans.
This week, the Department of
Education says it's now taking
action to help address what
it calls historical failures.
In the administration of
federal student loan programs.
So the history of this program is
that it has been rife with abuses and
problems both on the servicing side and
on the Department of Education. Side
persis. You of the student
borrower protection center calls
the acknowledgement step one,
the Department of Education says
it will review payment timelines in
history for borrowers enrolled in
public service loan forgiveness plans
and income driven repayment plans.
The changes are expected to
give 40,000 borrowers.
Immediate forgiveness and at least 3.6
million borrowers will receive three
years of additional credit towards
income driven repayment forgiveness.
Unfortunately, the department has not
given a timeline on when borrowers
will find out what happens right now.
The answer is to be patient and wait.
Blau still feels misled by her servicers,
who she says never told her about
income based repayment options.
Don't leave us behind.
We shouldn't be saddled.
With huge debt for the
rest of our lives, she
now urges caution to anyone thinking
about taking out a student loan,
hmm? The 40,000, whose debt is
forgiven meet all these requirements.
They work for the government or nonprofit.
They've made at least 120 on time payments,
the others getting relief.
Also work for the government or a nonprofit,
but they might have had trouble
paying in the past, so they're using
an income driven repayment plan.
The action taken by President Biden moves
them towards loan forgiveness faster.
Even if you aren't included
in this credit program,
you still don't have to pay
for your federal loans back,
at least until September.
Your loans aren't accruing interest either.
North Carolina lawmakers have
responded to the latest move
from the White House Democrat.
Alma Adams sent us a statement saying,
in part as we approach the summer months,
I am continuing to call on the
President to finish the job by canceling
up to 50,000 of student loan debt
across the board for our struggling.
Borrowers,
because we must crush the debt
before it crushes our economy.
Republican Virginia Fox says she
doesn't like the movie either.
She said a program that was the
brainchild of an expanded by
Democrats turned out to be a complete
disaster and taxpayers are forced
to fit the bill for their mistakes.
Some Republicans in the house filed a
bill to end that pause on repayments.
The Federal student Loan Integrity
Act would change the Secretary
of Education's ability to pause.
Student loan payments.
If the bill becomes law,
student loan pauses could last no
longer than 30 days and the pause
could not stop interest on your
payments from accruing the bill,
though has not made it out of committee.
The reason Republicans want payment
to pick back up is that it's cost
the federal government.
A whole lot of money.
The Department of Education says
it's cost about $95 billion in
the first two years.
The Department of Education's fiscal
report broke down the pauses impact.
Put another way,
the pause cost taxpayers about
four and a half billion dollars
each month since it started.
Think about this. I crunched the
numbers today on this in one month.
That is more money.
And taxpayers spent for an entire year to
run the cities of Greensboro High Point,
Winston-Salem,
Raleigh and Charlotte combined.
That is how much the pause
on loans is costing us.
The White House hasn't said much about
their plans beyond the August deadline,
but a spokesperson for the president
says he is always looking for ways
to ease the burden on student loans.
People hoping for more loans to
be cancelled might be in luck,
though,
because of the upcoming midterm elections.
A CBS News analyst says since
the loan repayment deadline is
right before people go to vote,
it could be a way for Democrats to
try to score some points with voters.
It's always difficult to get
younger voters to turn out,
but especially in a midterm election,
because it's not the kind of big pomp and
circumstance of a presidential election.
It's always harder to turn out
younger voters for for a midterm,
so this is the kind of thing that
Democrats have been pushing the Biden
ministration to do so then then.
They can come out and campaign on
look what we were able to accomplish.
The White House has not released a statement
or a timeline for what could come next.
While we wait to see where student
loan forgiveness lands, most financial
advisors will give you the same
26. This was not free money.
This money is money that
has to be repaid. Kathy
DeWitt. Dunn says.
While payments are frozen and
interest is not incurring,
it's a great time to keep paying.
Knock down that low.
If you can't spend the time preparing
now is really the time for you to
refocus on your financial future and
get a plan in place to address this.
Wanna start updating your information?
CBS business analyst Jill Schlesinger says
you should also check out studentaid.gov.
You've got to make sure all of your
data is collected the right way.
You're signing up for an auto debit.
You wanna check out your payment options?
While this is very strong labor market,
some people maybe are
not making as much money.
Maybe there's an income.
Driven repayment plan that's in your future.
Compare it. Look at it.
Don't just do what you had done.
People who qualify for student
loan forgiveness can expect a
letter in the mail letting them
know if you do get a letter.
Pay close attention to the fine print there,
but don't be fooled either.
Scammers will also be reaching out by phone,
text, email all of it.
We've seen it before.
They're going to do it again.
You can expect those phony letters,
and if anyone calls or sends a letter
saying you have student loans forgiven.
Think about it twice. If
you are going to do
some type of loan forgiveness program,
you actually as a student has
to initiate that yourself.
No one's going to call you and say
we're going to forgive your student
loans. If you get one of the calls,
just hang up, call your school's
financial aid office or whoever
you get your loans from and
verify if the offer is legit.
The bottom line, the mower recent
move from the White House doesn't
make a huge impact for most borrowers,
a lot can still happen,
though this story is nowhere close to over,
we likely won't hear the next
move until the end of summer.