1
00:00:00,080 --> 00:00:03,159
Speaker 1: Welcome to Hoa of Money. I'm Joel, I'm Matt. Today

2
00:00:03,200 --> 00:00:25,040
Speaker 1: we're talking about the student loan shakeup with Travis Hornsby.

3
00:00:25,880 --> 00:00:29,560
Speaker 2: Indeed, Joel, this is a more pressing, a more urgent

4
00:00:29,640 --> 00:00:32,200
Speaker 2: interview episode, which we don't typically get to do because

5
00:00:32,240 --> 00:00:35,280
Speaker 2: normally it's like a book tour and we're diving into

6
00:00:35,320 --> 00:00:37,000
Speaker 2: the book. It's like, do we talk to him now

7
00:00:37,240 --> 00:00:38,760
Speaker 2: or do we talk to him in like two months.

8
00:00:38,960 --> 00:00:41,120
Speaker 2: Typically it doesn't matter, but that is not the case

9
00:00:41,280 --> 00:00:44,280
Speaker 2: giving our topic of conversation today because according to the

10
00:00:44,600 --> 00:00:47,920
Speaker 2: new US Education Secretary, it is time for student borrowers

11
00:00:48,080 --> 00:00:51,360
Speaker 2: with federal loans to begin making payments. The clock is

12
00:00:51,400 --> 00:00:54,480
Speaker 2: taking and May fifth is the date that nearly two

13
00:00:54,520 --> 00:00:58,080
Speaker 2: million borrowers are going to be moved into repayment plans

14
00:00:58,480 --> 00:01:01,040
Speaker 2: and collections will begin for a loan that are in default.

15
00:01:01,560 --> 00:01:05,240
Speaker 2: This is a massive shakeup from what borrowers have experienced

16
00:01:05,240 --> 00:01:08,160
Speaker 2: over the past five years. And luckily we're joined by

17
00:01:08,160 --> 00:01:11,720
Speaker 2: a founder and CEO of Student Loan Planner, Travis Hornsby,

18
00:01:11,880 --> 00:01:15,840
Speaker 2: to parse out all the details. And Travis is very

19
00:01:15,959 --> 00:01:20,120
Speaker 2: qualified to talk about this. He has consulted on several

20
00:01:20,280 --> 00:01:24,440
Speaker 2: billion dollars of student debt, which is mind boggling. He's

21
00:01:24,480 --> 00:01:27,720
Speaker 2: a CFP, he's retired at the age of twenty five

22
00:01:27,800 --> 00:01:30,320
Speaker 2: before starting a student loan planner. I don't even know

23
00:01:30,319 --> 00:01:31,920
Speaker 2: if we'll have time to get to that, but he

24
00:01:32,080 --> 00:01:34,720
Speaker 2: is the man to turn two in response to all

25
00:01:34,760 --> 00:01:37,720
Speaker 2: of the latest student loan changes that we are about

26
00:01:37,720 --> 00:01:40,600
Speaker 2: to experience. And so Travis Hornsby, thank you so much

27
00:01:40,640 --> 00:01:41,680
Speaker 2: for coming on how to Money.

28
00:01:41,880 --> 00:01:43,960
Speaker 3: Absolutely, you know, you know, student loans are pressing, but

29
00:01:44,000 --> 00:01:46,640
Speaker 3: they don't have to be depressing, right, and so for

30
00:01:46,720 --> 00:01:49,000
Speaker 3: how to Money listeners, it doesn't have to be that way.

31
00:01:49,080 --> 00:01:50,560
Speaker 4: So I'm excited to talk about it today.

32
00:01:50,640 --> 00:01:52,800
Speaker 1: Glad you're here to bring the optimism, my friend. First

33
00:01:52,880 --> 00:01:55,320
Speaker 1: question we got to ask you, we ask everybody is

34
00:01:55,440 --> 00:01:57,840
Speaker 1: what do you like to sport? John? And I know

35
00:01:57,920 --> 00:01:59,840
Speaker 1: you're smart, be as smart with your money. You retired

36
00:01:59,840 --> 00:02:02,440
Speaker 1: it twenty five. You know what you're doing, but you

37
00:02:02,600 --> 00:02:05,120
Speaker 1: still spoilage every now and again. What is it that

38
00:02:05,160 --> 00:02:07,920
Speaker 1: you're throwing big bucks at that most people might think

39
00:02:07,960 --> 00:02:08,520
Speaker 1: is a little weird?

40
00:02:08,720 --> 00:02:11,280
Speaker 3: So spiritually I'm like a seven or eight year old boy, right,

41
00:02:11,360 --> 00:02:15,360
Speaker 3: So I'm gonna say telescopes and cargo electric bicycles. So

42
00:02:15,960 --> 00:02:18,760
Speaker 3: those are my two right now. I'm really into astronomy.

43
00:02:19,160 --> 00:02:21,919
Speaker 3: I've got a group of astronomy bros. And we hang

44
00:02:21,960 --> 00:02:24,720
Speaker 3: out on the weekends just like you know, compete over

45
00:02:24,720 --> 00:02:27,840
Speaker 3: who can get the best picture of Jupiter. And it's

46
00:02:28,360 --> 00:02:30,600
Speaker 3: kind of kind of funny to some people that there's

47
00:02:30,639 --> 00:02:32,760
Speaker 3: like a group of like astronomy dads just like hang

48
00:02:32,800 --> 00:02:35,119
Speaker 3: out and look at the stars. But it's a great

49
00:02:35,120 --> 00:02:38,520
Speaker 3: way to get perspective ha ha. You know, you see, like,

50
00:02:38,639 --> 00:02:40,720
Speaker 3: oh my gosh, this nebula is like, you know, a

51
00:02:40,760 --> 00:02:44,240
Speaker 3: trillion miles away, and you know, you know, like a

52
00:02:44,280 --> 00:02:46,600
Speaker 3: billion earths could fit inside it, and oh maybe my

53
00:02:46,600 --> 00:02:48,880
Speaker 3: problems aren't as bad. So I kind of really enjoy

54
00:02:48,919 --> 00:02:50,600
Speaker 3: it for that reason. And then same kind of thing

55
00:02:50,880 --> 00:02:53,920
Speaker 3: for bicycles, Like there's all these awesome electric bikes. I

56
00:02:54,000 --> 00:02:55,880
Speaker 3: like cargo ones because I can throw my kids in

57
00:02:55,919 --> 00:02:58,080
Speaker 3: them and strap them down, and they're too young to

58
00:02:58,080 --> 00:02:59,639
Speaker 3: bike on their own, and so it's just kind of

59
00:02:59,639 --> 00:03:02,440
Speaker 3: a cool way that I can turn something that's a chore,

60
00:03:02,480 --> 00:03:04,600
Speaker 3: like dropping kids off at school and make it fun, right,

61
00:03:04,639 --> 00:03:07,000
Speaker 3: so I get to take them to daycare in preschool,

62
00:03:07,040 --> 00:03:09,200
Speaker 3: and like the the electric cargo bike can be one

63
00:03:09,200 --> 00:03:12,080
Speaker 3: of those you know, cool Harley Dads except a bicycle.

64
00:03:12,480 --> 00:03:14,799
Speaker 1: That's at least how we envision ourselves. Travis. I don't

65
00:03:14,800 --> 00:03:16,080
Speaker 1: know if it's I don't know if that's how other

66
00:03:16,080 --> 00:03:17,520
Speaker 1: people see us, but yeah.

67
00:03:17,600 --> 00:03:20,120
Speaker 3: You know, definitely I get some like, oh that guy,

68
00:03:20,280 --> 00:03:22,160
Speaker 3: you know, I mean, I definitely there's some definitely views

69
00:03:22,160 --> 00:03:23,800
Speaker 3: like that. But you know what, I feel like a

70
00:03:23,800 --> 00:03:26,000
Speaker 3: Harley dad and you know another dad got one. So

71
00:03:26,120 --> 00:03:29,240
Speaker 3: we're talking about getting leather. You know, jackets made, right,

72
00:03:29,240 --> 00:03:31,440
Speaker 3: We're gonna make a biker gang. But it's like, you know,

73
00:03:31,480 --> 00:03:33,840
Speaker 3: an electric cargo biker gang. Yeah, so it's you know,

74
00:03:34,160 --> 00:03:37,400
Speaker 3: it's it's it's definitely you know, student loans, right, you know,

75
00:03:37,560 --> 00:03:39,560
Speaker 3: a weird person's attracted to doing them. So I'm just

76
00:03:39,600 --> 00:03:41,440
Speaker 3: you know, showing people my honest self.

77
00:03:41,480 --> 00:03:43,200
Speaker 1: Oh R, let's talk student loans. Let's get into it,

78
00:03:43,200 --> 00:03:46,880
Speaker 1: because I'm curious, first off, Travis, to think about or

79
00:03:46,920 --> 00:03:50,000
Speaker 1: to understand how you're thinking about the kind of whiplash

80
00:03:50,160 --> 00:03:54,560
Speaker 1: effect of approaches towards student loans. The last administration, there

81
00:03:54,600 --> 00:03:56,840
Speaker 1: was this incredibly generous spirit towards people who had student

82
00:03:56,920 --> 00:04:00,040
Speaker 1: loans that seems to have evaporated. Now we're encountering i

83
00:04:00,040 --> 00:04:02,440
Speaker 1: don't know, almost maybe a hostile vibe. How do you

84
00:04:02,560 --> 00:04:07,400
Speaker 1: think about that change and how should student loan borrowers

85
00:04:07,400 --> 00:04:07,840
Speaker 1: be feeling.

86
00:04:08,280 --> 00:04:12,760
Speaker 3: So, I mean, I've done this since the A Bomba administration, right,

87
00:04:12,840 --> 00:04:15,160
Speaker 3: and so I've definitely seen a lot of different attitudes

88
00:04:15,160 --> 00:04:19,520
Speaker 3: on student loans over time. I would say that what's

89
00:04:19,600 --> 00:04:23,800
Speaker 3: kind of happened over time with the change in the

90
00:04:23,800 --> 00:04:27,840
Speaker 3: political landscape is more and more educated voters have more

91
00:04:27,920 --> 00:04:30,560
Speaker 3: drifted towards the Democratic Party, right in terms of like

92
00:04:30,839 --> 00:04:33,520
Speaker 3: higher education levels predict more of a Democratic lane than

93
00:04:33,520 --> 00:04:35,520
Speaker 3: it used to, right, especially if you think about like

94
00:04:35,520 --> 00:04:37,320
Speaker 3: the Republican Party during like the Mitt Romne era in

95
00:04:37,360 --> 00:04:40,600
Speaker 3: twenty twelve. And so what's happened is student loans have

96
00:04:40,800 --> 00:04:43,039
Speaker 3: sort of drifted from this like kind of non partisan

97
00:04:43,080 --> 00:04:45,080
Speaker 3: issue to being more of a partisan issue.

98
00:04:45,279 --> 00:04:45,479
Speaker 4: Right.

99
00:04:45,800 --> 00:04:47,960
Speaker 3: So if we think about like what happened during the

100
00:04:47,960 --> 00:04:51,480
Speaker 3: Biden administration, Biden was you know, sort of the choice

101
00:04:51,640 --> 00:04:54,479
Speaker 3: of the Democratic Party because they didn't have an alternative

102
00:04:54,480 --> 00:04:57,440
Speaker 3: they could coalesce around, right, And President Biden wanted to

103
00:04:57,560 --> 00:05:00,359
Speaker 3: unify the support of the progressive base, and so he

104
00:05:00,440 --> 00:05:04,320
Speaker 3: viewed student loans is like this very easy policy area

105
00:05:04,480 --> 00:05:06,280
Speaker 3: to go big on and to try to go really

106
00:05:06,279 --> 00:05:09,200
Speaker 3: big on to maintain that political support to run for

107
00:05:09,279 --> 00:05:12,560
Speaker 3: that second term, right, and in the first term of

108
00:05:12,720 --> 00:05:15,440
Speaker 3: President Trump. You know, one thing that I would say

109
00:05:15,920 --> 00:05:18,400
Speaker 3: for people that are just like really terrified about their

110
00:05:18,400 --> 00:05:21,159
Speaker 3: student loans, really worried about what the administration's going to do,

111
00:05:21,640 --> 00:05:24,479
Speaker 3: is it's important to have the perspective of the fact

112
00:05:24,520 --> 00:05:26,839
Speaker 3: that the Trump administration was the one that started the

113
00:05:26,839 --> 00:05:30,000
Speaker 3: student loan pause and paused collections on student loans in

114
00:05:30,000 --> 00:05:34,039
Speaker 3: the first place. Right, So there's definitely some some negative

115
00:05:34,040 --> 00:05:36,080
Speaker 3: things that are going to happen to some borrowers financially

116
00:05:36,200 --> 00:05:38,160
Speaker 3: due to the new policies of the new administration. I

117
00:05:38,160 --> 00:05:40,159
Speaker 3: don't want to minimize that, but I do want to

118
00:05:40,160 --> 00:05:43,200
Speaker 3: say that everybody would need to have a very balanced

119
00:05:43,279 --> 00:05:45,560
Speaker 3: view of what's going to happen with student loans in

120
00:05:45,640 --> 00:05:47,160
Speaker 3: the next like few years.

121
00:05:47,320 --> 00:05:47,480
Speaker 1: Right.

122
00:05:47,640 --> 00:05:50,040
Speaker 3: So I would just say, like at a high level,

123
00:05:50,640 --> 00:05:53,599
Speaker 3: student un forgiveness is not dead. It's just not going

124
00:05:53,640 --> 00:05:55,360
Speaker 3: to be offered on steroids anymore.

125
00:05:56,160 --> 00:05:58,000
Speaker 2: One of the changes that seems like it's going to

126
00:05:58,000 --> 00:06:01,360
Speaker 2: take places transitioning student loans like towards the Small Business

127
00:06:01,440 --> 00:06:03,760
Speaker 2: Administration looks like they're going to run that. It seems

128
00:06:03,760 --> 00:06:07,240
Speaker 2: like a massive potential paperwork nightmare. I guess what do

129
00:06:07,279 --> 00:06:10,360
Speaker 2: you foresee being some of the problems with that transition.

130
00:06:10,760 --> 00:06:13,760
Speaker 3: Well, I mean they've fired half of the Department of Education, right,

131
00:06:13,800 --> 00:06:16,760
Speaker 3: And there's one person put in a court deposition that

132
00:06:16,800 --> 00:06:18,800
Speaker 3: there was six they left when they got fired. There

133
00:06:18,839 --> 00:06:22,440
Speaker 3: was sixteen thousand borrower complaints that were in her cue

134
00:06:22,440 --> 00:06:23,520
Speaker 3: that she had not answered yet.

135
00:06:23,640 --> 00:06:24,600
Speaker 4: My gosh.

136
00:06:24,720 --> 00:06:27,400
Speaker 3: So it's basically this wasn't working fast enough, is what

137
00:06:27,440 --> 00:06:29,560
Speaker 3: you're saying. Yeah, it's her fault, right, you know. But

138
00:06:30,279 --> 00:06:33,240
Speaker 3: so the thing is is like, so the new administration

139
00:06:33,480 --> 00:06:37,080
Speaker 3: is sort of testing the boundaries to see what the

140
00:06:37,120 --> 00:06:39,360
Speaker 3: courts will say is legal and what's not legal. Right,

141
00:06:39,960 --> 00:06:42,400
Speaker 3: And the way I would interpret this is they're saying

142
00:06:42,400 --> 00:06:44,560
Speaker 3: they're going to move it over to small Business Administration.

143
00:06:44,640 --> 00:06:46,880
Speaker 3: I am not convinced that they can do that. The

144
00:06:46,920 --> 00:06:49,560
Speaker 3: Secretary of Education is mentioned a whole lot in the statute,

145
00:06:49,920 --> 00:06:51,440
Speaker 3: and they can say that they're going to move it

146
00:06:51,480 --> 00:06:53,720
Speaker 3: over there. They can try to move it over there

147
00:06:53,720 --> 00:06:56,240
Speaker 3: potentially with their big budget reconciliation bill, and maybe that's

148
00:06:56,240 --> 00:06:57,839
Speaker 3: what they intend to do is try to pass it

149
00:06:57,880 --> 00:07:00,680
Speaker 3: in Congress right to make it legal, or maybe they

150
00:07:00,720 --> 00:07:02,240
Speaker 3: just plan to try to move it over there, right.

151
00:07:02,279 --> 00:07:04,760
Speaker 3: But what a borrower needs to be concerned about is

152
00:07:05,360 --> 00:07:08,680
Speaker 3: what's happened since the Obama administration is presidents have and

153
00:07:08,760 --> 00:07:11,480
Speaker 3: the inaction of Congress taken more and more of a

154
00:07:11,520 --> 00:07:14,560
Speaker 3: policy making role in student loans by issuing executive actions.

155
00:07:14,720 --> 00:07:16,000
Speaker 3: So a lot of the things that have happened in

156
00:07:16,000 --> 00:07:19,280
Speaker 3: the past several years, you know, have been the White

157
00:07:19,320 --> 00:07:21,560
Speaker 3: House just making press releases about things they're just going

158
00:07:21,640 --> 00:07:25,280
Speaker 3: to do, right, And what the Trump administration is doing

159
00:07:25,480 --> 00:07:28,640
Speaker 3: is rolling back pretty much anything that the Biden administration

160
00:07:28,760 --> 00:07:31,000
Speaker 3: did the executive action that's not written in the statute.

161
00:07:31,040 --> 00:07:33,680
Speaker 3: So what that means is if a borrower understands what

162
00:07:33,760 --> 00:07:35,920
Speaker 3: kind of loans they have and what they're guaranteed benefits

163
00:07:35,920 --> 00:07:38,200
Speaker 3: are in the statute of the law, the borrower can

164
00:07:38,200 --> 00:07:41,160
Speaker 3: make a plan for their future. And the confusion is

165
00:07:41,200 --> 00:07:43,200
Speaker 3: coming from, you know, all these things that have been

166
00:07:43,240 --> 00:07:45,480
Speaker 3: promised to the executive action that don't have the safety

167
00:07:45,520 --> 00:07:47,600
Speaker 3: of being a law, and borrowers just don't know how

168
00:07:47,640 --> 00:07:50,200
Speaker 3: to plan. So that's a big part of what we're

169
00:07:50,200 --> 00:07:53,080
Speaker 3: doing right now is educating borrowers around what are they guaranteed,

170
00:07:53,680 --> 00:07:55,200
Speaker 3: you know, with and the law, and what are they

171
00:07:55,240 --> 00:07:58,120
Speaker 3: not guaranteed in the law, And then that can help

172
00:07:58,160 --> 00:08:00,520
Speaker 3: somebody figure out like do I should I pay these back?

173
00:08:00,640 --> 00:08:03,160
Speaker 4: Like when? Like should I go for forgiveness? Like what should

174
00:08:03,160 --> 00:08:03,440
Speaker 4: I do?

175
00:08:04,160 --> 00:08:08,320
Speaker 1: I feel like the most recent news was the op

176
00:08:08,440 --> 00:08:11,640
Speaker 1: ed that was written by the Department of Education secretary,

177
00:08:12,040 --> 00:08:14,640
Speaker 1: and it seemed like she issued kind of a clearly

178
00:08:14,760 --> 00:08:18,360
Speaker 1: line of demarcation and that may fifth date stuck out

179
00:08:18,400 --> 00:08:21,000
Speaker 1: in my mind as a really important one. What is

180
00:08:21,040 --> 00:08:24,760
Speaker 1: the fallout going to be from, you know, based on

181
00:08:24,800 --> 00:08:28,960
Speaker 1: her pronouncement what she's said about the resumption of student

182
00:08:29,000 --> 00:08:32,320
Speaker 1: loan payments, Like we've obviously had student loan payments are

183
00:08:32,360 --> 00:08:34,960
Speaker 1: supposed to be being made right now except for some

184
00:08:34,960 --> 00:08:36,560
Speaker 1: folks who are in limbo on the safe plan, right,

185
00:08:36,600 --> 00:08:38,160
Speaker 1: I don't know. It gets all confusing to me, like

186
00:08:38,200 --> 00:08:40,240
Speaker 1: where are we at right now? Do people need to

187
00:08:40,240 --> 00:08:41,719
Speaker 1: be paying? And how worried should they be if they're

188
00:08:41,760 --> 00:08:42,160
Speaker 1: not paying?

189
00:08:42,440 --> 00:08:45,360
Speaker 3: So there's all the kinds of complex issues going on

190
00:08:45,400 --> 00:08:48,640
Speaker 3: with this to different types of borrower populations, right, So

191
00:08:49,320 --> 00:08:51,720
Speaker 3: to craft this for your listeners, what would you guess

192
00:08:51,760 --> 00:08:54,720
Speaker 3: would be the average balance of like how you know

193
00:08:54,760 --> 00:08:56,960
Speaker 3: and how to money listener, would you guess like in

194
00:08:57,040 --> 00:08:58,240
Speaker 3: terms of the size.

195
00:08:58,280 --> 00:09:00,440
Speaker 1: I'd say twelve thousand dollars. I would say more than that,

196
00:09:00,559 --> 00:09:03,120
Speaker 1: because what the average student loan balance of the average

197
00:09:03,120 --> 00:09:04,240
Speaker 1: America's upper.

198
00:09:04,040 --> 00:09:06,600
Speaker 4: Thirties, Yeah, which is like an undergrade balance.

199
00:09:06,960 --> 00:09:08,640
Speaker 1: Yeah, I would say maybe something close to that.

200
00:09:08,760 --> 00:09:10,240
Speaker 3: I'm sure it's a range, right, So I'm sure a

201
00:09:10,280 --> 00:09:12,320
Speaker 3: lot of your listeners have thirty k and then I'm

202
00:09:12,360 --> 00:09:13,720
Speaker 3: sure a lot of your listeners have a lot more

203
00:09:13,760 --> 00:09:16,000
Speaker 3: than that. There's probably a long tail of people right that, oh,

204
00:09:16,120 --> 00:09:19,240
Speaker 3: you know, high five figures, low six figures, even mid

205
00:09:19,280 --> 00:09:23,840
Speaker 3: six figures. So what I would say is, you know,

206
00:09:24,000 --> 00:09:26,920
Speaker 3: since the COVID pause and made in March twenty twenty,

207
00:09:27,360 --> 00:09:30,800
Speaker 3: the Department of ed Is essentially turned off the vast

208
00:09:30,880 --> 00:09:34,640
Speaker 3: collections apparatus of student loans and caused no consequences to

209
00:09:34,640 --> 00:09:38,560
Speaker 3: borrowers at all from not caring about them. And what

210
00:09:38,600 --> 00:09:42,360
Speaker 3: does that mean? Like, before the COVID pause, something like

211
00:09:42,400 --> 00:09:45,200
Speaker 3: thirteen percent of all borrowers were in default and a

212
00:09:45,200 --> 00:09:48,000
Speaker 3: lot of borrowers were in forbearance, which was you know,

213
00:09:48,040 --> 00:09:50,160
Speaker 3: not as damaging as a default on their record, but

214
00:09:50,240 --> 00:09:53,160
Speaker 3: still meant they weren't paying anything. And so if we

215
00:09:53,160 --> 00:09:56,599
Speaker 3: think about thirteen percent default rate, that roughly translates to

216
00:09:56,600 --> 00:09:58,760
Speaker 3: about five million people. They would be struggling to make

217
00:09:58,760 --> 00:10:02,800
Speaker 3: payments at any given time at a baseline. And so

218
00:10:02,920 --> 00:10:05,560
Speaker 3: your average person as thirty thousand of student debt, like

219
00:10:05,559 --> 00:10:07,400
Speaker 3: they'd have to pay about three hundred a month on

220
00:10:07,480 --> 00:10:09,959
Speaker 3: average to pay their loans off completely, right, And the

221
00:10:10,000 --> 00:10:12,240
Speaker 3: Biden administration came out with a plan called the Save

222
00:10:12,320 --> 00:10:15,600
Speaker 3: Plan that basically allowed most of those borrowers to pay

223
00:10:16,280 --> 00:10:18,440
Speaker 3: maybe like zero to one hundred dollars a month, so

224
00:10:18,480 --> 00:10:22,160
Speaker 3: it was making their payment far more affordable. Right, So

225
00:10:22,280 --> 00:10:24,320
Speaker 3: a lot of those listeners have just either not had

226
00:10:24,360 --> 00:10:26,800
Speaker 3: to worry about making payments because they just completely ignored

227
00:10:26,800 --> 00:10:29,240
Speaker 3: them and they weren't having their credit scores danked, or

228
00:10:29,240 --> 00:10:31,920
Speaker 3: they were signing up for this Save income based payment

229
00:10:31,960 --> 00:10:34,160
Speaker 3: plan and they were paying a very low percent of

230
00:10:34,160 --> 00:10:36,199
Speaker 3: their income, like five percent of your income, but only

231
00:10:36,280 --> 00:10:38,600
Speaker 3: after you make the first thirty or forty thousand. That's

232
00:10:38,640 --> 00:10:40,840
Speaker 3: like kind of simplifying things a little bit, but in general,

233
00:10:40,840 --> 00:10:43,920
Speaker 3: that's what the formula was, and the courts are saying Hey,

234
00:10:43,920 --> 00:10:47,480
Speaker 3: hold up, this Save Plan is not legal because Biden

235
00:10:47,559 --> 00:10:49,720
Speaker 3: tried to cancel student debt right, tried to cancel ten

236
00:10:49,760 --> 00:10:52,480
Speaker 3: to twenty thousand of all debt for all Americans, and

237
00:10:52,520 --> 00:10:55,240
Speaker 3: the Supreme Court said, hey, no, no way, Jose. And

238
00:10:55,280 --> 00:10:57,960
Speaker 3: then the response to that was, let's create an income

239
00:10:58,040 --> 00:11:00,520
Speaker 3: driven plan that's so generous. It's basically kind of like

240
00:11:00,559 --> 00:11:03,880
Speaker 3: the same things like forgiveness light exactly. It was Plan B, right,

241
00:11:03,920 --> 00:11:05,520
Speaker 3: And so they came out with Plan B and it

242
00:11:05,600 --> 00:11:08,080
Speaker 3: was about to go into law in July twenty twenty four,

243
00:11:08,640 --> 00:11:10,960
Speaker 3: and at the last second a bunch of Republican led

244
00:11:11,360 --> 00:11:14,320
Speaker 3: states sued and blocked it. And so since June of

245
00:11:14,360 --> 00:11:17,080
Speaker 3: twenty twenty four, about eight or nine million borrowers that

246
00:11:17,559 --> 00:11:19,760
Speaker 3: did sign up for the Save Plan out of the

247
00:11:19,800 --> 00:11:22,440
Speaker 3: forty million or so total, have been on ice and

248
00:11:22,520 --> 00:11:24,880
Speaker 3: just frozen in place, not knowing what they should do.

249
00:11:25,360 --> 00:11:27,200
Speaker 3: So that's like eight or nine million people. So that's

250
00:11:27,240 --> 00:11:28,800
Speaker 3: a lot of your listeners are going to be on

251
00:11:28,840 --> 00:11:30,520
Speaker 3: the Save Plan for barants. They're going to know what

252
00:11:30,520 --> 00:11:33,640
Speaker 3: that is, right, and they have not been allowed to

253
00:11:33,720 --> 00:11:36,680
Speaker 3: switch out of that, which is maddening. So they're saying,

254
00:11:36,720 --> 00:11:40,040
Speaker 3: we're turning on all collections may in early May. But

255
00:11:40,080 --> 00:11:42,240
Speaker 3: at the same token, they fired half the staff and

256
00:11:42,280 --> 00:11:45,120
Speaker 3: there's nobody to process these incometerin repayment applications, and they're

257
00:11:45,120 --> 00:11:46,760
Speaker 3: not allowing people that want to get out of this

258
00:11:47,280 --> 00:11:51,600
Speaker 3: paused frozen payment situation to get onto something. So are

259
00:11:51,600 --> 00:11:54,880
Speaker 3: those people going to be hurt negatively? I don't think

260
00:11:54,920 --> 00:11:57,360
Speaker 3: so by and large because Department of Ed knows that

261
00:11:57,400 --> 00:11:59,400
Speaker 3: these people haven't been allowed out of this forbearance, and

262
00:11:59,440 --> 00:12:01,160
Speaker 3: so those folks are going to have more time than

263
00:12:01,200 --> 00:12:04,319
Speaker 3: early May. There are people, though, that have not made

264
00:12:04,360 --> 00:12:07,080
Speaker 3: payments for years, that have been in default like before

265
00:12:07,160 --> 00:12:10,440
Speaker 3: COVID even, and they are going to start having their

266
00:12:10,480 --> 00:12:14,120
Speaker 3: wages garnish, their benefits garnished, and their tax refunds garnished.

267
00:12:14,160 --> 00:12:16,920
Speaker 3: So probably the single biggest impact for folks who are

268
00:12:17,320 --> 00:12:20,760
Speaker 3: more you know, economically disadvantaged or vulnerable is going to

269
00:12:20,800 --> 00:12:24,560
Speaker 3: be those tax refund intercepts. So that is not going

270
00:12:24,600 --> 00:12:26,560
Speaker 3: to happen this year because most of those refunds have

271
00:12:26,559 --> 00:12:29,559
Speaker 3: already gone out. But what often happens is people kind

272
00:12:29,600 --> 00:12:32,920
Speaker 3: of really especially lower income Americans, depend upon those you know,

273
00:12:33,240 --> 00:12:35,640
Speaker 3: two three four thousand dollars tax refunds to be able

274
00:12:35,679 --> 00:12:38,120
Speaker 3: to pay their bills. Right, So next tax season when

275
00:12:38,120 --> 00:12:40,800
Speaker 3: people go in file in like February March, we've had

276
00:12:40,920 --> 00:12:44,920
Speaker 3: years worth of you know, not collecting you know, intercepts

277
00:12:44,920 --> 00:12:46,760
Speaker 3: and wage garnishments and things like that, and that's going

278
00:12:46,800 --> 00:12:49,080
Speaker 3: to get turned on in May, and so people will

279
00:12:49,080 --> 00:12:50,839
Speaker 3: notice it right away. I mean, people that have not

280
00:12:50,880 --> 00:12:53,520
Speaker 3: paid attention to their loans for years are going to

281
00:12:53,559 --> 00:12:56,840
Speaker 3: start having their wages sapped at like fifteen percent of

282
00:12:56,880 --> 00:13:00,120
Speaker 3: income on average. So it's it's definitely not going to

283
00:13:00,160 --> 00:13:03,520
Speaker 3: be good. But I would say that there's a baseline

284
00:13:03,520 --> 00:13:07,400
Speaker 3: of thirteen percent of people being in default even before COVID, right,

285
00:13:07,800 --> 00:13:11,480
Speaker 3: so the measuring how bad will it be, I think

286
00:13:11,559 --> 00:13:15,280
Speaker 3: you probably need to look at like that baseline to say,

287
00:13:15,400 --> 00:13:17,400
Speaker 3: you know, if it's five million people, that's kind of

288
00:13:17,440 --> 00:13:21,600
Speaker 3: a normal environment for student and default collections, and if

289
00:13:21,640 --> 00:13:23,280
Speaker 3: it's way more than that, which actually I think it

290
00:13:23,320 --> 00:13:25,040
Speaker 3: will be way more than that once all of the

291
00:13:25,559 --> 00:13:29,000
Speaker 3: protections end. Because you do have people who are not

292
00:13:29,200 --> 00:13:31,880
Speaker 3: certified on a current income for their tax returns and

293
00:13:31,880 --> 00:13:33,640
Speaker 3: people that are in this eight million people that are

294
00:13:33,640 --> 00:13:35,840
Speaker 3: in this forbearance. It's not actually a default yet, but

295
00:13:35,880 --> 00:13:37,680
Speaker 3: it will be when they have to get told to

296
00:13:37,720 --> 00:13:39,400
Speaker 3: go get on a payment plan, So it could be

297
00:13:39,600 --> 00:13:41,800
Speaker 3: I think it could be ten to fifteen million people

298
00:13:41,840 --> 00:13:44,079
Speaker 3: that will end up in default, which will be really,

299
00:13:44,080 --> 00:13:44,600
Speaker 3: really bad.

300
00:13:45,040 --> 00:13:47,240
Speaker 2: We're kind of transitioning from talking about the policy to

301
00:13:47,400 --> 00:13:49,600
Speaker 2: kind of like as practical steps that folks can take,

302
00:13:50,160 --> 00:13:53,760
Speaker 2: and when folks aren't able to make these payments, I mean,

303
00:13:53,760 --> 00:13:56,280
Speaker 2: they're going to see damage done to let's say their

304
00:13:56,320 --> 00:13:59,319
Speaker 2: credit score. Do you have any recommendations for folks when

305
00:13:59,320 --> 00:14:01,320
Speaker 2: it comes to just practical steps that they can take

306
00:14:01,400 --> 00:14:04,880
Speaker 2: when they aren't able to afford making these payments as

307
00:14:04,880 --> 00:14:05,640
Speaker 2: they do resume?

308
00:14:05,960 --> 00:14:07,800
Speaker 3: Absolutely so, I mean I think the first thing is

309
00:14:07,840 --> 00:14:09,840
Speaker 3: to figure out what are you eligible for? I remember

310
00:14:09,880 --> 00:14:11,600
Speaker 3: I said what is in the statute versus what's an

311
00:14:11,640 --> 00:14:15,960
Speaker 3: executive action? So are you a new borrower as of

312
00:14:16,040 --> 00:14:18,440
Speaker 3: July twenty fourteen? In other words, did you have an

313
00:14:18,480 --> 00:14:22,920
Speaker 3: existing student on balance, you know, on July twenty fourteen

314
00:14:23,080 --> 00:14:26,120
Speaker 3: or before, and if you did, the thing you're eligible

315
00:14:26,120 --> 00:14:28,440
Speaker 3: for in the law is something called old income based

316
00:14:28,480 --> 00:14:31,640
Speaker 3: your payment that's fifteen percent of your income and you

317
00:14:31,640 --> 00:14:33,680
Speaker 3: get one hundred and fifty percent of the poverty line

318
00:14:33,720 --> 00:14:36,880
Speaker 3: to earn money on before they take that fifteen percent.

319
00:14:36,960 --> 00:14:39,200
Speaker 3: So for most people, it's about twenty grand for a

320
00:14:39,200 --> 00:14:41,520
Speaker 3: family of one. For a family, you know, a four,

321
00:14:41,640 --> 00:14:43,640
Speaker 3: maybe it's more like forty grand, And so they let

322
00:14:43,680 --> 00:14:46,240
Speaker 3: you earn that much first before they take fifteen percent.

323
00:14:46,840 --> 00:14:49,040
Speaker 3: But everything above that they're going to take fifteen percent.

324
00:14:49,080 --> 00:14:52,080
Speaker 3: And within that there's ways that you can pay less.

325
00:14:52,400 --> 00:14:55,520
Speaker 3: Right So, if you're a married borrower and you, you know,

326
00:14:55,560 --> 00:14:58,040
Speaker 3: are the only person in your household loans, a lot

327
00:14:58,120 --> 00:14:59,640
Speaker 3: of people are going to need to look at changing

328
00:14:59,640 --> 00:15:02,120
Speaker 3: have they fight all their taxes. So people tend to

329
00:15:02,160 --> 00:15:04,440
Speaker 3: file their taxes joint because that's just the default that

330
00:15:04,480 --> 00:15:06,960
Speaker 3: most married couples do a lot of married couples could

331
00:15:07,000 --> 00:15:10,520
Speaker 3: switch to married filing separate instead, and they could drastically

332
00:15:10,600 --> 00:15:13,160
Speaker 3: lower their student loan payments because then it's fifteen percent

333
00:15:13,200 --> 00:15:15,320
Speaker 3: of just their income instead of everybody's income.

334
00:15:15,880 --> 00:15:18,080
Speaker 1: Was it that a blip though, too, like a week

335
00:15:18,200 --> 00:15:22,680
Speaker 1: or two ago where there was something issued about Mary

336
00:15:22,680 --> 00:15:26,440
Speaker 1: filing jointly and hey, if you file separately, we're still

337
00:15:26,440 --> 00:15:28,320
Speaker 1: going to treat you the same way. But then they

338
00:15:28,360 --> 00:15:29,320
Speaker 1: had to redact that.

339
00:15:29,640 --> 00:15:34,600
Speaker 3: Yes, so I, along with some other people brought this

340
00:15:34,680 --> 00:15:38,760
Speaker 3: to the attention publicly of a lot of people urgently

341
00:15:38,880 --> 00:15:40,920
Speaker 3: because it was a major, major deal if they were

342
00:15:40,920 --> 00:15:43,560
Speaker 3: going to interpret things this way. The reason is is,

343
00:15:43,720 --> 00:15:45,800
Speaker 3: if you know what the statute says, which after ten

344
00:15:45,840 --> 00:15:48,360
Speaker 3: years of doing this, we do, it says in the

345
00:15:48,440 --> 00:15:51,240
Speaker 3: law that married borrowers do have the right to file

346
00:15:51,280 --> 00:15:52,960
Speaker 3: separate and exclude their spousal income.

347
00:15:53,080 --> 00:15:53,760
Speaker 4: So it's in the law.

348
00:15:53,800 --> 00:15:57,560
Speaker 3: It's not an executive action. But when one of the

349
00:15:57,680 --> 00:16:01,520
Speaker 3: acting Undersecretary of Education made pronouncement and a reply to

350
00:16:01,560 --> 00:16:04,920
Speaker 3: a lawsuit, it came out of nowhere. And because in

351
00:16:04,960 --> 00:16:07,840
Speaker 3: the same reply they affirmed something called the ps left

352
00:16:07,840 --> 00:16:10,400
Speaker 3: Buyback Program, which is a Biden error program that's kind

353
00:16:10,400 --> 00:16:12,720
Speaker 3: of generous to borrowers. So it made no sense that

354
00:16:12,760 --> 00:16:16,000
Speaker 3: they're ignoring, you know, a major part of the student

355
00:16:16,040 --> 00:16:18,800
Speaker 3: loan statutes while also affirming something that's in executive action.

356
00:16:18,880 --> 00:16:21,360
Speaker 3: So I raised that issue on X and other places

357
00:16:21,400 --> 00:16:24,600
Speaker 3: and said, what gives here right? And it turns out, guys,

358
00:16:24,680 --> 00:16:28,080
Speaker 3: that they just literally made an honest mistake, which is

359
00:16:28,240 --> 00:16:29,840
Speaker 3: which is which is? And the reason why we know

360
00:16:29,920 --> 00:16:33,200
Speaker 3: this is because within literally two or three days, they

361
00:16:33,200 --> 00:16:36,400
Speaker 3: came out with a corrective statement saying what we meant

362
00:16:36,400 --> 00:16:39,360
Speaker 3: to say was that we will include your spouse and

363
00:16:39,400 --> 00:16:41,920
Speaker 3: your family size no matter how you file your taxes,

364
00:16:41,960 --> 00:16:44,680
Speaker 3: not that we would include your spouse's income and your

365
00:16:44,720 --> 00:16:47,280
Speaker 3: payment calculation regardless of how you file your taxes. So

366
00:16:47,480 --> 00:16:50,000
Speaker 3: that's actually a positive for borrowers because instead of a

367
00:16:50,080 --> 00:16:54,280
Speaker 3: deduction based on a poverty line of three if you're

368
00:16:54,320 --> 00:16:57,120
Speaker 3: married with two kids, now you get a deduction based

369
00:16:57,120 --> 00:16:59,600
Speaker 3: on a family size of four. And you know, the

370
00:16:59,600 --> 00:17:02,680
Speaker 3: bidenmdministration had actually changed the rules in a negative way

371
00:17:02,720 --> 00:17:04,800
Speaker 3: to exclude your spouse from your family size if he

372
00:17:04,840 --> 00:17:05,600
Speaker 3: filed separately.

373
00:17:06,119 --> 00:17:08,440
Speaker 1: And that's like an additional child tax credit.

374
00:17:08,600 --> 00:17:08,919
Speaker 4: It is.

375
00:17:09,000 --> 00:17:11,640
Speaker 3: And the reason is because that's how the REGs were

376
00:17:11,760 --> 00:17:16,239
Speaker 3: pre COVID, and that's because the court struck down or

377
00:17:16,280 --> 00:17:19,240
Speaker 3: you know, is put on ice the save plan rule,

378
00:17:19,240 --> 00:17:21,680
Speaker 3: that income based plan that Biden did. He also put

379
00:17:21,720 --> 00:17:24,800
Speaker 3: in a ton of changes to regulations around IDR plans,

380
00:17:24,960 --> 00:17:26,719
Speaker 3: and the courts don't want to full with figure out

381
00:17:26,720 --> 00:17:28,199
Speaker 3: what they're going to pause and not pause, so they

382
00:17:28,240 --> 00:17:30,359
Speaker 3: just pause the whole thing. And in some kind of

383
00:17:30,480 --> 00:17:34,359
Speaker 3: hilarious ways, it's actually positive benefit to some borrowers because

384
00:17:34,400 --> 00:17:36,440
Speaker 3: some of those rules from pre COVID were actually better

385
00:17:36,480 --> 00:17:38,840
Speaker 3: than the ones that the Biden administration came out with. Interesting,

386
00:17:38,920 --> 00:17:42,320
Speaker 3: So you know, so the thing is is, like, the

387
00:17:42,359 --> 00:17:46,359
Speaker 3: ability to file separate is affirmed actually, which is great news.

388
00:17:46,400 --> 00:17:49,320
Speaker 3: And most borrowers that listen to this, especially if they're younger,

389
00:17:49,359 --> 00:17:51,480
Speaker 3: will have taken out their first student loan as of

390
00:17:51,920 --> 00:17:54,840
Speaker 3: July twenty fourteen or after. And what that means is

391
00:17:54,880 --> 00:17:57,080
Speaker 3: you actually qualify to pay ten percent of your income

392
00:17:57,119 --> 00:17:59,560
Speaker 3: instead of fifteen. And if you're in the private sector,

393
00:17:59,560 --> 00:18:02,720
Speaker 3: it's years tell forgiveness instead of twenty five. And that's

394
00:18:02,720 --> 00:18:06,280
Speaker 3: written into the statute. So might we see some major

395
00:18:06,400 --> 00:18:09,879
Speaker 3: legislation come out of Congress soon from the House Republicans

396
00:18:09,880 --> 00:18:12,439
Speaker 3: and Senate Republicans that might try to modify some of that.

397
00:18:12,920 --> 00:18:16,000
Speaker 3: It is possible, but it's also likely that they would

398
00:18:16,000 --> 00:18:19,239
Speaker 3: grandfather and existing borrowers under current law. And even if

399
00:18:19,240 --> 00:18:21,800
Speaker 3: they did make changes, those changes would probably be temporary

400
00:18:21,840 --> 00:18:24,920
Speaker 3: in nature because of the legislative maneuver they're going to

401
00:18:25,000 --> 00:18:28,359
Speaker 3: have to use to pass their bill for you know,

402
00:18:28,359 --> 00:18:30,840
Speaker 3: with the limited majorities they have. So you know, I

403
00:18:30,840 --> 00:18:32,440
Speaker 3: would say that I would say this, here's a quick

404
00:18:32,600 --> 00:18:34,520
Speaker 3: kind of like way that a borrower can get a

405
00:18:34,520 --> 00:18:38,360
Speaker 3: handle on their situation. Right, If you have less debt

406
00:18:38,400 --> 00:18:41,080
Speaker 3: than what you earn every year, you probably need to

407
00:18:41,080 --> 00:18:43,359
Speaker 3: pay it back. And there's a lot of flexibility you

408
00:18:43,400 --> 00:18:45,640
Speaker 3: have in terms of how much you can pay. You

409
00:18:45,680 --> 00:18:48,399
Speaker 3: can get on an extended or graduated plan. If you

410
00:18:48,440 --> 00:18:51,600
Speaker 3: can't afford to pay the standard plan, you can consolidate

411
00:18:51,640 --> 00:18:53,600
Speaker 3: your loans with the government and put them on a

412
00:18:53,640 --> 00:18:57,520
Speaker 3: longer term repayment plan you know, amortization schedule. But you

413
00:18:57,560 --> 00:18:59,119
Speaker 3: probably do need to pay it back. If you have

414
00:18:59,560 --> 00:19:02,320
Speaker 3: two times what you earn every year or more, so

415
00:19:02,400 --> 00:19:05,080
Speaker 3: you have debt that's twice your income or more, you

416
00:19:05,119 --> 00:19:07,119
Speaker 3: need to go for forgiveness. The only question is is

417
00:19:07,160 --> 00:19:09,320
Speaker 3: how and you can optimize that and do a better

418
00:19:09,440 --> 00:19:11,760
Speaker 3: job of paying a lot less. And if you're somewhere

419
00:19:11,760 --> 00:19:14,919
Speaker 3: in between, if you're one to two times debt of

420
00:19:14,960 --> 00:19:17,800
Speaker 3: what you make every year, then the answer to what

421
00:19:17,840 --> 00:19:20,200
Speaker 3: should you do with your loans is it depends and

422
00:19:20,240 --> 00:19:23,040
Speaker 3: you need to kind of have a careful analysis of

423
00:19:23,119 --> 00:19:25,080
Speaker 3: you know, what are your goals, what are your dreams?

424
00:19:25,400 --> 00:19:28,439
Speaker 3: You know, what are you willing to do to you know,

425
00:19:28,800 --> 00:19:30,840
Speaker 3: in terms of sacrifices to make to pay off loans

426
00:19:30,920 --> 00:19:32,600
Speaker 3: versus not payoff loans, and you can still do a

427
00:19:32,600 --> 00:19:34,000
Speaker 3: bunch of stuff to lower your payments.

428
00:19:34,000 --> 00:19:35,480
Speaker 4: So most people's.

429
00:19:35,000 --> 00:19:38,480
Speaker 3: Payments are not low as low as they qualify for

430
00:19:38,640 --> 00:19:41,600
Speaker 3: because they're not taking advantage of all the loopholes that exist.

431
00:19:41,880 --> 00:19:44,000
Speaker 2: Sure, yeah, and being able to take advantage of those

432
00:19:44,040 --> 00:19:47,439
Speaker 2: loopholes depends on understanding and knowing what the law is.

433
00:19:47,480 --> 00:19:49,639
Speaker 2: And like you pointed out, that's it seems like there

434
00:19:49,640 --> 00:19:52,120
Speaker 2: are more mistakes that are being made these days where

435
00:19:52,119 --> 00:19:54,440
Speaker 2: stuff's just kind of getting tossed out there. But I

436
00:19:54,480 --> 00:19:56,479
Speaker 2: don't know, at least there was a corrective statement.

437
00:19:57,080 --> 00:19:59,480
Speaker 3: Yeah, positive, you know, look glass half all right.

438
00:19:59,400 --> 00:20:02,160
Speaker 1: Yeah, little silver lining to the shakeup.

439
00:20:02,560 --> 00:20:04,000
Speaker 2: And I love how you're getting to more of these

440
00:20:04,040 --> 00:20:07,800
Speaker 2: practical tips and pieces of advice, Travis. We're going to

441
00:20:07,840 --> 00:20:10,280
Speaker 2: get some more of that, including whether, just I guess,

442
00:20:10,320 --> 00:20:13,520
Speaker 2: the likelihood of whether someone should even consider discharging student

443
00:20:13,560 --> 00:20:15,720
Speaker 2: loans through something like bankruptcy, how that's changed.

444
00:20:15,720 --> 00:20:25,480
Speaker 1: We'll get to that and more. Right after this. We're

445
00:20:25,480 --> 00:20:28,760
Speaker 1: back still talking with Travis Hornsby, talking about student loans

446
00:20:28,880 --> 00:20:32,679
Speaker 1: and the shakeup that's happening in the first you know,

447
00:20:32,800 --> 00:20:36,040
Speaker 1: six months of the Trump administration and how that impacts

448
00:20:36,119 --> 00:20:38,840
Speaker 1: you as someone who has student loans. One of the

449
00:20:38,840 --> 00:20:42,760
Speaker 1: things traves that happened during under the Biden administration was

450
00:20:43,600 --> 00:20:48,600
Speaker 1: essentially looser rules about discharging student loans through bankruptcy. And

451
00:20:49,080 --> 00:20:52,480
Speaker 1: for as long as I've been alive and been thinking

452
00:20:52,480 --> 00:20:55,520
Speaker 1: about these things, student loans through bankruptcy, like getting them

453
00:20:55,520 --> 00:20:58,840
Speaker 1: discharged was impossible. And then the Biden administration said, hey,

454
00:20:59,560 --> 00:21:01,600
Speaker 1: we we want to make it a little bit easier

455
00:21:01,600 --> 00:21:04,320
Speaker 1: for people to pull that off. They had to be

456
00:21:04,359 --> 00:21:07,520
Speaker 1: able to prove what basically that they were unable to

457
00:21:07,520 --> 00:21:09,479
Speaker 1: pay these student loans back student loans back, and then

458
00:21:09,480 --> 00:21:13,080
Speaker 1: they wouldn't be able to How has that changed in

459
00:21:13,240 --> 00:21:15,480
Speaker 1: the first four months of the Trump administration? Can people

460
00:21:15,480 --> 00:21:18,320
Speaker 1: still Is that still a way that people can get

461
00:21:18,400 --> 00:21:19,600
Speaker 1: rid of their student loans altogether?

462
00:21:19,960 --> 00:21:22,000
Speaker 3: Generally speaking, No, it's very difficult to get your student

463
00:21:22,040 --> 00:21:25,280
Speaker 3: loans discharged in bankruptcy. I would like to give kind

464
00:21:25,280 --> 00:21:27,480
Speaker 3: of a quick rule for people to think about student loans,

465
00:21:27,480 --> 00:21:31,600
Speaker 3: like studenton policy tends to get driven by terrible and

466
00:21:31,680 --> 00:21:35,160
Speaker 3: horrific headlines. So let me give you an example of this. Right, So,

467
00:21:35,320 --> 00:21:38,199
Speaker 3: in the first Trump administration, there was a headline that

468
00:21:38,240 --> 00:21:41,040
Speaker 3: a Michigan man who was a combat veteran of Iraq

469
00:21:41,080 --> 00:21:45,160
Speaker 3: and Afghanistan suffered a traumatic brain injury when ied exploded,

470
00:21:45,600 --> 00:21:49,360
Speaker 3: and had a couple hundred thousand of student loans right

471
00:21:49,440 --> 00:21:52,359
Speaker 3: from a graduate degree that he did pre you know,

472
00:21:52,480 --> 00:21:58,280
Speaker 3: combat tours. The balance was considered taxable income as a

473
00:21:58,280 --> 00:22:01,639
Speaker 3: result of his disability discharge, and so the IRS and

474
00:22:01,680 --> 00:22:04,879
Speaker 3: the State of Michigan sent him a nearly six figure

475
00:22:04,960 --> 00:22:07,920
Speaker 3: tax bill for his forgiven student loans. This is a

476
00:22:07,920 --> 00:22:10,359
Speaker 3: guy who served our country literally suffered a brain injury,

477
00:22:11,040 --> 00:22:13,000
Speaker 3: and they gave him a huge tax bill. And what

478
00:22:13,040 --> 00:22:15,359
Speaker 3: the Trump administration did and the Tax Cuts and Jobs

479
00:22:15,359 --> 00:22:20,840
Speaker 3: Act is made discharge due to disability tax free. When

480
00:22:20,880 --> 00:22:22,879
Speaker 3: I say that, I don't say that to say that

481
00:22:22,880 --> 00:22:24,720
Speaker 3: the Trump administration is going to be super generous to

482
00:22:24,800 --> 00:22:26,760
Speaker 3: people and change bankruptcy laws in a way that most

483
00:22:26,800 --> 00:22:28,639
Speaker 3: borrowers would really get excited about.

484
00:22:28,720 --> 00:22:28,920
Speaker 4: Right.

485
00:22:29,280 --> 00:22:32,199
Speaker 3: What I'm saying, though, is if you have ten to

486
00:22:32,200 --> 00:22:34,560
Speaker 3: fifteen million people going to student un default like could

487
00:22:34,560 --> 00:22:37,320
Speaker 3: happen right like we're talking about on this show. If

488
00:22:37,320 --> 00:22:39,720
Speaker 3: that were to happen, the headlines would be so horrific.

489
00:22:40,040 --> 00:22:43,840
Speaker 3: The problems in the housing market in other economic markets

490
00:22:43,880 --> 00:22:46,720
Speaker 3: would be so bad that they would have to confront

491
00:22:46,960 --> 00:22:48,879
Speaker 3: what do we do with student un default? Because right

492
00:22:48,920 --> 00:22:51,600
Speaker 3: now they made the rules based off of this like

493
00:22:51,640 --> 00:22:54,480
Speaker 3: undoe hardship standard, which is extremely difficult standard to meet

494
00:22:54,520 --> 00:22:58,040
Speaker 3: to actually get your loans discharged. And most people they think, well,

495
00:22:58,040 --> 00:23:00,080
Speaker 3: if I just stopped making payments, that'll go away. So

496
00:23:00,119 --> 00:23:02,840
Speaker 3: that doesn't happen, because what happens when we have collections

497
00:23:02,880 --> 00:23:05,320
Speaker 3: turned on, which we're going to have that in early May,

498
00:23:05,760 --> 00:23:08,360
Speaker 3: is the government just takes fifteen percent of your income anyway.

499
00:23:08,840 --> 00:23:10,840
Speaker 3: And so what I tell people that are you know,

500
00:23:10,840 --> 00:23:13,680
Speaker 3: don't want to make student loan payments, are struggling to is, hey,

501
00:23:13,720 --> 00:23:15,720
Speaker 3: you might be able to pay ten percent instead of

502
00:23:15,720 --> 00:23:17,920
Speaker 3: fifteen percent of your income if you qualify for new

503
00:23:17,960 --> 00:23:20,400
Speaker 3: IBr for example, and you won't.

504
00:23:20,200 --> 00:23:21,000
Speaker 4: Wreck your credit.

505
00:23:21,320 --> 00:23:23,840
Speaker 3: Because if the government's going to take fifteen percent through

506
00:23:24,040 --> 00:23:26,520
Speaker 3: wage garnishments and tax refunds, they are going to get

507
00:23:26,560 --> 00:23:28,600
Speaker 3: their money, right, There's no doubt they're going to get

508
00:23:28,640 --> 00:23:30,800
Speaker 3: their money, So you might as well give them less

509
00:23:30,920 --> 00:23:34,040
Speaker 3: by voluntarily turning it over instead of involuntarily turning over

510
00:23:34,320 --> 00:23:37,359
Speaker 3: and also wrecking your credit. So for bankruptcy, the only

511
00:23:37,400 --> 00:23:39,720
Speaker 3: scenarios I think where bankruptcy is something that could be

512
00:23:39,800 --> 00:23:42,679
Speaker 3: considered is maybe on private student loans, but only with

513
00:23:42,760 --> 00:23:45,280
Speaker 3: the assistance of, you know, a very educated student, own

514
00:23:45,280 --> 00:23:47,960
Speaker 3: attorney that understands the consumer laws in your state, because

515
00:23:47,960 --> 00:23:50,560
Speaker 3: they're all different on things like statute of limitations and

516
00:23:50,600 --> 00:23:51,960
Speaker 3: burden a proof and things like that.

517
00:23:52,280 --> 00:23:54,680
Speaker 2: Yeah, I guess on that note, what other factors should

518
00:23:54,680 --> 00:23:57,880
Speaker 2: folks consider if they're like, Okay, maybe you know, maybe

519
00:23:57,880 --> 00:24:00,240
Speaker 2: now's a good time to refinance out of a federal

520
00:24:00,280 --> 00:24:02,440
Speaker 2: student loan. Maybe I should consider private student loans. What

521
00:24:02,480 --> 00:24:04,320
Speaker 2: are some other wellan considerations there?

522
00:24:04,359 --> 00:24:06,720
Speaker 3: You know, the Trump administration here is not going to

523
00:24:06,800 --> 00:24:10,600
Speaker 3: last forever, right jokes on SNL aside, right, Like, he

524
00:24:11,400 --> 00:24:13,600
Speaker 3: will be done after the second term. And the question

525
00:24:13,680 --> 00:24:15,440
Speaker 3: is will a Republican win in twenty twenty eight or

526
00:24:15,440 --> 00:24:17,320
Speaker 3: will a Democrat win in twenty twenty eight? What I

527
00:24:17,320 --> 00:24:19,800
Speaker 3: would bet is if a Democratic wins in twenty twenty eight,

528
00:24:19,880 --> 00:24:22,560
Speaker 3: the federal student loan benefits are going to increase, and

529
00:24:22,600 --> 00:24:25,400
Speaker 3: if Republican wins, they will stay the same or decrease. Right,

530
00:24:25,440 --> 00:24:27,760
Speaker 3: That's generally a good bet. And so if you are

531
00:24:28,359 --> 00:24:31,159
Speaker 3: what I would call a marginal refinancing candidate, Like, you

532
00:24:31,200 --> 00:24:33,080
Speaker 3: have five and a half percent federal loans and you

533
00:24:33,160 --> 00:24:35,960
Speaker 3: might get a five percent from refinancing. You know what,

534
00:24:36,040 --> 00:24:38,400
Speaker 3: federal protections are worth something, and so if you're only

535
00:24:38,520 --> 00:24:41,560
Speaker 3: benefiting by like half a percent lower rate, it might

536
00:24:41,640 --> 00:24:43,359
Speaker 3: be kind of a good idea to kind of just

537
00:24:43,480 --> 00:24:47,080
Speaker 3: keep it federal, make your minimum payments. You know, see

538
00:24:47,119 --> 00:24:49,200
Speaker 3: what happens the next three years or so three and

539
00:24:49,200 --> 00:24:51,760
Speaker 3: a half years, right, and then if you are just

540
00:24:51,760 --> 00:24:54,920
Speaker 3: a slam dunk refinancing case, what is that? First off,

541
00:24:54,920 --> 00:24:56,919
Speaker 3: a lot of people are getting zero percent interest in

542
00:24:56,960 --> 00:24:59,040
Speaker 3: the same plan for bearance, and you want to benefit

543
00:24:59,160 --> 00:25:01,600
Speaker 3: on that until you you're completely done with that, Right,

544
00:25:01,680 --> 00:25:04,480
Speaker 3: So if you're getting zero percent, get all your zero

545
00:25:04,560 --> 00:25:07,800
Speaker 3: percent you possibly can. Yeah, And when that ends, you'll

546
00:25:07,840 --> 00:25:09,840
Speaker 3: have a decision to make. And the decision might be

547
00:25:10,320 --> 00:25:12,320
Speaker 3: depending on when you borrow your loans, because the interest

548
00:25:12,400 --> 00:25:14,000
Speaker 3: rates of the loans are all different depending on what

549
00:25:14,080 --> 00:25:16,520
Speaker 3: year you borrowed. So if you borrowed and your interest

550
00:25:16,600 --> 00:25:18,359
Speaker 3: rate is like eight or nine percent and you can

551
00:25:18,400 --> 00:25:21,200
Speaker 3: get five percent the private market. Remember that test I

552
00:25:21,200 --> 00:25:23,280
Speaker 3: said earlier of do you earn more money than you

553
00:25:24,240 --> 00:25:25,840
Speaker 3: have in student loans. So if you have you one

554
00:25:25,880 --> 00:25:29,159
Speaker 3: hundred thousand of income, you have fifty thousand of student loans.

555
00:25:29,720 --> 00:25:31,840
Speaker 3: Which you could do is do a selective refinancing. You

556
00:25:31,880 --> 00:25:34,239
Speaker 3: could say, Okay, anything above a five percent I'm going

557
00:25:34,280 --> 00:25:36,000
Speaker 3: to convert that to a private loan or a lower

558
00:25:36,000 --> 00:25:38,040
Speaker 3: interest rate, and anything that's you know, three to five,

559
00:25:38,119 --> 00:25:39,680
Speaker 3: I'm just going to keep it on the federal market.

560
00:25:39,800 --> 00:25:42,040
Speaker 3: So people have a lot of choices in how they

561
00:25:42,119 --> 00:25:45,000
Speaker 3: tackle this, right, they could refinance the whole thing. They

562
00:25:45,000 --> 00:25:47,280
Speaker 3: could do it with a federal government, which doesn't change

563
00:25:47,280 --> 00:25:49,080
Speaker 3: the interest rate, but it does change some of the

564
00:25:49,160 --> 00:25:53,000
Speaker 3: terms sometimes in your favor, right, like things like stretching

565
00:25:53,000 --> 00:25:54,960
Speaker 3: out the payment terms. So, for example, if you have

566
00:25:55,000 --> 00:25:57,520
Speaker 3: over sixty thousand in federal suit of loans, if you

567
00:25:57,600 --> 00:26:01,480
Speaker 3: quote unquote refinance with the government, then your payment required

568
00:26:01,520 --> 00:26:03,520
Speaker 3: payment goes from like a ten year schedule to a

569
00:26:03,560 --> 00:26:06,159
Speaker 3: thirty year schedule. And so that could be really beneficial

570
00:26:06,200 --> 00:26:07,879
Speaker 3: for somebody who has a bunch of credit card debt

571
00:26:07,920 --> 00:26:09,920
Speaker 3: who's struggling to make their payments and they can't make

572
00:26:09,960 --> 00:26:12,080
Speaker 3: the ten year payment, Well, what if you can convert

573
00:26:12,119 --> 00:26:14,640
Speaker 3: a tenure payment to a thirty year payment schedule? You'll

574
00:26:14,680 --> 00:26:16,080
Speaker 3: have to pay a lot less and you'll get more

575
00:26:16,119 --> 00:26:18,679
Speaker 3: breathing room. Right, So there's all kinds of levers that

576
00:26:18,720 --> 00:26:21,240
Speaker 3: you can pull, and the key thing is just to

577
00:26:21,320 --> 00:26:24,000
Speaker 3: know what, when do you pull which lever and why?

578
00:26:24,320 --> 00:26:27,840
Speaker 1: Yeah, I've heard, I've heard you also make the suggestion

579
00:26:28,359 --> 00:26:31,120
Speaker 1: that people think about changing jobs or taking a work

580
00:26:31,160 --> 00:26:34,120
Speaker 1: break in order to reduce that student loan payment, bring

581
00:26:34,119 --> 00:26:38,080
Speaker 1: the payment down. I guess maybe it's not. It's easier

582
00:26:38,119 --> 00:26:39,600
Speaker 1: said than none for a lot of people who are like,

583
00:26:39,760 --> 00:26:42,760
Speaker 1: I need a paycheck, Travis, but thank you. So how

584
00:26:42,760 --> 00:26:45,919
Speaker 1: do you think some people, though, can implement that strategy

585
00:26:46,119 --> 00:26:49,040
Speaker 1: in order to reduce their student loan payments? And when

586
00:26:49,119 --> 00:26:50,520
Speaker 1: might that be worth it? Well?

587
00:26:50,560 --> 00:26:52,480
Speaker 3: I mean, so, for example, you do not have to

588
00:26:52,520 --> 00:26:55,919
Speaker 3: report when your payment where your income goes up except

589
00:26:55,920 --> 00:26:58,880
Speaker 3: at like regularly scheduled intervals. So they're going to tell you, hey,

590
00:26:58,880 --> 00:27:01,200
Speaker 3: it's time to recertify your income, so we can calculate

591
00:27:01,200 --> 00:27:03,200
Speaker 3: your income based payment of what you should pay every

592
00:27:03,200 --> 00:27:05,840
Speaker 3: month on your loans. Right, But what they do allow

593
00:27:05,880 --> 00:27:08,040
Speaker 3: you to do is if your income goes down, you

594
00:27:08,080 --> 00:27:11,359
Speaker 3: can request an early recertification at Student ad dut Gov

595
00:27:11,440 --> 00:27:14,679
Speaker 3: slash IDR And I'll give you an example of this.

596
00:27:14,840 --> 00:27:18,000
Speaker 3: We had a client who was on a maternity leave

597
00:27:18,480 --> 00:27:21,760
Speaker 3: and the first six weeks were paid and then the

598
00:27:21,800 --> 00:27:25,280
Speaker 3: other six weeks were unpaid. And during those latter six weeks,

599
00:27:25,280 --> 00:27:28,119
Speaker 3: she was not getting a taxable income. So what I

600
00:27:28,160 --> 00:27:30,320
Speaker 3: suggested to her is go to student ad dut gov

601
00:27:30,359 --> 00:27:34,800
Speaker 3: slash idr and click on recalculate my payment and state

602
00:27:35,000 --> 00:27:38,280
Speaker 3: the truth, which is that at the moment she did that,

603
00:27:38,440 --> 00:27:40,960
Speaker 3: she did not have a taxable income that was coming

604
00:27:40,960 --> 00:27:44,240
Speaker 3: in right during the six weeks window that she did

605
00:27:44,240 --> 00:27:46,359
Speaker 3: not have a taxable income coming in. That was a

606
00:27:46,359 --> 00:27:48,360
Speaker 3: true statement, and so she was able to re calculate

607
00:27:48,400 --> 00:27:50,520
Speaker 3: her payment to a much lower number. So, if you're

608
00:27:50,560 --> 00:27:53,200
Speaker 3: in between jobs for a couple months, if you are

609
00:27:53,520 --> 00:27:56,800
Speaker 3: doing a a sabbatical from your job, if you're doing

610
00:27:56,960 --> 00:27:58,679
Speaker 3: what I did when I was in my twenties, traveling

611
00:27:58,720 --> 00:28:00,800
Speaker 3: the world, taking a break from where, it is within

612
00:28:00,880 --> 00:28:03,320
Speaker 3: your rights to go to your student loan website student

613
00:28:03,359 --> 00:28:06,080
Speaker 3: a dut gov slash IDR and get your payment recalculated

614
00:28:06,119 --> 00:28:07,439
Speaker 3: to a much much lower number.

615
00:28:07,640 --> 00:28:10,320
Speaker 1: How long does it last? Like so she goes back

616
00:28:10,359 --> 00:28:13,920
Speaker 1: to work and then her payment doesn't go up, right,

617
00:28:13,960 --> 00:28:15,120
Speaker 1: when she goes back day one.

618
00:28:15,320 --> 00:28:16,440
Speaker 4: Right, we all it depends the keys.

619
00:28:16,600 --> 00:28:19,240
Speaker 1: What TRAVI said, you said regular intervals. What are those intervals?

620
00:28:19,320 --> 00:28:21,320
Speaker 3: Yeah, it depends on the person. So what happens is

621
00:28:21,320 --> 00:28:23,959
Speaker 3: most people when they graduate, graduate in the spring, and

622
00:28:24,080 --> 00:28:26,040
Speaker 3: you have a six month grace period if you don't

623
00:28:26,080 --> 00:28:29,359
Speaker 3: do anything otherwise. So most people, if they do nothing,

624
00:28:29,680 --> 00:28:33,240
Speaker 3: are going into a like they graduate in June. Six

625
00:28:33,280 --> 00:28:36,280
Speaker 3: months after that is like November December, that's when they

626
00:28:36,280 --> 00:28:38,640
Speaker 3: get their first payment due. And so for that person,

627
00:28:38,720 --> 00:28:41,880
Speaker 3: their recertification date for their income based payment plan is

628
00:28:41,920 --> 00:28:45,280
Speaker 3: going to be November December every year at the same time. Right,

629
00:28:45,640 --> 00:28:48,479
Speaker 3: So if she's on this maternity leave, she might get

630
00:28:48,640 --> 00:28:51,240
Speaker 3: you know, the point at which she recalculated her payment

631
00:28:51,320 --> 00:28:54,640
Speaker 3: until her next recertification date with low payments, and then

632
00:28:54,800 --> 00:28:57,520
Speaker 3: you know what would happen is when she goes to

633
00:28:57,560 --> 00:29:01,880
Speaker 3: recalculate her new payment, she could do is to say, well,

634
00:29:02,520 --> 00:29:05,239
Speaker 3: you know, is my current income lower or higher than

635
00:29:05,240 --> 00:29:07,840
Speaker 3: my last tax return. If it's higher than my last

636
00:29:07,840 --> 00:29:10,440
Speaker 3: tax return, then she wants to use her last tax

637
00:29:10,440 --> 00:29:13,760
Speaker 3: return to recertify her income at her next recertification date

638
00:29:13,800 --> 00:29:16,479
Speaker 3: when she has to report her income for calculating her

639
00:29:16,520 --> 00:29:19,600
Speaker 3: IBr payment. Right, So for example, let's say you know,

640
00:29:19,640 --> 00:29:21,880
Speaker 3: she's making one hundred twenty K a year, you know,

641
00:29:21,960 --> 00:29:23,840
Speaker 3: and let's say she has to recertify every year in

642
00:29:23,880 --> 00:29:26,720
Speaker 3: December or something. So if she has this you know,

643
00:29:26,840 --> 00:29:30,000
Speaker 3: unpaid maternity leave, she recalculates her payment to basically zero,

644
00:29:30,440 --> 00:29:33,240
Speaker 3: and then her next you know, let's say her next

645
00:29:33,680 --> 00:29:36,200
Speaker 3: recertification date, she's back to making one hundred and twenty

646
00:29:36,280 --> 00:29:38,560
Speaker 3: K year. Well, since she had a maternity leave or

647
00:29:38,560 --> 00:29:41,240
Speaker 3: she was making nothing, maybe her prior year tax atturn

648
00:29:41,360 --> 00:29:43,520
Speaker 3: is showing one hundred K of income, so she'd rather

649
00:29:43,680 --> 00:29:46,239
Speaker 3: use that to recertify her income instead because it's going

650
00:29:46,280 --> 00:29:48,120
Speaker 3: to give her a lower payment. So that's kind of

651
00:29:48,200 --> 00:29:50,479
Speaker 3: that's kind of what I mean about just knowing what

652
00:29:50,520 --> 00:29:52,440
Speaker 3: are you allowed to do based off of the rules

653
00:29:52,440 --> 00:29:54,880
Speaker 3: and the laws. And you know, that's why most people

654
00:29:54,880 --> 00:29:57,080
Speaker 3: pay too much, is because they're not taking advantage of

655
00:29:57,080 --> 00:29:58,720
Speaker 3: what they're able to do legally.

656
00:29:58,760 --> 00:30:01,000
Speaker 2: Sure, I think some folks might have call them like loopholes,

657
00:30:01,040 --> 00:30:04,160
Speaker 2: but no, it's this is just truly what the law states.

658
00:30:04,520 --> 00:30:06,959
Speaker 2: And so to put a fine point on it, it is

659
00:30:07,000 --> 00:30:09,920
Speaker 2: an annual recertification because I thought I saw something about

660
00:30:10,400 --> 00:30:15,800
Speaker 2: enrollments in these IBr plans not requiring recertification every single year.

661
00:30:15,880 --> 00:30:20,160
Speaker 3: We also they have pushed out recertification dates every few

662
00:30:20,200 --> 00:30:23,120
Speaker 3: months four years. So it's one thing we talk about

663
00:30:23,160 --> 00:30:26,480
Speaker 3: the turning on the payments and collections aspect of student loans. Again,

664
00:30:26,800 --> 00:30:29,680
Speaker 3: the Trump administration, not the Biden administration, has just pushed

665
00:30:29,720 --> 00:30:33,400
Speaker 3: out IDR recertification dates to know earlier than February twenty

666
00:30:33,440 --> 00:30:37,680
Speaker 3: twenty six. So the Biden administration started doing this by

667
00:30:37,680 --> 00:30:40,680
Speaker 3: pushing out IDR recertification dates basically every few months because

668
00:30:40,720 --> 00:30:44,760
Speaker 3: they wanted payments to be low, especially before key election dates.

669
00:30:45,320 --> 00:30:47,880
Speaker 3: And they also didn't have the capacity in the services

670
00:30:47,960 --> 00:30:50,320
Speaker 3: to recalculate what people even owed, which is that's kind

671
00:30:50,320 --> 00:30:52,680
Speaker 3: of terrible, isn't it, Like in terms of just, you know,

672
00:30:52,720 --> 00:30:57,320
Speaker 3: an embarrassing operational failure that the servicers cannot even calculate

673
00:30:57,360 --> 00:30:59,720
Speaker 3: what people owe because they don't have the staff, they

674
00:30:59,720 --> 00:31:01,600
Speaker 3: don't have the rules given to them by department.

675
00:31:01,640 --> 00:31:03,480
Speaker 2: Event you don't have the infrastructure in place to be

676
00:31:03,480 --> 00:31:06,080
Speaker 2: able to handle exactly figuring out what the new payments

677
00:31:06,080 --> 00:31:06,520
Speaker 2: are going to be.

678
00:31:06,520 --> 00:31:08,760
Speaker 3: And so even the Trump administration which is making this

679
00:31:08,840 --> 00:31:11,080
Speaker 3: big public spectacle of you know, we're going to make

680
00:31:11,080 --> 00:31:14,240
Speaker 3: people pay what they owe. Well, they have pushed off recertification.

681
00:31:14,320 --> 00:31:17,520
Speaker 3: I've seen some borrowers with a required recertification date of

682
00:31:17,600 --> 00:31:20,360
Speaker 3: January twenty twenty seven. And these are people in some

683
00:31:20,440 --> 00:31:23,680
Speaker 3: cases who last recertified their income where their twenty eighteen

684
00:31:23,760 --> 00:31:26,760
Speaker 3: tax return in twenty nineteen, and then COVID happened in

685
00:31:26,760 --> 00:31:29,400
Speaker 3: March twenty twenty, and then people got paused on their

686
00:31:29,440 --> 00:31:31,960
Speaker 3: requirement certify. So I'm not I don't want to get

687
00:31:32,040 --> 00:31:34,160
Speaker 3: like in trouble sharing too much here, but we have

688
00:31:34,240 --> 00:31:37,400
Speaker 3: people making six figures that are perfectly willing to pay,

689
00:31:37,760 --> 00:31:39,360
Speaker 3: you know, two thousand a month, and their student loans

690
00:31:39,400 --> 00:31:41,720
Speaker 3: that they're supposed to that are getting credit for forgiveness

691
00:31:41,720 --> 00:31:43,680
Speaker 3: programs but are still paying based off of when they

692
00:31:43,720 --> 00:31:47,160
Speaker 3: just graduated. They're paying two hundred dollars a month, right, So,

693
00:31:47,400 --> 00:31:50,040
Speaker 3: and the Trump administration is saying we don't mind extending

694
00:31:50,080 --> 00:31:52,400
Speaker 3: those two hundred dollars a month payments to January twenty

695
00:31:52,440 --> 00:31:55,080
Speaker 3: twenty seven for some people. So this is like, yeah,

696
00:31:55,080 --> 00:31:55,640
Speaker 3: it's crazy.

697
00:31:55,720 --> 00:31:58,200
Speaker 1: From a personal finance standpoint, I'm curious, like, what are

698
00:31:58,280 --> 00:32:01,560
Speaker 1: you telling clients who come to you because hey, right

699
00:32:01,600 --> 00:32:05,120
Speaker 1: now the getting has been good, you've had payments deferred

700
00:32:05,240 --> 00:32:08,720
Speaker 1: or you have had an artificially low payment, and are

701
00:32:08,760 --> 00:32:11,960
Speaker 1: you suggesting bulk up those reserves because this might not

702
00:32:12,080 --> 00:32:15,480
Speaker 1: last forever. How do you help people think about the

703
00:32:15,600 --> 00:32:19,080
Speaker 1: fact that payments could go and they already are going

704
00:32:19,160 --> 00:32:22,160
Speaker 1: up for some people, uh and to be prepared for that.

705
00:32:22,920 --> 00:32:25,440
Speaker 1: While maybe you have a pretty solid deal right.

706
00:32:25,360 --> 00:32:28,160
Speaker 3: Now, Well, I mean I think that, you know, people

707
00:32:28,200 --> 00:32:31,520
Speaker 3: have different level of economic security, and I just want

708
00:32:31,520 --> 00:32:34,160
Speaker 3: to kind of acknowledge that, right, like so uh so,

709
00:32:34,200 --> 00:32:36,400
Speaker 3: for example, if if my taxes go way up, right,

710
00:32:36,920 --> 00:32:39,520
Speaker 3: I'm gonna I'm gonna, you know, make a comment hashtag

711
00:32:39,600 --> 00:32:41,920
Speaker 3: check my privilege here, right, But you know, if taxes

712
00:32:41,960 --> 00:32:45,080
Speaker 3: go way up, maybe maybe I'm cool with my one

713
00:32:45,080 --> 00:32:47,080
Speaker 3: thousand dollars telescope for a while, do you know what

714
00:32:47,120 --> 00:32:47,440
Speaker 3: I mean?

715
00:32:48,200 --> 00:32:49,160
Speaker 1: Upgrading quite yet?

716
00:32:49,360 --> 00:32:51,760
Speaker 3: Maybe maybe I'm putting off the fully loaded you know,

717
00:32:51,920 --> 00:32:54,800
Speaker 3: like you know, computer tracking the comments or whatever. You

718
00:32:54,840 --> 00:32:57,160
Speaker 3: know what I mean, like so, so and and so,

719
00:32:57,200 --> 00:32:59,880
Speaker 3: maybe for like a middle class person, this might mean,

720
00:33:00,080 --> 00:33:01,560
Speaker 3: you know, cay, I'm gonna drive my camera for a

721
00:33:01,560 --> 00:33:05,160
Speaker 3: while before upgrading to the newer model, right, or something

722
00:33:05,240 --> 00:33:06,960
Speaker 3: like that. Now for people at the lower end of

723
00:33:07,000 --> 00:33:10,000
Speaker 3: the economic spectrum, they don't have those those privileges, right,

724
00:33:10,280 --> 00:33:12,440
Speaker 3: And so the good news is if somebody knows their

725
00:33:12,520 --> 00:33:14,400
Speaker 3: rights under the student on rules, if you truly are

726
00:33:14,400 --> 00:33:16,000
Speaker 3: making not a lot of income, you should be able

727
00:33:16,040 --> 00:33:18,720
Speaker 3: to qualify for a zero dollar payment like or very

728
00:33:18,760 --> 00:33:20,560
Speaker 3: close to it, because you just have to get onto

729
00:33:20,560 --> 00:33:22,920
Speaker 3: the income based or payment plan. And so many people

730
00:33:22,960 --> 00:33:25,000
Speaker 3: don't even know that they could benefit from that, Like,

731
00:33:25,080 --> 00:33:27,800
Speaker 3: so many people don't still do not know that they

732
00:33:27,840 --> 00:33:30,480
Speaker 3: can sign up for that. Like, you know, eight million

733
00:33:30,560 --> 00:33:32,320
Speaker 3: or nine million people sign up for the Save plan.

734
00:33:32,920 --> 00:33:35,680
Speaker 3: The awkward truth about that though, is actually maybe like

735
00:33:35,720 --> 00:33:37,960
Speaker 3: twenty million people could have benefited from it, but only

736
00:33:38,000 --> 00:33:40,840
Speaker 3: eight or nine million people signed up, right, So you're

737
00:33:40,920 --> 00:33:45,560
Speaker 3: more economically struggling folks. The government cannot auto enroll people

738
00:33:45,600 --> 00:33:47,040
Speaker 3: into IBr they're not allowed to.

739
00:33:47,320 --> 00:33:49,640
Speaker 1: So maybe all those people were clairvoyant and they knew

740
00:33:49,680 --> 00:33:51,320
Speaker 1: that it wasn't going to last. I don't know, maybe

741
00:33:51,320 --> 00:33:53,040
Speaker 1: that's what it was. Yeah, but I think a lot

742
00:33:53,040 --> 00:33:55,960
Speaker 1: of it as people like to. I mean, money is

743
00:33:56,040 --> 00:33:59,320
Speaker 1: very stressful, particularly for people who are who do not

744
00:33:59,440 --> 00:34:01,800
Speaker 1: have access to the same income that middle and upper

745
00:34:01,840 --> 00:34:04,400
Speaker 1: middle income families have right, and so a lot of

746
00:34:04,440 --> 00:34:07,640
Speaker 1: people just take the maybe if ignore it'll go away approach.

747
00:34:07,920 --> 00:34:10,080
Speaker 1: And the problem with that thinking is it's absolutely not

748
00:34:10,080 --> 00:34:12,560
Speaker 1: true because the government can seize your wages and tax refunds.

749
00:34:12,600 --> 00:34:15,240
Speaker 2: Again, i've heard you mention the term partial financial hardship.

750
00:34:15,320 --> 00:34:17,480
Speaker 2: Is that something that folks should Is that what you're

751
00:34:17,520 --> 00:34:19,440
Speaker 2: talking about here or is that like a completely different term.

752
00:34:19,560 --> 00:34:22,000
Speaker 3: Well, partial financial hardship doesn't mean what it sounds like,

753
00:34:22,160 --> 00:34:26,200
Speaker 3: so Parkay, partial financial hardship sounds like you're struggling. In reality,

754
00:34:26,320 --> 00:34:28,920
Speaker 3: what it is is do you have a payment that's

755
00:34:28,960 --> 00:34:31,600
Speaker 3: lower than the standard tenure for your loan amount. So,

756
00:34:31,719 --> 00:34:35,000
Speaker 3: for example, somebody could have a forty thousand dollars income

757
00:34:35,080 --> 00:34:37,480
Speaker 3: in twenty thousand dollars of steat of loans and not

758
00:34:37,680 --> 00:34:41,080
Speaker 3: have a partial financial hardship because their payment calculated on

759
00:34:41,120 --> 00:34:43,360
Speaker 3: the income based your payment plan is higher than what

760
00:34:43,400 --> 00:34:45,879
Speaker 3: they'd have to pay if they paid two hundred dollars

761
00:34:45,920 --> 00:34:48,200
Speaker 3: a month to pay their twenty k off in ten years.

762
00:34:48,360 --> 00:34:51,440
Speaker 3: So that person with forty forty k income twenty k

763
00:34:51,480 --> 00:34:54,200
Speaker 3: of loans might not have a partial financial hardship. Meanwhile,

764
00:34:55,080 --> 00:34:57,480
Speaker 3: you know a doctor who has four hundred thousand of

765
00:34:57,480 --> 00:34:59,920
Speaker 3: steel loans with two hundred thousand of income might have

766
00:35:00,080 --> 00:35:02,759
Speaker 3: have a partial financial hardship because their income based your

767
00:35:02,760 --> 00:35:04,880
Speaker 3: payment is lower than four thousand a month, which is

768
00:35:04,880 --> 00:35:06,239
Speaker 3: what they would have to pay to pay it off

769
00:35:06,239 --> 00:35:06,880
Speaker 3: in ten years.

770
00:35:07,280 --> 00:35:07,480
Speaker 4: Right.

771
00:35:07,920 --> 00:35:12,080
Speaker 3: So what that means is is that you know, in general,

772
00:35:12,360 --> 00:35:15,040
Speaker 3: what I said about the greater than two times your

773
00:35:15,040 --> 00:35:17,919
Speaker 3: income and debt, you know, basically all those people should

774
00:35:17,960 --> 00:35:20,080
Speaker 3: go for forgiveness. Like if you're not going for forgiveness,

775
00:35:20,080 --> 00:35:23,839
Speaker 3: you're probably just hurting yourself financially. And what I said

776
00:35:23,920 --> 00:35:27,799
Speaker 3: during the Biden administration is is basically, if you have

777
00:35:28,600 --> 00:35:31,319
Speaker 3: more debt than your income at all, like if your

778
00:35:31,320 --> 00:35:33,239
Speaker 3: debt to income ratio is more than one to one,

779
00:35:33,320 --> 00:35:36,200
Speaker 3: you should go for forgiveness. During the Biden administration, you know,

780
00:35:36,239 --> 00:35:38,400
Speaker 3: the problem is is with the less generous rules the

781
00:35:38,440 --> 00:35:41,440
Speaker 3: Trump administration is rolling out. Forgiveness is still very much

782
00:35:41,440 --> 00:35:43,879
Speaker 3: a thing, but it's not as a thing for as

783
00:35:43,920 --> 00:35:46,200
Speaker 3: many people, which is why I'm saying, well, now it's

784
00:35:46,200 --> 00:35:48,400
Speaker 3: really more like two to one debt to income ratio,

785
00:35:48,440 --> 00:35:50,840
Speaker 3: go for forgiveness. And if you're in this one to

786
00:35:50,880 --> 00:35:54,839
Speaker 3: two times, you know your your income in debt student debt.

787
00:35:55,239 --> 00:35:58,640
Speaker 3: Then then it's a it depends, right, It depends on

788
00:35:58,680 --> 00:36:02,000
Speaker 3: your plans for your career, your family goals, your your

789
00:36:02,040 --> 00:36:05,239
Speaker 3: expected income growth, right, your your risk tolerance for you know,

790
00:36:05,239 --> 00:36:06,480
Speaker 3: do you want to wait it out a little bit

791
00:36:06,600 --> 00:36:09,319
Speaker 3: to see what happens policy wise? And you know, for

792
00:36:09,360 --> 00:36:13,560
Speaker 3: people who have less student debt than their income, there's

793
00:36:13,560 --> 00:36:16,439
Speaker 3: still strategies, there's still approaches to pay less, there's still

794
00:36:16,480 --> 00:36:20,080
Speaker 3: ways to have a better situation. You know, some people

795
00:36:20,120 --> 00:36:22,600
Speaker 3: even could still benefit from forgiveness if you're very low

796
00:36:22,640 --> 00:36:25,680
Speaker 3: income and that ratio applies to you. But you know

797
00:36:25,760 --> 00:36:29,600
Speaker 3: it just you know, it depends, is the mushy mouthed answer.

798
00:36:29,920 --> 00:36:33,080
Speaker 1: Yeah, no, no, but that's really helpful kind of lines

799
00:36:33,120 --> 00:36:37,120
Speaker 1: of demarcation there. I'm curious too, your you've talked about

800
00:36:37,160 --> 00:36:39,640
Speaker 1: the clawing back of forgiveness. People who have gotten forgiveness,

801
00:36:40,080 --> 00:36:43,279
Speaker 1: they're not going to get unforgiven, right, and that that

802
00:36:43,320 --> 00:36:47,680
Speaker 1: would be illegal. But are you worried about the PSLF

803
00:36:47,840 --> 00:36:49,920
Speaker 1: program and maybe some sort of rug pull. I know

804
00:36:50,000 --> 00:36:52,319
Speaker 1: people who are in that and who are let's say

805
00:36:52,320 --> 00:36:56,200
Speaker 1: seven eight years along, and they're worried. They're like, is

806
00:36:56,239 --> 00:36:58,919
Speaker 1: something going to happen before I get to that point

807
00:36:58,960 --> 00:37:01,320
Speaker 1: where forgiveness is real each cause, like I'm pop committed

808
00:37:01,360 --> 00:37:01,920
Speaker 1: at this point.

809
00:37:02,000 --> 00:37:05,160
Speaker 3: Well, I mean I like to think in terms of probabilities. Right,

810
00:37:05,920 --> 00:37:08,120
Speaker 3: I was an econ in stats. Major makes me weird,

811
00:37:08,320 --> 00:37:09,920
Speaker 3: but you know that's what I like to think of

812
00:37:10,000 --> 00:37:12,480
Speaker 3: in terms of giving people advice, because there's probabilities that

813
00:37:12,600 --> 00:37:15,279
Speaker 3: are fifty to fifty and there's ones that are like

814
00:37:15,320 --> 00:37:16,280
Speaker 3: ten percent chance.

815
00:37:16,400 --> 00:37:16,640
Speaker 4: Right.

816
00:37:17,040 --> 00:37:19,400
Speaker 3: And so with PS LEFT, the biggest drug pull that

817
00:37:19,400 --> 00:37:20,880
Speaker 3: can happen is there's a bill right now in the

818
00:37:20,880 --> 00:37:24,239
Speaker 3: House to take away nonprofit status from hospitals and make

819
00:37:24,280 --> 00:37:27,359
Speaker 3: them for profits. So that would be a way that

820
00:37:27,400 --> 00:37:29,400
Speaker 3: you could take away PS LEFT through a back door

821
00:37:29,440 --> 00:37:32,959
Speaker 3: for at least half the people that currently qualify for it, right,

822
00:37:33,280 --> 00:37:36,000
Speaker 3: And should you be worried about that? Like, what I

823
00:37:36,000 --> 00:37:38,160
Speaker 3: would tell people that are in that boat is no.

824
00:37:38,719 --> 00:37:40,799
Speaker 3: And the reason is it has to pass not just

825
00:37:40,840 --> 00:37:42,879
Speaker 3: the House but also the Senate. And if you look

826
00:37:42,920 --> 00:37:47,279
Speaker 3: at the Senate, there are basically four Republicans swing votes

827
00:37:47,360 --> 00:37:51,799
Speaker 3: right now. In my mind, there's Murkowski and Collins in

828
00:37:51,880 --> 00:37:54,839
Speaker 3: Alaska and Maine. There's Mitch McConnell, who's been voting against

829
00:37:54,880 --> 00:37:56,520
Speaker 3: administration and a lot of things now that he's not

830
00:37:56,560 --> 00:37:59,200
Speaker 3: the Republican leader, and there's Tom Tillis in North Carolina

831
00:37:59,239 --> 00:38:00,680
Speaker 3: and he's kind of like the wing votes. So if

832
00:38:00,680 --> 00:38:03,000
Speaker 3: you think about somebody like him, I live in North Carolina,

833
00:38:03,320 --> 00:38:06,840
Speaker 3: imagine Douke and you and see going from not for

834
00:38:06,920 --> 00:38:09,040
Speaker 3: profit to for profit and them having to do a

835
00:38:09,040 --> 00:38:11,400
Speaker 3: bunch of layoffs, and he's got a competitive reelection at

836
00:38:11,440 --> 00:38:13,080
Speaker 3: twenty twenty six. Is he going to vote for that?

837
00:38:13,719 --> 00:38:15,800
Speaker 3: I would bet not. I would bet that the Senate

838
00:38:15,920 --> 00:38:18,160
Speaker 3: modifies and makes less aggressive a lot of the House

839
00:38:18,200 --> 00:38:21,759
Speaker 3: GOP's proposals for things like this, and I would not

840
00:38:22,000 --> 00:38:25,600
Speaker 3: worry about that until we actually see the text of

841
00:38:25,640 --> 00:38:29,680
Speaker 3: the bill move along and pass you know, a committee

842
00:38:29,680 --> 00:38:32,920
Speaker 3: for example. So I think that people are really worried

843
00:38:32,920 --> 00:38:34,719
Speaker 3: about what the House and Senat are going to do

844
00:38:34,760 --> 00:38:37,920
Speaker 3: because they do have unified control of DC, right, and

845
00:38:37,960 --> 00:38:40,919
Speaker 3: they will pass some kind of big bill that's gonna

846
00:38:40,920 --> 00:38:42,359
Speaker 3: have a lot of stuff in it because they have

847
00:38:42,440 --> 00:38:44,279
Speaker 3: to because the Trump tax cuts expire at the end

848
00:38:44,320 --> 00:38:46,319
Speaker 3: of twenty twenty five. So that is a guarantee that

849
00:38:46,400 --> 00:38:48,680
Speaker 3: you will see a bill and there will be something

850
00:38:48,680 --> 00:38:50,600
Speaker 3: related to student loans in it. The question is is

851
00:38:50,640 --> 00:38:52,480
Speaker 3: how much will be in it and how much will

852
00:38:52,520 --> 00:38:54,520
Speaker 3: borrowers have to worry about when they find, you know,

853
00:38:54,520 --> 00:38:57,680
Speaker 3: when the text has battled over and finally published.

854
00:38:57,400 --> 00:38:59,560
Speaker 2: Could you see a situation where it's at least for

855
00:38:59,760 --> 00:39:02,680
Speaker 2: looking and a lot of folks get to get grandfathered

856
00:39:02,680 --> 00:39:05,720
Speaker 2: into the previous PSLF or I'm sorry, with a hospital

857
00:39:05,719 --> 00:39:06,640
Speaker 2: nonprofit designation.

858
00:39:06,960 --> 00:39:08,279
Speaker 3: I think that it will be and I think that

859
00:39:08,320 --> 00:39:09,840
Speaker 3: you know that the people the only people that have

860
00:39:09,880 --> 00:39:12,360
Speaker 3: to worry about forgiveness being clawed back is people that

861
00:39:12,520 --> 00:39:16,400
Speaker 3: were not actually eligible for it. And I know that

862
00:39:16,480 --> 00:39:19,480
Speaker 3: might sound ridiculous, but what I mean by that is

863
00:39:19,520 --> 00:39:23,439
Speaker 3: there are there's no auditing a PSLF really at all,

864
00:39:23,880 --> 00:39:26,000
Speaker 3: and so there are some employers that have been approved

865
00:39:26,000 --> 00:39:27,880
Speaker 3: for PSLF that I know, based on the rules, do

866
00:39:27,960 --> 00:39:30,960
Speaker 3: not qualify. And I've seen borrowers that have been mistakenly

867
00:39:31,000 --> 00:39:32,680
Speaker 3: given credit for years of payments that should not.

868
00:39:32,680 --> 00:39:34,320
Speaker 1: Say there's no cop on the beat.

869
00:39:34,200 --> 00:39:37,359
Speaker 3: There's none, no zero. So like a lot of there's

870
00:39:37,360 --> 00:39:39,560
Speaker 3: a lot of scams, there's a lot of fraudulent activity

871
00:39:39,600 --> 00:39:43,960
Speaker 3: going on there. And you know, if somebody, in my opinion,

872
00:39:43,960 --> 00:39:46,960
Speaker 3: for example, goes and starts a fake nonprofit and has

873
00:39:47,000 --> 00:39:50,000
Speaker 3: been approved for you know, ps LEF based on starting

874
00:39:50,000 --> 00:39:53,680
Speaker 3: a fake nonprofit. If they get approved and forgiven, like

875
00:39:54,239 --> 00:39:55,719
Speaker 3: it might work out. It's kind of like lying on

876
00:39:55,760 --> 00:39:58,120
Speaker 3: your taxes, right Like if you say you know, I'd

877
00:39:58,120 --> 00:40:00,200
Speaker 3: made no income and like they never audit, you got

878
00:40:00,200 --> 00:40:03,440
Speaker 3: away with it, right And if there's very little auditing

879
00:40:03,480 --> 00:40:06,319
Speaker 3: that's happening at the IRS, then maybe maybe some people decided,

880
00:40:06,360 --> 00:40:07,759
Speaker 3: well that's worth taking the chance on.

881
00:40:07,840 --> 00:40:07,960
Speaker 1: Right.

882
00:40:08,000 --> 00:40:10,279
Speaker 3: We don't give that type of advice. We say what

883
00:40:10,320 --> 00:40:11,799
Speaker 3: are the rules, what are the things you can do

884
00:40:11,840 --> 00:40:15,000
Speaker 3: within the rules? And you know, I would not be shocked.

885
00:40:15,120 --> 00:40:16,719
Speaker 3: I tell people, I would not be shocked if we

886
00:40:16,760 --> 00:40:19,640
Speaker 3: did see some kind of like you know, Operation Varsity

887
00:40:19,680 --> 00:40:22,279
Speaker 3: Blues right where they went after the famous actors, right

888
00:40:22,440 --> 00:40:25,239
Speaker 3: like the ones on Desperate Housewives whatever, right that we're

889
00:40:25,239 --> 00:40:28,040
Speaker 3: getting their kids in for water polo to like fancy schools.

890
00:40:28,120 --> 00:40:30,280
Speaker 3: Su I think that you might see something like people

891
00:40:30,560 --> 00:40:33,720
Speaker 3: that's like going after the very worst offenses for student

892
00:40:33,760 --> 00:40:36,080
Speaker 3: loan like stuff. Right Like for example, there was a

893
00:40:36,120 --> 00:40:38,759
Speaker 3: case pre pandemic where there was a group that was

894
00:40:38,800 --> 00:40:41,480
Speaker 3: telling borrowers to list of family size of ninety three,

895
00:40:41,680 --> 00:40:43,879
Speaker 3: so that they would have such a large family size

896
00:40:43,880 --> 00:40:46,880
Speaker 3: they'd qualify for a zero dollar payment and like, and

897
00:40:46,920 --> 00:40:48,560
Speaker 3: the funny thing is they put out a report like

898
00:40:48,600 --> 00:40:52,760
Speaker 3: February twenty twenty saying, like, hey, maybe someone a department

899
00:40:52,760 --> 00:40:55,040
Speaker 3: of edge should ask is it possible to have a

900
00:40:55,080 --> 00:40:58,080
Speaker 3: family size of ninety three in the if you're a rabbit,

901
00:40:58,120 --> 00:41:00,239
Speaker 3: you know, only like on the online form, And then

902
00:41:00,280 --> 00:41:02,359
Speaker 3: of course COVID happened a month later, nobody ever followed

903
00:41:02,440 --> 00:41:04,400
Speaker 3: up on it. So I mean, I think that there

904
00:41:04,440 --> 00:41:06,480
Speaker 3: will be a little bit of like a return of like,

905
00:41:07,080 --> 00:41:10,120
Speaker 3: what are the craziest things about the studolone system that

906
00:41:10,160 --> 00:41:12,960
Speaker 3: probably shouldn't be the case the way they are, and like,

907
00:41:13,440 --> 00:41:16,319
Speaker 3: you know, and frankly, like even the Daily Podcast had

908
00:41:16,360 --> 00:41:18,960
Speaker 3: this recent episode on you know, his student on forgetting

909
00:41:18,960 --> 00:41:23,319
Speaker 3: his dad, and they even talked about, you know, maybe

910
00:41:23,360 --> 00:41:25,759
Speaker 3: we shouldn't have unlimited student on borrowing, right, Like maybe

911
00:41:25,760 --> 00:41:28,400
Speaker 3: a student on borrowing should not be unlimited that you

912
00:41:28,400 --> 00:41:32,400
Speaker 3: can take out like eight hundred thousand for school across

913
00:41:32,480 --> 00:41:34,879
Speaker 3: like five children with no limit on your borrowing, which

914
00:41:34,880 --> 00:41:36,760
Speaker 3: is currently the rule. Right, if you want to send

915
00:41:37,120 --> 00:41:40,360
Speaker 3: six kids to the most expensive private schools in the country,

916
00:41:40,400 --> 00:41:42,200
Speaker 3: you can take out a million dollars of parent plus

917
00:41:42,239 --> 00:41:43,920
Speaker 3: loans currently and there's no limit on that.

918
00:41:44,200 --> 00:41:46,040
Speaker 1: All right, I want to ask you more about that

919
00:41:46,120 --> 00:41:50,759
Speaker 1: and about incentives of student loans moving forward and kind

920
00:41:50,760 --> 00:41:54,480
Speaker 1: of how that impacts the universities as well. We'll get

921
00:41:54,520 --> 00:41:56,400
Speaker 1: to some questions on that with Travis right after this.

922
00:42:04,200 --> 00:42:05,080
Speaker 1: We're back from the.

923
00:42:05,000 --> 00:42:09,399
Speaker 2: Break again, speaking with Travis Hornsby about student loans, what

924
00:42:09,440 --> 00:42:12,880
Speaker 2: it is folks should be doing now that they have them. Actually,

925
00:42:13,080 --> 00:42:14,640
Speaker 2: so let's turn the tables a little bit. Travis, what

926
00:42:14,680 --> 00:42:17,480
Speaker 2: about folks who don't have student loans yet? Because you

927
00:42:17,560 --> 00:42:20,560
Speaker 2: released this list of the careers where folks tend to

928
00:42:20,719 --> 00:42:25,279
Speaker 2: incur the most student loan debts, and Orthodontis turns out

929
00:42:25,320 --> 00:42:28,399
Speaker 2: they have it the worst. How do you think about

930
00:42:28,400 --> 00:42:31,280
Speaker 2: the trade off of taking on massive amounts of student

931
00:42:31,320 --> 00:42:34,920
Speaker 2: loan debt versus the potential for higher paid down the road.

932
00:42:34,960 --> 00:42:37,799
Speaker 3: Well, I remember, like one of the Orthodonts cases that

933
00:42:37,840 --> 00:42:40,080
Speaker 3: I talked about with the Wall Street Journal back in

934
00:42:40,120 --> 00:42:41,680
Speaker 3: the day. They did a story on like one of

935
00:42:41,680 --> 00:42:44,280
Speaker 3: the first borrowers to pass the million dollars of student loans,

936
00:42:44,280 --> 00:42:46,240
Speaker 3: Mark Oh, And that was like I think twenty eighteen,

937
00:42:46,280 --> 00:42:49,680
Speaker 3: twenty nineteen. And that's because the borrowing is unlimited, right,

938
00:42:49,760 --> 00:42:52,920
Speaker 3: And so if you're not yet in a program, what

939
00:42:52,960 --> 00:42:55,880
Speaker 3: I would be laser focused on is what does Congress

940
00:42:55,920 --> 00:42:58,680
Speaker 3: put out for their bill this summer or early fall

941
00:42:58,800 --> 00:43:01,360
Speaker 3: for the Reconciliation bill, which is going to pass in

942
00:43:01,400 --> 00:43:04,400
Speaker 3: a party line vote. And what that bill will say

943
00:43:04,560 --> 00:43:06,839
Speaker 3: is it will either say like, as of a certain date,

944
00:43:06,880 --> 00:43:09,280
Speaker 3: loans are capped and you can't borrow more than next amount,

945
00:43:09,520 --> 00:43:11,359
Speaker 3: or it might not make any changes, or it might

946
00:43:11,440 --> 00:43:13,279
Speaker 3: say if you're enrolled in a program as of a

947
00:43:13,360 --> 00:43:15,799
Speaker 3: certain date, you get to borrow whatever you need to

948
00:43:15,800 --> 00:43:18,840
Speaker 3: finish the program. Right. And so if I was somebody

949
00:43:18,840 --> 00:43:21,279
Speaker 3: that's looking at a graduate degree program, I would make

950
00:43:21,560 --> 00:43:24,040
Speaker 3: really sure that I looked at what that bill says,

951
00:43:24,400 --> 00:43:26,560
Speaker 3: because it might make the difference of you being able

952
00:43:26,600 --> 00:43:29,400
Speaker 3: to finish your medical school, dental school program or not.

953
00:43:29,800 --> 00:43:30,000
Speaker 4: Right.

954
00:43:30,440 --> 00:43:33,440
Speaker 3: And so pay attention to what Congress does this summer

955
00:43:33,480 --> 00:43:35,319
Speaker 3: and fall to see what changes they make to the

956
00:43:35,320 --> 00:43:38,600
Speaker 3: studento on system. But by and large, I would say,

957
00:43:38,680 --> 00:43:41,719
Speaker 3: under the current studo in system, you should always go

958
00:43:41,760 --> 00:43:46,920
Speaker 3: get another degree, another you know, educational pursuit. If you

959
00:43:46,920 --> 00:43:48,920
Speaker 3: don't mind a ten percent income tax. And what I

960
00:43:48,960 --> 00:43:51,920
Speaker 3: mean by that is, let's say that you know, it's

961
00:43:52,000 --> 00:43:54,880
Speaker 3: it's a struggle to get a job initially, like is

962
00:43:54,920 --> 00:43:57,960
Speaker 3: it worth it or not? Well, income driven repayment is

963
00:43:58,000 --> 00:44:01,040
Speaker 3: basically a ten percent income tax. There's more complexity to

964
00:44:01,080 --> 00:44:02,640
Speaker 3: it than that, but you're losing ten percent of your

965
00:44:02,640 --> 00:44:04,680
Speaker 3: income to pay back the government for like twenty years

966
00:44:04,680 --> 00:44:07,680
Speaker 3: on average. You know, people doing the public service thing,

967
00:44:07,719 --> 00:44:10,480
Speaker 3: it's ten years, some people it's twenty five. But you know,

968
00:44:10,560 --> 00:44:12,640
Speaker 3: ten to twenty five years, you're losing ten percent of

969
00:44:12,640 --> 00:44:13,040
Speaker 3: your income.

970
00:44:13,080 --> 00:44:13,839
Speaker 4: So what I like to tell.

971
00:44:13,760 --> 00:44:16,319
Speaker 3: People is, Okay, if you stop at being a nurse

972
00:44:16,320 --> 00:44:18,160
Speaker 3: and you're making sixty K a year and you have

973
00:44:18,280 --> 00:44:20,719
Speaker 3: zero debt, are you better or worse off than if

974
00:44:20,760 --> 00:44:22,960
Speaker 3: you go get you know, a nurse practitioner job and

975
00:44:22,960 --> 00:44:24,560
Speaker 3: you're making one hundred and twenty a k a year,

976
00:44:24,600 --> 00:44:27,040
Speaker 3: but you're losing ten percent of your income to an

977
00:44:27,080 --> 00:44:29,160
Speaker 3: income based your payment plan. We'll take away ten percent

978
00:44:29,200 --> 00:44:31,320
Speaker 3: of one hundred and twenty grand and you're still making

979
00:44:31,480 --> 00:44:35,000
Speaker 3: just over six figures. And so that income gap is

980
00:44:35,120 --> 00:44:37,799
Speaker 3: worth it, you know, compared to sticking to just your

981
00:44:37,840 --> 00:44:41,319
Speaker 3: bachelor's degree. So in general, get your bachelor's degree if

982
00:44:41,320 --> 00:44:42,759
Speaker 3: you can, and if you want to go to a

983
00:44:42,800 --> 00:44:45,480
Speaker 3: graduate program, I would just suggest that it be a

984
00:44:46,040 --> 00:44:48,680
Speaker 3: valuable program of some kind where you're going to make

985
00:44:49,040 --> 00:44:51,319
Speaker 3: at least ten percent more than you would make if

986
00:44:51,360 --> 00:44:54,799
Speaker 3: you just stopped at your current educational level. And even

987
00:44:54,840 --> 00:44:57,680
Speaker 3: if you wouldn't make that earnings gap, if you would

988
00:44:57,800 --> 00:45:00,480
Speaker 3: enjoy that job a lot more than what's your current doing,

989
00:45:00,520 --> 00:45:02,680
Speaker 3: it's still worth doing under the current rules. And so

990
00:45:02,760 --> 00:45:04,960
Speaker 3: I would just think that if the rules change or

991
00:45:04,960 --> 00:45:08,000
Speaker 3: there's more caps unborrowing and people actually have to think, well,

992
00:45:08,000 --> 00:45:09,920
Speaker 3: what if I actually had to pay this back directly,

993
00:45:10,280 --> 00:45:12,680
Speaker 3: then the math would change. But the math doesn't change

994
00:45:12,719 --> 00:45:13,840
Speaker 3: until the rules change.

995
00:45:14,160 --> 00:45:19,200
Speaker 1: How do you think the like the government's approach to

996
00:45:19,480 --> 00:45:24,600
Speaker 1: student loans, to the federal student loan program will change

997
00:45:24,640 --> 00:45:29,480
Speaker 1: the future of universities, how they price their education and

998
00:45:29,480 --> 00:45:31,480
Speaker 1: how much borrowers are willing to take on, like if

999
00:45:31,520 --> 00:45:35,279
Speaker 1: the program becomes less generous, right as interest rates have

1000
00:45:35,280 --> 00:45:38,200
Speaker 1: already gone up of course since when I was in

1001
00:45:38,200 --> 00:45:41,560
Speaker 1: school and since five years ago. So when people have

1002
00:45:41,600 --> 00:45:45,200
Speaker 1: to make those trade offs, when they're thinking through, well,

1003
00:45:45,200 --> 00:45:47,799
Speaker 1: how much debt should I take on even though I

1004
00:45:47,840 --> 00:45:51,120
Speaker 1: can essentially take on ridiculous amounts. Are we going to

1005
00:45:51,160 --> 00:45:55,000
Speaker 1: have just better incentives in place that will actually produce

1006
00:45:55,280 --> 00:45:58,760
Speaker 1: some secondary benefits like reducing the cost of education overall?

1007
00:45:58,800 --> 00:45:59,680
Speaker 1: Do you see that in the future.

1008
00:46:00,120 --> 00:46:03,000
Speaker 3: Well, so the problem there's the dirty little secret and

1009
00:46:03,080 --> 00:46:05,840
Speaker 3: hire that a lot of the big name schools that

1010
00:46:05,920 --> 00:46:08,600
Speaker 3: have very popular football teams earn a lot of money

1011
00:46:08,640 --> 00:46:11,440
Speaker 3: from the parent plus loan program right now. And so

1012
00:46:11,640 --> 00:46:14,080
Speaker 3: any big school with a big football program that has

1013
00:46:14,120 --> 00:46:16,279
Speaker 3: a lot of out of state students, what they'll often

1014
00:46:16,320 --> 00:46:18,480
Speaker 3: do is go market like maybe for example, like a

1015
00:46:18,600 --> 00:46:21,480
Speaker 3: University of Alabama might go market in Illinois to get

1016
00:46:21,520 --> 00:46:22,960
Speaker 3: them to come down and pay out of state tuition.

1017
00:46:23,360 --> 00:46:25,160
Speaker 3: Maybe those families don't have the money to just cut

1018
00:46:25,160 --> 00:46:27,000
Speaker 3: the twenty five k year whatever it is to go,

1019
00:46:27,400 --> 00:46:29,560
Speaker 3: and so those families might load up on parent plus

1020
00:46:29,600 --> 00:46:32,279
Speaker 3: loans because they're unlimited, and then the university's making a

1021
00:46:32,320 --> 00:46:34,040
Speaker 3: bunch of extra money compared to what they make on

1022
00:46:34,080 --> 00:46:37,320
Speaker 3: in state students, right And so there's this big incentive

1023
00:46:37,360 --> 00:46:39,719
Speaker 3: currently for the schools to bring in all these out

1024
00:46:39,719 --> 00:46:42,280
Speaker 3: of state students. And you know how parent plus loans

1025
00:46:42,280 --> 00:46:44,440
Speaker 3: be the thing they offer to people, and the schools

1026
00:46:44,480 --> 00:46:45,880
Speaker 3: are able to spend more money in a lot of

1027
00:46:45,880 --> 00:46:48,680
Speaker 3: different things because of that, right, like faculty, bigger stadiums,

1028
00:46:48,680 --> 00:46:49,680
Speaker 3: and il deals whatever.

1029
00:46:49,760 --> 00:46:51,799
Speaker 1: Right, And the parents just don't know how big of

1030
00:46:51,800 --> 00:46:53,680
Speaker 1: an albatross it's going to be around their neck for

1031
00:46:53,840 --> 00:46:56,920
Speaker 1: decades to come, exactly, and so and so there's been

1032
00:46:56,960 --> 00:46:59,880
Speaker 1: some loopholes too to manage that problem for parents as well,

1033
00:47:00,160 --> 00:47:02,120
Speaker 1: So like parents that have lots of parent plus owns,

1034
00:47:02,160 --> 00:47:03,759
Speaker 1: because you know, up till now, there's been a lot

1035
00:47:03,760 --> 00:47:06,120
Speaker 1: of strategies you can do. But that's kind of an aside.

1036
00:47:06,480 --> 00:47:09,040
Speaker 1: The issue with university is the big name universities are

1037
00:47:09,120 --> 00:47:10,279
Speaker 1: going to be fine. They're just going to have to

1038
00:47:10,280 --> 00:47:12,480
Speaker 1: make cuts. So maybe you have to cut back on

1039
00:47:12,520 --> 00:47:15,200
Speaker 1: some faculty and some programs. Maybe you can't do, you know,

1040
00:47:15,239 --> 00:47:18,200
Speaker 1: the athletic expansion you planned on doing if they were

1041
00:47:18,239 --> 00:47:18,960
Speaker 1: to lose access to.

1042
00:47:18,960 --> 00:47:20,120
Speaker 4: The parent plus loan program.

1043
00:47:20,200 --> 00:47:22,000
Speaker 3: Now, there's other schools that are more kind of like

1044
00:47:22,440 --> 00:47:26,080
Speaker 3: marginal schools that might not have the big football name brand, right,

1045
00:47:26,160 --> 00:47:28,960
Speaker 3: that are more just maybe they're serving a lot more

1046
00:47:29,040 --> 00:47:31,680
Speaker 3: just like middle class families. It maybe more regional schools.

1047
00:47:31,719 --> 00:47:34,000
Speaker 3: Some of those schools would absolutely have to close if

1048
00:47:34,000 --> 00:47:36,960
Speaker 3: they capt loans. It's just the reality a lot of

1049
00:47:36,960 --> 00:47:41,000
Speaker 3: these schools are in swing districts in swing states, and

1050
00:47:41,080 --> 00:47:43,279
Speaker 3: so the question is is a lot of these proposals,

1051
00:47:43,600 --> 00:47:46,160
Speaker 3: you know, makes sense on paper until you think about, well,

1052
00:47:46,160 --> 00:47:48,319
Speaker 3: what does it mean if you close down a bunch

1053
00:47:48,360 --> 00:47:50,799
Speaker 3: of regional schools in Pennsylvania? How popular are you going

1054
00:47:50,840 --> 00:47:52,520
Speaker 3: to be in the next presidential election in some of

1055
00:47:52,520 --> 00:47:55,400
Speaker 3: these swing districts? Right, So I think that from a

1056
00:47:55,440 --> 00:47:59,000
Speaker 3: political standpoint, there's there's some checks on what they're going

1057
00:47:59,040 --> 00:48:00,520
Speaker 3: to be able to do in terms of changes to

1058
00:48:00,560 --> 00:48:02,040
Speaker 3: the system. But you know, I mean, if you think

1059
00:48:02,040 --> 00:48:04,120
Speaker 3: about it just a common sense, it probably does not

1060
00:48:04,239 --> 00:48:06,560
Speaker 3: make sense to let universities charge whatever the heck they

1061
00:48:06,640 --> 00:48:09,000
Speaker 3: want for higher ed Like that's probably a really dumb idea.

1062
00:48:09,080 --> 00:48:11,120
Speaker 3: Like that changed in two thousand and six, and they

1063
00:48:11,120 --> 00:48:14,160
Speaker 3: did it to try to expand access. But the problem

1064
00:48:14,239 --> 00:48:16,759
Speaker 3: is they made it a blank check. They just said, hey, universities,

1065
00:48:16,880 --> 00:48:19,239
Speaker 3: go do whatever you want. There's no limits on what

1066
00:48:19,239 --> 00:48:21,839
Speaker 3: you can borrow for graduate programs. You could just charge

1067
00:48:21,880 --> 00:48:24,120
Speaker 3: whatever you want. And so what happened is the number

1068
00:48:24,120 --> 00:48:26,280
Speaker 3: of pharmacy schools, for example, more than tripled.

1069
00:48:26,480 --> 00:48:26,880
Speaker 1: Wow.

1070
00:48:26,960 --> 00:48:30,560
Speaker 3: So within literally like a few years you had triple

1071
00:48:30,600 --> 00:48:32,920
Speaker 3: the number of pharmacy schools. So pharmacy school went from

1072
00:48:32,920 --> 00:48:34,680
Speaker 3: a thing that was like a thirty five percent acceptance

1073
00:48:34,760 --> 00:48:37,359
Speaker 3: right to like a ninety five percent acceptance rate. And

1074
00:48:37,480 --> 00:48:41,080
Speaker 3: so a lot of incomes and graduate programs have actually

1075
00:48:41,120 --> 00:48:44,360
Speaker 3: like been very flat or even declined. And there's a

1076
00:48:44,360 --> 00:48:47,480
Speaker 3: big oversupply because the universities just thought, oh, look a

1077
00:48:47,520 --> 00:48:49,439
Speaker 3: great new revenue source, so we can just go open

1078
00:48:49,480 --> 00:48:53,200
Speaker 3: another school. Right, So there probably is a big contraction

1079
00:48:53,440 --> 00:48:55,400
Speaker 3: in the number of graduate programs and the number of

1080
00:48:55,520 --> 00:48:57,719
Speaker 3: universities that needs to happen just in terms of like

1081
00:48:57,840 --> 00:49:01,040
Speaker 3: a balancing. But the problem is is that also means

1082
00:49:01,080 --> 00:49:03,600
Speaker 3: real pain, like people will lose their jobs, like you know,

1083
00:49:03,719 --> 00:49:06,520
Speaker 3: And so that's just a question of do you want

1084
00:49:06,560 --> 00:49:08,759
Speaker 3: to take that pain? You know, how much pain do

1085
00:49:08,800 --> 00:49:10,000
Speaker 3: you want to cause? Do you want to make it

1086
00:49:10,000 --> 00:49:11,920
Speaker 3: a little bit softer by having the loan limits be

1087
00:49:11,960 --> 00:49:14,640
Speaker 3: a lot higher. Do you want to increase pelgrants so

1088
00:49:14,640 --> 00:49:18,279
Speaker 3: lower income students can still attend university. So there's all

1089
00:49:18,320 --> 00:49:20,800
Speaker 3: kinds of policy trade offs that and that's why the

1090
00:49:20,840 --> 00:49:24,680
Speaker 3: easier decision is just let's go punt the football, right, Well,

1091
00:49:24,680 --> 00:49:26,720
Speaker 3: you don't know what to do. Let's just yeah, income

1092
00:49:26,760 --> 00:49:29,840
Speaker 3: recertification in twenty twenty seven, how about that, you know exactly,

1093
00:49:29,960 --> 00:49:31,800
Speaker 3: So that's what's been happening, and that they must.

1094
00:49:31,600 --> 00:49:33,840
Speaker 1: Do the same thing with Social Security too, Travis, why not?

1095
00:49:33,920 --> 00:49:35,560
Speaker 3: No, I mean that's but that's the easier thing to do.

1096
00:49:35,600 --> 00:49:37,960
Speaker 3: And so politicians, you know, in my experience of student loans,

1097
00:49:38,000 --> 00:49:41,080
Speaker 3: always choose the easier thing to do unless they're forced

1098
00:49:41,120 --> 00:49:43,080
Speaker 3: to make a change, Like you get the headline of

1099
00:49:43,120 --> 00:49:45,719
Speaker 3: the you know, Afghanistan veteran with the traumatic brain injury,

1100
00:49:45,800 --> 00:49:47,879
Speaker 3: they got the six figure tax bill, and then they say, oh,

1101
00:49:48,040 --> 00:49:49,759
Speaker 3: you know, maybe we need to change the laws, maybe

1102
00:49:49,800 --> 00:49:52,279
Speaker 3: these dumb laws. But it takes that kind of, you know,

1103
00:49:52,680 --> 00:49:54,600
Speaker 3: level of an event to make a change.

1104
00:49:54,680 --> 00:49:57,279
Speaker 2: I'm surprised at the amount of politics that has gone

1105
00:49:57,280 --> 00:49:59,439
Speaker 2: into our conversation today, given the fact that we're talking

1106
00:49:59,440 --> 00:50:01,640
Speaker 2: about students loans, so to that note, and the fact

1107
00:50:01,640 --> 00:50:03,759
Speaker 2: that it does seem like politicians are punning the ball.

1108
00:50:04,320 --> 00:50:06,359
Speaker 2: Do you see a world where it makes sense for

1109
00:50:06,920 --> 00:50:11,080
Speaker 2: the federal government to get out of backing student loans.

1110
00:50:11,160 --> 00:50:13,960
Speaker 2: I mean, like that this all started with our desire

1111
00:50:14,000 --> 00:50:16,239
Speaker 2: to what back in the sixties to compete with like

1112
00:50:16,320 --> 00:50:19,360
Speaker 2: Russia and the space race and all that, and shoring

1113
00:50:19,480 --> 00:50:22,279
Speaker 2: up the ability for the US to be competitive from

1114
00:50:22,280 --> 00:50:24,440
Speaker 2: that standpoint, But like, are we past that? Does it

1115
00:50:24,480 --> 00:50:25,920
Speaker 2: make sense to open this up more up to the

1116
00:50:26,000 --> 00:50:28,920
Speaker 2: to the to the free markets as opposed to the government,

1117
00:50:28,920 --> 00:50:32,000
Speaker 2: which tends to react more slowly to some of the

1118
00:50:32,080 --> 00:50:33,080
Speaker 2: changes that need to happen.

1119
00:50:33,200 --> 00:50:34,960
Speaker 3: Well, a lot of people are asking that question, and

1120
00:50:35,000 --> 00:50:37,520
Speaker 3: the policy problem to that is how do you extract

1121
00:50:37,520 --> 00:50:40,359
Speaker 3: the government from one point six trillion dollars? So that's

1122
00:50:40,600 --> 00:50:42,960
Speaker 3: that's a really big problem, right, Like do you just

1123
00:50:43,000 --> 00:50:45,279
Speaker 3: have an auction and you just sell all the loans? Well,

1124
00:50:45,280 --> 00:50:47,440
Speaker 3: a lot of these benefits of those loans have already

1125
00:50:47,480 --> 00:50:50,239
Speaker 3: been promised, like income based repayment. Does a you know,

1126
00:50:50,320 --> 00:50:52,680
Speaker 3: a you know a JP Morgan and Goldman Sachs want

1127
00:50:52,680 --> 00:50:54,640
Speaker 3: to take on a bunch of what that? Yeah, people

1128
00:50:54,640 --> 00:50:56,319
Speaker 3: can pay ten percent of their income and never pay

1129
00:50:56,320 --> 00:50:58,640
Speaker 3: the balance off. So, you know, there's all kinds of

1130
00:50:58,680 --> 00:51:00,480
Speaker 3: problems with how do you get egg is that the

1131
00:51:00,560 --> 00:51:03,319
Speaker 3: existing you know, commitment that's been made, And then the

1132
00:51:03,360 --> 00:51:06,279
Speaker 3: other problem is, like you know, for the future if

1133
00:51:06,320 --> 00:51:08,680
Speaker 3: you do you know, the old system was essentially like

1134
00:51:08,719 --> 00:51:11,000
Speaker 3: the government would kind of cover the losses on the

1135
00:51:11,200 --> 00:51:13,279
Speaker 3: loan portfolio, and private lenders would make the loans and

1136
00:51:13,280 --> 00:51:14,240
Speaker 3: make the interest income.

1137
00:51:14,600 --> 00:51:16,600
Speaker 4: And that system.

1138
00:51:16,160 --> 00:51:19,799
Speaker 3: Worked like okay for a while, but then they decided, well,

1139
00:51:19,800 --> 00:51:23,719
Speaker 3: we want to expand access, and so pendulum and politics swings, right.

1140
00:51:23,760 --> 00:51:26,120
Speaker 3: So I think we're in the in the zone of

1141
00:51:26,120 --> 00:51:28,839
Speaker 3: like the pendulum swinging more towards Hey, let's do less,

1142
00:51:29,000 --> 00:51:31,200
Speaker 3: let's do fewer loans, let's make it, you know, more

1143
00:51:31,239 --> 00:51:33,719
Speaker 3: on the borrower to pay them back. And you know,

1144
00:51:33,760 --> 00:51:36,960
Speaker 3: I think that the devils and the details of student

1145
00:51:37,000 --> 00:51:38,839
Speaker 3: huns though, like you know, it's real easy to say, hey,

1146
00:51:38,920 --> 00:51:40,840
Speaker 3: get get the government of the student loan business, but

1147
00:51:41,200 --> 00:51:43,440
Speaker 3: there are so many problems that the government would have

1148
00:51:43,440 --> 00:51:45,520
Speaker 3: to figure It would be almost like saying, let's get

1149
00:51:45,520 --> 00:51:46,319
Speaker 3: the government.

1150
00:51:46,040 --> 00:51:48,440
Speaker 4: Of Social Security. Well, oops, how do you do that?

1151
00:51:48,880 --> 00:51:49,440
Speaker 4: You know what I mean?

1152
00:51:49,760 --> 00:51:52,680
Speaker 1: Yeah, no, for sure, Travis, this has been super helpful.

1153
00:51:52,920 --> 00:51:54,360
Speaker 1: I think a lot of our listeners are going to

1154
00:51:54,360 --> 00:51:56,040
Speaker 1: get a lot of value from this conversation. Thank you

1155
00:51:56,080 --> 00:51:58,520
Speaker 1: for joining us and your videos. By the way, your

1156
00:51:58,600 --> 00:52:00,840
Speaker 1: video updates have been incredibly helpful to I've been following

1157
00:52:00,920 --> 00:52:02,399
Speaker 1: them as I'm trying to kind of figure out what's

1158
00:52:02,400 --> 00:52:05,000
Speaker 1: going on with student loans in the day to day,

1159
00:52:05,040 --> 00:52:06,520
Speaker 1: which is kind of sad that we have to be

1160
00:52:06,880 --> 00:52:09,239
Speaker 1: pay attention to it that much. But how how can

1161
00:52:09,800 --> 00:52:12,200
Speaker 1: how do money listeners find out more about you and

1162
00:52:12,239 --> 00:52:12,719
Speaker 1: what you're up to?

1163
00:52:12,960 --> 00:52:14,600
Speaker 3: Well, I mean, I actually the best way is to

1164
00:52:14,600 --> 00:52:17,560
Speaker 3: get the discount for how to Money listeners if they

1165
00:52:17,600 --> 00:52:19,560
Speaker 3: if they need a custom plan, and I would say

1166
00:52:19,600 --> 00:52:21,919
Speaker 3: this is probably more in the you know, you owe

1167
00:52:22,400 --> 00:52:25,040
Speaker 3: maybe over fifty thousand dollars or US maybe even six

1168
00:52:25,080 --> 00:52:27,200
Speaker 3: figures if that's you. If you go to student Loan

1169
00:52:27,280 --> 00:52:30,200
Speaker 3: Planner dot com slash how to Money, so that's going

1170
00:52:30,239 --> 00:52:32,080
Speaker 3: to get you a discount and one hundred dollars off

1171
00:52:32,200 --> 00:52:34,359
Speaker 3: a custom supit loan plan if you think you need

1172
00:52:34,360 --> 00:52:36,919
Speaker 3: that right now? Who needs that? You know you have

1173
00:52:36,960 --> 00:52:39,480
Speaker 3: a lot of studilong confusion. You have a significant balance.

1174
00:52:39,920 --> 00:52:42,640
Speaker 3: Generally speaking, probably ninety percent of the time we're going

1175
00:52:42,719 --> 00:52:46,160
Speaker 3: to save a sort of projected mid five figure balance

1176
00:52:46,280 --> 00:52:48,560
Speaker 3: for the average client, which is about a two hundred

1177
00:52:48,800 --> 00:52:52,440
Speaker 3: k average balance. So for a few hundred dollars, the

1178
00:52:52,680 --> 00:52:55,480
Speaker 3: high likelihood will save that much money is generally really

1179
00:52:55,480 --> 00:52:57,239
Speaker 3: worth it. You can, you know, check our reviews by

1180
00:52:57,239 --> 00:53:00,000
Speaker 3: looking at Student one planner reviews and Google and see

1181
00:53:00,200 --> 00:53:02,640
Speaker 3: that we really do have a huge impact on people's lives.

1182
00:53:02,960 --> 00:53:04,799
Speaker 3: And then if you cannot if some of the listeners says,

1183
00:53:04,840 --> 00:53:06,719
Speaker 3: you know, that's great, I cannot afford, you know, a

1184
00:53:06,719 --> 00:53:09,120
Speaker 3: few hundred dollars even with the one hundred dollars off

1185
00:53:09,160 --> 00:53:11,480
Speaker 3: how to Money listener discount, then just like the student

1186
00:53:11,480 --> 00:53:13,520
Speaker 3: one Painter podcast, we have a free podcast where we

1187
00:53:13,520 --> 00:53:15,880
Speaker 3: answer a lot of people's questions and go over like

1188
00:53:15,920 --> 00:53:18,560
Speaker 3: what people need to know, and so that's the free way.

1189
00:53:18,600 --> 00:53:20,200
Speaker 3: And then of course our student old painter dot com

1190
00:53:20,200 --> 00:53:22,560
Speaker 3: website's got a lot of free content too. So but

1191
00:53:22,640 --> 00:53:24,399
Speaker 3: you know, if they want they want one hundred dollars

1192
00:53:24,440 --> 00:53:26,839
Speaker 3: how to Money discount, it's just again student one pointer

1193
00:53:26,880 --> 00:53:28,400
Speaker 3: dot com slash how to Money.

1194
00:53:28,840 --> 00:53:29,400
Speaker 1: That's right, man.

1195
00:53:29,480 --> 00:53:31,600
Speaker 2: Yeah, we're trying to help folks to avoid that student

1196
00:53:31,640 --> 00:53:34,400
Speaker 2: loan confusion, and y'all are doing that on all the fronts.

1197
00:53:34,560 --> 00:53:36,520
Speaker 2: Travis Hornsby, thank you so much for joining us today.

1198
00:53:36,520 --> 00:53:40,680
Speaker 1: Thanks for having me all right, Matt, great convo with Travis.

1199
00:53:41,080 --> 00:53:43,800
Speaker 1: I can't say that I'm enthusiastic about the state of

1200
00:53:43,840 --> 00:53:46,040
Speaker 1: student loans these days, but I'm less worried after talking

1201
00:53:46,040 --> 00:53:46,319
Speaker 1: to him.

1202
00:53:46,920 --> 00:53:48,840
Speaker 2: It makes total sense. The more, the more you know

1203
00:53:49,400 --> 00:53:52,040
Speaker 2: in the star is streaking across the sky, you see

1204
00:53:52,040 --> 00:53:53,920
Speaker 2: it that, of course Travis would be able to see

1205
00:53:53,920 --> 00:53:55,520
Speaker 2: because he's got the right tele that's good right to

1206
00:53:55,520 --> 00:53:57,359
Speaker 2: be able to It's a good point. And the more that, yeah,

1207
00:53:57,480 --> 00:53:59,640
Speaker 2: there's more control that we have in our hands than

1208
00:54:00,080 --> 00:54:02,239
Speaker 2: I guess I was under the impression. I will say

1209
00:54:02,239 --> 00:54:05,000
Speaker 2: I was disenheartened that so much of the future of

1210
00:54:05,040 --> 00:54:07,040
Speaker 2: US student loans comes down to who's going to be

1211
00:54:07,040 --> 00:54:08,640
Speaker 2: in the White House. And so my big takeaway is

1212
00:54:08,640 --> 00:54:10,399
Speaker 2: going to be, we just need to figure out who's

1213
00:54:10,440 --> 00:54:12,640
Speaker 2: going to be elected to office, and then you'll know

1214
00:54:12,680 --> 00:54:16,720
Speaker 2: what to do in four years exactly what's so hard.

1215
00:54:16,560 --> 00:54:18,799
Speaker 1: About about doing that?

1216
00:54:18,880 --> 00:54:18,920
Speaker 3: No?

1217
00:54:19,200 --> 00:54:22,120
Speaker 2: Okay, so I think American politics so easy to producere Yeah, No,

1218
00:54:22,360 --> 00:54:24,440
Speaker 2: I do think my big takeaway is going to be

1219
00:54:24,719 --> 00:54:28,920
Speaker 2: to consider re certifying your income, in particular if you

1220
00:54:29,000 --> 00:54:32,759
Speaker 2: are on an income based UH student Loan Repayment plan.

1221
00:54:33,160 --> 00:54:35,520
Speaker 2: Because the and he mentioned this u r L a

1222
00:54:35,560 --> 00:54:37,480
Speaker 2: couple of times, I'm going to do it again because

1223
00:54:37,600 --> 00:54:40,239
Speaker 2: I think it sounds like a fantastic resource student A

1224
00:54:40,400 --> 00:54:43,000
Speaker 2: dot go for slash i d R. The i DR

1225
00:54:43,040 --> 00:54:45,640
Speaker 2: stands for income driven repayment and.

1226
00:54:45,640 --> 00:54:47,720
Speaker 1: As this is especially true if you've.

1227
00:54:47,520 --> 00:54:50,920
Speaker 2: Seen your income drop recently, the ability you're not you're

1228
00:54:50,960 --> 00:54:53,719
Speaker 2: not fibbing, You're you're telling the truth. Your income has

1229
00:54:53,760 --> 00:54:57,719
Speaker 2: gone down and your repayment should reflect that. And I've

1230
00:54:57,719 --> 00:54:59,560
Speaker 2: got a feel and there are fewer folks doing that,

1231
00:54:59,680 --> 00:55:02,879
Speaker 2: or is it it's something that's kind of it's it's automated, right,

1232
00:55:02,920 --> 00:55:05,160
Speaker 2: Like it's automatic. It's they're not really thinking about it.

1233
00:55:05,200 --> 00:55:06,640
Speaker 2: They're like, oh, I've done that before, but no, this

1234
00:55:06,680 --> 00:55:09,520
Speaker 2: is something you can revisit. It's almost like reshopping your

1235
00:55:09,520 --> 00:55:12,640
Speaker 2: insurance rates that your insurance coverage. The ability to do

1236
00:55:12,680 --> 00:55:15,120
Speaker 2: that and save money every single month, especially if you've

1237
00:55:15,160 --> 00:55:17,839
Speaker 2: seen your income go down, I think is a fantastic

1238
00:55:18,320 --> 00:55:21,920
Speaker 2: takeaway for folks who might maybe they're even like overwhelmed

1239
00:55:21,920 --> 00:55:24,440
Speaker 2: with everything that we talked through with Travis, and they're like, Okay,

1240
00:55:24,480 --> 00:55:26,040
Speaker 2: well that's at least one thing that I.

1241
00:55:25,960 --> 00:55:28,040
Speaker 1: Can do one hundred percent. Yeah, even the maternity leave thing.

1242
00:55:28,080 --> 00:55:29,560
Speaker 1: I was like, oh, wait, you can, yep do that

1243
00:55:29,600 --> 00:55:33,000
Speaker 1: if that and apparently, according to the rules, you can,

1244
00:55:33,320 --> 00:55:35,279
Speaker 1: which I think is heartening. There's a lot of situations

1245
00:55:35,280 --> 00:55:37,479
Speaker 1: that where that could apply, I think to somebody whose

1246
00:55:37,520 --> 00:55:39,319
Speaker 1: income has gone down or gone away for a little bit.

1247
00:55:39,400 --> 00:55:41,360
Speaker 1: But how about how about for you? Is a big takeaway.

1248
00:55:41,400 --> 00:55:44,120
Speaker 1: I really liked kind of how he talked about the

1249
00:55:44,239 --> 00:55:47,839
Speaker 1: pros and cons of getting a secondary degree and how

1250
00:55:47,840 --> 00:55:50,480
Speaker 1: to think about the financial consequence essentially as like a

1251
00:55:51,040 --> 00:55:54,160
Speaker 1: flat ten percent tax on your income. And I think

1252
00:55:54,239 --> 00:55:56,360
Speaker 1: I can be just a really easy then back of

1253
00:55:56,560 --> 00:55:58,759
Speaker 1: envelope math to figure out, well, is it going to

1254
00:55:58,800 --> 00:56:00,759
Speaker 1: be worth it taking this dead into my life or not?

1255
00:56:00,920 --> 00:56:02,560
Speaker 1: Like how much more am I going to make? And

1256
00:56:02,560 --> 00:56:05,320
Speaker 1: then when I take the ten percent off of that increase, well,

1257
00:56:05,640 --> 00:56:08,279
Speaker 1: is god is it worth the time, the energy and

1258
00:56:08,400 --> 00:56:10,240
Speaker 1: is the joy I'm going to get from switching careers

1259
00:56:10,600 --> 00:56:13,040
Speaker 1: going to be worth all the effort that it takes

1260
00:56:13,360 --> 00:56:15,120
Speaker 1: and the debt that I've got to take on my back.

1261
00:56:15,280 --> 00:56:17,759
Speaker 1: So I think that's just at least when when we

1262
00:56:17,800 --> 00:56:19,400
Speaker 1: have a lot of listeners who are kind of in

1263
00:56:19,440 --> 00:56:21,760
Speaker 1: that period in their lives, like do I change careers

1264
00:56:21,800 --> 00:56:23,680
Speaker 1: and if so, how do I think through the financial consequences?

1265
00:56:23,680 --> 00:56:25,440
Speaker 2: Do I go get that MBA and do I get

1266
00:56:25,440 --> 00:56:27,400
Speaker 2: student loans for that or do I take on some

1267
00:56:27,440 --> 00:56:28,800
Speaker 2: special graduate degree.

1268
00:56:28,880 --> 00:56:31,120
Speaker 1: That's a that's like a simple math equation that can

1269
00:56:31,160 --> 00:56:33,200
Speaker 1: I think at least at least be helpful as you're

1270
00:56:33,280 --> 00:56:35,520
Speaker 1: kind of trying to figure that out. Berts, Yeah, especially.

1271
00:56:35,239 --> 00:56:37,440
Speaker 2: If you are looking to take on additional debt. But

1272
00:56:37,840 --> 00:56:40,280
Speaker 2: the beer Joel that you and I enjoyed during this episode,

1273
00:56:40,320 --> 00:56:42,399
Speaker 2: and this is one of those Burial beers. So it's

1274
00:56:42,400 --> 00:56:46,800
Speaker 2: got the long name and it reads only calling hours

1275
00:56:46,920 --> 00:56:49,320
Speaker 2: pull me back to these Midwestern roots.

1276
00:56:49,480 --> 00:56:51,200
Speaker 1: It's kind of hard to read. I'm pretty sure that's

1277
00:56:51,239 --> 00:56:53,719
Speaker 1: what it says. This is a West Coast style IPA

1278
00:56:54,480 --> 00:56:57,719
Speaker 1: by Burial collab with Hot Butcher. What do you think

1279
00:56:57,800 --> 00:57:00,960
Speaker 1: two of the greatest breweries in the world at this moment?

1280
00:57:01,080 --> 00:57:03,759
Speaker 1: I would say so. And this beer reflected that it

1281
00:57:03,840 --> 00:57:05,560
Speaker 1: was so good. This to me didn't feel like a

1282
00:57:05,560 --> 00:57:09,719
Speaker 1: traditional West Coast It was like juicier, less abrasive than

1283
00:57:09,760 --> 00:57:11,960
Speaker 1: a lot of them are. And that's what I would

1284
00:57:12,000 --> 00:57:14,080
Speaker 1: expect from these two guys trying to create a West

1285
00:57:14,120 --> 00:57:16,560
Speaker 1: Coast together. It's like, so good, it's a West Coast,

1286
00:57:16,600 --> 00:57:17,280
Speaker 1: it's up my alley.

1287
00:57:17,440 --> 00:57:20,080
Speaker 2: It's not a West coastal it's a Midwest Coast just

1288
00:57:20,160 --> 00:57:22,280
Speaker 2: like the there's a coast on the in the Midwest.

1289
00:57:22,280 --> 00:57:23,880
Speaker 2: Match is like the less we're talking about, like the

1290
00:57:23,880 --> 00:57:26,720
Speaker 2: shores of like Michigan. Yeah, Michigan's where it's out man

1291
00:57:26,920 --> 00:57:29,920
Speaker 2: also home to many fantastic breweries. But yeah, this was

1292
00:57:30,280 --> 00:57:32,280
Speaker 2: amazing and I'm going to shout out the label too,

1293
00:57:32,280 --> 00:57:33,920
Speaker 2: because I've never seen It's funny.

1294
00:57:33,920 --> 00:57:36,000
Speaker 1: So before we hit record, you said all kind of

1295
00:57:36,000 --> 00:57:36,280
Speaker 1: looks like.

1296
00:57:36,280 --> 00:57:39,760
Speaker 2: A bony their album cover, and I guess the snow

1297
00:57:39,880 --> 00:57:40,880
Speaker 2: is that what you were thinking of?

1298
00:57:41,240 --> 00:57:42,840
Speaker 1: For some reason it was I was thinking blood Bank

1299
00:57:42,840 --> 00:57:45,960
Speaker 1: and the kind of frigid it's kind of got the fridge.

1300
00:57:46,000 --> 00:57:46,960
Speaker 1: It looks cold.

1301
00:57:47,080 --> 00:57:51,320
Speaker 2: Yeah, it's funny you mentioned blood Bank because so in printing.

1302
00:57:51,480 --> 00:57:53,200
Speaker 1: I know this from my advertising days.

1303
00:57:53,440 --> 00:57:55,400
Speaker 2: Uh, there's a thing called spot color and it's a

1304
00:57:55,520 --> 00:57:58,440
Speaker 2: you know, you get the specific Pantone code because you

1305
00:57:58,440 --> 00:58:00,920
Speaker 2: want to want to use a very specific color. And

1306
00:58:01,000 --> 00:58:03,960
Speaker 2: it looks like they used a spot color and it

1307
00:58:04,000 --> 00:58:07,920
Speaker 2: makes this label, this artwork looks so premium. Specifically, it's

1308
00:58:07,920 --> 00:58:09,920
Speaker 2: on the red and it looks like it's just glowing.

1309
00:58:10,560 --> 00:58:12,400
Speaker 2: And that's how they've used it. It's like the science,

1310
00:58:12,400 --> 00:58:14,600
Speaker 2: it says, Limby's liquor. I don't know what that is.

1311
00:58:14,720 --> 00:58:16,200
Speaker 2: And then they got the red glow coming out of

1312
00:58:16,240 --> 00:58:18,360
Speaker 2: the windows a little bit, and it makes it look like,

1313
00:58:18,360 --> 00:58:20,640
Speaker 2: truly that this can is glowing in my hand. I

1314
00:58:20,640 --> 00:58:22,120
Speaker 2: almost want to set it over here next to our

1315
00:58:22,160 --> 00:58:26,480
Speaker 2: all day Food Market winter item that listeners sent our

1316
00:58:26,480 --> 00:58:30,120
Speaker 2: away because it's got the similar kulga, which I figured.

1317
00:58:29,880 --> 00:58:32,680
Speaker 1: You could appreciate. Yeah, well, and I think I am

1318
00:58:32,720 --> 00:58:36,080
Speaker 1: particularly drawn to dope can art and this and very

1319
00:58:36,120 --> 00:58:37,600
Speaker 1: all makes some great stuff, but this is like one

1320
00:58:37,600 --> 00:58:38,280
Speaker 1: of my favorites of this.

1321
00:58:38,320 --> 00:58:40,520
Speaker 2: Well, normally it's a bit more gothic, it's like it's

1322
00:58:40,560 --> 00:58:44,040
Speaker 2: a bit more metal and this just the vibes.

1323
00:58:43,800 --> 00:58:46,080
Speaker 1: Of this are off the charts. Yeah, for sure, very

1324
00:58:46,080 --> 00:58:48,560
Speaker 1: thoughtful as well as the beer. Very thoughtful art so good,

1325
00:58:48,840 --> 00:58:50,600
Speaker 1: but oh not quite.

1326
00:58:50,640 --> 00:58:53,760
Speaker 2: Let's remntion the url that he mentioned for how to

1327
00:58:53,840 --> 00:58:56,120
Speaker 2: money Listeners to get one hundred dollars off student loan

1328
00:58:56,120 --> 00:58:56,920
Speaker 2: planner dot com.

1329
00:58:56,800 --> 00:58:59,840
Speaker 1: For slash how to money. If you've got.

1330
00:58:59,640 --> 00:59:03,200
Speaker 2: A more complicated student owned situation going on, you want

1331
00:59:03,240 --> 00:59:06,080
Speaker 2: to take it to another level other than just recertifying

1332
00:59:06,080 --> 00:59:07,880
Speaker 2: your income. You're like, no, no, no, I really want

1333
00:59:07,880 --> 00:59:09,440
Speaker 2: to knock this thing out, really figure out how to

1334
00:59:09,480 --> 00:59:10,400
Speaker 2: pay as little as possible.

1335
00:59:10,440 --> 00:59:13,200
Speaker 1: Talk to the experts. That's what Travis's team are. So

1336
00:59:13,760 --> 00:59:16,840
Speaker 1: our buddy. Until next time. Best friends out, Best Friends Out.