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The Student Loan Reset Is Coming — Part One with The Student Loan Doctor · The Breakfast Club

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  Speaker 1: Today on front page. If you have student loans, you
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  Speaker 1: want to pay close attention. Big changes are coming July
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  Speaker 1: first that could impact how much you pay, how much
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  Speaker 1: you can borrow, and what happens if you're already behind
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  Speaker 1: on those loans.
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  Speaker 2: There are some options that are disappearing. There are going
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  Speaker 2: to be some new borrowing limits that are going to
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  Speaker 2: be introduced.
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  Speaker 1: In part one of our discussion, the Student Loan Doctor
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  Speaker 1: is going to break down what these changes mean, who
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  Speaker 1: they're going to affect, and what borrowers need to do
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  Speaker 1: right now. It's Friday, June nineteenth, from the Black Effect
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  Speaker 1: Podcast Network. I Mimi Brown. This is front page. Stay
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  Speaker 1: with me. More than forty two million Americans own the
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  Speaker 1: federal government a combined one point eighty seven trillion dollars
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  Speaker 1: in student loan debt. On July first, under President Trump's
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  Speaker 1: One Big Beautiful Bill, the rules are changing. Several Department
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  Speaker 1: of Education repayment plans are going away, including the Biden
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  Speaker 1: Error Savee Plan. Anyone who takes out a new federal
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  Speaker 1: student loan starting July first will have just two repayment
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  Speaker 1: plan options, a tiered standard plan with fixed monthly payments
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  Speaker 1: or repayment assistance plan based on income.
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  Speaker 2: That's it.
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  Speaker 1: So what does that mean for you and the loan
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  Speaker 1: you've been paying on? Right now, I call the one
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  Speaker 1: person I knew could help me make sense of it all,
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  Speaker 1: Sonya Lewis, the student loan doctor. Let's get into it.
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  Speaker 1: You give such good advice, such good information. And there
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  Speaker 1: is a July first deadline coming up when it comes
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  Speaker 1: to student loans that I think a lot.
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  Speaker 2: Of people do not know about.
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  Speaker 1: A lot of things are going to change, and so
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  Speaker 1: I want to tap in with you and so that
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  Speaker 1: you could just let us know what we need to
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  Speaker 1: know about this upcoming July first deadline.
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  Speaker 2: Well, many thanks for having me. July first is going
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  Speaker 2: to be one of the biggest studalone overhauls that we've
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  Speaker 2: seen in years, and millions of barbers are going to
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  Speaker 2: be focused on forgiveness. But also what they don't realize
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  Speaker 2: is that there are so many changes that are going
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  Speaker 2: to be happening with repayment and these decisions that are
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  Speaker 2: going to be made. It's going to affect not only
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  Speaker 2: the current generation of barwers, but the future generation is
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  Speaker 2: to come. So everything that we're discussing today is so important.
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  Speaker 2: I just hope that everyone has a pen and paper nearby.
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  Speaker 1: Yes, because they're definitely going to need a pen and paper.
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  Speaker 1: Because I feel like sometimes with this information they don't
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  Speaker 1: tell you.
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  Speaker 2: I feel like, you know, you may hear it here
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  Speaker 2: and there.
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  Speaker 1: But it's not something that's just front and center. And
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  Speaker 1: so we want to make sure that everyone gets this
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  Speaker 1: information today. So I know you said that there may
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  Speaker 1: be people could lose access to certain repayment plans.
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  Speaker 2: Can you explain that, Well, programs like the Safe Plan.
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  Speaker 2: Let's start there a VEE. The save Plan is going
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  Speaker 2: for sure, and I know that there was some debate
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  Speaker 2: if it would come back, but Congress officially allowed it
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  Speaker 2: to be ended. Now it ended before it officially started.
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  Speaker 2: So what's happening is there are about seven million people
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  Speaker 2: we need that think that they're in the Safe Plan.
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  Speaker 2: They can even log into studenta dot gov and they
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  Speaker 2: might even see that they're still in the SAVEE Plan.
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  Speaker 2: But as of July one, it's going to be a
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  Speaker 2: hard switch. People are either going to be put into
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  Speaker 2: what's called the Standard Plan or the Alternative Repayment Plan,
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  Speaker 2: and both are unaffordable and do not count towards id
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  Speaker 2: R forgiveness. Which stands for income driven forgiveness. We'll talk
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  Speaker 2: about that in a little right now, what's on the table.
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  Speaker 2: People have an option of the PAY plan, the ICR
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  Speaker 2: it can contingent repayment, and the IBr plan. What everyone
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  Speaker 2: here listening should know is that the IB is in
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  Speaker 2: bold R plan was created through Congress, so that plan
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  Speaker 2: can't just be removed or taken away very easily. So
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  Speaker 2: people are safe going from safe to IBr. Now, the
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  Speaker 2: biggest thing to explain here me me, and if I
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  Speaker 2: say it in a way that doesn't sound clear, you
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  Speaker 2: let me know. The biggest thing that they slid into
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  Speaker 2: the one big beautiful bill was that if someone went
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  Speaker 2: from the Safe Plan, let's say, to the new plan
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  Speaker 2: that this administration is introducing called the RAP plan Repayment
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  Speaker 2: Assistance Plan. The biggest challenge here is that they'll let
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  Speaker 2: you switch plans because it'll be a little more affordable there,
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  Speaker 2: but it's going to push people into repayment for an
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  Speaker 2: additional five to ten years. Okay, so stay with me.
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  Speaker 2: And there's one more like Simmy cole in here. Well,
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  Speaker 2: if I was to go into the IBr plan, I
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  Speaker 2: could be forgiven in a few years, right, just depending
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  Speaker 2: on who's listening their forgiveness at the twenty year mark
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  Speaker 2: when you're making payments and an income driven plan. Well, Mimi,
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  Speaker 2: here's what the administration is not telling people. They'll let
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  Speaker 2: you go to the new affordable plan called RAP, but
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  Speaker 2: they won't let you get out. And if you do
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  Speaker 2: want to come out, I know, it's like death for records.
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  Speaker 2: And if you do want to get out, right, that's fine.
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  Speaker 2: Here's the challenge. It's going to reset your clock for forgiveness. So, Mimi,
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  Speaker 2: just imagine someone fifty years old, forty years old, a
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  Speaker 2: year or two away from having their loans totally forgiven.
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  Speaker 2: They're at the twenty year mark, and just because they
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  Speaker 2: didn't know the right information. So I really thank you
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  Speaker 2: for allowing us on the show today that one change
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  Speaker 2: to switch back is going to reset their clock. Could
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  Speaker 2: you imagine someone fifty years old having to pay until
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  Speaker 2: they're seventy because they didn't know the right information.
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  Speaker 1: I need to make sure that I understand this. So basically,
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  Speaker 1: if you go from the sale plan to the RP plan, right,
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  Speaker 1: you can go.
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  Speaker 2: You can go. They'll put your payment for five to
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  Speaker 2: ten years, Okay, Okay, so you can go, Yeah, go ahead,
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  Speaker 2: go ahead, get on.
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  Speaker 1: But they won't let you out. And if they do
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  Speaker 1: let you out, you start all over again. So is
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  Speaker 1: it all the money that you've paid into that plan
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  Speaker 1: just resets?
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  Speaker 2: Everything starts over all over again, right? And the listener
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  Speaker 2: should be thinking like, well, why would I want to
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  Speaker 2: get out? Good question. So what's going to happen is
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  Speaker 2: that there's gonna be something called an id R tracker
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  Speaker 2: that's going to be put onto everyone's account through studenta
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  Speaker 2: dot gov. So, Mimi, let's say a month or two
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  Speaker 2: from now, people log in to studentaid dot gov and
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  Speaker 2: I keep it, come back and talk to you about
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  Speaker 2: this later, because this is a big deal. They come
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  Speaker 2: back on. I mean they log in and they're like,
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  Speaker 2: oh my god, I'm seventeen out of twenty years almost forgiven.
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  Speaker 2: That means what made me three years remaining? Right now, Mimi,
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  Speaker 2: that is the person who's going to want to go
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  Speaker 2: back out of the our AP plan because they only
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  Speaker 2: had three years. Well you could go back, but it
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  Speaker 2: won't be just three years. It starts to clock over
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  Speaker 2: to thirty years. Does this make sense? I know this
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  Speaker 2: sounds crazy to me. I know, It's like I was like,
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  Speaker 2: who wrote this. Yeah, these are in essence just traps. Really, Yeah,
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  Speaker 2: that's what it sounds like. Yeah, and I'm surprised that
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  Speaker 2: this has not been brought to the course just yet.
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  Speaker 2: There are many legal groups that are on the front
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  Speaker 2: line that are fighting this great cause. I'm surprised that
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  Speaker 2: it has not been held up by Congress. Like literally,
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  Speaker 2: we've been tracking it and tracking it for the last
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  Speaker 2: few years. That sentence I told you about that swap
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  Speaker 2: and that change that got added right in before publications
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  Speaker 2: were finalized. This is a huge document, so of course
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  Speaker 2: that could go over some people's head. But if someone's
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  Speaker 2: listening today, the biggest takeaway is, Okay, if I get
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  Speaker 2: out of the safe Plan, I should just go to IBr. Yes,
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  Speaker 2: it's gonna be a little more expensive, but no, you're
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  Speaker 2: not gonna have to pay an extra five or ten
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  Speaker 2: years and know you're not gonna want to reset your
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  Speaker 2: time clock later. That's the biggest takeaway for what we're
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  Speaker 2: talking about. Right now. All they have to do is
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  Speaker 2: go to studentad dot gov. There's about four tabs at
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  Speaker 2: the top of the site. I can look. I know
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  Speaker 2: about heart. You're gonna go in their loan repayment on
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  Speaker 2: your left kN column it says income driven application, and
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  Speaker 2: then they're gonna start new application even if it recognizes
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  Speaker 2: you from years ago, but we don't know what information
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  Speaker 2: they had from years ago. A lot of people haven't
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  Speaker 2: done this application since since before pandemic times. So we're
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  Speaker 2: gonna hit new application and we're gonna submit and share
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  Speaker 2: our information so we can get a new updated payment plan.
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  Speaker 1: Okay, and they have to do that before July first,
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  Speaker 1: because after July first, the only payment plan that will
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  Speaker 1: be available.
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  Speaker 2: Is the r AP. Yes, yes, so let's back up,
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  Speaker 2: okay right now? Okay, So until twenty and twenty eight,
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  Speaker 2: pay ICR and IBr are available. After twenty and twenty eight,
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  Speaker 2: it's only going to be our AP in IBr. Okay, Okay.
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  Speaker 2: But the thing is, we just need people to know
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  Speaker 2: IBr now so that they don't get jammed out when
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  Speaker 2: that IDR tracker comes back.
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  Speaker 1: That's Part one with Sonya Lewis, the Student Loan Doctor,
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  Speaker 1: and on Monday we'll dive into part two of our conversation.
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  Speaker 1: If you have student loans, you do not want to
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  Speaker 1: miss it. We're going to talk about wage garnishment, how
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  Speaker 1: the government can take money directly from your paycheck if
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  Speaker 1: you fall behind. She'll also discuss how to avoid default
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  Speaker 1: before it happens, what to do step by step if
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  Speaker 1: you're already in default and you need a way out.
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  Speaker 1: So that's on Monday right here on front page, so
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  Speaker 1: make sure you tune in. I Mimi Brown. This podcast
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  Speaker 1: was brought to you by the Lack Effect Podcast Network