Biden administration continues to seek ways to clear student debt for Americans.

<div class="block">The Biden administration has cleared student loan debt for thousands of Americans. Will Sealy, co-founder and CEO of Summer, joined &#39;Stretching Your Dollar&#39; to talk about the &#39;Save Program,&#39; which is aimed at helping borrowers lower their monthly payments. He also talked about eligibility and who could have debt completely cleared.</div>

Stretching Your Dollar

Stretching Your Dollar: Facts on Student Loan Forgiveness

President Biden announced that billions in student loans would be forgiven for thousands of American borrowers to learn more about what it means and who it impacts. We've got resident expert joining me on set will see the co founder and CEO of Summer, a student loans solution provider will thanks so much for joining. Happy to be here. Ok, so let's talk about first on how many student loan forgiveness programs are out there and how do they differ? Actually, a lot of student loan forgiveness programs, there's a number of income driven repayment options and the Biden administration just recently launched the save program adding to a slew of programs that help borrowers lower their monthly payments. There's also public service loan forgiveness, which is what we call the best gig in student loan forgiveness world where you can save limitless amounts of dollars. Just as long as you've been in public service at a nonprofit or government employer for 10 years, thing can get canceled of your federal loans after that. And there's a whole bunch of other programs. This announcement of 9 billion is really tying those two programs together, helping people who have been in these programs for decades actually get the cancellation. They were promised who is going to benefit from this? How do people know if they qualify? So, 125,000 people are in this pool who are saving a total of $9 billion roughly $72,000 per person on average. So that's real money. That's a big deal. But if you're in that 125,000, you've either been in public service loan forgiveness and you've been paying for over 10 years and you're finally getting your debt canceled or you've been an income driven repayment for over 20 years and you're finally getting your debt canceled or you're someone with a disability that is eligible for cancellation as well. So the way you'd find out is through a letter in the mail or potentially an email from the Department of Education. Ok. Very good to know. And then if you receive that correspondence, what's the next step? So this is theoretically happening if smoothly should just be, your balance is reduced to zero if you are one of these recipients. So logging into your FSA account, federal student aid, you should just see that number go down precipitously hopefully to zero. So very few steps should be required. So for borrowers who are watching this segment who don't qualify based on these particular limit limitations for this particular initiative, do you anticipate that more student loan forgiveness might be on the way down the road. Yeah, I think the take away from this is even if you're not in that 125,000 and let's be real. There are 45 million student loan borrowers who have all been praying that Biden would be able to cancel their debt. And the Supreme Court did block that decision, which leaves everyone with the question mark of what about me? So if you're not in that 125,000, there are few takeaways. One. I think it's important to note that people have looked at these programs that were retroactively fixed with skepticism since they were created decades ago. Public service loan forgiveness almost sounds too good to be true. You could get all your debt canceled if you just work for 10 years for a non profit or a government or some combination of the both. Well, that's amazing. But everyone thought would that would that day ever come where the government actually did what it said it would do and cancel that debt. Well, today, this marks an event showing that the government made good on its promise and you can count going forward, they will continue to make good on that promise. Income driven repayment is a similar program that lowers your monthly payments. So enrolling that program not only helps you today with just extra dollars in your pocket, but it also comes with a promise of debt canceled all debt remaining after 20 years now. That sounds like an impossibly long time if you're just graduating. But believe it or not, there are a lot of borrowers who have been in repayment for decades. And they're looking at that saying, well, I don't know if they're actually going to cancel that debt after 20 years. Is that just a pipe dream? Well, this announcement by the Biden administration can give you confidence that the Department of Education is making good on its word and these programs are real and can be helpful. So, if you're not in that enroll in those programs, it can certainly help you going forward. Why do you think now, why now that the Biden administration did decide to act on this? So this has been a decades long back and forth, like many issues that are in the news today, it's easy to kind of jump in last minute and you know, try to become an expert, but these have been issues going on for decades. And so the Department of Education has created these programs years ago with different past presidents. I think President Biden is now under a lot of pressure. As bars have said, you made a campaign promise of $10,000 canceled across the board. And where is that? Now? I know the Supreme Court blocked you, but are we going to get something? And so I think everyone's looking at him and his administration to do something. And so they're going back to all the existing programs that have been in place for years and said, can we improve these programs? Can we make sure people get the savings they were once promised? And can we fine tune the system and then we will continue to work towards cancellation in the future, which this 9 billion adds to now, a total of 100 close to $130 billion canceled under President Biden, which still is less than 10% of the overall $1.7 trillion of outstanding debt. But it is a big step forward to help people who really deserve it. It puts it in perspective a lot. I also want to talk about this new 12 month on ramp or part of it that Biden announced. What does that entail? Yes. So this is a little bit complicated, but the way that I would just cut through all the noise is if you can afford to repay your loans, definitely pay them if you are struggling to make your monthly payments. Now that payments have resumed, consider an income driven plan that could lower your monthly payment substantially. And again, put you on this path to 20 years of cancellation. And then if you really look at that plan and you can't afford it, then and only then I would suggest considering going into forbearance where you are not paying your loans, but keep in mind interest will accrue and it could eventually impact your credit score. The last word will advice for borrowers out there, student loan borrowers. What would you leave them with? I'd say so many employers right now are stepping up and actually contributing to student loan payments. They're coming in and they're matching retirement plans saying they match retirement plans based on student loan payments. Employers have more options than ever ask your employer for help navigating this if you're a borrower, a lot of hr leaders are trying to help now that payments are due. All right, great advice, especially for all of our viewers will. Thank you.