WEBVTT - Student Loan Shakeup w/ Travis Hornsby #977 0:00:00.080 --> 0:00:03.159 Welcome to Hoa of Money. I'm Joel, I'm Matt. Today 0:00:03.200 --> 0:00:25.040 we're talking about the student loan shakeup with Travis Hornsby. 0:00:25.880 --> 0:00:29.560 Indeed, Joel, this is a more pressing, a more urgent 0:00:29.640 --> 0:00:32.200 interview episode, which we don't typically get to do because 0:00:32.240 --> 0:00:35.280 normally it's like a book tour and we're diving into 0:00:35.320 --> 0:00:37.000 the book. It's like, do we talk to him now 0:00:37.240 --> 0:00:38.760 or do we talk to him in like two months. 0:00:38.960 --> 0:00:41.120 Typically it doesn't matter, but that is not the case 0:00:41.280 --> 0:00:44.280 giving our topic of conversation today because according to the 0:00:44.600 --> 0:00:47.920 new US Education Secretary, it is time for student borrowers 0:00:48.080 --> 0:00:51.360 with federal loans to begin making payments. The clock is 0:00:51.400 --> 0:00:54.480 taking and May fifth is the date that nearly two 0:00:54.520 --> 0:00:58.080 million borrowers are going to be moved into repayment plans 0:00:58.480 --> 0:01:01.040 and collections will begin for a loan that are in default. 0:01:01.560 --> 0:01:05.240 This is a massive shakeup from what borrowers have experienced 0:01:05.240 --> 0:01:08.160 over the past five years. And luckily we're joined by 0:01:08.160 --> 0:01:11.720 a founder and CEO of Student Loan Planner, Travis Hornsby, 0:01:11.880 --> 0:01:15.840 to parse out all the details. And Travis is very 0:01:15.959 --> 0:01:20.120 qualified to talk about this. He has consulted on several 0:01:20.280 --> 0:01:24.440 billion dollars of student debt, which is mind boggling. He's 0:01:24.480 --> 0:01:27.720 a CFP, he's retired at the age of twenty five 0:01:27.800 --> 0:01:30.320 before starting a student loan planner. I don't even know 0:01:30.319 --> 0:01:31.920 if we'll have time to get to that, but he 0:01:32.080 --> 0:01:34.720 is the man to turn two in response to all 0:01:34.760 --> 0:01:37.720 of the latest student loan changes that we are about 0:01:37.720 --> 0:01:40.600 to experience. And so Travis Hornsby, thank you so much 0:01:40.640 --> 0:01:41.680 for coming on how to Money. 0:01:41.880 --> 0:01:43.960 Absolutely, you know, you know, student loans are pressing, but 0:01:44.000 --> 0:01:46.640 they don't have to be depressing, right, and so for 0:01:46.720 --> 0:01:49.000 how to Money listeners, it doesn't have to be that way. 0:01:49.080 --> 0:01:50.560 So I'm excited to talk about it today. 0:01:50.640 --> 0:01:52.800 Glad you're here to bring the optimism, my friend. First 0:01:52.880 --> 0:01:55.320 question we got to ask you, we ask everybody is 0:01:55.440 --> 0:01:57.840 what do you like to sport? John? And I know 0:01:57.920 --> 0:01:59.840 you're smart, be as smart with your money. You retired 0:01:59.840 --> 0:02:02.440 it twenty five. You know what you're doing, but you 0:02:02.600 --> 0:02:05.120 still spoilage every now and again. What is it that 0:02:05.160 --> 0:02:07.920 you're throwing big bucks at that most people might think 0:02:07.960 --> 0:02:08.520 is a little weird? 0:02:08.720 --> 0:02:11.280 So spiritually I'm like a seven or eight year old boy, right, 0:02:11.360 --> 0:02:15.360 So I'm gonna say telescopes and cargo electric bicycles. So 0:02:15.960 --> 0:02:18.760 those are my two right now. I'm really into astronomy. 0:02:19.160 --> 0:02:21.919 I've got a group of astronomy bros. And we hang 0:02:21.960 --> 0:02:24.720 out on the weekends just like you know, compete over 0:02:24.720 --> 0:02:27.840 who can get the best picture of Jupiter. And it's 0:02:28.360 --> 0:02:30.600 kind of kind of funny to some people that there's 0:02:30.639 --> 0:02:32.760 like a group of like astronomy dads just like hang 0:02:32.800 --> 0:02:35.119 out and look at the stars. But it's a great 0:02:35.120 --> 0:02:38.520 way to get perspective ha ha. You know, you see, like, 0:02:38.639 --> 0:02:40.720 oh my gosh, this nebula is like, you know, a 0:02:40.760 --> 0:02:44.240 trillion miles away, and you know, you know, like a 0:02:44.280 --> 0:02:46.600 billion earths could fit inside it, and oh maybe my 0:02:46.600 --> 0:02:48.880 problems aren't as bad. So I kind of really enjoy 0:02:48.919 --> 0:02:50.600 it for that reason. And then same kind of thing 0:02:50.880 --> 0:02:53.920 for bicycles, Like there's all these awesome electric bikes. I 0:02:54.000 --> 0:02:55.880 like cargo ones because I can throw my kids in 0:02:55.919 --> 0:02:58.080 them and strap them down, and they're too young to 0:02:58.080 --> 0:02:59.639 bike on their own, and so it's just kind of 0:02:59.639 --> 0:03:02.440 a cool way that I can turn something that's a chore, 0:03:02.480 --> 0:03:04.600 like dropping kids off at school and make it fun, right, 0:03:04.639 --> 0:03:07.000 so I get to take them to daycare in preschool, 0:03:07.040 --> 0:03:09.200 and like the the electric cargo bike can be one 0:03:09.200 --> 0:03:12.080 of those you know, cool Harley Dads except a bicycle. 0:03:12.480 --> 0:03:14.799 That's at least how we envision ourselves. Travis. I don't 0:03:14.800 --> 0:03:16.080 know if it's I don't know if that's how other 0:03:16.080 --> 0:03:17.520 people see us, but yeah. 0:03:17.600 --> 0:03:20.120 You know, definitely I get some like, oh that guy, 0:03:20.280 --> 0:03:22.160 you know, I mean, I definitely there's some definitely views 0:03:22.160 --> 0:03:23.800 like that. But you know what, I feel like a 0:03:23.800 --> 0:03:26.000 Harley dad and you know another dad got one. So 0:03:26.120 --> 0:03:29.240 we're talking about getting leather. You know, jackets made, right, 0:03:29.240 --> 0:03:31.440 We're gonna make a biker gang. But it's like, you know, 0:03:31.480 --> 0:03:33.840 an electric cargo biker gang. Yeah, so it's you know, 0:03:34.160 --> 0:03:37.400 it's it's it's definitely you know, student loans, right, you know, 0:03:37.560 --> 0:03:39.560 a weird person's attracted to doing them. So I'm just 0:03:39.600 --> 0:03:41.440 you know, showing people my honest self. 0:03:41.480 --> 0:03:43.200 Oh R, let's talk student loans. Let's get into it, 0:03:43.200 --> 0:03:46.880 because I'm curious, first off, Travis, to think about or 0:03:46.920 --> 0:03:50.000 to understand how you're thinking about the kind of whiplash 0:03:50.160 --> 0:03:54.560 effect of approaches towards student loans. The last administration, there 0:03:54.600 --> 0:03:56.840 was this incredibly generous spirit towards people who had student 0:03:56.920 --> 0:04:00.040 loans that seems to have evaporated. Now we're encountering i 0:04:00.040 --> 0:04:02.440 don't know, almost maybe a hostile vibe. How do you 0:04:02.560 --> 0:04:07.400 think about that change and how should student loan borrowers 0:04:07.400 --> 0:04:07.840 be feeling. 0:04:08.280 --> 0:04:12.760 So, I mean, I've done this since the A Bomba administration, right, 0:04:12.840 --> 0:04:15.160 and so I've definitely seen a lot of different attitudes 0:04:15.160 --> 0:04:19.520 on student loans over time. I would say that what's 0:04:19.600 --> 0:04:23.800 kind of happened over time with the change in the 0:04:23.800 --> 0:04:27.840 political landscape is more and more educated voters have more 0:04:27.920 --> 0:04:30.560 drifted towards the Democratic Party, right in terms of like 0:04:30.839 --> 0:04:33.520 higher education levels predict more of a Democratic lane than 0:04:33.520 --> 0:04:35.520 it used to, right, especially if you think about like 0:04:35.520 --> 0:04:37.320 the Republican Party during like the Mitt Romne era in 0:04:37.360 --> 0:04:40.600 twenty twelve. And so what's happened is student loans have 0:04:40.800 --> 0:04:43.039 sort of drifted from this like kind of non partisan 0:04:43.080 --> 0:04:45.080 issue to being more of a partisan issue. 0:04:45.279 --> 0:04:45.479 Right. 0:04:45.800 --> 0:04:47.960 So if we think about like what happened during the 0:04:47.960 --> 0:04:51.480 Biden administration, Biden was you know, sort of the choice 0:04:51.640 --> 0:04:54.479 of the Democratic Party because they didn't have an alternative 0:04:54.480 --> 0:04:57.440 they could coalesce around, right, And President Biden wanted to 0:04:57.560 --> 0:05:00.359 unify the support of the progressive base, and so he 0:05:00.440 --> 0:05:04.320 viewed student loans is like this very easy policy area 0:05:04.480 --> 0:05:06.280 to go big on and to try to go really 0:05:06.279 --> 0:05:09.200 big on to maintain that political support to run for 0:05:09.279 --> 0:05:12.560 that second term, right, and in the first term of 0:05:12.720 --> 0:05:15.440 President Trump. You know, one thing that I would say 0:05:15.920 --> 0:05:18.400 for people that are just like really terrified about their 0:05:18.400 --> 0:05:21.159 student loans, really worried about what the administration's going to do, 0:05:21.640 --> 0:05:24.479 is it's important to have the perspective of the fact 0:05:24.520 --> 0:05:26.839 that the Trump administration was the one that started the 0:05:26.839 --> 0:05:30.000 student loan pause and paused collections on student loans in 0:05:30.000 --> 0:05:34.039 the first place. Right, So there's definitely some some negative 0:05:34.040 --> 0:05:36.080 things that are going to happen to some borrowers financially 0:05:36.200 --> 0:05:38.160 due to the new policies of the new administration. I 0:05:38.160 --> 0:05:40.159 don't want to minimize that, but I do want to 0:05:40.160 --> 0:05:43.200 say that everybody would need to have a very balanced 0:05:43.279 --> 0:05:45.560 view of what's going to happen with student loans in 0:05:45.640 --> 0:05:47.160 the next like few years. 0:05:47.320 --> 0:05:47.480 Right. 0:05:47.640 --> 0:05:50.040 So I would just say, like at a high level, 0:05:50.640 --> 0:05:53.599 student un forgiveness is not dead. It's just not going 0:05:53.640 --> 0:05:55.360 to be offered on steroids anymore. 0:05:56.160 --> 0:05:58.000 One of the changes that seems like it's going to 0:05:58.000 --> 0:06:01.360 take places transitioning student loans like towards the Small Business 0:06:01.440 --> 0:06:03.760 Administration looks like they're going to run that. It seems 0:06:03.760 --> 0:06:07.240 like a massive potential paperwork nightmare. I guess what do 0:06:07.279 --> 0:06:10.360 you foresee being some of the problems with that transition. 0:06:10.760 --> 0:06:13.760 Well, I mean they've fired half of the Department of Education, right, 0:06:13.800 --> 0:06:16.760 And there's one person put in a court deposition that 0:06:16.800 --> 0:06:18.800 there was six they left when they got fired. There 0:06:18.839 --> 0:06:22.440 was sixteen thousand borrower complaints that were in her cue 0:06:22.440 --> 0:06:23.520 that she had not answered yet. 0:06:23.640 --> 0:06:24.600 My gosh. 0:06:24.720 --> 0:06:27.400 So it's basically this wasn't working fast enough, is what 0:06:27.440 --> 0:06:29.560 you're saying. Yeah, it's her fault, right, you know. But 0:06:30.279 --> 0:06:33.240 so the thing is is like, so the new administration 0:06:33.480 --> 0:06:37.080 is sort of testing the boundaries to see what the 0:06:37.120 --> 0:06:39.360 courts will say is legal and what's not legal. Right, 0:06:39.960 --> 0:06:42.400 And the way I would interpret this is they're saying 0:06:42.400 --> 0:06:44.560 they're going to move it over to small Business Administration. 0:06:44.640 --> 0:06:46.880 I am not convinced that they can do that. The 0:06:46.920 --> 0:06:49.560 Secretary of Education is mentioned a whole lot in the statute, 0:06:49.920 --> 0:06:51.440 and they can say that they're going to move it 0:06:51.480 --> 0:06:53.720 over there. They can try to move it over there 0:06:53.720 --> 0:06:56.240 potentially with their big budget reconciliation bill, and maybe that's 0:06:56.240 --> 0:06:57.839 what they intend to do is try to pass it 0:06:57.880 --> 0:07:00.680 in Congress right to make it legal, or maybe they 0:07:00.720 --> 0:07:02.240 just plan to try to move it over there, right. 0:07:02.279 --> 0:07:04.760 But what a borrower needs to be concerned about is 0:07:05.360 --> 0:07:08.680 what's happened since the Obama administration is presidents have and 0:07:08.760 --> 0:07:11.480 the inaction of Congress taken more and more of a 0:07:11.520 --> 0:07:14.560 policy making role in student loans by issuing executive actions. 0:07:14.720 --> 0:07:16.000 So a lot of the things that have happened in 0:07:16.000 --> 0:07:19.280 the past several years, you know, have been the White 0:07:19.320 --> 0:07:21.560 House just making press releases about things they're just going 0:07:21.640 --> 0:07:25.280 to do, right, And what the Trump administration is doing 0:07:25.480 --> 0:07:28.640 is rolling back pretty much anything that the Biden administration 0:07:28.760 --> 0:07:31.000 did the executive action that's not written in the statute. 0:07:31.040 --> 0:07:33.680 So what that means is if a borrower understands what 0:07:33.760 --> 0:07:35.920 kind of loans they have and what they're guaranteed benefits 0:07:35.920 --> 0:07:38.200 are in the statute of the law, the borrower can 0:07:38.200 --> 0:07:41.160 make a plan for their future. And the confusion is 0:07:41.200 --> 0:07:43.200 coming from, you know, all these things that have been 0:07:43.240 --> 0:07:45.480 promised to the executive action that don't have the safety 0:07:45.520 --> 0:07:47.600 of being a law, and borrowers just don't know how 0:07:47.640 --> 0:07:50.200 to plan. So that's a big part of what we're 0:07:50.200 --> 0:07:53.080 doing right now is educating borrowers around what are they guaranteed, 0:07:53.680 --> 0:07:55.200 you know, with and the law, and what are they 0:07:55.240 --> 0:07:58.120 not guaranteed in the law, And then that can help 0:07:58.160 --> 0:08:00.520 somebody figure out like do I should I pay these back? 0:08:00.640 --> 0:08:03.160 Like when? Like should I go for forgiveness? Like what should 0:08:03.160 --> 0:08:03.440 I do? 0:08:04.160 --> 0:08:08.320 I feel like the most recent news was the op 0:08:08.440 --> 0:08:11.640 ed that was written by the Department of Education secretary, 0:08:12.040 --> 0:08:14.640 and it seemed like she issued kind of a clearly 0:08:14.760 --> 0:08:18.360 line of demarcation and that may fifth date stuck out 0:08:18.400 --> 0:08:21.000 in my mind as a really important one. What is 0:08:21.040 --> 0:08:24.760 the fallout going to be from, you know, based on 0:08:24.800 --> 0:08:28.960 her pronouncement what she's said about the resumption of student 0:08:29.000 --> 0:08:32.320 loan payments, Like we've obviously had student loan payments are 0:08:32.360 --> 0:08:34.960 supposed to be being made right now except for some 0:08:34.960 --> 0:08:36.560 folks who are in limbo on the safe plan, right, 0:08:36.600 --> 0:08:38.160 I don't know. It gets all confusing to me, like 0:08:38.200 --> 0:08:40.240 where are we at right now? Do people need to 0:08:40.240 --> 0:08:41.719 be paying? And how worried should they be if they're 0:08:41.760 --> 0:08:42.160 not paying? 0:08:42.440 --> 0:08:45.360 So there's all the kinds of complex issues going on 0:08:45.400 --> 0:08:48.640 with this to different types of borrower populations, right, So 0:08:49.320 --> 0:08:51.720 to craft this for your listeners, what would you guess 0:08:51.760 --> 0:08:54.720 would be the average balance of like how you know 0:08:54.760 --> 0:08:56.960 and how to money listener, would you guess like in 0:08:57.040 --> 0:08:58.240 terms of the size. 0:08:58.280 --> 0:09:00.440 I'd say twelve thousand dollars. I would say more than that, 0:09:00.559 --> 0:09:03.120 because what the average student loan balance of the average 0:09:03.120 --> 0:09:04.240 America's upper. 0:09:04.040 --> 0:09:06.600 Thirties, Yeah, which is like an undergrade balance. 0:09:06.960 --> 0:09:08.640 Yeah, I would say maybe something close to that. 0:09:08.760 --> 0:09:10.240 I'm sure it's a range, right, So I'm sure a 0:09:10.280 --> 0:09:12.320 lot of your listeners have thirty k and then I'm 0:09:12.360 --> 0:09:13.720 sure a lot of your listeners have a lot more 0:09:13.760 --> 0:09:16.000 than that. There's probably a long tail of people right that, oh, 0:09:16.120 --> 0:09:19.240 you know, high five figures, low six figures, even mid 0:09:19.280 --> 0:09:23.840 six figures. So what I would say is, you know, 0:09:24.000 --> 0:09:26.920 since the COVID pause and made in March twenty twenty, 0:09:27.360 --> 0:09:30.800 the Department of ed Is essentially turned off the vast 0:09:30.880 --> 0:09:34.640 collections apparatus of student loans and caused no consequences to 0:09:34.640 --> 0:09:38.560 borrowers at all from not caring about them. And what 0:09:38.600 --> 0:09:42.360 does that mean? Like, before the COVID pause, something like 0:09:42.400 --> 0:09:45.200 thirteen percent of all borrowers were in default and a 0:09:45.200 --> 0:09:48.000 lot of borrowers were in forbearance, which was you know, 0:09:48.040 --> 0:09:50.160 not as damaging as a default on their record, but 0:09:50.240 --> 0:09:53.160 still meant they weren't paying anything. And so if we 0:09:53.160 --> 0:09:56.599 think about thirteen percent default rate, that roughly translates to 0:09:56.600 --> 0:09:58.760 about five million people. They would be struggling to make 0:09:58.760 --> 0:10:02.800 payments at any given time at a baseline. And so 0:10:02.920 --> 0:10:05.560 your average person as thirty thousand of student debt, like 0:10:05.559 --> 0:10:07.400 they'd have to pay about three hundred a month on 0:10:07.480 --> 0:10:09.959 average to pay their loans off completely, right, And the 0:10:10.000 --> 0:10:12.240 Biden administration came out with a plan called the Save 0:10:12.320 --> 0:10:15.600 Plan that basically allowed most of those borrowers to pay 0:10:16.280 --> 0:10:18.440 maybe like zero to one hundred dollars a month, so 0:10:18.480 --> 0:10:22.160 it was making their payment far more affordable. Right, So 0:10:22.280 --> 0:10:24.320 a lot of those listeners have just either not had 0:10:24.360 --> 0:10:26.800 to worry about making payments because they just completely ignored 0:10:26.800 --> 0:10:29.240 them and they weren't having their credit scores danked, or 0:10:29.240 --> 0:10:31.920 they were signing up for this Save income based payment 0:10:31.960 --> 0:10:34.160 plan and they were paying a very low percent of 0:10:34.160 --> 0:10:36.199 their income, like five percent of your income, but only 0:10:36.280 --> 0:10:38.600 after you make the first thirty or forty thousand. That's 0:10:38.640 --> 0:10:40.840 like kind of simplifying things a little bit, but in general, 0:10:40.840 --> 0:10:43.920 that's what the formula was, and the courts are saying Hey, 0:10:43.920 --> 0:10:47.480 hold up, this Save Plan is not legal because Biden 0:10:47.559 --> 0:10:49.720 tried to cancel student debt right, tried to cancel ten 0:10:49.760 --> 0:10:52.480 to twenty thousand of all debt for all Americans, and 0:10:52.520 --> 0:10:55.240 the Supreme Court said, hey, no, no way, Jose. And 0:10:55.280 --> 0:10:57.960 then the response to that was, let's create an income 0:10:58.040 --> 0:11:00.520 driven plan that's so generous. It's basically kind of like 0:11:00.559 --> 0:11:03.880 the same things like forgiveness light exactly. It was Plan B, right, 0:11:03.920 --> 0:11:05.520 And so they came out with Plan B and it 0:11:05.600 --> 0:11:08.080 was about to go into law in July twenty twenty four, 0:11:08.640 --> 0:11:10.960 and at the last second a bunch of Republican led 0:11:11.360 --> 0:11:14.320 states sued and blocked it. And so since June of 0:11:14.360 --> 0:11:17.080 twenty twenty four, about eight or nine million borrowers that 0:11:17.559 --> 0:11:19.760 did sign up for the Save Plan out of the 0:11:19.800 --> 0:11:22.440 forty million or so total, have been on ice and 0:11:22.520 --> 0:11:24.880 just frozen in place, not knowing what they should do. 0:11:25.360 --> 0:11:27.200 So that's like eight or nine million people. So that's 0:11:27.240 --> 0:11:28.800 a lot of your listeners are going to be on 0:11:28.840 --> 0:11:30.520 the Save Plan for barants. They're going to know what 0:11:30.520 --> 0:11:33.640 that is, right, and they have not been allowed to 0:11:33.720 --> 0:11:36.680 switch out of that, which is maddening. So they're saying, 0:11:36.720 --> 0:11:40.040 we're turning on all collections may in early May. But 0:11:40.080 --> 0:11:42.240 at the same token, they fired half the staff and 0:11:42.280 --> 0:11:45.120 there's nobody to process these incometerin repayment applications, and they're 0:11:45.120 --> 0:11:46.760 not allowing people that want to get out of this 0:11:47.280 --> 0:11:51.600 paused frozen payment situation to get onto something. So are 0:11:51.600 --> 0:11:54.880 those people going to be hurt negatively? I don't think 0:11:54.920 --> 0:11:57.360 so by and large because Department of Ed knows that 0:11:57.400 --> 0:11:59.400 these people haven't been allowed out of this forbearance, and 0:11:59.440 --> 0:12:01.160 so those folks are going to have more time than 0:12:01.200 --> 0:12:04.319 early May. There are people, though, that have not made 0:12:04.360 --> 0:12:07.080 payments for years, that have been in default like before 0:12:07.160 --> 0:12:10.440 COVID even, and they are going to start having their 0:12:10.480 --> 0:12:14.120 wages garnish, their benefits garnished, and their tax refunds garnished. 0:12:14.160 --> 0:12:16.920 So probably the single biggest impact for folks who are 0:12:17.320 --> 0:12:20.760 more you know, economically disadvantaged or vulnerable is going to 0:12:20.800 --> 0:12:24.560 be those tax refund intercepts. So that is not going 0:12:24.600 --> 0:12:26.560 to happen this year because most of those refunds have 0:12:26.559 --> 0:12:29.559 already gone out. But what often happens is people kind 0:12:29.600 --> 0:12:32.920 of really especially lower income Americans, depend upon those you know, 0:12:33.240 --> 0:12:35.640 two three four thousand dollars tax refunds to be able 0:12:35.679 --> 0:12:38.120 to pay their bills. Right, So next tax season when 0:12:38.120 --> 0:12:40.800 people go in file in like February March, we've had 0:12:40.920 --> 0:12:44.920 years worth of you know, not collecting you know, intercepts 0:12:44.920 --> 0:12:46.760 and wage garnishments and things like that, and that's going 0:12:46.800 --> 0:12:49.080 to get turned on in May, and so people will 0:12:49.080 --> 0:12:50.839 notice it right away. I mean, people that have not 0:12:50.880 --> 0:12:53.520 paid attention to their loans for years are going to 0:12:53.559 --> 0:12:56.840 start having their wages sapped at like fifteen percent of 0:12:56.880 --> 0:13:00.120 income on average. So it's it's definitely not going to 0:13:00.160 --> 0:13:03.520 be good. But I would say that there's a baseline 0:13:03.520 --> 0:13:07.400 of thirteen percent of people being in default even before COVID, right, 0:13:07.800 --> 0:13:11.480 so the measuring how bad will it be, I think 0:13:11.559 --> 0:13:15.280 you probably need to look at like that baseline to say, 0:13:15.400 --> 0:13:17.400 you know, if it's five million people, that's kind of 0:13:17.440 --> 0:13:21.600 a normal environment for student and default collections, and if 0:13:21.640 --> 0:13:23.280 it's way more than that, which actually I think it 0:13:23.320 --> 0:13:25.040 will be way more than that once all of the 0:13:25.559 --> 0:13:29.000 protections end. Because you do have people who are not 0:13:29.200 --> 0:13:31.880 certified on a current income for their tax returns and 0:13:31.880 --> 0:13:33.640 people that are in this eight million people that are 0:13:33.640 --> 0:13:35.840 in this forbearance. It's not actually a default yet, but 0:13:35.880 --> 0:13:37.680 it will be when they have to get told to 0:13:37.720 --> 0:13:39.400 go get on a payment plan, So it could be 0:13:39.600 --> 0:13:41.800 I think it could be ten to fifteen million people 0:13:41.840 --> 0:13:44.079 that will end up in default, which will be really, 0:13:44.080 --> 0:13:44.600 really bad. 0:13:45.040 --> 0:13:47.240 We're kind of transitioning from talking about the policy to 0:13:47.400 --> 0:13:49.600 kind of like as practical steps that folks can take, 0:13:50.160 --> 0:13:53.760 and when folks aren't able to make these payments, I mean, 0:13:53.760 --> 0:13:56.280 they're going to see damage done to let's say their 0:13:56.320 --> 0:13:59.319 credit score. Do you have any recommendations for folks when 0:13:59.320 --> 0:14:01.320 it comes to just practical steps that they can take 0:14:01.400 --> 0:14:04.880 when they aren't able to afford making these payments as 0:14:04.880 --> 0:14:05.640 they do resume? 0:14:05.960 --> 0:14:07.800 Absolutely so, I mean I think the first thing is 0:14:07.840 --> 0:14:09.840 to figure out what are you eligible for? I remember 0:14:09.880 --> 0:14:11.600 I said what is in the statute versus what's an 0:14:11.640 --> 0:14:15.960 executive action? So are you a new borrower as of 0:14:16.040 --> 0:14:18.440 July twenty fourteen? In other words, did you have an 0:14:18.480 --> 0:14:22.920 existing student on balance, you know, on July twenty fourteen 0:14:23.080 --> 0:14:26.120 or before, and if you did, the thing you're eligible 0:14:26.120 --> 0:14:28.440 for in the law is something called old income based 0:14:28.480 --> 0:14:31.640 your payment that's fifteen percent of your income and you 0:14:31.640 --> 0:14:33.680 get one hundred and fifty percent of the poverty line 0:14:33.720 --> 0:14:36.880 to earn money on before they take that fifteen percent. 0:14:36.960 --> 0:14:39.200 So for most people, it's about twenty grand for a 0:14:39.200 --> 0:14:41.520 family of one. For a family, you know, a four, 0:14:41.640 --> 0:14:43.640 maybe it's more like forty grand, And so they let 0:14:43.680 --> 0:14:46.240 you earn that much first before they take fifteen percent. 0:14:46.840 --> 0:14:49.040 But everything above that they're going to take fifteen percent. 0:14:49.080 --> 0:14:52.080 And within that there's ways that you can pay less. 0:14:52.400 --> 0:14:55.520 Right So, if you're a married borrower and you, you know, 0:14:55.560 --> 0:14:58.040 are the only person in your household loans, a lot 0:14:58.120 --> 0:14:59.640 of people are going to need to look at changing 0:14:59.640 --> 0:15:02.120 have they fight all their taxes. So people tend to 0:15:02.160 --> 0:15:04.440 file their taxes joint because that's just the default that 0:15:04.480 --> 0:15:06.960 most married couples do a lot of married couples could 0:15:07.000 --> 0:15:10.520 switch to married filing separate instead, and they could drastically 0:15:10.600 --> 0:15:13.160 lower their student loan payments because then it's fifteen percent 0:15:13.200 --> 0:15:15.320 of just their income instead of everybody's income. 0:15:15.880 --> 0:15:18.080 Was it that a blip though, too, like a week 0:15:18.200 --> 0:15:22.680 or two ago where there was something issued about Mary 0:15:22.680 --> 0:15:26.440 filing jointly and hey, if you file separately, we're still 0:15:26.440 --> 0:15:28.320 going to treat you the same way. But then they 0:15:28.360 --> 0:15:29.320 had to redact that. 0:15:29.640 --> 0:15:34.600 Yes, so I, along with some other people brought this 0:15:34.680 --> 0:15:38.760 to the attention publicly of a lot of people urgently 0:15:38.880 --> 0:15:40.920 because it was a major, major deal if they were 0:15:40.920 --> 0:15:43.560 going to interpret things this way. The reason is is, 0:15:43.720 --> 0:15:45.800 if you know what the statute says, which after ten 0:15:45.840 --> 0:15:48.360 years of doing this, we do, it says in the 0:15:48.440 --> 0:15:51.240 law that married borrowers do have the right to file 0:15:51.280 --> 0:15:52.960 separate and exclude their spousal income. 0:15:53.080 --> 0:15:53.760 So it's in the law. 0:15:53.800 --> 0:15:57.560 It's not an executive action. But when one of the 0:15:57.680 --> 0:16:01.520 acting Undersecretary of Education made pronouncement and a reply to 0:16:01.560 --> 0:16:04.920 a lawsuit, it came out of nowhere. And because in 0:16:04.960 --> 0:16:07.840 the same reply they affirmed something called the ps left 0:16:07.840 --> 0:16:10.400 Buyback Program, which is a Biden error program that's kind 0:16:10.400 --> 0:16:12.720 of generous to borrowers. So it made no sense that 0:16:12.760 --> 0:16:16.000 they're ignoring, you know, a major part of the student 0:16:16.040 --> 0:16:18.800 loan statutes while also affirming something that's in executive action. 0:16:18.880 --> 0:16:21.360 So I raised that issue on X and other places 0:16:21.400 --> 0:16:24.600 and said, what gives here right? And it turns out, guys, 0:16:24.680 --> 0:16:28.080 that they just literally made an honest mistake, which is 0:16:28.240 --> 0:16:29.840 which is which is? And the reason why we know 0:16:29.920 --> 0:16:33.200 this is because within literally two or three days, they 0:16:33.200 --> 0:16:36.400 came out with a corrective statement saying what we meant 0:16:36.400 --> 0:16:39.360 to say was that we will include your spouse and 0:16:39.400 --> 0:16:41.920 your family size no matter how you file your taxes, 0:16:41.960 --> 0:16:44.680 not that we would include your spouse's income and your 0:16:44.720 --> 0:16:47.280 payment calculation regardless of how you file your taxes. So 0:16:47.480 --> 0:16:50.000 that's actually a positive for borrowers because instead of a 0:16:50.080 --> 0:16:54.280 deduction based on a poverty line of three if you're 0:16:54.320 --> 0:16:57.120 married with two kids, now you get a deduction based 0:16:57.120 --> 0:16:59.600 on a family size of four. And you know, the 0:16:59.600 --> 0:17:02.680 bidenmdministration had actually changed the rules in a negative way 0:17:02.720 --> 0:17:04.800 to exclude your spouse from your family size if he 0:17:04.840 --> 0:17:05.600 filed separately. 0:17:06.119 --> 0:17:08.440 And that's like an additional child tax credit. 0:17:08.600 --> 0:17:08.919 It is. 0:17:09.000 --> 0:17:11.640 And the reason is because that's how the REGs were 0:17:11.760 --> 0:17:16.239 pre COVID, and that's because the court struck down or 0:17:16.280 --> 0:17:19.240 you know, is put on ice the save plan rule, 0:17:19.240 --> 0:17:21.680 that income based plan that Biden did. He also put 0:17:21.720 --> 0:17:24.800 in a ton of changes to regulations around IDR plans, 0:17:24.960 --> 0:17:26.719 and the courts don't want to full with figure out 0:17:26.720 --> 0:17:28.199 what they're going to pause and not pause, so they 0:17:28.240 --> 0:17:30.359 just pause the whole thing. And in some kind of 0:17:30.480 --> 0:17:34.359 hilarious ways, it's actually positive benefit to some borrowers because 0:17:34.400 --> 0:17:36.440 some of those rules from pre COVID were actually better 0:17:36.480 --> 0:17:38.840 than the ones that the Biden administration came out with. Interesting, 0:17:38.920 --> 0:17:42.320 So you know, so the thing is is, like, the 0:17:42.359 --> 0:17:46.359 ability to file separate is affirmed actually, which is great news. 0:17:46.400 --> 0:17:49.320 And most borrowers that listen to this, especially if they're younger, 0:17:49.359 --> 0:17:51.480 will have taken out their first student loan as of 0:17:51.920 --> 0:17:54.840 July twenty fourteen or after. And what that means is 0:17:54.880 --> 0:17:57.080 you actually qualify to pay ten percent of your income 0:17:57.119 --> 0:17:59.560 instead of fifteen. And if you're in the private sector, 0:17:59.560 --> 0:18:02.720 it's years tell forgiveness instead of twenty five. And that's 0:18:02.720 --> 0:18:06.280 written into the statute. So might we see some major 0:18:06.400 --> 0:18:09.879 legislation come out of Congress soon from the House Republicans 0:18:09.880 --> 0:18:12.439 and Senate Republicans that might try to modify some of that. 0:18:12.920 --> 0:18:16.000 It is possible, but it's also likely that they would 0:18:16.000 --> 0:18:19.239 grandfather and existing borrowers under current law. And even if 0:18:19.240 --> 0:18:21.800 they did make changes, those changes would probably be temporary 0:18:21.840 --> 0:18:24.920 in nature because of the legislative maneuver they're going to 0:18:25.000 --> 0:18:28.359 have to use to pass their bill for you know, 0:18:28.359 --> 0:18:30.840 with the limited majorities they have. So you know, I 0:18:30.840 --> 0:18:32.440 would say that I would say this, here's a quick 0:18:32.600 --> 0:18:34.520 kind of like way that a borrower can get a 0:18:34.520 --> 0:18:38.360 handle on their situation. Right, If you have less debt 0:18:38.400 --> 0:18:41.080 than what you earn every year, you probably need to 0:18:41.080 --> 0:18:43.359 pay it back. And there's a lot of flexibility you 0:18:43.400 --> 0:18:45.640 have in terms of how much you can pay. You 0:18:45.680 --> 0:18:48.399 can get on an extended or graduated plan. If you 0:18:48.440 --> 0:18:51.600 can't afford to pay the standard plan, you can consolidate 0:18:51.640 --> 0:18:53.600 your loans with the government and put them on a 0:18:53.640 --> 0:18:57.520 longer term repayment plan you know, amortization schedule. But you 0:18:57.560 --> 0:18:59.119 probably do need to pay it back. If you have 0:18:59.560 --> 0:19:02.320 two times what you earn every year or more, so 0:19:02.400 --> 0:19:05.080 you have debt that's twice your income or more, you 0:19:05.119 --> 0:19:07.119 need to go for forgiveness. The only question is is 0:19:07.160 --> 0:19:09.320 how and you can optimize that and do a better 0:19:09.440 --> 0:19:11.760 job of paying a lot less. And if you're somewhere 0:19:11.760 --> 0:19:14.919 in between, if you're one to two times debt of 0:19:14.960 --> 0:19:17.800 what you make every year, then the answer to what 0:19:17.840 --> 0:19:20.200 should you do with your loans is it depends and 0:19:20.240 --> 0:19:23.040 you need to kind of have a careful analysis of 0:19:23.119 --> 0:19:25.080 you know, what are your goals, what are your dreams? 0:19:25.400 --> 0:19:28.439 You know, what are you willing to do to you know, 0:19:28.800 --> 0:19:30.840 in terms of sacrifices to make to pay off loans 0:19:30.920 --> 0:19:32.600 versus not payoff loans, and you can still do a 0:19:32.600 --> 0:19:34.000 bunch of stuff to lower your payments. 0:19:34.000 --> 0:19:35.480 So most people's. 0:19:35.000 --> 0:19:38.480 Payments are not low as low as they qualify for 0:19:38.640 --> 0:19:41.600 because they're not taking advantage of all the loopholes that exist. 0:19:41.880 --> 0:19:44.000 Sure, yeah, and being able to take advantage of those 0:19:44.040 --> 0:19:47.439 loopholes depends on understanding and knowing what the law is. 0:19:47.480 --> 0:19:49.639 And like you pointed out, that's it seems like there 0:19:49.640 --> 0:19:52.120 are more mistakes that are being made these days where 0:19:52.119 --> 0:19:54.440 stuff's just kind of getting tossed out there. But I 0:19:54.480 --> 0:19:56.479 don't know, at least there was a corrective statement. 0:19:57.080 --> 0:19:59.480 Yeah, positive, you know, look glass half all right. 0:19:59.400 --> 0:20:02.160 Yeah, little silver lining to the shakeup. 0:20:02.560 --> 0:20:04.000 And I love how you're getting to more of these 0:20:04.040 --> 0:20:07.800 practical tips and pieces of advice, Travis. We're going to 0:20:07.840 --> 0:20:10.280 get some more of that, including whether, just I guess, 0:20:10.320 --> 0:20:13.520 the likelihood of whether someone should even consider discharging student 0:20:13.560 --> 0:20:15.720 loans through something like bankruptcy, how that's changed. 0:20:15.720 --> 0:20:25.480 We'll get to that and more. Right after this. We're 0:20:25.480 --> 0:20:28.760 back still talking with Travis Hornsby, talking about student loans 0:20:28.880 --> 0:20:32.679 and the shakeup that's happening in the first you know, 0:20:32.800 --> 0:20:36.040 six months of the Trump administration and how that impacts 0:20:36.119 --> 0:20:38.840 you as someone who has student loans. One of the 0:20:38.840 --> 0:20:42.760 things traves that happened during under the Biden administration was 0:20:43.600 --> 0:20:48.600 essentially looser rules about discharging student loans through bankruptcy. And 0:20:49.080 --> 0:20:52.480 for as long as I've been alive and been thinking 0:20:52.480 --> 0:20:55.520 about these things, student loans through bankruptcy, like getting them 0:20:55.520 --> 0:20:58.840 discharged was impossible. And then the Biden administration said, hey, 0:20:59.560 --> 0:21:01.600 we we want to make it a little bit easier 0:21:01.600 --> 0:21:04.320 for people to pull that off. They had to be 0:21:04.359 --> 0:21:07.520 able to prove what basically that they were unable to 0:21:07.520 --> 0:21:09.479 pay these student loans back student loans back, and then 0:21:09.480 --> 0:21:13.080 they wouldn't be able to How has that changed in 0:21:13.240 --> 0:21:15.480 the first four months of the Trump administration? Can people 0:21:15.480 --> 0:21:18.320 still Is that still a way that people can get 0:21:18.400 --> 0:21:19.600 rid of their student loans altogether? 0:21:19.960 --> 0:21:22.000 Generally speaking, No, it's very difficult to get your student 0:21:22.040 --> 0:21:25.280 loans discharged in bankruptcy. I would like to give kind 0:21:25.280 --> 0:21:27.480 of a quick rule for people to think about student loans, 0:21:27.480 --> 0:21:31.600 like studenton policy tends to get driven by terrible and 0:21:31.680 --> 0:21:35.160 horrific headlines. So let me give you an example of this. Right, So, 0:21:35.320 --> 0:21:38.199 in the first Trump administration, there was a headline that 0:21:38.240 --> 0:21:41.040 a Michigan man who was a combat veteran of Iraq 0:21:41.080 --> 0:21:45.160 and Afghanistan suffered a traumatic brain injury when ied exploded, 0:21:45.600 --> 0:21:49.360 and had a couple hundred thousand of student loans right 0:21:49.440 --> 0:21:52.359 from a graduate degree that he did pre you know, 0:21:52.480 --> 0:21:58.280 combat tours. The balance was considered taxable income as a 0:21:58.280 --> 0:22:01.639 result of his disability discharge, and so the IRS and 0:22:01.680 --> 0:22:04.879 the State of Michigan sent him a nearly six figure 0:22:04.960 --> 0:22:07.920 tax bill for his forgiven student loans. This is a 0:22:07.920 --> 0:22:10.359 guy who served our country literally suffered a brain injury, 0:22:11.040 --> 0:22:13.000 and they gave him a huge tax bill. And what 0:22:13.040 --> 0:22:15.359 the Trump administration did and the Tax Cuts and Jobs 0:22:15.359 --> 0:22:20.840 Act is made discharge due to disability tax free. When 0:22:20.880 --> 0:22:22.879 I say that, I don't say that to say that 0:22:22.880 --> 0:22:24.720 the Trump administration is going to be super generous to 0:22:24.800 --> 0:22:26.760 people and change bankruptcy laws in a way that most 0:22:26.800 --> 0:22:28.639 borrowers would really get excited about. 0:22:28.720 --> 0:22:28.920 Right. 0:22:29.280 --> 0:22:32.199 What I'm saying, though, is if you have ten to 0:22:32.200 --> 0:22:34.560 fifteen million people going to student un default like could 0:22:34.560 --> 0:22:37.320 happen right like we're talking about on this show. If 0:22:37.320 --> 0:22:39.720 that were to happen, the headlines would be so horrific. 0:22:40.040 --> 0:22:43.840 The problems in the housing market in other economic markets 0:22:43.880 --> 0:22:46.720 would be so bad that they would have to confront 0:22:46.960 --> 0:22:48.879 what do we do with student un default? Because right 0:22:48.920 --> 0:22:51.600 now they made the rules based off of this like 0:22:51.640 --> 0:22:54.480 undoe hardship standard, which is extremely difficult standard to meet 0:22:54.520 --> 0:22:58.040 to actually get your loans discharged. And most people they think, well, 0:22:58.040 --> 0:23:00.080 if I just stopped making payments, that'll go away. So 0:23:00.119 --> 0:23:02.840 that doesn't happen, because what happens when we have collections 0:23:02.880 --> 0:23:05.320 turned on, which we're going to have that in early May, 0:23:05.760 --> 0:23:08.360 is the government just takes fifteen percent of your income anyway. 0:23:08.840 --> 0:23:10.840 And so what I tell people that are you know, 0:23:10.840 --> 0:23:13.680 don't want to make student loan payments, are struggling to is, hey, 0:23:13.720 --> 0:23:15.720 you might be able to pay ten percent instead of 0:23:15.720 --> 0:23:17.920 fifteen percent of your income if you qualify for new 0:23:17.960 --> 0:23:20.400 IBr for example, and you won't. 0:23:20.200 --> 0:23:21.000 Wreck your credit. 0:23:21.320 --> 0:23:23.840 Because if the government's going to take fifteen percent through 0:23:24.040 --> 0:23:26.520 wage garnishments and tax refunds, they are going to get 0:23:26.560 --> 0:23:28.600 their money, right, There's no doubt they're going to get 0:23:28.640 --> 0:23:30.800 their money, So you might as well give them less 0:23:30.920 --> 0:23:34.040 by voluntarily turning it over instead of involuntarily turning over 0:23:34.320 --> 0:23:37.359 and also wrecking your credit. So for bankruptcy, the only 0:23:37.400 --> 0:23:39.720 scenarios I think where bankruptcy is something that could be 0:23:39.800 --> 0:23:42.679 considered is maybe on private student loans, but only with 0:23:42.760 --> 0:23:45.280 the assistance of, you know, a very educated student, own 0:23:45.280 --> 0:23:47.960 attorney that understands the consumer laws in your state, because 0:23:47.960 --> 0:23:50.560 they're all different on things like statute of limitations and 0:23:50.600 --> 0:23:51.960 burden a proof and things like that. 0:23:52.280 --> 0:23:54.680 Yeah, I guess on that note, what other factors should 0:23:54.680 --> 0:23:57.880 folks consider if they're like, Okay, maybe you know, maybe 0:23:57.880 --> 0:24:00.240 now's a good time to refinance out of a federal 0:24:00.280 --> 0:24:02.440 student loan. Maybe I should consider private student loans. What 0:24:02.480 --> 0:24:04.320 are some other wellan considerations there? 0:24:04.359 --> 0:24:06.720 You know, the Trump administration here is not going to 0:24:06.800 --> 0:24:10.600 last forever, right jokes on SNL aside, right, Like, he 0:24:11.400 --> 0:24:13.600 will be done after the second term. And the question 0:24:13.680 --> 0:24:15.440 is will a Republican win in twenty twenty eight or 0:24:15.440 --> 0:24:17.320 will a Democrat win in twenty twenty eight? What I 0:24:17.320 --> 0:24:19.800 would bet is if a Democratic wins in twenty twenty eight, 0:24:19.880 --> 0:24:22.560 the federal student loan benefits are going to increase, and 0:24:22.600 --> 0:24:25.400 if Republican wins, they will stay the same or decrease. Right, 0:24:25.440 --> 0:24:27.760 That's generally a good bet. And so if you are 0:24:28.359 --> 0:24:31.159 what I would call a marginal refinancing candidate, Like, you 0:24:31.200 --> 0:24:33.080 have five and a half percent federal loans and you 0:24:33.160 --> 0:24:35.960 might get a five percent from refinancing. You know what, 0:24:36.040 --> 0:24:38.400 federal protections are worth something, and so if you're only 0:24:38.520 --> 0:24:41.560 benefiting by like half a percent lower rate, it might 0:24:41.640 --> 0:24:43.359 be kind of a good idea to kind of just 0:24:43.480 --> 0:24:47.080 keep it federal, make your minimum payments. You know, see 0:24:47.119 --> 0:24:49.200 what happens the next three years or so three and 0:24:49.200 --> 0:24:51.760 a half years, right, and then if you are just 0:24:51.760 --> 0:24:54.920 a slam dunk refinancing case, what is that? First off, 0:24:54.920 --> 0:24:56.919 a lot of people are getting zero percent interest in 0:24:56.960 --> 0:24:59.040 the same plan for bearance, and you want to benefit 0:24:59.160 --> 0:25:01.600 on that until you you're completely done with that, Right, 0:25:01.680 --> 0:25:04.480 So if you're getting zero percent, get all your zero 0:25:04.560 --> 0:25:07.800 percent you possibly can. Yeah, And when that ends, you'll 0:25:07.840 --> 0:25:09.840 have a decision to make. And the decision might be 0:25:10.320 --> 0:25:12.320 depending on when you borrow your loans, because the interest 0:25:12.400 --> 0:25:14.000 rates of the loans are all different depending on what 0:25:14.080 --> 0:25:16.520 year you borrowed. So if you borrowed and your interest 0:25:16.600 --> 0:25:18.359 rate is like eight or nine percent and you can 0:25:18.400 --> 0:25:21.200 get five percent the private market. Remember that test I 0:25:21.200 --> 0:25:23.280 said earlier of do you earn more money than you 0:25:24.240 --> 0:25:25.840 have in student loans. So if you have you one 0:25:25.880 --> 0:25:29.159 hundred thousand of income, you have fifty thousand of student loans. 0:25:29.720 --> 0:25:31.840 Which you could do is do a selective refinancing. You 0:25:31.880 --> 0:25:34.239 could say, Okay, anything above a five percent I'm going 0:25:34.280 --> 0:25:36.000 to convert that to a private loan or a lower 0:25:36.000 --> 0:25:38.040 interest rate, and anything that's you know, three to five, 0:25:38.119 --> 0:25:39.680 I'm just going to keep it on the federal market. 0:25:39.800 --> 0:25:42.040 So people have a lot of choices in how they 0:25:42.119 --> 0:25:45.000 tackle this, right, they could refinance the whole thing. They 0:25:45.000 --> 0:25:47.280 could do it with a federal government, which doesn't change 0:25:47.280 --> 0:25:49.080 the interest rate, but it does change some of the 0:25:49.160 --> 0:25:53.000 terms sometimes in your favor, right, like things like stretching 0:25:53.000 --> 0:25:54.960 out the payment terms. So, for example, if you have 0:25:55.000 --> 0:25:57.520 over sixty thousand in federal suit of loans, if you 0:25:57.600 --> 0:26:01.480 quote unquote refinance with the government, then your payment required 0:26:01.520 --> 0:26:03.520 payment goes from like a ten year schedule to a 0:26:03.560 --> 0:26:06.159 thirty year schedule. And so that could be really beneficial 0:26:06.200 --> 0:26:07.879 for somebody who has a bunch of credit card debt 0:26:07.920 --> 0:26:09.920 who's struggling to make their payments and they can't make 0:26:09.960 --> 0:26:12.080 the ten year payment, Well, what if you can convert 0:26:12.119 --> 0:26:14.640 a tenure payment to a thirty year payment schedule? You'll 0:26:14.680 --> 0:26:16.080 have to pay a lot less and you'll get more 0:26:16.119 --> 0:26:18.679 breathing room. Right, So there's all kinds of levers that 0:26:18.720 --> 0:26:21.240 you can pull, and the key thing is just to 0:26:21.320 --> 0:26:24.000 know what, when do you pull which lever and why? 0:26:24.320 --> 0:26:27.840 Yeah, I've heard, I've heard you also make the suggestion 0:26:28.359 --> 0:26:31.120 that people think about changing jobs or taking a work 0:26:31.160 --> 0:26:34.120 break in order to reduce that student loan payment, bring 0:26:34.119 --> 0:26:38.080 the payment down. I guess maybe it's not. It's easier 0:26:38.119 --> 0:26:39.600 said than none for a lot of people who are like, 0:26:39.760 --> 0:26:42.760 I need a paycheck, Travis, but thank you. So how 0:26:42.760 --> 0:26:45.919 do you think some people, though, can implement that strategy 0:26:46.119 --> 0:26:49.040 in order to reduce their student loan payments? And when 0:26:49.119 --> 0:26:50.520 might that be worth it? Well? 0:26:50.560 --> 0:26:52.480 I mean, so, for example, you do not have to 0:26:52.520 --> 0:26:55.919 report when your payment where your income goes up except 0:26:55.920 --> 0:26:58.880 at like regularly scheduled intervals. So they're going to tell you, hey, 0:26:58.880 --> 0:27:01.200 it's time to recertify your income, so we can calculate 0:27:01.200 --> 0:27:03.200 your income based payment of what you should pay every 0:27:03.200 --> 0:27:05.840 month on your loans. Right, But what they do allow 0:27:05.880 --> 0:27:08.040 you to do is if your income goes down, you 0:27:08.080 --> 0:27:11.359 can request an early recertification at Student ad dut Gov 0:27:11.440 --> 0:27:14.679 slash IDR And I'll give you an example of this. 0:27:14.840 --> 0:27:18.000 We had a client who was on a maternity leave 0:27:18.480 --> 0:27:21.760 and the first six weeks were paid and then the 0:27:21.800 --> 0:27:25.280 other six weeks were unpaid. And during those latter six weeks, 0:27:25.280 --> 0:27:28.119 she was not getting a taxable income. So what I 0:27:28.160 --> 0:27:30.320 suggested to her is go to student ad dut gov 0:27:30.359 --> 0:27:34.800 slash idr and click on recalculate my payment and state 0:27:35.000 --> 0:27:38.280 the truth, which is that at the moment she did that, 0:27:38.440 --> 0:27:40.960 she did not have a taxable income that was coming 0:27:40.960 --> 0:27:44.240 in right during the six weeks window that she did 0:27:44.240 --> 0:27:46.359 not have a taxable income coming in. That was a 0:27:46.359 --> 0:27:48.360 true statement, and so she was able to re calculate 0:27:48.400 --> 0:27:50.520 her payment to a much lower number. So, if you're 0:27:50.560 --> 0:27:53.200 in between jobs for a couple months, if you are 0:27:53.520 --> 0:27:56.800 doing a a sabbatical from your job, if you're doing 0:27:56.960 --> 0:27:58.679 what I did when I was in my twenties, traveling 0:27:58.720 --> 0:28:00.800 the world, taking a break from where, it is within 0:28:00.880 --> 0:28:03.320 your rights to go to your student loan website student 0:28:03.359 --> 0:28:06.080 a dut gov slash IDR and get your payment recalculated 0:28:06.119 --> 0:28:07.439 to a much much lower number. 0:28:07.640 --> 0:28:10.320 How long does it last? Like so she goes back 0:28:10.359 --> 0:28:13.920 to work and then her payment doesn't go up, right, 0:28:13.960 --> 0:28:15.120 when she goes back day one. 0:28:15.320 --> 0:28:16.440 Right, we all it depends the keys. 0:28:16.600 --> 0:28:19.240 What TRAVI said, you said regular intervals. What are those intervals? 0:28:19.320 --> 0:28:21.320 Yeah, it depends on the person. So what happens is 0:28:21.320 --> 0:28:23.959 most people when they graduate, graduate in the spring, and 0:28:24.080 --> 0:28:26.040 you have a six month grace period if you don't 0:28:26.080 --> 0:28:29.359 do anything otherwise. So most people, if they do nothing, 0:28:29.680 --> 0:28:33.240 are going into a like they graduate in June. Six 0:28:33.280 --> 0:28:36.280 months after that is like November December, that's when they 0:28:36.280 --> 0:28:38.640 get their first payment due. And so for that person, 0:28:38.720 --> 0:28:41.880 their recertification date for their income based payment plan is 0:28:41.920 --> 0:28:45.280 going to be November December every year at the same time. Right, 0:28:45.640 --> 0:28:48.479 So if she's on this maternity leave, she might get 0:28:48.640 --> 0:28:51.240 you know, the point at which she recalculated her payment 0:28:51.320 --> 0:28:54.640 until her next recertification date with low payments, and then 0:28:54.800 --> 0:28:57.520 you know what would happen is when she goes to 0:28:57.560 --> 0:29:01.880 recalculate her new payment, she could do is to say, well, 0:29:02.520 --> 0:29:05.239 you know, is my current income lower or higher than 0:29:05.240 --> 0:29:07.840 my last tax return. If it's higher than my last 0:29:07.840 --> 0:29:10.440 tax return, then she wants to use her last tax 0:29:10.440 --> 0:29:13.760 return to recertify her income at her next recertification date 0:29:13.800 --> 0:29:16.479 when she has to report her income for calculating her 0:29:16.520 --> 0:29:19.600 IBr payment. Right, So for example, let's say you know, 0:29:19.640 --> 0:29:21.880 she's making one hundred twenty K a year, you know, 0:29:21.960 --> 0:29:23.840 and let's say she has to recertify every year in 0:29:23.880 --> 0:29:26.720 December or something. So if she has this you know, 0:29:26.840 --> 0:29:30.000 unpaid maternity leave, she recalculates her payment to basically zero, 0:29:30.440 --> 0:29:33.240 and then her next you know, let's say her next 0:29:33.680 --> 0:29:36.200 recertification date, she's back to making one hundred and twenty 0:29:36.280 --> 0:29:38.560 K year. Well, since she had a maternity leave or 0:29:38.560 --> 0:29:41.240 she was making nothing, maybe her prior year tax atturn 0:29:41.360 --> 0:29:43.520 is showing one hundred K of income, so she'd rather 0:29:43.680 --> 0:29:46.239 use that to recertify her income instead because it's going 0:29:46.280 --> 0:29:48.120 to give her a lower payment. So that's kind of 0:29:48.200 --> 0:29:50.479 that's kind of what I mean about just knowing what 0:29:50.520 --> 0:29:52.440 are you allowed to do based off of the rules 0:29:52.440 --> 0:29:54.880 and the laws. And you know, that's why most people 0:29:54.880 --> 0:29:57.080 pay too much, is because they're not taking advantage of 0:29:57.080 --> 0:29:58.720 what they're able to do legally. 0:29:58.760 --> 0:30:01.000 Sure, I think some folks might have call them like loopholes, 0:30:01.040 --> 0:30:04.160 but no, it's this is just truly what the law states. 0:30:04.520 --> 0:30:06.959 And so to put a fine point on it, it is 0:30:07.000 --> 0:30:09.920 an annual recertification because I thought I saw something about 0:30:10.400 --> 0:30:15.800 enrollments in these IBr plans not requiring recertification every single year. 0:30:15.880 --> 0:30:20.160 We also they have pushed out recertification dates every few 0:30:20.200 --> 0:30:23.120 months four years. So it's one thing we talk about 0:30:23.160 --> 0:30:26.480 the turning on the payments and collections aspect of student loans. Again, 0:30:26.800 --> 0:30:29.680 the Trump administration, not the Biden administration, has just pushed 0:30:29.720 --> 0:30:33.400 out IDR recertification dates to know earlier than February twenty 0:30:33.440 --> 0:30:37.680 twenty six. So the Biden administration started doing this by 0:30:37.680 --> 0:30:40.680 pushing out IDR recertification dates basically every few months because 0:30:40.720 --> 0:30:44.760 they wanted payments to be low, especially before key election dates. 0:30:45.320 --> 0:30:47.880 And they also didn't have the capacity in the services 0:30:47.960 --> 0:30:50.320 to recalculate what people even owed, which is that's kind 0:30:50.320 --> 0:30:52.680 of terrible, isn't it, Like in terms of just, you know, 0:30:52.720 --> 0:30:57.320 an embarrassing operational failure that the servicers cannot even calculate 0:30:57.360 --> 0:30:59.720 what people owe because they don't have the staff, they 0:30:59.720 --> 0:31:01.600 don't have the rules given to them by department. 0:31:01.640 --> 0:31:03.480 Event you don't have the infrastructure in place to be 0:31:03.480 --> 0:31:06.080 able to handle exactly figuring out what the new payments 0:31:06.080 --> 0:31:06.520 are going to be. 0:31:06.520 --> 0:31:08.760 And so even the Trump administration which is making this 0:31:08.840 --> 0:31:11.080 big public spectacle of you know, we're going to make 0:31:11.080 --> 0:31:14.240 people pay what they owe. Well, they have pushed off recertification. 0:31:14.320 --> 0:31:17.520 I've seen some borrowers with a required recertification date of 0:31:17.600 --> 0:31:20.360 January twenty twenty seven. And these are people in some 0:31:20.440 --> 0:31:23.680 cases who last recertified their income where their twenty eighteen 0:31:23.760 --> 0:31:26.760 tax return in twenty nineteen, and then COVID happened in 0:31:26.760 --> 0:31:29.400 March twenty twenty, and then people got paused on their 0:31:29.440 --> 0:31:31.960 requirement certify. So I'm not I don't want to get 0:31:32.040 --> 0:31:34.160 like in trouble sharing too much here, but we have 0:31:34.240 --> 0:31:37.400 people making six figures that are perfectly willing to pay, 0:31:37.760 --> 0:31:39.360 you know, two thousand a month, and their student loans 0:31:39.400 --> 0:31:41.720 that they're supposed to that are getting credit for forgiveness 0:31:41.720 --> 0:31:43.680 programs but are still paying based off of when they 0:31:43.720 --> 0:31:47.160 just graduated. They're paying two hundred dollars a month, right, So, 0:31:47.400 --> 0:31:50.040 and the Trump administration is saying we don't mind extending 0:31:50.080 --> 0:31:52.400 those two hundred dollars a month payments to January twenty 0:31:52.440 --> 0:31:55.080 twenty seven for some people. So this is like, yeah, 0:31:55.080 --> 0:31:55.640 it's crazy. 0:31:55.720 --> 0:31:58.200 From a personal finance standpoint, I'm curious, like, what are 0:31:58.280 --> 0:32:01.560 you telling clients who come to you because hey, right 0:32:01.600 --> 0:32:05.120 now the getting has been good, you've had payments deferred 0:32:05.240 --> 0:32:08.720 or you have had an artificially low payment, and are 0:32:08.760 --> 0:32:11.960 you suggesting bulk up those reserves because this might not 0:32:12.080 --> 0:32:15.480 last forever. How do you help people think about the 0:32:15.600 --> 0:32:19.080 fact that payments could go and they already are going 0:32:19.160 --> 0:32:22.160 up for some people, uh and to be prepared for that. 0:32:22.920 --> 0:32:25.440 While maybe you have a pretty solid deal right. 0:32:25.360 --> 0:32:28.160 Now, Well, I mean I think that, you know, people 0:32:28.200 --> 0:32:31.520 have different level of economic security, and I just want 0:32:31.520 --> 0:32:34.160 to kind of acknowledge that, right, like so uh so, 0:32:34.200 --> 0:32:36.400 for example, if if my taxes go way up, right, 0:32:36.920 --> 0:32:39.520 I'm gonna I'm gonna, you know, make a comment hashtag 0:32:39.600 --> 0:32:41.920 check my privilege here, right, But you know, if taxes 0:32:41.960 --> 0:32:45.080 go way up, maybe maybe I'm cool with my one 0:32:45.080 --> 0:32:47.080 thousand dollars telescope for a while, do you know what 0:32:47.120 --> 0:32:47.440 I mean? 0:32:48.200 --> 0:32:49.160 Upgrading quite yet? 0:32:49.360 --> 0:32:51.760 Maybe maybe I'm putting off the fully loaded you know, 0:32:51.920 --> 0:32:54.800 like you know, computer tracking the comments or whatever. You 0:32:54.840 --> 0:32:57.160 know what I mean, like so, so and and so, 0:32:57.200 --> 0:32:59.880 maybe for like a middle class person, this might mean, 0:33:00.080 --> 0:33:01.560 you know, cay, I'm gonna drive my camera for a 0:33:01.560 --> 0:33:05.160 while before upgrading to the newer model, right, or something 0:33:05.240 --> 0:33:06.960 like that. Now for people at the lower end of 0:33:07.000 --> 0:33:10.000 the economic spectrum, they don't have those those privileges, right, 0:33:10.280 --> 0:33:12.440 And so the good news is if somebody knows their 0:33:12.520 --> 0:33:14.400 rights under the student on rules, if you truly are 0:33:14.400 --> 0:33:16.000 making not a lot of income, you should be able 0:33:16.040 --> 0:33:18.720 to qualify for a zero dollar payment like or very 0:33:18.760 --> 0:33:20.560 close to it, because you just have to get onto 0:33:20.560 --> 0:33:22.920 the income based or payment plan. And so many people 0:33:22.960 --> 0:33:25.000 don't even know that they could benefit from that, Like, 0:33:25.080 --> 0:33:27.800 so many people don't still do not know that they 0:33:27.840 --> 0:33:30.480 can sign up for that. Like, you know, eight million 0:33:30.560 --> 0:33:32.320 or nine million people sign up for the Save plan. 0:33:32.920 --> 0:33:35.680 The awkward truth about that though, is actually maybe like 0:33:35.720 --> 0:33:37.960 twenty million people could have benefited from it, but only 0:33:38.000 --> 0:33:40.840 eight or nine million people signed up, right, So you're 0:33:40.920 --> 0:33:45.560 more economically struggling folks. The government cannot auto enroll people 0:33:45.600 --> 0:33:47.040 into IBr they're not allowed to. 0:33:47.320 --> 0:33:49.640 So maybe all those people were clairvoyant and they knew 0:33:49.680 --> 0:33:51.320 that it wasn't going to last. I don't know, maybe 0:33:51.320 --> 0:33:53.040 that's what it was. Yeah, but I think a lot 0:33:53.040 --> 0:33:55.960 of it as people like to. I mean, money is 0:33:56.040 --> 0:33:59.320 very stressful, particularly for people who are who do not 0:33:59.440 --> 0:34:01.800 have access to the same income that middle and upper 0:34:01.840 --> 0:34:04.400 middle income families have right, and so a lot of 0:34:04.440 --> 0:34:07.640 people just take the maybe if ignore it'll go away approach. 0:34:07.920 --> 0:34:10.080 And the problem with that thinking is it's absolutely not 0:34:10.080 --> 0:34:12.560 true because the government can seize your wages and tax refunds. 0:34:12.600 --> 0:34:15.240 Again, i've heard you mention the term partial financial hardship. 0:34:15.320 --> 0:34:17.480 Is that something that folks should Is that what you're 0:34:17.520 --> 0:34:19.440 talking about here or is that like a completely different term. 0:34:19.560 --> 0:34:22.000 Well, partial financial hardship doesn't mean what it sounds like, 0:34:22.160 --> 0:34:26.200 so Parkay, partial financial hardship sounds like you're struggling. In reality, 0:34:26.320 --> 0:34:28.920 what it is is do you have a payment that's 0:34:28.960 --> 0:34:31.600 lower than the standard tenure for your loan amount. So, 0:34:31.719 --> 0:34:35.000 for example, somebody could have a forty thousand dollars income 0:34:35.080 --> 0:34:37.480 in twenty thousand dollars of steat of loans and not 0:34:37.680 --> 0:34:41.080 have a partial financial hardship because their payment calculated on 0:34:41.120 --> 0:34:43.360 the income based your payment plan is higher than what 0:34:43.400 --> 0:34:45.879 they'd have to pay if they paid two hundred dollars 0:34:45.920 --> 0:34:48.200 a month to pay their twenty k off in ten years. 0:34:48.360 --> 0:34:51.440 So that person with forty forty k income twenty k 0:34:51.480 --> 0:34:54.200 of loans might not have a partial financial hardship. Meanwhile, 0:34:55.080 --> 0:34:57.480 you know a doctor who has four hundred thousand of 0:34:57.480 --> 0:34:59.920 steel loans with two hundred thousand of income might have 0:35:00.080 --> 0:35:02.759 have a partial financial hardship because their income based your 0:35:02.760 --> 0:35:04.880 payment is lower than four thousand a month, which is 0:35:04.880 --> 0:35:06.239 what they would have to pay to pay it off 0:35:06.239 --> 0:35:06.880 in ten years. 0:35:07.280 --> 0:35:07.480 Right. 0:35:07.920 --> 0:35:12.080 So what that means is is that you know, in general, 0:35:12.360 --> 0:35:15.040 what I said about the greater than two times your 0:35:15.040 --> 0:35:17.919 income and debt, you know, basically all those people should 0:35:17.960 --> 0:35:20.080 go for forgiveness. Like if you're not going for forgiveness, 0:35:20.080 --> 0:35:23.839 you're probably just hurting yourself financially. And what I said 0:35:23.920 --> 0:35:27.799 during the Biden administration is is basically, if you have 0:35:28.600 --> 0:35:31.319 more debt than your income at all, like if your 0:35:31.320 --> 0:35:33.239 debt to income ratio is more than one to one, 0:35:33.320 --> 0:35:36.200 you should go for forgiveness. During the Biden administration, you know, 0:35:36.239 --> 0:35:38.400 the problem is is with the less generous rules the 0:35:38.440 --> 0:35:41.440 Trump administration is rolling out. Forgiveness is still very much 0:35:41.440 --> 0:35:43.879 a thing, but it's not as a thing for as 0:35:43.920 --> 0:35:46.200 many people, which is why I'm saying, well, now it's 0:35:46.200 --> 0:35:48.400 really more like two to one debt to income ratio, 0:35:48.440 --> 0:35:50.840 go for forgiveness. And if you're in this one to 0:35:50.880 --> 0:35:54.839 two times, you know your your income in debt student debt. 0:35:55.239 --> 0:35:58.640 Then then it's a it depends, right, It depends on 0:35:58.680 --> 0:36:02.000 your plans for your career, your family goals, your your 0:36:02.040 --> 0:36:05.239 expected income growth, right, your your risk tolerance for you know, 0:36:05.239 --> 0:36:06.480 do you want to wait it out a little bit 0:36:06.600 --> 0:36:09.319 to see what happens policy wise? And you know, for 0:36:09.360 --> 0:36:13.560 people who have less student debt than their income, there's 0:36:13.560 --> 0:36:16.439 still strategies, there's still approaches to pay less, there's still 0:36:16.480 --> 0:36:20.080 ways to have a better situation. You know, some people 0:36:20.120 --> 0:36:22.600 even could still benefit from forgiveness if you're very low 0:36:22.640 --> 0:36:25.680 income and that ratio applies to you. But you know 0:36:25.760 --> 0:36:29.600 it just you know, it depends, is the mushy mouthed answer. 0:36:29.920 --> 0:36:33.080 Yeah, no, no, but that's really helpful kind of lines 0:36:33.120 --> 0:36:37.120 of demarcation there. I'm curious too, your you've talked about 0:36:37.160 --> 0:36:39.640 the clawing back of forgiveness. People who have gotten forgiveness, 0:36:40.080 --> 0:36:43.279 they're not going to get unforgiven, right, and that that 0:36:43.320 --> 0:36:47.680 would be illegal. But are you worried about the PSLF 0:36:47.840 --> 0:36:49.920 program and maybe some sort of rug pull. I know 0:36:50.000 --> 0:36:52.319 people who are in that and who are let's say 0:36:52.320 --> 0:36:56.200 seven eight years along, and they're worried. They're like, is 0:36:56.239 --> 0:36:58.919 something going to happen before I get to that point 0:36:58.960 --> 0:37:01.320 where forgiveness is real each cause, like I'm pop committed 0:37:01.360 --> 0:37:01.920 at this point. 0:37:02.000 --> 0:37:05.160 Well, I mean I like to think in terms of probabilities. Right, 0:37:05.920 --> 0:37:08.120 I was an econ in stats. Major makes me weird, 0:37:08.320 --> 0:37:09.920 but you know that's what I like to think of 0:37:10.000 --> 0:37:12.480 in terms of giving people advice, because there's probabilities that 0:37:12.600 --> 0:37:15.279 are fifty to fifty and there's ones that are like 0:37:15.320 --> 0:37:16.280 ten percent chance. 0:37:16.400 --> 0:37:16.640 Right. 0:37:17.040 --> 0:37:19.400 And so with PS LEFT, the biggest drug pull that 0:37:19.400 --> 0:37:20.880 can happen is there's a bill right now in the 0:37:20.880 --> 0:37:24.239 House to take away nonprofit status from hospitals and make 0:37:24.280 --> 0:37:27.359 them for profits. So that would be a way that 0:37:27.400 --> 0:37:29.400 you could take away PS LEFT through a back door 0:37:29.440 --> 0:37:32.959 for at least half the people that currently qualify for it, right, 0:37:33.280 --> 0:37:36.000 And should you be worried about that? Like, what I 0:37:36.000 --> 0:37:38.160 would tell people that are in that boat is no. 0:37:38.719 --> 0:37:40.799 And the reason is it has to pass not just 0:37:40.840 --> 0:37:42.879 the House but also the Senate. And if you look 0:37:42.920 --> 0:37:47.279 at the Senate, there are basically four Republicans swing votes 0:37:47.360 --> 0:37:51.799 right now. In my mind, there's Murkowski and Collins in 0:37:51.880 --> 0:37:54.839 Alaska and Maine. There's Mitch McConnell, who's been voting against 0:37:54.880 --> 0:37:56.520 administration and a lot of things now that he's not 0:37:56.560 --> 0:37:59.200 the Republican leader, and there's Tom Tillis in North Carolina 0:37:59.239 --> 0:38:00.680 and he's kind of like the wing votes. So if 0:38:00.680 --> 0:38:03.000 you think about somebody like him, I live in North Carolina, 0:38:03.320 --> 0:38:06.840 imagine Douke and you and see going from not for 0:38:06.920 --> 0:38:09.040 profit to for profit and them having to do a 0:38:09.040 --> 0:38:11.400 bunch of layoffs, and he's got a competitive reelection at 0:38:11.440 --> 0:38:13.080 twenty twenty six. Is he going to vote for that? 0:38:13.719 --> 0:38:15.800 I would bet not. I would bet that the Senate 0:38:15.920 --> 0:38:18.160 modifies and makes less aggressive a lot of the House 0:38:18.200 --> 0:38:21.759 GOP's proposals for things like this, and I would not 0:38:22.000 --> 0:38:25.600 worry about that until we actually see the text of 0:38:25.640 --> 0:38:29.680 the bill move along and pass you know, a committee 0:38:29.680 --> 0:38:32.920 for example. So I think that people are really worried 0:38:32.920 --> 0:38:34.719 about what the House and Senat are going to do 0:38:34.760 --> 0:38:37.920 because they do have unified control of DC, right, and 0:38:37.960 --> 0:38:40.919 they will pass some kind of big bill that's gonna 0:38:40.920 --> 0:38:42.359 have a lot of stuff in it because they have 0:38:42.440 --> 0:38:44.279 to because the Trump tax cuts expire at the end 0:38:44.320 --> 0:38:46.319 of twenty twenty five. So that is a guarantee that 0:38:46.400 --> 0:38:48.680 you will see a bill and there will be something 0:38:48.680 --> 0:38:50.600 related to student loans in it. The question is is 0:38:50.640 --> 0:38:52.480 how much will be in it and how much will 0:38:52.520 --> 0:38:54.520 borrowers have to worry about when they find, you know, 0:38:54.520 --> 0:38:57.680 when the text has battled over and finally published. 0:38:57.400 --> 0:38:59.560 Could you see a situation where it's at least for 0:38:59.760 --> 0:39:02.680 looking and a lot of folks get to get grandfathered 0:39:02.680 --> 0:39:05.720 into the previous PSLF or I'm sorry, with a hospital 0:39:05.719 --> 0:39:06.640 nonprofit designation. 0:39:06.960 --> 0:39:08.279 I think that it will be and I think that 0:39:08.320 --> 0:39:09.840 you know that the people the only people that have 0:39:09.880 --> 0:39:12.360 to worry about forgiveness being clawed back is people that 0:39:12.520 --> 0:39:16.400 were not actually eligible for it. And I know that 0:39:16.480 --> 0:39:19.480 might sound ridiculous, but what I mean by that is 0:39:19.520 --> 0:39:23.439 there are there's no auditing a PSLF really at all, 0:39:23.880 --> 0:39:26.000 and so there are some employers that have been approved 0:39:26.000 --> 0:39:27.880 for PSLF that I know, based on the rules, do 0:39:27.960 --> 0:39:30.960 not qualify. And I've seen borrowers that have been mistakenly 0:39:31.000 --> 0:39:32.680 given credit for years of payments that should not. 0:39:32.680 --> 0:39:34.320 Say there's no cop on the beat. 0:39:34.200 --> 0:39:37.359 There's none, no zero. So like a lot of there's 0:39:37.360 --> 0:39:39.560 a lot of scams, there's a lot of fraudulent activity 0:39:39.600 --> 0:39:43.960 going on there. And you know, if somebody, in my opinion, 0:39:43.960 --> 0:39:46.960 for example, goes and starts a fake nonprofit and has 0:39:47.000 --> 0:39:50.000 been approved for you know, ps LEF based on starting 0:39:50.000 --> 0:39:53.680 a fake nonprofit. If they get approved and forgiven, like 0:39:54.239 --> 0:39:55.719 it might work out. It's kind of like lying on 0:39:55.760 --> 0:39:58.120 your taxes, right Like if you say you know, I'd 0:39:58.120 --> 0:40:00.200 made no income and like they never audit, you got 0:40:00.200 --> 0:40:03.440 away with it, right And if there's very little auditing 0:40:03.480 --> 0:40:06.319 that's happening at the IRS, then maybe maybe some people decided, 0:40:06.360 --> 0:40:07.759 well that's worth taking the chance on. 0:40:07.840 --> 0:40:07.960 Right. 0:40:08.000 --> 0:40:10.279 We don't give that type of advice. We say what 0:40:10.320 --> 0:40:11.799 are the rules, what are the things you can do 0:40:11.840 --> 0:40:15.000 within the rules? And you know, I would not be shocked. 0:40:15.120 --> 0:40:16.719 I tell people, I would not be shocked if we 0:40:16.760 --> 0:40:19.640 did see some kind of like you know, Operation Varsity 0:40:19.680 --> 0:40:22.279 Blues right where they went after the famous actors, right 0:40:22.440 --> 0:40:25.239 like the ones on Desperate Housewives whatever, right that we're 0:40:25.239 --> 0:40:28.040 getting their kids in for water polo to like fancy schools. 0:40:28.120 --> 0:40:30.280 Su I think that you might see something like people 0:40:30.560 --> 0:40:33.720 that's like going after the very worst offenses for student 0:40:33.760 --> 0:40:36.080 loan like stuff. Right Like for example, there was a 0:40:36.120 --> 0:40:38.759 case pre pandemic where there was a group that was 0:40:38.800 --> 0:40:41.480 telling borrowers to list of family size of ninety three, 0:40:41.680 --> 0:40:43.879 so that they would have such a large family size 0:40:43.880 --> 0:40:46.880 they'd qualify for a zero dollar payment and like, and 0:40:46.920 --> 0:40:48.560 the funny thing is they put out a report like 0:40:48.600 --> 0:40:52.760 February twenty twenty saying, like, hey, maybe someone a department 0:40:52.760 --> 0:40:55.040 of edge should ask is it possible to have a 0:40:55.080 --> 0:40:58.080 family size of ninety three in the if you're a rabbit, 0:40:58.120 --> 0:41:00.239 you know, only like on the online form, And then 0:41:00.280 --> 0:41:02.359 of course COVID happened a month later, nobody ever followed 0:41:02.440 --> 0:41:04.400 up on it. So I mean, I think that there 0:41:04.440 --> 0:41:06.480 will be a little bit of like a return of like, 0:41:07.080 --> 0:41:10.120 what are the craziest things about the studolone system that 0:41:10.160 --> 0:41:12.960 probably shouldn't be the case the way they are, and like, 0:41:13.440 --> 0:41:16.319 you know, and frankly, like even the Daily Podcast had 0:41:16.360 --> 0:41:18.960 this recent episode on you know, his student on forgetting 0:41:18.960 --> 0:41:23.319 his dad, and they even talked about, you know, maybe 0:41:23.360 --> 0:41:25.759 we shouldn't have unlimited student on borrowing, right, Like maybe 0:41:25.760 --> 0:41:28.400 a student on borrowing should not be unlimited that you 0:41:28.400 --> 0:41:32.400 can take out like eight hundred thousand for school across 0:41:32.480 --> 0:41:34.879 like five children with no limit on your borrowing, which 0:41:34.880 --> 0:41:36.760 is currently the rule. Right, if you want to send 0:41:37.120 --> 0:41:40.360 six kids to the most expensive private schools in the country, 0:41:40.400 --> 0:41:42.200 you can take out a million dollars of parent plus 0:41:42.239 --> 0:41:43.920 loans currently and there's no limit on that. 0:41:44.200 --> 0:41:46.040 All right, I want to ask you more about that 0:41:46.120 --> 0:41:50.759 and about incentives of student loans moving forward and kind 0:41:50.760 --> 0:41:54.480 of how that impacts the universities as well. We'll get 0:41:54.520 --> 0:41:56.400 to some questions on that with Travis right after this. 0:42:04.200 --> 0:42:05.080 We're back from the. 0:42:05.000 --> 0:42:09.399 Break again, speaking with Travis Hornsby about student loans, what 0:42:09.440 --> 0:42:12.880 it is folks should be doing now that they have them. Actually, 0:42:13.080 --> 0:42:14.640 so let's turn the tables a little bit. Travis, what 0:42:14.680 --> 0:42:17.480 about folks who don't have student loans yet? Because you 0:42:17.560 --> 0:42:20.560 released this list of the careers where folks tend to 0:42:20.719 --> 0:42:25.279 incur the most student loan debts, and Orthodontis turns out 0:42:25.320 --> 0:42:28.399 they have it the worst. How do you think about 0:42:28.400 --> 0:42:31.280 the trade off of taking on massive amounts of student 0:42:31.320 --> 0:42:34.920 loan debt versus the potential for higher paid down the road. 0:42:34.960 --> 0:42:37.799 Well, I remember, like one of the Orthodonts cases that 0:42:37.840 --> 0:42:40.080 I talked about with the Wall Street Journal back in 0:42:40.120 --> 0:42:41.680 the day. They did a story on like one of 0:42:41.680 --> 0:42:44.280 the first borrowers to pass the million dollars of student loans, 0:42:44.280 --> 0:42:46.240 Mark Oh, And that was like I think twenty eighteen, 0:42:46.280 --> 0:42:49.680 twenty nineteen. And that's because the borrowing is unlimited, right, 0:42:49.760 --> 0:42:52.920 And so if you're not yet in a program, what 0:42:52.960 --> 0:42:55.880 I would be laser focused on is what does Congress 0:42:55.920 --> 0:42:58.680 put out for their bill this summer or early fall 0:42:58.800 --> 0:43:01.360 for the Reconciliation bill, which is going to pass in 0:43:01.400 --> 0:43:04.400 a party line vote. And what that bill will say 0:43:04.560 --> 0:43:06.839 is it will either say like, as of a certain date, 0:43:06.880 --> 0:43:09.280 loans are capped and you can't borrow more than next amount, 0:43:09.520 --> 0:43:11.359 or it might not make any changes, or it might 0:43:11.440 --> 0:43:13.279 say if you're enrolled in a program as of a 0:43:13.360 --> 0:43:15.799 certain date, you get to borrow whatever you need to 0:43:15.800 --> 0:43:18.840 finish the program. Right. And so if I was somebody 0:43:18.840 --> 0:43:21.279 that's looking at a graduate degree program, I would make 0:43:21.560 --> 0:43:24.040 really sure that I looked at what that bill says, 0:43:24.400 --> 0:43:26.560 because it might make the difference of you being able 0:43:26.600 --> 0:43:29.400 to finish your medical school, dental school program or not. 0:43:29.800 --> 0:43:30.000 Right. 0:43:30.440 --> 0:43:33.440 And so pay attention to what Congress does this summer 0:43:33.480 --> 0:43:35.319 and fall to see what changes they make to the 0:43:35.320 --> 0:43:38.600 studento on system. But by and large, I would say, 0:43:38.680 --> 0:43:41.719 under the current studo in system, you should always go 0:43:41.760 --> 0:43:46.920 get another degree, another you know, educational pursuit. If you 0:43:46.920 --> 0:43:48.920 don't mind a ten percent income tax. And what I 0:43:48.960 --> 0:43:51.920 mean by that is, let's say that you know, it's 0:43:52.000 --> 0:43:54.880 it's a struggle to get a job initially, like is 0:43:54.920 --> 0:43:57.960 it worth it or not? Well, income driven repayment is 0:43:58.000 --> 0:44:01.040 basically a ten percent income tax. There's more complexity to 0:44:01.080 --> 0:44:02.640 it than that, but you're losing ten percent of your 0:44:02.640 --> 0:44:04.680 income to pay back the government for like twenty years 0:44:04.680 --> 0:44:07.680 on average. You know, people doing the public service thing, 0:44:07.719 --> 0:44:10.480 it's ten years, some people it's twenty five. But you know, 0:44:10.560 --> 0:44:12.640 ten to twenty five years, you're losing ten percent of 0:44:12.640 --> 0:44:13.040 your income. 0:44:13.080 --> 0:44:13.839 So what I like to tell. 0:44:13.760 --> 0:44:16.319 People is, Okay, if you stop at being a nurse 0:44:16.320 --> 0:44:18.160 and you're making sixty K a year and you have 0:44:18.280 --> 0:44:20.719 zero debt, are you better or worse off than if 0:44:20.760 --> 0:44:22.960 you go get you know, a nurse practitioner job and 0:44:22.960 --> 0:44:24.560 you're making one hundred and twenty a k a year, 0:44:24.600 --> 0:44:27.040 but you're losing ten percent of your income to an 0:44:27.080 --> 0:44:29.160 income based your payment plan. We'll take away ten percent 0:44:29.200 --> 0:44:31.320 of one hundred and twenty grand and you're still making 0:44:31.480 --> 0:44:35.000 just over six figures. And so that income gap is 0:44:35.120 --> 0:44:37.799 worth it, you know, compared to sticking to just your 0:44:37.840 --> 0:44:41.319 bachelor's degree. So in general, get your bachelor's degree if 0:44:41.320 --> 0:44:42.759 you can, and if you want to go to a 0:44:42.800 --> 0:44:45.480 graduate program, I would just suggest that it be a 0:44:46.040 --> 0:44:48.680 valuable program of some kind where you're going to make 0:44:49.040 --> 0:44:51.319 at least ten percent more than you would make if 0:44:51.360 --> 0:44:54.799 you just stopped at your current educational level. And even 0:44:54.840 --> 0:44:57.680 if you wouldn't make that earnings gap, if you would 0:44:57.800 --> 0:45:00.480 enjoy that job a lot more than what's your current doing, 0:45:00.520 --> 0:45:02.680 it's still worth doing under the current rules. And so 0:45:02.760 --> 0:45:04.960 I would just think that if the rules change or 0:45:04.960 --> 0:45:08.000 there's more caps unborrowing and people actually have to think, well, 0:45:08.000 --> 0:45:09.920 what if I actually had to pay this back directly, 0:45:10.280 --> 0:45:12.680 then the math would change. But the math doesn't change 0:45:12.719 --> 0:45:13.840 until the rules change. 0:45:14.160 --> 0:45:19.200 How do you think the like the government's approach to 0:45:19.480 --> 0:45:24.600 student loans, to the federal student loan program will change 0:45:24.640 --> 0:45:29.480 the future of universities, how they price their education and 0:45:29.480 --> 0:45:31.480 how much borrowers are willing to take on, like if 0:45:31.520 --> 0:45:35.279 the program becomes less generous, right as interest rates have 0:45:35.280 --> 0:45:38.200 already gone up of course since when I was in 0:45:38.200 --> 0:45:41.560 school and since five years ago. So when people have 0:45:41.600 --> 0:45:45.200 to make those trade offs, when they're thinking through, well, 0:45:45.200 --> 0:45:47.799 how much debt should I take on even though I 0:45:47.840 --> 0:45:51.120 can essentially take on ridiculous amounts. Are we going to 0:45:51.160 --> 0:45:55.000 have just better incentives in place that will actually produce 0:45:55.280 --> 0:45:58.760 some secondary benefits like reducing the cost of education overall? 0:45:58.800 --> 0:45:59.680 Do you see that in the future. 0:46:00.120 --> 0:46:03.000 Well, so the problem there's the dirty little secret and 0:46:03.080 --> 0:46:05.840 hire that a lot of the big name schools that 0:46:05.920 --> 0:46:08.600 have very popular football teams earn a lot of money 0:46:08.640 --> 0:46:11.440 from the parent plus loan program right now. And so 0:46:11.640 --> 0:46:14.080 any big school with a big football program that has 0:46:14.120 --> 0:46:16.279 a lot of out of state students, what they'll often 0:46:16.320 --> 0:46:18.480 do is go market like maybe for example, like a 0:46:18.600 --> 0:46:21.480 University of Alabama might go market in Illinois to get 0:46:21.520 --> 0:46:22.960 them to come down and pay out of state tuition. 0:46:23.360 --> 0:46:25.160 Maybe those families don't have the money to just cut 0:46:25.160 --> 0:46:27.000 the twenty five k year whatever it is to go, 0:46:27.400 --> 0:46:29.560 and so those families might load up on parent plus 0:46:29.600 --> 0:46:32.279 loans because they're unlimited, and then the university's making a 0:46:32.320 --> 0:46:34.040 bunch of extra money compared to what they make on 0:46:34.080 --> 0:46:37.320 in state students, right And so there's this big incentive 0:46:37.360 --> 0:46:39.719 currently for the schools to bring in all these out 0:46:39.719 --> 0:46:42.280 of state students. And you know how parent plus loans 0:46:42.280 --> 0:46:44.440 be the thing they offer to people, and the schools 0:46:44.480 --> 0:46:45.880 are able to spend more money in a lot of 0:46:45.880 --> 0:46:48.680 different things because of that, right, like faculty, bigger stadiums, 0:46:48.680 --> 0:46:49.680 and il deals whatever. 0:46:49.760 --> 0:46:51.799 Right, And the parents just don't know how big of 0:46:51.800 --> 0:46:53.680 an albatross it's going to be around their neck for 0:46:53.840 --> 0:46:56.920 decades to come, exactly, and so and so there's been 0:46:56.960 --> 0:46:59.880 some loopholes too to manage that problem for parents as well, 0:47:00.160 --> 0:47:02.120 So like parents that have lots of parent plus owns, 0:47:02.160 --> 0:47:03.759 because you know, up till now, there's been a lot 0:47:03.760 --> 0:47:06.120 of strategies you can do. But that's kind of an aside. 0:47:06.480 --> 0:47:09.040 The issue with university is the big name universities are 0:47:09.120 --> 0:47:10.279 going to be fine. They're just going to have to 0:47:10.280 --> 0:47:12.480 make cuts. So maybe you have to cut back on 0:47:12.520 --> 0:47:15.200 some faculty and some programs. Maybe you can't do, you know, 0:47:15.239 --> 0:47:18.200 the athletic expansion you planned on doing if they were 0:47:18.239 --> 0:47:18.960 to lose access to. 0:47:18.960 --> 0:47:20.120 The parent plus loan program. 0:47:20.200 --> 0:47:22.000 Now, there's other schools that are more kind of like 0:47:22.440 --> 0:47:26.080 marginal schools that might not have the big football name brand, right, 0:47:26.160 --> 0:47:28.960 that are more just maybe they're serving a lot more 0:47:29.040 --> 0:47:31.680 just like middle class families. It maybe more regional schools. 0:47:31.719 --> 0:47:34.000 Some of those schools would absolutely have to close if 0:47:34.000 --> 0:47:36.960 they capt loans. It's just the reality a lot of 0:47:36.960 --> 0:47:41.000 these schools are in swing districts in swing states, and 0:47:41.080 --> 0:47:43.279 so the question is is a lot of these proposals, 0:47:43.600 --> 0:47:46.160 you know, makes sense on paper until you think about, well, 0:47:46.160 --> 0:47:48.319 what does it mean if you close down a bunch 0:47:48.360 --> 0:47:50.799 of regional schools in Pennsylvania? How popular are you going 0:47:50.840 --> 0:47:52.520 to be in the next presidential election in some of 0:47:52.520 --> 0:47:55.400 these swing districts? Right, So I think that from a 0:47:55.440 --> 0:47:59.000 political standpoint, there's there's some checks on what they're going 0:47:59.040 --> 0:48:00.520 to be able to do in terms of changes to 0:48:00.560 --> 0:48:02.040 the system. But you know, I mean, if you think 0:48:02.040 --> 0:48:04.120 about it just a common sense, it probably does not 0:48:04.239 --> 0:48:06.560 make sense to let universities charge whatever the heck they 0:48:06.640 --> 0:48:09.000 want for higher ed Like that's probably a really dumb idea. 0:48:09.080 --> 0:48:11.120 Like that changed in two thousand and six, and they 0:48:11.120 --> 0:48:14.160 did it to try to expand access. But the problem 0:48:14.239 --> 0:48:16.759 is they made it a blank check. They just said, hey, universities, 0:48:16.880 --> 0:48:19.239 go do whatever you want. There's no limits on what 0:48:19.239 --> 0:48:21.839 you can borrow for graduate programs. You could just charge 0:48:21.880 --> 0:48:24.120 whatever you want. And so what happened is the number 0:48:24.120 --> 0:48:26.280 of pharmacy schools, for example, more than tripled. 0:48:26.480 --> 0:48:26.880 Wow. 0:48:26.960 --> 0:48:30.560 So within literally like a few years you had triple 0:48:30.600 --> 0:48:32.920 the number of pharmacy schools. So pharmacy school went from 0:48:32.920 --> 0:48:34.680 a thing that was like a thirty five percent acceptance 0:48:34.760 --> 0:48:37.359 right to like a ninety five percent acceptance rate. And 0:48:37.480 --> 0:48:41.080 so a lot of incomes and graduate programs have actually 0:48:41.120 --> 0:48:44.360 like been very flat or even declined. And there's a 0:48:44.360 --> 0:48:47.480 big oversupply because the universities just thought, oh, look a 0:48:47.520 --> 0:48:49.439 great new revenue source, so we can just go open 0:48:49.480 --> 0:48:53.200 another school. Right, So there probably is a big contraction 0:48:53.440 --> 0:48:55.400 in the number of graduate programs and the number of 0:48:55.520 --> 0:48:57.719 universities that needs to happen just in terms of like 0:48:57.840 --> 0:49:01.040 a balancing. But the problem is is that also means 0:49:01.080 --> 0:49:03.600 real pain, like people will lose their jobs, like you know, 0:49:03.719 --> 0:49:06.520 And so that's just a question of do you want 0:49:06.560 --> 0:49:08.759 to take that pain? You know, how much pain do 0:49:08.800 --> 0:49:10.000 you want to cause? Do you want to make it 0:49:10.000 --> 0:49:11.920 a little bit softer by having the loan limits be 0:49:11.960 --> 0:49:14.640 a lot higher. Do you want to increase pelgrants so 0:49:14.640 --> 0:49:18.279 lower income students can still attend university. So there's all 0:49:18.320 --> 0:49:20.800 kinds of policy trade offs that and that's why the 0:49:20.840 --> 0:49:24.680 easier decision is just let's go punt the football, right, Well, 0:49:24.680 --> 0:49:26.720 you don't know what to do. Let's just yeah, income 0:49:26.760 --> 0:49:29.840 recertification in twenty twenty seven, how about that, you know exactly, 0:49:29.960 --> 0:49:31.800 So that's what's been happening, and that they must. 0:49:31.600 --> 0:49:33.840 Do the same thing with Social Security too, Travis, why not? 0:49:33.920 --> 0:49:35.560 No, I mean that's but that's the easier thing to do. 0:49:35.600 --> 0:49:37.960 And so politicians, you know, in my experience of student loans, 0:49:38.000 --> 0:49:41.080 always choose the easier thing to do unless they're forced 0:49:41.120 --> 0:49:43.080 to make a change, Like you get the headline of 0:49:43.120 --> 0:49:45.719 the you know, Afghanistan veteran with the traumatic brain injury, 0:49:45.800 --> 0:49:47.879 they got the six figure tax bill, and then they say, oh, 0:49:48.040 --> 0:49:49.759 you know, maybe we need to change the laws, maybe 0:49:49.800 --> 0:49:52.279 these dumb laws. But it takes that kind of, you know, 0:49:52.680 --> 0:49:54.600 level of an event to make a change. 0:49:54.680 --> 0:49:57.279 I'm surprised at the amount of politics that has gone 0:49:57.280 --> 0:49:59.439 into our conversation today, given the fact that we're talking 0:49:59.440 --> 0:50:01.640 about students loans, so to that note, and the fact 0:50:01.640 --> 0:50:03.759 that it does seem like politicians are punning the ball. 0:50:04.320 --> 0:50:06.359 Do you see a world where it makes sense for 0:50:06.920 --> 0:50:11.080 the federal government to get out of backing student loans. 0:50:11.160 --> 0:50:13.960 I mean, like that this all started with our desire 0:50:14.000 --> 0:50:16.239 to what back in the sixties to compete with like 0:50:16.320 --> 0:50:19.360 Russia and the space race and all that, and shoring 0:50:19.480 --> 0:50:22.279 up the ability for the US to be competitive from 0:50:22.280 --> 0:50:24.440 that standpoint, But like, are we past that? Does it 0:50:24.480 --> 0:50:25.920 make sense to open this up more up to the 0:50:26.000 --> 0:50:28.920 to the to the free markets as opposed to the government, 0:50:28.920 --> 0:50:32.000 which tends to react more slowly to some of the 0:50:32.080 --> 0:50:33.080 changes that need to happen. 0:50:33.200 --> 0:50:34.960 Well, a lot of people are asking that question, and 0:50:35.000 --> 0:50:37.520 the policy problem to that is how do you extract 0:50:37.520 --> 0:50:40.359 the government from one point six trillion dollars? So that's 0:50:40.600 --> 0:50:42.960 that's a really big problem, right, Like do you just 0:50:43.000 --> 0:50:45.279 have an auction and you just sell all the loans? Well, 0:50:45.280 --> 0:50:47.440 a lot of these benefits of those loans have already 0:50:47.480 --> 0:50:50.239 been promised, like income based repayment. Does a you know, 0:50:50.320 --> 0:50:52.680 a you know a JP Morgan and Goldman Sachs want 0:50:52.680 --> 0:50:54.640 to take on a bunch of what that? Yeah, people 0:50:54.640 --> 0:50:56.319 can pay ten percent of their income and never pay 0:50:56.320 --> 0:50:58.640 the balance off. So, you know, there's all kinds of 0:50:58.680 --> 0:51:00.480 problems with how do you get egg is that the 0:51:00.560 --> 0:51:03.319 existing you know, commitment that's been made, And then the 0:51:03.360 --> 0:51:06.279 other problem is, like you know, for the future if 0:51:06.320 --> 0:51:08.680 you do you know, the old system was essentially like 0:51:08.719 --> 0:51:11.000 the government would kind of cover the losses on the 0:51:11.200 --> 0:51:13.279 loan portfolio, and private lenders would make the loans and 0:51:13.280 --> 0:51:14.240 make the interest income. 0:51:14.600 --> 0:51:16.600 And that system. 0:51:16.160 --> 0:51:19.799 Worked like okay for a while, but then they decided, well, 0:51:19.800 --> 0:51:23.719 we want to expand access, and so pendulum and politics swings, right. 0:51:23.760 --> 0:51:26.120 So I think we're in the in the zone of 0:51:26.120 --> 0:51:28.839 like the pendulum swinging more towards Hey, let's do less, 0:51:29.000 --> 0:51:31.200 let's do fewer loans, let's make it, you know, more 0:51:31.239 --> 0:51:33.719 on the borrower to pay them back. And you know, 0:51:33.760 --> 0:51:36.960 I think that the devils and the details of student 0:51:37.000 --> 0:51:38.839 huns though, like you know, it's real easy to say, hey, 0:51:38.920 --> 0:51:40.840 get get the government of the student loan business, but 0:51:41.200 --> 0:51:43.440 there are so many problems that the government would have 0:51:43.440 --> 0:51:45.520 to figure It would be almost like saying, let's get 0:51:45.520 --> 0:51:46.319 the government. 0:51:46.040 --> 0:51:48.440 Of Social Security. Well, oops, how do you do that? 0:51:48.880 --> 0:51:49.440 You know what I mean? 0:51:49.760 --> 0:51:52.680 Yeah, no, for sure, Travis, this has been super helpful. 0:51:52.920 --> 0:51:54.360 I think a lot of our listeners are going to 0:51:54.360 --> 0:51:56.040 get a lot of value from this conversation. Thank you 0:51:56.080 --> 0:51:58.520 for joining us and your videos. By the way, your 0:51:58.600 --> 0:52:00.840 video updates have been incredibly helpful to I've been following 0:52:00.920 --> 0:52:02.399 them as I'm trying to kind of figure out what's 0:52:02.400 --> 0:52:05.000 going on with student loans in the day to day, 0:52:05.040 --> 0:52:06.520 which is kind of sad that we have to be 0:52:06.880 --> 0:52:09.239 pay attention to it that much. But how how can 0:52:09.800 --> 0:52:12.200 how do money listeners find out more about you and 0:52:12.239 --> 0:52:12.719 what you're up to? 0:52:12.960 --> 0:52:14.600 Well, I mean, I actually the best way is to 0:52:14.600 --> 0:52:17.560 get the discount for how to Money listeners if they 0:52:17.600 --> 0:52:19.560 if they need a custom plan, and I would say 0:52:19.600 --> 0:52:21.919 this is probably more in the you know, you owe 0:52:22.400 --> 0:52:25.040 maybe over fifty thousand dollars or US maybe even six 0:52:25.080 --> 0:52:27.200 figures if that's you. If you go to student Loan 0:52:27.280 --> 0:52:30.200 Planner dot com slash how to Money, so that's going 0:52:30.239 --> 0:52:32.080 to get you a discount and one hundred dollars off 0:52:32.200 --> 0:52:34.359 a custom supit loan plan if you think you need 0:52:34.360 --> 0:52:36.919 that right now? Who needs that? You know you have 0:52:36.960 --> 0:52:39.480 a lot of studilong confusion. You have a significant balance. 0:52:39.920 --> 0:52:42.640 Generally speaking, probably ninety percent of the time we're going 0:52:42.719 --> 0:52:46.160 to save a sort of projected mid five figure balance 0:52:46.280 --> 0:52:48.560 for the average client, which is about a two hundred 0:52:48.800 --> 0:52:52.440 k average balance. So for a few hundred dollars, the 0:52:52.680 --> 0:52:55.480 high likelihood will save that much money is generally really 0:52:55.480 --> 0:52:57.239 worth it. You can, you know, check our reviews by 0:52:57.239 --> 0:53:00.000 looking at Student one planner reviews and Google and see 0:53:00.200 --> 0:53:02.640 that we really do have a huge impact on people's lives. 0:53:02.960 --> 0:53:04.799 And then if you cannot if some of the listeners says, 0:53:04.840 --> 0:53:06.719 you know, that's great, I cannot afford, you know, a 0:53:06.719 --> 0:53:09.120 few hundred dollars even with the one hundred dollars off 0:53:09.160 --> 0:53:11.480 how to Money listener discount, then just like the student 0:53:11.480 --> 0:53:13.520 one Painter podcast, we have a free podcast where we 0:53:13.520 --> 0:53:15.880 answer a lot of people's questions and go over like 0:53:15.920 --> 0:53:18.560 what people need to know, and so that's the free way. 0:53:18.600 --> 0:53:20.200 And then of course our student old painter dot com 0:53:20.200 --> 0:53:22.560 website's got a lot of free content too. So but 0:53:22.640 --> 0:53:24.399 you know, if they want they want one hundred dollars 0:53:24.440 --> 0:53:26.839 how to Money discount, it's just again student one pointer 0:53:26.880 --> 0:53:28.400 dot com slash how to Money. 0:53:28.840 --> 0:53:29.400 That's right, man. 0:53:29.480 --> 0:53:31.600 Yeah, we're trying to help folks to avoid that student 0:53:31.640 --> 0:53:34.400 loan confusion, and y'all are doing that on all the fronts. 0:53:34.560 --> 0:53:36.520 Travis Hornsby, thank you so much for joining us today. 0:53:36.520 --> 0:53:40.680 Thanks for having me all right, Matt, great convo with Travis. 0:53:41.080 --> 0:53:43.800 I can't say that I'm enthusiastic about the state of 0:53:43.840 --> 0:53:46.040 student loans these days, but I'm less worried after talking 0:53:46.040 --> 0:53:46.319 to him. 0:53:46.920 --> 0:53:48.840 It makes total sense. The more, the more you know 0:53:49.400 --> 0:53:52.040 in the star is streaking across the sky, you see 0:53:52.040 --> 0:53:53.920 it that, of course Travis would be able to see 0:53:53.920 --> 0:53:55.520 because he's got the right tele that's good right to 0:53:55.520 --> 0:53:57.359 be able to It's a good point. And the more that, yeah, 0:53:57.480 --> 0:53:59.640 there's more control that we have in our hands than 0:54:00.080 --> 0:54:02.239 I guess I was under the impression. I will say 0:54:02.239 --> 0:54:05.000 I was disenheartened that so much of the future of 0:54:05.040 --> 0:54:07.040 US student loans comes down to who's going to be 0:54:07.040 --> 0:54:08.640 in the White House. And so my big takeaway is 0:54:08.640 --> 0:54:10.399 going to be, we just need to figure out who's 0:54:10.440 --> 0:54:12.640 going to be elected to office, and then you'll know 0:54:12.680 --> 0:54:16.720 what to do in four years exactly what's so hard. 0:54:16.560 --> 0:54:18.799 About about doing that? 0:54:18.880 --> 0:54:18.920 No? 0:54:19.200 --> 0:54:22.120 Okay, so I think American politics so easy to producere Yeah, No, 0:54:22.360 --> 0:54:24.440 I do think my big takeaway is going to be 0:54:24.719 --> 0:54:28.920 to consider re certifying your income, in particular if you 0:54:29.000 --> 0:54:32.759 are on an income based UH student Loan Repayment plan. 0:54:33.160 --> 0:54:35.520 Because the and he mentioned this u r L a 0:54:35.560 --> 0:54:37.480 couple of times, I'm going to do it again because 0:54:37.600 --> 0:54:40.239 I think it sounds like a fantastic resource student A 0:54:40.400 --> 0:54:43.000 dot go for slash i d R. The i DR 0:54:43.040 --> 0:54:45.640 stands for income driven repayment and. 0:54:45.640 --> 0:54:47.720 As this is especially true if you've. 0:54:47.520 --> 0:54:50.920 Seen your income drop recently, the ability you're not you're 0:54:50.960 --> 0:54:53.719 not fibbing, You're you're telling the truth. Your income has 0:54:53.760 --> 0:54:57.719 gone down and your repayment should reflect that. And I've 0:54:57.719 --> 0:54:59.560 got a feel and there are fewer folks doing that, 0:54:59.680 --> 0:55:02.879 or is it it's something that's kind of it's it's automated, right, 0:55:02.920 --> 0:55:05.160 Like it's automatic. It's they're not really thinking about it. 0:55:05.200 --> 0:55:06.640 They're like, oh, I've done that before, but no, this 0:55:06.680 --> 0:55:09.520 is something you can revisit. It's almost like reshopping your 0:55:09.520 --> 0:55:12.640 insurance rates that your insurance coverage. The ability to do 0:55:12.680 --> 0:55:15.120 that and save money every single month, especially if you've 0:55:15.160 --> 0:55:17.839 seen your income go down, I think is a fantastic 0:55:18.320 --> 0:55:21.920 takeaway for folks who might maybe they're even like overwhelmed 0:55:21.920 --> 0:55:24.440 with everything that we talked through with Travis, and they're like, Okay, 0:55:24.480 --> 0:55:26.040 well that's at least one thing that I. 0:55:25.960 --> 0:55:28.040 Can do one hundred percent. Yeah, even the maternity leave thing. 0:55:28.080 --> 0:55:29.560 I was like, oh, wait, you can, yep do that 0:55:29.600 --> 0:55:33.000 if that and apparently, according to the rules, you can, 0:55:33.320 --> 0:55:35.279 which I think is heartening. There's a lot of situations 0:55:35.280 --> 0:55:37.479 that where that could apply, I think to somebody whose 0:55:37.520 --> 0:55:39.319 income has gone down or gone away for a little bit. 0:55:39.400 --> 0:55:41.360 But how about how about for you? Is a big takeaway. 0:55:41.400 --> 0:55:44.120 I really liked kind of how he talked about the 0:55:44.239 --> 0:55:47.839 pros and cons of getting a secondary degree and how 0:55:47.840 --> 0:55:50.480 to think about the financial consequence essentially as like a 0:55:51.040 --> 0:55:54.160 flat ten percent tax on your income. And I think 0:55:54.239 --> 0:55:56.360 I can be just a really easy then back of 0:55:56.560 --> 0:55:58.759 envelope math to figure out, well, is it going to 0:55:58.800 --> 0:56:00.759 be worth it taking this dead into my life or not? 0:56:00.920 --> 0:56:02.560 Like how much more am I going to make? And 0:56:02.560 --> 0:56:05.320 then when I take the ten percent off of that increase, well, 0:56:05.640 --> 0:56:08.279 is god is it worth the time, the energy and 0:56:08.400 --> 0:56:10.240 is the joy I'm going to get from switching careers 0:56:10.600 --> 0:56:13.040 going to be worth all the effort that it takes 0:56:13.360 --> 0:56:15.120 and the debt that I've got to take on my back. 0:56:15.280 --> 0:56:17.759 So I think that's just at least when when we 0:56:17.800 --> 0:56:19.400 have a lot of listeners who are kind of in 0:56:19.440 --> 0:56:21.760 that period in their lives, like do I change careers 0:56:21.800 --> 0:56:23.680 and if so, how do I think through the financial consequences? 0:56:23.680 --> 0:56:25.440 Do I go get that MBA and do I get 0:56:25.440 --> 0:56:27.400 student loans for that or do I take on some 0:56:27.440 --> 0:56:28.800 special graduate degree. 0:56:28.880 --> 0:56:31.120 That's a that's like a simple math equation that can 0:56:31.160 --> 0:56:33.200 I think at least at least be helpful as you're 0:56:33.280 --> 0:56:35.520 kind of trying to figure that out. Berts, Yeah, especially. 0:56:35.239 --> 0:56:37.440 If you are looking to take on additional debt. But 0:56:37.840 --> 0:56:40.280 the beer Joel that you and I enjoyed during this episode, 0:56:40.320 --> 0:56:42.399 and this is one of those Burial beers. So it's 0:56:42.400 --> 0:56:46.800 got the long name and it reads only calling hours 0:56:46.920 --> 0:56:49.320 pull me back to these Midwestern roots. 0:56:49.480 --> 0:56:51.200 It's kind of hard to read. I'm pretty sure that's 0:56:51.239 --> 0:56:53.719 what it says. This is a West Coast style IPA 0:56:54.480 --> 0:56:57.719 by Burial collab with Hot Butcher. What do you think 0:56:57.800 --> 0:57:00.960 two of the greatest breweries in the world at this moment? 0:57:01.080 --> 0:57:03.759 I would say so. And this beer reflected that it 0:57:03.840 --> 0:57:05.560 was so good. This to me didn't feel like a 0:57:05.560 --> 0:57:09.719 traditional West Coast It was like juicier, less abrasive than 0:57:09.760 --> 0:57:11.960 a lot of them are. And that's what I would 0:57:12.000 --> 0:57:14.080 expect from these two guys trying to create a West 0:57:14.120 --> 0:57:16.560 Coast together. It's like, so good, it's a West Coast, 0:57:16.600 --> 0:57:17.280 it's up my alley. 0:57:17.440 --> 0:57:20.080 It's not a West coastal it's a Midwest Coast just 0:57:20.160 --> 0:57:22.280 like the there's a coast on the in the Midwest. 0:57:22.280 --> 0:57:23.880 Match is like the less we're talking about, like the 0:57:23.880 --> 0:57:26.720 shores of like Michigan. Yeah, Michigan's where it's out man 0:57:26.920 --> 0:57:29.920 also home to many fantastic breweries. But yeah, this was 0:57:30.280 --> 0:57:32.280 amazing and I'm going to shout out the label too, 0:57:32.280 --> 0:57:33.920 because I've never seen It's funny. 0:57:33.920 --> 0:57:36.000 So before we hit record, you said all kind of 0:57:36.000 --> 0:57:36.280 looks like. 0:57:36.280 --> 0:57:39.760 A bony their album cover, and I guess the snow 0:57:39.880 --> 0:57:40.880 is that what you were thinking of? 0:57:41.240 --> 0:57:42.840 For some reason it was I was thinking blood Bank 0:57:42.840 --> 0:57:45.960 and the kind of frigid it's kind of got the fridge. 0:57:46.000 --> 0:57:46.960 It looks cold. 0:57:47.080 --> 0:57:51.320 Yeah, it's funny you mentioned blood Bank because so in printing. 0:57:51.480 --> 0:57:53.200 I know this from my advertising days. 0:57:53.440 --> 0:57:55.400 Uh, there's a thing called spot color and it's a 0:57:55.520 --> 0:57:58.440 you know, you get the specific Pantone code because you 0:57:58.440 --> 0:58:00.920 want to want to use a very specific color. And 0:58:01.000 --> 0:58:03.960 it looks like they used a spot color and it 0:58:04.000 --> 0:58:07.920 makes this label, this artwork looks so premium. Specifically, it's 0:58:07.920 --> 0:58:09.920 on the red and it looks like it's just glowing. 0:58:10.560 --> 0:58:12.400 And that's how they've used it. It's like the science, 0:58:12.400 --> 0:58:14.600 it says, Limby's liquor. I don't know what that is. 0:58:14.720 --> 0:58:16.200 And then they got the red glow coming out of 0:58:16.240 --> 0:58:18.360 the windows a little bit, and it makes it look like, 0:58:18.360 --> 0:58:20.640 truly that this can is glowing in my hand. I 0:58:20.640 --> 0:58:22.120 almost want to set it over here next to our 0:58:22.160 --> 0:58:26.480 all day Food Market winter item that listeners sent our 0:58:26.480 --> 0:58:30.120 away because it's got the similar kulga, which I figured. 0:58:29.880 --> 0:58:32.680 You could appreciate. Yeah, well, and I think I am 0:58:32.720 --> 0:58:36.080 particularly drawn to dope can art and this and very 0:58:36.120 --> 0:58:37.600 all makes some great stuff, but this is like one 0:58:37.600 --> 0:58:38.280 of my favorites of this. 0:58:38.320 --> 0:58:40.520 Well, normally it's a bit more gothic, it's like it's 0:58:40.560 --> 0:58:44.040 a bit more metal and this just the vibes. 0:58:43.800 --> 0:58:46.080 Of this are off the charts. Yeah, for sure, very 0:58:46.080 --> 0:58:48.560 thoughtful as well as the beer. Very thoughtful art so good, 0:58:48.840 --> 0:58:50.600 but oh not quite. 0:58:50.640 --> 0:58:53.760 Let's remntion the url that he mentioned for how to 0:58:53.840 --> 0:58:56.120 money Listeners to get one hundred dollars off student loan 0:58:56.120 --> 0:58:56.920 planner dot com. 0:58:56.800 --> 0:58:59.840 For slash how to money. If you've got. 0:58:59.640 --> 0:59:03.200 A more complicated student owned situation going on, you want 0:59:03.240 --> 0:59:06.080 to take it to another level other than just recertifying 0:59:06.080 --> 0:59:07.880 your income. You're like, no, no, no, I really want 0:59:07.880 --> 0:59:09.440 to knock this thing out, really figure out how to 0:59:09.480 --> 0:59:10.400 pay as little as possible. 0:59:10.440 --> 0:59:13.200 Talk to the experts. That's what Travis's team are. So 0:59:13.760 --> 0:59:16.840 our buddy. Until next time. Best friends out, Best Friends Out.