Millions of federal student loan borrowers
will soon see up to $20,000 of their
debt wiped away thanks to a new plan
announced by President Biden last week.
But there are still many questions to answer,
and joining me right now is
our great friend Ted Jenkins,
CEO of Oxygen Financial.
Ted, what will the forgiveness loans include?
And I think a question that many
parents have who qualifies for this?
Yeah. Well, thanks, Jeff.
Good to be here.
And you know, this is a heated debate.
Right now. There's some $10,000 of
federal student loan forgiveness
for those that help Pell grants.
It could be as much as $20,000
as to who qualifies individuals
that make less than $125,000 and
married couples that make less
than $250,000 will qualify.
What's interesting, Jeff,
is that this is predicated on your
adjusted gross income from 2020 or 2021,
not 2022 as we know, Jeff.
A lot of people made less money
in 2021 or 2020 because of COVID.
So I I suspect more people will
qualify than they probably think.
Well, you have to pay
tax on the canceled debt.
Well, this is some good news for
people who do get the forgiveness.
Generally, if you get debt that's cancelled,
you'll be issued something called the 1099
C and you would normally have to pay taxes.
But in this case,
being that it's a federal student loan,
there will be no tax whatsoever.
I would recommend that people at home contact
their student loan provider right now,
make sure that their address matches
their phone number is on record the
right way so they can be contacted.
And what's neat about this, Jeff,
is that you don't even have to
have finished college if you only
did a couple years of college
and took out student loans.
You can still qualify.
Wow. What about people who don't
qualify for the loan cancellation?
Well, to me this is going to be the
the last stand here pause repayment.
So there is a pause repayment
and now people will not have to
pay their student loans until
the beginning of January 2023 and
we're still at a 0% interest rate.
So people will have gone some 2
1/2 to almost three years without
making a student loan payment.
What's what's interesting about
this is normally you have something
called an income based repayment
plan or a pay as you earn plan
where you'd have to do up to 10 or
15% of your income come January.
But they've now lowered that to 5%,
so I imagine that will help people
stretch their dollars just a little
bit further while there's high
inflation and rising interest rates.
I'm trying to figure out how
to frame this question to you
in a way that sort of sidesteps
politics a bit, but here goes.
A good deal for Americans,
or does this just tack on to inflation
and the debt and this is merely,
you know, a drop in the bucket,
a drop in the ocean, so to speak,
as far as that goes when it
comes to college education?
Well, I mean, you're absolutely right, Jeff.
This is a really tough question because
it depends what camp you stand in.
People that are getting their debt
forgiven right now and that 10 or $20,000
are wiped away, they're jumping for joy.
Then there are people out there that
took those student loans, they worked
really hard and they paid them off.
They're not so happy about that,
including people that saved for
their kids college education.
They're not going to get
anything refunded whatsoever.
I think in the end in here, the problem is,
is that this is a case of cause and effect,
Jeff, the effect here we're
trying to get this student.
Don't forget them.
But the cause nothing's changed
on the side of colleges, Jeff,
colleges and universities,
they have more than $700 billion
right now of endowment money.
This is going to cost the American
taxpayer some 300 to $500 billion.
We really need to get at the cause,
Jeff,
which is how do we keep college
affordable for families so we don't run
into this debt situation in the future.
And the other question,
should everybody go to college?
I mean that's that's a very
complicated issue as well.
You know, you and I have talked
about this in the segment.
24 about, you know,
there are trade colleges,
ways to make a living and have a 6
figure income without going to college
learning how to be a welder or a plumber.
I mean there are a lot of men and women
making some great deal of money in,
in these occupations that they will
stay immersed in until, you know,
they so choose to step away from it. I
mean, it's 100% true when you look
at plumbers, electricians, welders,
even people that are truck drivers,
many of them in this economy right now,
Jeff, are making $100,000.
I think we need to continue
to teach kids that there are
all options in this country.
You can go to college,
you can be a blue collar worker or
you can start as an entrepreneur.
That's a great part about
being in this country,
agreed Ted Jenkins, CEO of Oxygen financial
and a member of Leadership Atlanta.
The class is at 2024 or 2023, right, Ted?
2023, Jeff, yeah, I'm excited.
I'm, I'm losing focus as to far
as what year it is. Thank you.
That's that's a troubling aspect
for me anyway, Ted, thank you.
Greatly. Appreciate
it. All right. Thanks, Jeff.