Biden Reveals NEW Student Loan Forgiveness (After Lawsuits) | Fed REPAYE Terms.

you're going to want to pay attention to

these changes with federal student loan

debt because they can make a huge

difference for the number of people who

could eventually buy real estate and

that might be you Treasury Department

just released new guidance on how you

could receive a federal student loan

relief now this is different from what

Joe Biden has previously been working

towards which is the 10 to 20 000 of

student loan forgiveness this has been

held up in many lawsuits and right now

looks so darn paused that it's probably

just never going to happen as a result

the treasury Department has revised

their guidance and introduced a new

potential system that could help

millions of individuals see their

payments for student loan debt federal

student loan debt cut by more than half

and supposedly the loan system is going

to become more manageable the new system

called repay with an e at the end ties

uh repayments basically to your family

size and income kind of like the

previous IDR or income driven repayment

systems but this plan is a slightly more

expanded and a little bit

larger in terms of how much of a

discount you could get on your federal

student loans so remember previously

under the old IDR rules if you made your

payments for about 20 years on many

federal student loans you could see the

rest of the balance of four given

depending on your income and family size

now the numbers have changed a little

bit and the new plan says that after 20

years of making payments you could see

your federal student debt forgiven as

long as you make the following minimum

payments

five percent of discretionary income for

undergraduate loans discretionary income

of course is any kind of income that you

have above and beyond General basic

needs like food and rent and usually

what they do is they just take the

federal poverty line and multiply that

by a percentage talk about that

percentage in just a moment so what you

want to write down though is if you have

an undergraduate student loan with the

federal government five percent of your

discretionary income needs to be made

for 20 years on most loans there's an

exception for loans around twelve

thousand dollars we'll talk about that

in just a moment but you write down

undergraduate loans five percent of

discretionary income under the new plan

that's half of what the old plan was

which was 10 of your discretionary

income graduate students however will

pay 10 percent of their discretionary

income and if you hold both of these

degrees and Loans related to both of

them then there will be a treasury

Department sort of waiting formula in

terms of okay well you know say 70 is

towards graduate maybe 30 is towards

undergrad and they'll weight that for

the five and ten percent now for what

discretionary income is so the old

system was that you would have to make

payments on your federal student loans

if you had any income in excess of 150

percent of the federal poverty line

which that was twenty thousand four

hundred dollars for singles forty one

thousand six hundred dollars for a

family of four so as soon as you start

making more than that money say you're

single and you start making more than

twenty thousand four hundred dollars

under the new plan you would pay five

percent towards undergraduate or ten

percent of your income towards graduate

loans the new plan changes these numbers

so the new plan says that you can

actually make up to thirty thousand five

hundred dollars or 200 25 percent of the

federal poverty line or if you're a

family of four up to sixty two thousand

four hundred dollars and make zero

monthly payments on your federal student

loans that means if your family four you

makes sixty two thousand four hundred

dollars and your federal student loans

the new plan as long as you sign up for

it you go to student8.gov to learn more

obviously that's

studentaid.gov you sign up for that plan

you could potentially make zero payments

and that's way up from the Forty one

thousand six hundred dollars for a

family four of income that it previously

was keep in mind that if you file

jointly with your spouse your spouse's

income is included in that calculation

if you're married and you file

separately it is not included but then

there are other implications towards

potentially your taxes you always want

to talk to a CPA when it comes to taxes

but that's interesting because now

you're only going to pay five percent

above thirty thousand five hundred

dollars uh if you have an undergraduate

loan and you're single or ten percent

above thirty thousand five hundred

dollars if you're single with graduate

loans and then again the family number a

family of four a sixty two four and then

scales for family size in between uh

that's pretty incredible and this is

going to reduce the amount of money

people are paying towards their student

loans dramatically but on top of that if

you have small loans there's also a new

plan now if you have loans of twelve

thousand dollars or less you actually

now need to just make monthly payment

events for 10 years instead of 20 years

to see your debt canceled so this is

kind of where Biden's trying to sneak in

the like ten thousand dollar forgiveness

thing just make payments for 10 years

and we'll cancel the rest and again in

order for you to be eligible for making

payments you have to be making more than

that federal poverty land now for small

loans every a thousand dollars every one

thousand dollars that you have a loan of

in excess of twelve thousand dollars

adds one year of repayment time so if

you have twenty thousand dollars of a

student loan that's eight years more

than twelve thousand so you'd have to

make payments for 18 years to be subject

to cancellation now there are also some

changes here bottom thirty percent of

owners via these changes would basically

qualify for 83 percent reduced payments

it's important to know that parents who

have taken taken out loans are excluded

through the parent Plus Loans they are

excluded if you are a delinquent by 75

days or more you're automatically

enrolled in the new payment system which

is actually really beneficial that it

wasn't that way previously however if

you are in default you get enrolled in

the old school uh payback plan not the

new repay plan now keep in mind two

things one right now this is Biden's

proposal so it's going to go through 30

days of public comment first and we'll

see if potentially lawsuits come out

after that but first we gotta go through

review and proposal periods in the whole

bureaucratic process so this isn't set

in stone yet but it looks better than

the straight up cancellation also if

your student loan debt is canceled

before

2025 you do not have to pay taxes on the

canceled amount so let's say you pay 30

in taxes and you get ten thousand

dollars of cancellation you might have

to pay income tax on that which would be

about three thousand bucks right but

that income tax provision is removed

through 2025 so ideally you want to see

your loan get canceled by 2025 or

hopefully they extend the sort of

forgiveness period for owing taxes on

debt that you had forgiven so usually if

you get a debt forgiven it's considered

income and you have to pay taxes on that

anyway gets a little tricky but the

point is so far this all sounds good but

then again we know when it comes to the

government things that sound good I

always end up having some caveat okay

now we gotta talk real estate so first

of all I want you to think about how

lower payments make a big deal for when

it comes to buying real estate every

single monthly dollar of debt expense

that you have in other words if you have

a credit card payment of one dollar per

month you have to earn two dollars and

34 cents more per month just to pay or

buy or qualify for the same amount of

house in other words every dollar of

debt you have can substantially reduce

your purchasing power so reducing your

monthly payments via this new student

loan program actually increases your

purchasing power for Real Estate by a

lot the rule of thumb is every dollar of

debt you have per month in payments

equals two dollars and 34 cents of

income it's a lot you all know I'm a big

fan of buying real estate I got programs

on building your wealth on real estate

zero to millionaire real estate

investing course for example and many

others coupon code down below got a real

estate housing startup love real estate

one of the great things about having the

amount of payments that you have to make

on a federal student loan debt on let's

say undergraduate loans for example

going from 10 of your disposable income

to five percent is that your minimum

repayment per month halves in that

scenario that actually reduces your debt

to income ratio which enables you to buy

more real estate now this is not not

saying you want to go out there and

splurge on a more expensive white picket

fenced house but it is to say that we

know the net worth of homeowners is

somewhere around 20x that of tenants and

if you want to break the cycle of

poverty you must must understand the

systems of capitalism which reward

people who hold assets through both bust

cycles and boom Cycles assets make you

rich and if you could start by putting

three percent down five percent down

maybe even getting credits to where

you're putting zero percent down on a

home

and you get a good deal on top of that

you can explode your net worth no longer

paying money to a landlord and renting

and instead actually building your

wealth by owning real estate that's at

least my opinion I'm a big fan of owning

real estate that's how I became a

millionaire real estate real estate real

estate now

this Student Loan program

obviously could also face Court

challenges that's the other issue this

is basically a backhanded way of

conducting small student loan

forgiveness again your loans could get

canceled after 10 years of payments if

your loan is less than twelve thousand

dollars and again uh you know you add a

year for every thousand dollars you have

more than that but either way the

minimum repayments required to get to

20-year cancellation isn't that high now

I'm not the biggest fan of Trying to

minimize your income so that you don't

have to pay more in student loan debt

right I'm a big fan of what can you do

to go increase your income and then just

ultimately pay off your student loan

debt and actually buy real estate but in

the short term this is potentially

really good relief for student loan

borrowers now some people might say this

could have an inflationary impact and it

could because people are going to have a

larger amount of disposable in income

but hey student loan debt is a big

burden for up to 400 30 million

Americans that's just federal student

loan debt not to include all the other

crazy forms of student loan debt we have

so these changes could be a big shift

for individuals to not just get their

finances maybe more in order under the

inflation that we've already seen but

hopefully folks can start looking at

getting into assets like owning stocks

real estate bonds and building their

wealth if you want to learn more make

sure to subscribe to the channel check

out the programs on building your wealth

link down below and thank you so much

for watching