Speaker 1: There's seventy eleven different repayment plans. So the opportunity for
Speaker 1: bad actors to call you on your phone and be like, oh,
Speaker 1: have you applied for the federal student Loan Forgiveness program?
Speaker 1: Those types of scams can proliferate. Then no one's making
Speaker 1: sure that loan servicers are giving borrowers the right information
Speaker 1: so they're not getting scammed.
Speaker 2: Yeah, it is. It's like when you don't have a
Speaker 2: trusted source to go to, and even the people working
Speaker 2: they're confused, is what's going on? Like what are you
Speaker 2: supposed to do?
Speaker 3: You got people who go to a school to be
Speaker 3: a teacher and they got one hundred and twenty thousand
Speaker 3: dollars a student loan deb because they, you know, they
Speaker 3: were just told college s Cottage College, college, you know,
Speaker 3: go to a good college, go and get your graduate degree.
Speaker 3: There was never a framework for them to understand like realistically,
Speaker 3: there's a certain amount of money that at that point,
Speaker 3: it's just it's a hard no because financially you're putting
Speaker 3: yourself in the red.
Speaker 1: Hey, ba fam, welcome to the Friday BAQA where we
Speaker 1: take your questions and try to give you some answer. Now,
Speaker 1: just keep in mind because I am not your financial coach,
Speaker 1: your dedicated advisor. I am just your financial bestie on
Speaker 1: these here internet streets. Don't sue me. That would be nice.
Speaker 1: Take everything in this episode with a grain of salt.
Speaker 1: I want y'all to start thinking about some of the
Speaker 1: ideas that I share on the show. But at the
Speaker 1: end of the day, you really want to seek out
Speaker 1: professionals who have a holistic picture of your finances before
Speaker 1: you make some big financial choices. I'm very excited about
Speaker 1: today's episode because it only was a few weeks ago
Speaker 1: that I got together with my girls. Yeah, Nellie Espinal,
Speaker 1: frequent Brown Table guest. She is the author of the
Speaker 1: book Mind Your Money, insightful stories and strategies to help
Speaker 1: you reach your hashtag money goals. And then Nasiman McElroy,
Speaker 1: who is a registered labor and delivery nurse by day
Speaker 1: and financial pro and Mama Bear by day and night
Speaker 1: by all the time. That's because we never take that
Speaker 1: hat off from do we Mama's So anyway, I had
Speaker 1: them both on. We talked a lot about the student
Speaker 1: loan situation right now, because repayments for student loans came
Speaker 1: back after many years of being paused at the beginning
Speaker 1: of May May fifth, to be precise, and at this
Speaker 1: point it's been a couple of weeks, but some stuff
Speaker 1: has changed. So this week, instead of taking a specific
Speaker 1: listener question, I got on the show me and jan
Speaker 1: Nelly and I brought back Chris Browning of Popcorn Finance.
Speaker 1: We all three sort of talked about what has changed,
Speaker 1: what borrowers need to know moving forward, and where some
Speaker 1: of these loan forgiveness programs stand today. So if you're
Speaker 1: someone who has been hit by student loan repayments after
Speaker 1: all this time of not having to worry about it,
Speaker 1: this episode is for you. And also, if y'all have
Speaker 1: specific student loan questions or any personal finance questions, really
Speaker 1: hit us up. You can email me Brand Ambition Podcast
Speaker 1: at gmail dot com or you can slide into my
Speaker 1: dms at Brand Ambition Podcast on Instagram and we will
Speaker 1: definitely add you questions to the list for future BAQA episodes. So,
Speaker 1: without further ado, here is our show all about student loans.
Speaker 1: Have we talked about student loans recently? Y' all like
Speaker 1: the student loans repayment restarting.
Speaker 3: We talked about a little bit Mandy last time you
Speaker 3: and I were on with Nasimo. But really, oh.
Speaker 1: Yeah, that's right. We talked about like getting a student
Speaker 1: loan coach for example. Yeah, that was one of the
Speaker 1: things I was talking to CNBC about and there I
Speaker 1: didn't think of it this way, but a lot I
Speaker 1: think the like the shock of having a student loan
Speaker 1: payment at all for people like coming out of the blue,
Speaker 1: and like how they're not used to doing that, and
Speaker 1: like where are they going to find the extra money
Speaker 1: and their budget with is an even more difficult challenge
Speaker 1: than what I thought was the biggest challenge, which is
Speaker 1: there's seventy eleven different repayment plans. Some of them are
Speaker 1: being ft with by the Trump administration, some of them
Speaker 1: still exist, and like how the hell does one understand
Speaker 1: if they're even in rows a plan?
Speaker 3: Yeah, especially given that the Detro student loan portal is
Speaker 3: a mess right now.
Speaker 1: It's rough.
Speaker 3: You might even just have to get on the phone,
Speaker 3: which I know people hate to do, but you might
Speaker 3: have to.
Speaker 1: But then they're laying people off. I've read that like
Speaker 1: because that was my advice too, which is like get
Speaker 1: on the I remembered from like a decade ago, when
Speaker 1: we were all talking about the student loan bubble and
Speaker 1: the trillion dollar student loan debt crisis and all of that,
Speaker 1: and at the time, experts were talking about how you
Speaker 1: would call your loan servicer and you'd get someone on
Speaker 1: the phone and they would tell you something different than
Speaker 1: the next person. So, like I've talked about calling a
Speaker 1: couple times and then double check, cross checking that with
Speaker 1: what you see on studentad dot gov. But exacerbating that
Speaker 1: is the fact that they are the Department of Education
Speaker 1: is being like systematically dismantled, and then you have the
Speaker 1: consumer watchdogs like the CFPB, which is being gutted. Yeah,
Speaker 1: has it been gutted. It's like a shell of itself,
Speaker 1: if anything at all. So the opportunity for bad actors
Speaker 1: to call you on your phone and be like, oh,
Speaker 1: have you applied for the federal student loan forgiveness program
Speaker 1: that's offered by the US government, Like give me your
Speaker 1: social and five thousand dollars, and it's you know, those
Speaker 1: types of scams can proliferate, and like the no one's
Speaker 1: making sure that loan servicers are giving borrowers the right
Speaker 1: information so they're not getting scammed.
Speaker 2: Yeah, it is. It's like when you don't have a
Speaker 2: trusted source to go to, and even the people working,
Speaker 2: they're confused, So what's going on? Like, what are you
Speaker 2: supposed to do? My brother he has huge student loan
Speaker 2: debt from graduate school and he's like, you know, one minute,
Speaker 2: he's like, I was in the safe program and then
Speaker 2: now it's going away, so now the payments are paused.
Speaker 2: And then he way he was working, he was in
Speaker 2: the process, you know, working towards getting like student with
Speaker 2: a public student loan forgiveness, which you have to work
Speaker 2: there for ten years. Now it's like, is that going away?
Speaker 2: But it's in their contract for where they work, so
Speaker 2: can they take it away? It's like he's just constantly confused.
Speaker 2: He didn't know what's happening, and it's like it's and
Speaker 2: he's just one of you know, millions of people dealing
Speaker 2: with is where you It's so hard to stay on
Speaker 2: top of what's happening when they just keep changing thanks
Speaker 2: constantly without any real reasoning behind it.
Speaker 1: Oh, good old Mark Kantrowitz. Don't you have you guys?
Speaker 1: Do you know that name? Prolific? He must be one
Speaker 1: hundred years old. Yes, of course, He's like, but because
Speaker 1: he's been doing student loan compred right, sorry, like a
Speaker 1: little inside baseball. But yeah, okay, ba fan, We're going
Speaker 1: to take a quick break alol wusaw and be back
Speaker 1: with more of the baqa All right, ba fan, we're back.
Speaker 3: He's the one that made up the one X rule.
Speaker 3: I think if I'm not mistaken, which is when you
Speaker 3: graduate high school and you start to look at student
Speaker 3: loans and you're starting to take him on, you don't
Speaker 3: know like how much is healthy or too much or
Speaker 3: unhealthy amount. And so what he said was to look
Speaker 3: at what your potential industry of work is going to be,
Speaker 3: and how much the entry level salary for that career
Speaker 3: path would be.
Speaker 1: So let's say, for.
Speaker 3: Example, for me, I'm looking at teaching. I became a
Speaker 3: third grade teacher after a graduated college. So as a
Speaker 3: third grade teacher in New York City, I was making
Speaker 3: about forty thousand dollars a year. So that one year
Speaker 3: of my salary as an entry level teacher, forty thousand
Speaker 3: dollars should be the maximum total for all four years
Speaker 3: of college of student loan debt that I am willing
Speaker 3: to take on if I want to have a healthy
Speaker 3: debt to income ratio. And I had never heard anybody
Speaker 3: talk about that. Like, you got people who go to
Speaker 3: a school to be a teacher and they got one
Speaker 3: hundred and twenty thousand dollars a student loan that because
Speaker 3: they you know, they were just told college, Scottish Statish college,
Speaker 3: you know, go to a good college, go and get
Speaker 3: your graduate degree. And they were never there was never
Speaker 3: a framework for them to understand, like, realistically, there's a
Speaker 3: certain amount of money that at that point, it's just
Speaker 3: it's a hard no, because financially, you're putting yourself in
Speaker 3: the red for so long, right, And I think he
Speaker 3: was the one that really coined that, Like the one
Speaker 3: X rule is something that needs to be taught in
Speaker 3: high school students who are considering college so they can
Speaker 3: actually crush the numbers and maybe go dang, it is
Speaker 3: their parents and their parents and the college.
Speaker 1: Counselors the one who may even help us. That's right. Oh,
Speaker 1: this is just y'all's reminder to check out your And
Speaker 1: you know, I just remembered I was interviewed on NPR
Speaker 1: about this.
Speaker 3: Yes, girl, you better go ahead and get on NPR.
Speaker 1: It was very stressful. I'm not gonna lie, I'm a
Speaker 1: pretty cool cucumber when it comes. But I had to
Speaker 1: talk about student loans with NPR and I was.
Speaker 2: Schweting ages so much to know. That's why I.
Speaker 1: Had to be honest. And maybe I'm too honest in interviews,
Speaker 1: but I was like, listen, if you're confused, so am I.
Speaker 1: And I'm willing to admit that because there's a lot
Speaker 1: of stuff going on. The best thing you can do
Speaker 1: is just get on student Day dot gov and keep
Speaker 1: listening to the news and yeah, this time is calling
Speaker 1: a it's calling for a lot from us. We got
Speaker 1: to be able to step it up.
Speaker 3: And at the same time, like, I'm giving so much
Speaker 3: grace to everybody with student owns because I understand in
Speaker 3: tent frustration. And at the same time, I will say,
Speaker 3: be real with yourself about what you can do that
Speaker 3: you're not doing, because that's the one thing everybody needs
Speaker 3: a little tough love. And when it comes to debt,
Speaker 3: it's it's so it's so easy to get tied up
Speaker 3: in the world of like, oh, but but it's the
Speaker 3: debt crisis, but it's the unfair system and all that stuff.
Speaker 3: But be real with yourself, step outside of your situation
Speaker 3: and look at the numbers and look at what you have,
Speaker 3: and look at what's going on, and be real. Do
Speaker 3: you need to downgrade your car? Do you need to
Speaker 3: get a roommate? Like, just be real, because I mean,
Speaker 3: I've been on the debt journey. We've all been on
Speaker 3: the dead journey before. And at the end of the day,
Speaker 3: there were so many sacrifices that I made to pay
Speaker 3: off my credit card debt that of course I didn't
Speaker 3: want to make. But I wanted to be debt free,
Speaker 3: and I wanted to really get on a path where
Speaker 3: I could start generating real value, real like a business
Speaker 3: and actually have retirement money in my retirement accounts like
Speaker 3: I wanted. That was the light at the end of
Speaker 3: the tunnel for me that I knew I wanted to
Speaker 3: get there, and I knew that if I just kept
Speaker 3: living how I was living and just spend more on
Speaker 3: the credit cards, it wasn't going to help.
Speaker 1: Me get there.
Speaker 3: So just try to be real with yourself, Like, yes
Speaker 3: I am, I'm giving you all the grace, but at
Speaker 3: the same time, I want you to be honest.
Speaker 1: And be real.
Speaker 3: Is there or two? Is there two things? Is there
Speaker 3: one thing that you can change that would help you
Speaker 3: just free up a little bit of money that you
Speaker 3: can put towards these loans so that you're not in default,
Speaker 3: so that they're not garnishing your wages, so you're not
Speaker 3: ruining your credit and affecting your home ownership opportunities and prospects.
Speaker 3: Just you know, a little bit can go a long way.
Speaker 2: Yeah, because you know what, I've been seeing a lot
Speaker 2: of the comments and videos online, like TikTok videos when
Speaker 2: ever comes to a student loans, people just like I'm
Speaker 2: not paying this, I'm not gonna pay this, And look,
Speaker 2: I get it. You ever heard of wage garnishment, That's
Speaker 2: what I'm saying, Like.
Speaker 3: Now they have.
Speaker 1: Now they have consequences this generation.
Speaker 2: That's the thing, because you can you can say I'm
Speaker 2: not gonna pay it, and I get it. Like sometimes
Speaker 2: it's unfair, and you know, they get people into the
Speaker 2: income driven repayment plans where they're just they're not even
Speaker 2: making it. The balance is going up every month because
Speaker 2: they're not paying enough and they just don't know that
Speaker 2: that's setting them up for failure. But like, not paying
Speaker 2: is not an option, even if you feel it's unfair,
Speaker 2: and a lot of times of the system is unfair,
Speaker 2: they'll still come for you, and they will come get
Speaker 2: their money one here another and ruin your life financially
Speaker 2: and you can't. I think it's easy to fall into
Speaker 2: that because it's so you know, you like the group
Speaker 2: think of everyone's complaining about it and saying, well, what
Speaker 2: if we all don't pay? Trust me, now, everyone's not.
Speaker 2: You're not gonna everyone's not gonna do this together. It'll
Speaker 2: be people who are paying and the sum of you
Speaker 2: are and the ones who aren't are gonna be left
Speaker 2: in as deaf spot.
Speaker 1: That's right.
Speaker 3: Same thing with taxes. They're gonna get their money. They
Speaker 3: will get it.
Speaker 2: Up, they'll find you.
Speaker 1: Why don't they come up with a different envelope for
Speaker 1: the tax doc for the tax letter. So like, if
Speaker 1: it's just gonna be a letter telling me that you
Speaker 1: received my request to change my address or whatever, like
Speaker 1: that letter should be like, let's say a bright pink
Speaker 1: or a yellow something friendly. Yeah, And then the ones
Speaker 1: that are like, hey, you screwed up, you owe us
Speaker 1: eighteen fifty two, it should have like an envelope that's green.
Speaker 1: Like it's a bit of a mistake, but it's a
Speaker 1: small one, so I kind adjust like my stress level
Speaker 1: before I'm mean, but then.
Speaker 3: But then everybody's gonna see your business. When you got
Speaker 3: a green eyes letter coming to the mail, I don't care.
Speaker 1: I'm streress.
Speaker 2: So much. I've gotten that that I R S. Later
Speaker 2: where it's like, oh, we have dated your address. I'm thinking,
Speaker 2: oh god, the coming for me? What I'm like, you
Speaker 2: could have just said that this could have been an email?
Speaker 2: Why did you need to mail me this?
Speaker 1: Yeah, I just like, why isn't my CFO.
Speaker 3: Hey don't email?
Speaker 2: Don't It's true, they don't email O. Yes, should say
Speaker 2: that they were not. The r S is an email that
Speaker 2: you don't for people.
Speaker 3: They don't call. They don't call you, they don't only
Speaker 3: send you email.
Speaker 2: That's true. Yeah, I r S.
Speaker 3: Oh.
Speaker 1: There's one thing we didn't mention jan Ellie when we
Speaker 1: talked about student loans last time. Well, I did say,
Speaker 1: go to the student a dot cup, But they have
Speaker 1: this loan simulator that you can play around with, which
Speaker 1: will actually so what we talked about getting a coach,
Speaker 1: which is great and all of that, but if you
Speaker 1: can't afford a coach, or you can't find a free
Speaker 1: service and you know, it's not a bad option. You
Speaker 1: can check out the loan Repayment Calculator. There's there's still
Speaker 1: resources that were written by people who did work at
Speaker 1: DO at one point. They may not be there anymore,
Speaker 1: but their resources are there. So I'll about the different
Speaker 1: payment plans. You can even simulate what if I take
Speaker 1: like if you're in college right now and you're needing
Speaker 1: loans to finish your degree, and you're worried that the
Speaker 1: loans you thought you'd be able to pay income based,
Speaker 1: you know, after school, like you're wondering like what would
Speaker 1: that cost you? You can simulate how much more loans
Speaker 1: would impact your monthly payment and the cost of your loans.
Speaker 1: So that's a fun little tool.
Speaker 3: Definitely check that tool out. We actually use that tool,
Speaker 3: y'all know. I work with MGPF a lot to do
Speaker 3: financial literacy curriculum for schools. In the free curriculum, we
Speaker 3: have a unit called paying for College and we actually
Speaker 3: have high school students go in and take on like
Speaker 3: personas in different scenarios to just like role play and
Speaker 3: they go through the simulation and go through the tool
Speaker 3: to actually see how much they would graduate with, how
Speaker 3: much debt, what would that look like as a monthly payment,
Speaker 3: because the reality is is sometimes the first time you're
Speaker 3: looking at that monthly payment amount is when you owe it.
Speaker 3: And that's just that's really a red flag. So trying
Speaker 3: to get them younger and younger to understand what they're
Speaker 3: about to get themselves into is so so important.
Speaker 1: Earlier the better.
Speaker 3: So, yeah, I use those tools, but don't you afraid
Speaker 3: to sit down with your with younger teens and students
Speaker 3: too and do it with them as well, so they
Speaker 3: just see the reality of these numbers.
Speaker 1: Yeah, and y'all are probably wondering too, like what about
Speaker 1: these forgiveness plans? This is changing all the time because
Speaker 1: there are legal challenges against something called the Safe Plan
Speaker 1: and the pay Plan, which basically had a shorter timeline
Speaker 1: to forgiveness something like twenty years versus the up to
Speaker 1: twenty five years that an income based repayment plan you know, offered.
Speaker 1: And I was reading the New York Times, so they
Speaker 1: say that processing income driven IDR income driven ME payment
Speaker 1: plan applications were on hold because of this legal challenge,
Speaker 1: but that as of last week, servicers have begun processing
Speaker 1: applications again, and there's a backlog of one point nine
Speaker 1: million applications, so maybe you can on that program. But
Speaker 1: in the meantime, but still there's income based repayment plan.
Speaker 1: Somebody got to like call your servicer because the income
Speaker 1: based repayment plan is pretty much it's similar to these plans.
Speaker 1: The difference is your loan payment could be as low
Speaker 1: as zero dollars, and the repayment like the amount of
Speaker 1: time you have to make payments not pay them off,
Speaker 1: but the amount of time you have to make on
Speaker 1: time payments in order to qualify for forgiveness is longer.
Speaker 1: It's like that twenty five year mark. But yeah, the
Speaker 1: real like wait and stop before you decide to do
Speaker 1: that moment is when it comes to like deferment and forbearance,
Speaker 1: because when you are deferring your loans or you have
Speaker 1: a temporary, you know, unemployment issue, when you're stressed out,
Speaker 1: then you can end up where you're not making payments.
Speaker 1: You're stressed free because you don't have payments. But because
Speaker 1: you're not making any payments, even if they were five
Speaker 1: dollars or fifty bucks whatever they might have been under
Speaker 1: one of these other repayment plans, you're not making any
Speaker 1: progress toward qualifying for forgiveness down the line, because you're
Speaker 1: in this like I'm not making any payments and even
Speaker 1: then you're having to deal with like interest accruing while
Speaker 1: you're getting by scott free without making these payments, which
Speaker 1: so great in theory, not be good anything else on
Speaker 1: student loans. What am I missing?
Speaker 3: Yeah? If you're stressed out, that's you know, you're not alone.
Speaker 3: That's the other thing is go online and like just
Speaker 3: you know, connect with other people. Don't sit in a
Speaker 3: silo and just go through this and frustration because there's
Speaker 3: a lot of resources online, a lot of other people
Speaker 3: sharing their stories and commiserating together, and that just makes
Speaker 3: it a little less lonely.
Speaker 1: But don't let them. Don't let them talk you into
Speaker 1: not like paying your bills.
Speaker 2: Yeah, exactly. Ignoring you is not gonna make it any better.
Speaker 1: Definitely, I know. Okayva fan, thank you so much for
Speaker 1: listening to this week's show. I want to shout out
Speaker 1: to our production team, Courtney, our editor, Carla, our fearless
Speaker 1: leader for idea to launch productions. I want to shout
Speaker 1: out my assistant Lauda Escalante and Cameron McNair for helping
Speaker 1: me put the show together. It is not a one
Speaker 1: person project, as much as I have tried to make
Speaker 1: it so these past ten years. I need help, y'all,
Speaker 1: and thank goodness, I've been able to put this team
Speaker 1: around me to support me on this journey and to
Speaker 1: y'all bea fam. I love you, so, so so so much.
Speaker 1: Please rate, review, subscribe, make sure you're signed up to
Speaker 1: the newsletter to get all the latest updates on upcoming episodes,
Speaker 1: our ten year anniversary celebrations to come, and until next time,
Speaker 1: talk to you soon via buye