George Kamel - THIS Is Going to Cost 45 Million Americans

Episode Date: September 4, 2023

Your student loans are officially unforgivable. And it’s the final countdown before the Covid-driven payment pause is up. While I’m not surprised in the slightest student loans didn’t get forgiven, I get that it’s a major bummer. So today, we’ll get into what you need to know about student loan repayments and how to afford it. Links: Student Loan Debt in America: How We Got Here + How We Get Out Budgeting For Beginners Student Loan Payoff Calculator Debt Snowball Method Student Loan Hub Learn more about your ad choices. Visit megaphone.fm/adchoices

Quick disclaimer. My mom didn't let me read Harry Potter growing up. I was more of a Wizards of Waverly Place kind of guy. If you know what I mean. I haven't the foggiest idea what you're talking about. I don't know why that was a euphemism. But I know my Potterheads out there know all about the unforgivable curses. But if you're a mogul like me, let me fill you in, okay? There's the killing curse.

Obvious what that one's about. Murder. The Cruciatus, the Imperious, and finally, the unforgivable curse currently affecting 45 million Americans that book editors surreptitiously cut from the Y8. fantasy series, your student loans. That's right, Wiz Kids. Your student loans are officially unforgivable. And it's the final countdown before the COVID-driven payment pause is up.

And while I'm not surprised in the slightest that student loans didn't get forgiven, I get that it's a major bummer to so many people out there. Not to mention, it's also a major wake-up call for the 99% of student loan borrowers who did not make payments on their loans during the pause. Shout out to the 1% who did. Aw, thank you. Now the payments are back Voldemort-style, circa Mike Newell's goblet of fire,

45 million student loan borrowers, most of whom are already living paycheck to paycheck, are going to have to belly up an extra 400 bucks a month on payments again. And this is going to disrupt finances, futures, even the economy. I mean, Nordstrom's feel in the pinch you. And when the Nordys get worried, that's saying something. Also, I don't really feel bad. Sorry, Nordstrom.

How dare you? I feel worse for the people than I do for Nordstrom, the entity. You know what I mean? But listen, even if this mess affects you, it doesn't have to turn your world upside down. We'll get into what you need. to know about student loan repayment and how to afford it. Right after I shamelessly ask for your approval and validation via the like, subscribe, and share

buttons. I need it more than you know. If that's a joke, I love it. If not, I cannot wait to unpack that with you. Now, you may be thinking, come on, George, it can't be that bad, right? The borrowers who stopped making payments for the last three years, they probably just save that money instead. They'll be fine.

And to that, Dwight Shrewitt and I say, false. A recent study found that federal borrowers whose payments and interest have been paused since the start of the pandemic didn't save that money. Like, at all. Instead, they did what we Americans were born and bred to do. Take on more debt. They took on credit card debt, got mortgages and car loans, and all and all piled on the private debt like Mugugui guy paying at the number four China buffet.

Even one of the researchers working on this study, Michael Dinerstein, said this. Once the student debt moratorium ends, I worry whether borrowers have enough earnings and liquidity to pay back larger amounts of total debt. Now, you may also be thinking, but didn't Biden overhaul his income-driven repayment plan to help people out? Surely that will make things better. Okay. Well, this is referencing the saving on a valuable education, aka save plan.

Say what you will about Biden. The man knows how to string together a chinty acronym. Get hot. I got a lot of it. I got hairy legs. Loves an acronym. Now, it might seem like it's doing you a favor because it gives you a lower monthly payment. But that sneaky Pete actually drags out your debt way longer, causing your balance to go nowhere.

How is that possible? Well, because smaller payments mean smaller progress. So instead of speeding up your debt payoff, these IDR plans slow it way. way down. And instead of inspiring you to increase your income, they encourage you to keep your income low so that your payment stays low. Leave it to the government to incentivize you to keep your income low so you stay on their crappy plan. Seriously, don't put yourself in an IDR box for years. In fact, don't put yourself in any box, especially one of those life-sized Barbie boxes, it's weird. Stop doing it. I'm not impressed and I'm not amused. Listen, you don't have to turn to

sketchy payment plans and you don't have to go broke paying for your student loans. Now, getting rid of them isn't going to happen overnight. Just like I didn't grow over. night. It took a whole lot of patience to finally hit five foot six and a half. And the half counts. Okay. Now it's going to take time. It's going to take hard work and a whole lot of sacrifice, but it's totally doable. And the faster you get rid of your loans, the sooner you can live life on your terms. So I want to share some quick steps with you that I used years ago to pay off $36,000 of student loan debt in just 18 months. So step number one, we're starting simple here. Contact your loan servicer and find out if anything has changed with your loan in the last three years. I mean,

And think about all the ways the world has changed in the last three years. Sticky restaurant menus have been replaced by QR codes. Sweatsuits are hashtag fashion. And all of your friends are taking revenge trips to the Amalfi Coast without you. So I wouldn't be surprised if something with your student loans has changed as well. Maybe you got married, maybe you moved. Maybe you had some other life change. And while you're at it, you should pull your credit report to find out exactly how much debt you have.

It won't be fun, but it's impossible to face those debt deans if you don't know what you're up against. And by the way, you can go to annualcreditreport.com and pull your credit report for free every 12. months from all three credit bureaus. There you go. Bonus tip. Number two, we got to get on a budget. A zero-based monthly budget will show you exactly where your money is going and where you can cut back. Looking at you, late-night dollar menu, those beefy fritos burritos can add up calorically and financially. Now, if you don't know how to make a monthly budget that works, I will drop a link to my budgeting for beginners video below that walks you through this whole process. Number three, find out your payoff date. Now there's actually a student loan

payoff calculator where you can figure out your payoff date using real math and real You just enter in your monthly payment, your loan balance, and interest rate for each student loan you've got. Then you'll see the date you'll pay off each loan, assuming you keep making those minimum payments. Now, if you don't like the date that you see when you punch in these numbers, don't worry. Just move on to step number four, which is pay more than the minimum payment. And this isn't some overly aggressive cross-fit-like strategy. No burpees here. You see, if you're only paying the minimum payment each month, you might not even be breaking even with the interest you're piling up.

It's like trying to empty a sinking ship with a Stanley Cup. Not even that ergonomic handle can save you now. Instead, by making larger payments, you'll be able to attack the amount you owe faster. But let's say something like the George Camel Channel inspired you to pay just 20% more than that minimum payment each month, putting your monthly payment at $512. Well, then you'd pay off your entire loan two years earlier and save almost three-granted interest.

Now, to be fair, taking eight years to pay off your loan still sucks in my book, and I think you can do better. So start dreaming with the student loan payoff calculator to see how extra payments can speed this up. I will link that for you below. Now, the goal I've got for you and the goal that I hope you set for yourself is to pay off all of your consumer debt in under two years, because that is the average time it takes for people following the Ramsey Baby Steps

to get rid of all their debt, not just their student loans. And that brings us to step number five. Make some financial sacrifices. Now, there are plenty of creative ways to save here, but it starts with being willing to make some temporary sacrifices for long-term gains. You might need to sell the Xbox. Your girlfriend hates it anyways, and she would love it. Eat your leftover enchiladas.

They're not that suck. put them in the air fryer. And, dare I say it, find a roommate. No, not that. I know, I know. They're not all murderers. I'm just saying, you're gonna be a roommate. You're not a murderer, are you?

I hope not. I don't want any murderers watching this channel. Leave, unsubscribe and leave. You're not welcome here. Remember, these sacrifices won't last forever. You're gonna be playing call of duty and eating those fresh entries in solitude one day very soon. Step number six, use the debt snowball to pay down your loans.

Now the debt snowball method is all about paying off your debts, not by an interest rate, but from smallest loan balance, to largest loan balance. And I'll spare you the gory details here because I did a whole video on the debt snowball where I break it down and I will link that below for some further watching. Step number seven, throw every raise, tax refund, and birthday cash from Grandma toward paying off your student loans. And do it as soon as you get it before you even have time to think about the new iPhone or before you lose self-control.

Step number eight, increase your income with a side hustle. Now there are plenty of awesome and legal side hustle options that are pretty darn lucrative. When I was paying off my student loans, I was paying off my student loans, I was was driving from Lyft and Uber and I did freelance marketing work to pay those bad boys off even faster. And don't hit me with this. I don't have time for another job. Listen, if you've got time to hang out with your friends and scroll Instagram and TikTok or watch all eight seasons of Dexter for the fourth time, you have time to make a few extra bucks. And again, the last episode of Dexter just made the whole thing not worth it. Terrible. Step number nine. Stop holding out for student loan

forgiveness. No matter what they say. And who's they? Politicians. Listen, politicians are like the bad boy Tom Petty about and free falling. They'll just break your horse love and heart. Sell the horse. These politicians make a whole lot of empty promises to try to get your vote. And at this point, there's a higher chance of me hitting six feet than of student loan forgiveness happening. And it doesn't matter who's in the White House. You are responsible for taking care of your money and your debts. Not anyone else, so don't bank on it. And lastly, step number 10, refinance if it makes sense for you. How do you know if it makes sense? Well, you got to be able to check off all of these boxes. It's 100% free to refinance. You can get a lower interest.

rate, you can keep a fixed rate or trade a variable rate for a fixed rate, you don't have to sign up for any longer repayment period, you don't need a co-signer, you haven't recently declared bankruptcy, and it will actually motivate you to pay after your student loans faster. If you can say yes to all of those, it could be the right move to refinance. The goal with refinancing your student loans is to pay less each month with better payment terms for a shorter amount of time. All right, I just throw a whole lot at you. But the big idea here is to have a plan and know where your money's going so that student loan repayment doesn't set you back financially. And there's There's no need to drag out your student loan payment for the next 5, 10, or even 20 years, okay?

Because when your money doesn't have Sally Mae's name on it every month, you can do so much more in life. Like, open up number 5 China buffet and make all the fortune cookies say, you will become debt-free if you use the debt snowball method. Now, that's a fortune cookie I can get behind. I'd crack that bad boy open. Now, I know some of you feel like you'll always have student loan debt hanging around, but do not lose hope. You're the hero in the story, not the government, not anyone else, and you can pay off your student loans. So step into that main character energy and give it all you got.

And if it feels impossible right now, just take it one step at a time. It won't be easy, but it will 1,000% be worth it. Now, I suggest checking out the Ramsey Student Loan Hub to get resources on how to ditch your debt faster than any payment plan your lender is pushing you toward. I will link that below. And what's really cool is that we've got a free live stream coming up from Ramsey Solutions from my friends Dave Ramsey, Rachel Cruz, and Jade Warshaw, where they're going to unpack this whole student loan crisis,

how we got here, and more importantly, what you can do about it. So do not miss this live stream. Be sure to register for it and tune in. I'll drop a link to that below as well. Now, if you like this video, make sure to share it with your horse-loving, heartbroken friends coming to terms with their own student loan repayment. They need some zip in their clip, okay? Some wolf in their hoof.

You know what I'm talking about? And I want to know from you guys, how much student loan debt do you have and what will your monthly payments add up to? Let me know in the comments below, and let's support our student loan homies and get them out of this mess. Thank you guys for watching. We'll see you next time.