August 18, 2025 • 50 mins
In this episode of the Healthy, Wealthy and Smart podcast, host Karen Litzy welcomes back financial expert Joe Reinket to discuss the latest changes in student loans. Joe, a CFA charter holder and founder of FitBux, shares valuable insights into how these changes will impact three key groups: current students, those in repayment, and graduates nearing forgiveness. The discussion provides practical information on what to expect regarding student loans. Join Karen and Joe for an informative conversation that aims to clarify the current landscape of student loans and empower listeners with knowledge.
Time Stamps:
[00:01:48] Student loan changes overview.
[00:05:03] Federal vs. private student loans.
[00:10:03] Student loan funding for programs.
[00:12:10] Student loan forgiveness programs.
[00:15:49] New IBR vs Old IBR.
[00:21:32] New vs. old IBR.
[00:25:11] New Income Repayment Assistance Plan.
[00:27:10] Loan forgiveness options explained.
[00:31:27] Public service loan forgiveness changes.
[00:37:32] Student loan refinancing options.
[00:39:25] Financial planning for young professionals.
[00:43:01] Home ownership financial perspective.
[00:45:57] AI scribe for physical therapists.
More About Joe:
Joseph is a Chartered Financial Analyst (CFA) and founder of FitBUX which has helped over 18,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old. In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.
He is currently an adjunct financial wellness professor at 15 universities.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Hey, everybody, welcome back to the Healthy, Wealthy and Smart podcast. I
am your host, Karen Litzy, owner of Karen Litzy Physical Therapy located
in New York City. And today we are talking about student
loans. So I'm happy to have back on the program,
friend of the program, Joe Ranke. He is
a CFA charter holder, founder of Fitbucks,
(00:24):
adjunct professor at 15 universities. In
short, he is a financial expert and also a
fellow Jane Ambassador. Jane, the
wonderful EMR that we all that we use.
So, Joe, welcome back to the podcast. Happy to talk about student
loans and what changes are happening as
(00:46):
a result of the latest a
big beautiful bill or whatever the heck they're calling it. So
thank you so much for coming back and sharing
Yeah, glad to be here. And I'm always, you know, talking
about student loans, so I'll throw something positive in there before
(01:07):
student loans. The stock market's at an all time high again, so yay. Like,
So I just feel every time we come on, we're talking about everybody's favorite
Well, that's a positive. That's a positive. So
now let's get into, and I'm
(01:28):
not saying this is a positive or a negative, but let's get
into student loan changes. You
can let us know what the dates of these changes are,
what some of the changes are going to be and how that affects
people in a very practical way. So I'm just going to toss the ball over
Yeah, so and the way you can think about this is people are getting affected in basically
(01:52):
three different categories. There's those that are students are going to
be students. Okay, there are those that are already in repayment.
And then there's those that are gonna be entering repayment after July 1st
of 2026. Okay, so there's basically three groups. The
middle group, the ones that are in repayment right now, are the ones that are,
everybody's like, I don't wanna say freaking out, but they're like panicking, because it's
(02:13):
like, we gotta choose something, because if they don't choose something now, those
choices are gonna be gone by July 1st. I shouldn't say
by July 1st of next year, by July 1st of 2028, but
that date might be moved forward. Okay. Um,
and so I'll start with the easiest ones. First, we'll start with like people that are in school. Okay,
because this is the easiest, but it also has a major impact on just
(02:35):
industries, especially the DPT, because graduate programs are
going to be affected. So right now, the current system, you
can get federal student loans up to
whatever your program says is the cost of tuition, cost
of attendance, and cost of living. Okay. So basically, and most schools
way overestimate cost of living. So basically that means 100% financing.
(02:57):
Okay. Um, that is going away. So if
a student starts school after July 1st
of next year, then the
cap that they're gonna be able to get for like undergrad and master's
programs is $100,000 and $25,000 per year. So $100,000 total. Total federal student loans. And
(03:20):
if it's for a professional program, which they haven't defined yet, we
believe it's gonna include DPT, okay? Like, because of the
way they defined it in the past. But things like MDs,
DPTs, they're gonna be able to get a total of
$200,000 for, that's combined undergrad and grad
school, and capped out at $50,000 a year. And
(03:42):
so the reality of it is that people are
going to end up having private loans again, and it's going to be more like
a system like we had prior to 2008, where Just
here we got some statistics about going into 2008, 2009, because
that's when they changed loans to direct loans, like the government basically
took over the loans. It was about 50-50,
(04:06):
50% federal, 50% private. And then now it's
like 94% federal, 6% private. It's
going to shift back just because of the way it is. It might not
be 50-50, it still might be like 60% federal, 70% federal,
but there's going to be more of a private industry there. So
that's what's going on with in-school stuff. I
(04:29):
know a lot of programs are starting to freak out because a lot of their grants and stuff
have been hit, but they're also saying
how is this going to affect enrollment, which
enrollment's actually already been down across the board for graduate programs, so
this might just increase it, maybe
put some pressure on tuition rates, I don't know. Right.
(04:52):
TBD. Now, can you explain what is the difference between
a federal loan and a private loan and how might that
Yeah, so a federal loan is backed by the government. And
there's a lot more leniency there. There's three times you can go
on forbearance, for example, for 18 months in case you can't make payments. But
(05:13):
most importantly, from a repayment perspective, you qualify for
income driven repayment plans, or your payments are based as
a percentage of your income, and they also qualify for public service loan forgiveness, which
there's a ruling that came out this morning, we'll touch on that too. But
it qualifies for public service loan forgiveness. When you're a private loan, you
don't qualify, like you're paying them off. And
(05:35):
so what we could see end up happening. is where,
let's just say a student has $225,000 in federal student
loans, they can go on to things like loan forgiveness and
be okay, whereas if they were having that split, say
it's like 100 grand federal and 100 grand private, chances
are you're gonna have to pay off both of those now. Because even
(05:57):
though you might qualify for forgiveness on federal, it's only $100,000. So over
time, your payments are gonna be at a point where you're paying it off
anyway. And so
we, we see, and we've seen this before, by the way. So
there's been like PT programs, for example, that are
getting accredited. So borrowers can't get all
the federal student loans. So they end up graduating with half and a half. It's,
(06:21):
they can pay it off, but it's a struggle. Um, and so
that's where I see, you know, some issues coming up in three or
four or five years for even DPTs, because
let's just say you go to undergrad and you have, you
know, a hundred grand in loans already. you can only take out
another hundred grand and you can only take out 50 grand per year. So some of
the programs, I know like a couple of the programs, like Karen,
(06:44):
you might throw up and you hear this. Like one of the programs caught
For the full three
For the full three years, correct. And so it's like, well, if
that student has, you know, a hundred grand from undergrad. Can't
do it. Like they can only take out another 100 grand. Like
(07:05):
they're gonna have probably 150 in private student loans as
well. So you're gonna have 200 grand in
federal, 150 grand in private. It's
too much. Right? So, you
know, and that's why I was saying, hopefully it puts a little bit of pressure on like tuition rates
(07:25):
Yeah. Yeah. I had this conversation with a
professor last week about, well, do
you think now that they've capped loans, will it
force universities to drop their prices?
And he said, well, it better. But to
(07:49):
You know, time will tell. But
they're, at any rate, that's a whole other conversation on tuition costs
and why they're so high, et cetera, et cetera. So we will leave
that for another time. So if
you're a student now, for
all of undergrad, you can take out $100,000. That's four
(08:12):
years of undergraduate studies or three, however long it takes you
And for master's programs. So like if you have
your undergrad and your MBA, the most you can take out is a hundred grand.
Oh my, okay. All right. And then, so you
go through your four years of college, you've taken out, you had to
take out a hundred grand, right? So now
(08:35):
you're applying to physical therapy school and you can
now take out a maximum of-
They have two different labels, like your undergrad
and master's programs, and then professional programs. If you go to a professional program,
the combined can be $200,000. I see. If it's just undergrad
(08:56):
and grad school through a master's, it's
only a hundred. And that's why there's other industries out
there. So like PA, NP, those are
not considered in the past. Those have not been considered professional programs. Those
are considered master's programs. So they're not
getting funding. That's what the industry is believing. SLPs
(09:18):
may get funding like up in the air because
one's an MOT, one's a OTD. So like, What
are we doing there? So in the past, the way they've classified them is
how long you're in school. So like if I started school as
an undergrad to completion to get my license, is it a six-year
program? So in DPTs, that's what it is. If
(09:40):
you're traditional route, it's four years for undergrad, three years for
your DPT, that's seven, that's more than six, and there's a license at
the end of it. Like, that's good. But like PA stuff,
Oh, so they would not be able to take out the loan for
(10:03):
Correct. And they got to make it work. That's the way a lot of the people in
student loan industry that I've talked to are interpreting it. They haven't come out with the official announcement
yet, but that's the big wild card right now. And I know that's why a
lot of programs and health science departments that I work with, like, They're
freaking out. Sure. What's going to happen there
And to be clear, that's one hundred thousand from the federal side.
(10:25):
Anything above that, you would have to go to a private institution
Like a Sallie Mae, a College Ave, a LendKey, you
know, SoFi, like those private lenders that have
Right. And so what is, so
if you have those private student loans and you lose your
(10:46):
job, you can't go on forbearance, put them on hold. You
have to keep paying them. Is the interest higher in
Typically, yeah. A little bit higher. They
do have some forbearance stuff, like someone will let you forbear for six months,
but they're a lot more strict. You actually have to show that you got terminated.
(11:09):
There's very strict things you gotta follow versus just the government.
You're like, put me on forbearance, and they're like, okay. Got it. So
Okay. All right. Well, that's a really good overview of
what happens if you're a student or you're going to
be a student. So how about those folks who are
(11:29):
currently in repayment? I know there are people that
graduated around the time I graduated that are
still in repayment. And there are people obviously who graduate
in the last 10, 20 years who are in repayment. So what
happens to their choices when it comes to
So when you look at student loans right now, the actual loan forgiveness plans that
(11:51):
are available, you have ICR, which basically nobody
goes on, which it's, don't even need to be talking about
it. Then you have pay as you earn, P-A-Y-E. And
then you have SAVE, which is basically already gone.
It's being challenged in court. And then you have this thing called IBR, income-based
repayment. And people get confused with income-based repayment for
(12:12):
two reasons. One, you have old IBR and you have
new IBR. Of course. Let's make it
confusing, right? Old IBR is for people that had loans prior to
January 2014. Before that, July 1st, 2014. New IBR is after that date. That's
the cutoff. Now
(12:33):
the second piece I get confused on is pay-as-you-earn is
exactly the same thing as new IVR in terms
of how they calculate it and everything else. Eligibility is a little bit different, but
the actual repayment plan is exactly the same. So
when I say things like new IVR, I use new IVR and pay-as-you-earn interchangeably.
Okay, so what's happened with the OBBB,
(12:57):
whatever they called it, what that's doing
is it's getting rid of save and
They're gone. And the reason being is because all those
programs were passed by presidential action, not by
Congress. So the only ones that were passed by Congress were
(13:19):
IBR, income-based repayment. So
they've told everybody that is in repayment right
now that you're going to have to choose one of those programs
if you want to stay on it. And the deadline is
July 1st, 2028, which is the deadline in the bill. But
it says that the Department of Education has to have everybody switched by
(13:42):
that date. So the Department of Education can come
back and say, you got to be on this by July 1st of next year, choose.
Like they just have that deadline of three years. Like
the Department of Education has that deadline, but they can do it
anytime sooner that they want to. So a lot of people are like freaking
out because it's like, well, am I going to miss the deadline? It's like, we don't know because we
(14:03):
don't know what that deadline is yet. But that's the
big thing there. And for a lot of times, up
until August 1st, a lot of people were not doing anything
because they were on, say, forbearance and it wasn't accruing interest. That stopped
August 1st. And so people, there's like
for about 90% of people, there's no reason to stay on forbearance anymore because
(14:24):
you're accruing interest and you're not getting any credit towards forgiveness. So
So you could start paying into it, paying off that interest, yeah.
And those months start counting towards forgiveness. Like, you gotta go.
Right. So yeah, the last like
two, three, four weeks, I mean, we've had
probably over almost 1,500 phone calls just because of that.
(14:47):
People needed to make the decision. And
to make it even more confusing is a lot of people, they haven't made a
switch over in the programs yet for the government, like
on their site. So people can still qualify for pay as
you earn, even though it's going to go away. And
so right now, if you're kind of contemplating which plan to go on, if
(15:08):
you can get on new IVR, which is 10% of your income,
that's the one to go on because that's not going anywhere. That's the cheapest. If
you can get on it, get on it. If you're
like an older borrower, You know, if you can get on
pay as you earn for the next year, fantastic. But chances are you're going to go to old
So what's the difference? Are the choices just
(15:37):
So new IBR is 20 years long and 10% of
It's a lot cheaper. Got it. So if you're an older borrower,
let's say you graduated in 2000 from
physical therapy school, you would be considered in, maybe
(16:03):
So you can make the switch from
You can't, and that's where a
lot of people make a mistake because the loan servicers,
and they're right, they'll tell you this, you can consolidate your loans
and then go into new IBR because when you consolidate your loans, it's considered a brand
(16:24):
new loan. The problem is it's considered a brand new loan. So
let's just say you have 15 years of payments. and
you have 10 more years on old IBR, you
So now you're at 20 years. Man,
(16:45):
Yeah, and so it's a double whammy
too, what we're seeing right now. This is like a new phenomenon we've
been seeing in the last like month. is that people
are gonna be on that plan, which a lot of them are already on that plan anyways. So
they understood that payment. But what has happened, when you ran projections 10, 15 years
ago, you might say, hey, look, a normalized income increase
(17:08):
is 3%. So this is what's gonna happen over time. Well, because of
inflation over the last four or five years, we've
been seeing people, especially in the hospital systems, getting raises of 5% or
10%. So their incomes have increased Their
cost of living, though, has increased more, so their salary is not keeping
up with cost of income, so their overall money coming home
(17:29):
is already tight, but because of that extra bump in
salary increases, it's also increasing their student loan payment.
So they're getting hit with a double whammy where like if inflation wouldn't
have happened, they probably would have been fine. But because inflation happening,
their cost of living is going up so much and their
student loan payments going up. It's like, oh crap, like how am I supposed to
(17:53):
And that's why we've had probably like five to 10% of people that we work with.
They're like, I have to stay on forbearance because I got to figure out how the hell, like
between my mortgage and everything, like I did not plan for this payment going up this much.
I got to figure out where I need to shift my finances and I
need six to 12 months to figure this out. Like, you
know, they're panicking because they're, it's like, what do you cut? You
(18:16):
know, like you can't cut food, you got to eat. Like, so.
Right, right. And most people can't cut a car payment or
car insurance. You know, if you live in a place where you need a car, that's
Yeah. Yeah. And I mean, car insurance, I just I
mean, I just, for example, got a rude awakening. I mean, my
car insurance would go renew and they doubled it. And I'm like, no, no, no.
(18:39):
Like I went out and shopped and I got it back lowered. But I was like, this
is not being doubled for no reason. They're like inflation. It's like that's
bullshit. I'm not paying this. Hmm.
But, you know, it's it's a real thing. And
that's, to me, a lot of people are saying, oh, the student loans are
the big problem right now. It's like, no, no, no, you're seeing the repercussions of inflation. Like
(19:03):
Right. And also for those people who, let's say,
weren't making regular payments because with COVID,
OK. So how does, what does that do to
people's budgeting, I guess? You really have to make some
Well, it's a massive shock on two fronts. One, I mean, we know people that have
(19:26):
zero dollar payments for the last five years just because of the way things happen.
We've seen other people that they might have got it approved.
like the year that they graduated. So their payments were like $100 a month
because they were only qualifying on partial income because they didn't work the whole year.
And so now that they have a full year's income, that's
(19:47):
going to spike to $600 or $700. And that's
going to be the normal payment. That's what it was supposed to be all the time. It's just when
you're originally qualified, You did so with partial income.
So now it's going up to normal. And so that's where you
know, you see a lot of these stories on like Facebook or Instagram or
Reddit, and they're like, my payment was, you know, $200 a month, and now it's 600. It's
(20:08):
like, that's why it's going to a normalized payment. And
it's not so much because the repayment plans. The
repayment plans is maybe $100 to $200 for most people. It's not earth
shattering. It's because of people's income changing.
Got it, got it. So for people, just
(20:30):
to recap this new and old, for people on the
old IBR, can kind
of have to stay on that old IBR. Otherwise they'd have
to consolidate their loans, which would be a new loan. Then they have
to go on the new IBR, which starts at day zero. So
you still have 20 years. So if you've been paying, so if you graduated in
(20:51):
2000 and you've been, paying your loans, but let's
see, you didn't have to pay for five years. Let's say you're 20 years, you want
to kind of stick to where you are because maybe you only have five years left. Is
And then the new IBR are for who?
People that started that, people that did not
(21:15):
Okay. So if you graduated physical therapy
If those were your first loans, yeah. If you had undergrad loans before that, then
it's still old IBR. So all your loans
would have had to be new after July 1st,
Okay, that's a good distinction. Thanks for that. So that's
(21:35):
undergrad and physical therapy school. So
all of that had to be after 2014. I
And the even more confusing part is that we know people that had loans before
that, when they go on right now to studentaid.gov, it's saying that they qualify for
new IBR, even though they shouldn't. And I'm like, great, go on
(22:00):
Go on new IBR. Should we
tell them? It's like, no. Go on. Take
Okay. New IBR is 20 years. Old IBR is
25 years. But if you're on old IBR, you're probably
(22:25):
maybe fairly close of reaching that 25 years versus
And that's the big dilemma right now is because people are like, well, I
still have 10 more years left. But for a lot of people, the
payments are so high. It's like, do I just turn around and pay this off
instead of go for loan forgiveness now? So that's the other part
(22:47):
that they're trying to contemplate is I'm not really
And now they got accrued interest and they gotta pay that back. So it's just
Right, right. So people who are on the
old IBR, by the time they finish,
(23:11):
Or very little. Correct. Right. So when
you do reach those, that 25 years on old or
20 years on new, and let's say you have
$50,000 left on the loan, that loan is forgiven, but
Right. So you have to remember to put that money
(23:34):
aside. So you need to kind of have people like you who
can do that calculation for you and say, at the end of
this loan, this 20 years at 10 percent of your income, depending
on, you know, you can probably do some projections to see maybe where
the income might be. Make sure you're putting away this
much money every year so that when the time comes, you're like,
(24:01):
Correct, and now you do have it. So that's
one of the big things when we're building out financial plans that we're looking at is how much do you
And how are you gearing up for that? Yeah, and
so that's old IBR and new IBR. And then the new one, it's
got some good features on it. Before I dive into the
(24:22):
new one, any questions on all that? No, I think- You got it down pretty good because
I think I got it. I was sitting here taking notes and being like, hey, I
get this. I think I got it. I got it. I'm much more confident in
And if you're listening to this, you might have to like, in your car, you might have to pull over and take some notes
Keep rewinding. Yeah. And also, the
(24:44):
hard part too is like, there is no solid date.
Like you said, it could be July 1st, 2028, but
We don't know yet. We don't know. The one date we do know is
July 1st of next year. That's when the new income
Okay. That is the one date that we do know. It's called RAP. It's R-A-P, or
(25:11):
Okay, now this is very similar. It's based as a percentage of
your income on your monthly payments, but
it's different because it's a tiered percentage. So it's not a
flat 10%. It's based on
your adjusted gross income. So for example, like if you make
between 20 and $30,000 a year, it's 2% of that number. And then it tears up for every 10,000. So it goes
(25:32):
3%, 4%, 5%. Once you hit 100,000, it's 10% of your income and it's capped at 10%. It doesn't go
up anymore from there. Okay, so that's. That's
a little bit different of a feature, which makes it, like when you're lower income,
it makes it more affordable than some of the current plans and so on and so forth.
(25:54):
And so that's a decent feature. Now, on
top of that, there's interest forgiveness every month,
interest subsidies. So when your payment doesn't cover your interest, instead
of the loan balance increasing, the government's gonna
forgive that interest immediately. You don't pay any taxes on it or anything. So
on the new plan, your balance never goes up. In
(26:17):
addition, your balance, the government also
provides a $50 match towards your principal. So every
month, if you have a normal payment of like $400 a month, and
it only covers interest, the government will reduce your principal
by $50 a month as well. So those
are pretty good features. So when people are actually like looking at this, they're like, what's the
(26:38):
downside, right? Because if you look at the monthly payment, it's
gonna be cheaper than old IBR. And people
on old IBR can go to the new plan and
Okay, so if you're on old IBR, sit tight
until July 1st, maybe. Of
(27:03):
Because everything in this plan sounds great, but it's also 30 years
Oh, OK. So for a lot of people, they
may completely pay off that loan in 30 years and there's
That's what it's going to be. And I can see somebody asked me about some
(27:26):
stats the other day. I can say that probably 70, 80% of
people are going to end up saying, I just want to pay off my loans instead of going on this. Um,
and that's what it's going to be. Um,
except for if they're at a nonprofit, because if I, if I'm on
old IVR, and I got two or three years left until
I get my loans forgiven for PSLF, then I can
(27:49):
go on WRAP and the monthly payment's lower and I don't care
about the 30 years because I get public service loan forgiveness. So
if you're on public service loan forgiveness, it may be a really good plan to go on
because the payments are cheaper. But that's why I
was saying, for the people that are in repayment right now, if you can get on old
IVR, it's way better, or new IVR, I'm
(28:09):
sorry, new IVR. If you can get on new IVR, it's way better than old IVR and
it's way better than RAP. There's no question, that's where you're going. If
you're stuck on old IVR, then that's where the question
mark comes in is, do I stay there? Do I go on RAP? Or
do I just say, nah, screw this. I'm going to pay off my loans. OK, now,
if you're not in repayment already and you graduate and
(28:30):
your repayment does not start until after July of next year,
you don't have a choice. It's either RAP or the standard plan. There is no more choice.
So the standard plans are gonna change too. So right now the standard plan
is 10 years. It's just a regular 10 year, like if you have a car loan
and it's a five year car loan, you make the payments, it's gone in five years, that's the
(28:51):
standard plan. The standard plans are changing to
say if you owe less than 25 grand, it's 10 years. If
it's 25 to 50 grand, it's a 15 year loan. If
it's a 50 to a hundred grand, then it's a 20 year
loan. And if you owe over a hundred grand, it's 25 years. Now, of course you can
always make prepayments. Like you can be on the 25 year plan and pay it
(29:14):
And so with a standard plan, you're just paying off the
That's what I was at. Cause I, when I got, I saved my
Yeah. And so that's what you've done was a standard plan. These other ones that we're talking
about are the income repayment plans, which most of the time somebody
(29:36):
is going to go for loan forgiveness. But to your point
that you made earlier, especially on the new RAP plan, people
are gonna have basically nothing or very little forgiven, especially in
the healthcare industry. That's if
you work the entire 30 years. The only way we can see that that not happening is
like if you stay at home part of the time or whatever it is, then
(29:58):
yeah, maybe you still might have some stuff forgiven. But for when we
run scenarios for people, even though you
can't go on to wrap until next year, we already have it in our technology. So when
we run it, That's what we're seeing is for
most people, you're better off just paying it off
and saying, hey, how fast can I pay this off? What does it look like? But
(30:20):
in a nutshell, that's all the new fun stuff coming out. You
know, there was a PSLF announcement today that the Department of Education is
going to try to change some stuff on who qualifies. I
would not put a lot of stock into that. I can see them doing that. And
then I can see it being immediately challenged in court and getting thrown out in
court. So right now, you guys are probably seeing
(30:42):
headlines. Some of you might have saw headlines yesterday and today about that. I
wouldn't get too worried about it right now, even if they do put it into law
coming up soon. it's gonna get challenged pretty damn
Right, and that's for the, like if you're working at a non-for-profit, so
a hospital. So could you just explain my understanding of
it? I'll give you my understanding and you let me know if I'm right or
(31:05):
wrong. Yeah. So my understanding is if you
work for a non-for-profit, like a hospital or something like that, and
you have to make your payments every single month, never miss
a payment, after 10 years, the loan is forgiven, but you still
(31:27):
So what's happening right now with this new stuff on
public service loan forgiveness is they've
come out and they've said, if the program, if
the nonprofit does anything that is illegal
or can be conscribed of illegal activity, illegal activity, all
(31:47):
the employees don't qualify. as a problem and I really say
what that is what they said, level for example if
it's deemed illegal to do trans,
any type of trans treatment for a minor that is illegal, everybody
(32:11):
that works for the hospital doesn't get public service loan forgiveness, period.
If you are at a university that, or
here's the big one, this was the one that we saw, that actually I
just read before I got on here, is the government, if
your city, so like if you live in Boston or you live in New York, And
(32:31):
your mayor and your guys, the people that
run the city, have announced that it's a sanctuary city and they're housing
illegal immigrants. That is against federal law. Anybody
that works for that government no longer gets public service loan forgiveness because
they're engaged in illegal activities. And so
that's That's, you know, depending
(32:55):
on which side you're on, it's like, well, that's good, that's bad. I don't even care about that
part of it. I care about the legal part. Because when PSLF
was passed, which a lot of people don't realize this, it was bipartisan,
but Republicans were in office when that passed. Like, they champion
public service loan forgiveness. Like, it's not going anywhere by law. But
(33:15):
what ends up, what ended up happening was that it's
very explicit in the law that Congress passed, that it's all
50C31 companies. They don't say, if you do this, it's illegal. Like
it's not up to the administration to add that part
in. So just like when President Biden did all this stuff with SAVE and
all these different things, and that got challenged in court because it wasn't done by
(33:37):
Congress. And we just all talked about earlier about Pays You Earn being
gone and SAVE being gone. It's gone because it wasn't
done by Congress. So all this stuff with PSLF, it's
not done by Congress. So I could see the courts immediately
just being like, nope. Like Congress said
this, if you want this changed, it's got to go through Congress. And
(34:02):
if they were going to do anything to it, they would have done it
probably with this last bill. It would have changed something. So
to me, when I hear the
administration talking about this stuff, It's
just talking points. They probably know they're never gonna get anything done,
but it's just to say, look, we're trying to do what we said we
(34:22):
were gonna do. And that's it. I
don't really see it coming down and changing
Right, right. Well, that's good, because boy, oh boy, that would
be a revolt in the streets, I think. Yeah.
And it would, I would assume, just discourage people
(34:43):
from, working in underserved areas,
in rural areas and things like that where people
really need medical care because it
Yeah, and the reason why, by the way, I said that this is like, it has bipartisan support
is, so the big thing that when you talk to a
(35:05):
lot of Republicans, what they were really upset on, on
public service loan forgiveness, was you're right. They set up
that program for like rural areas and
mostly nonprofits that had lower pay. What was happening
is that you had like MDs that would go through residencies and fellowships.
And all that time, those five years, would count towards public service
(35:27):
loan forgiveness. And then they would become an
MD, and they have a half a million dollar salary, and
their loans are 300 grand, 400 grand, but they're getting it forgiven because
all that time during residency. And they're like, wait a second, these people can
afford to pay these off. And so both Democrats
and Republicans wanted to go after that. And
(35:49):
in the big beautiful bill, that was actually one of the things they changed
was like residency no longer counts towards public service loan
forgiveness. And then with the new wrap plan,
it's not going to make any sense for an MD or a dentist or something like
that to do that and try to go on forgiveness, they're going to have to pay back their loans.
And so that target for both Democrats and Republicans on
(36:12):
that part has already been, quote unquote, solved. So
I don't see, that was the only thing that I could see Republicans being like, we're going
to change pre-obligatory law and forgiveness. Well, they basically already did on
Yeah. Yeah. All right. Well, that's all really
good. Very good info. So we covered students,
(36:32):
we covered those in repayment, and we covered those who
will be in repayment after July 1st.
So the wrap plan is only for people who
(36:53):
Because for whatever reason you think. And we've talked to maybe
3 or 4% of people that are going to be on old IBR and it makes sense to
switch to WRAP when it comes out. Every single one of them are at
a nonprofit going for public service loan forgiveness. So that's
Right. Right. Okay. So what did, what
(37:13):
did we miss? Is that everything? Is there anything else that
you feel like students or people who
are graduating soon, those who are
already in repayment, et cetera, et cetera. Is there anything we
missed that you feel like is really
Yeah, I would say the last piece is, as I mentioned earlier,
(37:36):
more people are going to be deciding to pay off their loans, which means looking
into student loan refinancing and figuring out if you should do that or not and
dropping your interest rates. And there's a lot of misconceptions like
I have to refinance all my loans. No, you don't. Like some of the new grads are coming out
with eight, nine percent interest rates. You can refinance those higher
interest rate ones, get them down to like five or six percent right now. And
(37:58):
so, you know, mix and match. Make sure you're actually calculating
how much you save. Like that's something that we do every day on the phone with people like
because Like if you go to SoFi, their calculators are built
for compliance, not actually to show you how much you actually save.
So oftentimes when they show you the numbers, they're comparing apples to oranges situations.
You got to be able to compare them apples to apples to figure out how much you're actually saving. And
(38:19):
then when we get to that number, that's when you make
the decision. And I'll give you an example. I was talking to a FitBucks member
the other day, and she's like, yeah, it makes no sense for me to do this.
I'm going to end up paying off my loans really quickly. And so she's going to end up paying
off her loans in about one or one and a half or two years. And
she could have refinanced her loans, but it was actually only gonna save her because
she's paying off her loan so fast, it was gonna save like $200. So if I was
(38:42):
showing her something like $15,000 in savings, it's like, no, because
they're mapping this out over 10 years, not two years that you're actually gonna pay this off.
And so she's like, well, it makes sense to just stay in my federal loans in
case something happens like COVID or something, right? I'm like, yeah, exactly. She's like, for
$500, I'm not refinancing. But that's the type of calculations that
you need to do. to figure out, hey, you
(39:06):
Got it. Okay. Well, I feel like I've
learned a lot more. I've got my notes. I can't counsel anyone,
but I can tell them where to go and they can go to you. So where
can people go to find more information about Fitbucks and
Yeah, fitbucks.com is full on financial planning, financial
(39:28):
management for young professionals. We started it in the world of student
loans and then built the technology around all that. So we're experts in student
loans, but we do everything now, everything from investments to everything like
buying homes and all that type of stuff. So it's
just, it's fitbucks.com. You know, everybody's like Financial
planners are like, four grand, three grand. It's like, no, it's $18.99 a month, because we
(39:49):
use tech to supplement what we do, so it's a lot more efficient. So
come on on board, and if you do come on, we tell everybody, build
your profile. You can use the technology on your own if you want to, but
we highly encourage you to schedule a call. It's no extra cost. Get
on a call with one of our experts. Make sure you get all your questions answered. Get
the plan set up perfectly, so that way you know you're doing the right thing,
(40:12):
All right, so everyone that's fitbucks.com, F-I-T-B-U-X.com. I
know, I know, I've been, this is not my first rodeo here. So,
you know, I feel like I've asked you this question so many
times as what advice you would give to your younger self. So
what if we kind of, switch it up a little bit
(40:35):
and we'll, you talk to a lot of physical therapists, right?
So we'll, we're going to do a little game here, a
little back and forth based on Andy Cohen and watch what happens
live where he has this thing like do X,
Y, Z, give a damn. So I'm going to ask you do physical
therapists give a damn. And we'll just ask a couple of
(40:57):
questions and you will say yes or
you will say no. And if you want to say why, that's fine. OK, so
so the first one is going to be it's a softball. Do physical therapists
give a damn about the new
(41:17):
They shouldn't. I mean, very little if they do. I mean, it does
have an effect, but once you decide what it is and what
you're doing, just how does it slot
right into your overall financial plan, right? And
we brought up the technology a few minutes ago and the service. That was
the whole reason why I created it, because I didn't want this stuff stressing people out. And
(41:38):
so when you set up the plan, you're like, okay,
I could slide this here, move this here. Yeah, you got to think about it
for about five minutes, 10 minutes, but after that, you just
go on with your life. So, you know, stressing about
it, it is what it is. Like, you
Got it, got it. Okay, so second one, this'll
(42:00):
be a little off topic, but do
you think physical therapists give a damn about Taylor Swift's new
Sorry, that is my bias coming in.
I did not even know she had a new album. I can't even
(42:22):
I can't even probably tell you, if you could play a Taylor Swift song for me right
now, I probably wouldn't even know that it was her. So all
I did is I just, yeah, I don't, yeah,
I'm trying to keep my eight year old away. I'm failing
(42:43):
Well, your eight-year-old probably gives a damn. Okay, how about this? Do
you think physical therapists give a damn about buying
Yes, because... Or buying
So this is my thing, because I look at this from a financial perspective, okay?
(43:04):
So I believe that that
over the years, in the last century, the National
Relatives Association and the financial industry and banks and
even Congress have done an extremely
good job of propagandizing buying
a home and that everybody needs to do it and
(43:26):
that's the American dream. And it's like, You know, the American dream was
owning your own property and being free. That's what a
lot of the founding fathers said, but that wasn't necessarily American
dream. American dream was people coming over here wanting to get away from tyranny and
just having a chance. That doesn't necessarily mean owning your own property. And
when you look at the mathematics behind it, owning your own property oftentimes is
(43:48):
actually a waste of money. Not necessarily a waste, but the return
is nowhere near what it would be if you just rented and invested in the stock market. And
so it's one of those things where it's like, It's
propaganda, but it's also part people
saying that they want to, this is mine. And I
get that. That's perfectly fine. Like I own my own house. Like,
(44:10):
you know, it is what it is. Like, do I want to own it now? Probably not. It's
too much shit to take care of. But
like, I believe the answer is yes, because just the
outside influences that people have. And oftentimes when
people actually sit and really examine it,
(44:33):
Right, right. Yeah, Ramit
Sethi is on, believes in that. Okay,
so last question, pop culture again, related. So
do you think physical, I know, that's why I'm asking, I think it's so funny.
Do you think physical therapists give a damn about Love
Island season seven reunion coming up? with
(45:04):
I have no idea. People
are like, what do you watch? Here's some insight to me, because I don't ever tell
people this. Even my best friend was like, I had no idea that you
Yeah, when I was growing up, I've read every Star Wars book you could possibly
(45:26):
think of. Even my best friend was like, I didn't even know you liked Star Wars. I'm like, yeah, I
just don't. talk about it. I just, why? Like,
I'm not gonna make Star Wars, like, small talk about some make-believe fantasy
land. Like, no, I like it. It's entertaining and, like,
move on with my life. Like, but other than that, I don't, I
(45:46):
All right, that's why I asked. Actually, one more, one more. And
do you think physical therapists should give a damn about Jane's
Absolutely, especially if you're self-employed. Like, that's, It's
from like the feedback that we get. That's why we have them as a partner on
Fitbox and that we help promote them is because the cost of
(46:07):
it, the ability, the time saving aspect of it is
massive, massive, massive, massive. The scribe component of it
I can't tell you. I mean, you guys are PT, so I know this, but like just
taking notes, everybody complains about taking notes. Like
the AI scribe piece is so awesome. It
(46:31):
And it's accurate. And you don't have to sit
there taking notes or I love it because I
don't have to remember everything that I do
during the session because it's transcribing it
as I go along. So that's why I love it. So I think we're
in agreement on this one. Maybe not Taylor Swift
(46:52):
and Love Island, but physical therapists should definitely give a damn about
Jane's new AI scribe. And if you want to find
more info about Jane, we both have
Jane codes that you can use if you want
(47:15):
Perfect, so use either one of those. If you go down
to the show notes of today's, of
this episode, whatever you're listening on, whatever platform, you'll
find all the links to Fitbox and you'll find all the links to
Jane as well. So Joe, thank you so much for
coming on. This was a great, great conversation. And
(47:36):
I know that you have helped a lot of people with this conversation, so
Yeah, thanks for having me and thanks for stopping me on the pop culture questions. Appreciate
Anytime, anytime. And everyone, thanks so much for
tuning in. Have a great couple of days and stay healthy, wealthy, and
Hey, everybody, welcome back to the Healthy, Wealthy and Smart podcast. I
am your host, Karen Litzy, owner of Karen Litzy Physical Therapy located
in New York City. And today we are talking about student
loans. So I'm happy to have back on the program,
friend of the program, Joe Ranke. He is
a CFA charter holder, founder of Fitbucks,
(00:24):
adjunct professor at 15 universities. In
short, he is a financial expert and also a
fellow Jane Ambassador. Jane, the
wonderful EMR that we all that we use.
So, Joe, welcome back to the podcast. Happy to talk about student
loans and what changes are happening as
(00:46):
a result of the latest a
big beautiful bill or whatever the heck they're calling it. So
thank you so much for coming back and sharing
Yeah, glad to be here. And I'm always, you know, talking
about student loans, so I'll throw something positive in there before
(01:07):
student loans. The stock market's at an all time high again, so yay. Like,
So I just feel every time we come on, we're talking about everybody's favorite
Well, that's a positive. That's a positive. So
now let's get into, and I'm
(01:28):
not saying this is a positive or a negative, but let's get
into student loan changes. You
can let us know what the dates of these changes are,
what some of the changes are going to be and how that affects
people in a very practical way. So I'm just going to toss the ball over
Yeah, so and the way you can think about this is people are getting affected in basically
(01:52):
three different categories. There's those that are students are going to
be students. Okay, there are those that are already in repayment.
And then there's those that are gonna be entering repayment after July 1st
of 2026. Okay, so there's basically three groups. The
middle group, the ones that are in repayment right now, are the ones that are,
everybody's like, I don't wanna say freaking out, but they're like panicking, because it's
(02:13):
like, we gotta choose something, because if they don't choose something now, those
choices are gonna be gone by July 1st. I shouldn't say
by July 1st of next year, by July 1st of 2028, but
that date might be moved forward. Okay. Um,
and so I'll start with the easiest ones. First, we'll start with like people that are in school. Okay,
because this is the easiest, but it also has a major impact on just
(02:35):
industries, especially the DPT, because graduate programs are
going to be affected. So right now, the current system, you
can get federal student loans up to
whatever your program says is the cost of tuition, cost
of attendance, and cost of living. Okay. So basically, and most schools
way overestimate cost of living. So basically that means 100% financing.
(02:57):
Okay. Um, that is going away. So if
a student starts school after July 1st
of next year, then the
cap that they're gonna be able to get for like undergrad and master's
programs is $100,000 and $25,000 per year. So $100,000 total. Total federal student loans. And
(03:20):
if it's for a professional program, which they haven't defined yet, we
believe it's gonna include DPT, okay? Like, because of the
way they defined it in the past. But things like MDs,
DPTs, they're gonna be able to get a total of
$200,000 for, that's combined undergrad and grad
school, and capped out at $50,000 a year. And
(03:42):
so the reality of it is that people are
going to end up having private loans again, and it's going to be more like
a system like we had prior to 2008, where Just
here we got some statistics about going into 2008, 2009, because
that's when they changed loans to direct loans, like the government basically
took over the loans. It was about 50-50,
(04:06):
50% federal, 50% private. And then now it's
like 94% federal, 6% private. It's
going to shift back just because of the way it is. It might not
be 50-50, it still might be like 60% federal, 70% federal,
but there's going to be more of a private industry there. So
that's what's going on with in-school stuff. I
(04:29):
know a lot of programs are starting to freak out because a lot of their grants and stuff
have been hit, but they're also saying
how is this going to affect enrollment, which
enrollment's actually already been down across the board for graduate programs, so
this might just increase it, maybe
put some pressure on tuition rates, I don't know. Right.
(04:52):
TBD. Now, can you explain what is the difference between
a federal loan and a private loan and how might that
Yeah, so a federal loan is backed by the government. And
there's a lot more leniency there. There's three times you can go
on forbearance, for example, for 18 months in case you can't make payments. But
(05:13):
most importantly, from a repayment perspective, you qualify for
income driven repayment plans, or your payments are based as
a percentage of your income, and they also qualify for public service loan forgiveness, which
there's a ruling that came out this morning, we'll touch on that too. But
it qualifies for public service loan forgiveness. When you're a private loan, you
don't qualify, like you're paying them off. And
(05:35):
so what we could see end up happening. is where,
let's just say a student has $225,000 in federal student
loans, they can go on to things like loan forgiveness and
be okay, whereas if they were having that split, say
it's like 100 grand federal and 100 grand private, chances
are you're gonna have to pay off both of those now. Because even
(05:57):
though you might qualify for forgiveness on federal, it's only $100,000. So over
time, your payments are gonna be at a point where you're paying it off
anyway. And so
we, we see, and we've seen this before, by the way. So
there's been like PT programs, for example, that are
getting accredited. So borrowers can't get all
the federal student loans. So they end up graduating with half and a half. It's,
(06:21):
they can pay it off, but it's a struggle. Um, and so
that's where I see, you know, some issues coming up in three or
four or five years for even DPTs, because
let's just say you go to undergrad and you have, you
know, a hundred grand in loans already. you can only take out
another hundred grand and you can only take out 50 grand per year. So some of
the programs, I know like a couple of the programs, like Karen,
(06:44):
you might throw up and you hear this. Like one of the programs caught
For the full three
For the full three years, correct. And so it's like, well, if
that student has, you know, a hundred grand from undergrad. Can't
do it. Like they can only take out another 100 grand. Like
(07:05):
they're gonna have probably 150 in private student loans as
well. So you're gonna have 200 grand in
federal, 150 grand in private. It's
too much. Right? So, you
know, and that's why I was saying, hopefully it puts a little bit of pressure on like tuition rates
(07:25):
Yeah. Yeah. I had this conversation with a
professor last week about, well, do
you think now that they've capped loans, will it
force universities to drop their prices?
And he said, well, it better. But to
(07:49):
You know, time will tell. But
they're, at any rate, that's a whole other conversation on tuition costs
and why they're so high, et cetera, et cetera. So we will leave
that for another time. So if
you're a student now, for
all of undergrad, you can take out $100,000. That's four
(08:12):
years of undergraduate studies or three, however long it takes you
And for master's programs. So like if you have
your undergrad and your MBA, the most you can take out is a hundred grand.
Oh my, okay. All right. And then, so you
go through your four years of college, you've taken out, you had to
take out a hundred grand, right? So now
(08:35):
you're applying to physical therapy school and you can
now take out a maximum of-
They have two different labels, like your undergrad
and master's programs, and then professional programs. If you go to a professional program,
the combined can be $200,000. I see. If it's just undergrad
(08:56):
and grad school through a master's, it's
only a hundred. And that's why there's other industries out
there. So like PA, NP, those are
not considered in the past. Those have not been considered professional programs. Those
are considered master's programs. So they're not
getting funding. That's what the industry is believing. SLPs
(09:18):
may get funding like up in the air because
one's an MOT, one's a OTD. So like, What
are we doing there? So in the past, the way they've classified them is
how long you're in school. So like if I started school as
an undergrad to completion to get my license, is it a six-year
program? So in DPTs, that's what it is. If
(09:40):
you're traditional route, it's four years for undergrad, three years for
your DPT, that's seven, that's more than six, and there's a license at
the end of it. Like, that's good. But like PA stuff,
Oh, so they would not be able to take out the loan for
(10:03):
Correct. And they got to make it work. That's the way a lot of the people in
student loan industry that I've talked to are interpreting it. They haven't come out with the official announcement
yet, but that's the big wild card right now. And I know that's why a
lot of programs and health science departments that I work with, like, They're
freaking out. Sure. What's going to happen there
And to be clear, that's one hundred thousand from the federal side.
(10:25):
Anything above that, you would have to go to a private institution
Like a Sallie Mae, a College Ave, a LendKey, you
know, SoFi, like those private lenders that have
Right. And so what is, so
if you have those private student loans and you lose your
(10:46):
job, you can't go on forbearance, put them on hold. You
have to keep paying them. Is the interest higher in
Typically, yeah. A little bit higher. They
do have some forbearance stuff, like someone will let you forbear for six months,
but they're a lot more strict. You actually have to show that you got terminated.
(11:09):
There's very strict things you gotta follow versus just the government.
You're like, put me on forbearance, and they're like, okay. Got it. So
Okay. All right. Well, that's a really good overview of
what happens if you're a student or you're going to
be a student. So how about those folks who are
(11:29):
currently in repayment? I know there are people that
graduated around the time I graduated that are
still in repayment. And there are people obviously who graduate
in the last 10, 20 years who are in repayment. So what
happens to their choices when it comes to
So when you look at student loans right now, the actual loan forgiveness plans that
(11:51):
are available, you have ICR, which basically nobody
goes on, which it's, don't even need to be talking about
it. Then you have pay as you earn, P-A-Y-E. And
then you have SAVE, which is basically already gone.
It's being challenged in court. And then you have this thing called IBR, income-based
repayment. And people get confused with income-based repayment for
(12:12):
two reasons. One, you have old IBR and you have
new IBR. Of course. Let's make it
confusing, right? Old IBR is for people that had loans prior to
January 2014. Before that, July 1st, 2014. New IBR is after that date. That's
the cutoff. Now
(12:33):
the second piece I get confused on is pay-as-you-earn is
exactly the same thing as new IVR in terms
of how they calculate it and everything else. Eligibility is a little bit different, but
the actual repayment plan is exactly the same. So
when I say things like new IVR, I use new IVR and pay-as-you-earn interchangeably.
Okay, so what's happened with the OBBB,
(12:57):
whatever they called it, what that's doing
is it's getting rid of save and
They're gone. And the reason being is because all those
programs were passed by presidential action, not by
Congress. So the only ones that were passed by Congress were
(13:19):
IBR, income-based repayment. So
they've told everybody that is in repayment right
now that you're going to have to choose one of those programs
if you want to stay on it. And the deadline is
July 1st, 2028, which is the deadline in the bill. But
it says that the Department of Education has to have everybody switched by
(13:42):
that date. So the Department of Education can come
back and say, you got to be on this by July 1st of next year, choose.
Like they just have that deadline of three years. Like
the Department of Education has that deadline, but they can do it
anytime sooner that they want to. So a lot of people are like freaking
out because it's like, well, am I going to miss the deadline? It's like, we don't know because we
(14:03):
don't know what that deadline is yet. But that's the
big thing there. And for a lot of times, up
until August 1st, a lot of people were not doing anything
because they were on, say, forbearance and it wasn't accruing interest. That stopped
August 1st. And so people, there's like
for about 90% of people, there's no reason to stay on forbearance anymore because
(14:24):
you're accruing interest and you're not getting any credit towards forgiveness. So
So you could start paying into it, paying off that interest, yeah.
And those months start counting towards forgiveness. Like, you gotta go.
Right. So yeah, the last like
two, three, four weeks, I mean, we've had
probably over almost 1,500 phone calls just because of that.
(14:47):
People needed to make the decision. And
to make it even more confusing is a lot of people, they haven't made a
switch over in the programs yet for the government, like
on their site. So people can still qualify for pay as
you earn, even though it's going to go away. And
so right now, if you're kind of contemplating which plan to go on, if
(15:08):
you can get on new IVR, which is 10% of your income,
that's the one to go on because that's not going anywhere. That's the cheapest. If
you can get on it, get on it. If you're
like an older borrower, You know, if you can get on
pay as you earn for the next year, fantastic. But chances are you're going to go to old
So what's the difference? Are the choices just
(15:37):
So new IBR is 20 years long and 10% of
It's a lot cheaper. Got it. So if you're an older borrower,
let's say you graduated in 2000 from
physical therapy school, you would be considered in, maybe
(16:03):
So you can make the switch from
You can't, and that's where a
lot of people make a mistake because the loan servicers,
and they're right, they'll tell you this, you can consolidate your loans
and then go into new IBR because when you consolidate your loans, it's considered a brand
(16:24):
new loan. The problem is it's considered a brand new loan. So
let's just say you have 15 years of payments. and
you have 10 more years on old IBR, you
So now you're at 20 years. Man,
(16:45):
Yeah, and so it's a double whammy
too, what we're seeing right now. This is like a new phenomenon we've
been seeing in the last like month. is that people
are gonna be on that plan, which a lot of them are already on that plan anyways. So
they understood that payment. But what has happened, when you ran projections 10, 15 years
ago, you might say, hey, look, a normalized income increase
(17:08):
is 3%. So this is what's gonna happen over time. Well, because of
inflation over the last four or five years, we've
been seeing people, especially in the hospital systems, getting raises of 5% or
10%. So their incomes have increased Their
cost of living, though, has increased more, so their salary is not keeping
up with cost of income, so their overall money coming home
(17:29):
is already tight, but because of that extra bump in
salary increases, it's also increasing their student loan payment.
So they're getting hit with a double whammy where like if inflation wouldn't
have happened, they probably would have been fine. But because inflation happening,
their cost of living is going up so much and their
student loan payments going up. It's like, oh crap, like how am I supposed to
(17:53):
And that's why we've had probably like five to 10% of people that we work with.
They're like, I have to stay on forbearance because I got to figure out how the hell, like
between my mortgage and everything, like I did not plan for this payment going up this much.
I got to figure out where I need to shift my finances and I
need six to 12 months to figure this out. Like, you
know, they're panicking because they're, it's like, what do you cut? You
(18:16):
know, like you can't cut food, you got to eat. Like, so.
Right, right. And most people can't cut a car payment or
car insurance. You know, if you live in a place where you need a car, that's
Yeah. Yeah. And I mean, car insurance, I just I
mean, I just, for example, got a rude awakening. I mean, my
car insurance would go renew and they doubled it. And I'm like, no, no, no.
(18:39):
Like I went out and shopped and I got it back lowered. But I was like, this
is not being doubled for no reason. They're like inflation. It's like that's
bullshit. I'm not paying this. Hmm.
But, you know, it's it's a real thing. And
that's, to me, a lot of people are saying, oh, the student loans are
the big problem right now. It's like, no, no, no, you're seeing the repercussions of inflation. Like
(19:03):
Right. And also for those people who, let's say,
weren't making regular payments because with COVID,
OK. So how does, what does that do to
people's budgeting, I guess? You really have to make some
Well, it's a massive shock on two fronts. One, I mean, we know people that have
(19:26):
zero dollar payments for the last five years just because of the way things happen.
We've seen other people that they might have got it approved.
like the year that they graduated. So their payments were like $100 a month
because they were only qualifying on partial income because they didn't work the whole year.
And so now that they have a full year's income, that's
(19:47):
going to spike to $600 or $700. And that's
going to be the normal payment. That's what it was supposed to be all the time. It's just when
you're originally qualified, You did so with partial income.
So now it's going up to normal. And so that's where you
know, you see a lot of these stories on like Facebook or Instagram or
Reddit, and they're like, my payment was, you know, $200 a month, and now it's 600. It's
(20:08):
like, that's why it's going to a normalized payment. And
it's not so much because the repayment plans. The
repayment plans is maybe $100 to $200 for most people. It's not earth
shattering. It's because of people's income changing.
Got it, got it. So for people, just
(20:30):
to recap this new and old, for people on the
old IBR, can kind
of have to stay on that old IBR. Otherwise they'd have
to consolidate their loans, which would be a new loan. Then they have
to go on the new IBR, which starts at day zero. So
you still have 20 years. So if you've been paying, so if you graduated in
(20:51):
2000 and you've been, paying your loans, but let's
see, you didn't have to pay for five years. Let's say you're 20 years, you want
to kind of stick to where you are because maybe you only have five years left. Is
And then the new IBR are for who?
People that started that, people that did not
(21:15):
Okay. So if you graduated physical therapy
If those were your first loans, yeah. If you had undergrad loans before that, then
it's still old IBR. So all your loans
would have had to be new after July 1st,
Okay, that's a good distinction. Thanks for that. So that's
(21:35):
undergrad and physical therapy school. So
all of that had to be after 2014. I
And the even more confusing part is that we know people that had loans before
that, when they go on right now to studentaid.gov, it's saying that they qualify for
new IBR, even though they shouldn't. And I'm like, great, go on
(22:00):
Go on new IBR. Should we
tell them? It's like, no. Go on. Take
Okay. New IBR is 20 years. Old IBR is
25 years. But if you're on old IBR, you're probably
(22:25):
maybe fairly close of reaching that 25 years versus
And that's the big dilemma right now is because people are like, well, I
still have 10 more years left. But for a lot of people, the
payments are so high. It's like, do I just turn around and pay this off
instead of go for loan forgiveness now? So that's the other part
(22:47):
that they're trying to contemplate is I'm not really
And now they got accrued interest and they gotta pay that back. So it's just
Right, right. So people who are on the
old IBR, by the time they finish,
(23:11):
Or very little. Correct. Right. So when
you do reach those, that 25 years on old or
20 years on new, and let's say you have
$50,000 left on the loan, that loan is forgiven, but
Right. So you have to remember to put that money
(23:34):
aside. So you need to kind of have people like you who
can do that calculation for you and say, at the end of
this loan, this 20 years at 10 percent of your income, depending
on, you know, you can probably do some projections to see maybe where
the income might be. Make sure you're putting away this
much money every year so that when the time comes, you're like,
(24:01):
Correct, and now you do have it. So that's
one of the big things when we're building out financial plans that we're looking at is how much do you
And how are you gearing up for that? Yeah, and
so that's old IBR and new IBR. And then the new one, it's
got some good features on it. Before I dive into the
(24:22):
new one, any questions on all that? No, I think- You got it down pretty good because
I think I got it. I was sitting here taking notes and being like, hey, I
get this. I think I got it. I got it. I'm much more confident in
And if you're listening to this, you might have to like, in your car, you might have to pull over and take some notes
Keep rewinding. Yeah. And also, the
(24:44):
hard part too is like, there is no solid date.
Like you said, it could be July 1st, 2028, but
We don't know yet. We don't know. The one date we do know is
July 1st of next year. That's when the new income
Okay. That is the one date that we do know. It's called RAP. It's R-A-P, or
(25:11):
Okay, now this is very similar. It's based as a percentage of
your income on your monthly payments, but
it's different because it's a tiered percentage. So it's not a
flat 10%. It's based on
your adjusted gross income. So for example, like if you make
between 20 and $30,000 a year, it's 2% of that number. And then it tears up for every 10,000. So it goes
(25:32):
3%, 4%, 5%. Once you hit 100,000, it's 10% of your income and it's capped at 10%. It doesn't go
up anymore from there. Okay, so that's. That's
a little bit different of a feature, which makes it, like when you're lower income,
it makes it more affordable than some of the current plans and so on and so forth.
(25:54):
And so that's a decent feature. Now, on
top of that, there's interest forgiveness every month,
interest subsidies. So when your payment doesn't cover your interest, instead
of the loan balance increasing, the government's gonna
forgive that interest immediately. You don't pay any taxes on it or anything. So
on the new plan, your balance never goes up. In
(26:17):
addition, your balance, the government also
provides a $50 match towards your principal. So every
month, if you have a normal payment of like $400 a month, and
it only covers interest, the government will reduce your principal
by $50 a month as well. So those
are pretty good features. So when people are actually like looking at this, they're like, what's the
(26:38):
downside, right? Because if you look at the monthly payment, it's
gonna be cheaper than old IBR. And people
on old IBR can go to the new plan and
Okay, so if you're on old IBR, sit tight
until July 1st, maybe. Of
(27:03):
Because everything in this plan sounds great, but it's also 30 years
Oh, OK. So for a lot of people, they
may completely pay off that loan in 30 years and there's
That's what it's going to be. And I can see somebody asked me about some
(27:26):
stats the other day. I can say that probably 70, 80% of
people are going to end up saying, I just want to pay off my loans instead of going on this. Um,
and that's what it's going to be. Um,
except for if they're at a nonprofit, because if I, if I'm on
old IVR, and I got two or three years left until
I get my loans forgiven for PSLF, then I can
(27:49):
go on WRAP and the monthly payment's lower and I don't care
about the 30 years because I get public service loan forgiveness. So
if you're on public service loan forgiveness, it may be a really good plan to go on
because the payments are cheaper. But that's why I
was saying, for the people that are in repayment right now, if you can get on old
IVR, it's way better, or new IVR, I'm
(28:09):
sorry, new IVR. If you can get on new IVR, it's way better than old IVR and
it's way better than RAP. There's no question, that's where you're going. If
you're stuck on old IVR, then that's where the question
mark comes in is, do I stay there? Do I go on RAP? Or
do I just say, nah, screw this. I'm going to pay off my loans. OK, now,
if you're not in repayment already and you graduate and
(28:30):
your repayment does not start until after July of next year,
you don't have a choice. It's either RAP or the standard plan. There is no more choice.
So the standard plans are gonna change too. So right now the standard plan
is 10 years. It's just a regular 10 year, like if you have a car loan
and it's a five year car loan, you make the payments, it's gone in five years, that's the
(28:51):
standard plan. The standard plans are changing to
say if you owe less than 25 grand, it's 10 years. If
it's 25 to 50 grand, it's a 15 year loan. If
it's a 50 to a hundred grand, then it's a 20 year
loan. And if you owe over a hundred grand, it's 25 years. Now, of course you can
always make prepayments. Like you can be on the 25 year plan and pay it
(29:14):
And so with a standard plan, you're just paying off the
That's what I was at. Cause I, when I got, I saved my
Yeah. And so that's what you've done was a standard plan. These other ones that we're talking
about are the income repayment plans, which most of the time somebody
(29:36):
is going to go for loan forgiveness. But to your point
that you made earlier, especially on the new RAP plan, people
are gonna have basically nothing or very little forgiven, especially in
the healthcare industry. That's if
you work the entire 30 years. The only way we can see that that not happening is
like if you stay at home part of the time or whatever it is, then
(29:58):
yeah, maybe you still might have some stuff forgiven. But for when we
run scenarios for people, even though you
can't go on to wrap until next year, we already have it in our technology. So when
we run it, That's what we're seeing is for
most people, you're better off just paying it off
and saying, hey, how fast can I pay this off? What does it look like? But
(30:20):
in a nutshell, that's all the new fun stuff coming out. You
know, there was a PSLF announcement today that the Department of Education is
going to try to change some stuff on who qualifies. I
would not put a lot of stock into that. I can see them doing that. And
then I can see it being immediately challenged in court and getting thrown out in
court. So right now, you guys are probably seeing
(30:42):
headlines. Some of you might have saw headlines yesterday and today about that. I
wouldn't get too worried about it right now, even if they do put it into law
coming up soon. it's gonna get challenged pretty damn
Right, and that's for the, like if you're working at a non-for-profit, so
a hospital. So could you just explain my understanding of
it? I'll give you my understanding and you let me know if I'm right or
(31:05):
wrong. Yeah. So my understanding is if you
work for a non-for-profit, like a hospital or something like that, and
you have to make your payments every single month, never miss
a payment, after 10 years, the loan is forgiven, but you still
(31:27):
So what's happening right now with this new stuff on
public service loan forgiveness is they've
come out and they've said, if the program, if
the nonprofit does anything that is illegal
or can be conscribed of illegal activity, illegal activity, all
(31:47):
the employees don't qualify. as a problem and I really say
what that is what they said, level for example if
it's deemed illegal to do trans,
any type of trans treatment for a minor that is illegal, everybody
(32:11):
that works for the hospital doesn't get public service loan forgiveness, period.
If you are at a university that, or
here's the big one, this was the one that we saw, that actually I
just read before I got on here, is the government, if
your city, so like if you live in Boston or you live in New York, And
(32:31):
your mayor and your guys, the people that
run the city, have announced that it's a sanctuary city and they're housing
illegal immigrants. That is against federal law. Anybody
that works for that government no longer gets public service loan forgiveness because
they're engaged in illegal activities. And so
that's That's, you know, depending
(32:55):
on which side you're on, it's like, well, that's good, that's bad. I don't even care about that
part of it. I care about the legal part. Because when PSLF
was passed, which a lot of people don't realize this, it was bipartisan,
but Republicans were in office when that passed. Like, they champion
public service loan forgiveness. Like, it's not going anywhere by law. But
(33:15):
what ends up, what ended up happening was that it's
very explicit in the law that Congress passed, that it's all
50C31 companies. They don't say, if you do this, it's illegal. Like
it's not up to the administration to add that part
in. So just like when President Biden did all this stuff with SAVE and
all these different things, and that got challenged in court because it wasn't done by
(33:37):
Congress. And we just all talked about earlier about Pays You Earn being
gone and SAVE being gone. It's gone because it wasn't
done by Congress. So all this stuff with PSLF, it's
not done by Congress. So I could see the courts immediately
just being like, nope. Like Congress said
this, if you want this changed, it's got to go through Congress. And
(34:02):
if they were going to do anything to it, they would have done it
probably with this last bill. It would have changed something. So
to me, when I hear the
administration talking about this stuff, It's
just talking points. They probably know they're never gonna get anything done,
but it's just to say, look, we're trying to do what we said we
(34:22):
were gonna do. And that's it. I
don't really see it coming down and changing
Right, right. Well, that's good, because boy, oh boy, that would
be a revolt in the streets, I think. Yeah.
And it would, I would assume, just discourage people
(34:43):
from, working in underserved areas,
in rural areas and things like that where people
really need medical care because it
Yeah, and the reason why, by the way, I said that this is like, it has bipartisan support
is, so the big thing that when you talk to a
(35:05):
lot of Republicans, what they were really upset on, on
public service loan forgiveness, was you're right. They set up
that program for like rural areas and
mostly nonprofits that had lower pay. What was happening
is that you had like MDs that would go through residencies and fellowships.
And all that time, those five years, would count towards public service
(35:27):
loan forgiveness. And then they would become an
MD, and they have a half a million dollar salary, and
their loans are 300 grand, 400 grand, but they're getting it forgiven because
all that time during residency. And they're like, wait a second, these people can
afford to pay these off. And so both Democrats
and Republicans wanted to go after that. And
(35:49):
in the big beautiful bill, that was actually one of the things they changed
was like residency no longer counts towards public service loan
forgiveness. And then with the new wrap plan,
it's not going to make any sense for an MD or a dentist or something like
that to do that and try to go on forgiveness, they're going to have to pay back their loans.
And so that target for both Democrats and Republicans on
(36:12):
that part has already been, quote unquote, solved. So
I don't see, that was the only thing that I could see Republicans being like, we're going
to change pre-obligatory law and forgiveness. Well, they basically already did on
Yeah. Yeah. All right. Well, that's all really
good. Very good info. So we covered students,
(36:32):
we covered those in repayment, and we covered those who
will be in repayment after July 1st.
So the wrap plan is only for people who
(36:53):
Because for whatever reason you think. And we've talked to maybe
3 or 4% of people that are going to be on old IBR and it makes sense to
switch to WRAP when it comes out. Every single one of them are at
a nonprofit going for public service loan forgiveness. So that's
Right. Right. Okay. So what did, what
(37:13):
did we miss? Is that everything? Is there anything else that
you feel like students or people who
are graduating soon, those who are
already in repayment, et cetera, et cetera. Is there anything we
missed that you feel like is really
Yeah, I would say the last piece is, as I mentioned earlier,
(37:36):
more people are going to be deciding to pay off their loans, which means looking
into student loan refinancing and figuring out if you should do that or not and
dropping your interest rates. And there's a lot of misconceptions like
I have to refinance all my loans. No, you don't. Like some of the new grads are coming out
with eight, nine percent interest rates. You can refinance those higher
interest rate ones, get them down to like five or six percent right now. And
(37:58):
so, you know, mix and match. Make sure you're actually calculating
how much you save. Like that's something that we do every day on the phone with people like
because Like if you go to SoFi, their calculators are built
for compliance, not actually to show you how much you actually save.
So oftentimes when they show you the numbers, they're comparing apples to oranges situations.
You got to be able to compare them apples to apples to figure out how much you're actually saving. And
(38:19):
then when we get to that number, that's when you make
the decision. And I'll give you an example. I was talking to a FitBucks member
the other day, and she's like, yeah, it makes no sense for me to do this.
I'm going to end up paying off my loans really quickly. And so she's going to end up paying
off her loans in about one or one and a half or two years. And
she could have refinanced her loans, but it was actually only gonna save her because
she's paying off her loan so fast, it was gonna save like $200. So if I was
(38:42):
showing her something like $15,000 in savings, it's like, no, because
they're mapping this out over 10 years, not two years that you're actually gonna pay this off.
And so she's like, well, it makes sense to just stay in my federal loans in
case something happens like COVID or something, right? I'm like, yeah, exactly. She's like, for
$500, I'm not refinancing. But that's the type of calculations that
you need to do. to figure out, hey, you
(39:06):
Got it. Okay. Well, I feel like I've
learned a lot more. I've got my notes. I can't counsel anyone,
but I can tell them where to go and they can go to you. So where
can people go to find more information about Fitbucks and
Yeah, fitbucks.com is full on financial planning, financial
(39:28):
management for young professionals. We started it in the world of student
loans and then built the technology around all that. So we're experts in student
loans, but we do everything now, everything from investments to everything like
buying homes and all that type of stuff. So it's
just, it's fitbucks.com. You know, everybody's like Financial
planners are like, four grand, three grand. It's like, no, it's $18.99 a month, because we
(39:49):
use tech to supplement what we do, so it's a lot more efficient. So
come on on board, and if you do come on, we tell everybody, build
your profile. You can use the technology on your own if you want to, but
we highly encourage you to schedule a call. It's no extra cost. Get
on a call with one of our experts. Make sure you get all your questions answered. Get
the plan set up perfectly, so that way you know you're doing the right thing,
(40:12):
All right, so everyone that's fitbucks.com, F-I-T-B-U-X.com. I
know, I know, I've been, this is not my first rodeo here. So,
you know, I feel like I've asked you this question so many
times as what advice you would give to your younger self. So
what if we kind of, switch it up a little bit
(40:35):
and we'll, you talk to a lot of physical therapists, right?
So we'll, we're going to do a little game here, a
little back and forth based on Andy Cohen and watch what happens
live where he has this thing like do X,
Y, Z, give a damn. So I'm going to ask you do physical
therapists give a damn. And we'll just ask a couple of
(40:57):
questions and you will say yes or
you will say no. And if you want to say why, that's fine. OK, so
so the first one is going to be it's a softball. Do physical therapists
give a damn about the new
(41:17):
They shouldn't. I mean, very little if they do. I mean, it does
have an effect, but once you decide what it is and what
you're doing, just how does it slot
right into your overall financial plan, right? And
we brought up the technology a few minutes ago and the service. That was
the whole reason why I created it, because I didn't want this stuff stressing people out. And
(41:38):
so when you set up the plan, you're like, okay,
I could slide this here, move this here. Yeah, you got to think about it
for about five minutes, 10 minutes, but after that, you just
go on with your life. So, you know, stressing about
it, it is what it is. Like, you
Got it, got it. Okay, so second one, this'll
(42:00):
be a little off topic, but do
you think physical therapists give a damn about Taylor Swift's new
Sorry, that is my bias coming in.
I did not even know she had a new album. I can't even
(42:22):
I can't even probably tell you, if you could play a Taylor Swift song for me right
now, I probably wouldn't even know that it was her. So all
I did is I just, yeah, I don't, yeah,
I'm trying to keep my eight year old away. I'm failing
(42:43):
Well, your eight-year-old probably gives a damn. Okay, how about this? Do
you think physical therapists give a damn about buying
Yes, because... Or buying
So this is my thing, because I look at this from a financial perspective, okay?
(43:04):
So I believe that that
over the years, in the last century, the National
Relatives Association and the financial industry and banks and
even Congress have done an extremely
good job of propagandizing buying
a home and that everybody needs to do it and
(43:26):
that's the American dream. And it's like, You know, the American dream was
owning your own property and being free. That's what a
lot of the founding fathers said, but that wasn't necessarily American
dream. American dream was people coming over here wanting to get away from tyranny and
just having a chance. That doesn't necessarily mean owning your own property. And
when you look at the mathematics behind it, owning your own property oftentimes is
(43:48):
actually a waste of money. Not necessarily a waste, but the return
is nowhere near what it would be if you just rented and invested in the stock market. And
so it's one of those things where it's like, It's
propaganda, but it's also part people
saying that they want to, this is mine. And I
get that. That's perfectly fine. Like I own my own house. Like,
(44:10):
you know, it is what it is. Like, do I want to own it now? Probably not. It's
too much shit to take care of. But
like, I believe the answer is yes, because just the
outside influences that people have. And oftentimes when
people actually sit and really examine it,
(44:33):
Right, right. Yeah, Ramit
Sethi is on, believes in that. Okay,
so last question, pop culture again, related. So
do you think physical, I know, that's why I'm asking, I think it's so funny.
Do you think physical therapists give a damn about Love
Island season seven reunion coming up? with
(45:04):
I have no idea. People
are like, what do you watch? Here's some insight to me, because I don't ever tell
people this. Even my best friend was like, I had no idea that you
Yeah, when I was growing up, I've read every Star Wars book you could possibly
(45:26):
think of. Even my best friend was like, I didn't even know you liked Star Wars. I'm like, yeah, I
just don't. talk about it. I just, why? Like,
I'm not gonna make Star Wars, like, small talk about some make-believe fantasy
land. Like, no, I like it. It's entertaining and, like,
move on with my life. Like, but other than that, I don't, I
(45:46):
All right, that's why I asked. Actually, one more, one more. And
do you think physical therapists should give a damn about Jane's
Absolutely, especially if you're self-employed. Like, that's, It's
from like the feedback that we get. That's why we have them as a partner on
Fitbox and that we help promote them is because the cost of
(46:07):
it, the ability, the time saving aspect of it is
massive, massive, massive, massive. The scribe component of it
I can't tell you. I mean, you guys are PT, so I know this, but like just
taking notes, everybody complains about taking notes. Like
the AI scribe piece is so awesome. It
(46:31):
And it's accurate. And you don't have to sit
there taking notes or I love it because I
don't have to remember everything that I do
during the session because it's transcribing it
as I go along. So that's why I love it. So I think we're
in agreement on this one. Maybe not Taylor Swift
(46:52):
and Love Island, but physical therapists should definitely give a damn about
Jane's new AI scribe. And if you want to find
more info about Jane, we both have
Jane codes that you can use if you want
(47:15):
Perfect, so use either one of those. If you go down
to the show notes of today's, of
this episode, whatever you're listening on, whatever platform, you'll
find all the links to Fitbox and you'll find all the links to
Jane as well. So Joe, thank you so much for
coming on. This was a great, great conversation. And
(47:36):
I know that you have helped a lot of people with this conversation, so
Yeah, thanks for having me and thanks for stopping me on the pop culture questions. Appreciate
Anytime, anytime. And everyone, thanks so much for
tuning in. Have a great couple of days and stay healthy, wealthy, and
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