Loan Forgiveness | Engaging Aging Parents and Joy

Loan Forgiveness by the numbers: While we reserve political commentary on President Biden’s recent executive order forgiving student debt, it serves us well to have a clear picture of the financials beneath it all. “It’s all in the details,” as they say. Here are some of them, along with a link to further detail at the bottom:

• The policy would forgive $10,000 in student loan debt for individuals earning less than $125,000/year.
• There would be an additional $10,000 in loan forgiveness for low-income students.
• According to recent estimates, there is $175 trillion in student loan debt.
• The average balance per person is around $41,000.
• The majority of loans are owed to the U.S. government.
• Current estimates suggest Biden’s forgiveness program would cost around $300 billion, or about $2,300 per U.S. household. (This burden would not be shared equally across all households but does provide context for costs.)
• Per capita basis indicates that the typical graduate student has roughly twice as much debt as the typical undergraduate student. (This implies that a small number of borrowers hold a disproportionate share of the total student loan debt. According to Sandy Baum at The Urban Institute, only 6% of borrowers have over $100,000 in student loans, yet these borrowers account for 35% of the total student loan debt.)

For a more detailed look at this plan, consider reading the article online where much of the above data came from: click here.

Starting the Conversation: It’s sort of just understood, isn’t it? Don’t talk about money, politics, or religion. The problem is, at least when it comes to money, it’s important to communicate clearly. As our parents age and children need to take a more significant role in helping to think through life decisions, money is obviously a part of that discussion. Financial journalist, Cameron Huddleston, says, “People don’t talk about [money] because they’re worried that the person they’re having the conversation with either makes more money than they do or less money, and that can create issues for people and their relationships with others.” For Huddleston, having the conversation with her parents was not only difficult, but the introduction of Alzheimer’s created even more complications. But the bottom line is that it became a necessity, and Huddleston had to develop strategies to have the conversations and help her mom plan. Read more about her approach here.

Business Briefing

• Federal Workers’ Pay Hike: President Biden announced on Wednesday in a letter to House Speaker Nancy Pelosi (D-Calif.) that his administration plans to raise civilian federal employees’ pay 4.6 percent, on average, in 2023. Biden said the plan would help government compete with the private sector in recruiting and retaining workers by narrowing a “substantial pay gap” that widened in recent years of low raises. (The Washington Post)
• Halting Exports of 2 AI Chips: Nvidia announced that the U.S. government had ordered it to stop exporting two top artificial intelligence computing chips to China. The move would mark an escalation in a U.S. crackdown on Chinese technology firms as tensions rise over Taiwan, a self-governing island the U.S. supports but China views as a part of their territory. (Reuters)
• Fast Food Wage Law: Restaurant franchise owners and business advocates launched a concerted effort to pressure California Gov. Gavin Newsom (D) to veto a bill that would raise wages for fast-food workers to as high as $22 per hour starting next year. (The Wall Street Journal)

Never too Old for Adventure: D.C. resident, Brad Ryan, had a goal in mind: to help his grandmother see a mountain. Brad was stunned when his grandmother, who he knew loved nature, casually mentioned she had never seen a large mountain in person. So he asked her, who was 85 at the time if she would be interested in a road trip to Great Smoky Mountain National Park. Her response? “What time are you picking me up?” Of course, his grandmother’s first name is Joy! Since then, the pair has visited 62 National Parks! Read the full story here. Perhaps we all need a little more of Brad’s intentionality and Joy’s adventurous spirit.