The Student Loan Crisis: Qualifying For Forgiveness

In this week's podcast we are having a conversation about the $1.7 trillion gorilla in the room….called student loans. America is in a student loan crisis whether it is willing to admit it or not. 

Here are a few stats to help you understand the gravity of the situation: 

• 43 million Americans owe a combined $1.7 trillion in student loan debt. 
• 20 years after graduating from college half of the borrowers still over $20K in outstanding debt
• 70% of graduates leave college with student loans
• In 2005 the average student loan debt was $17K, as of April 2022, the Wall Street Journal states college graduates start their careers with an average of $36K

This is problematic because it not only impacts a borrower's ability to save and invest, but it is also a drain on the economy. America really does not manufacture anything anymore, instead relying on consumption for economic expansion. 

Having a significant portion of your salary allocated to student debt, means there is less money to purchase a home, spend on clothes, eat out with your friends and fully participate in the economy.

Contributing guest: Ja'net Adams

The contributing guest on this week’s podcast is Ja’Net Adams. She is an international speaker, author and CEO of EMAC consulting. Shortly after graduating, she was $50,000 in debt, but made a commitment to pay it off and she did just that within two years. 

Now she takes the financial principles that she learned to teach others all over the world. As a professional motivational speaker, she speaks to universities, corporations, high schools, and not-for-profits about financial literacy. 

She has spoken on behalf of the White House, The Department of Education and has been featured in various media outlets including Forbes, BBC, CNBC, Huffington Post, Black Enterprise Magazine, Fox Business News, USA Today.

Here is what we know about the student loan cancellation situation

Senators Richard Burr and Thom Tillis (both of NC), have recently (May 2022) introduced a bill to prevent President Biden from forgiving any student loan debt, including exemptions for programs like the Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness. 

If the Republicans take charge of either branch of government this fall, it is not likely that any student loan forgiveness will occur. 

It is also doubtful that President Biden will cancel $50k in student as requested by some Democrats. However, he is considering the legality of cancelling $10k for undergraduate loans for those with incomes less than $125k.

Requirements to get closer to student loan forgiveness

I recommend anyone reading these show notes to go to the Department of Education's website for the most recent information on student loan forgiveness, the situation is very fluid and changing constantly. 

At the time of podcast recording (May 2022) these were the guidelines to qualify for PSFL forgiveness: 

• Employed with the government, 501(c)(3) not-for-profit, or other not-for-profit organization

• Working full time

• Previous years of student loan payments will now count towards forgiveness (must apply by October 31, 2022)
• Have Direct Student Loans (or consolidate other loans into Direct Loans)
• Make 120 qualifying payments

To stay aware of what is happening in the student loan industry, bookmark the Department of Education's website: Federal Student Aid: https://studentaid.gov/pslf/

You can find Ja'Net on Instagram @JaNetAdamsSpeak  and www.DebtSucksUniversity.com