Borrowers are in MORE debt during student loan pauseAug 22, 2023
It's alarming how borrowers find themselves in a more profound debt situation now than before the pandemic. This issue has been dissected by the Wall Street Journal, and honestly, it's really maddening.
The article highlights that suspending student loan payments "enabled college grads to spend beyond their means while his promises of loan forgiveness encouraged them to pile on the debt—not only for expensive advanced degrees but also homes, cars, and travel. As a result, borrowers are in a worse position financially than before the pandemic."
Let me be direct—what truly infuriates me is that during the student loan payment pause, people managed to amass more debt. This was the perfect opportunity for Americans to SAVE money, to finally pay DOWN credit card debt, and to begin building real wealth. But it's astonishing how the article almost dismisses the notion of personal responsibility when it comes to falling into debt as if debt is something that mysteriously befalls individuals.
This is not to discredit the unfortunate events that can lead to debt, such as unforeseen medical expenses and unexpected emergencies like cars breaking down or a family member falling ill. But it does bring up a very jarring point; are people secretly waiting for someone else to fix their problem? And do they think that while they wait, why not go on that extra vacation, buy that extra outfit, and join friends at that extra dinner? What's one more expense when you're barrelling down a mountain of debt?
Why am I so fired up about this? Because it's personal for me. Why? Because being shackled by debt doesn't have to be the norm. I know what it's like to stay awake at night, worrying about the bills piling up. I've experienced the feeling of being trapped, as if life has hit a dead end. Moreover, I've learned that sometimes, opportunities are right there in front of us, but we're too blinded by our own hang-ups to seize them.
According to that same article, "Borrowers with paused payments added an average of $1,800 in other debt during the first 18 months of the reprieve."
Let that sink in.
So what can we do now? It's time to turn the tide to reverse the trend. Let's start by recognizing the opportunities that lie before us. We might have missed the chance during the student loan pause, but that doesn't mean we're out of options. The future doesn't have to be defined by money troubles; it can be about seizing opportunities, chasing dreams, and enjoying true financial freedom. It's about taking control of our choices, making smart financial decisions, and working towards a future where debt is no longer a constant weight on our shoulders. It's never too late to change the course, and the journey toward financial stability starts with the small steps we take today.
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