1 00:00:29,040 --> 00:00:34,400 Suze: August 3rd, 2025. Why do I always chuckle when I 2 00:00:34,400 --> 00:00:37,759 Suze: say the date? I don't know. But anyway, welcome everybody 3 00:00:37,759 --> 00:00:40,750 Suze: to the Women and Money podcast, as well as everybody 4 00:00:40,750 --> 00:00:42,830 Suze: smart enough to listen. 5 00:00:43,290 --> 00:00:47,278 Suze: Today is Suze School, and we are going to continue 6 00:00:47,279 --> 00:00:51,879 Suze: from last week's going over some of the provisions of 7 00:00:51,880 --> 00:00:55,509 Suze: the big beautiful bill that I think you should know about. 8 00:00:55,799 --> 00:01:01,750 Suze: But Miss Travis, as we speak, is in British Columbia 9 00:01:02,080 --> 00:01:07,199 Suze: catching fish, salmon with her sister and some friends and 10 00:01:07,199 --> 00:01:09,919 Suze: having the time of her life, but she will be 11 00:01:09,919 --> 00:01:11,040 Suze: back in time for 12 00:01:11,559 --> 00:01:17,018 Suze: Ask KT's asking show anyway, that's what she calls it, 13 00:01:17,040 --> 00:01:20,480 Suze: by the way. It's the KT asking show when she 14 00:01:20,480 --> 00:01:24,199 Suze: talks to me about it. Get out your Suze notebooks 15 00:01:24,199 --> 00:01:28,779 Suze: because I am going to talk about three different aspects 16 00:01:28,779 --> 00:01:32,559 Suze: of the new big beautiful bill, all right, just so 17 00:01:32,559 --> 00:01:38,120 Suze: you know, the first one is all about how there 18 00:01:38,120 --> 00:01:39,429 Suze: is a new law. 19 00:01:39,989 --> 00:01:44,019 Suze: That temporarily, and I want you to underline the word 20 00:01:44,019 --> 00:01:51,099 Suze: temporarily increases the state and local tax deduction. Now state 21 00:01:51,099 --> 00:01:52,819 Suze: and local tax deduction. 22 00:01:53,559 --> 00:02:00,940 Suze: It's abbreviated by the initials SALT state and local tax. 23 00:02:01,430 --> 00:02:04,830 Suze: All right, so when you hear me say salt, you'll 24 00:02:04,830 --> 00:02:08,109 Suze: know what I'm talking about. So those of you who 25 00:02:08,110 --> 00:02:11,580 Suze: live in states with an income tax, you may be 26 00:02:11,580 --> 00:02:15,059 Suze: in line for some really serious tax relief. 27 00:02:15,649 --> 00:02:19,649 Suze: Now the big new federal tax bill that became law 28 00:02:19,649 --> 00:02:24,850 Suze: in early July increases the federal deduction for salt. 29 00:02:25,750 --> 00:02:29,339 Suze: And that will help you on your taxes. 30 00:02:30,050 --> 00:02:34,440 Suze: Do you remember how ever since the 2017 tax bill 31 00:02:34,740 --> 00:02:38,809 Suze: when that was passed, there has been a $10,000 limit 32 00:02:38,809 --> 00:02:42,619 Suze: on salt that can be deducted from federal taxes. Do 33 00:02:42,619 --> 00:02:43,619 Suze: you remember that? 34 00:02:44,309 --> 00:02:50,889 Suze: The new law, however, increases the potential deduction to $40,000. 35 00:02:51,100 --> 00:02:58,049 Suze: Now this is per household, everybody, not per person, per household. 36 00:02:58,508 --> 00:03:04,429 Suze: The maximum $40,000 salt deduction is allowed for single filers 37 00:03:04,429 --> 00:03:10,269 Suze: as well as married file jointly with a modified gross 38 00:03:10,270 --> 00:03:18,470 Suze: income below $500,000. If you are married, filing separately. 39 00:03:19,300 --> 00:03:24,960 Suze: The max to take the $20,000 salt deduction is if 40 00:03:24,960 --> 00:03:32,149 Suze: you make under $250,000 of modified adjusted gross income. 41 00:03:33,419 --> 00:03:38,919 Suze: However, if your income is above those limits, then your 42 00:03:38,919 --> 00:03:44,429 Suze: maximum salt deduction is reduced by 30% of the amount. 43 00:03:44,740 --> 00:03:49,639 Suze: Your income exceeds the limit. Now what that means to 44 00:03:49,639 --> 00:04:00,000 Suze: you is this if you have over $633,333 of modified 45 00:04:00,000 --> 00:04:02,240 Suze: adjusted gross income and. 46 00:04:02,470 --> 00:04:05,529 Suze: You are single or married finally jointly. 47 00:04:06,710 --> 00:04:10,720 Suze: You've maxed out your salt deduction and it automatically goes 48 00:04:10,720 --> 00:04:16,010 Suze: all the way back down to $10,000 if you are 49 00:04:16,010 --> 00:04:24,440 Suze: married finally separately, once you make $316,667 or more. 50 00:04:25,320 --> 00:04:30,459 Suze: You've lost your $20,000 salt deduction and it too goes 51 00:04:30,459 --> 00:04:37,350 Suze: back to what? $5000. So let me give you an example. 52 00:04:37,619 --> 00:04:41,359 Suze: Let's say you're single or married finally jointly does not matter, 53 00:04:41,660 --> 00:04:47,109 Suze: and you make $550,000 of adjusted gross income. You are 54 00:04:47,109 --> 00:04:54,540 Suze: $50,000 over the $500,000 max for the full $40,000 salt deduction. 55 00:04:55,250 --> 00:05:02,880 Suze: You would times that $50,000 by 30% and that equals $15,000. 56 00:05:03,170 --> 00:05:07,010 Suze: You would minus $15,000 from the $40,000 and you would 57 00:05:07,010 --> 00:05:13,849 Suze: have a $25,000 salt deduction. Now let's just say you 58 00:05:13,850 --> 00:05:16,160 Suze: were married finally separately. 59 00:05:16,820 --> 00:05:20,220 Suze: Same thing and your income now is let's just say 60 00:05:20,220 --> 00:05:25,329 Suze: $300,000 or $50,000 above the maximum. 61 00:05:26,230 --> 00:05:34,220 Suze: 50,000 again times 30% is $15,000 so $15,000 from $20,000 62 00:05:34,250 --> 00:05:36,920 Suze: which is the max if you're married finally and separately, 63 00:05:37,480 --> 00:05:43,238 Suze: so now your deduction is $5000. Again I'm just gonna reiterate, 64 00:05:43,410 --> 00:05:45,359 Suze: no matter how much money you make. 65 00:05:46,200 --> 00:05:51,600 Suze: You always will have either a 10,000 salt deduction if 66 00:05:51,600 --> 00:05:56,200 Suze: in fact you're married finally, jointly or single, or 5000 67 00:05:56,200 --> 00:05:58,829 Suze: if you are married finally separately. 68 00:06:16,540 --> 00:06:19,859 Suze: Now, do you remember when I started this, I said 69 00:06:19,859 --> 00:06:23,179 Suze: pay attention to the word temporary. 70 00:06:23,899 --> 00:06:29,678 Suze: The $40,000 salt deduction is temporary and it can be 71 00:06:29,678 --> 00:06:39,640 Suze: claimed for 2025, 2026, 2027, 2028, and 2029. Under the 72 00:06:39,640 --> 00:06:43,558 Suze: new law, the salt deduction is going to revert to 73 00:06:43,559 --> 00:06:49,760 Suze: the $10,000 limit for all households in 2030. 74 00:06:50,320 --> 00:06:58,959 Suze: So from 2026 through 2029, the $40,000 salt deduction and 75 00:06:58,959 --> 00:07:05,989 Suze: the modified adjusted gross income limits will both increase 1% 76 00:07:05,988 --> 00:07:07,040 Suze: a year, so. 77 00:07:07,670 --> 00:07:12,929 Suze: If you have a hefty state income tax bill and 78 00:07:12,929 --> 00:07:16,649 Suze: property tax bill, let's just say you do, and your 79 00:07:16,649 --> 00:07:22,410 Suze: household income is near the deduction limits, it may pay 80 00:07:22,410 --> 00:07:25,769 Suze: to do some tax planning to see if you can 81 00:07:25,769 --> 00:07:30,010 Suze: push your income just below the limits so you can 82 00:07:30,010 --> 00:07:33,369 Suze: claim the highest possible salt deduction. 83 00:07:33,890 --> 00:07:36,170 Suze: So I want you all to sit down with the 84 00:07:36,170 --> 00:07:40,649 Suze: tax pro and to consider ways to reduce your income. 85 00:07:41,700 --> 00:07:46,929 Suze: Example, I know, I know modifying Roth conversions, you may 86 00:07:46,929 --> 00:07:51,140 Suze: not want to do roth conversions during those years, or 87 00:07:51,140 --> 00:07:56,339 Suze: reducing taxable withdrawals from your retirement accounts. That can all 88 00:07:56,339 --> 00:08:01,220 Suze: be a very, very smart move. All right, so just 89 00:08:01,220 --> 00:08:05,570 Suze: know there are rules you need to know. The next one, 90 00:08:05,619 --> 00:08:07,779 Suze: and this one upsets me a little bit, I have 91 00:08:07,779 --> 00:08:08,489 Suze: to tell you. 92 00:08:08,920 --> 00:08:15,070 Suze: Is the law that makes big changes to federal college loans. 93 00:08:15,130 --> 00:08:16,269 Suze: You ready, everybody? 94 00:08:17,329 --> 00:08:24,320 Suze: Any student or family planning to take out federal loans 95 00:08:24,529 --> 00:08:28,470 Suze: to pay for college, you need to be aware that 96 00:08:28,470 --> 00:08:32,409 Suze: there are huge changes to how much can be borrowed 97 00:08:32,409 --> 00:08:35,320 Suze: and how repayment will work. 98 00:08:36,380 --> 00:08:39,750 Suze: The big federal tax bill signed into law in July 99 00:08:40,280 --> 00:08:44,640 Suze: is going to limit parents how much you can borrow 100 00:08:44,640 --> 00:08:50,440 Suze: for a child's undergrad degree and how the repayment plans 101 00:08:50,440 --> 00:08:54,439 Suze: are going to change. So bottom line is that paying 102 00:08:54,440 --> 00:08:59,809 Suze: for college just got more complicated. So are you ready? 103 00:09:00,320 --> 00:09:02,840 Suze: Let's start with a list of the new rules, and 104 00:09:02,840 --> 00:09:05,159 Suze: then I'll share my advice on how to plan. 105 00:09:05,609 --> 00:09:14,280 Suze: For college, given these new rules, undergraduate borrowing beginning July 1st, 2026. 106 00:09:14,289 --> 00:09:20,650 Suze: Write this down, everybody. The parent plus loan program limits 107 00:09:20,650 --> 00:09:28,049 Suze: parental borrowing to $20,000 per year per student and a 108 00:09:28,049 --> 00:09:34,968 Suze: lifetime total per student of $65,000. 109 00:09:35,650 --> 00:09:38,770 Suze: Under the old rules you could borrow up to the 110 00:09:38,770 --> 00:09:42,960 Suze: full cost of their attendance for your kids' parents. Not 111 00:09:42,960 --> 00:09:46,289 Suze: any more. So what does that mean? That means if 112 00:09:46,289 --> 00:09:49,130 Suze: you're sending your kids and they want to go to 113 00:09:49,130 --> 00:09:52,319 Suze: these schools that are $65,000 a year. 114 00:09:53,039 --> 00:09:56,630 Suze: Good luck. How are you going to pay for them? 115 00:09:56,840 --> 00:10:01,280 Suze: You better start thinking about that right now. Parent plus 116 00:10:01,280 --> 00:10:08,989 Suze: loans taken out after July 1st, 2026. I hate this one, 117 00:10:09,200 --> 00:10:15,199 Suze: will no longer be eligible for an income-driven repayment plan. 118 00:10:15,979 --> 00:10:20,849 Suze: Parent plus loans will only be eligible everybody for the 119 00:10:20,849 --> 00:10:26,809 Suze: standard repayment plan which sets repayments between 10 and 25 120 00:10:26,809 --> 00:10:31,650 Suze: years depending on the balance. So you used to be 121 00:10:31,650 --> 00:10:34,690 Suze: able to pay off these loans based on your income. 122 00:10:35,460 --> 00:10:41,770 Suze: A standard repayment plan is a whole lot more so parents, 123 00:10:42,140 --> 00:10:46,130 Suze: you better think twice before you just take out a loan. 124 00:10:46,299 --> 00:10:48,130 Suze: You think you're going to be able to repay it. 125 00:10:48,299 --> 00:10:51,099 Suze: You better know the new rules, how much you can 126 00:10:51,099 --> 00:10:54,488 Suze: borrow and what it is actually going to cost you, 127 00:10:55,059 --> 00:10:58,179 Suze: and you best sit down with your children who want 128 00:10:58,179 --> 00:11:03,539 Suze: help from you and really go over. Can you afford 129 00:11:03,539 --> 00:11:04,770 Suze: it or not. 130 00:11:05,250 --> 00:11:13,108 Suze: Again, beginning July 1st, 2026, students, students, listen to me 131 00:11:13,409 --> 00:11:18,909 Suze: borrowing for undergrad will have their interest payments during school 132 00:11:19,520 --> 00:11:22,760 Suze: added to their loan balance. Do you remember when you 133 00:11:22,760 --> 00:11:27,228 Suze: used to be able to get subsidized loans? Subsidized meaning 134 00:11:27,229 --> 00:11:30,520 Suze: that while you were in school, interest didn't accrue to 135 00:11:30,520 --> 00:11:33,830 Suze: the money you borrowed, not any more. 136 00:11:34,400 --> 00:11:37,580 Suze: Now what you're going to see is that the new 137 00:11:37,580 --> 00:11:44,830 Suze: law makes all undergrad loans unsubsidized, so in plain English 138 00:11:44,830 --> 00:11:48,520 Suze: that means that even those students do not have to 139 00:11:48,520 --> 00:11:51,880 Suze: make payments on their loans while they are in school. 140 00:11:52,270 --> 00:11:56,780 Suze: The interest on the loan is charged, and if unpaid 141 00:11:56,780 --> 00:12:01,099 Suze: while in school, the interest charged is added to the 142 00:12:01,099 --> 00:12:06,059 Suze: loan balance. That will mean bigger payments once the student 143 00:12:06,059 --> 00:12:10,840 Suze: leaves school and repayment starts. So you might want to 144 00:12:10,840 --> 00:12:13,739 Suze: think about it, everybody, that if you're going to take 145 00:12:13,739 --> 00:12:15,260 Suze: out a student loan. 146 00:12:15,979 --> 00:12:19,469 Suze: The student is going to take it out. You might 147 00:12:19,469 --> 00:12:24,229 Suze: want to pay the interest on that loan yearly starting 148 00:12:24,229 --> 00:12:28,320 Suze: the very first year, because otherwise it's going to compound. 149 00:12:29,140 --> 00:12:36,608 Suze: The annual borrowing limits for federal undergraduate loans is unchanged. Oh, well, 150 00:12:36,650 --> 00:12:40,969 Suze: we have one thing unchanged. They start at 5500 for 151 00:12:40,969 --> 00:12:47,049 Suze: the first year, $6500 for year 2 $7500 for year 152 00:12:47,049 --> 00:12:51,520 Suze: three and beyond. Now there is a lifetime limit, listen 153 00:12:51,520 --> 00:12:57,669 Suze: to me, of $31,000 for students who are claimed as 154 00:12:57,669 --> 00:12:58,609 Suze: a dependent. 155 00:12:59,000 --> 00:13:04,880 Suze: On a parent's tax return, so limits for independent students 156 00:13:04,880 --> 00:13:08,080 Suze: are higher just so you know, but I want you 157 00:13:08,080 --> 00:13:11,919 Suze: to think about that. If the parent plus loans, you 158 00:13:11,919 --> 00:13:14,000 Suze: are limited to what you can borrow. 159 00:13:14,799 --> 00:13:18,789 Suze: You now have to pay it back under an unfavorable term. 160 00:13:19,590 --> 00:13:25,090 Suze: Interest on these student loans start accumulating right away. 161 00:13:25,880 --> 00:13:30,049 Suze: You have to really be careful about how much you 162 00:13:30,049 --> 00:13:34,770 Suze: are borrowing now repayment of loans taken out, everybody, after 163 00:13:34,770 --> 00:13:40,409 Suze: July 1st, 2026. They will be eligible for two basic 164 00:13:40,409 --> 00:13:45,319 Suze: repayment plans, a standard plan that will require the loan 165 00:13:45,320 --> 00:13:48,929 Suze: be paid off in 10 to 25 years, depending on 166 00:13:48,929 --> 00:13:51,799 Suze: the loan size. But however, 167 00:13:52,380 --> 00:13:57,000 Suze: There will be just one income driven plan, and it's 168 00:13:57,000 --> 00:14:02,030 Suze: going to be called the repayment assistant plan or RAP 169 00:14:02,340 --> 00:14:08,659 Suze: that will tie payments to income. Payments will range from 1% 170 00:14:08,659 --> 00:14:12,580 Suze: to 10% of your discretionary income. 171 00:14:13,000 --> 00:14:18,710 Suze: And there will be no zero payment options. So nowadays 172 00:14:18,710 --> 00:14:21,789 Suze: it's possible, depending on your income that you don't have 173 00:14:21,789 --> 00:14:24,309 Suze: to pay anything on it and you're not in default 174 00:14:24,309 --> 00:14:29,150 Suze: or anything. Under rap, a loan will be forgiven, however, 175 00:14:29,229 --> 00:14:33,909 Suze: after 30 years, which is 5 years longer than the 176 00:14:33,909 --> 00:14:36,549 Suze: old plans. So what does that mean? 177 00:14:37,049 --> 00:14:43,020 Suze: For borrowers on an IDR plan taken out before July 26th, 178 00:14:43,390 --> 00:14:46,710 Suze: you will need to switch to one of these two 179 00:14:46,710 --> 00:14:52,510 Suze: new plans after July 28th. So don't think if you 180 00:14:52,510 --> 00:14:55,549 Suze: took out a loan before this goes into effect that 181 00:14:55,549 --> 00:15:02,070 Suze: you missed it. No, you didn't. So beginning July 1st, 2027, 182 00:15:02,229 --> 00:15:03,900 Suze: not 2026. 183 00:15:04,780 --> 00:15:11,500 Suze: Deferment of a federal loan due to economic hardship is ended. 184 00:15:12,280 --> 00:15:13,580 Suze: Did you just hear me? 185 00:15:14,500 --> 00:15:17,119 Suze: Is this a bill that you love that passed? 186 00:15:18,169 --> 00:15:22,440 Suze: Are you all excited about it? Are you starting to 187 00:15:22,440 --> 00:15:28,200 Suze: understand how this bill works against you if you are 188 00:15:28,200 --> 00:15:30,799 Suze: out there and you need to borrow money? 189 00:15:31,520 --> 00:15:36,359 Suze: To send your kids to school, are you understanding this? 190 00:15:36,989 --> 00:15:40,419 Suze: So again, I'm going to say this one more time. 191 00:15:41,099 --> 00:15:49,030 Suze: Beginning July 1st, 2027, not 2026, deferment of a federal 192 00:15:49,030 --> 00:15:54,669 Suze: loan due to economic hardship is ended. There will be 193 00:15:54,669 --> 00:15:57,190 Suze: no way to completely defer. 194 00:15:57,909 --> 00:16:02,510 Suze: Principal and interest payments due to hardship. No, you can 195 00:16:02,510 --> 00:16:06,830 Suze: still defer payments while in school, but this new rule 196 00:16:06,830 --> 00:16:10,830 Suze: applies to once you have left school, you are in 197 00:16:10,830 --> 00:16:14,109 Suze: the repayment phase, and there is nothing you can do 198 00:16:14,109 --> 00:16:21,109 Suze: to stop that repayment phase. Again beginning July 1st, 2027, 199 00:16:21,440 --> 00:16:25,440 Suze: you will still be able to apply for repayment forbearance. 200 00:16:26,299 --> 00:16:28,739 Suze: Which means you can't afford to pay it back, but 201 00:16:28,739 --> 00:16:33,799 Suze: if granted, it will only be allowed for 9 months 202 00:16:33,799 --> 00:16:39,619 Suze: within any 2-year period. Remember, with forbearance you do not 203 00:16:39,619 --> 00:16:44,219 Suze: owe any payments, but the interest on the loan continues 204 00:16:44,219 --> 00:16:48,340 Suze: to accrue and is added to your loan balance. Why 205 00:16:48,340 --> 00:16:50,210 Suze: do they want to be able to allow you to 206 00:16:50,210 --> 00:16:50,900 Suze: do that? 207 00:16:51,320 --> 00:16:56,039 Suze: Because student loans still in most cases are not dischargeable 208 00:16:56,039 --> 00:17:00,400 Suze: in bankruptcy, they can come after you. They can garnish 209 00:17:00,400 --> 00:17:03,359 Suze: your wages. They can even go after your Social Security 210 00:17:03,359 --> 00:17:07,560 Suze: check later on in life, and it's compounding and compounding, 211 00:17:07,920 --> 00:17:13,319 Suze: so you better be careful. Let's talk about graduate borrowing 212 00:17:13,319 --> 00:17:19,000 Suze: because this was for undergraduate beginning July 1st, 2026, so 213 00:17:19,000 --> 00:17:20,390 Suze: about one year from now. 214 00:17:20,920 --> 00:17:26,979 Suze: The graduate plus program ready, everybody is abolished. 215 00:17:28,329 --> 00:17:33,119 Suze: Under this program, graduate students have been able to borrow, 216 00:17:33,439 --> 00:17:38,819 Suze: you all know this, up to the full cost of attendance. 217 00:17:39,209 --> 00:17:43,780 Suze: There are now limits on how much a graduate student 218 00:17:43,780 --> 00:17:44,719 Suze: can borrow. 219 00:17:45,500 --> 00:17:52,709 Suze: Beginning July 1, 2026, the only remaining program for federal 220 00:17:52,709 --> 00:18:00,550 Suze: graduate school borrowing will be unsubsidized loans for graduate school. 221 00:18:01,140 --> 00:18:07,540 Suze: The annual limit for master's programs and PhD programs will 222 00:18:07,540 --> 00:18:10,780 Suze: be $20,500 a year. 223 00:18:11,300 --> 00:18:17,500 Suze: And there will be a lifetime limit of $100,000. So 224 00:18:17,500 --> 00:18:23,650 Suze: for professional degrees like doctors, lawyers, federal borrowing will be 225 00:18:23,650 --> 00:18:30,000 Suze: limited to $50,000 a year and a $200,000 total. 226 00:18:31,359 --> 00:18:34,410 Suze: Where are you all going to get the money to 227 00:18:34,410 --> 00:18:37,760 Suze: attend college? Doesn't it kind of feel like we have 228 00:18:37,760 --> 00:18:41,439 Suze: a thing going on about higher education with everything that's 229 00:18:41,439 --> 00:18:45,479 Suze: going on with many of the universities? I don't know 230 00:18:45,479 --> 00:18:49,170 Suze: what you think, but I sure do. So the new 231 00:18:49,170 --> 00:18:54,430 Suze: grad school lifetime limits are in addition to any federal 232 00:18:54,430 --> 00:18:59,890 Suze: undergraduate borrowing. Now my advice for undergrad debt. 233 00:19:00,420 --> 00:19:04,209 Suze: I have long advised you, have I not, parents, you 234 00:19:04,209 --> 00:19:08,639 Suze: are not to put their retirement at risk by borrowing 235 00:19:08,839 --> 00:19:14,089 Suze: or overborrowing for their children's college costs. You know how 236 00:19:14,089 --> 00:19:18,250 Suze: I feel about that, but I also know that has 237 00:19:18,250 --> 00:19:20,739 Suze: been a challenge for many families. 238 00:19:21,760 --> 00:19:25,030 Suze: These new limits provide some guard rails that can help 239 00:19:25,030 --> 00:19:30,000 Suze: nudge more of you to carefully calibrate college borrowing for 240 00:19:30,000 --> 00:19:35,119 Suze: your kids, and the same rule applies. Children should always 241 00:19:35,119 --> 00:19:41,239 Suze: borrow first before you, parents. The interest rate that they 242 00:19:41,239 --> 00:19:44,800 Suze: pay on federal loans is lower than the cost of 243 00:19:44,800 --> 00:19:49,260 Suze: parent plus loans, so they need to do it first 244 00:19:49,260 --> 00:19:51,280 Suze: before you. Got that. 245 00:19:51,920 --> 00:19:52,949 Suze: More importantly, 246 00:19:54,170 --> 00:19:56,650 Suze: Do I sound sad to you cause this all makes 247 00:19:56,650 --> 00:19:59,920 Suze: me so sad I can't even stand it. The new 248 00:19:59,920 --> 00:20:04,839 Suze: borrowing limits should really spark your family to double down 249 00:20:05,170 --> 00:20:10,810 Suze: on looking for the best affordable school. So the dream 250 00:20:10,810 --> 00:20:15,839 Suze: school for your children and for you is the one. 251 00:20:16,430 --> 00:20:20,140 Suze: That is so eager for your child to attend that 252 00:20:20,140 --> 00:20:24,420 Suze: it will offer a great merit ad package that reduces 253 00:20:24,420 --> 00:20:28,629 Suze: or even eliminates everybody the need for your kid to borrow, 254 00:20:28,699 --> 00:20:30,020 Suze: let alone you. 255 00:20:30,790 --> 00:20:33,979 Suze: Do you hear me? So you need to start talking 256 00:20:33,979 --> 00:20:38,229 Suze: to your kids about this in grammar school in early 257 00:20:38,229 --> 00:20:42,150 Suze: years of high school to say, listen, if you want 258 00:20:42,150 --> 00:20:45,589 Suze: to go to college, I need you to really have 259 00:20:45,589 --> 00:20:49,869 Suze: all the colleges want you to attend. So you have 260 00:20:49,869 --> 00:20:52,750 Suze: got to get straight A's. Maybe you should excel in 261 00:20:52,750 --> 00:20:57,629 Suze: a sport, but you have got to do everything and 262 00:20:57,630 --> 00:20:59,270 Suze: anything you can do. 263 00:20:59,619 --> 00:21:02,390 Suze: As for the change in repayment plans, well. 264 00:21:03,140 --> 00:21:05,530 Suze: I have to tell you, the big takeaway is that 265 00:21:05,530 --> 00:21:09,920 Suze: students and parents really need to think hard about what 266 00:21:09,920 --> 00:21:14,729 Suze: they will owe after school is over. Please remember that 267 00:21:14,729 --> 00:21:20,239 Suze: the repayment plans now are less generous, forbearance is limited. 268 00:21:20,609 --> 00:21:23,969 Suze: You need to be prepared for making on-time payments once 269 00:21:23,969 --> 00:21:25,640 Suze: the student leaves school. 270 00:21:25,920 --> 00:21:29,099 Suze: And the worst thing you can do is borrow now 271 00:21:29,099 --> 00:21:36,188 Suze: without understanding your future repayment commitment. Do you understand me? 272 00:21:37,150 --> 00:21:42,339 Suze: Notice I said that the repayment happens as soon as 273 00:21:42,339 --> 00:21:48,550 Suze: the student leaves schools. Loans must be repaid regardless of 274 00:21:48,550 --> 00:21:52,069 Suze: what the student graduates or not. 275 00:21:53,339 --> 00:21:55,369 Suze: So if you have a kid that goes to school 276 00:21:55,369 --> 00:21:59,030 Suze: for 2 years, doesn't graduate, and now you have all 277 00:21:59,030 --> 00:22:02,680 Suze: of these loans, you have to start making payments right away. 278 00:22:02,930 --> 00:22:06,930 Suze: So that's just another reason to have a serious family 279 00:22:06,930 --> 00:22:12,290 Suze: talk long before freshman year about attending college and paying 280 00:22:12,290 --> 00:22:16,119 Suze: for college. The worst move is to force a child 281 00:22:16,329 --> 00:22:18,920 Suze: into an education they aren't eager for. 282 00:22:19,329 --> 00:22:22,879 Suze: And that they and you may still end up paying 283 00:22:22,880 --> 00:22:27,839 Suze: for even if they don't complete a degree. I still 284 00:22:27,839 --> 00:22:32,079 Suze: don't see anything wrong with community college just same. My 285 00:22:32,079 --> 00:22:36,640 Suze: advice for grad school is this. All right. The majority 286 00:22:36,640 --> 00:22:42,790 Suze: of recent borrowers for a master's degree borrowed less than $100,000. 287 00:22:42,880 --> 00:22:46,198 Suze: All right, so I'm not too concerned about this new limit. 288 00:22:46,689 --> 00:22:51,400 Suze: But you should be able to fulfill any borrowing needs 289 00:22:51,400 --> 00:22:57,390 Suze: by sticking with federal loans. Professional degrees are another matter. 290 00:22:57,640 --> 00:23:01,449 Suze: The cost of obtaining a medical degree or a law 291 00:23:01,449 --> 00:23:08,280 Suze: degree absolutely exceeds in most cases, $200,000. So under the 292 00:23:08,280 --> 00:23:11,930 Suze: new rules, anyone who needs to borrow. 293 00:23:12,540 --> 00:23:16,160 Suze: More for their graduate degree will need to look for 294 00:23:16,160 --> 00:23:20,939 Suze: a private student loan, and that is a big stand 295 00:23:20,939 --> 00:23:24,569 Suze: in your truth moment. Do you hear me? You need 296 00:23:24,569 --> 00:23:28,849 Suze: to slow down and carefully, and I mean very carefully, 297 00:23:29,579 --> 00:23:35,089 Suze: understand the risks and retirements of a private student loan. 298 00:23:35,260 --> 00:23:39,739 Suze: Got that? For starters, private student loans work a bit 299 00:23:39,739 --> 00:23:40,859 Suze: like a car loan. 300 00:23:41,170 --> 00:23:43,989 Suze: You know what I think about car loans, but anyway, 301 00:23:44,319 --> 00:23:49,270 Suze: you need to qualify, and that means a credit score check. 302 00:23:49,479 --> 00:23:53,000 Suze: So you better make sure that your FICO score, your 303 00:23:53,000 --> 00:23:56,400 Suze: credit score is as high as it possibly can be, 304 00:23:56,439 --> 00:24:00,000 Suze: because even if you are approved, the interest rate you 305 00:24:00,000 --> 00:24:00,920 Suze: are offered. 306 00:24:01,979 --> 00:24:05,500 Suze: On your private loan can be fixed or a variable 307 00:24:05,500 --> 00:24:10,099 Suze: rate which will be set by your credit profile. So 308 00:24:10,099 --> 00:24:13,890 Suze: another option is for someone else, typically a parent with income, 309 00:24:14,180 --> 00:24:15,459 Suze: to co-sign. 310 00:24:16,699 --> 00:24:18,560 Suze: Are you kidding me? 311 00:24:19,530 --> 00:24:23,119 Suze: For the parents right now listening to me, please do 312 00:24:23,119 --> 00:24:27,569 Suze: not tell me and more importantly yourself, that cosigning is 313 00:24:27,569 --> 00:24:32,189 Suze: no big deal given it is for such a worthy endeavor. 314 00:24:32,569 --> 00:24:35,609 Suze: What if your child doesn't finish the degree or if 315 00:24:35,609 --> 00:24:40,170 Suze: the child's income is not sufficient to cover the hefty repayments? You, 316 00:24:40,290 --> 00:24:43,810 Suze: my dear parents, will be on the hook to make 317 00:24:43,810 --> 00:24:49,000 Suze: payments if that in any way interferes with your retirement security. 318 00:24:50,060 --> 00:24:55,079 Suze: You get a hard denied from me. I'm serious. It's 319 00:24:55,079 --> 00:24:59,079 Suze: also important to understand that private loans do not offer 320 00:24:59,079 --> 00:25:03,879 Suze: the same repayment and protection plans as federal loans. That 321 00:25:03,880 --> 00:25:06,400 Suze: doesn't mean that your child can become a doctor or 322 00:25:06,400 --> 00:25:10,160 Suze: a lawyer. It does mean that they should look for 323 00:25:10,160 --> 00:25:14,560 Suze: programs that will subsidize the cost. I'm going to repeat this. 324 00:25:15,099 --> 00:25:18,810 Suze: The best school, whether we are talking about someone pursuing 325 00:25:18,810 --> 00:25:24,569 Suze: an undergrad, master's, or professional degree, is the program that 326 00:25:24,569 --> 00:25:30,489 Suze: offers the best financial aid. Ideally, you would never need 327 00:25:30,489 --> 00:25:34,729 Suze: to take out private loans, and in a minimum, if 328 00:25:34,729 --> 00:25:38,810 Suze: you need private loans, it should be for the smallest 329 00:25:38,810 --> 00:25:43,719 Suze: amount possible. I'm sure there are millions of you out there. 330 00:25:44,209 --> 00:25:46,880 Suze: That are saying, but Suze, what about me? I already 331 00:25:46,880 --> 00:25:50,949 Suze: have student loans. How much of this applies to me? 332 00:25:51,119 --> 00:25:52,880 Suze: The first thing I want to say to all of 333 00:25:52,880 --> 00:25:59,000 Suze: you is stop going on all these boards and freaking 334 00:25:59,000 --> 00:26:02,479 Suze: out because you're reading about oh my God, my payments 335 00:26:02,479 --> 00:26:05,349 Suze: are immediately gonna go up 600%. I don't know how 336 00:26:05,349 --> 00:26:07,199 Suze: to do it. It's crazy. 337 00:26:08,010 --> 00:26:11,839 Suze: So I've always said the only way to conquer fear 338 00:26:11,839 --> 00:26:13,089 Suze: is through action. 339 00:26:14,010 --> 00:26:17,410 Suze: When you take action, however, you have to have the 340 00:26:17,410 --> 00:26:22,488 Suze: correct information so you know how to act. The first 341 00:26:22,489 --> 00:26:27,010 Suze: thing you better all get is that anybody who has 342 00:26:27,010 --> 00:26:33,410 Suze: an existing subsidized or non-subsidized staff for loan that's gonna 343 00:26:33,410 --> 00:26:39,380 Suze: be dispersed before July 1st, 2026, you need to know 344 00:26:39,380 --> 00:26:41,719 Suze: nothing has changed for you. 345 00:26:42,280 --> 00:26:46,879 Suze: All the rules and repayment terms that you're under, you're 346 00:26:46,880 --> 00:26:53,959 Suze: still under them, but only until July 1st, 2028. So 347 00:26:53,959 --> 00:26:57,280 Suze: you have a lot of time to figure this out 348 00:26:57,280 --> 00:27:00,199 Suze: or to put more money towards your student loan, but 349 00:27:00,199 --> 00:27:05,719 Suze: you have time. So what happens on July 1st, 2028. 350 00:27:06,199 --> 00:27:10,010 Suze: Well, that's when you gotta switch to the new available options, 351 00:27:10,359 --> 00:27:13,119 Suze: and if you don't switch yourself, oh, you will be 352 00:27:13,119 --> 00:27:16,680 Suze: auto-enrolled in the standard repayment plan. 353 00:27:17,689 --> 00:27:22,949 Suze: Remember those are fixed monthly payments or the new repayment 354 00:27:22,949 --> 00:27:28,649 Suze: assistant plan known as RAP which is income driven. Those 355 00:27:28,650 --> 00:27:31,959 Suze: will be your only two choices now. 356 00:27:32,989 --> 00:27:38,639 Suze: Existing parent plus borrowers, you can still consolidate and access 357 00:27:38,640 --> 00:27:44,709 Suze: some income driven repayment plans or the IDR options, but 358 00:27:44,709 --> 00:27:51,500 Suze: after July 1st, 2026, new parent plus loans must be 359 00:27:51,500 --> 00:27:56,389 Suze: repaid under this standard repayment plan and will not be 360 00:27:56,390 --> 00:28:01,699 Suze: eligible for RAM or IBR. So to maintain flexibility, everybody. 361 00:28:02,530 --> 00:28:06,530 Suze: If you have a current parent plus loan, you should 362 00:28:06,530 --> 00:28:12,889 Suze: think about consolidating and enrolling in an IDR plan before 363 00:28:12,890 --> 00:28:19,729 Suze: July 1st, 2026. Got that? After that cutoff date, you 364 00:28:19,729 --> 00:28:24,489 Suze: lose the ability to use any IDR option for any 365 00:28:24,489 --> 00:28:26,300 Suze: new parent plus loan. 366 00:28:27,229 --> 00:28:31,680 Suze: Now for those of you under public student loan forgiveness, oh, 367 00:28:31,750 --> 00:28:37,229 Suze: it still exists, but with some changes, hopefully all of 368 00:28:37,229 --> 00:28:41,099 Suze: you are up to date. I've tried educating you on this, 369 00:28:41,390 --> 00:28:45,750 Suze: that the save program that maybe you've been using to 370 00:28:45,750 --> 00:28:50,869 Suze: make repayments, it doesn't exist any more, and all of 371 00:28:50,869 --> 00:28:55,619 Suze: you had to change by August 1st, a few days ago. 372 00:28:56,359 --> 00:29:00,180 Suze: You had to change it to something else because if 373 00:29:00,180 --> 00:29:05,020 Suze: you're still under save those payments are not going to 374 00:29:05,020 --> 00:29:08,650 Suze: count towards your repayments, all right? 375 00:29:09,459 --> 00:29:12,109 Suze: So what must you do? What is the something else 376 00:29:12,109 --> 00:29:17,160 Suze: you must do? You should use now an IBR method 377 00:29:17,469 --> 00:29:21,660 Suze: and then consider switching to rap when it launches just 378 00:29:21,750 --> 00:29:27,989 Suze: that simple. But remember, by July 1st, 2028, 0, you 379 00:29:27,989 --> 00:29:31,790 Suze: will be enrolled in rap or a qualifying plan, and 380 00:29:31,790 --> 00:29:34,459 Suze: if you don't do it yourself, you're going to be 381 00:29:34,750 --> 00:29:36,069 Suze: auto enrolled. 382 00:29:36,430 --> 00:29:39,390 Suze: The one thing I want you to watch carefully if 383 00:29:39,390 --> 00:29:46,140 Suze: you're in the PSLF plans is that while in 2025. 384 00:29:47,020 --> 00:29:49,949 Suze: You will have forgiveness. Let's say you've paid it off 385 00:29:49,949 --> 00:29:53,069 Suze: and you're forgiven you're not gonna pay taxes on that 386 00:29:53,599 --> 00:29:59,469 Suze: starting in 2026 unless something changes, that forgiveness most likely 387 00:29:59,469 --> 00:30:03,560 Suze: is going to be considered taxable. So those are the 388 00:30:03,560 --> 00:30:06,719 Suze: main things you need to know if you have a 389 00:30:06,719 --> 00:30:09,130 Suze: current student loan. 390 00:30:10,420 --> 00:30:14,640 Suze: Now I had one more law that I wanted to 391 00:30:14,640 --> 00:30:17,319 Suze: talk to you about which is about the law that 392 00:30:17,319 --> 00:30:21,510 Suze: kills one's car buying tax credit and creates a new one, 393 00:30:21,760 --> 00:30:23,920 Suze: but I have to tell you the one about student 394 00:30:23,920 --> 00:30:26,839 Suze: loans dined me in. That's about all I can take 395 00:30:26,839 --> 00:30:28,479 Suze: about this bill right now. 396 00:30:28,800 --> 00:30:32,560 Suze: So that concludes this podcast, but listen to me on 397 00:30:32,560 --> 00:30:37,310 Suze: August 10th. I'm gonna continue with the other things about 398 00:30:37,310 --> 00:30:40,729 Suze: the BBB that you should know, and there's some really 399 00:30:40,739 --> 00:30:44,119 Suze: great things, by the way, especially if you work for 400 00:30:44,119 --> 00:30:48,599 Suze: tips or you do overtime or you have a car 401 00:30:48,599 --> 00:30:52,670 Suze: loan or whatever it may be, don't miss it because again, 402 00:30:52,719 --> 00:30:56,150 Suze: it's everything you need to know. 403 00:30:56,540 --> 00:31:00,150 Suze: So with that we'll all look forward to Miss Travis 404 00:31:00,150 --> 00:31:02,430 Suze: joining us again. I've missed her so much. I can't 405 00:31:02,430 --> 00:31:06,790 Suze: even stand it. But anyway, there's only one thing that 406 00:31:06,790 --> 00:31:09,780 Suze: I want you to remember when it comes to your money. 407 00:31:10,290 --> 00:31:14,099 Suze: You have got to understand how this big beautiful bill 408 00:31:14,390 --> 00:31:15,859 Suze: really affects you. 409 00:31:16,489 --> 00:31:18,829 Suze: When does it allow you to make more out of 410 00:31:18,829 --> 00:31:21,729 Suze: the money that you make, and when does it allow 411 00:31:21,729 --> 00:31:24,979 Suze: you to make less out of the money that you 412 00:31:24,979 --> 00:31:28,849 Suze: already make? You better understand it, and I hope that 413 00:31:28,849 --> 00:31:33,989 Suze: this podcast today did a whole lot, especially on student loans, 414 00:31:34,010 --> 00:31:38,589 Suze: to explaining that to you. So until Thursday, there's only 415 00:31:38,589 --> 00:31:40,489 Suze: one thing that I want you to remember when it 416 00:31:40,489 --> 00:31:42,449 Suze: comes to your money, and it is this. 417 00:31:43,369 --> 00:31:47,780 Suze: You have to know everything so that you really can 418 00:31:47,780 --> 00:31:52,339 Suze: make your money make more money. All right, everybody stay safe, 419 00:31:52,579 --> 00:31:56,209 Suze: stay healthy, and once again know how much we love you. 420 00:31:56,339 --> 00:31:57,010 Suze: Bye bye.