Stacy Cowley

Thanks for having me.

Thanks for having me.

Fourth, I think.

Fourth, I think.

There's a lot of developments along the way.

There's a lot of developments along the way.

So we're at a real turning point on this. After this nearly five-year period when most people weren't making payments and weren't required to do so and weren't having any negative consequences if they didn't, the government really dropped the hammer in the last few months. They've said, we are done with timeouts. We're done with pauses. You need to start paying again.

So we're at a real turning point on this. After this nearly five-year period when most people weren't making payments and weren't required to do so and weren't having any negative consequences if they didn't, the government really dropped the hammer in the last few months. They've said, we are done with timeouts. We're done with pauses. You need to start paying again.

Mm-hmm. And they instructed their loan servicers to start reporting delinquencies to the credit bureaus again, which hasn't happened for five years now. So that immediately resulted in four million people found delinquencies reported on their credit reports. And these are serious delinquencies. People saw their credit scores plunge.

Mm-hmm. And they instructed their loan servicers to start reporting delinquencies to the credit bureaus again, which hasn't happened for five years now. So that immediately resulted in four million people found delinquencies reported on their credit reports. And these are serious delinquencies. People saw their credit scores plunge.

That can have immediate impacts on your ability to rent an apartment, to get a mortgage, to get a loan for a car. So this can be pretty catastrophic when this happens to you. And we've had 4 million people who are now in that delinquency. The estimates are that we're going to have as many as 9 million by the end of this year and that many of those people could end up in default.

That can have immediate impacts on your ability to rent an apartment, to get a mortgage, to get a loan for a car. So this can be pretty catastrophic when this happens to you. And we've had 4 million people who are now in that delinquency. The estimates are that we're going to have as many as 9 million by the end of this year and that many of those people could end up in default.

That's what happens when you don't pay for at least nine months. And that sets off a whole nother series of very bad financial consequences. And if we do end up with 9 million people defaulting, that would be a record number.

That's what happens when you don't pay for at least nine months. And that sets off a whole nother series of very bad financial consequences. And if we do end up with 9 million people defaulting, that would be a record number.

Yes. And even beyond that, the repayment really hasn't gone as planned. Right now, of the roughly 38 million borrowers who have payments due and are supposed to be making payments. Yeah, it's a big number. So of those 38 million, right now only about a third are making payments.

Yes. And even beyond that, the repayment really hasn't gone as planned. Right now, of the roughly 38 million borrowers who have payments due and are supposed to be making payments. Yeah, it's a big number. So of those 38 million, right now only about a third are making payments.

Yeah. So the federal student loan payment system has always been kind of rocky. It has never really worked particularly smoothly for the last decade and a half. But what happened when the pandemic started back in March 2020 was the government immediately called an emergency timeout.

Yeah. So the federal student loan payment system has always been kind of rocky. It has never really worked particularly smoothly for the last decade and a half. But what happened when the pandemic started back in March 2020 was the government immediately called an emergency timeout.

In response to kind of the economic conditions at the time, they said, all right, we're going to take this burden away from people. You don't have to make these payments.

In response to kind of the economic conditions at the time, they said, all right, we're going to take this burden away from people. You don't have to make these payments.