Student Loan Shakeup w/ Travis Hornsby #977

Episode Transcript
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Speaker 1 (00:00):
Welcome to Hoa of Money. I'm Joel, I'm Matt. Today
we're talking about the student loan shakeup with Travis Hornsby.

Speaker 2 (00:25):
Indeed, Joel, this is a more pressing, a more urgent
interview episode, which we don't typically get to do because
normally it's like a book tour and we're diving into
the book. It's like, do we talk to him now
or do we talk to him in like two months.
Typically it doesn't matter, but that is not the case
giving our topic of conversation today because according to the
new US Education Secretary, it is time for student borrowers

(00:48):
with federal loans to begin making payments. The clock is
taking and May fifth is the date that nearly two
million borrowers are going to be moved into repayment plans
and collections will begin for a loan that are in default.
This is a massive shakeup from what borrowers have experienced
over the past five years. And luckily we're joined by

(01:08):
a founder and CEO of Student Loan Planner, Travis Hornsby,
to parse out all the details. And Travis is very
qualified to talk about this. He has consulted on several
billion dollars of student debt, which is mind boggling. He's
a CFP, he's retired at the age of twenty five
before starting a student loan planner. I don't even know

(01:30):
if we'll have time to get to that, but he
is the man to turn two in response to all
of the latest student loan changes that we are about
to experience. And so Travis Hornsby, thank you so much
for coming on how to Money.

Speaker 3 (01:41):
Absolutely, you know, you know, student loans are pressing, but
they don't have to be depressing, right, and so for
how to Money listeners, it doesn't have to be that way.

Speaker 4 (01:49):
So I'm excited to talk about it today.

Speaker 1 (01:50):
Glad you're here to bring the optimism, my friend. First
question we got to ask you, we ask everybody is
what do you like to sport? John? And I know
you're smart, be as smart with your money. You retired
it twenty five. You know what you're doing, but you
still spoilage every now and again. What is it that
you're throwing big bucks at that most people might think
is a little weird?

Speaker 3 (02:08):
So spiritually I'm like a seven or eight year old boy, right,
So I'm gonna say telescopes and cargo electric bicycles. So
those are my two right now. I'm really into astronomy.
I've got a group of astronomy bros. And we hang
out on the weekends just like you know, compete over
who can get the best picture of Jupiter. And it's
kind of kind of funny to some people that there's

(02:30):
like a group of like astronomy dads just like hang
out and look at the stars. But it's a great
way to get perspective ha ha. You know, you see, like,
oh my gosh, this nebula is like, you know, a
trillion miles away, and you know, you know, like a
billion earths could fit inside it, and oh maybe my
problems aren't as bad. So I kind of really enjoy
it for that reason. And then same kind of thing

(02:50):
for bicycles, Like there's all these awesome electric bikes. I
like cargo ones because I can throw my kids in
them and strap them down, and they're too young to
bike on their own, and so it's just kind of
a cool way that I can turn something that's a chore,
like dropping kids off at school and make it fun, right,
so I get to take them to daycare in preschool,
and like the the electric cargo bike can be one
of those you know, cool Harley Dads except a bicycle.

Speaker 1 (03:12):
That's at least how we envision ourselves. Travis. I don't
know if it's I don't know if that's how other
people see us, but yeah.

Speaker 3 (03:17):
You know, definitely I get some like, oh that guy,
you know, I mean, I definitely there's some definitely views
like that. But you know what, I feel like a
Harley dad and you know another dad got one. So
we're talking about getting leather. You know, jackets made, right,
We're gonna make a biker gang. But it's like, you know,
an electric cargo biker gang. Yeah, so it's you know,
it's it's it's definitely you know, student loans, right, you know,
a weird person's attracted to doing them. So I'm just

(03:39):
you know, showing people my honest self.

Speaker 1 (03:41):
Oh R, let's talk student loans. Let's get into it,
because I'm curious, first off, Travis, to think about or
to understand how you're thinking about the kind of whiplash
effect of approaches towards student loans. The last administration, there
was this incredibly generous spirit towards people who had student
loans that seems to have evaporated. Now we're encountering i
don't know, almost maybe a hostile vibe. How do you

(04:02):
think about that change and how should student loan borrowers
be feeling.

Speaker 3 (04:08):
So, I mean, I've done this since the A Bomba administration, right,
and so I've definitely seen a lot of different attitudes
on student loans over time. I would say that what's
kind of happened over time with the change in the
political landscape is more and more educated voters have more
drifted towards the Democratic Party, right in terms of like

(04:30):
higher education levels predict more of a Democratic lane than
it used to, right, especially if you think about like
the Republican Party during like the Mitt Romne era in
twenty twelve. And so what's happened is student loans have
sort of drifted from this like kind of non partisan
issue to being more of a partisan issue.

Speaker 4 (04:45):
Right.

Speaker 3 (04:45):
So if we think about like what happened during the
Biden administration, Biden was you know, sort of the choice
of the Democratic Party because they didn't have an alternative
they could coalesce around, right, And President Biden wanted to
unify the support of the progressive base, and so he
viewed student loans is like this very easy policy area
to go big on and to try to go really

(05:06):
big on to maintain that political support to run for
that second term, right, and in the first term of
President Trump. You know, one thing that I would say
for people that are just like really terrified about their
student loans, really worried about what the administration's going to do,
is it's important to have the perspective of the fact
that the Trump administration was the one that started the

(05:26):
student loan pause and paused collections on student loans in
the first place. Right, So there's definitely some some negative
things that are going to happen to some borrowers financially
due to the new policies of the new administration. I
don't want to minimize that, but I do want to
say that everybody would need to have a very balanced
view of what's going to happen with student loans in
the next like few years.

Speaker 1 (05:47):
Right.

Speaker 3 (05:47):
So I would just say, like at a high level,
student un forgiveness is not dead. It's just not going
to be offered on steroids anymore.

Speaker 2 (05:56):
One of the changes that seems like it's going to
take places transitioning student loans like towards the Small Business
Administration looks like they're going to run that. It seems
like a massive potential paperwork nightmare. I guess what do
you foresee being some of the problems with that transition.

Speaker 3 (06:10):
Well, I mean they've fired half of the Department of Education, right,
And there's one person put in a court deposition that
there was six they left when they got fired. There
was sixteen thousand borrower complaints that were in her cue
that she had not answered yet.

Speaker 4 (06:23):
My gosh.

Speaker 3 (06:24):
So it's basically this wasn't working fast enough, is what
you're saying. Yeah, it's her fault, right, you know. But
so the thing is is like, so the new administration
is sort of testing the boundaries to see what the
courts will say is legal and what's not legal. Right,
And the way I would interpret this is they're saying
they're going to move it over to small Business Administration.
I am not convinced that they can do that. The

(06:46):
Secretary of Education is mentioned a whole lot in the statute,
and they can say that they're going to move it
over there. They can try to move it over there
potentially with their big budget reconciliation bill, and maybe that's
what they intend to do is try to pass it
in Congress right to make it legal, or maybe they
just plan to try to move it over there, right.
But what a borrower needs to be concerned about is
what's happened since the Obama administration is presidents have and

(07:08):
the inaction of Congress taken more and more of a
policy making role in student loans by issuing executive actions.
So a lot of the things that have happened in
the past several years, you know, have been the White
House just making press releases about things they're just going
to do, right, And what the Trump administration is doing
is rolling back pretty much anything that the Biden administration
did the executive action that's not written in the statute.

(07:31):
So what that means is if a borrower understands what
kind of loans they have and what they're guaranteed benefits
are in the statute of the law, the borrower can
make a plan for their future. And the confusion is
coming from, you know, all these things that have been
promised to the executive action that don't have the safety
of being a law, and borrowers just don't know how
to plan. So that's a big part of what we're
doing right now is educating borrowers around what are they guaranteed,

(07:53):
you know, with and the law, and what are they
not guaranteed in the law, And then that can help
somebody figure out like do I should I pay these back?

Speaker 4 (08:00):
Like when? Like should I go for forgiveness? Like what should
I do?

Speaker 1 (08:04):
I feel like the most recent news was the op
ed that was written by the Department of Education secretary,
and it seemed like she issued kind of a clearly
line of demarcation and that may fifth date stuck out
in my mind as a really important one. What is
the fallout going to be from, you know, based on

(08:24):
her pronouncement what she's said about the resumption of student
loan payments, Like we've obviously had student loan payments are
supposed to be being made right now except for some
folks who are in limbo on the safe plan, right,
I don't know. It gets all confusing to me, like
where are we at right now? Do people need to
be paying? And how worried should they be if they're
not paying?

Speaker 3 (08:42):
So there's all the kinds of complex issues going on
with this to different types of borrower populations, right, So
to craft this for your listeners, what would you guess
would be the average balance of like how you know
and how to money listener, would you guess like in
terms of the size.

Speaker 1 (08:58):
I'd say twelve thousand dollars. I would say more than that,
because what the average student loan balance of the average
America's upper.

Speaker 4 (09:04):
Thirties, Yeah, which is like an undergrade balance.

Speaker 1 (09:06):
Yeah, I would say maybe something close to that.

Speaker 3 (09:08):
I'm sure it's a range, right, So I'm sure a
lot of your listeners have thirty k and then I'm
sure a lot of your listeners have a lot more
than that. There's probably a long tail of people right that, oh,
you know, high five figures, low six figures, even mid
six figures. So what I would say is, you know,
since the COVID pause and made in March twenty twenty,
the Department of ed Is essentially turned off the vast

(09:30):
collections apparatus of student loans and caused no consequences to
borrowers at all from not caring about them. And what
does that mean? Like, before the COVID pause, something like
thirteen percent of all borrowers were in default and a
lot of borrowers were in forbearance, which was you know,
not as damaging as a default on their record, but
still meant they weren't paying anything. And so if we

(09:53):
think about thirteen percent default rate, that roughly translates to
about five million people. They would be struggling to make
payments at any given time at a baseline. And so
your average person as thirty thousand of student debt, like
they'd have to pay about three hundred a month on
average to pay their loans off completely, right, And the
Biden administration came out with a plan called the Save
Plan that basically allowed most of those borrowers to pay

(10:16):
maybe like zero to one hundred dollars a month, so
it was making their payment far more affordable. Right, So
a lot of those listeners have just either not had
to worry about making payments because they just completely ignored
them and they weren't having their credit scores danked, or
they were signing up for this Save income based payment
plan and they were paying a very low percent of
their income, like five percent of your income, but only
after you make the first thirty or forty thousand. That's

(10:38):
like kind of simplifying things a little bit, but in general,
that's what the formula was, and the courts are saying Hey,
hold up, this Save Plan is not legal because Biden
tried to cancel student debt right, tried to cancel ten
to twenty thousand of all debt for all Americans, and
the Supreme Court said, hey, no, no way, Jose. And
then the response to that was, let's create an income
driven plan that's so generous. It's basically kind of like

(11:00):
the same things like forgiveness light exactly. It was Plan B, right,
And so they came out with Plan B and it
was about to go into law in July twenty twenty four,
and at the last second a bunch of Republican led
states sued and blocked it. And so since June of
twenty twenty four, about eight or nine million borrowers that
did sign up for the Save Plan out of the
forty million or so total, have been on ice and

(11:22):
just frozen in place, not knowing what they should do.
So that's like eight or nine million people. So that's
a lot of your listeners are going to be on
the Save Plan for barants. They're going to know what
that is, right, and they have not been allowed to
switch out of that, which is maddening. So they're saying,
we're turning on all collections may in early May. But
at the same token, they fired half the staff and
there's nobody to process these incometerin repayment applications, and they're

(11:45):
not allowing people that want to get out of this
paused frozen payment situation to get onto something. So are
those people going to be hurt negatively? I don't think
so by and large because Department of Ed knows that
these people haven't been allowed out of this forbearance, and
so those folks are going to have more time than
early May. There are people, though, that have not made
payments for years, that have been in default like before

(12:07):
COVID even, and they are going to start having their
wages garnish, their benefits garnished, and their tax refunds garnished.
So probably the single biggest impact for folks who are
more you know, economically disadvantaged or vulnerable is going to
be those tax refund intercepts. So that is not going
to happen this year because most of those refunds have
already gone out. But what often happens is people kind

(12:29):
of really especially lower income Americans, depend upon those you know,
two three four thousand dollars tax refunds to be able
to pay their bills. Right, So next tax season when
people go in file in like February March, we've had
years worth of you know, not collecting you know, intercepts
and wage garnishments and things like that, and that's going
to get turned on in May, and so people will
notice it right away. I mean, people that have not

(12:50):
paid attention to their loans for years are going to
start having their wages sapped at like fifteen percent of
income on average. So it's it's definitely not going to
be good. But I would say that there's a baseline
of thirteen percent of people being in default even before COVID, right,
so the measuring how bad will it be, I think

(13:11):
you probably need to look at like that baseline to say,
you know, if it's five million people, that's kind of
a normal environment for student and default collections, and if
it's way more than that, which actually I think it
will be way more than that once all of the
protections end. Because you do have people who are not
certified on a current income for their tax returns and

(13:31):
people that are in this eight million people that are
in this forbearance. It's not actually a default yet, but
it will be when they have to get told to
go get on a payment plan, So it could be
I think it could be ten to fifteen million people
that will end up in default, which will be really,
really bad.

Speaker 2 (13:45):
We're kind of transitioning from talking about the policy to
kind of like as practical steps that folks can take,
and when folks aren't able to make these payments, I mean,
they're going to see damage done to let's say their
credit score. Do you have any recommendations for folks when
it comes to just practical steps that they can take
when they aren't able to afford making these payments as
they do resume?

Speaker 3 (14:05):
Absolutely so, I mean I think the first thing is
to figure out what are you eligible for? I remember
I said what is in the statute versus what's an
executive action? So are you a new borrower as of
July twenty fourteen? In other words, did you have an
existing student on balance, you know, on July twenty fourteen
or before, and if you did, the thing you're eligible

(14:26):
for in the law is something called old income based
your payment that's fifteen percent of your income and you
get one hundred and fifty percent of the poverty line
to earn money on before they take that fifteen percent.
So for most people, it's about twenty grand for a
family of one. For a family, you know, a four,
maybe it's more like forty grand, And so they let
you earn that much first before they take fifteen percent.

(14:46):
But everything above that they're going to take fifteen percent.
And within that there's ways that you can pay less.
Right So, if you're a married borrower and you, you know,
are the only person in your household loans, a lot
of people are going to need to look at changing
have they fight all their taxes. So people tend to
file their taxes joint because that's just the default that
most married couples do a lot of married couples could

(15:07):
switch to married filing separate instead, and they could drastically
lower their student loan payments because then it's fifteen percent
of just their income instead of everybody's income.

Speaker 1 (15:15):
Was it that a blip though, too, like a week
or two ago where there was something issued about Mary
filing jointly and hey, if you file separately, we're still
going to treat you the same way. But then they
had to redact that.

Speaker 3 (15:29):
Yes, so I, along with some other people brought this
to the attention publicly of a lot of people urgently
because it was a major, major deal if they were
going to interpret things this way. The reason is is,
if you know what the statute says, which after ten
years of doing this, we do, it says in the
law that married borrowers do have the right to file

(15:51):
separate and exclude their spousal income.

Speaker 4 (15:53):
So it's in the law.

Speaker 3 (15:53):
It's not an executive action. But when one of the
acting Undersecretary of Education made pronouncement and a reply to
a lawsuit, it came out of nowhere. And because in
the same reply they affirmed something called the ps left
Buyback Program, which is a Biden error program that's kind
of generous to borrowers. So it made no sense that
they're ignoring, you know, a major part of the student

(16:16):
loan statutes while also affirming something that's in executive action.
So I raised that issue on X and other places
and said, what gives here right? And it turns out, guys,
that they just literally made an honest mistake, which is
which is which is? And the reason why we know
this is because within literally two or three days, they
came out with a corrective statement saying what we meant

(16:36):
to say was that we will include your spouse and
your family size no matter how you file your taxes,
not that we would include your spouse's income and your
payment calculation regardless of how you file your taxes. So
that's actually a positive for borrowers because instead of a
deduction based on a poverty line of three if you're
married with two kids, now you get a deduction based

(16:57):
on a family size of four. And you know, the
bidenmdministration had actually changed the rules in a negative way
to exclude your spouse from your family size if he
filed separately.

Speaker 1 (17:06):
And that's like an additional child tax credit.

Speaker 4 (17:08):
It is.

Speaker 3 (17:09):
And the reason is because that's how the REGs were
pre COVID, and that's because the court struck down or
you know, is put on ice the save plan rule,
that income based plan that Biden did. He also put
in a ton of changes to regulations around IDR plans,
and the courts don't want to full with figure out
what they're going to pause and not pause, so they
just pause the whole thing. And in some kind of

(17:30):
hilarious ways, it's actually positive benefit to some borrowers because
some of those rules from pre COVID were actually better
than the ones that the Biden administration came out with. Interesting,
So you know, so the thing is is, like, the
ability to file separate is affirmed actually, which is great news.
And most borrowers that listen to this, especially if they're younger,
will have taken out their first student loan as of

(17:51):
July twenty fourteen or after. And what that means is
you actually qualify to pay ten percent of your income
instead of fifteen. And if you're in the private sector,
it's years tell forgiveness instead of twenty five. And that's
written into the statute. So might we see some major
legislation come out of Congress soon from the House Republicans
and Senate Republicans that might try to modify some of that.

(18:12):
It is possible, but it's also likely that they would
grandfather and existing borrowers under current law. And even if
they did make changes, those changes would probably be temporary
in nature because of the legislative maneuver they're going to
have to use to pass their bill for you know,
with the limited majorities they have. So you know, I
would say that I would say this, here's a quick
kind of like way that a borrower can get a

(18:34):
handle on their situation. Right, If you have less debt
than what you earn every year, you probably need to
pay it back. And there's a lot of flexibility you
have in terms of how much you can pay. You
can get on an extended or graduated plan. If you
can't afford to pay the standard plan, you can consolidate
your loans with the government and put them on a
longer term repayment plan you know, amortization schedule. But you

(18:57):
probably do need to pay it back. If you have
two times what you earn every year or more, so
you have debt that's twice your income or more, you
need to go for forgiveness. The only question is is
how and you can optimize that and do a better
job of paying a lot less. And if you're somewhere
in between, if you're one to two times debt of
what you make every year, then the answer to what

(19:17):
should you do with your loans is it depends and
you need to kind of have a careful analysis of
you know, what are your goals, what are your dreams?
You know, what are you willing to do to you know,
in terms of sacrifices to make to pay off loans
versus not payoff loans, and you can still do a
bunch of stuff to lower your payments.

Speaker 4 (19:34):
So most people's.

Speaker 3 (19:35):
Payments are not low as low as they qualify for
because they're not taking advantage of all the loopholes that exist.

Speaker 2 (19:41):
Sure, yeah, and being able to take advantage of those
loopholes depends on understanding and knowing what the law is.
And like you pointed out, that's it seems like there
are more mistakes that are being made these days where
stuff's just kind of getting tossed out there. But I
don't know, at least there was a corrective statement.

Speaker 3 (19:57):
Yeah, positive, you know, look glass half all right.

Speaker 1 (19:59):
Yeah, little silver lining to the shakeup.

Speaker 2 (20:02):
And I love how you're getting to more of these
practical tips and pieces of advice, Travis. We're going to
get some more of that, including whether, just I guess,
the likelihood of whether someone should even consider discharging student
loans through something like bankruptcy, how that's changed.

Speaker 1 (20:15):
We'll get to that and more. Right after this. We're
back still talking with Travis Hornsby, talking about student loans
and the shakeup that's happening in the first you know,
six months of the Trump administration and how that impacts

(20:36):
you as someone who has student loans. One of the
things traves that happened during under the Biden administration was
essentially looser rules about discharging student loans through bankruptcy. And
for as long as I've been alive and been thinking
about these things, student loans through bankruptcy, like getting them
discharged was impossible. And then the Biden administration said, hey,

(20:59):
we we want to make it a little bit easier
for people to pull that off. They had to be
able to prove what basically that they were unable to
pay these student loans back student loans back, and then
they wouldn't be able to How has that changed in
the first four months of the Trump administration? Can people
still Is that still a way that people can get
rid of their student loans altogether?

Speaker 3 (21:19):
Generally speaking, No, it's very difficult to get your student
loans discharged in bankruptcy. I would like to give kind
of a quick rule for people to think about student loans,
like studenton policy tends to get driven by terrible and
horrific headlines. So let me give you an example of this. Right, So,
in the first Trump administration, there was a headline that
a Michigan man who was a combat veteran of Iraq

(21:41):
and Afghanistan suffered a traumatic brain injury when ied exploded,
and had a couple hundred thousand of student loans right
from a graduate degree that he did pre you know,
combat tours. The balance was considered taxable income as a
result of his disability discharge, and so the IRS and

(22:01):
the State of Michigan sent him a nearly six figure
tax bill for his forgiven student loans. This is a
guy who served our country literally suffered a brain injury,
and they gave him a huge tax bill. And what
the Trump administration did and the Tax Cuts and Jobs
Act is made discharge due to disability tax free. When
I say that, I don't say that to say that

(22:22):
the Trump administration is going to be super generous to
people and change bankruptcy laws in a way that most
borrowers would really get excited about.

Speaker 4 (22:28):
Right.

Speaker 3 (22:29):
What I'm saying, though, is if you have ten to
fifteen million people going to student un default like could
happen right like we're talking about on this show. If
that were to happen, the headlines would be so horrific.
The problems in the housing market in other economic markets
would be so bad that they would have to confront
what do we do with student un default? Because right
now they made the rules based off of this like

(22:51):
undoe hardship standard, which is extremely difficult standard to meet
to actually get your loans discharged. And most people they think, well,
if I just stopped making payments, that'll go away. So
that doesn't happen, because what happens when we have collections
turned on, which we're going to have that in early May,
is the government just takes fifteen percent of your income anyway.
And so what I tell people that are you know,
don't want to make student loan payments, are struggling to is, hey,

(23:13):
you might be able to pay ten percent instead of
fifteen percent of your income if you qualify for new
IBr for example, and you won't.

Speaker 4 (23:20):
Wreck your credit.

Speaker 3 (23:21):
Because if the government's going to take fifteen percent through
wage garnishments and tax refunds, they are going to get
their money, right, There's no doubt they're going to get
their money, So you might as well give them less
by voluntarily turning it over instead of involuntarily turning over
and also wrecking your credit. So for bankruptcy, the only
scenarios I think where bankruptcy is something that could be
considered is maybe on private student loans, but only with

(23:42):
the assistance of, you know, a very educated student, own
attorney that understands the consumer laws in your state, because
they're all different on things like statute of limitations and
burden a proof and things like that.

Speaker 2 (23:52):
Yeah, I guess on that note, what other factors should
folks consider if they're like, Okay, maybe you know, maybe
now's a good time to refinance out of a federal
student loan. Maybe I should consider private student loans. What
are some other wellan considerations there?

Speaker 3 (24:04):
You know, the Trump administration here is not going to
last forever, right jokes on SNL aside, right, Like, he
will be done after the second term. And the question
is will a Republican win in twenty twenty eight or
will a Democrat win in twenty twenty eight? What I
would bet is if a Democratic wins in twenty twenty eight,
the federal student loan benefits are going to increase, and
if Republican wins, they will stay the same or decrease. Right,

(24:25):
That's generally a good bet. And so if you are
what I would call a marginal refinancing candidate, Like, you
have five and a half percent federal loans and you
might get a five percent from refinancing. You know what,
federal protections are worth something, and so if you're only
benefiting by like half a percent lower rate, it might
be kind of a good idea to kind of just
keep it federal, make your minimum payments. You know, see

(24:47):
what happens the next three years or so three and
a half years, right, and then if you are just
a slam dunk refinancing case, what is that? First off,
a lot of people are getting zero percent interest in
the same plan for bearance, and you want to benefit
on that until you you're completely done with that, Right,
So if you're getting zero percent, get all your zero
percent you possibly can. Yeah, And when that ends, you'll

(25:07):
have a decision to make. And the decision might be
depending on when you borrow your loans, because the interest
rates of the loans are all different depending on what
year you borrowed. So if you borrowed and your interest
rate is like eight or nine percent and you can
get five percent the private market. Remember that test I
said earlier of do you earn more money than you
have in student loans. So if you have you one
hundred thousand of income, you have fifty thousand of student loans.

(25:29):
Which you could do is do a selective refinancing. You
could say, Okay, anything above a five percent I'm going
to convert that to a private loan or a lower
interest rate, and anything that's you know, three to five,
I'm just going to keep it on the federal market.
So people have a lot of choices in how they
tackle this, right, they could refinance the whole thing. They
could do it with a federal government, which doesn't change
the interest rate, but it does change some of the
terms sometimes in your favor, right, like things like stretching

(25:53):
out the payment terms. So, for example, if you have
over sixty thousand in federal suit of loans, if you
quote unquote refinance with the government, then your payment required
payment goes from like a ten year schedule to a
thirty year schedule. And so that could be really beneficial
for somebody who has a bunch of credit card debt
who's struggling to make their payments and they can't make
the ten year payment, Well, what if you can convert
a tenure payment to a thirty year payment schedule? You'll

(26:14):
have to pay a lot less and you'll get more
breathing room. Right, So there's all kinds of levers that
you can pull, and the key thing is just to
know what, when do you pull which lever and why?

Speaker 1 (26:24):
Yeah, I've heard, I've heard you also make the suggestion
that people think about changing jobs or taking a work
break in order to reduce that student loan payment, bring
the payment down. I guess maybe it's not. It's easier
said than none for a lot of people who are like,
I need a paycheck, Travis, but thank you. So how
do you think some people, though, can implement that strategy

(26:46):
in order to reduce their student loan payments? And when
might that be worth it? Well?

Speaker 3 (26:50):
I mean, so, for example, you do not have to
report when your payment where your income goes up except
at like regularly scheduled intervals. So they're going to tell you, hey,
it's time to recertify your income, so we can calculate
your income based payment of what you should pay every
month on your loans. Right, But what they do allow
you to do is if your income goes down, you
can request an early recertification at Student ad dut Gov

(27:11):
slash IDR And I'll give you an example of this.
We had a client who was on a maternity leave
and the first six weeks were paid and then the
other six weeks were unpaid. And during those latter six weeks,
she was not getting a taxable income. So what I
suggested to her is go to student ad dut gov
slash idr and click on recalculate my payment and state

(27:35):
the truth, which is that at the moment she did that,
she did not have a taxable income that was coming
in right during the six weeks window that she did
not have a taxable income coming in. That was a
true statement, and so she was able to re calculate
her payment to a much lower number. So, if you're
in between jobs for a couple months, if you are
doing a a sabbatical from your job, if you're doing

(27:56):
what I did when I was in my twenties, traveling
the world, taking a break from where, it is within
your rights to go to your student loan website student
a dut gov slash IDR and get your payment recalculated
to a much much lower number.

Speaker 1 (28:07):
How long does it last? Like so she goes back
to work and then her payment doesn't go up, right,
when she goes back day one.

Speaker 4 (28:15):
Right, we all it depends the keys.

Speaker 1 (28:16):
What TRAVI said, you said regular intervals. What are those intervals?

Speaker 3 (28:19):
Yeah, it depends on the person. So what happens is
most people when they graduate, graduate in the spring, and
you have a six month grace period if you don't
do anything otherwise. So most people, if they do nothing,
are going into a like they graduate in June. Six
months after that is like November December, that's when they
get their first payment due. And so for that person,
their recertification date for their income based payment plan is

(28:41):
going to be November December every year at the same time. Right,
So if she's on this maternity leave, she might get
you know, the point at which she recalculated her payment
until her next recertification date with low payments, and then
you know what would happen is when she goes to
recalculate her new payment, she could do is to say, well,

(29:02):
you know, is my current income lower or higher than
my last tax return. If it's higher than my last
tax return, then she wants to use her last tax
return to recertify her income at her next recertification date
when she has to report her income for calculating her
IBr payment. Right, So for example, let's say you know,
she's making one hundred twenty K a year, you know,
and let's say she has to recertify every year in

(29:23):
December or something. So if she has this you know,
unpaid maternity leave, she recalculates her payment to basically zero,
and then her next you know, let's say her next
recertification date, she's back to making one hundred and twenty
K year. Well, since she had a maternity leave or
she was making nothing, maybe her prior year tax atturn
is showing one hundred K of income, so she'd rather
use that to recertify her income instead because it's going

(29:46):
to give her a lower payment. So that's kind of
that's kind of what I mean about just knowing what
are you allowed to do based off of the rules
and the laws. And you know, that's why most people
pay too much, is because they're not taking advantage of
what they're able to do legally.

Speaker 2 (29:58):
Sure, I think some folks might have call them like loopholes,
but no, it's this is just truly what the law states.
And so to put a fine point on it, it is
an annual recertification because I thought I saw something about
enrollments in these IBr plans not requiring recertification every single year.

Speaker 3 (30:15):
We also they have pushed out recertification dates every few
months four years. So it's one thing we talk about
the turning on the payments and collections aspect of student loans. Again,
the Trump administration, not the Biden administration, has just pushed
out IDR recertification dates to know earlier than February twenty
twenty six. So the Biden administration started doing this by

(30:37):
pushing out IDR recertification dates basically every few months because
they wanted payments to be low, especially before key election dates.
And they also didn't have the capacity in the services
to recalculate what people even owed, which is that's kind
of terrible, isn't it, Like in terms of just, you know,
an embarrassing operational failure that the servicers cannot even calculate
what people owe because they don't have the staff, they

(30:59):
don't have the rules given to them by department.

Speaker 2 (31:01):
Event you don't have the infrastructure in place to be
able to handle exactly figuring out what the new payments
are going to be.

Speaker 3 (31:06):
And so even the Trump administration which is making this
big public spectacle of you know, we're going to make
people pay what they owe. Well, they have pushed off recertification.
I've seen some borrowers with a required recertification date of
January twenty twenty seven. And these are people in some
cases who last recertified their income where their twenty eighteen
tax return in twenty nineteen, and then COVID happened in

(31:26):
March twenty twenty, and then people got paused on their
requirement certify. So I'm not I don't want to get
like in trouble sharing too much here, but we have
people making six figures that are perfectly willing to pay,
you know, two thousand a month, and their student loans
that they're supposed to that are getting credit for forgiveness
programs but are still paying based off of when they
just graduated. They're paying two hundred dollars a month, right, So,

(31:47):
and the Trump administration is saying we don't mind extending
those two hundred dollars a month payments to January twenty
twenty seven for some people. So this is like, yeah,
it's crazy.

Speaker 1 (31:55):
From a personal finance standpoint, I'm curious, like, what are
you telling clients who come to you because hey, right
now the getting has been good, you've had payments deferred
or you have had an artificially low payment, and are
you suggesting bulk up those reserves because this might not
last forever. How do you help people think about the
fact that payments could go and they already are going

(32:19):
up for some people, uh and to be prepared for that.
While maybe you have a pretty solid deal right.

Speaker 3 (32:25):
Now, Well, I mean I think that, you know, people
have different level of economic security, and I just want
to kind of acknowledge that, right, like so uh so,
for example, if if my taxes go way up, right,
I'm gonna I'm gonna, you know, make a comment hashtag
check my privilege here, right, But you know, if taxes
go way up, maybe maybe I'm cool with my one
thousand dollars telescope for a while, do you know what

(32:47):
I mean?

Speaker 1 (32:48):
Upgrading quite yet?

Speaker 3 (32:49):
Maybe maybe I'm putting off the fully loaded you know,
like you know, computer tracking the comments or whatever. You
know what I mean, like so, so and and so,
maybe for like a middle class person, this might mean,
you know, cay, I'm gonna drive my camera for a
while before upgrading to the newer model, right, or something
like that. Now for people at the lower end of
the economic spectrum, they don't have those those privileges, right,

(33:10):
And so the good news is if somebody knows their
rights under the student on rules, if you truly are
making not a lot of income, you should be able
to qualify for a zero dollar payment like or very
close to it, because you just have to get onto
the income based or payment plan. And so many people
don't even know that they could benefit from that, Like,
so many people don't still do not know that they
can sign up for that. Like, you know, eight million

(33:30):
or nine million people sign up for the Save plan.
The awkward truth about that though, is actually maybe like
twenty million people could have benefited from it, but only
eight or nine million people signed up, right, So you're
more economically struggling folks. The government cannot auto enroll people
into IBr they're not allowed to.

Speaker 1 (33:47):
So maybe all those people were clairvoyant and they knew
that it wasn't going to last. I don't know, maybe
that's what it was. Yeah, but I think a lot
of it as people like to. I mean, money is
very stressful, particularly for people who are who do not
have access to the same income that middle and upper
middle income families have right, and so a lot of
people just take the maybe if ignore it'll go away approach.

(34:07):
And the problem with that thinking is it's absolutely not
true because the government can seize your wages and tax refunds.

Speaker 2 (34:12):
Again, i've heard you mention the term partial financial hardship.
Is that something that folks should Is that what you're
talking about here or is that like a completely different term.

Speaker 3 (34:19):
Well, partial financial hardship doesn't mean what it sounds like,
so Parkay, partial financial hardship sounds like you're struggling. In reality,
what it is is do you have a payment that's
lower than the standard tenure for your loan amount. So,
for example, somebody could have a forty thousand dollars income
in twenty thousand dollars of steat of loans and not
have a partial financial hardship because their payment calculated on

(34:41):
the income based your payment plan is higher than what
they'd have to pay if they paid two hundred dollars
a month to pay their twenty k off in ten years.
So that person with forty forty k income twenty k
of loans might not have a partial financial hardship. Meanwhile,
you know a doctor who has four hundred thousand of
steel loans with two hundred thousand of income might have
have a partial financial hardship because their income based your

(35:02):
payment is lower than four thousand a month, which is
what they would have to pay to pay it off
in ten years.

Speaker 4 (35:07):
Right.

Speaker 3 (35:07):
So what that means is is that you know, in general,
what I said about the greater than two times your
income and debt, you know, basically all those people should
go for forgiveness. Like if you're not going for forgiveness,
you're probably just hurting yourself financially. And what I said
during the Biden administration is is basically, if you have

(35:28):
more debt than your income at all, like if your
debt to income ratio is more than one to one,
you should go for forgiveness. During the Biden administration, you know,
the problem is is with the less generous rules the
Trump administration is rolling out. Forgiveness is still very much
a thing, but it's not as a thing for as
many people, which is why I'm saying, well, now it's
really more like two to one debt to income ratio,
go for forgiveness. And if you're in this one to

(35:50):
two times, you know your your income in debt student debt.
Then then it's a it depends, right, It depends on
your plans for your career, your family goals, your your
expected income growth, right, your your risk tolerance for you know,
do you want to wait it out a little bit
to see what happens policy wise? And you know, for
people who have less student debt than their income, there's

(36:13):
still strategies, there's still approaches to pay less, there's still
ways to have a better situation. You know, some people
even could still benefit from forgiveness if you're very low
income and that ratio applies to you. But you know
it just you know, it depends, is the mushy mouthed answer.

Speaker 1 (36:29):
Yeah, no, no, but that's really helpful kind of lines
of demarcation there. I'm curious too, your you've talked about
the clawing back of forgiveness. People who have gotten forgiveness,
they're not going to get unforgiven, right, and that that
would be illegal. But are you worried about the PSLF
program and maybe some sort of rug pull. I know

(36:50):
people who are in that and who are let's say
seven eight years along, and they're worried. They're like, is
something going to happen before I get to that point
where forgiveness is real each cause, like I'm pop committed
at this point.

Speaker 3 (37:02):
Well, I mean I like to think in terms of probabilities. Right,
I was an econ in stats. Major makes me weird,
but you know that's what I like to think of
in terms of giving people advice, because there's probabilities that
are fifty to fifty and there's ones that are like
ten percent chance.

Speaker 4 (37:16):
Right.

Speaker 3 (37:17):
And so with PS LEFT, the biggest drug pull that
can happen is there's a bill right now in the
House to take away nonprofit status from hospitals and make
them for profits. So that would be a way that
you could take away PS LEFT through a back door
for at least half the people that currently qualify for it, right,
And should you be worried about that? Like, what I
would tell people that are in that boat is no.

(37:38):
And the reason is it has to pass not just
the House but also the Senate. And if you look
at the Senate, there are basically four Republicans swing votes
right now. In my mind, there's Murkowski and Collins in
Alaska and Maine. There's Mitch McConnell, who's been voting against
administration and a lot of things now that he's not
the Republican leader, and there's Tom Tillis in North Carolina

(37:59):
and he's kind of like the wing votes. So if
you think about somebody like him, I live in North Carolina,
imagine Douke and you and see going from not for
profit to for profit and them having to do a
bunch of layoffs, and he's got a competitive reelection at
twenty twenty six. Is he going to vote for that?
I would bet not. I would bet that the Senate
modifies and makes less aggressive a lot of the House
GOP's proposals for things like this, and I would not

(38:22):
worry about that until we actually see the text of
the bill move along and pass you know, a committee
for example. So I think that people are really worried
about what the House and Senat are going to do
because they do have unified control of DC, right, and
they will pass some kind of big bill that's gonna
have a lot of stuff in it because they have

(38:42):
to because the Trump tax cuts expire at the end
of twenty twenty five. So that is a guarantee that
you will see a bill and there will be something
related to student loans in it. The question is is
how much will be in it and how much will
borrowers have to worry about when they find, you know,
when the text has battled over and finally published.

Speaker 2 (38:57):
Could you see a situation where it's at least for
looking and a lot of folks get to get grandfathered
into the previous PSLF or I'm sorry, with a hospital
nonprofit designation.

Speaker 3 (39:06):
I think that it will be and I think that
you know that the people the only people that have
to worry about forgiveness being clawed back is people that
were not actually eligible for it. And I know that
might sound ridiculous, but what I mean by that is
there are there's no auditing a PSLF really at all,
and so there are some employers that have been approved
for PSLF that I know, based on the rules, do

(39:27):
not qualify. And I've seen borrowers that have been mistakenly
given credit for years of payments that should not.

Speaker 1 (39:32):
Say there's no cop on the beat.

Speaker 3 (39:34):
There's none, no zero. So like a lot of there's
a lot of scams, there's a lot of fraudulent activity
going on there. And you know, if somebody, in my opinion,
for example, goes and starts a fake nonprofit and has
been approved for you know, ps LEF based on starting
a fake nonprofit. If they get approved and forgiven, like

(39:54):
it might work out. It's kind of like lying on
your taxes, right Like if you say you know, I'd
made no income and like they never audit, you got
away with it, right And if there's very little auditing
that's happening at the IRS, then maybe maybe some people decided,
well that's worth taking the chance on.

Speaker 1 (40:07):
Right.

Speaker 3 (40:08):
We don't give that type of advice. We say what
are the rules, what are the things you can do
within the rules? And you know, I would not be shocked.
I tell people, I would not be shocked if we
did see some kind of like you know, Operation Varsity
Blues right where they went after the famous actors, right
like the ones on Desperate Housewives whatever, right that we're
getting their kids in for water polo to like fancy schools.

(40:28):
Su I think that you might see something like people
that's like going after the very worst offenses for student
loan like stuff. Right Like for example, there was a
case pre pandemic where there was a group that was
telling borrowers to list of family size of ninety three,
so that they would have such a large family size
they'd qualify for a zero dollar payment and like, and
the funny thing is they put out a report like

(40:48):
February twenty twenty saying, like, hey, maybe someone a department
of edge should ask is it possible to have a
family size of ninety three in the if you're a rabbit,
you know, only like on the online form, And then
of course COVID happened a month later, nobody ever followed
up on it. So I mean, I think that there
will be a little bit of like a return of like,
what are the craziest things about the studolone system that

(41:10):
probably shouldn't be the case the way they are, and like,
you know, and frankly, like even the Daily Podcast had
this recent episode on you know, his student on forgetting
his dad, and they even talked about, you know, maybe
we shouldn't have unlimited student on borrowing, right, Like maybe
a student on borrowing should not be unlimited that you
can take out like eight hundred thousand for school across

(41:32):
like five children with no limit on your borrowing, which
is currently the rule. Right, if you want to send
six kids to the most expensive private schools in the country,
you can take out a million dollars of parent plus
loans currently and there's no limit on that.

Speaker 1 (41:44):
All right, I want to ask you more about that
and about incentives of student loans moving forward and kind
of how that impacts the universities as well. We'll get
to some questions on that with Travis right after this.
We're back from the.

Speaker 2 (42:05):
Break again, speaking with Travis Hornsby about student loans, what
it is folks should be doing now that they have them. Actually,
so let's turn the tables a little bit. Travis, what
about folks who don't have student loans yet? Because you
released this list of the careers where folks tend to
incur the most student loan debts, and Orthodontis turns out

(42:25):
they have it the worst. How do you think about
the trade off of taking on massive amounts of student
loan debt versus the potential for higher paid down the road.

Speaker 3 (42:34):
Well, I remember, like one of the Orthodonts cases that
I talked about with the Wall Street Journal back in
the day. They did a story on like one of
the first borrowers to pass the million dollars of student loans,
Mark Oh, And that was like I think twenty eighteen,
twenty nineteen. And that's because the borrowing is unlimited, right,
And so if you're not yet in a program, what
I would be laser focused on is what does Congress

(42:55):
put out for their bill this summer or early fall
for the Reconciliation bill, which is going to pass in
a party line vote. And what that bill will say
is it will either say like, as of a certain date,
loans are capped and you can't borrow more than next amount,
or it might not make any changes, or it might
say if you're enrolled in a program as of a
certain date, you get to borrow whatever you need to
finish the program. Right. And so if I was somebody

(43:18):
that's looking at a graduate degree program, I would make
really sure that I looked at what that bill says,
because it might make the difference of you being able
to finish your medical school, dental school program or not.

Speaker 4 (43:29):
Right.

Speaker 3 (43:30):
And so pay attention to what Congress does this summer
and fall to see what changes they make to the
studento on system. But by and large, I would say,
under the current studo in system, you should always go
get another degree, another you know, educational pursuit. If you
don't mind a ten percent income tax. And what I
mean by that is, let's say that you know, it's

(43:52):
it's a struggle to get a job initially, like is
it worth it or not? Well, income driven repayment is
basically a ten percent income tax. There's more complexity to
it than that, but you're losing ten percent of your
income to pay back the government for like twenty years
on average. You know, people doing the public service thing,
it's ten years, some people it's twenty five. But you know,
ten to twenty five years, you're losing ten percent of

(44:12):
your income.

Speaker 4 (44:13):
So what I like to tell.

Speaker 3 (44:13):
People is, Okay, if you stop at being a nurse
and you're making sixty K a year and you have
zero debt, are you better or worse off than if
you go get you know, a nurse practitioner job and
you're making one hundred and twenty a k a year,
but you're losing ten percent of your income to an
income based your payment plan. We'll take away ten percent
of one hundred and twenty grand and you're still making
just over six figures. And so that income gap is

(44:35):
worth it, you know, compared to sticking to just your
bachelor's degree. So in general, get your bachelor's degree if
you can, and if you want to go to a
graduate program, I would just suggest that it be a
valuable program of some kind where you're going to make
at least ten percent more than you would make if
you just stopped at your current educational level. And even
if you wouldn't make that earnings gap, if you would

(44:57):
enjoy that job a lot more than what's your current doing,
it's still worth doing under the current rules. And so
I would just think that if the rules change or
there's more caps unborrowing and people actually have to think, well,
what if I actually had to pay this back directly,
then the math would change. But the math doesn't change
until the rules change.

Speaker 1 (45:14):
How do you think the like the government's approach to
student loans, to the federal student loan program will change
the future of universities, how they price their education and
how much borrowers are willing to take on, like if
the program becomes less generous, right as interest rates have

(45:35):
already gone up of course since when I was in
school and since five years ago. So when people have
to make those trade offs, when they're thinking through, well,
how much debt should I take on even though I
can essentially take on ridiculous amounts. Are we going to
have just better incentives in place that will actually produce
some secondary benefits like reducing the cost of education overall?

(45:58):
Do you see that in the future.

Speaker 3 (46:00):
Well, so the problem there's the dirty little secret and
hire that a lot of the big name schools that
have very popular football teams earn a lot of money
from the parent plus loan program right now. And so
any big school with a big football program that has
a lot of out of state students, what they'll often
do is go market like maybe for example, like a
University of Alabama might go market in Illinois to get

(46:21):
them to come down and pay out of state tuition.
Maybe those families don't have the money to just cut
the twenty five k year whatever it is to go,
and so those families might load up on parent plus
loans because they're unlimited, and then the university's making a
bunch of extra money compared to what they make on
in state students, right And so there's this big incentive
currently for the schools to bring in all these out
of state students. And you know how parent plus loans

(46:42):
be the thing they offer to people, and the schools
are able to spend more money in a lot of
different things because of that, right, like faculty, bigger stadiums,
and il deals whatever.

Speaker 1 (46:49):
Right, And the parents just don't know how big of
an albatross it's going to be around their neck for
decades to come, exactly, and so and so there's been
some loopholes too to manage that problem for parents as well,
So like parents that have lots of parent plus owns,
because you know, up till now, there's been a lot
of strategies you can do. But that's kind of an aside.
The issue with university is the big name universities are
going to be fine. They're just going to have to

(47:10):
make cuts. So maybe you have to cut back on
some faculty and some programs. Maybe you can't do, you know,
the athletic expansion you planned on doing if they were
to lose access to.

Speaker 4 (47:18):
The parent plus loan program.

Speaker 3 (47:20):
Now, there's other schools that are more kind of like
marginal schools that might not have the big football name brand, right,
that are more just maybe they're serving a lot more
just like middle class families. It maybe more regional schools.
Some of those schools would absolutely have to close if
they capt loans. It's just the reality a lot of
these schools are in swing districts in swing states, and

(47:41):
so the question is is a lot of these proposals,
you know, makes sense on paper until you think about, well,
what does it mean if you close down a bunch
of regional schools in Pennsylvania? How popular are you going
to be in the next presidential election in some of
these swing districts? Right, So I think that from a
political standpoint, there's there's some checks on what they're going
to be able to do in terms of changes to
the system. But you know, I mean, if you think

(48:02):
about it just a common sense, it probably does not
make sense to let universities charge whatever the heck they
want for higher ed Like that's probably a really dumb idea.
Like that changed in two thousand and six, and they
did it to try to expand access. But the problem
is they made it a blank check. They just said, hey, universities,
go do whatever you want. There's no limits on what
you can borrow for graduate programs. You could just charge
whatever you want. And so what happened is the number

(48:24):
of pharmacy schools, for example, more than tripled.

Speaker 1 (48:26):
Wow.

Speaker 3 (48:26):
So within literally like a few years you had triple
the number of pharmacy schools. So pharmacy school went from
a thing that was like a thirty five percent acceptance
right to like a ninety five percent acceptance rate. And
so a lot of incomes and graduate programs have actually
like been very flat or even declined. And there's a
big oversupply because the universities just thought, oh, look a

(48:47):
great new revenue source, so we can just go open
another school. Right, So there probably is a big contraction
in the number of graduate programs and the number of
universities that needs to happen just in terms of like
a balancing. But the problem is is that also means
real pain, like people will lose their jobs, like you know,
And so that's just a question of do you want
to take that pain? You know, how much pain do

(49:08):
you want to cause? Do you want to make it
a little bit softer by having the loan limits be
a lot higher. Do you want to increase pelgrants so
lower income students can still attend university. So there's all
kinds of policy trade offs that and that's why the
easier decision is just let's go punt the football, right, Well,
you don't know what to do. Let's just yeah, income
recertification in twenty twenty seven, how about that, you know exactly,

(49:29):
So that's what's been happening, and that they must.

Speaker 1 (49:31):
Do the same thing with Social Security too, Travis, why not?

Speaker 3 (49:33):
No, I mean that's but that's the easier thing to do.
And so politicians, you know, in my experience of student loans,
always choose the easier thing to do unless they're forced
to make a change, Like you get the headline of
the you know, Afghanistan veteran with the traumatic brain injury,
they got the six figure tax bill, and then they say, oh,
you know, maybe we need to change the laws, maybe
these dumb laws. But it takes that kind of, you know,
level of an event to make a change.

Speaker 2 (49:54):
I'm surprised at the amount of politics that has gone
into our conversation today, given the fact that we're talking
about students loans, so to that note, and the fact
that it does seem like politicians are punning the ball.
Do you see a world where it makes sense for
the federal government to get out of backing student loans.
I mean, like that this all started with our desire
to what back in the sixties to compete with like

(50:16):
Russia and the space race and all that, and shoring
up the ability for the US to be competitive from
that standpoint, But like, are we past that? Does it
make sense to open this up more up to the
to the to the free markets as opposed to the government,
which tends to react more slowly to some of the
changes that need to happen.

Speaker 3 (50:33):
Well, a lot of people are asking that question, and
the policy problem to that is how do you extract
the government from one point six trillion dollars? So that's
that's a really big problem, right, Like do you just
have an auction and you just sell all the loans? Well,
a lot of these benefits of those loans have already
been promised, like income based repayment. Does a you know,
a you know a JP Morgan and Goldman Sachs want
to take on a bunch of what that? Yeah, people

(50:54):
can pay ten percent of their income and never pay
the balance off. So, you know, there's all kinds of
problems with how do you get egg is that the
existing you know, commitment that's been made, And then the
other problem is, like you know, for the future if
you do you know, the old system was essentially like
the government would kind of cover the losses on the
loan portfolio, and private lenders would make the loans and
make the interest income.

Speaker 4 (51:14):
And that system.

Speaker 3 (51:16):
Worked like okay for a while, but then they decided, well,
we want to expand access, and so pendulum and politics swings, right.
So I think we're in the in the zone of
like the pendulum swinging more towards Hey, let's do less,
let's do fewer loans, let's make it, you know, more
on the borrower to pay them back. And you know,
I think that the devils and the details of student

(51:37):
huns though, like you know, it's real easy to say, hey,
get get the government of the student loan business, but
there are so many problems that the government would have
to figure It would be almost like saying, let's get
the government.

Speaker 4 (51:46):
Of Social Security. Well, oops, how do you do that?
You know what I mean?

Speaker 1 (51:49):
Yeah, no, for sure, Travis, this has been super helpful.
I think a lot of our listeners are going to
get a lot of value from this conversation. Thank you
for joining us and your videos. By the way, your
video updates have been incredibly helpful to I've been following
them as I'm trying to kind of figure out what's
going on with student loans in the day to day,
which is kind of sad that we have to be
pay attention to it that much. But how how can

(52:09):
how do money listeners find out more about you and
what you're up to?

Speaker 3 (52:12):
Well, I mean, I actually the best way is to
get the discount for how to Money listeners if they
if they need a custom plan, and I would say
this is probably more in the you know, you owe
maybe over fifty thousand dollars or US maybe even six
figures if that's you. If you go to student Loan
Planner dot com slash how to Money, so that's going
to get you a discount and one hundred dollars off
a custom supit loan plan if you think you need

(52:34):
that right now? Who needs that? You know you have
a lot of studilong confusion. You have a significant balance.
Generally speaking, probably ninety percent of the time we're going
to save a sort of projected mid five figure balance
for the average client, which is about a two hundred
k average balance. So for a few hundred dollars, the
high likelihood will save that much money is generally really

(52:55):
worth it. You can, you know, check our reviews by
looking at Student one planner reviews and Google and see
that we really do have a huge impact on people's lives.
And then if you cannot if some of the listeners says,
you know, that's great, I cannot afford, you know, a
few hundred dollars even with the one hundred dollars off
how to Money listener discount, then just like the student
one Painter podcast, we have a free podcast where we
answer a lot of people's questions and go over like

(53:15):
what people need to know, and so that's the free way.
And then of course our student old painter dot com
website's got a lot of free content too. So but
you know, if they want they want one hundred dollars
how to Money discount, it's just again student one pointer
dot com slash how to Money.

Speaker 1 (53:28):
That's right, man.

Speaker 2 (53:29):
Yeah, we're trying to help folks to avoid that student
loan confusion, and y'all are doing that on all the fronts.
Travis Hornsby, thank you so much for joining us today.

Speaker 1 (53:36):
Thanks for having me all right, Matt, great convo with Travis.
I can't say that I'm enthusiastic about the state of
student loans these days, but I'm less worried after talking
to him.

Speaker 2 (53:46):
It makes total sense. The more, the more you know
in the star is streaking across the sky, you see
it that, of course Travis would be able to see
because he's got the right tele that's good right to
be able to It's a good point. And the more that, yeah,
there's more control that we have in our hands than
I guess I was under the impression. I will say
I was disenheartened that so much of the future of
US student loans comes down to who's going to be

(54:07):
in the White House. And so my big takeaway is
going to be, we just need to figure out who's
going to be elected to office, and then you'll know
what to do in four years exactly what's so hard.

Speaker 1 (54:16):
About about doing that?

Speaker 3 (54:18):
No?

Speaker 2 (54:19):
Okay, so I think American politics so easy to producere Yeah, No,
I do think my big takeaway is going to be
to consider re certifying your income, in particular if you
are on an income based UH student Loan Repayment plan.
Because the and he mentioned this u r L a
couple of times, I'm going to do it again because
I think it sounds like a fantastic resource student A

(54:40):
dot go for slash i d R. The i DR
stands for income driven repayment and.

Speaker 1 (54:45):
As this is especially true if you've.

Speaker 2 (54:47):
Seen your income drop recently, the ability you're not you're
not fibbing, You're you're telling the truth. Your income has
gone down and your repayment should reflect that. And I've
got a feel and there are fewer folks doing that,
or is it it's something that's kind of it's it's automated, right,
Like it's automatic. It's they're not really thinking about it.
They're like, oh, I've done that before, but no, this
is something you can revisit. It's almost like reshopping your

(55:09):
insurance rates that your insurance coverage. The ability to do
that and save money every single month, especially if you've
seen your income go down, I think is a fantastic
takeaway for folks who might maybe they're even like overwhelmed
with everything that we talked through with Travis, and they're like, Okay,
well that's at least one thing that I.

Speaker 1 (55:25):
Can do one hundred percent. Yeah, even the maternity leave thing.
I was like, oh, wait, you can, yep do that
if that and apparently, according to the rules, you can,
which I think is heartening. There's a lot of situations
that where that could apply, I think to somebody whose
income has gone down or gone away for a little bit.
But how about how about for you? Is a big takeaway.
I really liked kind of how he talked about the
pros and cons of getting a secondary degree and how

(55:47):
to think about the financial consequence essentially as like a
flat ten percent tax on your income. And I think
I can be just a really easy then back of
envelope math to figure out, well, is it going to
be worth it taking this dead into my life or not?
Like how much more am I going to make? And
then when I take the ten percent off of that increase, well,
is god is it worth the time, the energy and

(56:08):
is the joy I'm going to get from switching careers
going to be worth all the effort that it takes
and the debt that I've got to take on my back.
So I think that's just at least when when we
have a lot of listeners who are kind of in
that period in their lives, like do I change careers
and if so, how do I think through the financial consequences?

Speaker 2 (56:23):
Do I go get that MBA and do I get
student loans for that or do I take on some
special graduate degree.

Speaker 1 (56:28):
That's a that's like a simple math equation that can
I think at least at least be helpful as you're
kind of trying to figure that out. Berts, Yeah, especially.

Speaker 2 (56:35):
If you are looking to take on additional debt. But
the beer Joel that you and I enjoyed during this episode,
and this is one of those Burial beers. So it's
got the long name and it reads only calling hours
pull me back to these Midwestern roots.

Speaker 1 (56:49):
It's kind of hard to read. I'm pretty sure that's
what it says. This is a West Coast style IPA
by Burial collab with Hot Butcher. What do you think
two of the greatest breweries in the world at this moment?
I would say so. And this beer reflected that it
was so good. This to me didn't feel like a
traditional West Coast It was like juicier, less abrasive than

(57:09):
a lot of them are. And that's what I would
expect from these two guys trying to create a West
Coast together. It's like, so good, it's a West Coast,
it's up my alley.

Speaker 2 (57:17):
It's not a West coastal it's a Midwest Coast just
like the there's a coast on the in the Midwest.
Match is like the less we're talking about, like the
shores of like Michigan. Yeah, Michigan's where it's out man
also home to many fantastic breweries. But yeah, this was
amazing and I'm going to shout out the label too,
because I've never seen It's funny.

Speaker 1 (57:33):
So before we hit record, you said all kind of
looks like.

Speaker 2 (57:36):
A bony their album cover, and I guess the snow
is that what you were thinking of?

Speaker 1 (57:41):
For some reason it was I was thinking blood Bank
and the kind of frigid it's kind of got the fridge.
It looks cold.

Speaker 2 (57:47):
Yeah, it's funny you mentioned blood Bank because so in printing.

Speaker 1 (57:51):
I know this from my advertising days.

Speaker 2 (57:53):
Uh, there's a thing called spot color and it's a
you know, you get the specific Pantone code because you
want to want to use a very specific color. And
it looks like they used a spot color and it
makes this label, this artwork looks so premium. Specifically, it's
on the red and it looks like it's just glowing.
And that's how they've used it. It's like the science,
it says, Limby's liquor. I don't know what that is.

(58:14):
And then they got the red glow coming out of
the windows a little bit, and it makes it look like,
truly that this can is glowing in my hand. I
almost want to set it over here next to our
all day Food Market winter item that listeners sent our
away because it's got the similar kulga, which I figured.

Speaker 1 (58:29):
You could appreciate. Yeah, well, and I think I am
particularly drawn to dope can art and this and very
all makes some great stuff, but this is like one
of my favorites of this.

Speaker 2 (58:38):
Well, normally it's a bit more gothic, it's like it's
a bit more metal and this just the vibes.

Speaker 1 (58:43):
Of this are off the charts. Yeah, for sure, very
thoughtful as well as the beer. Very thoughtful art so good,
but oh not quite.

Speaker 2 (58:50):
Let's remntion the url that he mentioned for how to
money Listeners to get one hundred dollars off student loan
planner dot com.

Speaker 1 (58:56):
For slash how to money. If you've got.

Speaker 2 (58:59):
A more complicated student owned situation going on, you want
to take it to another level other than just recertifying
your income. You're like, no, no, no, I really want
to knock this thing out, really figure out how to
pay as little as possible.

Speaker 1 (59:10):
Talk to the experts. That's what Travis's team are. So
our buddy. Until next time. Best friends out, Best Friends Out.

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Student Loan Shakeup w/ Travis Hornsby #977