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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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00:00:20,559 --> 00:00:25,920
listening to Carrie Letz's Financial Survival Network, where you get valuable information you just

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00:00:26,039 --> 00:00:31,719
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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00:00:37,719 --> 00:00:44,200
get your free newsletter and gift.
Financial Survival Network now more than ever,

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00:00:47,600 --> 00:00:52,439
and welcome you are listening to watching
the Financial Survival Network. I'm your host,

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00:00:52,520 --> 00:00:57,079
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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00:14:03,720 --> 00:14:05,440
tell us again where we find you, how we connect with you on the

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00:14:05,519 --> 00:14:11,120
web, and and what else you
can do. Listen, just go to

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00:14:11,240 --> 00:14:16,879
better qualified dot com. You can
ask questions anonymously. You can get access

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00:14:16,960 --> 00:14:22,720
to two different self help guides.
You can speak to one of our credit

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00:14:22,799 --> 00:14:26,320
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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00:14:48,279 --> 00:14:52,120
a brief phone call, and the
consultation and analysis is always free, and

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00:14:52,240 --> 00:14:56,480
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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00:15:03,720 --> 00:15:09,279
just shoot us an email, leave
your comments on the YouTube channel below.

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00:15:09,440 --> 00:15:13,879
If you're watching us there and make
sure go over to Financial Survival Network dot

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00:15:13,960 --> 00:15:18,200
com show notes this interview. Paul's
link will be there. Paul, always

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00:15:18,240 --> 00:15:22,679
a pleasure, Thanks for stopping by, Thanks you having back on, Thanks

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00:15:22,720 --> 00:15:28,080
for listening to carry Let's Financial Survival
Network, your solution to today's trying times.

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00:15:28,440 --> 00:15:33,320
For the latest, go to Financial
Survival Network dot com. Financial Survival

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00:15:33,440 --> 00:15:35,799
Network now more than ever