Updated: Oct 9, 2022
Hey, it’s Jon from Financial MD. Welcome to today’s Didactic Minute. Today, we’re going to talk again about student loan forgiveness – now, not necessarily Public Service Loan Forgiveness, the PSLF that we’re always talking about that would affect a ton of physicians – but it’s the student loan forgiveness that the Biden administration is going to start talking about. Looks like he’s going to be the president. He’s starting to put together his cabinet and looking at the policies that he promised during his campaign. One of which – which affects you guys and us at Financial MD and for all of our physician clients – is this student loan forgiveness which is obviously promised by a lot of Democrats and promising they’re going to do something about it which would impact most physicians by far. Now how much would it impact physicians for one and how much would it impact the overall economy.
Physicians on average have about 180 thousand dollars in student loan debt. Now the grand total of the student loan economy, 1.6 trillion dollars, that the feds have lent to borrowers. Now what you may not know is that 30 percent of student loan borrowers actually have no bachelor’s degree in their household. So all this debt didn’t even finish and get a degree – that happens a lot – so forgiveness would certainly help them. But out of that 1.6 trillion dollars, the multiple of how it would actually affect the economy and impact is not nearly to the extent of actually issuing stimulus checks would be – and this is an article that I linked to on our Facebook group and on Twitter and LinkedIn. If you check this out by Forbes, it talks about what the actual economic impact would be. Not what it will be to you because that would be helpful, for sure, unless it’s only five thousand dollars and you owe 500 thousand – I guess it’s better than nothing – but then there’s the question of is that taxable or not, and of course, that’s another entire video and another entire discussion.
But one last tidbit that I’ll leave you with: Believe it or not, less than 10 percent of the bulk of the student loan borrowers – so graduate levels, doctors, lawyers, CPAs, those kinds of things - are sitting in a two, three, four hundred thousand; dentists too; sometimes up to 500 thousand dollars in student loans, so the high 6 figures. Ten percent of them are actually unemployed due to COVID. So 90 percent of the bulk of the student loan balances are still employed and probably very employed, so working a lot.
So that’s kind of the economic impact in who it would actually affect and how it’s going to help and maybe and how much and who knows, so be sure to follow us on Facebook, Twitter, the other social media feeds, and our email newsletter because I’m always following everyday what’s going on with student loans. If there’s going to be any prospect of forgiveness, you’ll hear it first here.
So this is Jon with our Didactic Minute. We’ll see you next time.