Preparation for Student Loan Payment Resumption

Do you feel lost in the convoluted world of student loans? It's time to clear the fog and understand what the recent Supreme Court's rejection of President Biden's student loan plan entails for you. As someone who has navigated this labyrinth, I share my journey, which includes default, a resurge through the Fresh Start program, and articulating how to get ready for the recommencement of payments.

Get ready to decode the cryptic terminologies and understand the implications of subsidized versus unsubsidized loans. Learn how to find out your loan interest rates and tips on budget planning. If you're still in school or struggling with a financial crisis, discover available options, including income-driven repayment, loan consolidation, and official deferment or forbearance. This episode equips you with the knowledge and resources to face your student loans head-on, so stop fretting and start planning.

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Episode Transcript

Speaker 1 (00:01):
All right, welcome to tonight's live stream.
It is a rather impromptu livestream, though the news is not
new.
I don't know why I'm calling itnews.
It's not new.
This is the Savvy Budget Girlpodcast And we are going live
July 1st to talk about therecent stories, or news stories

(00:25):
about student loans.
So if you live in the UnitedStates, particularly if you've
been watching from around theworld, you know this is a big,
huge mess.
And yesterday the news came downthat the Supreme Court struck
down President Biden's studentloan plan And what that means is

(00:46):
the student loan forgivenessthat was promised by President
Biden I think it was last year,so it was 10,000 for some people
, 20,000 for others if you hadtaken out Pell grants I think it
was Pell grants, basically thatwent all the way to the Supreme

(01:11):
Court of the United StatesSCOTUS for short And SCOTUS said
, hey, the president doesn'thave authority under that law
that he tried to use to cancelstudent loan debt.
So in response to that and I'mlooking at an article from USA

(01:35):
Today, so I'm going to share myscreen if you're watching this
on YouTube, so you can see.
If you're not watching this onYouTube and you're listening to
the audio, that's fine, i'mgoing to read what it says
anyway.
Usa Today says that on Friday,president Joe Biden said that he
will pursue canceling studentloan debt through an alternative

(01:55):
legal authority after theSupreme Court blocked his
signature program to eliminateup to $20,000 in student loan
debt for millions of Americans.
Biden said his administrationwill work to forgive student
loan debt through the HigherEducation Act of 1965, which
authorizes the EducationSecretary to modify, waive or
compromise federal student loanunder certain circumstances.

(02:20):
Now, previously they had used alaw, and I don't remember what
it was called the HEROES Act.
That the HEROES Act was whatthe Biden administration
previously tried to use to waiveor modify the terms of student

(02:42):
loans.
And then Scott has said, hey,you can't do that, not through
the HEROES Act.
So what does all that mean?
Well, there's a couple ofthings going on.
The first thing that's going onis when we had the debt ceiling
crisis not long ago And I meanit was a month ago we had the

(03:05):
debt ceiling crisis In order tocome to a specific compromise.
What happened was it was agreedin the bill that student loans
would no longer be paused, sothe continual student loan
payments that borrowers likemyself had been receiving during
the pandemic for the last threeyears was going to go away.

(03:28):
There wasn't much publicityabout that, so hopefully you
knew that.
And so then what we found out Ithink it was last week was
student loan payments wouldresume sometime in the fall
because of what was agreed to inthe debt ceiling.
So nobody was anticipatingreally that SCOTUS was going to

(03:54):
say that this move by thepresident was constitutional.
Because of that, the studentloan pause ends August 29th.
Interest will start accruingagain September 1st 2023, with
payments resuming sometime inOctober 2023.

(04:14):
That is what we have come to sofar with student loan payment.
So we're gonna look at what itsays officially on studentaidgov
, which is your website forchecking your end applying for
federal student aid, and it saysthis helps, if I share my

(04:37):
screen, it says the SupremeCourt issued a decision blocking
us from moving forward with ourone-time student debt relief
plan.
Visit studentaidgov, slash debtrelief to learn more about the
actions President Bidenannounced following the decision
and find out how this decisionimpacts you.
And then it also talks abouthow you can have lower payments

(05:01):
from the new save plan And ifyou sign up for the repay now
plan, you will automatically beenrolled in the save plan before
payments resume.
So that is a lot to know.
Like I said, payments willresume sometime in October.
You should have already heardfrom your student loan finance

(05:27):
or about when the payments wouldresume, because they do have to
let you know in a timelyfashion before those student
loans resume.
So, that being said, what if youhaven't been paying on those
student loans for the past threeyears?
I haven't been, of course.
There was a time in the lastthree years where I didn't

(05:48):
really know what my studentloans were, so I had to pull my
head out of the sand in order tofigure out what my student loan
debt was before I could figureout what I was going to
potentially owe.
So one of the things I did andleave a comment below if you
have been paying your studentloans the whole time.

(06:08):
So if you're watching this onYouTube, leave a comment below
the video.
Let me know if you've beenpaying your student loans this
whole time or if you took apause like most Americans did.
So I had to pull my head out ofthe sand to make sure that I
even knew what my student loanswere, and I have about $69,000
in student loans Previously, 24,25 of that have been in default

(06:34):
, and so I use the Fresh Startprogram to offer it by the
government, which you can alsofind on studentaidgov, to pull
those loans out of default.
Of course, i do have to makethose payments, but now I have
$69,000 of student loan payments.
That will all be current oncepayments resume.

(07:00):
So what you have to do now isbudget.
Yeah, that was incrediblysimple.
You waited seven minutes for meto tell you to budget.
You have to put the payments inyour budget right now, and if
you don't know how much you'regoing to be paying when the
payments resume in October, thefirst thing you're going to want

(07:22):
to do is total up all yourstudent loans, figure out how
much you have in student loans,figure out what the interest
rates are And if it doesn't sayonline because most of us are
looking at these statementsonline, because a lot of them
say zero right now because ofthe payment, pause, call your

(07:43):
servicer.
I know nobody wants to do that.
That's like I mean hello, wendy, what are you talking about?
Yeah, call your servicer, askfor the interest rates And then,
while you've got them on thephone, ask them what the
anticipated monthly payment willbe, and if you're still in
school, like I am, and you won'thave to pay, interest may still

(08:06):
accrue, depending on the typeof loan that you have.
So you're going to want to findthat out as well.
Do you have subsidized loans?
Do you have unsubsidized loans?
If interest is going to beaccruing, it may be in your best
interest to either make theentire payment while you're
still in school, if you are able, or to at least pay the

(08:27):
interest while you're still inschool, because that's where a
lot of us get in trouble.
It's not so much the amountthat we took out, but the amount
of interest that accrued duringthe time we were in school.
And so now that's all catchingup to us when we're trying to
pay these loans after a school,whether that's after your

(08:48):
bachelor's, master's, phdwhatever you did medical school,
law school, whatever you didyou were in school for a long
time And you probably have a lotof interest accruing.
So, at the very least, makeyour budget so that you can
account for paying at least theinterest if you are still in

(09:08):
school.
And if you're not in school andpayments are just going to
become due, it is more importantthan ever that you talk to your
service loan provider Becausestatistically, or at least by
survey, many people are not in aposition to repay their student
loans once those paymentsresume in October.

(09:31):
If that's you, you're going towant to take advantage of one of
the loan repayment methods,like income driven repayment.
You could consolidate yourloans.
There are a variety of paymentplans, including official
deferment or forbearance if youare in a hardship situation.

(09:53):
So don't think that justbecause the government
forbearance is ending, that youcan't get forbearance on your
loans.
You can in certain situationsif you qualify.
So you're going to want to lookinto that.
And again, all that informationis available on studentaidgov

(10:13):
And if you've never logged intothere, you never created an
account.
Create an account if you'venever logged in, but it has a
wealth of information for you onhow to get loan forgiveness,
how to repay your loans,understanding your loans and
knowing who holds your loans.
Again, this is a federalgovernment website, this is
studentaidgov.

(10:36):
So it's easy for me to say putit in your budget.
But I know that there's a lotof things straining your budget
inflation, recession, there's alot of things going on.
The price of everything ishigher, but wages haven't kept
up, or maybe you're in betweenjobs, or maybe you want a better
job and you're looking for ahigher income.

(10:56):
Whatever the situation is, youhave to start by getting a hold
of your budget.
You have to know how much moneyis coming in and how much money
is going out so that you canproperly budget, not just for
student loan payments, but anydebt repayment, as well as your

(11:17):
goals for the future.
Maybe you want to buy a house,maybe you need a new car, maybe
you want to buy a new computer,maybe you just want a new phone.
Whatever it is, it's harder toachieve those goals if you don't
budget, because you need toknow what's coming in and you
need to know what's going outand specifically where it's
going.
That's why I wrote a whole bookabout it, called Budgeting for

(11:39):
Women, because that's my thing,it's budgeting.
That's why we don't talk aboutinvesting much on this channel.
We don't talk about Any otherthing except budgeting, because
that, i believe, is truly thefoundation of everything that
you need going forward, whetheryou're a fire movement person,

(12:00):
financial independence, retireearly or whether you're in the
retire standard whatever that'scalled camp.
So I want you to be prepared inthe best way possible for
student loan payments to resumein October.
You can start making paymentsnow if you want.
You could have been makingpayments the whole time.

(12:22):
We all could have if it was inour budget, but we took
advantage of the payment pauseand we didn't make those
payments.
So now we're going to have tofigure out a way to get this
stuff back in our budget.
So that may mean cutting back onsome things that you took
advantage of before.
It may mean finding a way toincrease your income.

(12:46):
It may mean and increasing yourincome may mean side hustles.
It may be starting a business.
It could be getting a new job.
It could be getting a part timejob, which I hate to tell
people to get two jobs that I'vedone that.
I did that for like a month andit nearly killed me.
So do what you can do,realizing that you can only cut

(13:08):
so much.
I'm not saying live on beansand rice, rice and beans and
tuna.
I'm not saying, well, tuna isexpensive.
I'm not saying you have to sellyour house to get out of debt,
but something has to give, andthat may be a combination of
saving money and creating moreincome.
I'm working on doing the samething myself.

(13:30):
I've been in an internship forthe last year an unpaid
internship for the last year atmy church, and this fall I need
to start bringing in more incomethat I wasn't able to do while
I was in the internship.
So to do that, i'm going tostart offering VIP financial
planning days.
Yes, this episode is kind ofsponsored by me, but I want you

(13:54):
to know that, as a money coachspecifically as a faith based
money coach I feel like it is abiblical imperative for us to
steward our money Well.
Okay, it's our job to be goodusers of the resources God has

(14:15):
entrusted in us, and budgetingis a tool we use to do that.
Whether you call it a budget ora spending plan, the fact of
the matter is is we still needto do it.
We are not the federalgovernment.
I mean, the government has thebudget, but we just can't spend
more than we make and expectthat to last for a long time.

(14:36):
It's a recipe for disaster.
So I'm here to help you on thischannel, on this podcast, as a
money coach, to do the thingsthat we need to do to write our
ship financially so that we canbe in a good financial position
Just to help ourselves but tohelp others, to be that generous

(14:58):
, philanthropic, human beingthat you want to be.
But we do that by getting ourhouse in order first.
Don't rely on the government todo for you what you can do for
yourself.
You can do this.
I believe in you.
If you need help along the way,i've got plenty of free content.

(15:18):
If you want to sign up for aVIP day, you can connect with me
on Instagram or on TikTok.
It's Abby budget girl.
I just want you to know that,although a lot of people are
upset by this decision by SCOTUSto block student loan debt
relief, it doesn't mean you'llnever get relief And it doesn't

(15:40):
mean you'll always be paying onit the rest of your life.
Take care, my friends, andremember the budget is where
it's at.
If you have any remainingquestions, i can answer in a
future episode.
Leave a comment below the video.
If you're watching on YouTube,if you are listening to the
audio podcast, hop on over toInstagram or TikTok and leave me

(16:01):
a message at Savvy budget girl.
Again, my name is Wendy Koopand I'm the Savvy budget girl.
Thank you so much for tuning in.
I appreciate you and I wish youa happy and safe 4th of July
weekend.
Take care.
Bye.