Soaring Student Loan Bills Deepen Affordability Woes

What happened here. This has to do with, um, Joe Biden and what he did for student loans. And now what President Trump is doing when it comes to student loans. Right? A lot of American student loan borrowers are really kind of caught in the crosshairs of these shifting federal student loan repayment plans. Uh, we spoke with my colleagues, Liam Knox and Janelle Martz. We kind of profiled student loan borrowers across the country, asking them what payment plans they're picking, how their bills are changing, how it's impacting their finances. And many of the borrowers that we spoke with told us that their payments have, in some cases, doubled. So that's because they're choosing bigger payments as opposed to extending their loans for longer. Right. There is two new repayment plan options, and a lot of them either come with longer repayment windows or they come with higher bills that can accelerate those repayments. And so it's resulting in a lot of these Americans who took on student loan debt kind of choosing between paying off their student loan bill or saving for retirement, saving for other long term goals. And a lot of the borrowers that we spoke with mentioned to us that, you know, they're kind of having to sacrifice new research on this. Is there any understanding that for decades people paid their student loans. I spoke with one borrower who has continued to make payments for almost 20 years, and he switched to multiple different repayment plans. He's gone back and forth on forbearance periods while he's gone to graduate school, and it's ultimately resulted in the interest of being even higher than the principal balance that he took out. The amount that people are borrowing now is vastly different than what they were borrowing 20, 30, or 40 years. I totally agree with that. So I don't know that it's a fair comparison. I agree. I mean, the outstanding student loan out there is massive compared with credit card loans or auto loans. Talk a little bit about the makeup there. Yeah. We also looked at kind of the composition of debt that a lot of households have. And it's still the case that, you know, this housing debt makes up the biggest share. But when you compare auto loans and student loan debt, you know, those are roughly identical. And it's really kind of the increase that we've seen in student loan debt since the early 2000. So that's big a major kind of hurdle. I got to do this on personal finance. A chart earlier in the week was a shock, and it was so important folks were going to give it to you again. Of course, Sarah's living this as you look at the 30 year mortgage rate. Who knows where it'll be Monday? Who knows where it'll be a month from now? But the trajectory is really, really shocking. The long term trend of the free lunch. Scarlett expanded out to 8000ft². Right in the bottom there in 2022. Up, up we go from 3 to 7%. Sarah, this is a profound impact, even for people who aren't looking for a 30 year mortgage. I go back to the beginning of the year, and I think about what I was hearing from a lot of the economists who I was speaking with, and the hope was that 2026 would really be better for us. You know, we even briefly saw mortgage rates tip below 6%. But. Right, the idea was that we would see interest rate cuts from the Federal Reserve, and therefore that would bring down mortgage rates and allow people, especially first time homebuyers, to finally be able to buy that home. And it's been so difficult because I think what was originally thought as the ceiling at 7% rate is now being questioned as whether it's the new floor and you know it, as long as the war in Iran continues, you know, oil prices trading above $100 a barrel at record highs, this is going to continue to be a problem.