Stimulus Package 2 | Student Loans Options Explained

by CHZ



Although right now we have the Heals act, a proposal that is likely to be passed. I wanted to go over, the student loan portion of the bill. And break it all down to see which options Are going to be best.

1. What we currently have going on
– With the cares act
– We basically got forbearance on our federal student loans
– Until September 30th ( meaning no interest to be accrued or payments required till then)

But September:
– is only 2 months away
– So let’s talk about the new options that are being offered and which one is best

2. The First thing you need to know ( this Is being proposed)
– No income means no payments will be required
– So that’s actually a great thing
– If for whatever reason you don’t have a job, you will have no monthly payments required

However:
– Listen carefully, just because no payments are required doesn’t mean your balance will not accrued interest
– Meaning if you don’t make any payments for a long period of time
– When you do start making payments you could owe a lot more money y

For example:
– Let’s say you owe exactly 36k which is the average and your interest is 5.8% which is the average also.
– If you don’t make any payments over 2 years you can go up to 40k
– So the answer, if you do have some hard times right, make sure to get a job and start making payments

Well: Unless you plan on being unemployed for 20 years then your loans will be forgiving undergrad or maybe 25 years and your graduate loans would be forgiving. But that’s a terrible plan obviously.

3. income-based repayment option ( 10% cap if needed)
– now this actually a plan that I like
– it means that you will not have to pay more than 10% of your income towards loans if you don’t want to
– but also gives you the option that if you want to, you can always pay extra

For example:
– again say you owe 36k and interest is 5.8% and you earn 52k each year
– it means that they will take 5200 bucks for payments and you get to keep the other 90% for your normal expenses
– btw after 10 years of doing this it means you would have paid a full years salary of 52k which means you would have been don’t with your loans a long time ago ( 8.9 years to be exact )

However:
– realistically the only problem with this plan are two things
– the first is its going to cost you a ton of money in interest around 10k with that example I used.
– When you actually go to apply for a mortgage, they will judge based on that required monthly payment ( debt to income ratio, which could be the different between getting qualified or deinied)

Tip: this is the option I wouldpick, but just add some more cast to finish faster, but I can also go back to 10% if I face some hard times.

4. ten year mortgage-like option
– this is if you are set to pay your student loans in 10 years and you want to make a deadline
– usually if you have the average student loan debt of 36k you would finish faster with the income based if your salary is above 50k
– but this is also a good option
The idea is simple:
– they will organize your monthly payment in a way, where you pay interest and capital
– and it’s guaranteed to be paid off in 10 years
– however again, it doesn’t mean you can pay an extra 100 or 500 bucks per month and finish a lot faster

5. what do I think

– this plan has actually been proposed for over 6 years, this might be the year that this actually past
– I think its better for lenders because it’s going to guarantee them some payments instead of people going in default
– And I think is better for borrowers because it gives them options, legroom, and a clear payment completion date.

Link: https://www.forbes.com/sites/jimwang/2020/07/26/next-stimulus-package-on-monday-1200-stimulus-check-eviction-moratorium-and-reduced-unemployment-aid-in-cares-2-act/#22b8d71226aa

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29 comments

TommyBryson November 24, 2020 - 2:50 am

If this does Pass, it will definitely make things a lot more simply
**Video on Person With 1M in Student Loan Debt**
link: https://www.youtube.com/watch?v=ETyBi5SyfA0

Reply
SmokeRanch November 24, 2020 - 2:50 am

What I want to ask is why do these pampered children get off thinking they are so special where they feel they deserve to have the tax payers pay for their schooling? And why do they feel those who chose not to go to school also have to pay for them as well? These arrogant little children deserve nothing more than the way it has always been. Where this idea comes from are the college professors who feel they deserve a pay raise and fill these children's minds with all this socialist BS. Defund colleges and give the police a pay raise

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RN & LPN NCLEX and TEST PREPARATION CHANNEL November 24, 2020 - 2:50 am

We need to be smart…go to community college for less spendings.

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Mr. ADASLA November 24, 2020 - 2:50 am

Graduated in December and paid of my entire loan of 29k with a great a strategy.

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Maui T November 24, 2020 - 2:50 am

Some of what you're saying is old news dude. Great video to inform ppl that don't know though. Keep it up and stop yelling sheesh almost makes the video unbearable

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David November 24, 2020 - 2:50 am

That 10% is a joke for a lot of people. The amount of interest would outweigh the payment on a monthly basis. In the past, they were making me pay 10% of my income, but a 5.8% interest rate on a 30,000 dollar loan means the payment would do nothing, the loan would actually continue to go up.

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Kit Kat November 24, 2020 - 2:50 am

I went from owing 95k to 116k because of interest, alone. Yes, I'm employed. Be careful what program you sign up for.

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GOON SQAD November 24, 2020 - 2:50 am

O i only owe 56,000$

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GOON SQAD November 24, 2020 - 2:50 am

What if you work and dnt make enough money to pay student loans? Im on the loan forgiveness program where i pay zero $ because my income is so low.

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Adrian Martinez November 24, 2020 - 2:50 am

What if my student loans went to collections last year lol

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Leonna Mai November 24, 2020 - 2:50 am

Hey love the video I would just like to clarify that this cares act info is only for loans directly through the department of education not for federal commercial loans. So make sure you look into what type of loans you have. Also the 0$ income driven plan is already a thing lol the only new thing is the covid forb and interest waiver until 09/30/20

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haianda2001 November 24, 2020 - 2:50 am

Wait, is the interest not calculated daily, as opposed to yearly?

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Elizabeth Crittenden November 24, 2020 - 2:50 am

Thanks, Tommy. Very insightful. I'll be more deliberate about attacking this debt.

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David O November 24, 2020 - 2:50 am

These options are already available. Unless somehow they were taken away and looking to re introduce them. Been on it since 4 years ago. Not sure how this is new to anyone 🤷🏼‍♂️🤦🏼‍♂️

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Kayla Cimone November 24, 2020 - 2:50 am

I’m not going to lie, I regret going to college at times. I wish I would have went to trade school. I’m not working in my field but my career requires a degree for management.

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Mohammed Ahmed November 24, 2020 - 2:50 am

If there is a student loan forgiveness,then it will be for those who are not making 45k or less. I hope I'm wrong.

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Chris Spooner November 24, 2020 - 2:50 am

If u have 17 years before an income based plan can be forgiven is it worth refinancing for a lower rate? I'm also wondering if I'm accruing interest right now even though I am still making the payments on a income-based plan. Should I even be making the payments knowing that I'll be heading towards the 20-year for forgiveness mark.

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KelechIwuaba November 24, 2020 - 2:50 am

Gonna have some "so the answer is…" Shirts soon enough.

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Gregory Kosies November 24, 2020 - 2:50 am

Look here I got a loan for 2650 1991 it's now worth 14000 2007 ssdi now there garnishing in default on the interest rate loan the loan is paid for it's all interset on the loan they just consolidated to make it a loan that I don't even know who the lender is who consolidated to the paid the student loan I can't work so there just taking my ssdi for 79 a month I figured it out to be a 60 year loan if I don't die

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TaWanna Green November 24, 2020 - 2:50 am

You talk too fast.

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breezyenough November 24, 2020 - 2:50 am

Hey Tommy, I’m doing the income driven payments where my payments are 0 since I’m a single parent of two. Quick question though, after the ten years of doing my payments this way, would I still have to pay off the loans? I think I’ve been doing it this way for about 2-3years. Thanks, Candice

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beast mode November 24, 2020 - 2:50 am

You look like bubble bass the dude from SpongeBob the hiting the pickles under his tongue

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ralph flores November 24, 2020 - 2:50 am

Yupp i have like 22k on student loans

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Cash app Generator November 24, 2020 - 2:50 am

OMG 😱 I got paid of $10k from this dude which I use to pay of my school loan.;

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Cash app Generator November 24, 2020 - 2:50 am

OMG 😱 I got paid of $10k from this dude which I use to pay of my school loan.;

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Sophia Bailey November 24, 2020 - 2:50 am

Hey thanks for the information. Education should be free abd health ❤ care

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Thilan W November 24, 2020 - 2:50 am

I’ve been having income based repayment plan for a while now and I enjoy the option to pay extra payments when I can on top of it.

Only issue is It’s been 10 years and I still have a long way to go 😞 I’m trying to get a better paying job and pay it off in the next ten years or less if possible

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david Ela November 24, 2020 - 2:50 am

How about they get rid of the interest…. Wouldn't that be the best option?

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Mark November 24, 2020 - 2:50 am Reply

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