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Speaker 1: Welcome to Stuff You Should Know, a production of My

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Speaker 1: Heart Radios How Stuff Works. Hey, and welcome to the podcast.

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Speaker 1: I'm Josh Clark. There's Charles W. Chuck Bryan over there,

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Speaker 1: there's Dave c the guest producer extraordinaire. That's right, Um,

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Speaker 1: and this is stuff you should know about. Wait, don't

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Speaker 1: go anywhere student loans now, really don't go anywhere. Yeah,

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Speaker 1: this is uh, this is pretty dry. I mean, we'll

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Speaker 1: add our funnies. I know we won't. We'll add our

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Speaker 1: funnies like we always do. But uh, there's no getting

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Speaker 1: around it that this is one of those stuff you

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Speaker 1: Should Know episodes that sort of falls under the banner

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Speaker 1: of p s A a little public service announcement for

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Speaker 1: people to learn about something that they may not get.

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Speaker 1: But it's just not scintillating. How's that to drive people away?

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Speaker 1: I really think you're you hooked him for sure. No,

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Speaker 1: listen for the funnies. And hey, man, if you're out

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Speaker 1: there and you don't understand student loans, don't know what

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Speaker 1: you're getting into, your high school student, or if you're

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Speaker 1: already drowning in debt, already drowning in debt, we'll pay

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Speaker 1: that debt for you to send us an email with

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Speaker 1: your monthly bills and we'll pay them all on. Now.

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Speaker 1: That should really clear up a lot of that stuff though,

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Speaker 1: because um, it's it's not complicated, but there's just a

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Speaker 1: lot to it. Yeah, but like the how we got

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Speaker 1: into this place, because yes, there's student loans and applying

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Speaker 1: for student loans and you know what you should know.

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Speaker 1: But then there's also what you should know about after

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Speaker 1: that when you join this forty five million clubs student

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Speaker 1: loan debt holders or debt owers. Um. Who oh, like

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Speaker 1: one point six trillion dollars worth of debt and like

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Speaker 1: a lot of that, about a trillion of it I

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Speaker 1: think a little less than a trillion has been generated

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Speaker 1: since two Yeah, I mean there are a lot of

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Speaker 1: progressives in this country. That's a you want to really

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Speaker 1: kick start the economy in a long, permanent way, just

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Speaker 1: forgive all these student debts. Yeah, and other people say

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Speaker 1: you're a communist. Some people do. Um, yeah, you know.

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Speaker 1: I should go ahead and preface this with my personal experience.

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Speaker 1: I did not get a student loan. I went to

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Speaker 1: school and college. You were a little behind me, but

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Speaker 1: it wasn't as big of a thing back then. No,

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Speaker 1: I saw in the nineties that average student loan debt

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Speaker 1: for a bachelor degree, not a year, not a minute,

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Speaker 1: a bachelor's degree was nine grand. Yeah, college used to

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Speaker 1: be a lot cheaper. Um. State universities are still, you know,

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Speaker 1: not the most expensive. But when I was going to

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Speaker 1: University of Georgia, dude, it was like tuition for a

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Speaker 1: full load for a quarter was something like six dollars.

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Speaker 1: Not that much money in like pot, especially at Georgia's.

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Speaker 1: So when my parents got to worced that part of

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Speaker 1: the divorce was them, uh selling a couple of things,

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Speaker 1: like we had an airstream camper and not like things

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Speaker 1: that clearly the family wouldn't be using anymore. Uh. And

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Speaker 1: so they agreed, like, let's sell these couple of things.

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Speaker 1: And Chuck's the last one going through because my brother,

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Speaker 1: of course had an academic scholarship. Of course, I didn't

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Speaker 1: have to pay for anything. Uh, Chuck's he needs that

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Speaker 1: money for school because he's not getting anything. He needs

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Speaker 1: that camper money. I needed that camper money. So they said,

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Speaker 1: let's put that in an account for Chuck to go

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Speaker 1: to school. Uh. That lasted me a two or two

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Speaker 1: or three years. Camper money did yeah, because Georgia was

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Speaker 1: so cheap. It was a heck of a camper two Okay,

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Speaker 1: but yeah, Georgia was really cheap and I was in

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Speaker 1: living there was cheap and books were pretty cheap. Uh

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Speaker 1: So that lasted me a few years. And then after that,

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Speaker 1: I just, um, you know, I've been working since I

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Speaker 1: was thirteen. Anyway, I was gonna say, you had a

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Speaker 1: job throughout the yeah, totally. Um, And I just kept

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Speaker 1: paying for my college after that. It wasn't like some

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Speaker 1: big like, hey, I'm gonna pay for my school starting

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Speaker 1: from now. I was just like, well, that money's gone,

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Speaker 1: so I need to I'm not gonna ask my parents

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Speaker 1: for it. Like I've been working since I was a teenager.

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Speaker 1: They sold their camper, so I'll just keep working and

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Speaker 1: pay for my my remaining education. And it was not

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Speaker 1: that big of a deal. I live very well in college.

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Speaker 1: You know what that's called is pulling yourself up by

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Speaker 1: your bootstraps nineties style. I don't even feel like it

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Speaker 1: was though. I was just like, hey, I wait tables

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Speaker 1: and make pretty good money. I can afford that six

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Speaker 1: hundred bucks a quarter. The thing is is like the

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Speaker 1: idea of being able to live as a college student

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Speaker 1: and pay for college and feel like you're doing fine

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Speaker 1: waiting tables is it's just outrageous, outlandish everything. I cannot

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Speaker 1: imagine leaving Georgia with thirty thousand dollars of student debt.

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Speaker 1: I cannot imagine that. And that's well, that's one of

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Speaker 1: the things that makes all of those people who say

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Speaker 1: like whiners, you took out these loans, you owe them.

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Speaker 1: We paid off our student loans when we went to school.

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Speaker 1: All those older people who are saying that are missing

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Speaker 1: the point that college has gotten way more expensive than

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Speaker 1: the last ten about tennis years for um a lot

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Speaker 1: of different reasons, but it turns out largely because of

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Speaker 1: an Obama era initiative to make higher education accessible to

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Speaker 1: more people. There were just a couple of safeguards that

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Speaker 1: were put in place that really let this thing run

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Speaker 1: rampant um. And that if you say, like like I

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Speaker 1: paid off my student loans with no problem, why can't you,

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Speaker 1: you're missing the point that that it's different. It's a

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Speaker 1: different world now. Things are different, and it used to

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Speaker 1: be before. When you had your first real piece of

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Speaker 1: life long or long term debt. It was a mortgage

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Speaker 1: for a house. You were paying for that house, and

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Speaker 1: you were virtually guaranteed that at the end of that mortgage,

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Speaker 1: that last mortgage payment, what you paid for that house

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Speaker 1: was going to be less than what the house was worth.

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Speaker 1: Then it was an investment. Now we're putting out teenagers

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Speaker 1: into the world who have in some cases mortgage level

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Speaker 1: debt um without having any income yet whatsoever. And when

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Speaker 1: they pay off that last bit of debt, there's nothing

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Speaker 1: that was a value necessarily associated with it because they

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Speaker 1: had to get a college degree just to try to

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Speaker 1: get a job. Whereas before it was like you got

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Speaker 1: a college degree, and you you automatically, we're going to

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Speaker 1: get a good paying a job. Are certainly a better

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Speaker 1: paying job than you would have gotten with the high

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Speaker 1: school diploma. It's a different world now, definitely, you probably

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Speaker 1: don't get a student one either. Did you know, I

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Speaker 1: luckily didn't need them. They had the Oh what was

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Speaker 1: that the lottery paid for? Yeah? I think when you

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Speaker 1: came along, that was in place. That started right as

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Speaker 1: I was leaving. I think first year for me, was

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Speaker 1: it the pel or was it it was the Georgia

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Speaker 1: lottery pay for it? Uh? Man, I can't remember. I

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Speaker 1: can't remember the name of it either, but it was

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Speaker 1: a kind of grant that like like, yeah, you had

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Speaker 1: basically a free ride in school if your d p

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Speaker 1: A was high enough at an in state school, that's right,

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Speaker 1: great deal. Yeah, and if you are a student, hope, Hope,

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Speaker 1: that's it, hope, because I just remembered all of the

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Speaker 1: parents saying you better not lose that Hope grant. I

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Speaker 1: think it was like it was at three point or something,

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Speaker 1: three point to something like that, because something definitely attainable.

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Speaker 1: So uh, I mean our first bit of advice, We're

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Speaker 1: gonna pepper some advice in here as old old dudes. Oh,

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Speaker 1: so I should say shout out to my dad. He

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Speaker 1: once I inevitably lost the Hope grant, he stepped in

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Speaker 1: and helped pay for college for me. Yeah, the herbal Elvis.

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Speaker 1: So uh, we want to give out a few pieces

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Speaker 1: of advice here and there. Um, avoid taking student loans

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Speaker 1: if you can. Yeah, try and get as much free

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Speaker 1: money as you can, grant scholarships. What I don't get

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Speaker 1: is why so many parents of these children didn't set

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Speaker 1: them up for college. What do you mean start saving

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Speaker 1: for college? Like by the time my daughters graduating high school,

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Speaker 1: all her college is going to be ready to go.

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Speaker 1: So if she wants to go to college. Um. One

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Speaker 1: of the things that this this Obama era initiative to

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Speaker 1: expand higher education, one of the purposes of it was

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Speaker 1: to make it so that people lower income families, um,

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Speaker 1: had an easier opportunity to go to college. Yeah. So

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Speaker 1: they basically said, come all, who want to borrow money

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Speaker 1: to go to college, regardless of your ability to repay, well,

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Speaker 1: go finish. But I want to amend my statements to

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Speaker 1: go ahead and so so. Um. A lot of people

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Speaker 1: who started to get to go to college, their families

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Speaker 1: didn't have any money to put them through school. So um,

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Speaker 1: they I think for people whose parents have been planning

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Speaker 1: for very little change. But it was that an entire

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Speaker 1: tranche of Americans that hadn't really had much access to

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Speaker 1: higher education all of a sudden did starting in two

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Speaker 1: thousand ten. Yes, to be crystal clear, was not talking

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Speaker 1: about those people. Did their parents just set them up?

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Speaker 1: Romney thing right, remember when he said that. No, he

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Speaker 1: was like, why don't you just go borrow the money

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Speaker 1: from your parents? When he was binders full of women. Uh,

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Speaker 1: was that Romney who had binders. Um, now I'm talking

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Speaker 1: about the the tranche of kids whose parents could afford

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Speaker 1: to save money for their kids college and did not.

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Speaker 1: I don't know. I think one of the other things,

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Speaker 1: maybe there are a lot of parents who are like,

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Speaker 1: you know what, this is your education, you pay for

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Speaker 1: it yourself. I think there are also a lot of

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Speaker 1: selfish people in that generation of parents, narcissists too. Uh,

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Speaker 1: did not plan for that stuff for their children because

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Speaker 1: they were busy taking care of themselves, but they blew

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Speaker 1: it all on. Hey. I don't know, man, I'm not

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Speaker 1: I'm not saying that, but I just want to make

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Speaker 1: it clear. I was not talking about less fortunate people

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Speaker 1: that are totally now able to go to school. I

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Speaker 1: think that was good that you amended that. But if

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Speaker 1: anybody didn't know that that you weren't saying that, they

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Speaker 1: haven't listened to stuff. You should know very that's true.

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Speaker 1: We haven't even started this podcast. It's gonna be three

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Speaker 1: hours long. No, we'll we'll blaze through this. Uh. There

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Speaker 1: are different types of student loans. The main two big

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Speaker 1: groups are federal student loans and then private sector student

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Speaker 1: loans and so so again, after you've exhausted all chances

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Speaker 1: for grant scholarship, any kind of free money, and you

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Speaker 1: turn to right the first ones you want to turn to,

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Speaker 1: or the federal governments, because the loans you get from

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Speaker 1: them are top quality as far as your being a

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Speaker 1: borrower is concerned. That's right. And there are a few

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Speaker 1: different kinds of those. They are direct subsidized, direct unsubsidized,

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Speaker 1: and direct plus plus is capitalized all the way across

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Speaker 1: subsidized direct loans. Um, the Department of Education as your lender.

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Speaker 1: I didn't know any of this stuff. Well it's new, yeah,

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Speaker 1: I mean, I was just surprised at some of this stuff.

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Speaker 1: But it's not I'm sorry, it's not new. These member

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Speaker 1: stafford Stafford loans. Yeah, that's what they used to call

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Speaker 1: direct loan. Okay, I remember, it's basically the same thing,

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Speaker 1: but it's just radically expanded since two thousand ten. Okay,

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Speaker 1: So I don't I don't feel as old as I thought. So, Um,

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Speaker 1: the Department of Education is going to cover the interest

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Speaker 1: under a few circumstances. And the interest is you're gonna

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Speaker 1: hear that word a lot. That's a big deal with

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Speaker 1: any kind of loan or credit that you get. That's

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Speaker 1: that's where they get you. And this is specifically the

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Speaker 1: direct subsidized loan that they will cover the interest. That's

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Speaker 1: right if uh, you were in school at least part time. Uh,

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Speaker 1: that is one during the first six months after you

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Speaker 1: leave school. Don't you have to graduate, but you've either

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Speaker 1: graduated or disenrolled or whatever unenrolled been dishonorably question rulled

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Speaker 1: or if your loans are in deferment um. Only undergraduates

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Speaker 1: can get these. They are based on financial need and

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Speaker 1: the school is going to say how much you can borrow.

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Speaker 1: You can't just say like, yeah, tuition's ten grand, but

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Speaker 1: i'd really like thirty. Well even if even if you

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Speaker 1: could do that, these things are capped because the interest

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Speaker 1: is covered by the Department of Ed, like you were saying,

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Speaker 1: which is a big deal. So if you go to

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Speaker 1: school full time for four years and get your bachelor's degree,

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Speaker 1: that whole time, you're not accruing a penny of interest. Yeah,

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Speaker 1: and that's a big, big deal, huge deal. But there's

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Speaker 1: a cap on this on the amount that you can

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Speaker 1: borrow if you're a dependent student, meaning that your parents

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Speaker 1: still claim you as dependent on their taxes and they

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Speaker 1: could conceivably help you out or whatever. They don't have

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Speaker 1: campers to sell exactly, or they've sold all the campers

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Speaker 1: and now they're tapped out. Um, you can conceivably borrow

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Speaker 1: UM thirty five hundred dollars and have it be subsidized.

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Speaker 1: And I think over the course of your college career

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Speaker 1: it's something like, uh twenty three thousand dollars or something. No,

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Speaker 1: I'm sorry, it's UM thirty one thousand dollars for a

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Speaker 1: four year degree. UM that could possibly be subsidized, which,

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Speaker 1: as we'll see, is not enough to cover a four

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Speaker 1: year degree basically anywhere these days. I didn't I didn't

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Speaker 1: tell you what the second thing they sold though. By

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Speaker 1: the way, we had a food truck. What this is

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Speaker 1: pre food truck. It was a trailer. Didn't even call

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Speaker 1: it a food truck. You know what it was called?

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Speaker 1: What the food factory? What? What kind of food? So

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Speaker 1: my dad and my mom would go to these arts

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Speaker 1: and crafts festivals and set up and sell like hot

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Speaker 1: dogs and hamburgers and popcorn and stuff. And they still

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Speaker 1: got a divorce after that kind of experience together. Some

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Speaker 1: might say it had a direct correlation burned the popcorn again.

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Speaker 1: So they sold the airstream in the food factory. Wow,

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Speaker 1: we so would they sleep in the air stream and

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Speaker 1: the food factory would tow the air stream? No? No, no,

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Speaker 1: these were just local things. She goes set up for

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Speaker 1: the weekend at the Yellow Daisy Festival in sal hamburgers

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Speaker 1: all weekend to rednecks. Did they do it for fun? No,

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Speaker 1: they did it to make money. My dad was always

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Speaker 1: trying to make extra money. He always had these, Uh.

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Speaker 1: I don't know about get rich quick schemes because they

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Speaker 1: weren't but make a just enough money to cover the

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Speaker 1: cost schemes. Yeah, he was great schemes. Yeah, it's funny.

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Speaker 1: My brother's kind of the same way, but he's actually

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Speaker 1: smart and uh and it does make money on the side,

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Speaker 1: I said, way too much direct unsubsidized Our Wikipedia page

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Speaker 1: so annoying. Uh, these unsubsidized direct loans you can get

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Speaker 1: undergraduate and graduate students. Uh, they're not based on your

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Speaker 1: financial need, even though the school is still going to

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Speaker 1: say how much you can borrow. It can't be more

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Speaker 1: than the costs to attend the school obviously, Um, and

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Speaker 1: the interest rate is probably pretty low, but you are

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Speaker 1: going to pay interest and they're accruing interest over the

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Speaker 1: life of the loan. Um. That's a big deal. It's

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Speaker 1: it's basically like like you're it's you're still accruing interest.

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Speaker 1: So it's like a regular loan. But what makes it

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Speaker 1: so much more attractive than say, like a private loan,

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Speaker 1: which we'll talk about, is that the interest rate is

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Speaker 1: fixed and it's low. The government's like, we're not trying

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Speaker 1: to like screw you over anything like that. We're gonna

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Speaker 1: loan you money. It's still alone, but we're gonna make

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Speaker 1: the terms pretty good to just bend over and we'll

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Speaker 1: make a deposit. You're still going to Wow. We where

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Speaker 1: they're like teens getting ready for college listening to this

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Speaker 1: with their parents right now. They get it. Yes, kids,

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Speaker 1: ask your parents what Chuck just meant. They get it. Um. Okay.

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Speaker 1: So there's direct subsidized, there's direct unsubsidized, and then there's

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Speaker 1: the one that comes from the federal as that most

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Speaker 1: resembles like a regular private lender bankload. That's the direct

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Speaker 1: plus loan. Do you know what plus stands for? No?

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Speaker 1: I should have looked that up. This is a house

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Speaker 1: stuff Works article. By the way, very thorough. Um, I

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Speaker 1: wasn't telling you I want to know to Uh, all right,

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Speaker 1: so you look that up, but rare in show look up, Um,

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Speaker 1: federal student loans. These are the direct plus. They are

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Speaker 1: federal student loans UM borrowed by your parents or if

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Speaker 1: you're a graduate student or a professional student. Let's say,

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Speaker 1: what is it parent loan for undergraduate student whether you

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Speaker 1: have it? Okay, but it doesn't really make sense in

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Speaker 1: a second, Uh, really what am I missing? Then? Just

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Speaker 1: go ahead? Okay, Um, if your parents are eligible, is

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Speaker 1: just going to be based like your regular loan, on

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Speaker 1: their their credit score and that kind of thing, and

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Speaker 1: the cost of attendance where you're going to be going

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Speaker 1: to school or enrolling in school is going to set

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Speaker 1: that limit again kind of like the other ones. But

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Speaker 1: your parents are just king this loan and these are unsubsidized,

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Speaker 1: so they're unsubsidized. You can also borrow for an entire education,

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Speaker 1: and you can also use them not just for undergrad

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Speaker 1: but for graduate school too, which is why it doesn't

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Speaker 1: make sense because the grad plus loan means graduate parent

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Speaker 1: loan for undergraduate students. Somebody didn't think that one through. Um,

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Speaker 1: Thanks Obama, but with with the with the plus loans um,

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Speaker 1: that cost of attendance is a really big deal. And

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Speaker 1: it's true with any loan. Every school you go to

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Speaker 1: has the cost of attendance. And every year they calculate

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Speaker 1: how much it costs for everything, for tuition, fees, books, transportation,

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Speaker 1: room and board, everything, how much it will cost the

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Speaker 1: out of the person pot um to go to the

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Speaker 1: school for a year. But the problem and you can

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Speaker 1: borrow up to that amount. You can't borrow pass to

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Speaker 1: each borrow up to that amount. So you can say

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Speaker 1: I'm borrowing and I don't need to spend a penny

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Speaker 1: other than what I borrowed. The problem is is it

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Speaker 1: may cost you less to go to school than that

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Speaker 1: average amount, and so you've borrowed up to that amount,

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Speaker 1: which means you're paying interest on money you don't need.

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Speaker 1: And there's when you get these loans. There's a lot

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Speaker 1: of different things, a lot of different processes there that

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Speaker 1: it's going to go through. But the upshot of all

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Speaker 1: of them is it doesn't come to you. It goes

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Speaker 1: to the school. Never knew that. I didn't either, But

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Speaker 1: the school says, okay, let's deduct for this and this

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Speaker 1: and this, and oh, they have the scholarship, so we

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Speaker 1: can take that out. They have this grant, we can

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Speaker 1: take that out, and let's say that there's some money

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Speaker 1: left over there. Then they will send you a check

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Speaker 1: or deposit it directly into your account. But when they

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Speaker 1: do that, you would be very wise to say, no, no, no,

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Speaker 1: you guys, hold onto this. I'm gonna use it for

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Speaker 1: next year. You can just roll that right on over.

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Speaker 1: That's the best thing you could do with a bad situation.

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Speaker 1: And the reason it's a bad situation is because you

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Speaker 1: have borrowed too much and now you're paying interest on

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00:19:04,400 --> 00:19:07,080
Speaker 1: money that's just sitting there for a year in the

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Speaker 1: school's coffers. They're actually making money off of that interest.

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Speaker 1: You're paying interest on that money you're not using until

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Speaker 1: next year. So the best thing you can do is

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Speaker 1: really try to calculate the best you can, down to

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Speaker 1: the penny, how much money you really need to borrow,

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Speaker 1: and borrow that amount and not just borrow the cost

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Speaker 1: of attendance because it might be less than that. Yeah,

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Speaker 1: is the school really making money on that? Sure? Yeah.

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Speaker 1: Anytime any institution has money that they're holding, they make

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Speaker 1: interest off of it. I didn't know if it was

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Speaker 1: like an s grow situation. I don't know, alright, I

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Speaker 1: don't know. That's a good point. So that's a great point.

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Speaker 1: Oh I thought you were You said you knew for sure.

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Speaker 1: You just were thinking, Hey, they got the money in

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Speaker 1: the bank. They're making some money. Basically, like Tony from

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Speaker 1: Jersey would think. So, Uh, here's the deal. If you

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Speaker 1: some private schools are really really expensive. Uh, you might

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Speaker 1: not be able even if you max out, you may

360
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Speaker 1: not be able to cover the call of your school.

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Speaker 1: Take it or leave it here some more advice from

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Speaker 1: your uncle Chuck. Don't go to one of the schools. Yeah,

363
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Speaker 1: just don't do it. Go to a school you can afford.

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Speaker 1: Because you know what, it doesn't matter. The one thing

365
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Speaker 1: I saw, get that college degree. How many people have

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Speaker 1: been like, oh, well, I mean there are some prestigious schools,

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Speaker 1: sure where that really does matter that them. I don't

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Speaker 1: think it really matters. I think it's more than the

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00:20:29,720 --> 00:20:33,440
Speaker 1: networking that's available to you those schools. That's what they

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Speaker 1: say is necessarily a degree these days, I think. But

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Speaker 1: the thing is they go to a big state school

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Speaker 1: with so many more students in such a bigger net

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Speaker 1: the thing I saw that was, like, the most foolish

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Speaker 1: thing you can do is to go to a state

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Speaker 1: school that's out of state for you, because you get

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00:20:53,800 --> 00:20:56,160
Speaker 1: at that state school is going to be virtually identical

377
00:20:56,280 --> 00:20:58,479
Speaker 1: to the education you get at the in state school,

378
00:20:58,800 --> 00:21:01,000
Speaker 1: but you're paying three to four times as much for

379
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Speaker 1: that same education. But your parents don't live an hour

380
00:21:03,440 --> 00:21:06,520
Speaker 1: I guess so. I guess so. But surely there's another

381
00:21:06,640 --> 00:21:09,879
Speaker 1: state school four hours away or two hours away or whatever.

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Speaker 1: I get wanting to be a your parents or whatever.

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00:21:12,840 --> 00:21:16,920
Speaker 1: I totally get that, but like, figure out another way,

384
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Speaker 1: Like going to a different state school is a not

385
00:21:19,760 --> 00:21:22,080
Speaker 1: a good idea, agreed, And you know you can just

386
00:21:22,400 --> 00:21:25,760
Speaker 1: flush all this advice down the toilet. Kids, But um,

387
00:21:25,800 --> 00:21:27,800
Speaker 1: what you really shouldn't do, I think, is go to

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Speaker 1: that super expensive private school that has like students because

389
00:21:32,600 --> 00:21:38,280
Speaker 1: you're not. The networking opportunities there are so slim, you know. Well,

390
00:21:38,800 --> 00:21:42,800
Speaker 1: they say that people who borrow for a litteral liberal

391
00:21:42,920 --> 00:21:47,639
Speaker 1: arts degree um typically have the hardest time repaying it,

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Speaker 1: even if they come from the socio economic class that

393
00:21:51,720 --> 00:21:53,800
Speaker 1: is more likely to repay it, that could repay it

394
00:21:54,320 --> 00:21:58,600
Speaker 1: because the wages don't pan out to be anything that

395
00:21:58,600 --> 00:22:00,879
Speaker 1: that can really pay off a really so you have

396
00:22:00,920 --> 00:22:05,920
Speaker 1: a really expensive education and then reading poetry. Yeah that

397
00:22:05,920 --> 00:22:08,920
Speaker 1: that that that doesn't graduate well. And it's not all

398
00:22:08,920 --> 00:22:12,600
Speaker 1: about money totally. I totally get that. Chuck gets that too.

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Speaker 1: That's not that's not the point, and it's not the

400
00:22:14,840 --> 00:22:17,919
Speaker 1: answer to to everything. Money is not the answer to everything. No,

401
00:22:18,640 --> 00:22:22,360
Speaker 1: But having lifelong debt you will never get out from

402
00:22:22,440 --> 00:22:26,959
Speaker 1: under is it's it's hard to fathom at age seventeen.

403
00:22:27,800 --> 00:22:30,840
Speaker 1: And so hopefully your parents are worried about this and

404
00:22:31,160 --> 00:22:32,920
Speaker 1: saying like, hey, you need to be thinking about this,

405
00:22:32,960 --> 00:22:35,000
Speaker 1: you shouldn't do that, and giving you good advice. But

406
00:22:35,040 --> 00:22:39,600
Speaker 1: if they're not, please please seriously sit there and consider

407
00:22:39,960 --> 00:22:43,199
Speaker 1: whether what you're going to spend an astronomical amount of

408
00:22:43,200 --> 00:22:46,880
Speaker 1: money on is actually worth it. Yeah, because it's not

409
00:22:46,920 --> 00:22:50,000
Speaker 1: just about money. But having that mountain of debt at

410
00:22:50,080 --> 00:22:54,679
Speaker 1: twenty one years old really narrows your opportunities in life.

411
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Speaker 1: And if you might think it broadens opportunities to have

412
00:22:57,560 --> 00:23:00,359
Speaker 1: gone to the school, but if you've got nine thousand

413
00:23:00,400 --> 00:23:03,800
Speaker 1: dollars in student debt, you it narrows your opportunities. It

414
00:23:03,880 --> 00:23:06,560
Speaker 1: just does. I'm not opportunities but on the paths that

415
00:23:06,600 --> 00:23:09,200
Speaker 1: you might be able to take right, well, you're probably

416
00:23:09,240 --> 00:23:11,040
Speaker 1: going to be in a situation where you don't have

417
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Speaker 1: the luxury of saying I'm gonna wait for a better

418
00:23:13,720 --> 00:23:15,760
Speaker 1: job offer to come along. You're gonna be like, just

419
00:23:15,800 --> 00:23:18,040
Speaker 1: give me a give me a job please, They'll take whatever,

420
00:23:18,320 --> 00:23:21,080
Speaker 1: and you're gonna be very unhappy. What's more, there's a

421
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Speaker 1: really high likelihood that the more astronomical your debt and

422
00:23:25,040 --> 00:23:27,560
Speaker 1: the lower your wages, that you're going to default on that,

423
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Speaker 1: which we'll talk about later. But once you start defaulting

424
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Speaker 1: on loans, then you really are on a hard path

425
00:23:32,720 --> 00:23:36,480
Speaker 1: because credit opportunities are closed to you. Um, you get

426
00:23:36,520 --> 00:23:39,200
Speaker 1: harassed all the time. There's just it's it's there. It's

427
00:23:39,200 --> 00:23:41,840
Speaker 1: a lot. It's a bad jam. Bad things can happen

428
00:23:41,880 --> 00:23:44,760
Speaker 1: if you owe people too much money, even the federal government.

429
00:23:45,160 --> 00:23:47,000
Speaker 1: All right, we should take a break. But it's really

430
00:23:47,040 --> 00:23:49,240
Speaker 1: occurring to me how smart we are and how every

431
00:23:49,280 --> 00:23:51,680
Speaker 1: child in America needs to be listening to us. Now.

432
00:23:52,080 --> 00:23:57,600
Speaker 1: All right, we're gonna come back right after this. And

433
00:24:25,440 --> 00:24:28,080
Speaker 1: you just made me really nervous. All Right, kids, we're

434
00:24:28,080 --> 00:24:30,520
Speaker 1: gonna catch some heat for this, aren't we we're gonna Nah,

435
00:24:30,640 --> 00:24:32,800
Speaker 1: we're gonna talk because I've guaranteed their parents that are

436
00:24:32,800 --> 00:24:34,600
Speaker 1: gonna be like, hey, you should listen to this. Yeah,

437
00:24:34,640 --> 00:24:36,480
Speaker 1: you won't listen to me. Listen to Josh and Chuck

438
00:24:36,600 --> 00:24:38,879
Speaker 1: your stupid heroes. You want to go to Sarah Lawrence.

439
00:24:38,960 --> 00:24:44,719
Speaker 1: Listen to these guys. Don't blow it all on pot alright, Lawrence.

440
00:24:44,880 --> 00:24:48,520
Speaker 1: So now we're talking about private loans. Where is Sarah Lawrence?

441
00:24:50,720 --> 00:24:53,240
Speaker 1: Is that Massachusetts? It seems like a massachuse every schools

442
00:24:53,240 --> 00:24:57,040
Speaker 1: in Massachusetts, isn't it. A lot of them are, Yeah,

443
00:24:57,080 --> 00:24:59,720
Speaker 1: they are all. That's one of the great spinal tap

444
00:24:59,800 --> 00:25:03,399
Speaker 1: joke is uh when they talk about canceling a Boston show,

445
00:25:04,600 --> 00:25:06,680
Speaker 1: they say, oh, sorry, it's not a big college down

446
00:25:10,080 --> 00:25:13,400
Speaker 1: so uh and you finally saw it, right, I've seen

447
00:25:13,400 --> 00:25:15,920
Speaker 1: it before. Yeah. I don't know why you can't take

448
00:25:15,960 --> 00:25:20,400
Speaker 1: this kernel of information and subsume it into your general's

449
00:25:20,400 --> 00:25:25,320
Speaker 1: awere and subsumed. So private loans um you there are

450
00:25:25,359 --> 00:25:27,359
Speaker 1: a bunch of little bells and whistles that a private

451
00:25:27,400 --> 00:25:30,240
Speaker 1: lender can offer you that a federal government loan will not.

452
00:25:31,040 --> 00:25:33,920
Speaker 1: They can be like, hey, we'll knock off a little

453
00:25:34,520 --> 00:25:36,639
Speaker 1: quarter for a percentage point if you sign up for

454
00:25:36,680 --> 00:25:39,800
Speaker 1: auto pay. If you refer people, you might get a

455
00:25:39,800 --> 00:25:42,040
Speaker 1: little kicked back. The guys they send to your house

456
00:25:42,040 --> 00:25:45,000
Speaker 1: to break your legs are usually really well dressed and polite.

457
00:25:45,240 --> 00:25:47,280
Speaker 1: If you pay on time, you might get a little

458
00:25:47,280 --> 00:25:51,440
Speaker 1: discount along the way. So they're they're a little fun

459
00:25:51,480 --> 00:25:53,320
Speaker 1: things like that that they can do that the federal

460
00:25:53,359 --> 00:25:57,040
Speaker 1: government does not do or can't do. Maybe uh, sometimes

461
00:25:57,040 --> 00:25:59,680
Speaker 1: they say you can defer this until you graduate six

462
00:25:59,720 --> 00:26:03,159
Speaker 1: months after UM. We'll talk about defermance in more detail

463
00:26:03,200 --> 00:26:07,760
Speaker 1: in a minute. But it's also a private lender, so

464
00:26:08,320 --> 00:26:12,440
Speaker 1: the only thing they care about is taking your money, sure,

465
00:26:12,800 --> 00:26:14,760
Speaker 1: and they know how to get They know how to

466
00:26:14,840 --> 00:26:17,120
Speaker 1: lend it, and they know how to get it. One

467
00:26:17,119 --> 00:26:20,520
Speaker 1: of the other things the other cons about UM going

468
00:26:20,560 --> 00:26:22,760
Speaker 1: to a private lender for a loan is like they

469
00:26:22,840 --> 00:26:25,480
Speaker 1: might say, no, you can't have it. That's a huge

470
00:26:25,520 --> 00:26:29,840
Speaker 1: distinction UM from a federal loan. The federal government analyzes

471
00:26:29,920 --> 00:26:33,600
Speaker 1: your ability to pay UM. As a kid, you're they're

472
00:26:33,640 --> 00:26:36,399
Speaker 1: just gonna say, yes, fine, come on in, here's your money.

473
00:26:36,680 --> 00:26:38,800
Speaker 1: If it's a plus loan and your parents are on

474
00:26:38,800 --> 00:26:41,439
Speaker 1: the hook, they don't look at your parents credit score.

475
00:26:41,600 --> 00:26:44,000
Speaker 1: They don't look at your parents debt to income ratio,

476
00:26:44,119 --> 00:26:47,359
Speaker 1: meaning essentially their ability to repay the loan. I think

477
00:26:47,359 --> 00:26:49,040
Speaker 1: they do look at their credit score. They look at

478
00:26:49,040 --> 00:26:52,280
Speaker 1: their credit worthiness, and there's a big difference. Basically, they

479
00:26:52,320 --> 00:26:55,400
Speaker 1: look to see do your parents have any negative reporting

480
00:26:55,440 --> 00:26:58,840
Speaker 1: on them? Have they defaulted on other ones in the past. No, great,

481
00:26:58,920 --> 00:27:01,040
Speaker 1: we don't need any other Yeah, I see what you mean.

482
00:27:01,080 --> 00:27:03,920
Speaker 1: Not No, they pay their bills, but they also only

483
00:27:03,960 --> 00:27:06,600
Speaker 1: have five percent of their income left after bills are paid.

484
00:27:06,600 --> 00:27:08,840
Speaker 1: And this is a horrible hardship for uce. But please

485
00:27:08,880 --> 00:27:11,359
Speaker 1: lend us the money. Anyway, a private lender is gonna

486
00:27:11,359 --> 00:27:13,400
Speaker 1: be like your parents that the income ratio is too high.

487
00:27:13,400 --> 00:27:15,159
Speaker 1: We're not gonna We're not gonna give you this or

488
00:27:15,320 --> 00:27:16,959
Speaker 1: I hate to break it to the seventeen year old,

489
00:27:17,000 --> 00:27:19,360
Speaker 1: but your parents are in a really bad financial situation.

490
00:27:20,680 --> 00:27:22,920
Speaker 1: They had to sell the food truck and the airstream

491
00:27:23,040 --> 00:27:25,960
Speaker 1: put you through. That's right, So the private lender may

492
00:27:26,000 --> 00:27:29,159
Speaker 1: turn you down. That's another con too. Yeah. Um, you

493
00:27:29,160 --> 00:27:31,360
Speaker 1: can get a co signer, of course. This is when

494
00:27:31,359 --> 00:27:33,960
Speaker 1: you get um like usually when your parents on board

495
00:27:34,040 --> 00:27:36,520
Speaker 1: or something. Um there of course on the hook court,

496
00:27:36,600 --> 00:27:41,280
Speaker 1: just like they it is their loan, But lenders offer

497
00:27:41,600 --> 00:27:43,760
Speaker 1: a couple of different things. You can get a fixed loan,

498
00:27:44,280 --> 00:27:47,639
Speaker 1: you can get a variable loan. Those variable ones, you know,

499
00:27:47,720 --> 00:27:52,280
Speaker 1: if anyone learned anything from the housing UH crisis, they

500
00:27:52,280 --> 00:27:55,720
Speaker 1: can be very dangerous because they're based on a couple

501
00:27:55,720 --> 00:28:00,440
Speaker 1: of things. The lib or London Interbank offered rate UH

502
00:28:00,440 --> 00:28:02,760
Speaker 1: and the prime rate. And that's when if you have

503
00:28:02,960 --> 00:28:05,560
Speaker 1: like the best credit in the world, you're going to

504
00:28:05,640 --> 00:28:08,960
Speaker 1: get that rate. But in the variable rate can vary,

505
00:28:09,080 --> 00:28:11,280
Speaker 1: and so three years into school you could be paying

506
00:28:11,280 --> 00:28:14,120
Speaker 1: a different rate. Yeah, because those rates change, that prime

507
00:28:14,200 --> 00:28:16,480
Speaker 1: rate and the library rate change, and so they're taking

508
00:28:16,520 --> 00:28:18,359
Speaker 1: that as the base rate and then adding to it

509
00:28:18,560 --> 00:28:21,760
Speaker 1: percentages based on your credit worthiness, and then that's the

510
00:28:21,760 --> 00:28:24,959
Speaker 1: interest rate you pay. And because those base rates change,

511
00:28:25,200 --> 00:28:28,040
Speaker 1: your interest rate changes, and if those go up dramatically,

512
00:28:28,200 --> 00:28:30,880
Speaker 1: your monthly bill goes up dramatically from month to month.

513
00:28:30,920 --> 00:28:33,520
Speaker 1: It can just kind of swing kind of wildly, and

514
00:28:33,560 --> 00:28:35,840
Speaker 1: it's not good for the old ticker when you open

515
00:28:35,880 --> 00:28:38,880
Speaker 1: those envelopes or get that email with your monthly bill. Yeah,

516
00:28:38,880 --> 00:28:40,840
Speaker 1: we dodged a bullet with that with our house loan

517
00:28:40,880 --> 00:28:43,520
Speaker 1: because we had one of those variable arms and it

518
00:28:43,600 --> 00:28:46,000
Speaker 1: just didn't bite us in the butt. Oh that's good.

519
00:28:46,080 --> 00:28:48,200
Speaker 1: We just got kind of lucky. I remember hearing about that.

520
00:28:48,240 --> 00:28:51,680
Speaker 1: With the sub prime mortgage debacle. You know, people were

521
00:28:51,680 --> 00:28:54,240
Speaker 1: getting these loans and the first four years it was

522
00:28:54,360 --> 00:28:56,360
Speaker 1: easy street, and then year five would come and the

523
00:28:56,400 --> 00:29:01,640
Speaker 1: payments would just balloon boing um. So yeah, that's variable rate.

524
00:29:01,680 --> 00:29:03,800
Speaker 1: You can also get fixed rate, although it's usually higher

525
00:29:04,360 --> 00:29:06,720
Speaker 1: than what you're signing up for, but you know exactly

526
00:29:06,720 --> 00:29:08,560
Speaker 1: what you're getting through the life of the loan. And

527
00:29:08,600 --> 00:29:12,400
Speaker 1: that's what the federals. Um, federal government loans offers a

528
00:29:12,480 --> 00:29:16,080
Speaker 1: fixed rate, almost always lower than what you're going to

529
00:29:16,120 --> 00:29:18,480
Speaker 1: get from a private lender. Right, So if you're going

530
00:29:18,520 --> 00:29:21,240
Speaker 1: to a private lender, you're probably going because you have

531
00:29:21,400 --> 00:29:25,040
Speaker 1: exhausted the money that you got from the federal government. Um.

532
00:29:25,240 --> 00:29:27,640
Speaker 1: The private loans are still going to disperse the money

533
00:29:27,680 --> 00:29:31,680
Speaker 1: to your school, which I didn't know as well. Um. Yeah,

534
00:29:31,680 --> 00:29:34,720
Speaker 1: everybody's just going around you. That's that drives me crazy.

535
00:29:34,800 --> 00:29:38,000
Speaker 1: It's like, I'm borrowing, give it to me the money,

536
00:29:38,040 --> 00:29:43,040
Speaker 1: but they're like no, I guess because they're like they're like,

537
00:29:43,080 --> 00:29:47,760
Speaker 1: you're seventeen, you can't be trusted. With check. You know,

538
00:29:48,280 --> 00:29:50,960
Speaker 1: it's not the worst thing in the world to maybe

539
00:29:50,960 --> 00:29:53,480
Speaker 1: do that, agreed, It would still drive me crazy though.

540
00:29:53,920 --> 00:29:56,800
Speaker 1: So repaying these loans, there are a bunch of different

541
00:29:56,800 --> 00:30:00,000
Speaker 1: ways you can structure these. With private loans, you gotta

542
00:30:00,040 --> 00:30:04,800
Speaker 1: few different options, um full deferral, and deferral means, you know,

543
00:30:04,800 --> 00:30:06,400
Speaker 1: while I'm in school, I don't want to work, I

544
00:30:06,440 --> 00:30:08,560
Speaker 1: don't want to pay off this loan. So just give

545
00:30:08,600 --> 00:30:11,760
Speaker 1: me the money, give it to me, and I'm not

546
00:30:11,800 --> 00:30:13,760
Speaker 1: gonna work, and I'm not gonna pay anything until six

547
00:30:13,760 --> 00:30:16,320
Speaker 1: months after I graduate. And they say we'll give you

548
00:30:16,400 --> 00:30:20,240
Speaker 1: to your school instead. Fine, And they'll say, fine, but

549
00:30:20,280 --> 00:30:22,200
Speaker 1: you're gonna be paying that interest. You know, that's still

550
00:30:22,200 --> 00:30:24,800
Speaker 1: accruing the whole time, Right, You're not making any payments

551
00:30:24,840 --> 00:30:27,840
Speaker 1: whatsoever until after you graduate or leave school six months

552
00:30:27,880 --> 00:30:31,680
Speaker 1: after sometimes, But like you were saying, the interest is accruing,

553
00:30:31,760 --> 00:30:33,800
Speaker 1: and like it's gonna be a bigger payment, and it's

554
00:30:33,840 --> 00:30:36,280
Speaker 1: going to be an eye popping payment when you when

555
00:30:36,320 --> 00:30:39,320
Speaker 1: you start finally making payments. Right, depending on how much

556
00:30:39,360 --> 00:30:41,320
Speaker 1: money you make when you graduate and start paying, you

557
00:30:41,360 --> 00:30:44,959
Speaker 1: can deduct some of that interest on your taxes about up.

558
00:30:47,000 --> 00:30:52,240
Speaker 1: So that's nice immediate repayment means you're in school, you

559
00:30:52,320 --> 00:30:55,440
Speaker 1: get this loan, but you start paying every month just

560
00:30:55,600 --> 00:30:58,200
Speaker 1: while you're in school because you're smart, got a job

561
00:30:58,200 --> 00:31:01,560
Speaker 1: at MEXICALI grill that's right, are making some payments. Start

562
00:31:01,600 --> 00:31:05,400
Speaker 1: making those payments at least on interest. UM. You have

563
00:31:05,440 --> 00:31:08,880
Speaker 1: an option, I think, whether to pay interest or not. Yeah,

564
00:31:08,920 --> 00:31:11,560
Speaker 1: there's interest only payments to which is basically like, I

565
00:31:11,560 --> 00:31:13,800
Speaker 1: want to pay all just the interest on my loan

566
00:31:14,600 --> 00:31:16,960
Speaker 1: UM so that I know exactly what I'm paying when

567
00:31:17,000 --> 00:31:19,840
Speaker 1: I when I finally start paying off the principle after

568
00:31:19,880 --> 00:31:22,920
Speaker 1: I graduate. Or you can even make partial interest payments,

569
00:31:22,920 --> 00:31:25,640
Speaker 1: which is just you're just keeping it from being is

570
00:31:25,720 --> 00:31:29,960
Speaker 1: this tidal wave of interest when you finally start making payments.

571
00:31:30,720 --> 00:31:32,800
Speaker 1: But also I think, and this is this is just

572
00:31:32,840 --> 00:31:35,520
Speaker 1: a little bit for me. Just getting in the habit

573
00:31:35,560 --> 00:31:38,000
Speaker 1: of making payments, even if it's just a little bit

574
00:31:38,520 --> 00:31:42,800
Speaker 1: every month, has got to help ease that transition when

575
00:31:42,840 --> 00:31:46,000
Speaker 1: you finally do start attacking it after college. We should

576
00:31:46,000 --> 00:31:47,840
Speaker 1: have a little bell in here to day every time

577
00:31:47,920 --> 00:31:50,280
Speaker 1: we give a little personal nugget, you know what we need.

578
00:31:50,520 --> 00:31:53,719
Speaker 1: We need an arm extender so we can pat ourselves

579
00:31:53,760 --> 00:31:56,440
Speaker 1: on the back loudly every time we give one of

580
00:31:56,520 --> 00:31:59,600
Speaker 1: the that's a good idea, they make those a little

581
00:31:59,680 --> 00:32:03,320
Speaker 1: robot arm grabbers. I also, I think we should just

582
00:32:03,320 --> 00:32:06,600
Speaker 1: say saying one more time, even though our school was

583
00:32:06,600 --> 00:32:09,160
Speaker 1: paid for, paid for it ourselves, and were we don't

584
00:32:09,160 --> 00:32:12,920
Speaker 1: have student loans, we totally sympathize with anybody who struggle

585
00:32:13,320 --> 00:32:15,840
Speaker 1: student loaned that like, that's that sucks, and like that's

586
00:32:16,120 --> 00:32:18,240
Speaker 1: we don't want you to feel like we're talking down

587
00:32:18,240 --> 00:32:20,720
Speaker 1: to you by giving you this advice. Not at all. Okay,

588
00:32:20,760 --> 00:32:23,600
Speaker 1: that's very nice thing to say, though. Uh, federal loans,

589
00:32:23,640 --> 00:32:27,040
Speaker 1: it's a little bit different with the repayment structure. Um.

590
00:32:27,120 --> 00:32:29,400
Speaker 1: You can just like with the private loans, you can

591
00:32:29,520 --> 00:32:33,240
Speaker 1: have that option of full deferral if you want, um,

592
00:32:33,280 --> 00:32:38,120
Speaker 1: But federal government has this deal where between like ten

593
00:32:38,160 --> 00:32:42,600
Speaker 1: and thirty years, they say you can repay this thing

594
00:32:42,680 --> 00:32:46,000
Speaker 1: in a standard way or the extended way. I think

595
00:32:46,080 --> 00:32:49,840
Speaker 1: standard is ten, extended is twenty five. But if you

596
00:32:49,880 --> 00:32:52,960
Speaker 1: can solidate loans, it can go up to thirty. Yeah.

597
00:32:53,040 --> 00:32:56,680
Speaker 1: In the private lending world, consolidations called refinancing. It's basically

598
00:32:56,680 --> 00:32:58,920
Speaker 1: taking all of your loans and combining them into one

599
00:32:58,920 --> 00:33:03,080
Speaker 1: new loan. Let's so called loan consolidation. Sure, but in

600
00:33:03,120 --> 00:33:05,480
Speaker 1: this case, from what I saw, it's like the government

601
00:33:05,520 --> 00:33:10,840
Speaker 1: calls this consolidation. The private lenders called refining. Yeah really yeah, okay,

602
00:33:10,920 --> 00:33:15,680
Speaker 1: swear to God. But um, with the when you're consolidating

603
00:33:15,680 --> 00:33:18,880
Speaker 1: the federal loans, you're not saving money. You're just making

604
00:33:18,920 --> 00:33:22,959
Speaker 1: it easier on yourself. When you refinance the private loans

605
00:33:23,160 --> 00:33:25,840
Speaker 1: or with a private lender, you're probably going to save

606
00:33:25,880 --> 00:33:30,640
Speaker 1: money because not only can you consolidate or refinance your

607
00:33:30,920 --> 00:33:33,640
Speaker 1: private loans, if you have federal loans, you can consolidate

608
00:33:33,640 --> 00:33:35,920
Speaker 1: them with the private leander. They go in, pay off

609
00:33:35,960 --> 00:33:37,959
Speaker 1: your loans the federal government, and they say, now you

610
00:33:38,000 --> 00:33:41,480
Speaker 1: pay us. But maybe it's at a lower rate, maybe

611
00:33:41,520 --> 00:33:44,920
Speaker 1: it's at a fixed rate. Who knows. Um, If you're

612
00:33:44,920 --> 00:33:47,200
Speaker 1: doing that, you're probably doing it to make it so

613
00:33:47,280 --> 00:33:49,320
Speaker 1: that you're paying less every month or over the course

614
00:33:49,360 --> 00:33:52,239
Speaker 1: of the loan. That's right. If a federal loan, if

615
00:33:52,280 --> 00:33:55,600
Speaker 1: you go to graduated repayment route over that ten years,

616
00:33:57,000 --> 00:34:01,000
Speaker 1: repayments start low um monthly and then they increase over

617
00:34:01,040 --> 00:34:04,920
Speaker 1: time with the supposition that your salary is increasing over time,

618
00:34:05,720 --> 00:34:08,600
Speaker 1: which makes sense, And so that's I think the standard

619
00:34:08,640 --> 00:34:11,160
Speaker 1: one or the graduated one, those are the that's the

620
00:34:11,640 --> 00:34:15,719
Speaker 1: default setting when you start repaying your loan. But what

621
00:34:15,760 --> 00:34:17,960
Speaker 1: a lot of people don't realize is that the federal

622
00:34:18,000 --> 00:34:21,920
Speaker 1: government on their loans offer UM what are called income

623
00:34:21,920 --> 00:34:26,960
Speaker 1: based repayment plans of sense, they're a really good idea.

624
00:34:27,120 --> 00:34:30,640
Speaker 1: I saw I read a really um great article from

625
00:34:30,760 --> 00:34:34,600
Speaker 1: Brookings I believe, basically saying like, here's all the ways

626
00:34:34,680 --> 00:34:39,880
Speaker 1: that the UM, the student loan UH situation is just

627
00:34:40,000 --> 00:34:44,520
Speaker 1: totally broken. But it's it's based on some really good ideas.

628
00:34:45,000 --> 00:34:47,279
Speaker 1: It just needs to be fixed in some ways. It

629
00:34:47,320 --> 00:34:50,440
Speaker 1: was written by Adam Looney. It's called a Better Way

630
00:34:50,480 --> 00:34:53,720
Speaker 1: to Provide Relief to Student Loan Borrowers. Really interesting stuff

631
00:34:53,840 --> 00:34:56,440
Speaker 1: on Brookings. But UM. One of things he says is

632
00:34:56,640 --> 00:35:02,040
Speaker 1: like the default should be a repay um income based payment,

633
00:35:02,360 --> 00:35:05,920
Speaker 1: the r e p a y E revised pay as

634
00:35:05,960 --> 00:35:09,720
Speaker 1: you earn type, because what it is it says, okay,

635
00:35:09,719 --> 00:35:12,480
Speaker 1: what's your income every year you you file a new

636
00:35:12,520 --> 00:35:15,919
Speaker 1: income report UM, and then they say, well, they take

637
00:35:16,000 --> 00:35:19,240
Speaker 1: a hundred and fifty percent of the poverty limit whatever

638
00:35:19,280 --> 00:35:21,719
Speaker 1: the government says the poverty level is. They subtract the

639
00:35:21,760 --> 00:35:27,040
Speaker 1: two and you pay ten percent of that that's your payment. Okay, So, um,

640
00:35:28,040 --> 00:35:30,840
Speaker 1: it actually is is set up so that as you

641
00:35:30,880 --> 00:35:34,600
Speaker 1: start to make more money, your payments go up. But

642
00:35:34,719 --> 00:35:37,200
Speaker 1: if you don't ever really start to make more money,

643
00:35:37,440 --> 00:35:39,880
Speaker 1: you may you pay about the same. So the whole,

644
00:35:40,040 --> 00:35:43,640
Speaker 1: the whole idea behind all the income based repayment solutions

645
00:35:43,680 --> 00:35:49,360
Speaker 1: is that if you if your diploma is paying off, great,

646
00:35:50,000 --> 00:35:52,520
Speaker 1: If it's not, we're not gonna like, we're not going

647
00:35:52,560 --> 00:35:54,680
Speaker 1: to treat you like the people who are benefiting from

648
00:35:54,760 --> 00:35:58,480
Speaker 1: the college experience that they had you with the philosophy degree.

649
00:35:59,120 --> 00:36:01,960
Speaker 1: Bless your heart. Go start thinking about existential risks. That's

650
00:36:01,960 --> 00:36:04,879
Speaker 1: the best thing you could do. Uh. There are other

651
00:36:04,920 --> 00:36:08,000
Speaker 1: different kinds of income driven repayment options. Um you talked

652
00:36:08,040 --> 00:36:11,279
Speaker 1: about revised pay as you earn. There's also pay as

653
00:36:11,320 --> 00:36:15,399
Speaker 1: you earn, income based repayment, income contingent repayment, and they're

654
00:36:15,400 --> 00:36:18,680
Speaker 1: all just tweaked versions of sort of the same idea,

655
00:36:18,840 --> 00:36:21,879
Speaker 1: where and you're figuring out how much you can pay

656
00:36:21,880 --> 00:36:25,319
Speaker 1: out of your discretionary income, or rather they're figuring it

657
00:36:25,320 --> 00:36:28,120
Speaker 1: out for you exactly. It can be you know, between

658
00:36:28,120 --> 00:36:30,239
Speaker 1: ten and twenty years to pay off. It can be

659
00:36:30,280 --> 00:36:33,120
Speaker 1: ten percent your discretionary income. In the worst case, it

660
00:36:33,160 --> 00:36:37,600
Speaker 1: could be of your discretionary income. Um. But but yeah,

661
00:36:37,600 --> 00:36:40,560
Speaker 1: it's it's a set amount and it's income. It reflects

662
00:36:40,560 --> 00:36:43,600
Speaker 1: the amount of money that you make. So it's pretty cool. Um.

663
00:36:43,680 --> 00:36:46,320
Speaker 1: The other great thing about these with the federal government

664
00:36:46,320 --> 00:36:48,360
Speaker 1: that you are not going to get from a private

665
00:36:48,440 --> 00:36:53,439
Speaker 1: lender is after the term of your loan, right ten years,

666
00:36:53,480 --> 00:36:56,480
Speaker 1: twenty years, whatever, thirty years. I think if you get

667
00:36:56,560 --> 00:37:02,319
Speaker 1: like the super duper extended version, they say, okay, well

668
00:37:02,520 --> 00:37:05,160
Speaker 1: you tried to pay it off. Um, what this this

669
00:37:05,239 --> 00:37:07,880
Speaker 1: amount that's left over, We're just going to discharge. You

670
00:37:07,920 --> 00:37:10,200
Speaker 1: don't have to pay it. It's going to be forgiven.

671
00:37:10,400 --> 00:37:13,200
Speaker 1: Oh are we talking forgiveness? I think? So all right,

672
00:37:13,360 --> 00:37:15,719
Speaker 1: do you want to take a break first? Uh, yeah,

673
00:37:15,760 --> 00:37:17,520
Speaker 1: let's take a quick break and we'll we'll get more

674
00:37:17,560 --> 00:37:19,920
Speaker 1: specific about forgiveness right after this. We'll call it a

675
00:37:19,920 --> 00:37:53,520
Speaker 1: cliffhanger things and chuck and chuck stop. All right, So

676
00:37:53,719 --> 00:37:59,360
Speaker 1: you teased forgiveness so hard. You're the one, he said,

677
00:37:59,400 --> 00:38:02,040
Speaker 1: bend over and I'll make a depot. I don't want

678
00:38:02,040 --> 00:38:06,600
Speaker 1: to hear it from you. Um. Sorry again, parents with

679
00:38:06,719 --> 00:38:09,600
Speaker 1: children listening, that's right. There is a plan called the

680
00:38:09,640 --> 00:38:14,040
Speaker 1: Public Service Loan Forgiveness Plan that what you were talking about.

681
00:38:14,160 --> 00:38:19,600
Speaker 1: Under certain circumstances, if you they will forgive your remaining balance, um,

682
00:38:19,640 --> 00:38:21,759
Speaker 1: if you have been paying for that ten years or

683
00:38:21,800 --> 00:38:27,880
Speaker 1: a hundred and twenty qualifying months. Um. You are working

684
00:38:27,920 --> 00:38:32,480
Speaker 1: full time for a qualifying employer, which is government or

685
00:38:32,560 --> 00:38:36,480
Speaker 1: nonprofit that is a true nonprofit. So you can't like

686
00:38:36,560 --> 00:38:39,919
Speaker 1: go work for the Democratic National Committee or something like that. Yeah,

687
00:38:39,960 --> 00:38:42,520
Speaker 1: it has to be a nonpartisan nonprofit, that's right, but

688
00:38:42,600 --> 00:38:44,920
Speaker 1: it can't literally, from what I saw, any five oh

689
00:38:44,920 --> 00:38:49,920
Speaker 1: one C three organization that isn't uh partisan or involved

690
00:38:49,920 --> 00:38:52,719
Speaker 1: in labor unions, it would qualify. Yeah. But here's the

691
00:38:52,800 --> 00:38:55,000
Speaker 1: thing is, uh, they's got a bit of a bad

692
00:38:55,080 --> 00:39:00,719
Speaker 1: rap when that first wave came through because uh of

693
00:39:00,760 --> 00:39:04,560
Speaker 1: these relief applications were rejected. But then other people pointed

694
00:39:04,560 --> 00:39:07,279
Speaker 1: out that, you know what, some of these people didn't

695
00:39:07,280 --> 00:39:09,439
Speaker 1: make those add twenty payments. Some of these people filled

696
00:39:09,440 --> 00:39:13,239
Speaker 1: out things incorrectly on their applications. They weren't eligible. They

697
00:39:13,239 --> 00:39:16,000
Speaker 1: didn't work for a qualifying employer. So like all the

698
00:39:16,040 --> 00:39:17,839
Speaker 1: things you said you had to do, like a lot

699
00:39:17,880 --> 00:39:19,719
Speaker 1: of people didn't do these so I don't know if

700
00:39:19,719 --> 00:39:22,799
Speaker 1: we have a real good percentage number. I don't think

701
00:39:22,800 --> 00:39:26,279
Speaker 1: they were just rejecting people like just for fun. Yeah. No,

702
00:39:26,960 --> 00:39:29,040
Speaker 1: we'll have a better I guess better view of it

703
00:39:29,120 --> 00:39:31,879
Speaker 1: next year, the next couple of years. But the point

704
00:39:31,920 --> 00:39:35,879
Speaker 1: of it is to drive people into um careers like

705
00:39:36,800 --> 00:39:40,040
Speaker 1: being a cop or a firefighter or working for a nonprofit.

706
00:39:40,400 --> 00:39:44,040
Speaker 1: Because again, after ten years, just ten years of making payments,

707
00:39:44,440 --> 00:39:47,239
Speaker 1: once you've made that hundred and twenties payment, they say,

708
00:39:47,239 --> 00:39:49,200
Speaker 1: thanks for the memories. You don't have to pay anymore.

709
00:39:49,360 --> 00:39:52,239
Speaker 1: Not bad, your your loan is gone, sometimes tens of

710
00:39:52,280 --> 00:39:54,759
Speaker 1: thousands of dollars just gone, and you still get to

711
00:39:54,840 --> 00:39:57,480
Speaker 1: keep that degree, plus your ten years into a career

712
00:39:57,520 --> 00:40:01,040
Speaker 1: that you hopefully are really happy. Way, that's right, because

713
00:40:01,040 --> 00:40:04,880
Speaker 1: that's what works exactly. Um. Here's the thing, though, is

714
00:40:06,080 --> 00:40:10,200
Speaker 1: loan forgiveness. There's something called a tax bomb, and it

715
00:40:10,239 --> 00:40:15,399
Speaker 1: works a little something like this. Uh, you eventually will

716
00:40:15,440 --> 00:40:20,080
Speaker 1: get taxed because whatever they forgive you have to count

717
00:40:20,120 --> 00:40:24,160
Speaker 1: as income and then you are taxed on that income. Right,

718
00:40:24,640 --> 00:40:27,560
Speaker 1: they always got their hand out. So this, this is

719
00:40:27,600 --> 00:40:30,520
Speaker 1: not gotten away with something. This is not for that

720
00:40:30,719 --> 00:40:33,040
Speaker 1: ten year one the ten yere one did you say,

721
00:40:33,120 --> 00:40:36,680
Speaker 1: is called the Public Service Loan Forgiveness Plan. That's right, Okay,

722
00:40:36,719 --> 00:40:39,879
Speaker 1: that one the text bomb doesn't apply. This is for

723
00:40:40,000 --> 00:40:43,399
Speaker 1: the forgiveness for just regular federal student loans where somebody

724
00:40:43,480 --> 00:40:45,800
Speaker 1: has been paying for twenty years or twenty five years,

725
00:40:46,040 --> 00:40:49,839
Speaker 1: whatever's left. The federal government says, you know what you

726
00:40:49,880 --> 00:40:52,359
Speaker 1: did it you were you faithfully paid this stuff off,

727
00:40:52,400 --> 00:40:54,640
Speaker 1: but you just never made enough money to really pay

728
00:40:54,640 --> 00:40:56,359
Speaker 1: it off. So we're gonna forget about clear that you're

729
00:40:56,400 --> 00:41:00,400
Speaker 1: not going anywhere in life. But but that that amount

730
00:41:00,440 --> 00:41:02,879
Speaker 1: that's left over, we're going to we're going to count

731
00:41:02,920 --> 00:41:05,759
Speaker 1: that as as income on your income text. So so

732
00:41:05,920 --> 00:41:08,839
Speaker 1: you have thirty thou dollars, like, if you're a high

733
00:41:09,000 --> 00:41:12,880
Speaker 1: income earner by that time, well we should pay Probably

734
00:41:12,880 --> 00:41:16,600
Speaker 1: are right exactly. But let's say let's say all of

735
00:41:16,680 --> 00:41:18,680
Speaker 1: a sudden, you just had a huge uptick in your

736
00:41:18,680 --> 00:41:22,080
Speaker 1: salary and two years before that, twentieth year of payments

737
00:41:22,080 --> 00:41:26,279
Speaker 1: come along, um, and you just still had a big

738
00:41:26,320 --> 00:41:29,960
Speaker 1: amount left over. You could be paying thirty seven percent

739
00:41:30,080 --> 00:41:32,640
Speaker 1: on that. So uh, if you had thirty grand left

740
00:41:32,680 --> 00:41:35,359
Speaker 1: over and you're in the highest earner bracket, you would

741
00:41:35,360 --> 00:41:39,960
Speaker 1: owe eleven grand in taxes on that debt forgiveness. The

742
00:41:40,000 --> 00:41:42,879
Speaker 1: thing is, some people who know about this stuff say,

743
00:41:43,000 --> 00:41:45,160
Speaker 1: there's no way the federal government is actually going to

744
00:41:45,200 --> 00:41:47,480
Speaker 1: do this because we're not there yet. No, we've got

745
00:41:47,560 --> 00:41:51,160
Speaker 1: about ten years before the first people whom are eligible

746
00:41:51,200 --> 00:41:53,960
Speaker 1: for that will come. We will be able, we'll be

747
00:41:53,960 --> 00:41:56,359
Speaker 1: able to test that. Yeah, and we should also point

748
00:41:56,360 --> 00:41:58,880
Speaker 1: out that it's all relative. You know, if you are

749
00:41:58,920 --> 00:42:01,480
Speaker 1: not in a high tax bracket, it could still be

750
00:42:01,520 --> 00:42:03,799
Speaker 1: a big burden on you because you're not making that

751
00:42:03,880 --> 00:42:07,359
Speaker 1: much money. Sure, but when you reach that that right, Yeah, yeah,

752
00:42:07,440 --> 00:42:09,399
Speaker 1: you're right, you know what I mean. But hopefully some

753
00:42:09,440 --> 00:42:12,280
Speaker 1: observers are saying they won't they won't do that to anybody.

754
00:42:12,440 --> 00:42:15,160
Speaker 1: Other people say, I don't know, you know, Like there's

755
00:42:15,520 --> 00:42:17,360
Speaker 1: if you default, which we'll talk about in a second.

756
00:42:17,360 --> 00:42:20,839
Speaker 1: If you default on federal student loans, they take your

757
00:42:21,600 --> 00:42:26,600
Speaker 1: your tax refund. So who knows, maybe they will charge

758
00:42:26,640 --> 00:42:31,200
Speaker 1: people with that tax bomb at the end. Maybe m

759
00:42:33,440 --> 00:42:37,839
Speaker 1: So defaulting that means, well, it could mean a few things.

760
00:42:37,920 --> 00:42:41,319
Speaker 1: If you're a day late, you're delinquent, doctor short, if

761
00:42:41,360 --> 00:42:44,359
Speaker 1: you're if you're three months late, you're ninety days late.

762
00:42:45,120 --> 00:42:48,960
Speaker 1: Then they're going to report you to the credit bureaus. Um,

763
00:42:49,000 --> 00:42:50,840
Speaker 1: if you don't make a payment for two hundred and

764
00:42:50,880 --> 00:42:55,759
Speaker 1: seventy days, then you're finally considered in default. And uh

765
00:42:55,880 --> 00:42:57,080
Speaker 1: that you don't want to do that. You don't want

766
00:42:57,080 --> 00:43:00,360
Speaker 1: to default on any loan in life, because it's the

767
00:43:00,360 --> 00:43:04,440
Speaker 1: wrong thing to do if you can help it at all. Um.

768
00:43:04,480 --> 00:43:06,640
Speaker 1: I know sometimes life happens in such a way that

769
00:43:06,680 --> 00:43:10,160
Speaker 1: you can't, but if you can avoid defaulting on that loan,

770
00:43:10,400 --> 00:43:13,000
Speaker 1: please don't. Yeah. The thing is is like when people

771
00:43:13,000 --> 00:43:19,279
Speaker 1: are calling you every day, right when? Um? No, yeah, man,

772
00:43:19,320 --> 00:43:22,560
Speaker 1: that took a second. Um, people are calling you and

773
00:43:22,600 --> 00:43:26,080
Speaker 1: harassing you every day. Um. Apparently the federal government uses

774
00:43:26,120 --> 00:43:30,160
Speaker 1: a company called Navigant, who are particularly despicable when it

775
00:43:30,200 --> 00:43:32,719
Speaker 1: comes to some of the stuff they'll do. I think

776
00:43:32,719 --> 00:43:35,560
Speaker 1: they have like five federal lawsuits filed against them in

777
00:43:35,640 --> 00:43:38,960
Speaker 1: one year, and like the second largest competitor to them

778
00:43:38,960 --> 00:43:42,360
Speaker 1: had like forty. So yeah, they're not very well liked,

779
00:43:42,760 --> 00:43:46,480
Speaker 1: but they they they When they're calling and harassing you

780
00:43:46,560 --> 00:43:48,920
Speaker 1: multiple times a day, the last thing you want to

781
00:43:48,920 --> 00:43:51,040
Speaker 1: do is reach out to him and say, hey, how

782
00:43:51,080 --> 00:43:53,640
Speaker 1: can I get back on track to paying you? Guys?

783
00:43:54,160 --> 00:43:57,640
Speaker 1: You just wanted to go away, right, But like, that's

784
00:43:57,680 --> 00:44:00,359
Speaker 1: the opposite of what you should do. If you find

785
00:44:00,400 --> 00:44:02,440
Speaker 1: that you can't pay your bill, you should get in

786
00:44:02,480 --> 00:44:04,600
Speaker 1: touch with your lender and say, I can't pay my bill.

787
00:44:04,719 --> 00:44:07,520
Speaker 1: I need to make this more manageable. What can we do.

788
00:44:08,239 --> 00:44:10,520
Speaker 1: The problem is one of the first things they'll offer

789
00:44:11,040 --> 00:44:14,919
Speaker 1: is something called a forbearance, and that is just, hey,

790
00:44:15,280 --> 00:44:18,480
Speaker 1: take a little time, you don't make any payments, get

791
00:44:18,480 --> 00:44:21,520
Speaker 1: yourself together. Yep, maybe you need a couple of months,

792
00:44:21,600 --> 00:44:23,680
Speaker 1: maybe you need a couple of years, who knows, but

793
00:44:23,760 --> 00:44:26,600
Speaker 1: we're gonna put you in forbearance. So you're not delinquent

794
00:44:26,680 --> 00:44:29,600
Speaker 1: on your account, you're not in default. But the problem

795
00:44:29,640 --> 00:44:33,279
Speaker 1: is that you're still accruing interest and that's actually not

796
00:44:33,360 --> 00:44:36,400
Speaker 1: the best solution that you want. You're like, yeah, so

797
00:44:36,440 --> 00:44:38,200
Speaker 1: you turn the interest switch off, right, And they're like,

798
00:44:38,320 --> 00:44:40,000
Speaker 1: oh no, no, no, we don't have to know how

799
00:44:40,000 --> 00:44:41,799
Speaker 1: to do that. There is no switch, Like, oh sorry,

800
00:44:41,800 --> 00:44:44,520
Speaker 1: couldn't hear you buy? Yeah, um, so you're not you're

801
00:44:44,520 --> 00:44:46,879
Speaker 1: not in Uh, you're not in default, but you're still

802
00:44:46,880 --> 00:44:50,400
Speaker 1: accruing interests. You're just not making payments. And the problem

803
00:44:50,480 --> 00:44:54,719
Speaker 1: is apparently these um the servicing companies that actually make

804
00:44:54,800 --> 00:44:57,560
Speaker 1: the collections on the loan payments for the government or

805
00:44:57,600 --> 00:45:01,320
Speaker 1: for for private lenders. Even too, it's way more expedient

806
00:45:01,400 --> 00:45:03,120
Speaker 1: to be like, hey, we don't want you to be

807
00:45:03,160 --> 00:45:05,759
Speaker 1: in default anymore. How about a forbearance. Okay, we'll get

808
00:45:05,760 --> 00:45:07,719
Speaker 1: you in the program by and it sounds really good

809
00:45:07,719 --> 00:45:10,080
Speaker 1: to you exactly like, oh great, I could use six

810
00:45:10,120 --> 00:45:11,879
Speaker 1: months or a year, but if they would take five

811
00:45:11,920 --> 00:45:14,800
Speaker 1: more minutes, they would say, actually, if you're a federal

812
00:45:15,000 --> 00:45:19,440
Speaker 1: loan um borrower, there's all these income based payments that

813
00:45:19,760 --> 00:45:22,040
Speaker 1: are going to make it way more realistic for you.

814
00:45:22,200 --> 00:45:24,400
Speaker 1: Rather than just kicking the can down the road and

815
00:45:24,440 --> 00:45:26,680
Speaker 1: having to face this in six months when your forbearance

816
00:45:26,760 --> 00:45:29,160
Speaker 1: is over, we could put you in one of these

817
00:45:29,200 --> 00:45:31,800
Speaker 1: income based plans and you'll be better off. And a

818
00:45:31,840 --> 00:45:34,279
Speaker 1: lot of people don't know that. So the forbearance does

819
00:45:34,320 --> 00:45:37,120
Speaker 1: seem like a great basically gift from God all of

820
00:45:37,160 --> 00:45:40,160
Speaker 1: a sudden, when actually it's a it's a it's a

821
00:45:40,200 --> 00:45:42,640
Speaker 1: bite in the in the bottom, but from the horse

822
00:45:42,680 --> 00:45:50,479
Speaker 1: God that you aren't expecting. That's good. Uh. We talked

823
00:45:50,480 --> 00:45:53,960
Speaker 1: about consolidation, that is um can be a very good idea.

824
00:45:54,920 --> 00:45:58,520
Speaker 1: Uh We what we haven't talked. Is rehabilitating your account.

825
00:45:58,560 --> 00:46:01,640
Speaker 1: If you through a period in life where you default

826
00:46:02,440 --> 00:46:04,640
Speaker 1: and you're like, screw it, I can't or won't or

827
00:46:04,680 --> 00:46:08,920
Speaker 1: refuse to make my payment. Um, you can pick up

828
00:46:08,960 --> 00:46:13,919
Speaker 1: a year later and say like, jeez, is it too late,

829
00:46:14,320 --> 00:46:18,279
Speaker 1: and you know what they'll say, Oh no, calm yeah,

830
00:46:18,719 --> 00:46:21,839
Speaker 1: get out that checkbook. You can rehabilitate that account, which

831
00:46:21,880 --> 00:46:24,480
Speaker 1: is a really good thing. Start making payments again. That's

832
00:46:24,480 --> 00:46:26,920
Speaker 1: all you have to do. Uh. And it's and if

833
00:46:27,000 --> 00:46:30,359
Speaker 1: you couldn't afford that payment before, they'll even restructure that

834
00:46:30,440 --> 00:46:33,480
Speaker 1: back to what you were talking about, to your income.

835
00:46:33,520 --> 00:46:36,760
Speaker 1: Like if you let's say I have a salary reduction

836
00:46:36,800 --> 00:46:39,760
Speaker 1: in life, and that's why you defaulted in the first place,

837
00:46:40,320 --> 00:46:42,759
Speaker 1: pick up the phone. They will just answer the phones.

838
00:46:42,800 --> 00:46:46,200
Speaker 1: They're gonna be calling you, uh, and rehabilitate it and

839
00:46:46,239 --> 00:46:49,759
Speaker 1: say listen, well let's let's talk this through. Um, I'm

840
00:46:49,760 --> 00:46:52,120
Speaker 1: a good person. I really want to pay this, and

841
00:46:52,160 --> 00:46:54,759
Speaker 1: they'll say, great, well can you afford Let's look at

842
00:46:54,800 --> 00:46:57,480
Speaker 1: your numbers and then you start paying it and then

843
00:46:57,520 --> 00:47:00,839
Speaker 1: all of a sudden, if you've paid nine payments over

844
00:47:00,920 --> 00:47:04,680
Speaker 1: ten months, then you're considered current. Your default status is removed.

845
00:47:05,080 --> 00:47:09,200
Speaker 1: Credit bureaus think you're a great person again, and uh,

846
00:47:09,320 --> 00:47:11,080
Speaker 1: you only get one shot at this though, right that

847
00:47:11,200 --> 00:47:15,080
Speaker 1: rehabilitation you get one chance. Um, and that's just with

848
00:47:15,160 --> 00:47:20,240
Speaker 1: federal loans, right, I believe, So I'm pretty sure that's federal.

849
00:47:20,600 --> 00:47:24,400
Speaker 1: So um yeah, ultimately you want to stay out of that.

850
00:47:24,440 --> 00:47:26,839
Speaker 1: There is a second chance with the federal government, but

851
00:47:27,040 --> 00:47:33,080
Speaker 1: it's not necessarily easy to do. Um. So with one

852
00:47:33,080 --> 00:47:35,120
Speaker 1: of the things that happened with all of the student

853
00:47:35,120 --> 00:47:37,840
Speaker 1: loan there's like a student loan debt bubble that a

854
00:47:37,840 --> 00:47:40,560
Speaker 1: lot of people are worried about because there's like one

855
00:47:40,800 --> 00:47:44,160
Speaker 1: point six trillion dollars out there right now. Which is

856
00:47:44,200 --> 00:47:47,760
Speaker 1: good in one way because with student loans, the system

857
00:47:47,880 --> 00:47:50,400
Speaker 1: is set up so that the people who are benefiting

858
00:47:50,440 --> 00:47:53,200
Speaker 1: from it now, people who are borrowing to go to college,

859
00:47:53,680 --> 00:47:56,120
Speaker 1: are paying back into it later to benefit the people

860
00:47:56,120 --> 00:47:59,240
Speaker 1: who need to borrow, they are coming behind them. Okay,

861
00:47:59,280 --> 00:48:02,640
Speaker 1: so it's actually pretty interesting, good system. But the problem

862
00:48:02,640 --> 00:48:06,080
Speaker 1: is with that much money out and as many people

863
00:48:06,120 --> 00:48:08,640
Speaker 1: at risk of defaulting on these loans, a lot of

864
00:48:08,640 --> 00:48:11,120
Speaker 1: people are worried about it. One of the reasons that

865
00:48:11,160 --> 00:48:15,160
Speaker 1: people are worried about being of the risk of default.

866
00:48:15,239 --> 00:48:19,360
Speaker 1: Among a large section are what UM some people call sums,

867
00:48:20,080 --> 00:48:23,279
Speaker 1: people who have some college educations. You see that. Yeah,

868
00:48:23,400 --> 00:48:26,840
Speaker 1: people who went to college and like didn't graduate basically. Yeah.

869
00:48:26,920 --> 00:48:29,759
Speaker 1: And one of the problems from that Obama initiative to

870
00:48:29,920 --> 00:48:35,560
Speaker 1: expand UM higher education was to say, oh, yeah, online

871
00:48:35,560 --> 00:48:39,560
Speaker 1: colleges we've never heard of before, Sure, come on in, UM,

872
00:48:39,719 --> 00:48:45,120
Speaker 1: barely accredited colleges, come on in, UM, like basically scams,

873
00:48:45,640 --> 00:48:47,479
Speaker 1: come on in and take all this money. I won't

874
00:48:49,080 --> 00:48:52,560
Speaker 1: very prominent, No, we can't. Okay, I looked it up.

875
00:48:52,600 --> 00:48:59,000
Speaker 1: That didn't apply, not even accredited. Yeah, um. So uh so.

876
00:48:59,800 --> 00:49:04,760
Speaker 1: The the fact that this that the country was awash

877
00:49:05,280 --> 00:49:09,920
Speaker 1: in easy money for college education and that no one

878
00:49:10,120 --> 00:49:12,640
Speaker 1: was watching the sharks who were coming to soak it up,

879
00:49:13,080 --> 00:49:15,040
Speaker 1: means that a lot of people went to schools that

880
00:49:15,120 --> 00:49:18,840
Speaker 1: they got zero benefit from but walked away with a

881
00:49:18,920 --> 00:49:21,640
Speaker 1: lot of money that they owed. And so these are

882
00:49:21,680 --> 00:49:23,799
Speaker 1: the sum So basically these people would have been better

883
00:49:23,840 --> 00:49:27,160
Speaker 1: off with just a high school education, because to an employer,

884
00:49:27,840 --> 00:49:32,120
Speaker 1: a little bit of college doesn't doesn't help. You have

885
00:49:32,239 --> 00:49:34,839
Speaker 1: to go graduate. Yeah, you don't walk in and say, well,

886
00:49:34,920 --> 00:49:39,319
Speaker 1: it's spent three years and so close, Jim, Jim, Can

887
00:49:39,360 --> 00:49:42,799
Speaker 1: I call you Jim? So close Jim. What's called the

888
00:49:42,800 --> 00:49:46,360
Speaker 1: sheep's can affect, which is the actual increase in wages

889
00:49:46,400 --> 00:49:50,080
Speaker 1: that you can typically expect from a college diploma. There's

890
00:49:50,120 --> 00:49:54,040
Speaker 1: no proportion to it. If you get three years of schooling,

891
00:49:54,080 --> 00:49:56,480
Speaker 1: you don't get three quarters of the sheepskin affect. It's

892
00:49:56,520 --> 00:49:59,200
Speaker 1: all or nothing, and you only get it when you graduate.

893
00:49:59,200 --> 00:50:02,239
Speaker 1: So if you don't eduate, you got nothing from that

894
00:50:02,800 --> 00:50:06,879
Speaker 1: that increase in wages, and you actually owe money through

895
00:50:06,920 --> 00:50:09,880
Speaker 1: student loans. So there's a big problem associated with student

896
00:50:09,880 --> 00:50:12,000
Speaker 1: loans and a lot of people are kind of worried

897
00:50:12,040 --> 00:50:15,359
Speaker 1: about it um And one of the things that there

898
00:50:15,440 --> 00:50:17,840
Speaker 1: that is causing worried to our people have figured out

899
00:50:18,280 --> 00:50:20,960
Speaker 1: how to take a bad situation to make it even worse.

900
00:50:21,719 --> 00:50:25,279
Speaker 1: Because some lenders, and I think the federal government's among them,

901
00:50:25,680 --> 00:50:32,480
Speaker 1: take student loans, package them up and sell them as securities. Crisis.

902
00:50:32,520 --> 00:50:35,720
Speaker 1: It's exactly like the housing crisis, with one big difference

903
00:50:36,000 --> 00:50:40,239
Speaker 1: that subprime mortgage crisis. Even if somebody defaulted on a loan,

904
00:50:40,520 --> 00:50:43,880
Speaker 1: there was still a house that could be taken and sold.

905
00:50:44,120 --> 00:50:47,080
Speaker 1: And I that sounds extraordinarily heartless. But I'm saying from

906
00:50:47,120 --> 00:50:52,359
Speaker 1: an investor's point of view, there's collateral with the student loan,

907
00:50:52,640 --> 00:50:55,840
Speaker 1: there's nothing backing it. If the person defaults, then you

908
00:50:56,000 --> 00:50:59,040
Speaker 1: just lost everything from this investment. But the idea that

909
00:50:59,040 --> 00:51:01,560
Speaker 1: people are like, oh, they're a student loan bubble, let's

910
00:51:01,600 --> 00:51:03,960
Speaker 1: figure out how to turn it into an investment that

911
00:51:04,280 --> 00:51:07,600
Speaker 1: is really ill advised. That's what I think. Something like

912
00:51:07,640 --> 00:51:11,000
Speaker 1: a two hundred eight billion dollars of that one point

913
00:51:11,040 --> 00:51:14,880
Speaker 1: six trillion is securitized. I think Mark Cuban one of

914
00:51:14,920 --> 00:51:19,279
Speaker 1: his big deals as student loan, uh like paying it off,

915
00:51:19,320 --> 00:51:22,160
Speaker 1: for relieving it, trying to help solve the problem. Yeah,

916
00:51:22,200 --> 00:51:23,560
Speaker 1: I think he's one of the ones that's kind of

917
00:51:23,560 --> 00:51:26,040
Speaker 1: been shouting like there's a big problem coming. There's a

918
00:51:26,120 --> 00:51:28,200
Speaker 1: huge problem coming. I think a lot of people know it,

919
00:51:28,280 --> 00:51:30,680
Speaker 1: but very few people know what to do about it.

920
00:51:31,280 --> 00:51:33,960
Speaker 1: There's one other thing. There's a proposal by Rand Paul

921
00:51:34,440 --> 00:51:38,640
Speaker 1: that was brought to committee on December third, nine, and

922
00:51:38,680 --> 00:51:41,080
Speaker 1: it basically says you can get like fifty sid bucks

923
00:51:41,120 --> 00:51:43,880
Speaker 1: out of your four oh one k penalty free and

924
00:51:44,040 --> 00:51:46,440
Speaker 1: tax free if you use it to pay off your

925
00:51:46,440 --> 00:51:49,839
Speaker 1: student loans. Yeah, that's a tough one. Uh, it's a

926
00:51:49,880 --> 00:51:53,480
Speaker 1: math problem, Like, just do the math. Uh, it's sort

927
00:51:53,520 --> 00:51:55,879
Speaker 1: of like robbing Peter to pay Paul. You're not gonna

928
00:51:55,880 --> 00:51:59,400
Speaker 1: have that money later on, right exactly. But um, depending

929
00:51:59,440 --> 00:52:01,799
Speaker 1: on how the numb first workout, it could benefit you.

930
00:52:02,160 --> 00:52:03,880
Speaker 1: It could benefit you in the short term. But what

931
00:52:04,040 --> 00:52:06,680
Speaker 1: some people are saying is like, no, dude, we were

932
00:52:06,680 --> 00:52:09,160
Speaker 1: going to have a big enough problem with a lot

933
00:52:09,239 --> 00:52:14,000
Speaker 1: of people not prepared for retirement thirty years. We should

934
00:52:14,040 --> 00:52:17,040
Speaker 1: not be encouraging those same people to take whatever money

935
00:52:17,080 --> 00:52:20,120
Speaker 1: they have saved a way for retirement to pay off

936
00:52:20,120 --> 00:52:22,480
Speaker 1: their student loans. It's not a good idea. It's not

937
00:52:22,560 --> 00:52:24,640
Speaker 1: for everyone. It could be for some people. It depends

938
00:52:24,640 --> 00:52:26,520
Speaker 1: on how your life goes well. Yeah, Plus a lot

939
00:52:26,520 --> 00:52:28,279
Speaker 1: of people are like, I don't have five grain in

940
00:52:28,360 --> 00:52:29,960
Speaker 1: my four oh one k. What's a four oh one K?

941
00:52:30,160 --> 00:52:32,080
Speaker 1: All I can think about is my student loan debt.

942
00:52:33,120 --> 00:52:36,359
Speaker 1: It's a it's a it's a bad situation. I'm very

943
00:52:36,360 --> 00:52:39,080
Speaker 1: curious to see what happens. Yeah, me too, And uh,

944
00:52:39,920 --> 00:52:41,200
Speaker 1: go to go to school where you want to go

945
00:52:41,239 --> 00:52:44,359
Speaker 1: to school, kids, But I'm telling you, try to make

946
00:52:44,360 --> 00:52:46,799
Speaker 1: it someplace you can afford and really, really, really look

947
00:52:46,800 --> 00:52:51,360
Speaker 1: at the benefit and the and and that that outweigh

948
00:52:51,400 --> 00:52:53,879
Speaker 1: is if it's worth it you think to spend all

949
00:52:53,880 --> 00:52:57,360
Speaker 1: that money? Just just think more about it. Well, you

950
00:52:57,360 --> 00:52:59,680
Speaker 1: want to know one thing that's really despicable that came

951
00:52:59,680 --> 00:53:03,600
Speaker 1: across that I did not understand, Chuck. The federal government

952
00:53:03,719 --> 00:53:08,160
Speaker 1: is not allowed to share data on outcomes from schools.

953
00:53:08,800 --> 00:53:10,880
Speaker 1: So like if you went to a private school and

954
00:53:11,000 --> 00:53:13,439
Speaker 1: you just got a wash in debt and you make

955
00:53:13,520 --> 00:53:17,120
Speaker 1: ten grand a year, there's no way to share that

956
00:53:17,160 --> 00:53:19,399
Speaker 1: with prospective students who say, oh, I want to stay

957
00:53:19,400 --> 00:53:21,480
Speaker 1: away from that school. I want to stay away from that.

958
00:53:21,840 --> 00:53:26,640
Speaker 1: To Sarah Lawrence, the average salary is agoing senior is blank. Like,

959
00:53:26,680 --> 00:53:29,680
Speaker 1: they don't share that. So the what we're advising people

960
00:53:29,680 --> 00:53:32,080
Speaker 1: to do, it's very tough to do because the federal

961
00:53:32,080 --> 00:53:37,360
Speaker 1: government is barred from sharing that information. I think, have

962
00:53:37,440 --> 00:53:39,799
Speaker 1: you got anything else? Nope, this is a big one.

963
00:53:39,840 --> 00:53:42,040
Speaker 1: We could talk about this forever. This one, Chuck, may

964
00:53:42,080 --> 00:53:45,560
Speaker 1: have broken a record. I had sixty four tabs open

965
00:53:45,800 --> 00:53:49,640
Speaker 1: on just student loans today. I believe it sixty four

966
00:53:50,040 --> 00:53:54,239
Speaker 1: too many tabs. It's a lot of tabs. Okay, since

967
00:53:54,280 --> 00:53:56,520
Speaker 1: I said it's a lot of tabs and Chuck said

968
00:53:56,560 --> 00:54:02,000
Speaker 1: something horrid about deposits. It's Sime for listening mail. I'm

969
00:54:02,000 --> 00:54:04,480
Speaker 1: gonna call this to listener mails because they're both pretty

970
00:54:04,480 --> 00:54:08,920
Speaker 1: short and both uh corrections. Hey guys, been listening a

971
00:54:08,920 --> 00:54:11,200
Speaker 1: long time, Really love the show. I finally have some

972
00:54:11,239 --> 00:54:14,160
Speaker 1: info that I can share with you regarding a recent episode.

973
00:54:14,680 --> 00:54:16,880
Speaker 1: Listening to the Coyotes episode and Josh was searching for

974
00:54:16,920 --> 00:54:19,839
Speaker 1: a word, uh for something that is active at dawn

975
00:54:19,840 --> 00:54:23,240
Speaker 1: and dusk, and I'm here to tell you that word

976
00:54:23,520 --> 00:54:27,359
Speaker 1: is crepuscular. It sounds like a pete and pete kind

977
00:54:27,360 --> 00:54:30,080
Speaker 1: of word. It does. The crepuscule is another word for

978
00:54:30,160 --> 00:54:35,640
Speaker 1: twilight or dawn and dusk, So crepuscular means of the

979
00:54:35,680 --> 00:54:37,719
Speaker 1: twilight or an animal that is active at that time.

980
00:54:38,120 --> 00:54:40,080
Speaker 1: Hope that helps at your next tribute night. That is

981
00:54:40,080 --> 00:54:44,279
Speaker 1: Sarah from Wisconsin. And now we're gonna read one from

982
00:54:44,280 --> 00:54:50,600
Speaker 1: Bethany a correction uh for my pronunciation of tagalog. Hey guys, listen,

983
00:54:50,600 --> 00:54:51,799
Speaker 1: we got a few of these. I listen to your

984
00:54:51,800 --> 00:54:54,319
Speaker 1: show every day during work and love listening to what

985
00:54:54,360 --> 00:54:56,320
Speaker 1: you have to offer. Because of my frequency of listening,

986
00:54:56,320 --> 00:54:59,480
Speaker 1: I know you're always looking to improve pronunciation and want

987
00:54:59,480 --> 00:55:01,960
Speaker 1: to be respect cool of other cultures. I'm currently on

988
00:55:02,040 --> 00:55:04,920
Speaker 1: your latest short stuff on the murder of Tera Cita

989
00:55:04,920 --> 00:55:08,600
Speaker 1: Bassa and our Bassa, and wanted to point out the

990
00:55:08,640 --> 00:55:12,719
Speaker 1: correct way to pronounce the Filipino language. Chuck said, tagalogue,

991
00:55:13,040 --> 00:55:16,880
Speaker 1: it's actually to galug you're thinking of those little Debbie

992
00:55:16,920 --> 00:55:20,799
Speaker 1: cookies or no Girl Scout cookie. Now, I just didn't

993
00:55:20,840 --> 00:55:22,880
Speaker 1: know that's how I pronounced it to Chuck. I just

994
00:55:22,920 --> 00:55:24,759
Speaker 1: wanted to help where I can say thank you for

995
00:55:24,880 --> 00:55:28,640
Speaker 1: continuing to produce awesome content year after year. Once again,

996
00:55:28,680 --> 00:55:36,000
Speaker 1: it's to galag to to go long, I think, well,

997
00:55:36,000 --> 00:55:38,399
Speaker 1: this is g a h g u A somebody else

998
00:55:38,440 --> 00:55:43,239
Speaker 1: ad g u h. Boy, here we go. That's from Bethany,

999
00:55:43,719 --> 00:55:47,640
Speaker 1: Thanks a lot, Bethany, uh and from Sarah to to

1000
00:55:48,120 --> 00:55:51,839
Speaker 1: listener mails to top notch ones. If you want to

1001
00:55:51,880 --> 00:55:54,560
Speaker 1: try your hand at sending a top notch listener mail,

1002
00:55:54,920 --> 00:55:56,919
Speaker 1: wrap it up, spank it on the bottom, and send

1003
00:55:56,920 --> 00:56:03,399
Speaker 1: it off to Stuff podcast and i heeart radio dot com.

1004
00:56:02,520 --> 00:56:05,200
Speaker 1: Radio Stuff you Should Know is a production of iHeart

1005
00:56:05,280 --> 00:56:08,200
Speaker 1: Radio's How Stuff Works. For more podcasts for my heart Radio,

1006
00:56:08,280 --> 00:56:10,920
Speaker 1: visit the iHeart Radio app, Apple podcasts or wherever you

1007
00:56:11,000 --> 00:56:13,080
Speaker 1: listen to your favorite shows. H