WEBVTT - The Impending Student Loan Cliff #707 0:00:00.120 --> 0:00:01.440 Welcome to out of money. 0:00:01.480 --> 0:00:03.960 I'm Joel and I am Matt. 0:00:04.120 --> 0:00:07.240 Yes he is, and today we're talking about the impending 0:00:07.480 --> 0:00:08.360 student loan cliff. 0:00:27.840 --> 0:00:30.920 That's right, buddy, we are talking about student loans, and 0:00:31.200 --> 0:00:33.040 it's there's a good reason for us to talk about 0:00:33.040 --> 0:00:35.960 this because there are changes on the horizon. Even though 0:00:36.000 --> 0:00:39.600 I personally am not affected, I am actually fortunate. Either 0:00:39.720 --> 0:00:43.680 Kate nor I were fortunate enough some would say privileged 0:00:43.800 --> 0:00:46.920 enough to not have any student loans by the time 0:00:47.040 --> 0:00:49.640 we are we know ever, but certainly when we graduated, 0:00:49.720 --> 0:00:51.919 Emily and I we both had student loans, and we're 0:00:51.960 --> 0:00:54.160 currently paying cash for her grad school, so we've paid 0:00:54.160 --> 0:00:57.520 for education over here, but it's paid a little bit 0:00:57.560 --> 0:01:00.720 of a little bit of interest on your your higher education. 0:01:00.720 --> 0:01:02.760 I will say we were lucky when when we graduated, 0:01:02.880 --> 0:01:05.360 rates words were crazy, crazy low on the student loans. 0:01:05.360 --> 0:01:07.800 So it but there's a lot of good news for 0:01:07.800 --> 0:01:10.319 people who have student loans. If you're like the erabous 0:01:10.360 --> 0:01:12.440 about what's coming this fall, yes there's a cliff coming, 0:01:12.480 --> 0:01:14.640 but that cliff has been I don't know, there's like 0:01:14.760 --> 0:01:16.360 a soft pad at the bottom of the cliff for 0:01:16.400 --> 0:01:18.320 a lot of people, given kind of all the changes 0:01:18.319 --> 0:01:20.440 that are that have occurred. We're going to discuss all 0:01:20.440 --> 0:01:20.880 that today. 0:01:20.920 --> 0:01:23.880 It's like one of those blow up mattresses the firefighters, 0:01:23.880 --> 0:01:26.480 but right there's a jumper where they're like, as long 0:01:26.480 --> 0:01:28.560 as you land within the circle exactly, we think that 0:01:28.600 --> 0:01:31.240 there is a maybe a soft landing ahead for you. 0:01:32.040 --> 0:01:34.560 But Matt, before we get to that, I just wanted 0:01:34.600 --> 0:01:37.560 to mention really quickly that one of my tenants, they 0:01:37.600 --> 0:01:39.360 reached out for the email and they said, Hey, we're 0:01:39.360 --> 0:01:41.640 thinking about changing the way we pay you every month. 0:01:41.760 --> 0:01:43.560 Is that okay? And I was like, well, we can 0:01:43.600 --> 0:01:46.160 pay you in pennies. What's you thinking? That would be 0:01:46.200 --> 0:01:46.640 messed up? 0:01:46.840 --> 0:01:49.200 Pay you in greasy pennies? Coded and motor oil I did. 0:01:49.200 --> 0:01:51.240 It was a story we talked about like three yeah, 0:01:51.400 --> 0:01:52.080 two three years ago. 0:01:52.120 --> 0:01:53.920 I made a bet one time with a friend and 0:01:54.360 --> 0:01:56.800 he about whether or not one one player was going 0:01:56.880 --> 0:01:58.240 to make the All Star Game. I won the bet 0:01:58.240 --> 0:02:01.200 and he paid me in pennies. You're so man, but 0:02:01.600 --> 0:02:03.680 what you get right? But so no, my tenant was like, Hey, 0:02:03.720 --> 0:02:05.320 I think I'm gonna pay with this this thing called 0:02:05.320 --> 0:02:08.240 the built master Card. And I was like, I'm so. 0:02:08.200 --> 0:02:10.040 Proud of them I know about the built card. 0:02:10.120 --> 0:02:11.640 Ye talk about that all the time. I was like, 0:02:11.680 --> 0:02:14.120 this is going to add one small extra hassle every 0:02:14.120 --> 0:02:16.640 week or every month right when I collect rent, because 0:02:16.680 --> 0:02:18.280 now I have to actually like take a picture of 0:02:18.280 --> 0:02:20.400 the check and deposit it. But still not really that 0:02:20.440 --> 0:02:23.040 big of a deal. And the tenant now gets the rewards. 0:02:23.080 --> 0:02:25.600 And I've never I haven't been on the receiving. 0:02:25.280 --> 0:02:28.400 End yet someone using it. Sure can't you enroll in 0:02:28.440 --> 0:02:31.480 within the belt program the platform and then it gets 0:02:31.520 --> 0:02:34.120 sent directly to you? Is that? 0:02:34.240 --> 0:02:36.360 Is that not correct? Oh? As a landlord? Yeah, dude, 0:02:36.480 --> 0:02:37.679 I should have thought of that, and I don't. I 0:02:37.680 --> 0:02:40.400 haven't even thought of that now, So I don't know. 0:02:40.480 --> 0:02:40.840 I haven't. 0:02:40.880 --> 0:02:42.600 Like obviously we've talked about all the show and I 0:02:42.639 --> 0:02:44.240 know something about it, But like, do you actually get 0:02:44.240 --> 0:02:46.480 rewards too, like as as the receiver, No. 0:02:46.440 --> 0:02:48.480 I don't think so that's just the pay. But it's 0:02:48.520 --> 0:02:50.480 just a good reminder too, you have boom. You don't 0:02:50.480 --> 0:02:53.919 need to keep your iPhone after all, you don't need that. 0:02:54.000 --> 0:02:57.000 Nicer Cameron, No, that pictures of the checks the pixel 0:02:57.040 --> 0:03:00.840 camera was just fine, but it's important mentioned to to 0:03:01.080 --> 0:03:03.680 people out there who are renting. This is the built 0:03:03.680 --> 0:03:06.639 Master card. It's the only card out there that rewards 0:03:06.680 --> 0:03:08.760 you for paying your rent with a credit card. And 0:03:08.840 --> 0:03:11.880 so obviously, as Matt and I always say, be responsible 0:03:11.880 --> 0:03:13.799 with your credit card. If you can't pay the balance 0:03:13.840 --> 0:03:15.520 off on time and in full every month, it's not 0:03:15.560 --> 0:03:18.920 for you skip it, but it's mortgage can yeah, and 0:03:18.960 --> 0:03:21.440 mortgage payers they don't get the same perk, but but 0:03:21.560 --> 0:03:23.760 renters do. So the built Master Parts School, We've got 0:03:23.800 --> 0:03:25.679 a review. We'll link to that in the show notes. 0:03:25.720 --> 0:03:27.040 But I was like, I was just so proud of 0:03:27.040 --> 0:03:29.799 my tenant earning rewards on that payment, like. 0:03:29.960 --> 0:03:32.600 A proud parent. Do you have like a sense of 0:03:33.120 --> 0:03:36.320 like a paternal sort of feeling towards your tenants in 0:03:36.360 --> 0:03:36.920 a certain way. 0:03:37.040 --> 0:03:39.000 Not really, I mean there's sometimes I can, Like I 0:03:39.040 --> 0:03:40.480 told him, I was like, oh, dude, because I want 0:03:40.520 --> 0:03:41.720 some congrats. 0:03:41.200 --> 0:03:43.520 But I want them to do well and when they're 0:03:44.120 --> 0:03:46.800 making the right financial decisions, because like you get to 0:03:47.000 --> 0:03:49.440 know them and their finances a little bit in the 0:03:49.600 --> 0:03:51.800 screening process. I'm rooting for them, but I try not 0:03:51.880 --> 0:03:53.240 to bring it up as a topic. You know, I 0:03:53.240 --> 0:03:55.480 don't bring it up. But when they, for instance, are 0:03:55.520 --> 0:03:58.440 paying on time, and when you know that maybe they 0:03:58.520 --> 0:04:00.680 had an issue with that, or or maybe they had 0:04:00.720 --> 0:04:02.520 a bunch of debts in the passing. Granted, I don't 0:04:02.560 --> 0:04:05.920 know how caught up they might be now like at 0:04:05.920 --> 0:04:07.960 the time I knew where they were when it came 0:04:07.960 --> 0:04:11.560 to screening. But even still, the ability to not only 0:04:11.640 --> 0:04:14.440 sometime paying on time, but even paying slightly early, it all, 0:04:14.880 --> 0:04:17.039 it just it bodes well, right Like it makes me 0:04:17.080 --> 0:04:19.159 think that, Okay, I think they're doing a good job 0:04:19.200 --> 0:04:21.479 over there, makes me feel feel good about what it 0:04:21.560 --> 0:04:24.000 is that they're up to. But cool man. 0:04:24.080 --> 0:04:24.279 Yeah. 0:04:24.320 --> 0:04:26.279 Again, We'll make sure to link to that built card 0:04:26.320 --> 0:04:28.960 review if you are looking, if you are interested in 0:04:29.800 --> 0:04:31.800 getting one of those, we'll link to that there in 0:04:31.839 --> 0:04:34.400 the show notes. Let's introduced the beer that we're going 0:04:34.440 --> 0:04:36.760 to enjoy during this episode. Buddy, This is an IPA 0:04:37.480 --> 0:04:39.920 and I know that because on the can here from 0:04:40.040 --> 0:04:41.640 Japan it says beer I PA. 0:04:41.800 --> 0:04:43.159 It's literally the only thing you can read. 0:04:43.040 --> 0:04:45.080 And there's a bunch of Japanese on there, and actually 0:04:45.120 --> 0:04:47.239 I looked it up, and so we know the actual 0:04:47.360 --> 0:04:49.800 name of the brewery of the brewery now, but I'm 0:04:49.800 --> 0:04:52.239 not going to try to say it it's a total 0:04:52.240 --> 0:04:54.560 mouthful except for people what they want to hear. So 0:04:54.760 --> 0:04:58.599 waku wako that's I'll say that part. But you sound 0:04:58.680 --> 0:05:02.840 like Fozzy from the Muppets right now. Waka waka waku 0:05:02.920 --> 0:05:06.120 waku tezukori farm kawakita. 0:05:06.440 --> 0:05:08.560 I guess this is a very good I think I'll 0:05:08.560 --> 0:05:09.440 give you an A plus one. 0:05:09.440 --> 0:05:12.880 That's again from Julia. We're looking forward to uh enjoy 0:05:13.800 --> 0:05:15.320 do I just maybe did you ever watch the wedding 0:05:15.360 --> 0:05:16.240 singer back in the day? 0:05:16.320 --> 0:05:17.599 Julia? Julia? 0:05:17.640 --> 0:05:21.480 Gulia, Uh, Juli. We're not making fun of your name, 0:05:21.560 --> 0:05:23.599 unless I guess your last name was Gulia, which I 0:05:23.600 --> 0:05:26.159 don't think it is. But we will let everyone know 0:05:26.200 --> 0:05:28.520 our thoughts on this beer at the end of the episode. 0:05:28.560 --> 0:05:30.320 For sure. I always fun to have something a little, 0:05:30.680 --> 0:05:32.920 a little out there from the other side of the world. 0:05:32.960 --> 0:05:35.000 So literally, you would have to go to Japan in 0:05:35.120 --> 0:05:37.520 order to try this beer, which is here. We are 0:05:37.520 --> 0:05:39.120 in a shortlist of places to visit. By the way, 0:05:39.120 --> 0:05:41.559 for real, I want to catch a baseball game in Japan? 0:05:41.800 --> 0:05:44.360 Is that going to be our next the next couple's trip? 0:05:44.400 --> 0:05:47.320 Maybe maybe next year. That's so, that's an expensive flight. 0:05:47.400 --> 0:05:49.599 They got a great coffee culture over there too, do they? Yeah, 0:05:49.640 --> 0:05:51.280 Oh my god, you don't know about this. No, oh, 0:05:51.279 --> 0:05:53.799 you got a good coffee culture. There's a YouTube rabbit 0:05:53.800 --> 0:05:54.600 hole you can go down there. 0:05:54.680 --> 0:05:57.800 Yes, yes, Okay, dude, like I don't spend enough on 0:05:57.960 --> 0:06:00.360 uh coffee coffee paraperialia us. 0:06:00.520 --> 0:06:02.320 All right, well let's get to the topic and hand Matt, 0:06:02.360 --> 0:06:05.040 we're talking about the impending student Luan Cliff, and it 0:06:05.120 --> 0:06:07.160 made me think, Yeah, I'm guessing there's some how to 0:06:07.200 --> 0:06:10.359 money listeners out there, myself included, who have had a 0:06:10.400 --> 0:06:12.640 health issue that maybe they chose to ignore for a 0:06:12.680 --> 0:06:15.040 little while, maybe there was like a mole on their back, 0:06:15.080 --> 0:06:16.760 and they're like, eh, I'll get a checked out at 0:06:16.760 --> 0:06:19.559 some point in the future. And you know you should 0:06:19.560 --> 0:06:22.600 go see a dermatologist. Right, So it's the ABC's right. 0:06:22.640 --> 0:06:25.599 You look for what is it, asymmetry, the border and 0:06:25.640 --> 0:06:27.839 the color. I still know that I remember from dude. 0:06:27.839 --> 0:06:29.880 It was all those days of sitting in the dermatologist's 0:06:29.880 --> 0:06:32.120 office as a teenager with all my zits. All right, well, 0:06:32.640 --> 0:06:34.760 now I'm reading the skin cancer. Now I could run 0:06:34.839 --> 0:06:36.520 my skin issues by you before I go see a pro. 0:06:36.680 --> 0:06:40.880 ABC's asymmetry border and color. If you got some irregular 0:06:41.040 --> 0:06:43.280 irregularities there, buddy, you might want to go and get 0:06:43.279 --> 0:06:45.240 that thing looked at it. Right Well, no, I'm fine 0:06:45.320 --> 0:06:47.320 right now, at least as far as I know. I mean, 0:06:47.440 --> 0:06:49.479 have you had Emily look you over. We have, It's 0:06:49.560 --> 0:06:51.040 the end of the summer. You just spent a lot 0:06:51.040 --> 0:06:51.880 of time outside. 0:06:52.400 --> 0:06:56.000 I'll ask her tonight. I got your back, okay. Well, 0:06:56.040 --> 0:06:58.679 And the truth is, some of those little things could 0:06:58.720 --> 0:07:02.040 be like, not a big deal. It could be completely 0:07:02.440 --> 0:07:05.279 it could be not a problem. You might be overanalyzing, overthinking. 0:07:05.279 --> 0:07:07.280 You're like, it's regular old mole, literally just a mole. 0:07:07.320 --> 0:07:10.680 Get not a big deal. Sure, but you could be 0:07:10.760 --> 0:07:13.440 risking something though by doing nothing. And the longer we 0:07:13.520 --> 0:07:15.200 kick the can down the road, the bigger the problem 0:07:15.240 --> 0:07:17.400 can become. It can negatively affect your health and then 0:07:17.440 --> 0:07:20.520 your finances because now you're paying for, you know, a 0:07:20.560 --> 0:07:24.440 bigger procedure to get that resolved, and a skin issue 0:07:24.440 --> 0:07:26.400 that could have maybe been resolved with a quick in 0:07:26.480 --> 0:07:29.240 office visit. Now it's like you got to see the 0:07:29.280 --> 0:07:32.280 surgeon or something like that. And you know, we might 0:07:32.280 --> 0:07:35.240 have given this episode an intense title, but the truth is, 0:07:35.280 --> 0:07:37.400 tens of millions of folks feel like there's this impending 0:07:37.400 --> 0:07:41.400 cliff coming in October when payments resume, like they're walking 0:07:41.440 --> 0:07:43.320 the plank or something like that. To take it back 0:07:43.320 --> 0:07:45.880 to kind of the I just finished reading Treasure Island, 0:07:45.920 --> 0:07:47.280 so I guess I have Pirates on the mind. That's a 0:07:47.280 --> 0:07:49.280 good one. It's just revisiting some of the classics, is 0:07:49.360 --> 0:07:51.080 what I'm doing. But we're going to talk about that 0:07:51.440 --> 0:07:54.600 and the impending reality, basically what to do about it 0:07:54.640 --> 0:07:56.200 so that you can have a plan and so that 0:07:56.240 --> 0:07:59.520 you can rest easier, maybe maybe see that giant patting 0:07:59.560 --> 0:08:01.440 at the bottom of that cliff and sure not feel 0:08:01.520 --> 0:08:03.160 as daunted by what's coming. 0:08:03.320 --> 0:08:06.640 Yeah, you might still lose your lunch as your folly, 0:08:06.720 --> 0:08:09.960 but the actual impact isn't going to be what you 0:08:10.200 --> 0:08:13.360 thought it would be. But the biggest problem, man, is that, honestly, 0:08:13.400 --> 0:08:15.080 like a lot of folks, they just didn't use the 0:08:15.120 --> 0:08:20.280 payment pause as the financial catalyst that it could have been. Instead, 0:08:20.320 --> 0:08:22.960 we kick the can down the road. Instead of getting 0:08:22.960 --> 0:08:25.200 that mole checked out, you just keep waiting and boom, 0:08:25.200 --> 0:08:26.520 all of a sudden, Yeah you got to go under 0:08:26.520 --> 0:08:29.800 the knife. It's something that we've just a lot of 0:08:29.840 --> 0:08:33.520 folks have avoided is paying any attention to their student loss, 0:08:33.520 --> 0:08:36.600 and not only just on borrowers' behalf, Like not only 0:08:36.600 --> 0:08:39.040 on you know that is this something that they did, 0:08:39.080 --> 0:08:41.160 but the government did as well. This is something that 0:08:41.520 --> 0:08:46.280 kept getting prolonged, which only cemented the out of sight, 0:08:46.600 --> 0:08:48.959 out of mind sort of mindset that I think a 0:08:49.000 --> 0:08:51.000 lot of folks took towards their student loans. 0:08:51.040 --> 0:08:53.720 People started to think, oh, sure, payments are going to resume, 0:08:53.760 --> 0:08:55.480 because like by the fifth kick the can, you're like 0:08:55.880 --> 0:08:59.760 maybe again, And especially when we were talking about forgiveness 0:08:59.760 --> 0:09:01.360 and all that kind of stuff, and I think people 0:09:01.559 --> 0:09:05.360 just assumed understandably, so, hey, guess what these student loans, 0:09:05.440 --> 0:09:06.560 somebody else is gonna take care of them. 0:09:06.640 --> 0:09:09.200 Yeah, but it's honestly, it's something that we have been 0:09:09.240 --> 0:09:11.680 recommending for folks to do, you know, like not having 0:09:11.760 --> 0:09:13.400 to make any payments for three and a half years. 0:09:13.480 --> 0:09:16.160 It could have been massively helpful, and honestly it was 0:09:16.200 --> 0:09:17.760 for some We've heard from a ton of how to 0:09:17.800 --> 0:09:21.640 money listeners who made hay while the sun was shining 0:09:21.720 --> 0:09:24.160 right they saved up a massive nest egg to pay 0:09:24.200 --> 0:09:26.640 off a big chunk all at once, or even to 0:09:26.760 --> 0:09:30.280 eliminate those loans altogether. But that wasn't the case for everyone, 0:09:30.400 --> 0:09:33.360 as you might imagine. A recent survey found that one 0:09:33.600 --> 0:09:38.080 in three borrowers spent money instead of saving it because 0:09:38.080 --> 0:09:40.080 they thought that they wouldn't have to actually pay their 0:09:40.120 --> 0:09:41.240 loans back, because all. 0:09:41.080 --> 0:09:43.200 The messaging was telling them that it's going to be true. 0:09:43.240 --> 0:09:47.360 Yeah, those forgiveness attempts by the government, they actually hurt 0:09:47.440 --> 0:09:50.360 people financially because they ended up counting their chickens before 0:09:50.360 --> 0:09:50.720 they hash. 0:09:50.840 --> 0:09:51.040 Right. 0:09:51.520 --> 0:09:53.520 It makes me think one of our favorite quotes from 0:09:53.600 --> 0:09:57.880 Morgan Housel, which is save like a pessimist and invests 0:09:58.200 --> 0:10:00.920 like an optimist. And so we're looking at the saving 0:10:01.320 --> 0:10:04.800 like a pessimist side of that quote, and folks did 0:10:04.840 --> 0:10:09.200 the exact opposite. They spent like optimists. They spent like 0:10:10.080 --> 0:10:13.240 this was going to continue. It just only reinforces like 0:10:13.320 --> 0:10:15.800 recency bias, where you're only looking at the past, like 0:10:15.920 --> 0:10:17.640 just the recent period of time, and you're thinking that 0:10:17.679 --> 0:10:20.160 things are going to continue like they have been. There's 0:10:20.160 --> 0:10:22.960 another another paper from the University of Chicago, and they 0:10:23.000 --> 0:10:27.199 found that borrowers whose payments were paused, and this is 0:10:27.280 --> 0:10:30.760 regardless of their income, they took on more credit card. 0:10:30.800 --> 0:10:33.960 They took on more mortgage and auto loan debt than 0:10:34.040 --> 0:10:38.320 borrowers whose payments weren't on hiatus. It's clear that there 0:10:38.320 --> 0:10:41.480 are a lot of folks who did the exact opposite 0:10:42.000 --> 0:10:44.679 thing that they should have done, and there's it's almost 0:10:44.720 --> 0:10:46.440 like there's a reckoning. But the good news is that 0:10:46.440 --> 0:10:48.200 there are some things, like you said, that are going 0:10:48.240 --> 0:10:50.240 to help lessen the fall as we approached that cliff. 0:10:50.320 --> 0:10:51.880 Yeah, and so we'll get to that. That's that's really 0:10:51.920 --> 0:10:53.319 we're going to talk about here in just a bit. 0:10:53.400 --> 0:10:55.200 That the Save Plan is what it's known as, and 0:10:55.200 --> 0:10:57.720 there's a whole lot of stuff to talk about on 0:10:57.720 --> 0:11:00.280 that and how it's going to change your life if 0:11:00.320 --> 0:11:02.120 you're a student loan borrow Really it's going to change 0:11:02.120 --> 0:11:04.000 your finances in a big way. But at that same 0:11:04.000 --> 0:11:07.040 paper you just referenced, the one from the University of Chicago, 0:11:07.040 --> 0:11:10.440 it said that American households live in hand to mouth fashion. 0:11:10.559 --> 0:11:13.360 Is what they said. They just spend whatever comes in, which, 0:11:14.000 --> 0:11:17.120 in my experience and from what we see, isn't terribly 0:11:17.160 --> 0:11:19.560 far from the truth. Right, three quarters of the people 0:11:19.600 --> 0:11:21.640 in the survey you just mentioned said they were confident 0:11:21.880 --> 0:11:24.440 that debt relief was coming. They believed it was coming, 0:11:24.520 --> 0:11:26.559 and so they spent like it was bound to happen. 0:11:26.840 --> 0:11:29.440 And now fifty eight percent of folks say they're unprepared 0:11:29.480 --> 0:11:31.760 for student loan payments to resume. And we again, we 0:11:31.840 --> 0:11:34.640 totally understand why people feel this way. It kind of 0:11:34.640 --> 0:11:36.760 felt like the wol was pulled over your eyes. You 0:11:36.800 --> 0:11:39.400 were told something that didn't end up being true. The 0:11:39.520 --> 0:11:43.520 confidence with which student loan forgiveness was proposed and almost implemented, 0:11:43.559 --> 0:11:45.640 it led a lot of people to believe that they 0:11:45.640 --> 0:11:47.520 weren't going to be on the hook for the remainder 0:11:47.559 --> 0:11:49.240 of their loans, or that a big chunk was going 0:11:49.240 --> 0:11:50.600 to be forgiven, which was going to give you more 0:11:50.600 --> 0:11:54.720 breathing room. They planned based on the confident assertions and 0:11:54.840 --> 0:11:57.760 promises of elected officials, and then they were let down. 0:11:57.960 --> 0:12:01.480 And this isn't the first time politicians let somebody down, 0:12:01.760 --> 0:12:04.280 but it almost feels like it's even more of an 0:12:04.320 --> 0:12:07.440 injustice because it caused people to believe something that wasn't 0:12:07.480 --> 0:12:09.959 true for so long that they're in a worse position 0:12:10.080 --> 0:12:12.800 now than they would have been had that promise never 0:12:12.840 --> 0:12:13.720 even been made in the first place. 0:12:13.800 --> 0:12:16.840 Yeah, Yeah, it made it worse. And the fact is, 0:12:16.880 --> 0:12:18.640 if you would have been listening to the show, you 0:12:18.800 --> 0:12:21.760 would have heard us in telling you about this basically 0:12:21.920 --> 0:12:25.360 like heads up, and you might not have liked what 0:12:25.360 --> 0:12:28.160 we said over the past, you know, three plus years 0:12:28.200 --> 0:12:31.719 about preparing for student loans to resume and the unlikeliness 0:12:31.720 --> 0:12:34.840 of forgiveness to actually become reality. But we did end 0:12:34.920 --> 0:12:36.600 up being right in this case. And it's a I've 0:12:36.640 --> 0:12:38.520 told you some moments why I'm not going to say it. 0:12:38.520 --> 0:12:39.640 I'm not going to say it, but we do want 0:12:39.720 --> 0:12:41.800 encourage folks to listen to the show. We don't want 0:12:41.840 --> 0:12:44.360 to dwell on the past, but it is important to 0:12:44.360 --> 0:12:46.920 mention that that political promises are a dime a dozen. 0:12:47.400 --> 0:12:50.120 And if money from the Feds comes your way, sure 0:12:50.120 --> 0:12:51.560 that's great and we're going to talk about it. But 0:12:51.600 --> 0:12:54.760 banking on the government to come through in the clutch, 0:12:54.840 --> 0:12:57.280 it's a poor financial strategy. And of course folks didn't. 0:12:57.440 --> 0:12:59.360 They did the exact opposite of banking that money. They 0:12:59.400 --> 0:13:02.400 just they spent it. Yeah, exactly. They took those promises 0:13:02.440 --> 0:13:05.200 as fact when they weren't facked yet. And it makes 0:13:05.240 --> 0:13:07.319 me think of Matt. Let's say, your kid's gonna be 0:13:07.360 --> 0:13:10.120 less disappointed if you don't get them a pony for 0:13:10.360 --> 0:13:13.080 their birthday, if you didn't promise it in the first place. 0:13:13.120 --> 0:13:15.000 But if you told them you're getting a pony for 0:13:15.040 --> 0:13:17.040 your birthday and then you end up pulling the rug 0:13:17.040 --> 0:13:19.160 out from under them, how disappointing is that, Like it's 0:13:19.160 --> 0:13:22.199 even more their hopes and dreams to that actually happened, right, 0:13:22.240 --> 0:13:25.200 and so because why you always set the barlow right, 0:13:26.440 --> 0:13:28.720 Daddy loves you, but probably not get anything, and then 0:13:28.760 --> 0:13:30.600 you get something and then their thrilled boom. 0:13:30.679 --> 0:13:35.160 Yeah, parenting hack exactly. If you want to save money 0:13:35.160 --> 0:13:36.560 as a parent, that's the way to do it. But 0:13:36.640 --> 0:13:38.360 that's you know, we try to stay away from politics 0:13:38.400 --> 0:13:41.240 on the show, but we're very much in campaign season 0:13:41.320 --> 0:13:44.160 right now, and so some of these promises that you're hearing, 0:13:44.360 --> 0:13:46.199 they can sound so nice from people on both sides 0:13:46.240 --> 0:13:48.160 of the aisle, by the way, but keep a healthy 0:13:48.200 --> 0:13:51.520 degree of skepticism when you're hearing those things. Hopefully not 0:13:51.920 --> 0:13:55.200 a disbelief and positive change, But know that many of 0:13:55.200 --> 0:13:58.640 the campaign speeches we hear are even if they're well intentioned, 0:13:58.800 --> 0:14:02.319 they're unlikely to result in sweeping change. Even people that 0:14:02.679 --> 0:14:05.120 I may be a politician that I gravitate towards, or 0:14:05.120 --> 0:14:07.040 that I like or that I respect. I have to 0:14:07.120 --> 0:14:10.040 keep take everything they say with a grain of salt, 0:14:10.040 --> 0:14:12.520 because I know that there's a decent chance a lot 0:14:12.520 --> 0:14:14.080 of things they want to do they can't actually. 0:14:13.880 --> 0:14:15.640 Get done and not actually going to be able to implement. 0:14:15.880 --> 0:14:18.000 They might have the right ideas, but what's the reality 0:14:18.040 --> 0:14:21.160 of that actually coming to fruition. But so let's also 0:14:21.200 --> 0:14:24.440 talk about just like the larger impacts, like the macro 0:14:24.520 --> 0:14:27.200 impacts of student loans resuming. And first of all, this 0:14:27.240 --> 0:14:30.480 could help calm inflation even more than we've seen it 0:14:30.480 --> 0:14:32.640 come down over the past few months. I know it's 0:14:32.640 --> 0:14:35.080 not quite the silver lining that you're looking for if 0:14:35.120 --> 0:14:38.040 you have a four hundred and fifty dollars payment that 0:14:38.320 --> 0:14:41.360 is exiting your spending account every single. 0:14:41.240 --> 0:14:44.040 Month, cold comfort something, shut up, Matt. 0:14:44.200 --> 0:14:47.640 But the financial constraints that student loans will create, oddly enough, 0:14:47.640 --> 0:14:49.720 it could be good for the economy as a whole. 0:14:49.840 --> 0:14:53.040 It's like the exact opposite of Semischek's which were a 0:14:53.080 --> 0:14:55.760 big reason obviously, I mean, why we were in this 0:14:55.880 --> 0:14:59.280 current inflation situation again, though we have seen it subside 0:14:59.360 --> 0:15:01.720 a little bit but this will also cost taxpayers a 0:15:01.720 --> 0:15:05.720 pretty penny. As we've been saying, this is actually more 0:15:05.880 --> 0:15:10.080 generous than the actual the straight up forgiveness that the 0:15:10.120 --> 0:15:13.440 administration Biden administration was going for. In the New York Times, 0:15:13.520 --> 0:15:16.120 they recently confirmed that and over the next decade, this 0:15:16.160 --> 0:15:20.000 could be a trillion dollar wealth transfer program. Yeah, it's 0:15:20.040 --> 0:15:20.760 a lot of money. 0:15:20.800 --> 0:15:22.280 It could be like what in the first ten years, 0:15:22.320 --> 0:15:25.480 something like four hundred and fifty billion, But over twenty plus, 0:15:25.680 --> 0:15:27.760 I mean, yeah, we can get to that trillion dollar market. 0:15:27.840 --> 0:15:30.280 So this is going to cost more, in our likelihood 0:15:30.320 --> 0:15:32.520 than that straight up forgiveness amount that people were so 0:15:32.560 --> 0:15:34.520 excited about. Well, this could be this can make a 0:15:34.520 --> 0:15:36.400 bigger impact, but it's also going to have a bigger 0:15:36.440 --> 0:15:39.000 impact on people, you know what, the federal government are. 0:15:39.320 --> 0:15:41.120 Folks aren't as excited about it though, because it's not 0:15:41.160 --> 0:15:43.800 the sexy sure, Like people aren't patient, right, and so 0:15:43.880 --> 0:15:46.480 the basically saying that, like, over the course of time, 0:15:46.600 --> 0:15:48.680 this will be better for you, people don't want that. 0:15:48.720 --> 0:15:52.400 They want the they want the whatever the sexy option is. 0:15:52.760 --> 0:15:55.080 Forgiveness sounds so much better, But the truth is this 0:15:55.200 --> 0:15:58.280 is kind of like forgiveness under another name, because it's 0:15:58.440 --> 0:16:02.120 just gonna dramatic lower the amount that people have to 0:16:02.160 --> 0:16:04.760 pay towards their student loans, a good portion of people, 0:16:04.760 --> 0:16:08.120 and so for a large swath of people without standing 0:16:08.160 --> 0:16:11.560 student loan debt, it's going to have a bigger impact. Yes, 0:16:11.720 --> 0:16:14.080 a bigger impact than that blanket ten or twenty K 0:16:14.360 --> 0:16:16.440 worth of loan forgiveness that you were hoping for. And 0:16:16.480 --> 0:16:19.200 so that is how big this Save Plan is. It's 0:16:19.200 --> 0:16:20.680 going to cost a lot of money, but it's going 0:16:20.760 --> 0:16:24.000 to have a big impact. And so the biggest cost 0:16:24.080 --> 0:16:26.960 center of the Save Plan is those lower payments that 0:16:27.080 --> 0:16:29.120 it's going to create for most people, for tens of 0:16:29.120 --> 0:16:31.160 millions of people really. So we're going to talk about 0:16:31.200 --> 0:16:33.720 the SAVE plan next, how it works, how much you 0:16:33.760 --> 0:16:36.600 might save, and some of those gory details for how 0:16:36.640 --> 0:16:38.160 impactful it can be for you. We'll get to that 0:16:38.360 --> 0:16:38.960 right after this. 0:16:48.680 --> 0:16:52.800 All right, we're back from the break talking about the Specifically, 0:16:52.800 --> 0:16:54.960 we're going to talk about the SAVE Plan. What does 0:16:55.000 --> 0:16:59.400 it stand for? Again, Saving Americans valuable valuable education. Yeah, 0:17:00.120 --> 0:17:03.440 like that again, it's the acronym. It's political, doesn't really 0:17:03.440 --> 0:17:05.520 matter what it stands for. It's the Safe Plan. It's 0:17:05.520 --> 0:17:08.640 just it's branding, right, and branding gets used by companies 0:17:08.640 --> 0:17:10.399 all over the place, but it also gets used by 0:17:10.400 --> 0:17:12.600 the federal government and politicians. Stud you got to sell 0:17:12.640 --> 0:17:15.240 these ideas. A quick note, I wanted to mention, we're 0:17:15.240 --> 0:17:17.960 talking about federal loans here. By the way, this does 0:17:18.000 --> 0:17:21.600 not go towards private loans. Those are very different. Those 0:17:21.600 --> 0:17:25.280 don't come with the same opportunities and these federal benefits 0:17:25.600 --> 0:17:28.880 plus the forgiveness opportunities that we're going to describe here. 0:17:29.119 --> 0:17:31.960 So if you have federal loans, we would encourage you 0:17:32.000 --> 0:17:36.560