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 ›
While it's possible to be frugal with many aspects of your lifestyle, there are certain events and possessions that will require you to spend a substantial amount of money. Thus, a wise course of action is to begin saving well ahead of time while thinking about your goals for the future. This way, you'll be able to maintain a stable financial state even when faced with those large expenses. The following are a few major life purchases that you should plan for.
Marriage is a joyous occasion that many people look forward to. However, a wedding can be quite expensive, often costing thousands of dollars. Your family and your future spouse's family will often contribute to covering this, but you should still prepare to spend a good deal of your own money on the ceremony. If you're in a serious relationship and are considering marriage, you should plan where the funds for the wedding will come from and take the necessary actions to accumulate them. It's also crucial to discuss financial matters with your partner, since your property will merge once you get married.
A New Car
Automobiles remain one of the top modes of transportation. As a result, you may want to purchase a new car at some point in your life. Although you may be fine with an old or used vehicle at present, you may one day be motivated by a desire to acquire something nice for yourself or by the practical needs that arise as you raise children. Whatever the case, obtaining a new car is a major life purchase that you should plan for.
In addition to setting aside funds to eventually put towards a vehicle, you should also aim to build you credit score. This is because your credit score will determine your available car loan options. The higher your credit score, the more you may be able to lower your interest rates on your car.
Owning your own residential property is a worthy objective that you may hope to make a reality one day. Ideally, you should save about 20 percent of the total cost of a house before you buy it. This will allow you to make a larger down payment and thereafter face less interest on your mortgage.
As with acquiring a car, the mortgage options that you'll have can change based on how strong your credit score is. You'll want to increase your score as much as possible in the years leading up to buying a house so that you can get more favorable interest rates. In addition to contemplating down payments and mortgages, you must also remember that you'll need to deal with property taxes, insurance, maintenance and repair fees, and sometimes homeowners' association charges.
It's also necessary to hire a real estate agent to help you with the buying process. There are different types of real estate professionals. You should know how to distinguish between buyer's agents and seller's agents so that you can obtain favorable prices on homes as well.
Many people live together before getting married and have begun the process of combining accounts and sharing responsibilities. However, some people wait to do this only after marriage, and others wait until they're married to live together. Whichever path you've chosen, it's still crucial to know a few tips to manage money together as newlyweds to determine where you should begin and how you can remain on the same page.
Discussing Money Motivations
As we begin to share money with our significant other, we soon find out what one person may rank as a priority regarding money and the other may not. As such, sitting down and discussing money motivations is important. Two people who cannot agree on how to handle money may cause serious issues. This should include:
- How to deal with money following payday. Is a percentage put into savings? Is that the day to splurge on dinner, drinks, and more?
- The frequency and size of payments made to debts. Some people like to pay minimums, whereas others pay in full or make double payments.
- What do you each consider money well spent? Is it a new 70" 4K television? Is it an investment? Is it paying as much debt off as possible?
- How do you go about consulting each other before making purchases over a certain amount?
Establishing Financial Goals
After you evaluate the motivations behind your money and how it should be spent, you'll need to spend time together hashing out financial goals. As newlyweds, there are certain things on your list that you're going to want to save for. How do you go about that? How much of each paycheck will you dedicate to a particular fund?
Some things in the future worth making a financial plan for include savings and paying down debts. This is the time to be honest about your current financial standing. If you're looking to buy a home, you'll want to assemble a first-time homeowner financial checklist to begin to develop topics of conversation. Some of the things to consider setting goals for are:
- Student loans
- Car loans
- Future children
- A house
- Medical bills
- Delinquencies on credit reports
- Vacation and rainy-day funds
- Emergency funds
The more honest and open you can be with each other about the money you have and now the debts you share, the better. Implementing plans for the best ways to have the things that you both desire while still taking care of existing demands is important. These can be uncomfortable things to talk about; however, these conversations are necessary.
Following these tips to manage money together as newlyweds will allow you to have a starting point for conversations that can be tough to start. The sooner you and your partner get on the same page with finances and the responsibilities that come with them, the easier the transition will be and the sooner you'll find success.
It's the dream: money you can count on to keep rolling in, even while you sleep.
Passive income isn't entirely passive, of course. You'll put in work up-front to get the profits rolling, so don't relax in your recliner just yet. But with so many potential sources of passive income available to you, picking one or several will mean that the day you can finally kick back will draw steadily closer.
Real estate is a tried-and-true wealth builder for a simple reason: people will always need somewhere to live. Research the market in a growing community until you know a good deal when you see it. You can maximize rent by fixing up a deteriorating property or upgrading a mediocre one. The key is to hire a property manager to do all the day-to-day landlord duties for you—and you'll need a good one. Smart investors put their profits in another property and repeat the process until they have a diverse portfolio.
A YouTube Channel
You can start a blog if you're more comfortable hiding behind a computer, but consumers are more likely to prefer video content. Post a series of “how-to" videos to answer questions about whatever you're an expert in.
You can put up any content you want, but if you don't want to commit to regularly updating it, focus on “evergreen" topics that will draw clicks for eternity. Ads will create your income, especially if your channel grows in popularity. Better yet, sign up for affiliate marketing. If you recommend a product and provide a link to buy it, you'll get a small percentage of those transactions.
If you don't mind vinyl-wrapping your car with an ad for a company, you can get cash just driving around and running your errands. Make sure you contact a reputable company that doesn't ask for any money from you; if they're the real deal, they'll evaluate your car, your driving habits, your area, and more. Bonus: the brighter the ad, the easier it'll be to find your vehicle in the parking lot.
What's something that people will pay for but doesn't require shipping on your part? Finding that item is what can supplement your income indefinitely. Write an e-book, charge for your cross-stitching patterns, design prints that people can digitally download, invent an app, record a “masterclass," or whatever else you want. Every time someone new discovers it, the cash register rings. With a little more effort, this is a potential source of passive income for you that can continue to grow. Once you build up a customer base, they might want more products. The good part is that it's up to you whether you wish to give it to them.