There’s a bit of confusion surrounding the Biden Administration’s student loan forgiveness plan—to put it mildly. Will it happen, won’t it happen? Is it only for certain students or certain income levels?
“I think it’s a real emotional coaster for borrowers right now,” Laurel Taylor said when asked for insight. “The feeling of elation of $10,000 to $20,000 of forgiveness, especially for those who come from low-income households and tend to be historically underrepresented, that amount is life-changing.”
Taylor, Founder and CEO of Candidly, a student debt solutions and financial wellness technology firm, cited her own data that found borrowers who are most engaged in receiving the $10,000 to $20,000 of debt forgiveness tend to have $75,000 of debt.
“It’s a little counter to what the market more broadly may anticipate,” she explained. “Those with $75,000 of student debt are the most engaged in claiming that one-time forgiveness. They know they’ll still have $60,000 to $65,000 remaining, but that catalytic progress is so exciting and such a relief.”
She and the team are “strongly encouraging” borrowers to apply for the one-time forgiveness, which over 22 million Americans have already done. But, she cautioned, they should expect to possibly still not know what’s happening on January 1 and to be prepared to enter into payment on the total outstanding balance.
The confusion might cause borrowers to wait to apply for loans, yet it’s something she rejected.
“We have not seen people waiting on the sidelines,” Taylor countered. “When you think about education and price sensitivity, there is less price sensitivity than we might anticipate. What are my alternatives if I didn’t access financing to support my education? What is my future job opportunity? So, it’s a must-have.”
Simple and easy
Noting that the application for forgiveness is now available, she’s pleased by its simplicity and digital nature, not something always heard about government programs.
“It takes borrowers less than two minutes. It’s a very simple form. That’s huge progress in and of itself. The application is easy to submit basic information. Of course, the question is, will that one-time relief be delivered to the borrower?”
Candidly as a firm, is heavily focused on the provisions in the SECURE Act 2.0, something Taylor called “truly transformative legislation.”
“We’re so excited about defining and creating the technology that commercializes the Act. All Americans who are paying down their student debt and work for an employer that offers a retirement match will be able to receive that retirement match contingent on their student loan payments.”
After a recent name change, Candidly also broadened its focus, not only offering student debt reduction products and services but helping with what she called the entire “end-to-end journey.”
We enable hardworking Americans to navigate education financing, and also now enable families to prepare and plan for college,” Taylor concluded. “The number one request I have personally received from employers since founding the company is, how is financing mitigated or avoided in the first place? Our response is now to manage the full lifecycle of education financing because, candidly, it is extremely difficult and daunting. There is still a lot of stigma and shame around student debt. And we want to be able to relieve that and have candid conversations with our users about their financial health and wellness.”