Millennial Debt This Week: May 2

Student Loan Forgiveness Benefits These Members Of Congress

  • 59 Members of Congress currently hold student loan debt
  • The total balance of their debt is up to $5.8 million, or around $98,000 each, on average. 
  • The author proceeds to list 7 of the 59 representatives  who hold student loan debt, and reiterates that members of Congress may have student loan debt along with 44 million other Americans.

  • Individuals whose wages have been garnished by the Department of Education for past-due federal loan debt are not receiving relief through the CARES Act. 
  • The CARES Act has suspended the garnishment of wages by the Department of Education through September 30, 2020. 
  • Wages garnished after March 13, 2020 are eligible for a full refund. 

  • A couple in Indianapolis owed $50,000 in student loan debt, and felt that it was making their decision to have children more difficult financially. 
  • They sought help from a financial advisor to help them achieve their goals. 
  • They set a budget to live off at 60% of their income. 
    • This is a great decision, and the easiest way I've found to accomplish this is to put all of your money for bills in one account, all of your savings in another, and whatever is left over in a third account.
    • Preferably, you don't have debit cards with your first two accounts, and the only withdrawals are automatic monthly payments. The third account is what you have your debit card for, and can be used for things like eating out, shopping, and travel.
    • That way, you're always certain to hit your financial goals, month-by-month, and year-by-year, and you never spend more than what aligns with your financial goals. 
    • You also don't feel the pain of budgeting, since you have an entire bank account where you can spend as frivolously as you desire without the risk of spending more than you have. 
  • This couple was able to leverage income from a side job to increase their payments towards student loans
  • The husband lost his job as a result of the coronavirus economy, but they are still able to survive financially, because they did such an excellent job managing their budget prior to the downturn. 
    • If you're looking to pay off your loans in the next 10 years or less, this could be a great strategy to look into.

  • Student Loan Hero surveyed nearly 1,250 Americans regarding mass student loan forgiveness.
  • 46% of Americans think mass student loan forgiveness is unfair to borrowers who've already paid down their loans
  • Around 56% of respondents felt that the government should provide compensation for those who already paid off their loans, if widespread forgiveness in enacted.
  • Millennials want student loan forgiveness more than other generations, including Gen X. 
    • This is likely from a lower overall balance of student loans from Gen X compared to millennials. 
    • I'm guessing that by the time many Gen Zers (those born roughly 1997-2012) hit their post college years, we will be in dire need of student loan reform. 
    • The federal government will be in serious financial trouble if the majority of borrowers' student loan balances are higher then their gross annual incomes. 
      • This will lead to record numbers of students seeking student loan forgiveness. A windfall which the government might not be ready for.