According to CNBC, 73% of Americans who benefit from President Biden’s pending debt cancellation plan will use the extra cash to dine out and travel; borrowers throughout the U.S. could see their balances reduced by up to $20,000 if Joe’s plan goes through.
While recipients won’t see that aid in the form of a check, any remaining balances will be re-amortized, meaning monthly payments will be recalculated to reflect the new balance. For borrowers, that means monthly payments could drop by up to $300 per month.
That extra cash will be a much-needed lifeline to cover other bills or necessary expenses for many. But some borrowers plan to spend the money more freely.
In fact, 73% of anticipated recipients say they expect to spend their debt forgiveness on non-essential items, including travel, dining out and new tech, according to a recent survey from Intelligent.com.
“If you look at it as a ‘windfall’ and spend it on non-essentials, you’re not getting ahead,” Blumstein tells CNBC Make It. “If you look at it as paying my future self instead of the student loan debt, you can start to build wealth for yourself.”
“If we are only living for the short-term, or using all of the debt forgiveness on ‘fun’ non-essential spending, our long-term selves should eventually be harmed,” Blumstein adds.
More over at CNBC:
— CNBC (@CNBC) November 9, 2022