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| | Here's the Gist today Happy Thursday Origin Member. The average student loan payment is about $503 per month, but some borrowers aren't paying anything at all. Can you guess how many have a $0 monthly payment? A. 3M B. 4M C. 6M Here are the topics for today: - Where Does Student Loan Forgiveness Stand These Days?
- What The Heck Is 'Loud Budgeting'?
- Emergency Savings Accounts As a Benefit
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| Where Does Student Loan Forgiveness Stand These Days? |
Recipients of Federal student loans have endured the epitome of uncertainty over the last year and a half. What started with a valiant effort for loan forgiveness in August of 2022 became a drawn-out, failed attempt, and the aftermath has created much confusion. In the wake of the Supreme Court's ruling, the Biden Admin made a dizzying amount of changes to the way student loans are borrowed, repaid, and forgiven in a very short amount of time. Understandably, this has left the vast majority of borrowers at least a little confused. Let's clarify some things — here's what you need to know Student loans aren't forgiven, but you keep seeing stories online about debt being forgiven — why? The Biden admin has made several adjustments and corrections to the way borrowers' path to forgiveness is calculated, such as those en route to PSLF or IDR forgiveness paths. Essentially, they've found errors in their record-keeping (administrative inaccuracies) and have determined these borrowers do now qualify for forgiveness and over $136.6B has been forgiven through this correction so far.
What about that 'alternative pathway'? Basically, after the SC struck down the original plan, Biden announced plans to pursue an alternative under provisions in the Higher Education Act of 1965, which grants the education secretary the power to modify, waive, or compromise federal student loans under specific circumstances. However, there's been little to no update or announced progress on this pathway since then, and the odds remain long.
What is the 'On-Ramp' thing? The on-ramp aspect of student loan repayment resumption is basically a grace period. This adjustment period will prevent those who are unable to make payments from being in default or having their credit negatively impacted for up to 12 months after payments resume. As of now, that ends in about 7 months.
Forgiveness through SAVE: Biden didn't achieve forgiveness, but the admin has made noteworthy changes to the options to obtain it. For example, if you're enrolled in the SAVE plan, you initially borrowed less than $12,000, and you've been making your qualifying payments for more than 10 years — your remaining balance is forgiven. Additionally, if your income is low enough to qualify for those $0 monthly payments, those months do count as made payments as well.
And what's up with FAFSA? The FSA rolled out a revamped FAFSA form at a much later date than usual, but students are now experiencing a lot of technical bugs with the updated platform, delaying their applications even more. The attempted updates included a shorter, streamlined form, increased Pell Grants, and other miscellaneous changes that are aimed at improving the form and student aid experience.
So, overall, it's safe to say student loans are still in flux. Nevertheless, borrowers still stand to benefit from these existing updates amidst the chaos. To make sure your situation is optimized — enroll in the right repayment plan, don't wait on forgiveness, and make sure to start your FAFSA form as early as possible. |
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| What The Heck Is 'Loud Budgeting'? |
Quiet luxury, girl math, no spend, envelope stuffing…2024 is not short of money trends to follow, and 'loud budgeting' just got added to the list. Money should be talked about, and it shouldn't be taboo. Loud budgeting embodies that ideal almost perfectly, proving that you don't have to be ashamed of your money, and making it clear where you stand is cool. So, what does it mean?
Essentially, loud budgeting is the antithesis of girl math, quiet luxury, or any money trend that excuses excessive indulgence. Loud budgeting is exactly what it sounds like — making it known that you're not down to be frivolous with your spending and that you are, in fact, on a budget.
For some people, this means posting and promoting your budgeting goals or low-spending habits on social media, whereas for others it might just mean having open and honest discussions about it with friends and family.
This progression is a reversal from last year's theme of indulgence, and for good reason. Life is expensive, and it's a harsh truth that Gen Z and younger people in general are being forced to confront. With its empowering message, this shift toward frugality might be a sustainable trend too.
How to embody loud budgeting
Stick to your guns: 69% of Americans say that they have financial regrets from last year. Don't allow that theme to repeat in 2024. It's often easy to get caught up in the moment and justify our whimsical purchases, but this often leads to regret and hurts our financial situation down the line.
Make a plan: A good plan, and subsequently a good budget, will help you make informed, intentional decisions with your money. You'll be much less likely to fall prey to spending temptations if you have a why, a how, and know where your money is going.
Encourage others to join you: Being around frivolous spenders can have a gravitational pull on your own finances, not to mention hurting their own. Encourage your friends, family, and loved ones to join the trend with you. Not only will this help you stay disciplined, but it will benefit them as well. | |
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| Emergency Savings Accounts As a Benefit |
When you think of employee benefits, what comes to mind? $100 says the first thing that came to mind was the term 401(k). Outside of that, maybe PTO, health insurance subsidies, or even life insurance. But with 56% of adults saying they lack the savings to cover a $1,000 emergency — shouldn't savings benefits be a thing? The answer is yes, and luckily, recent legislation is here to change that. New legislation — new benefits The passing of Secure 2.0 in 2022 made room for this and some other fringe savings benefits. It included legislation that allows for 3% of an employee's check to be put in an emergency savings account up to $2,500 per year, and it also includes an option for employers to match 401(k) contributions with an employee's student loan payments, another tax benefit.
With an increasing amount of emphasis on financial awareness, and eventually wellness, employees are keen on these new saving benefits. While only 10% of employers offered the auto-enrolled emergency savings benefit last year, surveys show that 42% of employees want to be enrolled in one automatically.
And as it turns out, auto-enrollment in things that are good for you is, in fact, good for you. We've seen this play out similarly with Social Security and the advent of retirement plans — an increased emphasis on retirement planning has increased our propensity to save for it, and a traditional emergency fund or savings account is not a likely exception to that rule.
But your savings also shouldn't be contingent on this. Employees should continue to place emphasis on saving a portion of each paycheck, and if automating something increases your likelihood of doing it, set up recurring auto-transfers to your emergency fund for each time you get paid. |
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| By the way 👨🎓 Answer: It's B., almost $4M (Money.com) 🚫 House votes 'yes' for TikTok ban, but it's more complicated than it seems (Axios) 👻 'Ghosting' isn't just a problem for daters, it's in the job market too (CNBC) 👮 TSA introduces a new "self-screening" security process in Vegas (NPR) |
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