By Katerina Belales
WASHINGTON, D.C. (WENY) – The Biden administration proposed new rules last week to make student debt forgiveness easier for college graduates.
The program is designed to help people working in non-profits and higher education. If individuals in those programs pay their loans for up to 10 years, they could then have their loans forgiven.
“The problem we’ve seen in the last 20 years or so is the layers of paperwork, or people applying for the program when it would be the wrong one and having to restart,” said Matthew Burr, Owner of Burr Consulting, LLC. “There was a special on CBS’ 60 Minutes where people were getting trapped in the bureaucracy. The changes proposed are going to help streamline that process, make sure people get approved and make it easier for people in these nonprofits to get their loans wiped out if they do meet the 10-year minimum payment.”
The Education Department plans to finalize the rules no later than July 1, 2023.
Federal student loan payments are additionally suspended through August 31st. Burr explained the importance of ensuring recent graduates are prepared for those upcoming payments.
“Labor has the upper hand right now, and if you’re looking for a job there are 11.3 million jobs [currently available],” he said. “My advice to anyone is to negotiate a high salary and know what you’re worth. You also basically have a golden opportunity to make payments on your student loans with no interest accrued because it’s federally-backed. So, right now is an opportunity to begin making some serious payments on principle, and, frankly, don’t rely on the government to pay it for you. You need to own your debt at this point because you signed up for it.”
Preparing to pay student loans is not the only concern many recent graduates have. The ideas of entering the “adult world,” such as starting a new job, moving out and having to pay rent can be daunting for many new graduates. One of the most efficient ways to manage finances in general, according to Burr, is to understand the idea of “need versus want.”
“Do you really need the $6 coffee every day? Probably not,” he said. “Do you really need a new vehicle or a new phone every year? Probably not. You’ve gotta own the debt and the priority and execute a plan to get out of debt. I’ve done it. I got out of a quarter of a million dollars in student loans relatively quickly, but you have to understand priority…those are the decisions you have to make.”
Burr shares his story of how he was able to pay his MBA of $120,000 in 33 months in his book, Slay the Student Loan Dragon. To learn more about his tips and tricks to tackling the student loan industry, you can buy it on Amazon here.