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The Biden Administration takes another shot at student loan forgiveness, this time for Americans who have financial hardship that prevents them from repaying their loans. To discuss what this might mean for you and your student debt, we have Amanda Hainault, who is the Fidelity Investments VP of emerging products and student debt. Thank you so much for taking the time here with us today. First, you know, as you think about this effort, how does this differ from efforts past and the type of impact that is anticipated?

Great question. And I think when you look at a lot of the efforts that the Biden administration has made toward student loan forgiveness, what's clear is that there's a lot of attempt to help those with financial burdens. There's also a lot of tug of war in DC around how these will be actually pulled into action by people. And so when you're looking at the overarching results for those with student debt, what we recommend is really making sure that you are keeping up with an action plan as we wait and see how this works through DC.

And so how many are anticipated to be able to take advantage of this forgiveness here? And and really it kind of is more telling about the financial hardship that many who are trying to repay student loans, but cannot because of that hardship, are actually facing right now.

That's right. So this is a more targeted forgiveness. It has about 8 million people who are anticipated to receive some kind of forgiveness if it were to continue through to action, comparatively to about 40 million who would not qualify for it. There's lots of different ways that this administration has started to look and say, how can we actually provide additional help for those who have hardships with student loans, whether it's deferment of payments or different types of loan repayment options, all of which are worth knowing if you are a student loan borrower who is really struggling to make those monthly student loan payments.

You know, for those who may not fall under this particular forgiveness, or or, you know, larger plan, what are the steps that the top tips that you were telling repayers of these loans, who are trying to make sure that they can either get back in good standing or just get on good footing with regular payments?

Yeah, absolutely. We recommend a couple of things. The first one is to have a plan. So you need to really know, make sure that you can get organized, get informed, know who your loan servicer is, and then look about how that actually fits into your financial profile. How much can you afford to pay? Can you start putting money aside and paying some of that? And then if there are options that don't work for you, talk to your loan servicer, see if there's different types of repayment plans within there that might be better suited to your needs. And the final one is to actually talk to employers. They're really starting to lean in and offer additional options to help you with that student loan payment.

And with this all in mind, I mean, thinking back to where those loans originate, it's typically at the beginning of that that college exploration and higher education type of exploration decision-making that that individuals and their families are making as well. For those who are just trying to figure out, okay, how do I make sure that if I need to take on a loan, it's one that I can certainly pay down over time and ultimately start a better pathway towards savings and not just paying down debt. How how can they identify where a loan is worth it and where it's not?

Yes, so it's going to be super personal and what you actually think is worth it with your projected career choices. But thinking about where you have the ability to pay down that debt that you're taking on for the kind of education that you're receiving is always helpful, and making it real in terms of the monthly payment that you're projected to have after college. So what can you be expected to pay, how does that fit into starting salaries, and what does that look like for you? The same kind of planning that people with student loans can do in terms of making those kinds of adjustments, or what you can do before you actually take out the loans for college.

Are are are loans, or just the cost of college, dramatically changing the type of degrees, programs you see, people who you might even be advising that they opt into? And and how do you see that kind of calculus being run at the family level as well?

Yeah, so we see a lot of, especially high schoolers, those who are starting to go to college, really starting to think about the cost of college and thinking about what kind of degrees they might want in order to be able to go there. So certainly, I think, um, the cost of college has become a real consideration and factor in what type of degrees people are coming into, and what the conversations at home are between parents and children as they're starting to go out, making sure that they all feel comfortable with that financial burden that is going to be taken on in order to reach higher education.

Amanda Hainault, who is the Fidelity Investments VP of Emerging Products, Student Debt. Thanks so much for taking the time.

Thank you.