If one essentially runs the numbers, many student loan borrower’s monthly debt payments will actually increase under Warren’s forgiveness policy. Add the $210/month tax debt obligation, and now the borrower’s total monthly debt service has increased from $432/month to $642/month. Loan forgiveness is not a panaceaWe need start getting real about student loan forgiveness by having honest, candid conversations around what that truly means for borrowers. In addition, the policy will most likely turn the portion of student loan debt forgiven into another type of debt – tax debt – which is currently not forgivable, and may add to the debt burden that student loan borrowers are currently facing. Borrowers should avoid depending on political promises, and start talking to their student loan provider and ideally a CERTIFIED FINANCIAL PLANNER™ who specializes in student loans, to determine how student loan forgiveness will impact their personal financial situation.

Source: Forbes May 05, 2019 17:50 UTC