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Student borrowers pursuing public service loan forgiveness haven’t had to make a payment on their debt in years, while they’ve moved closer to getting relief.
As a result, the pandemic-era policy likely saved many public servants thousands of dollars.

Skynesher | E+ | Getty Images

The pandemic-era policy suspending federal student loan payments has been an especially big win for public servants.
Most borrowers have benefited from the payment pause, which has lasted more than three years and spanned two presidencies. But for those pursuing the popular Public Service Loan Forgiveness program, the policy has allowed them to get closer to debt cancellation while not making any payments on their debt.

“We can safely say that borrowers in PSLF have saved thousands of dollars,” said higher education expert Mark Kantrowitz.
The PSLF program was signed into law by then-President George W. Bush in 2007 and allows qualifying nonprofit and government employees to have their federal student loans canceled after 10 years, or 120 payments. The Consumer Financial Protection Bureau estimates that one-quarter of American workers could be eligible.
Here’s what the payment pause has meant for those who are pursuing the relief.

Months of the pause count toward loan forgiveness

Each month during the pause should count toward a borrowers’ timeline on PSLF, whether or not they made a payment. Because of that, experts have recommended that public servants avoid making payments on their debt during this period.
The pause on federal student loan bills has been extended eight times since it was first announced in March 2020 and has been in effect for more than 36 months now, meaning nearly a third of borrowers’ required payments to get PSLF may be covered by the relief policy.

Advocates say that public servants deserved such a benefit after the problems that have plagued the loan forgiveness program. Borrowers were often under the impression they were paying their way to loan cancellation only to discover at some point in the process that they don’t qualify, usually for confusing and technical reasons. Advocates and regulators have also blamed lenders for misleading borrowers and botching their timelines.
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Kantrowitz said borrowers can visit StudentAid.gov to check the number of qualifying payments they’ve racked up.
The Biden administration is also working to make adjustments to people’s accounts, to make sure their payments have been counted correctly, Kantrowitz said.

Many PSLF requirements still in place

While borrowers pursuing PSLF will get credit for payments during the pause, they still need to be employed with the government or a qualifying nonprofit to be heading toward loan forgiveness, Kantrowitz said.
“The Biden administration did not waive the requirement that the borrower be employed full-time in a public service job for a paused payment to count toward PSLF,” he said.

The best way to find out if your job qualifies as public service is to fill out the employer certification form. Try to do this paperwork at least once a year, Kantrowitz said, and keep records of your confirmed qualifying payments to avoid errors or missed credit.
Borrowers should also make sure their loans are in the Direct Loan program and that they are enrolled in an income-driven repayment plan, which are other mandates of the policy. Those with other types of federal loans have until the end of 2023 to consolidate into the Direct Loan program to receive credit for qualifying payments, a spokesperson for the Education Department said.
When the payment pause on federal student loans ends, likely in September, borrowers will have to resume payments to get credit for PSLF.

Sweeping forgiveness will have less of an impact

The fate of the Biden administration’s sweeping student loan forgiveness is currently in the hands of the Supreme Court.
If the justices allow the program to proceed, the impact on borrowers pursuing PSLF may not be too significant, experts say. For some, the $10,000 or $20,000 in relief would wipe away their debt, and they would not have to make any more monthly payments.
Yet if they still have a balance remaining, their monthly bill would probably not change after the relief, since their payment is usually calculated as a share of their income rather than total debt. More

Tuition assistance may be the most valuable incentive companies are using to attract and keep workers.
For employees, tuition assistance can be a game changer.
Big corporate names including Walmart, McDonald’s, T-Mobile and Amazon have programs that help cover the cost of going back to school.

As a growing number of Americans feel priced out of a college education, tuition assistance may be the most valuable incentive companies are using to attract and keep workers.
In the last few years, more businesses have added or expanded benefit offerings of free college programs. Not only does free or discounted higher education improve recruitment and retention, it also cuts down on student debt while advancing the long-term well-being of employees, experts say.

Big corporate names including Walmart, McDonald’s, T-Mobile, Amazon, Home Depot, Target, UPS, FedEx, Chipotle and Starbucks have programs that help cover the cost of going back to school. Waste Management will not only pay for college degrees and professional certificates for employees, but also offers this same benefit to their spouses and children.
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Of course, employers paying for their employees to get a degree is not new. For decades, businesses have picked up the tab for white-collar workers’ graduate studies and MBAs.
However, many companies are now extending this benefit to front-line workers, such as drivers, cashiers and hourly employees, as well as heavily promoting the offering more than they have before.
Coming out of the Covid-19 pandemic, these types of benefits play a big part in the competition for workers and more companies are now offering opportunities to develop new skills, according to the Society for Human Resource Management’s 2022 employee benefits survey. 

To that point, 48% of employers said they offer undergraduate or graduate tuition assistance as a benefit, according to the SHRM survey. A separate survey from Willis Towers Watson in 2021 found 80% of large employers offer tuition reimbursement.

Programs can open ‘career paths to higher-paying roles’

“I thought about college, but I didn’t think I had the resources to work full time and go to school,” said Tara Sims, 39, an associate at a Walmart store in Fayetteville, Arkansas.

Walmart associate Tara Sims with her daughter Brylie.
Source: Tara Sims

Sims is now almost a year into a bachelor’s degree in business administration through Walmart’s Live Better U education program. Sims, who will be the first person in her family to complete college, said she was motivated by her 12-year-old daughter, Brylie.
“I actually made the honor roll last fall and sharing that email with her was really exciting for me,” Sims said.
Five years ago, Walmart unveiled an ambitious educational assistance plan for its workers. Then, in 2021, the country’s largest employer said it would make the program entirely free for all full- and part-time associates, covering 100% of college tuition and book costs.

“Our higher education system is in trouble right now,” said Lorraine Stomski, senior vice president of learning and leadership at Walmart. “We just keep doubling down on the programs that are going to unlock those career paths to higher-paying roles.”
Over the last five years, the company has helped employees save nearly half a billion dollars in what otherwise would have been student debt, she estimated.
About 104,000 associates of Walmart and its Sam’s Club subsidiary have participated in the Live Better U education program so far, the company announced Thursday.
Those employees are two times more likely to be promoted and four times less likely to leave the company, according to Rachel Romer, CEO of Guild Education, Walmart’s partner for the program.
“Our goal is to create career mobility,” Romer said, and “Walmart has also inspired other companies to get in the game.”
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Psychoanalyst Orna Guralnik says money is one of the biggest stressors on relationships.
While financial issues can spark intense conflict for couples, Guralnik doesn’t believe money, or the lack of it, is the real reason they split up.
Two people in a relationship can have vastly different attitudes about money, Guralnik said.

Orna Guralnik on Showtime’s “Couples Therapy.”
Source: Showtime

When I was growing up, my father used to repeat a saying he’d heard as a child from his grandmother: “When money doesn’t come through the door, love goes out the window.” That proverb appears to date back to a 19th century painting by the English artist George Frederick Watts, titled “When Poverty Comes in at the Door, Love Flies out of the Window.”
I relayed the quote to psychoanalyst Orna Guralnik, and she agreed money is one of the biggest stressors on couples, “especially because of the society we live in.” Guralnik is the star of the Showtime documentary series “Couples Therapy,” in which she analyzes real patients in a room with hidden cameras. New episodes of its third season premiered last month.

While financial issues can spark intense conflict for couples, Guralnik doesn’t believe money, or the lack of it, is the real reason they split up. “Ultimately, from my perspective, the breakup is not about money,” she said. Instead, Guralnik said, “the breakup is about not being able to negotiate differences, to be honest or to find a way to common ground.”
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Guralnik describes money as one of the major “touchstones with reality” that can make it clear two people can’t problem-solve together. It is this inability to communicate, emphasize and compromise with each other that might ruin a relationship, she said.
During my interview in late April with Guralnik, she had many other interesting things to say about love and money. Here are three of them.

1. When people don’t talk about money, they’re ‘shielding themselves from knowing reality’

In her work with patients, Guralnik said it can take a long time for people to open up about their financial situation.

“Sometimes, I find people are more private about money than their sex life,” she said.
It’s not just with their therapist people avoid topics such as debt or overspending, Guralnik said. People can be married for years and still not have told their partner what’s going on with their finances.

Guralnik understands this avoidance of the subject.
“In American society, money locates you in the social structure more than anything else,” she said. “A lot hangs on money in terms of people’s self-worth.”
People take huge risks by avoiding talking about and confronting their finances, she said.
“If you’re refusing to look at your bank account when you’re pulling out your credit card, you can accrue debt,” Guralnik said. “And if you keep doing that, that debt can be pretty devastating.”

Sometimes, I find people are more private about money than their sex life.

Orna Guralnik
psychoanalyst and host of “Couples Therapy”

“It can put you in the hole for a lifetime to come,” she added.
“I’m not saying that hyperbolically,” Guralnik went on to say. “I have plenty of people that come into my office in that situation.”
People are “shielding themselves from knowing reality” when they refuse to pay attention to their finances, Guralnik said. She added, “you can’t take care of yourself if you don’t deal with reality.”

2. It’s OK ‘finances are part of the reasons people are together’

At one point in the new episodes of season three of “Couples Therapy,” couple Kristi and Brock tell Guralnik they’re worried a big reason they’re moving in together is to save money.
Guralnik doesn’t see a problem with that motivation, however. “I’m cool with the fact that finances are part of the reasons people are together,” she said.
“Kristi and Brock are idealists, and I love them for that,” she went on. “They believe they should be moving in for love, not financial easement.”

But the idea marriage should only be about love is a pretty new idea, she added.
“Marriage has always been, first of all, a way to create a structure that protects people. It is there to protect the financial unit.”
Money can help a couple stay together too, Guralnik said. After all, two people can have a lot to lose financially by parting.
“It gives them another reason to try to work it out,” she said.

3. ‘Money is not just money. It stands for something else.’

Two people in a relationship can have vastly different attitudes about money, Guralnik said.
“Some people are frugal and can lean towards the obsessive side,” she said. “Some people do not have any impulse control, and they hate thinking about the future.”
“Any conversation about budgeting or planning is excruciating for them,” she added.

Jamie Grill | Getty Images

To understand their behavior, Guralnik tries to understand what money has come to symbolize for her patients.
“As a psychoanalyst, my general way of approaching things is with the belief that concrete realities are tied to unconscious realities,” she said.
For example, she once had a patient who hoarded money. “We discovered through analysis that, for her, money stood for time,” Guralnik said. “By hoarding money, in her unconscious mind, she was protecting herself against death.”
In other words, she said, “Money is not just money. It stands for something else, as well.” More

The Supreme Court could announce its decision on the Biden administration’s sweeping student loan forgiveness plan any day.
The U.S. Department of Education has braced borrowers to be ready for the bills to resume 60 days after that.
Borrowers should take these steps now to prepare, experts say.

Nikola Stojadinovic | E+ | Getty Images

1. Connect with your servicer

During the Covid-19 pandemic, several of the largest companies that service federal student loans announced they’ll no longer be doing so, meaning many borrowers will have to adjust to a new servicer when payments resume.
Three companies that serviced federal student loans — Navient, the Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State — all said they’d be ending their relationship with the government.
As a result, about 16 million borrowers will have a different company to deal with by the time payments resume, or not long after, according to Kantrowitz.

Double-check your servicer has your current contact information, so you receive all the notices about the upcoming change, experts say.
Affected borrowers should get multiple notices, Buchanan said.
If you mistakenly send a payment to your old servicer, the money should be forwarded by the former servicer to your new one, he added.

2. Find an affordable repayment option

Many people’s lives have been changed by the Covid-19 pandemic. If your circumstances look different than they did three years ago, it may make sense to review the payment plans available to you and find one that’s the best fit for your current situation.
In the meantime, the law has also changed.
Student loan forgiveness is now tax-free until at least 2025 because of a provision included in the $1.9 trillion federal coronavirus stimulus package President Joe Biden signed into law March 2021. That policy will likely become permanent.
This may make income-driven repayment plans more appealing, since they often come with lower monthly bills and borrowers will likely no longer be hit with a massive tax bill at the end of their 20 years or 25 years of payments.
Meanwhile, the Biden administration is also working to roll out a new income-driven repayment plan that would slash some borrowers’ payments in half.

But if you can afford it, the standard repayment plan is just 10 years.
To calculate how much your monthly bill would be under different plans, use one of the calculators at Studentaid.gov or Freestudentloanadvice.org, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
If you do decide to change your repayment plan, Mayotte recommends submitting that application with your servicer before payments turn back on.
“I have significant concerns that there will be some big servicing delays,” she said.

3. Have a plan if you can’t make payments

If you’re unemployed or dealing with another financial hardship, you’ll have options when payments resume.
First, put in a request for economic hardship or unemployment deferment, experts say.
Those are the ideal ways to postpone your federal student loan payments because interest usually doesn’t accrue under them, as long as they’re subsidized undergraduate student loans.
If you don’t qualify for either, however, you can use a forbearance to continue suspending your bills. But keep in mind interest will rack up and your balance will be larger — sometimes much larger — when you resume paying. More

With days to go before a debt ceiling deadline, the U.S. may be at risk of a default.
If that happens, the oldest and poorest Social Security beneficiaries may be the first who are at risk not receiving their payments, one expert warns.

President Joe Biden and House Speaker Kevin McCarthy, R-Calif., meet in the Oval Office on May 22, 2023.
Saul Loeb | AFP | Getty Images

As President Joe Biden and House Speaker Kevin McCarthy, R-Calif., continue to negotiate ahead of a June debt ceiling deadline, experts are warning that Social Security checks could be at risk if there is a default.
Based on the payment schedule for those monthly payments, the oldest and poorest beneficiaries could be the first who may have their payments affected, according to Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.

“That would be devastating for those people, because they rely on their benefits so much,” Romig said.
If lawmakers fail to reach an agreement, U.S. could default on its debt as soon as June 1, according to Treasury Secretary Janet Yellen. That, in turn, would interfere with the Social Security benefits slated to go out the first week of June, Romig said.
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Beneficiaries scheduled to receive payments that week include those who started receiving Social Security before May 1997 who are age 88 or older, noted Romig.
In addition, Supplemental Security Income benefits are paid that week for those who receive benefits either exclusively through that program or in combination with Social Security. Supplemental Security Income, or SSI, provides monthly checks to adults and children with disabilities or blindness, as well as people age 65 and up with limited financial resources. To qualify for SSI, beneficiaries generally must have income and resources below certain thresholds.

Because SSI beneficiaries face a $2,000 asset limit including all their financial resources, they do not have a cushion to fall back on if they do not receive their checks, Romig noted.
“They are the most immediately at risk in a default scenario,” Romig said. “They really don’t have a fallback.”

Other beneficiaries’ checks may be affected if the situation continues. Benefit payments are scheduled for the second, third and fourth Wednesday for other Social Security beneficiaries based on their birth dates.
Some experts say it’s unlikely the debt-ceiling debate will reach that point.
“If there is a scenario where seniors are not getting their Social Security checks, there would be a near immediate resolution of this fight,” Ed Mills, Washington policy analyst at Raymond James, previously told CNBC.com.
The National Committee to Preserve Social Security and Medicare has warned that Social Security, Medicare, Medicaid and other payments “may not be made on time and in full” without a debt limit increase.

If there is a scenario where seniors are not getting their Social Security checks, there would be a near immediate resolution of this fight.

analyst at Raymond James

“Even if all we’re talking about is a delay, you could end up with significant hardship on a large number of people,” said Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare.

‘Best educated guesses’ on what could happen

The debt ceiling is the maximum amount of money the U.S. government can borrow to pay its bills. While Washington has been up against the debt ceiling before, it has never defaulted on its financial obligations.
“There is not a road map for a default,” Romig said.
There is, therefore, much debate as to what could happen with Social Security benefits and other federal payments that Americans rely on, including whether Washington would be able to prioritize certain categories.

“We’re all taking our best educated guesses based on what the laws say and what we know Treasury is capable of doing,” Romig said.
The government relies on payroll taxes and Social Security’s trust funds, which include $2.8 trillion in Treasury bonds, to pay benefits.
If the U.S. were to default, that would include those government bonds, Romig said. More

College enrollment remains well below pre-pandemic levels, although associate’s degrees and shorter-term credential programs are gaining steam.
High schoolers are more interested in career training and post-college employment.
Still, earning a bachelor’s degree is almost always worthwhile, research shows.

Three years after the Covid pandemic, there are more than 1 million fewer students enrolled in college.
“Overall, undergraduate enrollment is still well below pre-pandemic levels, especially among degree-seeking students,” said Doug Shapiro, executive director of the National Student Clearinghouse Research Center.

Only community colleges notched enrollment gains in the current semester, while enrollments in bachelor’s degree programs fell, according to the Research Center’s new report.
As students look for a more direct link to the workforce, there’s a shift “toward shorter term programs,” Shapiro said.
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Concerns over rising costs and large student loan balances are causing more young adults to reconsider their plans after high school, a separate report by Junior Achievement and Citizens also found. 
More than 75% of high schoolers now say that a two-year or technical certification is enough, and only 41% believe they must have a four-year degree to get a good job.

“Teens are really starting to question the value of the four-year degree,” said Ed Grocholski, chief marketing officer at Junior Achievement.
For his part, Chris Ebeling, head of student lending at Citizens, said “it’s not surprising, given that the price of college has dramatically outpaced household income over the past two decades, which puts further pressure on families.”

Teens are really starting to question the value of the four-year degree.

Ed Grocholski
chief marketing officer at Junior Achievement

At the same time, between online credits and certifications, there are more options available at a lower cost, according to Grocholski. “There are a lot of opportunities out there that didn’t exist before,” he said.
Federal data also shows that trade school students are more likely to be employed after school than their degree-seeking counterparts — and much more likely to work in a job related to their field of study.

Getting a degree still pays

For decades, research found that earning a degree is almost always worthwhile.
Bachelor’s degree holders generally earn 75% more than those with just a high school diploma, according to “The College Payoff,” a report from the Georgetown University Center on Education and the Workforce — and the higher the level of educational attainment, the larger the payoff.

Finishing college puts workers on track to earn a median of $2.8 million over their lifetimes, compared with $1.6 million if they only had a high school diploma, the report found. 
Over time, occupations as a whole are steadily requiring more education, according to another recent report by Georgetown’s Center on Education and the Workforce. And the fastest-growing industries, such as computer and data processing, still require workers with disproportionately high education levels compared with industries that have not grown as quickly.

In 1983, only 28% of jobs required any postsecondary education and training beyond high school. By 2021, that had jumped to 68%, the report also found. In another decade, it will climb to 72%.
What’s more, a growing number of companies, including many in tech, recently decided to drop degree requirements for middle-skill and even higher-skill roles.
“A four-year a degree has value, but not everybody needs to go to college,” Grocholski said. “There are a lot of things you could do to gain skills and get out there in the world.”
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Young adults in the U.S. are taking longer to reach “key life milestones” that impact finances compared to four decades ago, according to a Pew Research Center analysis.
In 2021, adults who were 21 were less likely to have a full-time job; be financially independent, living on their own or married; or have children than their predecessors from 1980.
Here’s how parents can navigate the challenge of financially supporting their adult children, according to experts.

Young adults in the United States are taking longer to reach “key life milestones,” including financial independence from parents and living on their own, compared to four decades ago, according to a Pew Research Center analysis released on Tuesday.
In 2021, adults who were 21 were less likely to have a full-time job; be financially independent, living on their own or married; or have children than their predecessors from 1980.

Today’s young adults are closer to full-time employment and financial independence by age 25, the analysis of Census Bureau data shows. Financial independence is defined as having a single income of at least 150% of the poverty level.
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In 2021, some 39% of 21-year-olds were working full-time, compared to nearly two-thirds in 1980. And only one-quarter were financially independent of their parents, versus more than 40% in 1980, the analysis found.
There are a couple of reasons for differences between each group, including higher college enrollment over the past 40 years, said Ted Rossman, senior industry analyst at Bankrate. Today, nearly half of 21-year-olds are in college, while only 31% were enrolled in 1980, according to the Pew Research report.
Today’s cohort may also face other challenges.

“I would argue that young adults now are facing much higher costs for housing,” buying a car, food and gas, Rossman said. “So, I think there’s a strong inflation component.”

‘Examine your own situation’ first

While many parents are eager to help their offspring, it can come at a high cost. More than two-thirds of parents have made or are currently making financial sacrifices — such as not saving more for retirement or their emergency fund, or paying down debt — to assist their adult children, the Bankrate report found. 
“A big theme of our survey was this idea that you need to put your oxygen mask on before helping others,” Rossman said.  
It’s important to “examine your own situation” before offering to help adult children, said Paul Golden, managing director of the National Endowment for Financial Education.

Before giving your child a loan or allowing him or her to move back into your house, work together to decide exactly how long the situation will last.

Paul Golden
Managing director of the National Endowment for Financial Education

And if you decide to assist, you need to make a plan with a time limit.
“Before giving your child a loan or allowing him or her to move back into your house, work together to decide exactly how long the situation will last,” he suggested.  
Golden added that “one of the best ways to help your adult children live a healthy financial lifestyle is by demonstrating the behavior you’d like them to emulate.” More

Overall, 61% of Americans now say they are living paycheck to paycheck, according to a recent report.
Aside from income, where you live is the most important factor in determining whether you are stretched too thin.
City dwellers are much more likely to feel financially strained.

Even as inflation cools, consumers still show signs of strain.
As of April, the share of adults feeling stretched too thin held nearly steady at 61%, according to a new LendingClub report.

However, high-income earners are increasingly under pressure, LendingClub found. Of those earning more than six figures, 49% reported living paycheck to paycheck, a jump from last year’s 42%. 
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Alternatively, the percentage of those earning less than $100,000 who reported living paycheck to paycheck remained steady or fell over the same period — moving slightly to 63% from 64% of those earning $50,000 to $100,000, and dropping to 73% from 80% of those earning less than $50,000.

Where you live determines your financial standing

Depending on where you live, a $100,000 income may not stretch that far, according to Anuj Nayar, LendingClub’s financial health officer.
A separate report by SmartAsset analyzed how far six figures will go in America’s 25 largest cities. In New York, for example, $100,000 amounts to just $35,791 after accounting for taxes and the high cost of living. 

In contrast, a six-figure salary is worth much more in Memphis — roughly the equivalent of $86,444 due to a lower cost of living and no state income tax. Here’s a breakdown of how much you need to earn to afford to live in the country’s most popular cities.

Colorful cafe bars at the iconic Beale Street music and entertainment district of downtown Memphis, Tennessee.
benedek | iStock | Getty Images

In general, 69% of city dwellers live paycheck to paycheck, 25% more than their suburban counterparts, LendingClub found.
“While income is obviously a major factor, where you live appears to be almost equally important in factoring whether a consumer is living paycheck to paycheck,” Nayar said.
Along with surging mortgage rates and home prices, rents are still higher in many cities across the country, according to the latest data from rental listings site Rent.com. 

As of last month, 29 of the 50 most populous U.S. cities notched year-over-year rent increases, Rent.com found.
Compared with two years ago, rents have jumped more than 16% — that’s the equivalent of a $275 increase in monthly rent bills, according to Jon Leckie, researcher for Rent.com.
“That kind of growth over such a short period of time is going to put a lot of pressure on pocket books.”

How to break the paycheck-to-paycheck cycle

High earners and urbanites are often susceptible to “lifestyle creep,” said CFP Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida. 
As consumers earn more, they spend more, she said, particularly on eating out or deliveries through DoorDash, as well as additional subscription services. It’s easy to “fall into the trap of too much convenience spending.”
To break the cycle, “the first thing to do is look at convenience spending and figure out ways to cut the spending that is not bringing them value,” said McClanahan, who also is a member of CNBC’s Advisor Council. 
“Immediately divert that money to savings to create an emergency fund.” Once you have three to six months of expenses set aside, “start saving more for other goals.”
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