➡ The article discusses the issue of student loan defaults in the U.S., with 5.3 million people reportedly in default. The Trump administration is set to resume student debt collections after a five-year pause, affecting millions of borrowers. The article also criticizes the advice given to borrowers to consolidate their loans and apply for income-driven repayment plans, arguing that this will only lead to paying interest indefinitely without reducing the principal debt. The author suggests that borrowers should have a plan to repay their loans and avoid making bad investments in their education.
➡ This text discusses the misconceptions about credit ratings and student loans. It explains that while credit ratings measure your ability to repay debts, they don’t guarantee wealth. The text also highlights the importance of managing finances effectively over having good credit. It suggests that people often fear dealing with credit due to lack of understanding, leading to unnecessary financial stress.

I want to go over student loans really quickly and then we’re going to get into Stephen A Smith. 5.3 million people are allegedly in student loan default. Let me play this quick clip and then we’re going to get straight into, straight into the conversation and we’re going to move over to Stephen A Smith. Make sure y’all hit a like for the algorithm, subscribe to the channel and turn on your notifications. 5.3 million people are being reported to be in student loan default. Black5 is watching your wallet tonight and if your student loans are in default they could be about to go into collection and you could even have your wages garnished.

Fox says Kendall Green is here with how this could affect millions of borrowers currently in default. Kendall. Hey, good evening Natasha. Out of the more than 262 million adults in the U.S. about 42 million have student debt and these sweeping changes and just a matter of weeks could affect more than 60 percent of those borrowers either behind or in default on their payments. After a five-year long pause on student debt collections, the Trump administration is forcing borrowers to pay up beginning as early as next month. No student loan has been referred to collections since March of 2020.

That comes to an end. Tuesday, White House Press Secretary Levitt announced on May 5th, the Department of Education will begin involuntary collections from borrowers with federal student loans in default. The feds report the country’s student loan debt has reached nearly 1.6 trillion dollars among nearly 43 million borrowers with fewer than 4 out of 10 borrowers current in repayment. So a lot of y’all may be unfamiliar with student loans. I hear a lot of people complaining about it on social media. I’ve seen some disrespectful numbers. Somebody said, last I checked, Texas land was cheap.

No, Texas land is not cheap. Texas land is cheaper than what you see over in California, but Texas land also can kick your butt when it comes to property taxes. So be careful. It’s not just the price of the land. Y’all got to also take into consideration property taxes. Go online and type in how much you’re going to be paying for property taxes every single year. That is going to be the biggest thing. It’s the property taxes. It’s the property taxes. I’ve seen some disrespectful numbers of people that are basically dreading the idea that they have to start to repay their student loans.

I’ve seen one lady said that she had student loans that totaled over 200 and some 280,000. 26,000. I did a review video on it yesterday. She said her husband was at like 580. I didn’t know if she had made a mistake and said 580 or something like that, but how do y’all get to such huge student loan numbers? What the hell is y’all doing? How do y’all get to a hundred plus thousand dollars in student loans? Y’all don’t work with y’all just living off of the money? You know that student loans is an investment into your future, right? And if you don’t have the ability to pay it back, then that means that it was a bad investment.

$1.6 trillion in total debt. You know what the United States of America can do with that good old money? Four out of 10 borrowers or two out of five are in repayment. Nearly one in four are delinquent. That means they are going to start coming for your social security. They are going to start coming for your monies. What is one way that you can defer this? Well, one way that I don’t necessarily agree with is that there are people that are basically re-enrolling in school to then be able to push back their repayments of their loans.

Other people are refinancing and then taking it out for another 10 years. I’ve seen a woman say that she’s made so far 166 payments on her student loans that she hasn’t even made a dent in it. I will tell you this. There are also, and this is the part that a lot of people don’t want to include in this conversation, when the economy went bust in 2008. When the Obama administration came into office in 2008, they pushed for people to go back to school, and they expanded their programs when it came to pushing you and making it easier for you to be able to take out loans.

Private loans, regular student loans, regular government loans, they made it incredibly easy for you to get your hands on money. Why? Because even though they knew that she was going to have to repay it down the road, it helped people to survive in their living circumstances. People that were taking out loans in 8, 9, 10, 11, 12, 13, and 14, those are the ones that are struggling to repay their student loans back the most. They took those loans out as a lifeline, they lived off of them, and then a lot of people never even finished school, and so now you see why a lot of people, see, there’s people in the chat.

Brandy said it’s the biggest mistake of her life. During Obama’s administration, they were pushing everybody to re-pivot when it came to their career. A lot of people went back to school when a lot of people took out student loans as a result of it. That’s just the truth. That’s the honest to God truth. A lot of the things that you see happen in a society today, you can trace it back to the political administration that was in office at that time. A lot of people are now choosing to go back to school, and they’re taking out these trash degrees, and they’re not learning from the things that they did in their past, and they’ve got to suffer as a result of it.

There’s a lot of people, a lot of people taking out student loans, man. The pandemic era paused, triggered by Trump, and extended multiple times under the Biden administration reached its final grace period in October last year. Since then, the volume of borrowers in default skyrocketed to more than 5.3 million, as data shows 4 million borrowers are between three and six months behind on payments. Now, all in that category are subject to have government payments held back, including tax refunds and federal salaries. Going into default, it takes 270 days, right? You’re delinquent if you’re one day late.

It takes 90 days for them to report to credit agencies, but the immediate impact of wage garnishment, or taking away your tax refund, or however much you get from Social Security, some people live on that. Debt cannot be wiped away. It just ends up getting transferred to others. After a 30-day notice, the government plans to garnish wages for borrowers in default. When they were forgiven, a lot of these people stole loans. That wasn’t just disappearing. That was paid from the taxpayers. That was money from you, money from you, money from you. Now, I know some people that did, they stole loans forgiven.

Really, it got paid by federal taxpayers. And they are incredibly thankful as a result of it. But for the overwhelming majority of people, listen, if you was able to finesse the government in the paying your student loans, congratulations, you won. You won if you finesse the government to, or you finesse the government on behalf of taxpayers, to forgive your student loans. But for the majority of y’all, you should have already had a plan to pay it in the first place. The ballooning debt and unfair liability to taxpayers. The best advice from Andrew Pentis, a certified student debt counselor at bank rate, is for borrowers to consider rehabbing their loans by making nine on-time payments within the 10-month period.

If that’s not doable for you, as it won’t be for many federal student loan borrowers, the more realistic option is to consolidate your federal student loans with your federal student loan servicer. And then ideally, to get that lower monthly payment, apply for an income-driven repayment plan. Don’t do that. Let me tell y’all something. They’re going to give you all bad advice. Oh, I hate to do this. I hate to have this uncomfortable conversation with y’all. They are going to tell you to jump on an income-based repayment plan. You’ll never get out of it.

You’ll just be paying the interest for the rest of your life. Because what they’re trying to tell you guys to do is to lower the amount that you have to have in your payment so that you can then be able to live the lifestyle that you need to live. But you are going to continue to accrue interest, and you’re not going to pay down the principal. When you are on an income-based repayment plan for your student loans, you do not come from under that loan. That’s why you wind up paying that loan for the next 25, 30 years until you die.

You wind up paying that student loan for the next 25 to 30 years until you die. Imagine being on child support for the rest of your life. Not just for the 18 years you’re on child support for the rest of your life. Imagine paying alimony for the rest of your life. Except for the person that’s on the receiving end of your money. It’s the bank. It’s the federal government. If your payments are $500 a month and they put you on an income-based repayment plan, and that’s basically they’re going to allow for you to pay whatever you can pay according to your income.

But you have a $40,000 student loan. In five years, if you never get a raise or you never start to pay off that loan, then you will effectively have a higher balance in five years than when you was paying it. The only thing that they’re saying is that we’re not going to put up your credit rating. This is why credit ratings are dangerous. Because credit ratings only measure your ability to pay things back on time and faster. It doesn’t actually say that you’re going to be wealthy as a result of it.

I remember it was this thing that was going around a while ago, and the question was, would you rather have a million dollars or something in good credit? And it was the dumbest thing that I’ve ever seen. It was actually happening during the pandemic, and people were saying, sure, I’d rather have a good credit because I could pull out this many millions of dollars and then I’ll go and flip that around. Okay, well then if that’s the case, how come y’all not rich already? People were saying that I would rather forgo the money in order to have the great credit.

That tells you the psychological playbook that they basically made against you guys. Do y’all remember that? Y’all don’t remember that? Let me see if I can find that. Let me see if I can find it for y’all real quick. Rather. Great credit. I don’t know if I could find it. I don’t know if it’s available. I’m going to just pick the first thing that I see. It’s paramount. If it came down to we have a couple of dollars and some good credit, I’m going to pick the good credit because the credit can help me to get even further.

But if it came down to me having a million dollars in bad credit, I’m going to take a million dollars because I know how to turn that credit around to have good credit. But here’s the thing about credit. People always think it’s a lot more difficult than it is. And so what happens is when we see this thing that we’re just not familiar with, we become overwhelmed and it becomes this monstrosity and we’re just like, ah, then we just shut down and we don’t want to do it. And so now it’s the boogeyman, it’s the big bad wolf, that thing that you just want to play with that you just don’t even want to deal with.

And that’s what credit becomes for a lot of people. You know, I know people who file bankruptcy in the 90s, they’re like, my credit’s bad. That was my parents. My credit, my parents, you know, up until I became an adult, they thought that they have bad credit because they file bankruptcy in the 80s. And like, no, that shit fell off 15 years ago. But here’s the question. Here’s the question. Did you change the way that you do things that because credit is not a bad thing. I don’t want people to get it misconstrued.

Credit is not a bad thing, but your ability to manage your finances effectively is more fruitful. [tr:trw].

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