The Supreme Court struck down the administration’s student loan forgiveness plan Friday. This is huge for every person with student loans and struggling to make ends meet. While you might think that you didn’t have that 300 dollar payment or 400 dollar payment, very soon you will get that payment back on top of all the other money concerns. 

So what is happening next? How are people going to make those student loan payments and still be able to afford food, gas, housing, and be able to get out of the house? In this video, I will go over what just happened, the implications, and how you can even get your money in place to be able to save some money, so stay tuned!

The Supreme court decision to strike down loan forgiveness should have no effect on the economy. That’s what chief economist of Moody’s Analytics Mark Zandi just said. 

It is hard to know what will happen with such policy, but one thing for sure is the government doesn’t have enough money to cover every single student’s loans even if they wanted to. 

Just a week or two ago they were struggling with the debt ceiling where the whole government was in the brink of collapse and the country is in the deepest debt ever. We are still sending aid overseas which I don’t understand but that’s a whole different story. 

If it passed, the repercusions on the economy would’ve been hard to time. Americans would’ve had more money on their hands, which means more spending, and more spending means more inflation which is what the FED is trying to control.

They said that they will spend 3 to 6% of their increased wealth on new and accelerated purchases, which means BS you don’t need. 

Overturning student loan forgiveness is therefore somewhat deflationary and means the Federal Reserve may not have raised borrowing costs as much as it otherwise would if forgiveness succeeded. In simpler words, without student loan forgiveness they don’t have to raise the rates more and affect the housing market per say. 

Inflation right now has fallen into the 4% category from a 9.1% pandemic era peak but still remains elevated compared to the 2% the FED is striking for. You have to give it to them, that their policy of raising the rates has worked, otherwise we will be sitting on 10+% inflation right now and many more Americans will be in poverty line. 

Consumer spending is still the life of the US Economy, accounting for about 70% of US Gross domestic product, which is a measure of the nation’s total economic output. 

But the average borrower who hasn’t paid any student loans in three years is about to start paying around $275 a month average in October. This is 40 million Americans with student loans, averaging 275 a month, that’s 11 Billion Dollars per month of money going from Americans pockets into loans. 

This effect will likely reduce spending by 0.5% overall, which is nothing for the Macro economy. In reality, where it hits the most is in the Micro level which is the household. If you are already struggling with debt, using your credit card to make ends meet, cannot afford any luxury or going out, and still have to add a payment for a student loan you have since years ago, it becomes a huge burden.

One thing the administration is doing is marking every account as current. Even if you haven’t made a single payment in three years, you can have a fresh start. Try not paying your credit card or your mortgage for 3 years, good luck living on the streets. 

The reality is that the administration is working on new plans to help borrowers, not to cover their loans but to ensure they can be paid. 

What about your money? Well, if the average payment is 275 a month and you need to start making it in October, you still have time to prep. You have three months, July, August and September to prepare yourself for October payment. 

If you cannot make ends meet and want to be able to pay that money in October you need to start pulling back on spending today. Saving on everything you buy will ensure you have money to pay those loans in October. 

Create an account or a piggy bank named Student Loans and start by calling all your services. Gas, Water, Electricity, Internet, Phone, streaming services, and any kind of subscription and negotiate. Tell them you will go to the competition and get better pricing. All the money you save there should go to the account named Student Loans. 

Then when you get your food be mindful of what you get and never go shopping hungry. Get store brands and find deals. That could save some pennies. 

When you go out, don’t go into the shots and expensive drinks, pregame home and just get a couple of beers out. Or even better, have someone else pay them for you!

If you could get a side hustle or side gig that pays 300 a month, that will be perfect just to be able to pay for those 300 a month, which is not too much if you think it by week it’s 75 a week or 15 a day not counting weekends. 

The least I want is for you to put that money into a credit card and keep getting into more and more debt. That’s a recipe for disaster. Make your best to ensure that you will have enough money to cover your extra payment in Q4. 

But remember, TAKE CONTROL OF YOUR LIFE AND TAKE CONTROL OF YOUR MONEY!!