Should You Pay Off Your Student Debt or Wait for Dems to Cancel it?
Student Debt is basically the killer from an 80s slasher movie.
It can't be killed, it will come back to haunt you decades after it stopped being relevant, and it wants to punish you for having fun. If you're planning to shed your student debt by dying or declaring bankruptcy, I have some bad news for you. The loan you signed up for when you were too young to vote can often follow you and your bereaved loved ones forever. The sooner you give in, cut all leisure and luxury from your life to focus on paying off those debts, the sooner you'll be free.
But what about these Democrats running for office now? Some of them—just two, really—are coming out with some pretty radical new policies about debt forgiveness. It would be foolish to put all that time and energy into paying off debt that might just disappear if you can wait it out another year and change. And don't forget the money—all that sweet, delicious money. So, with the national burden of student debt approaching two trillion dollars, should you get to work unburdening yourself from the crippling weight of debt you were basically tricked into when you were too young to know better, or should you bet on a leftward political shift to rescue you? To figure out your chances, we need to break down each prominent candidate's position on student debt and figure out their likelihood of actually getting it done.
Bernie comes first, because he's too often ignored, and because his plan for student debt is the most aggressive. If Bernie has his way, all the student debt in the country is going out the window. Wipe the slate clean. It's like it never happened. If you're currently failing to pay off debt from multiple expensive degrees, Bernie is your best hope. He polls consistently well—with only Biden's fading star outshining him—and he's the only candidate with no restrictions or limitations on student debt forgiveness.
If you're feeling the Bern so much that you aren't concerned about how his legislation could actually get passed in Congress, you might as well take out some more loans and get another degree while you wait. But just to play devil's advocate, even if Bernie gets the nomination and wins the presidency, it's unlikely that most of his major proposals will get through. He's prioritizing Medicare For All, so unless student debt somehow gets bundled up with healthcare, a whole lot of political willpower is likely to be expended before anyone considers letting you off the hook. And even then, Bernie's plan is so much better for the powerless than for the powerful that you have to know that congress would do their best to chop it up into much more of a compromise. So... probably don't start taking out any new loans just yet.
Speaking of compromise, say hello to everyone's favorite not-quite-Bernie. Warren hasn't done quite as well in the polls as Sanders, but she's done an impressive job of chiseling out a serious spot in the top tier of contenders—far left of Biden, but noticeably more centrist than Bernie—and is generally considered to have some momentum in the polls, though that seems to be waning. As for student debt forgiveness, Warren's plan is nearly as extensive as Bernie's, with some notable exceptions.
Warren's plan would forgive up to $50,000 of your student debt if your household makes $100,000/year or less. Above that amount, the forgiveness begins to taper off, and it wouldn't cover members of households making $250,000/year at all. So if you went to NYU, you'll probably still have a lot of debt left—especially if you still live with your rich parents. That said, around 95% of people with student debt would have it eliminated, so it would definitely also need to be knee-capped by centrist legislators who just want to keep everything stable by making sure that rich people don't get any less rich. Fortunately, with Warren's focus being on her wealth tax proposal, it's a bit easier to imagine student debt being folded into the first round of Congressional activity under a Warren presidency.
Joe Biden is not going to do much for your private loans. Maybe he'll make it easier to refinance, but don't expect forgiveness. He does, however, have a plan for federal loans. If the government paid for your education, and you're paying off your loans with an Income-Based Repayment plan, Biden wants to cut your payment rates in half, from 10% of "discretionary" income—income above a certain basic threshold—down to 5%. If you make these payments for 20 years, any remaining debt is forgiven, which could actually be a lot under this new structure.
So if you're willing to wait two decades to have only federal student debt erased, Joe might work out for you. Assuming he maintains his precarious front-runner status—despite his consin poor debate performances and the minimal enthusiasm of his supporters—this more moderate plan could be in your future. On the other hand, it's still a Democrat's policy proposal, and Republican legislators would therefore treat it as full-blown communist takeover and do everything they can to cripple it. So unless you trust Biden to make it a legislative priority, don't expect much.
There are way too many other candidates to go through all their plans here, and most likely none of them have a chance. Pete Buttigieg has a ton of student debt himself, but he still prefers to focus on refinancing and cutting future costs. Andrew Yang has suggested a federal buyout of private loans, so you can pay them off to the government at less predatory rates, and he also wants to give you money every month so you stop complaining. Julian Castro wants to offer partial loan forgiveness for people who receive public assistance benefits for three out of five years. And Kamala Harris would offer up to $20,000 of debt forgiveness... if you received a Pell Grant...and you start your own business...that lasts at least three years...in a disadvantaged community. So no one you've ever met will qualify.
Whether their plans would do much to alleviate the student debt crisis or whether they'd be viable in Congress are both moot points, because none of these people are going to win the Democratic nomination, let alone the presidency.
The only kind of debt forgiveness Donald Trump cares about is the kind that involves nine zeroes, and allows him to keep putting his name on stuff. He will not help you unless he directly benefits from helping you. He is a broken man, and you and everyone you know do not exist in Donald Trump's world outside of your value to him personally. He will tell you what you want to hear, and then give you nothing. Still, nearly half the country loves him, and that portion that does matters more than the rest of us every four years, so he stands a pretty good chance of being reelected.
With that in mind, it's probably a good idea to keep paying off your student debt. Minimum payments can work if you're crossing your fingers for 2020, but if you stop paying you will destroy your credit and risk having your wages garnished—AKA gruesomely slashed. Ouch.
- How to Budget for Long and Short Term Goals - PayPath ›
- The Best Financial Tips for Millennials - PayPath ›
- How Will the Joe Biden Tax Plan Affect Me? - PayPath ›
- Apply for Income-Driven Student Loan Repayment | StudentLoans.gov ›
- Student Loan Repayment Options: Find the Best Plan — NerdWallet ›
- Repayment Plans | Federal Student Aid ›
- A student loan plan that could actually work - MarketWatch ›
- Warren's plan to wipe out student debt (and how she'd pay for it) ›
- Trump just laid out a pretty radical student debt plan - The ... ›
- Elizabeth Warren releases sweeping student debt cancellation and ... ›
- Elizabeth Warren's plan to forgive student debt would help 45 million ... ›
- Bernie Sanders pushes plan to cancel all student loan debt ... ›
- Bernie Sanders has a plan to forgive all student debt ›
Looking for a job? In addition to encountering those annoying never-ending job interviews you may find yourself face-to-face with an artificial intelligence bot.
Companies worldwide increasingly use artificial intelligence tools and analytics in employment decision-making – from parsing through resumes and screening candidates to automated assessments and digital interviews. But recent studies claim that AI does more harm than good.
While AI screening tools were developed to save companies time and money, they’ve been criticized for placing women and people of color at a disadvantage. The problem is that many companies lack appreciable diversity in their data set, making it impossible for an algorithm to know how people from underrepresented groups have performed in the past. As a result, the algorithm will be biased toward the data available and compare future candidates to that archetype.
The City’s Automated Employment Decision Tools (AEDT) law is designed to offset the potential misuse of AI and protect job candidates against discrimination. It was enforced on July 5th, 2023 in New York City - with other cities and states expected to gradually follow suit. Employers must now inform applicants when and how they encounter AI. Furthermore, companies have to commission a third-party audit of the AI software used, and publish a summary of the results to prove that their systems aren’t racist or sexist. Job applicants are able to request information regarding what data is collected and analyzed by the AI. Violations of the law can result in fines of up to $1,500.
Replacing Human Hiring Decisions
However, should a job applicant want to opt-out of such impersonal judgement by a bot, the new law's scope is quite limited.
While the law specifies that instructions for requesting an alternative selection process must be included in the AI screening disclosure, companies aren't actually required to use other screening methods. Not to mention that the law only applies to AI in hiring and not any other employment decisions. It also wouldn't apply if the AI, for example, flags candidates with relevant experience, but a human then reviews all applications, making the ultimate hiring decision.
Some civil rights advocates and public interest groups argue that the law isn’t extensive enough and that it’s even unenforceable. On the other hand, businesses say that it’s impractical, costly, and burdensome, and that independent audits aren’t feasible.
Responsible use of AI in hiring
Although this law may be a good first attempt to assign more regulatory guardrails around AI, it remains to be seen if it ensures the responsible use of AI in hiring processes. At the end of the day, perhaps recruiting talent should remain a human-made decision.
The good news is that AI can help companies without harming potential job candidates in many ways – such as connecting new employees with internal organizational information and company benefits during onboarding. Or helping employees to do their jobs more effectively rather than replacing them.
There’s all this talk about solo travel. And for good reason — no wasting precious time waiting for others to get their act together, take the plans out of the group chat and actually buy the tickets. Going solo, you can be spontaneous. You can plan your trips according to your precise tastes. You can hop on any flight and fly awayyyyyy.
But what if each time you flew you’d get a free ticket? That’s what you get with the Southwest Companion Pass.
Award status, upgrades, lounge access — there are many perks in the frequent flier game. But one of the coveted holy grails is the Southwest Companion Pass.
What is the Southwest Companion Pass?
The Companion Pass is part of Southwest’s Rapid Rewards program. You get to choose one person to be your “companion,” and they fly with you for free (plus some taxes and fees) on every flight. That’s right. Two for the price of one. That’s half off each ticket if you split it! Whether you’re flying with a partner, family member, friend, or anyone else, they can tag along for free.
And it gets better: once you earn the pass, you can reap the rewards for that full calendar year … AND the next. That’s why people go mad trying to earn a companion pass during the early months of the year. The sooner you qualify, the longer you can use it.
There are also no blackout dates. There are no limits. And if you didn’t purchase the ticket (think: work travel, your companion, or a generous benefactor), there are no restrictions! As long as you’re the one on the plane, your companion can also … be on the plane.
You can also switch out your designated companion 3x a year. So, no need to stay in a relationship simply to get the most out of your companion pass! Ghost and fly away — with a whole new companion!
If this sounds too good to be true — it’s not. But there is one small catch. It’s kinda tough to earn this mega reward.
How to qualify for the Southwest Companion Pass?
You can qualify for the pass in one of two ways:
- Fly 100 qualifying one-way flights
- Earn 135,000 qualifying points in a calendar year.
Clearly, this is no small feat — especially if you’re trying to qualify ASAP.
So how do you actually earn the Southwest Companion Pass?
Don’t worry, there’s a path to earning this amazing reward without climbing on 100 flights or spending an exorbitant amount of money.
Earning 135K reward points may seem completely impossible, but it’s easier than it sounds. Simply sign up for a Southwest Credit Card and turn those spending habits into a rapid rewards account. Through the Rewards Priority Credit Card, earn points when using local transit and commuting, plus score major points and miles whenever you spend.
Stay with me here. This is not some scheme to get you into credit card debt. Many airline cards come with potential savings, giantic rewards, awarding you points, and cashback with every purchase you make that can be redeemed for travel. And often they can come with passive sign-up bonuses. If you spend a specific amount of money within a certain timeframe of opening the card, you can be in for a windfall of points.
Now that’s where the companion pass comes in:
- Southwest Rapid Rewards Premier
- Southwest Rapid Rewards Plus Credit Card
- Southwest Priority Credit Card
- Southwest Rapid Rewards Premier Business Credit Card
- Southwest Performance Business Credit Card
Southwest has three personal cards and a business card. Each of these cards offers rewards between 30K-80K points. In the past, people could open two cards and get a bonus that granted enough points to almost meet the minimum. However, with new restrictions on personal cards, you can only get one bonus every 24 months. Boo!
However, this doesn’t apply to business cards. If you’re eligible, have good credit, and not likely to spiral into insane credit card debt, you can open a business card and a personal card, and accrue 100K+ points. The Rapid Rewards Priority Credit Card will get you points after you spend money in no time.
Now to earn the rest of them.
The secret to gaining these credit card points is to plan your card sign-ups around big purchases. Just before a recent move, I opened a card . . . and the rewards came rolling in — a small balm to ease the pain of how exorbitant moving can be.
Put everyday spend — especially big purchases or bulk items — on your Southwest credit card and watch your award points quickly add up. Typically, you earn 1 point per $1 spent on your Southwest card and 2 points per $1 on actual Southwest purchases.
But there are other ways to earn points, including:
- Flying Southwest: Booking travel on Southwest earns more points. The cost of this travel will be worth it with your companion pass
- Shopping from Rapid Rewards Partners: Purchases with Southwest’s “Home & Lifestyle” and “Shop and Dine” Partners also earn Companion Pass qualifying points. While you shouldn’t make gratuitous purchases, browse Southwest’s partners to see if you could earn extra points for items you'd be purchasing anyway. All this, simply from enrolling in their Dining Program and shopping with their partners.
So there you have it! And since it’s almost Spring, get to earning and soon you’ll be flying two for the price of one!