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Uploaded:2022-09-20
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Welcome to TFD.

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Hey, guys. It's Chelsea from The Financial Diet. And if you're looking at this video and thinking, "Wow, that's a more bold top than we're used to seeing for Chelsea," that's a great observation. And I'm about to get into why.

So as I filmed this, it is currently the very beginning of September, which means we are coming on the most all-time God-tier elite season anywhere in the world and that is fall in New York, baby. We're talking "When Harry Met Sally" weather. We're talking "You're Got Mail" weather.

And if you're anything like me, it is incredibly easy when, as the memes say, "I can't wait for fall so I can really start dressing" to not want to buy absolutely everything. I'm constantly tempted to online shop for clothes and find myself often making mood boards, because even if I were to buy some of the items, it's literally still gonna be 90 degrees out for another month. But luckily, if you are someone who wants to change up your wardrobe, whether for everyday or special occasion, but doesn't necessarily want to spend the incredible amount of money it would take to overhaul your wardrobe every month, I highly recommend Nuuly, which is a subscription clothing rental service on which I got this entire outfit, as well as several other awesome items that I have for the whole month.

And right now, you can get $20 off your first month of Nuuly when you sign up with my code, TFD20. So obviously, I have this cute, like, canvas-y green pant that goes with so much that I have. I have this lemon top that, honestly, is a little bolder than something that I would truly invest in for the long term, but is really great for a nice transitional piece.

And as we've talked about before on the channel many times, renting clothing can actually be an amazing alternative, not just for people who tend to always want new things, which is a very common thing, but also might have different needs. Maybe you have special occasions for which you don't necessarily need to wear an item a million times, but still want to have a new item. And it's also good for those items which you may love and want to wear, but aren't necessarily going to be able to justify wearing all the time, because if you're a good TFD viewer, you like to measure in cost per use.

And Nuuly is a subscription clothing rental service where, for just $88 a month, you get your choice of any six styles, which works out to just under $15 an item with much superior quality than any fast fashion purchase at that price. You choose whatever you want to rent for whatever you have going on. Everything from going out looks to premium denim to cozy sweaters to one of a kind vintage pieces.

It's totally up to you. You get access to thousands of styles from more than 300 brands, newly stocked styles in a range of sizes from petite to plus size all the way up to 5X and maternity. They carry some of my favorite labels.

Like right now, I'm in basically head to toe Anthropology. Plus, they have fast, free shipping and returns and professional cleaning and Nuuly's state of the art laundering facility. So no laundry for you to have to worry about.

And you get the option to actually buy pieces you love at a discount, sometimes up to 70% off. Nuuly is already a great value at $88 a month for any six styles. But right now, you can get $20 off your first month of Nuuly when you sign up with the code TFD20.

Just go to N-U-U-L-Y.com-- that's Nuuly with two U's. --and enter the code TFD20 and sign up to get $20 off your first month. That's N-U-U-L-Y.com. Nuuly with two U's with code TFD20.

Nuuly subscription clothing rental, change your clothes. And welcome to my home. It's a kind of dreary, very late summer, I want it to be early fall, not quite day.

We got my bike parked in the back here, because I was too lazy to bring it downstairs after charging it. And it's just a vibe. We got a bunch of candles going.

It's raining. I'm gonna order a monstrous amount of takeout tonight. And I'm ready to complain, my favorite thing to do.

And today, it's not so much complaining as it is [BLEEP] about something that I feel like needs to be much more of a settled conversation than it is. And that is student loan forgiveness. Now, basically, I would assume all of us at this point are aware that student loan forgiveness has been, really, a big part of the zeitgeist in the past month.

Joe Biden campaigned with a lot of illusions and sometimes approaching actual promises to eliminating a lot of student debt for people. And for like a two and a half-year period, during all of the COVID pauses, when so much of people's financial lives were kind of up in the air regardless, it was very unclear as to what the next steps were actually going to be with regards to not just delaying or suspending payments on student loans, but actually forgiving them for people. But it has turned out that though it was not nearly to the extent that was promised on the campaign trail, based Brandon did in fact come through and forgive a good amount of student loans.

And we'll get into the details of that and what you need to know a little bit later. But as predicted, the student loan debate has become a bit of a political football in a time where who controls Congress come November is kind of anyone's game at this point. There are obvious reasons why doing things, like forgiving student loans this close to midterm elections, would be a really good thing for the Democrats.

But it's also very easy for people who might oppose these things to make very caricature-ish statements about who's actually benefiting from this forgiveness in order to make Democrats look as terrible as possible, which has raised a perennial debate around who "deserves" certain things. Usually, when it comes to personal finance, the concept of "deserving" often just boils down to your social class, i.e. it's shameful and even unnecessary for people below the poverty line to enjoy themselves or watch movies or own any kind of technology or occasionally eat food that isn't rice and beans they bought in bulk. But when it comes to who deserves things like debt forgiveness, we're in a pretty interesting time to be having that debate.

And it's not a perfect divide, but generally speaking, those more on the right of the aisle have rallied around the concept that blue-haired baristas with gender degrees shouldn't have hard-working coal miners and plumbers pay for their choice to go to an elite private school in New England, even though when you look at the data, this is by and large not an accurate representation of who goes to college or for what. But on this very specific issue, in this very specific post-pandemic relief moment provided to be a bit of an own goal for Republicans. Because given that many of the outspoken politicians railing against student loan forgiveness were themselves recipients of the PPP loan and had said loans forgiven and why members of Congress were even able to do this for their private businesses is an entirely separate issue that we can get into later, but it did lead to one of the rare recent instances of the Biden administration actually seeming based as hell, with one White House communications staffer going on an absolute rampage of quote tweeting Republican politicians railing against said student loan forgiveness by showing exactly how much they'd had forgiven in PPP loans, which is publicly available information.

As "Forbes" put it back in late August, a tweet calling out Marjorie Taylor Greene had attracted nearly 1.1 million interactions, including more than 275,000 retweets and almost 800,000 likes, "The White House's post quote-tweeted a video in which Greene called student loan forgiveness unfair, adding a message that simply red 'Congresswoan Marjorie Taylor Greene had $183,504 in PPP loans forgiven.'" Now, I should say here that the message that some may have taken, that people shouldn't have been taking PPP loans or getting them forgiven is not what I'm trying to say. TFD received six figures worth of PPP loans. We got them disbursed to us twice.

And we got both of them totally forgiven. We also used them for exactly what they were intended for, to maintain our payroll and avoid layoffs during a time when COVID had decimated our revenue. But in general, the PPP loans were a perfect example of government actually doing good things and providing direct relief to its constituents.

So the point here is not that certain people are inherently bad for having taken PPP loans and gotten them forgiven, but rather that it underscores the very specific idea we tend to have in this country of who deserves to get help and who deserves to have things forgiven, which usually translates to either the wealthy, huge corporations, corporate lobbyists, or small business owners, many of whom, unfortunately, were committing fraud with the PPP loans. Often, the same people who are the first to rail against government handouts when they think of, like, for example, a single mom receiving food stamps, are happy to turn a blind eye when it's things, like, for example, corporate agriculture making everyone eat 80 pounds of corn every day. But I am someone who, in this right-wing caricature of who does and doesn't deserve help, should be most against the idea of student loan forgiveness.

I came from a lower and then middle-middle class background. I went to a community college. I dropped out and built a fairly lucrative and successful small business on my own.

Now, of course, it would be ridiculous to say it was entirely on my own. I have a co-founder. I have partners.

I have employees, like all of this was a collective effort. But let's just say in the very simplistic binary narrative of the American dream, I clearly typify it. And I did it while not accruing student loans, because I don't have a degree.

So I should be a prime candidate for telling everyone about them making their own choices and how they should bootstrap their way to success and feel embittered by the fact that their frivolous choice to go to Bard or Oberlin and major in theater is being reimbursed while my sacrificial decision to go to community college resulted in no such handout. But I am actually extremely supportive of the idea of student loan forgiveness. And why is that, even though I don't benefit from it at all and could easily be filled with resentment at the idea?

Well, it's because I live in a society. And student loan debt, on the whole, is actually extremely harmful for our overall economy. And therefore, even if I weren't morally supportive of debt forgiveness, which I am, I would support it for purely economic reasons.

But before we dive into my opinions on why this relief is actually a good thing and should go even further, let's just quickly go over what this forgiveness actually entails. The average student loan debt in the US is currently $32,731, which has risen over 300% since 2004. Now, on the forgiveness front, applications will be available starting in October for those who do not receive relief automatically.

And this will be the case if the Department of Education does not have your current income information. If your application is accepted, you can expect to receive relief in four to six weeks. And apply before November 15th so your application can be processed before the payment pause period is up at the end of the year.

Those who received Pell Grants, generally people applying to college with exceptional financial need-- I actually received a Pell Grant. Fun fact. --may be eligible for up to $20,000 of debt forgiveness, while other borrowers may be eligible for up to $10,000 of forgiveness. The income thresholds for this are $125,000 for individuals or $250,000 for households.

This forgiveness is for public loans only. If you took out private loans or had a public loan that you refinanced to a private loan, unfortunately, that is not eligible for forgiveness. And relief is capped at the amount you owe.

For instance, if your outstanding loan balance is $15,000 but you are eligible for 20k forgiveness, you will still only receive 15k in relief. You may be eligible to have the relief applied automatically based on the data the DOE has on its borrowers. And this would be reflected in your account balance.

And there are also temporary changes to the Public Service Loan Forgiveness Program. So if you work for a non-profit or government agency, you can actually apply to have some of your past payments credited back to you, even if you haven't completed the program yet. And even those who aren't eligible for forgiveness, the student loan repayment pause has been extended through the end of December 2022.

And again, reminder that this is not even what Biden campaigned on, which was full student loan forgiveness. This is literally the least he can do. But it is something.

Now, as I mentioned, I went to a community college and don't have a degree. But as someone who does live in said society and who has to deal with all of the macroeconomic conditions happening around me, I am very clearly aware of why having so many people hobbled by student loan debt is a bad thing, generally. So you may have heard a lot of talk about industries that millennials are "killing" and the myriad ways in which they're not "adulting" at the levels their parents were.

And this is not, on the whole, because they're buying too much avocado toast. It's because they're entering into a completely different economy than their parents did, where wages have almost completely stagnated, things cost much more, especially big things like houses, and because they are strapped with a level of debt that was unheard of to previous generations, because the cost of college has ballooned way past inflation. If out-of-touch boomers are mad at millennials because they were not able to support themselves while going to college by working at a fast food restaurant full time, it makes a lot more sense when you realize that depending on when they went to college, based on the actual tuition levels in times like the '60s, '70s, and early '80s, that actually may genuinely have been possible to do.

But listen, Uncle Steve, one simple Google search will tell you why that's no longer possible. But whether or not you personally would benefit from student loan forgiveness as a member of that same shared society, you are negatively impacted by having a massive generation of adults who cannot afford to have a healthy and prosperous financial life. Aside from not being able to do things like buy homes, which people selling homes need someone to do, they also increasingly can't afford to do things like have children.

You may not have heard, but our birthrate has been pretty steadily declining over the years. And not having enough children to replace our population is actually a terrible thing for societies. Societies need children to function.

You're going to get old and someone's going to have to wipe your [BLEEP]. And I don't know if robots are going to be that dexterous by then. Essentially having an entire generation of young adults who cannot afford to make normal consumer or life choices is of no benefit to me.

And beyond that, there is often this really strange moral argument, which we saw come up plenty over the past few weeks, which is "You decided to take this money out. You're responsible for paying it back." Now, I think in some cases, OK, I can maybe see where that's true. But when it comes to student loans specifically, I actually think the system is much closer to something like loan sharking than it is to, say, getting a line of credit with your bank.

Aside from the fact that universities have been able to use the ubiquity of student debt to balloon their tuition past what any average American should be able to be expected to pay, most of the 18-year-olds, and, yes, those are effectively children, who are signing on to these loans are not only signing on to them at a time where they're, frankly, too young to even understand the consequences of this financial decision, but they're also signing on them in a context where they've likely been told their entire life that the most important thing they can do is get into the absolute best college possible and then pay for that college by any means. Because, otherwise, they'll never have a chance at doing things like getting a good job or buying a home, all of the things that said student loan debt will also often prevent them from doing. The terms of these loans, especially private ones, are often extremely exploitative.

And many specific programs have even been sued by alumni over incredibly misleading advertising on things like post-grad job prospects or starting salaries. It is not a coincidence that most people signing on to student loans think that, on the long term, it is a solid investment with a high likely return. It's because this is what we're being sold and, in many cases, what these universities are explicitly advertising, even when it's not true.

At the end of the, day as someone who has truly no dog in this fight, I fully support not just this current wave of student loan forgiveness, but as much student loan forgiveness as we can possibly squeeze out of all of the bloodless boomers who are currently filling our federal government. I support it. I say yes.

And, honestly, if you went to [BLEEP] Bard and you got a degree in gender dance and you got $300,000 worth of student loan debt and it all gets wiped away, honestly, congratulations. You gamed the system and I'm proud of you and I hope you didn't do too many psychedelic drugs to permanently ruin your brain. Anyway, guys, as always, thank you for watching.

And don't forget to hit the Subscribe button and to come back every Monday, Tuesday, and Thursday for new and awesome videos. Bye.