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Moderator: Record high student loan defaults are setting many new graduates back possibly
for years. There are alternatives though but too few new graduates are aware of them but
here with everything you need to know about the latest alternatives for student debt and
how it impacts all of us is Fox 29 Lifestyle Lawyer Shari Olefson., affectionately known
to us as Shari O. Good morning! Shari Olefson: Good morning Kaley.
Moderator: Thank you for being here. Alright, let's dive right into it. Student debt numbers
were hear are huge now. Exactly how much money are we talking about?
Shari Olefson: We are talking about almost 40 million students. We are talking about
over 1.1 trillion dollars and here's the thing, that balance is increasing at the rate of
$3,000 per second so this is growing faster than credit card debt, car debt, anything
except for mortgage debt. Student loans is way up there. What is really scary is that
hundreds of billions of dollars in defaults. That's federal tax money that is going into
default and students who are really bearing the burden of it.
Moderator: Talking about defaults, exactly what happens when a student defaults and why
should that matter to someone who doesn't have a student loan.
Shari Olefson: Right. Well of course we have credit dings that happen and of course that
means that students are going to be paying more and more to borrow after that which together
with the high loan balances that they already have makes it very difficult for this generation
to be borrowing so that means borrowing to buy a home, borrowing to buy a car, and even
just the high payments themselves translate to less consumption. All of that impacts all
of us because 70% of GDP is consumer spending and this is a huge demographic that is not
able to spend. Moderator: So it is hard for a lot of students
to pay back their loans now once they graduate. You mentioned it is hard for them to find
jobs now. What are some alternatives for them? Shari Olefson: Well there are actually some
great alternatives that came out about 2 years ago that tie the student loan payments to
income. So there are several plans we have them on the screen. The problem is a lot of
students aren't aware of this. So the consumer financial protection bureau is now undertaking
a new initiative to educate students about this. This is comparable Kaley to the home
affordable modification programs and the home affordable refinance programs that were offered
for mortgages that home owners were struggling with and the problem of course was for years
folks were not aware of them and they didn't know the requirements that kind of thing.
We are seeing the exact same thing now with student debt and there's a big push. You can
go to CFPB.gov to learn more about it but the goal is to get literally hundreds of millions
of students a year who are defaulting who could be saved with these programs to know
about these programs and take advantage of it.
Moderator: And it is hard nowadays to get a real person on the phone when you call customer
care for your student loans but can't you just call them up and say, "Look, I'm having
a tough time paying it back, can you help me?"
Shari Olefson: Yes. And there are lot of resources on the website. If you go to cfpb.gov they've
got some really great resources including applications and sort of these programs you
can take answer questions and it will take you step by step through and show you what
your alternatives are. Moderator: Alright, thank you Shari O. I swear,
I always feel smarter when Shari O. comes here.