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Kansas City graduates, students weigh in on government's student debt relief plan

Posted at 6:03 AM, Aug 29, 2022
and last updated 2022-08-29 09:32:35-04

KANSAS CITY, Mo — Mixed reactions continue to pour in after the Biden Administration announced its student loan forgiveness plan.

One financial expert in Kansas City says while this is a step in the right direction, more needs to be done to fix the student loan crisis.

Hallie Matlick is in her third year at the University of Oregon and is studying Criminal Psychology. She currently works two jobs during the summer and works part time while juggling school and has taken out student loans. Matlick knows she will still graduate with debt and believes more needs to be done to teach people about taking out student loans.

“I think it's not taught enough in high schools,” Matclick said. “I went to college and it was just like, ‘oh, you have to get a loan to survive in college’ and I wasn't taught how to do that, so I think it's quite a confusing topic that needs to be discussed.”

Mallory Baska is a financial expert based in Kansas City and shares money saving tips on social media to help people become financially independent. Baska founded Fueling Financial Freedom and believes the problem with student loans is people who take out those loans for the first time just turned 18 and don't understand fully the commitment they are about to make.

“What I see happen is many, 18 year-olds, rightfully so are signing the dotted line of these student loans, not realizing that the career path that they are choosing may not ever be able to pay that off,” Baska said. “Or it would take a very long time to pay that off, so I think that greater education in a focus on personal finance education in our public school system would really help people more logically choose their current costs.”

According to a Department of Education analysis, the typical undergraduate student with loans now graduates with nearly $25,000 dollars in debt.

KSHB 41 News spoke to Reilly Wadsworth who graduated from the University of Oregon last year. Wadsworth says she graduated with around $30,000 in debt and was only eligible to receive $10,000 in relief. She thinks once those student loan payments start up again she estimates they will be around $400 a month.

“I’m paying for that experience and education, so I'm grateful for every part that has brought me to where I am right now,” Wadsworth explained.

Baska says when it comes to student loans, her clients are torn but there are ways to get out of student debt, but believes a budget can come a long way.

“If your interest rates on your student loan debt are below 7%, therefore investing in the market or investing in other avenues, would outperform paying off that student loan debt, and you don't have anxiety about your student loan debt, that's a fair strategy,” Baska said. “If you're not prepared to make your minimum payments when the pause ends, you do need to prepare for that, and a budget can help, but there are also some people and clients I've spoken to who their student debt literally keeps them up at night.”

Here’s what you need to know, you have until the end of the year to apply for student loan forgiveness by submitting an application on the Student Aid website. In order to qualify, you have to be making less than $125,000, if you're married as a combined couple you need to be making less than $250,000. If you meet these qualifications you could be eligible for up to $20,000.