Latest / Financial Survival Network / Student Loan Drive Recession -- Paul Oster #5852

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Student Loan Drive Recession -- Paul Oster #5852 · Financial Survival Network

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  I know the administration is looking at a plan B and unfortunately let's go by.
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  Just take a step back for one second and realize that student loans have
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  become politicized, right, so bar words are confused. I'm by not going
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  to pay back? Am I paying it back? What's going on? You're
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  listening to Carrie Letz's Financial Survival Network, where you get valuable information you just
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  can't find anywhere else to thrive in today's trying times. You need the Financial
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  Survival Network now more than ever. Go to Financial Survival Network dot com and
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  get your free newsletter and gift. Financial Survival Network now more than ever,
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  and welcome you are listening to watching the Financial Survival Network. I'm your host,
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  Carrie Letz. Well, you recently heard there was a huge setback to
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  the current administration's plans to forgive student loan debt. The Supreme Court struck it
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  down basically said the President does not have authority to a unilaterally give debt forgiveness
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  to millions of student loan borrowers. If you recall, during the global pandemic,
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  the repayments of these loans were suspended. I mean we're talking a trillion
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  and a half nearly two trillion dollars worth of debt. The president announced a
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  plan that he was going to forgive a number hundreds of thousands of people's student
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  loan debt. It went to court, he lost, and now we're back
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  to square one. But more importantly is what effect does this have on you?
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  What effect will it have on the economy? And our good friend Paul
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  Auster is with us now, and Paul, it's great to have you back
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  on. You're the credit expert here. I mean, you know that that
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  it's going to have a huge impact. What's your take on it? What
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  do you think it is going to be the impact of this, Paul.
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  So, so we already know from certain surveys that have been done, and
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  but it was millions of borrowers. A certain percentage of those barrowers will not
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  make the first payment that comes due in October, right, so they start
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  the clot back on September one, injuries will start to a crew. First
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  payments will be due October first, and borrowers are going to miss the first
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  thirty day about payment. And the other side of the coin here is not
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  having any of that debt canceled will equate to hire credit card debt for a
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  certain amount of the other barrowers. And as soon as you start taking up
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  on credit card debt, your your credit scores come down. So it's going
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  to cost them more for everything else. So this is a credit killer.
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  It's a one two punch for sure, between the late payments between the higher
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  credit card debt. It's going to have a tremendous impact on the economy.
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  Now I'm not saying that you know, they should have forgiven the debt.
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  They shouldn't have forgiven the debt SIPs way above my pay grade. But what
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  I do know in terms of the impact on the economy and consumers credit,
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  this will not be a good thing. Now, does the economy need to
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  slow down anyway? Does this have some type of benefit indirectly? Maybe?
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  Ads? All right, so, and I should note your firm is called
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  better Qualified. You're in New Jersey, but work around the country. And
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  so it's somewhere around fifteen billion dollars a month in payments that will start flowing
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  into the government. But a substantial number these people have already spent that money,
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  if you will, or counted on not having to make any repayment.
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  So there's going to be a huge number of defaults. So effectively, here
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  they've just kicked the can down the road, haven't they make sure had it?
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  You know when you start you know again, these early thirty daily payments,
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  we already see the uptick on auto payments. These are typically the early
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  bellweathers of a downturn in the economy. So we see the uptick in pre
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  foreclosures, we see the uptick in auto payments. You're going to see it
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  in student loans. So it's not a good situation. And now what will
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  happen also is you will effectively remove a couple of million in barrowers from the
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  housing market from buying a car. Because this will destroy their credit. They
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  will not be in a position to obtain any type of financing. So this
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  is definitely going to have a negative impact. So potentially this could be the
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  have many more times the effect of a federal reserve rate. I couldn't it,
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  it, sure could it Sure couldn't. Now, Look, I don't
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  think anybody would argue with suspending the payments. During the pandemic, these young
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  bars were in some of the worst positions coming out of school. The job
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  market was obviously crushed, so suspending the payments during the pandemic was a good
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  move. Trying to forgive that much debt after the pandemic under you know,
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  loosely associated the Heroes Act of two thousand and three. It just didn't I
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  didn't think there was any way that the Supreme Court was gonna, you know,
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  uphold it. And here we are, so the solution's going to have
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  to come from Congress. And maybe this is a good time to revisit the
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  entire student loan scheme, all right, the fact that it's the only type
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  of debt virtually out there, with some other exceptions, but the only type
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  of debt that is non dischargeable in bankruptcy, maybe it's time for Congress to
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  say, you know what, a student loans, especially if the person never
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  graduated from college got the value that they were seeking. Maybe this is the
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  time to revisit this, and maybe it's going to result in forgiveness. But
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  on the other hand, you've got to be sympathetic to the people who either
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  paid for their college in whole or paid back their student loans, spend ten
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  years paying them back, and then is that fair to them? To see
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  millions of people have their loans forgiven just for showing up. Yeah, I
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  mean there were already income based repayment plans. There are page you go plans,
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  there are service loan forgiveness that if you work for a government agency or
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  a nonprofit for ten years, um. After the ten years, then it's
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  it's forgiven. So those types of incentives are still herere and barrowers need to
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  be very proactive. But what I've been trying to do is just get the
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  message out there. You can't wait until September one. It's it'll be here
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  in a blink of an eye October one. You have to have a plan
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  in place and figure this out. It's not just gonna go away. UM,
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  so do something. When was the last time you logged in to your
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  to your student loan account? You even know what the principal balances do?
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  You know what those monthly payments are going to look like? Um? You
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  know when they when they start to kick in. So be proactive. Go
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  to student aid dot gov. Student aid dot gov is the only website,
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  the only place borrowers should go to get information. As you don't carry what's
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  going to happen is you're gonna have all these bad actors jumping in here.
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  It's a perfect time for them to pray on these bar works who are very,
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  very susceptible right now. They're panicking, So you're going to have people
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  wind up getting it, you know, caught up in scams and fraud and
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  situations like that because they're so vulnerable right now. So student aid student aid
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  dot gov is the only website a bar where should go to. And again,
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  there are retainment plans out there that are going to be directly correlated to
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  your current income, So you have to figure it out. So what do
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  you think, good? What do you think is going to be the upshot
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  of this? I mean, you know you're being a not being a gambler
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  as such, but knowing the magnitude of the problem out there and how many
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  people will be suffering as a result, where do you think this is heading?
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  So again, that's the only time is going to tell that. But
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  I know the administration is looking at a plan bum and unfortunately let's go by
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  Just take a step back for one second and realize that student loans have become
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  politicized, right so bar words are confused by not going to pay it back?
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  Am I paying it back? What's going on, and of course human
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  nature says, let's hope for the best. Right, They're going to get
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  this through, and I'm not going to have to pay back, um,
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  maybe all of my student loan or ten twenty five thousand dollars worth of the
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  student loan. It's going to significantly decrease my payments. And that's These are
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  just carrots that have been you know, hanging out there, being dangled in
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  front of these students causing confusion. So the politic is the poet is the
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  politics behind this um. You know, ongoing debacle is not a good thing
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  for anybody. So what happens, you know, moving forward, we know
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  there will be ex out of the falls. We know there's going to be
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  x amount of late payments. We know they're going to carry higher credit our
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  debt because of the student loan debt. And again what I am saying that
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  is this is a real one two punch killer for these young people because they
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  don't have a long credit history. So people loans are very powerful helping these
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  young people build their credit. Well it's gone in the blink of an eye
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  with one thirty daily late payment. You know, you could lose a young
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  person like that could lose fifty seventy five one hundred points off their credit scores.
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  So this is not a good situation, to say the least. It's
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  a nightmare scenario. People who've been trying to do the right thing. The
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  government gives them this relief, and it's questionable whether they really have the authority
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  to do that in the first place. But nobody seems to be challenging that,
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  right. So you know, uh, you gotta wonder the government has
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  caused this mess, so they need to They need to settle the problem.
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  They need to solve it, right, Congress, and go back to what
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  you were saying before. You don't solve it by forgiving the debt um that's
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  already been obtained, right, because that's not fair to a guy like me
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  who paid my student loans back. You know, I didn't come from a
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  high net income family. I had to pay my student loans back. And
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  what about the students that invest in trade schools and and try and start their
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  own businesses. You know, where do you draw the line? So you
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  draw the line in you signed a contract for these student loans. Why does
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  it cost so much money? Some of these universities have you know, endowments
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  that are that are the size of countries GDP. I mean, it's just
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  an amazing situation that you diversities have become these powerful, powerful financial vehicles.
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  So how did we get here in the first place. The universities are charging
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  way too much in room board and tuition, and it's offset. It's kind
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  of like the healthcare industry. They charge that because they know that these students
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  are going to be able to get financing. They paid for it. So
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  there really has to be a going to peel back the onion all the way
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  and kind of almost start over and then you know, deal with the problem.
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  But you know, canceling the debt is not solving the problem. Yeah,
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  definitely not. And well, I guess we're gonna find out. You
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  know, Congress got us into this mess, and Congress it's up to Congress
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  to get us out, right. That's a scary thought. Care. That's
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  just you don't have a good track record. They have a great track record
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  and getting us into mess, but they don't have a great track record in
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  getting us out. It's certainly not without causing pain somewhere else, or just
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  like you had said, just kicking the can down the road. You know,
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  and what you were saying about these large college institutions here creating this problem.
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  You know, they're the beneficiaries of it, right, I mean,
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  they benefit from the problem that was created here. And so you can't just
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  let them off the hook and say they have no you know, they become
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  these wealthy institutions here, you know, as a result of government large s.
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  So they got to be part of the solution, and they have to
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  they have to bite the bullet here, right, there's no doubt, there's
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  no doubt that they have to be held accountable and also participate in in how
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  we move fall right, could not agree with you more. Hey, just
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  tell us again where we find you, how we connect with you on the
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  web, and and what else you can do. Listen, just go to
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  better qualified dot com. You can ask questions anonymously. You can get access
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  to two different self help guides. You can speak to one of our credit
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  experts to figure out, you know, what's the best way to move forward.
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  We can suggest debt management programs to kind of deal with all your other
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  debt. You know, like you had said, if if it's a federal
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  student loan, there is no you know, even if you have filed for
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  bankruptcy, it will be excluded. So we have to look at this holistically
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  for each consumer. So just go to better Qualified dot com, set up
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  a brief phone call, and the consultation and analysis is always free, and
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  let's figure out if if we can provide any sort of relief and assistance.
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  All right, Hey, we really appreciate you coming on as always, Paul.
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  If you've got a question for Paul myself kl at kryltz dot com,
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  just shoot us an email, leave your comments on the YouTube channel below.
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  If you're watching us there and make sure go over to Financial Survival Network dot
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  com show notes this interview. Paul's link will be there. Paul, always
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  a pleasure, Thanks for stopping by, Thanks you having back on, Thanks
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  for listening to carry Let's Financial Survival Network, your solution to today's trying times.
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  For the latest, go to Financial Survival Network dot com. Financial Survival
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