Unknown Speaker  0:00  
This is a production of km media dot Pro. Welcome back to positive talk radio. Our goal is simple to explore evolving ideas one conversation at a time. So come on over into our world. I know you'll like it. Because on today's show, do you have kids that are in high school? Do you know somebody who has kids that are in high school? Do you know somebody who has? Anyway, you know, you get one a you, you get where I'm going with that? In today's show, we're gonna talk about preparing for college. You know, Eric, I know that you went to college, and did you have to take out student loans to get that done.

Unknown Speaker  0:46  
Luckily, I went to a technical college and I was able to cover it with, you know, a part time job at the time, little help from dad paying the rent. But, you know, mostly I was able to pay out of pocket. But I understand this is the exception rather than the rule for sure.

Unknown Speaker  1:05  
These days, that's the that's what I understand as well. And I know lots and lots of people that are so indebted after they get out of college. And the career that they've chosen doesn't necessarily pay for the debt that they have incurred over time. And so some people end up with that in their 20s, late 20s 30s, and 35 and 40. And, and it makes it very tough goes down before we begin. And we've got a wonderful lady who's going to talk to us about getting ready for kids going to college, and how best to position them. And when they need to start looking at that and that kind of thing. But first, I do I have to say that starting the 14th of November, we are Monday show is moving from 9am to 3pm. All because we get to have Eric as our producer.

Unknown Speaker  2:02  
Is that why? Fantastic?

Unknown Speaker  2:04  
No, it has actually more to do with the fact that 9am Just a little early for me to get all excited about, you know, getting everything ready and stuff like that. So I needed a little bit more time,

Unknown Speaker  2:13  
believe me as a night owl, I totally understand. So I'm excited to be working with you for two days a week now.

Unknown Speaker  2:21  
It'll be great fun, it is really hard to get up to spend the rest of your time and go to bed at midnight, one o'clock. And then to get up at 730 and prepare for a show. And then to actually be coherent at nine o'clock even though I'm I lack coherency most of the time anyway. But that's that's okay. But in any event that starts on the 14th that will be at 3pm on Monday 4pm on Wednesday and noon on Friday. So I hope that you you will tune into that that'll be great fun, and we've got a full lineup of guests, and it's gonna it's gonna be fun like today. I've interviewed this young lady before. And first of all, let me tell you about her. Let me see if I can do this without massacring her name on Aurora. De Silva Kilgore is that close.

Unknown Speaker  3:09  
It's close. It's an audio, but I'm Nadia, I go when you don't look at it, you say it perfectly?

Unknown Speaker  3:17  
Well, I can say it right after you say it. That's that's, I mimic people very, very well. But, and you are a lawyer. And you have been working with people in financial matters and long term planning for a long time. But in your bio, one of the things that says is that one of the recurring themes that comes up is if you are a parent, and you're raising a couple of kids and you want, you know, you get I know what this is like, because this is what happened to me, you, you raise your kids eight or 10 or 12. And you start thinking, Well, you know, I probably need to start preparing for college. And then they get to be 13 and 14, and then you start to say to yourself, you know, I probably need to start preparing for college. And then they get to 16 and 17. And they go into their senior year. And you say to yourself, you know, I probably should get ready to prepare for college. And by that time, it's way too late. And it's been a long time since a lot of us have been in school. And so we don't know how to negotiate through the minefields that are out there with student loans and how it all works, which is why you started your business, which is called PCC I personal college counseling, Incorporated and, and that's why you do what you do. And welcome to the show, by the way.

Unknown Speaker  4:47  
Thanks, Kevin. Thanks for having me back. I you know, like you said, I did a little bit of a pivot in my practice because I felt that there was such a need for PD people getting real information, I always feel that information is power. And knowledge is power. And using that knowledge and information to your advantage is, is super helpful, especially when you're looking at the prices of higher education, whether it's public or private, they're all pretty expensive. You know, unlike Eric's experience, that is definitely not how most kids can get through nowadays. And for some of us, you know, we're fortunate we have saved up like, since the day these kids were born,

Unknown Speaker  5:37  
for sure, sure to

Unknown Speaker  5:39  
do if you're really hoping to cover the whole thing. But most people, you know, they save what they can when they can, and then it's often not enough. So it's a real problem. Because you also have the emotional factor that factors in like, Oh, I know, this school was supposedly great. So I'm gonna, like, go into debt, because someday it'll pay off. And then there's a little bit of an issue with that, too, you know, you gotta go, where's good for you. And then that means a lot of things like academically and financially, my whole point of what I do, is I take my legal skills, analytical skills, research skills, and know how to use all that. But also, to find out, you know, where's the best place with this particular kid exactly the way they are, has a shot at getting some extra funds that can make that place affordable for them. Right. And that's so important, because you don't want to over borrow in this, you know, if you want to talk about the the current Biden loan forgiveness program, that's important, too. But it's, you know, it's, it's helpful, but it's not going to with one, magic wand sweep away. Everybody's problems on student loans, but it's certainly helpful. But working with someone like me from the get go, the whole point is not to get in over your head. You know, so a lot of issues.

Unknown Speaker  7:13  
Is it true that there are kids, young adults now or adults in you know, that are graduated from college that have as much as $100,000 in debt? Or $50,000? What? What is the average student that doesn't have? You know, Daddy Warbucks have lots of bucks in his pocket? Um, how much debt do they do they leave college with as a rule?

Unknown Speaker  7:39  
Well, way too much. If you go over what I consider reasonable borrowing, I think it's reasonable to have the kids, the young adults, as you said, have some skin in the game and take an interest in help helping finance their own education. And that's where the government student guaranteed student loan program program is excellent. But you can't rely on that to cover the whole cost of college because it's 5500 as a freshman a little bit more as a sophomore, and so on. So if you were to just take the guaranteed student loans, you'd be graduating with, I probably should know this off the top of my head, but let's just say $27,000, roughly, maybe 21, somewhere around there. Whatever that is, I think that's a reasonable number. And to put into your own education that you can reasonably pay back over the expected time period, which is roughly about 10 years. And if you were to be able to graduate from college, and just have that debt, you're looking at the equivalent of maybe a car payment or something, but for a longer period of time. I don't think that's ridiculous. I really don't. But when you graduate from undergrad, the first four years of college, and you have six figures in debt, you have done something massively wrong. That that is not a good head start in life that is going to impact your ability to make job choices, to move out of mom and dad's basement, to buy a car to be able to get to work to start a family to save money for your own place or a house that is starting off life with a mortgage and no place to live. And that's, that's not the way to go about things.

Unknown Speaker  9:35  
You know, when we first talked, I asked you, you know, when should you as a parent, and as a child that is wanting to go to a four year quality institution. When should they start planning and you surprise me because your timeframe is a lot longer than I would have thought it was?

Unknown Speaker  9:56  
I am not your typical planner. I don't think because I do have a couple of stereotypes that go up against all the time and one is, oh junior year, that's when you start thinking about it. And like junior year, on my timeframe, you're playing catch up, I would love to grab all my kids as freshmen in high school, right after they get their first set of grades, because I can still affect their trajectory, I can help them get on or stay on the right track. I just read something recently, and it was after the last time we talked that about half of the state's high school requirements for graduating are inadequate to satisfy the basic requirements to get into a decent school. Why exactly. Say,

Unknown Speaker  10:54  
how is that even possible?

Unknown Speaker  10:56  
Well, the key example, it comes up all the time, you know, so many schools are like, they don't make you take a foreign language as a requirement to graduate high school, or I love this one, you took one year or two years in middle school. So now you only have to take one year of the foreign language because it's like you have three because you took two in middle school, no one gives a flying fit what you did in middle school, when you're applying for college, you should be continuing that and taking four years, or three years, or at the very least two years. Right? But so many schools don't even require that. And now the kids are like, Oh, how come I don't qualify for this nice competitive school? Well, because you don't have the prerequisites to even get in the door, you know, or you only need two years of some sort of science, and you're talking to a science base kid wants to go to a good program, good school, they want more than your basic two years, they want your two years a lab science plus, plus more, you know, and it just isn't enough. But it goes to my point that I always tell parents is one, high school guidance counselors have too much on their plate. And their primary job is to make sure your kid graduates high school. They're not they're analyzing your finances and what you can afford her not to do. And oh, maybe this kid should go up a level or down a level based on you know, what their goals are and how they're doing. Now, they're not doing any of that analysis? Of course not. They're looking at your kid. And if you have a good student, that's not in trouble, you're going to be lucky. And I say this with 100% certainty because I have yet to be proven wrong with anyone I've worked with. You're gonna get five minutes. If you're lucky, with your guidance counselor with a pre printed schedule. Here's what you should take next semester next year. Nice to see you have a nice day. Next. There's no counseling, there's no in depth look, there's no future planning, they need to get you through the door.

Unknown Speaker  13:15  
Well, they're not really that's not really their job is been there and the way that they look at it, because they've got too many kids on their plate. They've got how many? On average, in a major High School, how many students does a the average counselor have?

Unknown Speaker  13:29  
Way too many, I'm in an area where we have some big local high school. So it's not unusual for a guidance counselor to have 130 150 kids at any given time. Probably on the low side. And if you have a smaller school, that guidance counselor might be responsible for even more kids and more grades. It's not it's not ideal. And it's not like that's all they're doing. Like for me in fpcci. That's all I'm doing. You know, I'm obsessing over this for your one child. Right? I am not also having to worry if someone came to school that day, and they didn't eat, or are they in a safe environment? Or what is going on? Why is this kid showing up in a certain way? And what can we do to keep them safe and healthy and still be a good student? Those are important, but they don't help my kids get on track for college.

Unknown Speaker  14:30  
So so let's say a student or a counselor has got 150 Kids, he probably he or she probably spends the bulk of their time with the 30 or 40 or 50 kids that are in trouble or not doing well or are skipping school or have substance abuse problems or have problems at home or they've you know all that kind of stuff just trying to navigate them so that they can survive the high school years in graduate

Unknown Speaker  14:59  
school. Yeah, you hit it on the head, and I have a lot of great kids. And sometimes I don't have access to everything the school has on them, for example, like, what's your GPA? What's your class rank? What percentage are you in, they're not even going to give the kids this most most of the time till they're seniors, which is very late in the game, I want to earlier if I can get it, and then I'll say to my students, get back in touch with your high school counselor and get this info. And they'll have to wait two, three weeks, maybe to even get in the door, to ask the question, to get the answer. Versus literally I work I'm like, I'll text you and I want to answer or vice versa, you know, or yeah, let's get together this week, or tonight or tomorrow, whatever. It's, it's a much different relationship. And the key is, it is actually a relationship, I have a relationship with each one of my students, you know,

Unknown Speaker  15:58  
I need to tell you a story. And to everybody that's listening. This story could apply, because this happens all the time. I have a good friend of mine, he is he has means he does well, he has done well. And he was able to provide financing to his student, his son to go to a particular school. His son wanted to go to Arizona State. And the reason he wanted to go there is it is known as a party school. And his dad had no earthly idea. And so he thought, well, Arizona is a nice area, and it would be good. And so he paid the money up front, then for him to go there. And I think the bill for room and board and and to be a freshman is up for the first quarter was like $1,000, just for all of the things that he was going to need to have and without having to work and stuff. Well, sadly, he didn't make it past the first quarter because he spent more time partying at the school because he is an 18 year old kid who's never been on his own before, and doesn't have the sense that God gave him a 10 year old, because you know it because it was party party. And so consequently, he flunked out of school, and his dad was out the money and he never was able to go back. Because of that thing, then that happens, doesn't it?

Unknown Speaker  17:29  
It does happen sometimes. And you're gonna get me off on morality things. And

Unknown Speaker  17:37  
the reason the reason that I bring that up is that because you are intimately involved with a kid and have a relationship with the student themselves, you can guide them away from, hey, I want to go to this school, because why do you want to go there? Well, it's a great party school. And I think that's probably not a great idea for you. And here's the

Unknown Speaker  17:57  
thing there, if you want a party, you're gonna find out, you're gonna, you're gonna party, and some places are going to make it easier than others for sure. So I'll let you in on the few private conversations that I have with the kids, because I talked to the kids primarily one on one I talk with, or to the parents as needed. But for the most part, you know, part of my process is, trust your student, trust me to get through this and get their real opinions on things and what they're thinking. Because there's things they're going to tell me they're not going to say in front of their parents, or they just close their mouth, right? And mom and dad take over the conversation which, okay, but that doesn't tell me what they really think

Unknown Speaker  18:41  
you don't I think that's a rule of life is that children, your teenagers are not going to be honest with you as a parent, because there's no win in being honest with your parents, because it's going to be a problem.

Unknown Speaker  18:57  
Well, when I was a kid, my philosophy was what they don't know won't hurt me. So

Unknown Speaker  19:04  
that's, that's part of the the being of being a kid being being a teenager is you have

Unknown Speaker  19:10  
to understand their you know, they have a certain amount of capacity, and you want to focus on the good stuff, and really kind of encourage them to be their better selves. But you also have to be, I think, as a parent, and as an adult, if you want to be included in the conversation with them, you don't try to manipulate and control everything they do, but give them techniques, and, you know, common sense about how to do things. So one thing I always tell the kids before they go away, is you know, you should be social, you should socialize with your friends and not everybody's a big partier. And even if you're at a party, it doesn't mean you have to be drinking to oblivion. So start learning, you know where your limits are, what it feels like to be buzzed. I know sometimes it'd be like, Nobody drinks before they're 20 100 Sure, get some real life experience in a controlled environment. But also, the red solo cups are your friend. Nobody knows what's in them. So you can put water in there, you can be drinking soda, and nobody knows if you're still knocking them down at the same rate as everyone else or not.

Unknown Speaker  20:26  
Well, and then I've got I've got a, I, we live in the state of Washington, and then KK, and w, is broadcast all throughout the Seattle area. And there's a group of kids that are gonna end up in Washington at Washington State University, which is over a Pullman, which is like walking distance to Moscow, Idaho, and we're the drinking age, I'm not sure if it's still the same, but at one at one time, the drinking age was a lot lower. And so they could go over there, and have just a whale of a good time. And, and get into problems there as well. So let me

Unknown Speaker  21:00  
tell you, Kevin, it doesn't matter how old you are. And I'm from New England. So and I'm gonna date myself with this term. But you know, there's a thing out here that we call the Paki run. So that means when you get alcohol, you go to a package store. So if you want someone to go on a Paki run, they're gonna go to the package store and buy some alcohol. All you got to do is know somebody who's 21, to go to do the run, you don't have to go across state lines, or any other you know, extravagant means to get this. So it's important that I think kids know how to drink responsibly. Also, you know, and a lot of schools are taking this to heart and have a policy of, if you see something call for help, no matter what it is, if you call, you will not get in trouble. Because that's where kids really mess up with the excessive drinking, someone passes out hits their head, whatever. I mean, you don't know how serious this could be. I mean, call for help, they're not going to get you in trouble. But I'm calling to get them obliterated

Unknown Speaker  22:17  
in the first place. Exactly. Speaking of calling for help, I've arranged for a good friend of mine that is, has been in college fairly recently, and has accumulated some student debt. And she's on the line. Her name is Holly. And I want to bring her on the show right now, Holly, how are you?

Unknown Speaker  22:37  
Oh, hello, thank you so much for taking my call.

Unknown Speaker  22:40  
You You are so welcome. And we were talking about student debt and and the latest changes and on auroria. Did I say that right?

Unknown Speaker  22:50  
No. Why don't you call me nod Kevin, that you can handle that?

Unknown Speaker  22:59  
Oh, call your nod. That would be? That would be much better. But So Holly, have you been paying attention to what we've been talking about so far?

Unknown Speaker  23:08  
I have. Yeah, I wanted to hear a little bit more about it. I did make sure to apply for the most recent student loan relief, forgiveness application, and I'm just waiting. But a lot of my friends that do have students that didn't even hadn't heard about it yet didn't know about it. And so I was wondering, at least for myself, I know we're having to wait, one update I saw was something like it was in court, but my student loan bank or whoever handles my loans still said to still apply for it. And so I'd love to find out more about that, because I'm not well versed in politics. And then my other question is, if you might know if, when things like that happen if it's generally considered like taxable income, or I would just love to know a lot more and for all the other students out there, or people who were students and now have that as well, just some of the basics around it. Sure. Oh, one

Unknown Speaker  24:11  
more. One more question that I wanted to add to that is the Fed today raised interest rates again, and does that have anything to do with the rates that people are charged on their student loans?

Unknown Speaker  24:28  
Okay, so let's start with a question number five, I know the answer directly for that one, but for Holly, you did the right thing right now. It's pretty straightforward. It's literally will take people two minutes to fill in the information. You just go to student aid.gov It's the same primary website that handles FAFSA and all that other stuff, which I think caused a crash the other day, but nonetheless you go to Student Aid dad COMM And They're asking that, you know, you just apply by December 31, of 2023. So there's plenty of time. But I would do it now sooner than later for sure. Because the application process and the receiving of the applications is open. So everyone can, that's qualifies can still submit that. But the ability for the federal government to grant a discharge or the forgiveness of that debt, that's what's on pause right now due to current litigation. So there's no reason not to submit the form and you just get the bill, send you an acknowledgement, they got it. And then you'll hear back from the servicer when that goes into place right now, payments on student loans are also on pause, I believe until December 22, something like that, end of this year. But there's a few things people need to know this is not going to cover every loan under the sun. This is meant to address federal funded student loans. So we're talking about the William Ford Federal Direct Loan, or just called the direct loan. There's also the Federal Family Education Loan, the FF e LL, there's the Federal Perkins loan that's processed by the Education Department. And it even includes stuff like student loans that are being serviced by Stafford the Parent PLUS loan, the Graduate PLUS loan, the Perkins loans. And if you are someone who's a few years out of school, and you don't even remember what kind of loans you got, or if they're one of these, once you log in there, you can actually go to the tab that says my aid. And then you can go further to loan breakdown and actually view your loans and the details. So they've, they've tracked you, they know which ones you got. And if you're in any one of these types of loans, then you can qualify for that. And you can check on the site, if that's one of your loan types. And then the other thing is, it's going to depend on your gross income for either 2020 or 2021. So you can use whatever year is most advantageous to you. But the big thing, too, is, this is for guaranteed student loans that were dispersed prior to June 30, of 2022. It is not for any loans that have been taken since that day. So you're going back in time, and you're looking at those loans, and then there's a cap on it, you know, it's it's 10,000, up to 10,000. If you have at least 10,000 in debt. And for recipients that got the Pell Grants, they can get 20,000. But you still have to make under that certain amount, gross income for the last two years. So if you're single, or married, filing separate, the cap is $125,000 per year, gross income. If you're married filing jointly, or you're head of household, then the cap goes up to $250,000. And they even have something for a qualifying widow or widower, which is also under $250,000. So that that that'll cover a lot of people, I think. But here's an interesting little tidbit that I thought was interesting. If you actually made any payments on these loans between March 13 2020 to December 31 2022, you can actually get a refund. So that's

Unknown Speaker  29:15  
to get a little bit of Yeah, it's it's kind of I don't know how many people are gonna fall into that very, I think small window, but let's say you were down to a point where you just owed $10,000. And you were paying in that timeframe. So now you have less than $10,000 to pay off. But the program lets you get debt forgiveness for 10. And you made some of those payments in that time block. You can get a refund back for that amount you paid in that period that brought it under 10. So I thought that was kind of neat.

Unknown Speaker  29:52  
That is that's exciting. I hadn't even heard about that part yet.

Unknown Speaker  29:56  
There's some interesting tidbits there. And the other thing I thought was interesting is, if you got those loans before 630 2022, that still covers current students, let's say you're a senior in college right now, or a junior, you've probably already accumulated $10,000 of guaranteed student loans, you can still apply.

Unknown Speaker  30:23  
So that's good to know, too.

Unknown Speaker  30:26  
Yeah, I think a lot of folks are under the impression you have to have already graduated. So take it even a step further kids in grad school or law school or med school, I know they have a ton of loans. So any chipping away that they can do that they qualify for this stuff would be helpful. And they should be looking at that. And the other nice part, also, it even covers loans for folks who have been in default, or even are in default right now, as long as qualify that, yeah, for the type of loan. And under the income qualification, even if they're being serviced now by other parties, you can still apply for that relief. So I think that's very helpful.

Unknown Speaker  31:17  
No, that's wonderful to hear about, because the little bit of information that I was able to get, when I did fill out the application and did not have a lot of lots of that, that you were able to help educate us with just now.

Unknown Speaker  31:31  
Yeah, you kind of have to dig for it out there. But it's, it's out there. But the form itself that they're having you guys fill out, it's literally name, address, social security number, and then they're gonna they're gonna tracking. And then after the payment pause goes away, then they're supposed to get back to you with a re amortized schedule. So let's say you get the relief, whenever they're allowed to grant it, well, then the servicer is going to have to get back to you with the new loan balance that's recalculated down on the new balance. And to Kevin's point at whatever interest rate it's being tracked at. Oh, that's what it is payment, pause ends this year 1231 2022. So student loans are set to go back into payment status, January 1.

Unknown Speaker  32:29  
So if you have a student loan, and you're still paying on it right now, you probably should not be paying on it until the end of the year. Yes. I have one other question for you, because I heard this that some of the older loans that were serviced by an outside company that are not government affiliated, those have been paused, or they have been told that those are not going to be forgivable, is that true?

Unknown Speaker  32:56  
Sort of, Oh, good.

Unknown Speaker  32:57  
I love it when government regulations are black and white like that?

Unknown Speaker  33:01  
Well, they are black and white. But the problem is, let's say your loan servicer has changed hands multiple times, and you've been paying on a large amount of debt. For several years. I'm pretty sure a lot of those people are not going to remember if they had a Stafford or a Ford, or a Perkins or some other protected one. And if you go to the site, and you get the loan breakdown, it doesn't matter who's servicing your loan. Now it matters how they originated, even if you consolidated them.

Unknown Speaker  33:36  
So it's complicated. So but but

Unknown Speaker  33:40  
trackable? It's not. It's not insurmountable. And again, we're talking 10,020 $1,000 tidbits. So it's not like they're granting everything this is gonna go away. But I still think if you can get that relief, hey, every bit helps and and you should knock it down. And there's no reason not to take five minutes and go on the site and just fill in the very basic things they need to know that you're interested in. They're tracking you.

Unknown Speaker  34:14  
Holly, what other questions might you have? Oh, sure.

Unknown Speaker  34:16  
I think the only other one I was wondering about is if it's something like that is sometimes considered like taxable income or not because I've never experienced any big chunks of money before

Unknown Speaker  34:31  
I'm gonna guess it probably will become taxable because they can tax you they probably will want to, but when you're talking about taxes, I'd rather pay a percentage of tax on 10,000 than actual 10,000. I'm not overly concerned about that. If if you have to pay a little bit on the forgiven amount it Cool. Yeah, and especially if it doesn't like change your tax bracket, you know?

Unknown Speaker  35:06  
Awesome. Well, thank you so much for taking my call. I really appreciate it to hearing way more than I ever knew was involved in it.

Unknown Speaker  35:13  
Oh, God, I help. Thanks for calling in.

Unknown Speaker  35:16  
And then Holly, thank you. Would you like to take just a moment to tell everybody about your, your, your the company that you own? And also, you work with? K Media Productions dot Pro? Would you like to take a moment to talk about oh, yeah,

Unknown Speaker  35:33  
no, I'd be happy to. So my company is called a natural design.com. And it's like a boutique, floral hybrid, Design Studio, we do normal floral, you know, out the door fresh cut arrangements. But we also do a lot of other things on our website that you'll see like, you know, art related and such. And we help sponsor positive talk radio. And sometimes we'll be able to give out prizes, especially like the dropship. Print On Demand prizes. And Kevin wants to give some of those out to the other callers. And his company came up that prayer that produces positive talk radio is just phenomenal to work with. They're all really nice.

Unknown Speaker  36:19  
Well, that's because you're here, you're there. So, so thank you. Thank you so much, Holly. And I'm glad that those are those answers some of your questions, because you know, that's a really big deal.

Unknown Speaker  36:31  
Yeah, I have $14,000. So it will be amazing. If any of that can get forgiven, I will definitely, even if they tax some of it. I'll be happy. Happy to pay the tax on it.

Unknown Speaker  36:45  
Yeah, going from 14,000 to four is huge.

Unknown Speaker  36:50  
Yeah, big, big, big.

Unknown Speaker  36:52  
Well, hold before you go. Because I've know nothing about student loans. Or they do when you get a student loan, are you required to pay it every month on a regular basis? Or can you skip some? Are? Can you? No, no, you can you required? It's like it's like a bank loan kind of thing. She's nodding her head. So you have to

Unknown Speaker  37:17  
answer for her. But yeah, you get a payment plan, and you're supposed to pay every month. And if you ever get to a point where you know, stuff happens, and you need a break, you can ask for a deferral or forbearance. And they usually put you on pause for like six months, so you're not in default. They're just giving you a break, you know, you might be between jobs, or who knows, maybe you had a baby, or you have to take care of somebody and you can't work for a little while. And people don't think about and they just say oh, I'll catch up later, well, that's gonna hurt your credit, because now you're just in default, when you don't make the payment. And also, they're looking at a lot of these income driven repayment plans. So they're, they're really trying to introduce more flexibility into how they figure out what that monthly payment plan should be for you.

Unknown Speaker  38:15  
Am I also correct that this is not dischargeable in bankruptcy.

Unknown Speaker  38:20  
BINGO, BINGO. It is definitely not. Wow. Yes. So the, again, this is leads me down my path and why I was seeing so many clients with so much student loan debt, whether it was themselves, or parents that had overextended on student loans to help their kids. And I'm like, What are you doing? I can't get rid of this for you, I can get rid of everything else. So that yeah, now you can pay this for the rest of your life. But we really should change that trajectory into a more useful use of funds and time and energy. For sure.

Unknown Speaker  38:58  
So if you default on a student loan, what happens to you?

Unknown Speaker  39:04  
Oh, you know, you there's lots of things that can happen just like with any other debt, you know, one is, you don't want to be in default on anything, because it's bad for your credit and credit really drives our economy. It's what lets you borrow new money or, or refinance and get good rates and the worse your credit is, the worse your rates are, and the less things you can do in a responsible manner. So you don't want to be in default. And then when you don't pay you get sued eventually. And if you don't pay your judgments that you get in court, then they start looking to grab your things like bank accounts and wages and things like that. But the worst part is that because it's a student loan, and everybody knows it's non dischargeable, there's no negotiation room really for me to do anything with because why should they take less on the Dollar when they know they've got you forever.

Unknown Speaker  40:03  
So I'm assuming then that getting a student loan is easy discharging it is hard. And but they when you're take out a student loan and holla, you can speak to this too. They mean it, they're serious as a heart attack, you will pay it back.

Unknown Speaker  40:20  
You I did have to sign several different pages and different ways of saying that I understood that I was responsible to pay back any money that I was borrowing. So it at least in my experience, they definitely made sure to have that repetitive process of like, Yes, I know, I understand I'm taking on this responsibility, and I will have to pay it back.

Unknown Speaker  40:47  
Yeah, and that is take that with a grain of salt too, because with the guaranteed student loans, you know, you swear that you're only going to use this money to pay for your school related expenses and, and whatnot, and that you are promising that you're going to pay it back under the schedule you get. And that's all fine and dandy. What they don't really explain to you is how interest works and how compound interest works. And how that number can easily go up if you still miss a few payments here or there, or whatnot. But what gets interesting is after the guaranteed student loans, this is where people get really in trouble. Because like I said, I think if you can stick to your normal guaranteed student loans, that's a fair price. But then you get the private lenders in this sector, that it's still pretty easy to go and borrow more than this amount of money per year. And I have seen people get in trouble because well, they were living on their own and they're at school schools expensive, they're not working, they still want to have all the things they had before. So they borrow the student loan money and up, they bought a car because they needed a car to get the class. And then oh, they needed a nicer place to live than that little cramped dorm. So they borrowed enough to pay the rent, and so on and so forth. And that accumulates really, really fast. And it's not a good idea.

Unknown Speaker  42:21  
Oh my gosh, I actually knew a girl years ago, that did exactly that. She used it to buy a car and then ended up crashing it later that same week. And I just remember,

Unknown Speaker  42:32  
Oh, yeah. And guess what? They don't care that you did that. You don't get to say, oh, sorry, can you forgive me? Or can I? Can I back out of that loan? Because I don't have the car that I bought? Bought with your money? No,

Unknown Speaker  42:46  
no. Now, if you have a kid, and you and he goes to get a student loan, do you have as a parent have to cosign for that? Or can the kid do it on his own?

Unknown Speaker  42:59  
Well, the beauty of the guaranteed student loans is this, this is meant for the student. This is the student's responsibility not mom and dad's. But when you go beyond these guaranteed student loans, then it's a mishmash of a lot of different things.

Unknown Speaker  43:15  
So parents have a tendency to go into maybe re mortgaging their house and taking money out to give that to cover to as a bridge loan to the kid because they are spending more than what the student loan covers. And then that becomes a responsibility of the parents. And that's how they get into trouble. Is that right?

Unknown Speaker  43:36  
Well, sort of if I think parents get into more trouble when they start taking the Parent Plus loans, and I remember that's guaranteed student loans under the federal system are at a pretty low interest rate, relatively speaking. And every time you go beyond that system, and further away from it in the private loans. In the student loan segment, the higher that interest starts to be and they go into repayment right away. So it's it's a very different thing students have until they graduate and then they get a six month grace period before they pay it back. But depending on whether that loan was subsidized or unsubsidized affects whether or not it's a pure accruing interest from day one or not. So there's some distinctions there. But what I encourage my parents to do if they have the means to do this, and they're responsible enough to do it, is if you have equity in your home, your equity or HELOC, loans are going to be at a much lower rate generally than any of these other parents student loans are going to be and you can use your house as your bank if your discipline so I want to get my students in a situation where after the full cost of the school, which is As tuition, room and board, I don't include the incidentals because I actually expect students to work in the summer and pay for their own books and incidentals. So I do expect them to do something. But I do accept Mamma mia, I just have rules and expectations and rules. Know that this, they have responsibility. And, you know, they have to be vested in the whole process. And I think it's important to have those conversations realistically with the kids from day one. But then the parents have to cover the balance the difference between total cost minus student loan and aid, whatever that balance is, my goal is to get that number to be in range that a family can cover and every family's needs are different. Some people need that number to get really small, others can handle a bigger number, that's okay. But if you can get it down to a number they can cover but they just don't have it sitting in the bank account. Right then because you have to pay in August and again in January for half and half. Let's say you take a HELOC loan for 20,000. Now pay yourself back over the next year as if you had a strict loan, you're just paying yourself back at a much lower rate. And if you run into some bumps along the way, well, a HELOC loan, you're only paying interest to not be in default, on your loan, the first 10 years of the draw, so you have that flexibility there that a Parent PLUS loan is not going to give you and it's going to charge you a higher rate. So if you can do that every year, then you really should end up at the end of the four years with a zero sum game here because you paid yourself back every year, the amount you took out. And if you run into a bump, you can give yourself a little bit of a break. But you have to be disciplined to keep paying yourself.

Unknown Speaker  47:02  
There are so many hand and Holly you know this, there are so many areas that need to be addressed. Like, what's the kid going to be taking in school, what does he want his major to be, I don't know a human on the earth that can pick it 19 years old, what they're going to do for the rest of their life,

Unknown Speaker  47:22  
I don't ask them to do that, actually, I want to know where their interest lies, because I just want to know what you're geared towards, so that we can set the table with enough options that you're going to fall into something you like, because I really believe if you're doing something you're interested in and you enjoy, then you're gonna put the time that you need to put into it to get good at it and then follow that the next step towards an internship or a job or whatever it just, it's Foundation, and everything is built on one step after the other. But if you take a kid that's great at writing, and you force them to go into a STEM school and become an engineer, I don't think that's gonna work out so well. They're just not gonna love the work that it's gonna take to get good at what the engineering needs, if they would rather be writing something different. It's just you're just not geared that way.

Unknown Speaker  48:25  
I think that's great. And Holly, I think that what she's saying makes a whole lot of sense to me. Because, you know, you can't know everything as a parent. And it's great to have that somebody to help you get through all of that, because it's it is really a minefield, isn't it?

Unknown Speaker  48:46  
Isn't it so overwhelming, like, you know, most parents don't have enough time to take care of just going and working full time and then trying to make sure everybody's eating is housed in, you know, so having someone to help out and help guide the whole process in the conversation. Like, yeah,

Unknown Speaker  49:05  
that's exactly what's going on. I have I have an interesting variety of families, if you will, I have a lot of, you know, first generation students, so their parents didn't either go to college or through our college system. So this is way beyond anything they're used to even dealing with. It's all brand new to them. So I have a lot of that. But I also have a lot of parents that work hard and make really good money. And they don't have time for this because they're already working 60 to 80 hours a week, you know, and this takes time. It takes time to do it well, and to get the kids into places they should be looking at that's good for them and also that the parents don't have to overpay for that's my key. I don't ever want to overpay for anything. I don't mind paying for things I want. I just don't want to overpay for them.

Unknown Speaker  50:00  
And then are you are you able and willing as an example, you know, his grandfather was a doctor, and I'm a doctor. And by gum, I think he should be a doctor, too. Are you able to stand up to? I'm sure you have that conversation once or

Unknown Speaker  50:17  
twice, I have a story for you right along that line. I had a single mom trying to, you know, help the kid out as much as she could. And she is a nurse. So she's, you know, had a tough road, but she's made it and she has a good paying job. So she wanted her daughter to be a nurse and to go into nursing. And the kid was a little bit passive aggressive in the sense that, is this what you want? Yes, yes, this is what I want. I want to look into this blah, blah, blah. Okay, so the grades weren't great. But nonetheless, there's a place for everybody. And I found her plenty of options. And out of the, let's say, nine schools or so she applied to, she got into four of their nursing programs. So she got into all nine, but out of the nine she only got into for nursing programs. Find today good. It's really good, right? They're really hard to get into. So anyway, she got she had four options. At the end of the day, you can only go to one place so fine. Don't you know the kid ended up picking the college, the one college out of the four, where if she didn't start off in the nursing program, she could never get into the nursing program. That's where she wants to go. Coming? Of course not she's not in the nursing program. She that was her backhanded way. Or as I say, passive aggressive way of telling mom, I'm not going to be a nurse. And oh, because I'm going here. And I didn't get into the nursing program. So that's off the table.

Unknown Speaker  51:55  
Smart kid, smart kid.

Unknown Speaker  51:58  
This is what I'm saying this, this kid, you know, wasn't very good at communicating her own need, because you could have just told me that, you know, we we could have soften the blow sooner. But I, I could hear it in her in some of our meetings, and then the mom would talk over her. You know, and that's why it's not good to have mom or dad, or both in most of the meetings.

Unknown Speaker  52:28  
Holly, we're about to wrap it up. Is there anything else you'd like to add before we unceremoniously kicked off?

Unknown Speaker  52:35  
No, this was a wonderful show. Thank you so much. And I learned a ton much appreciate it.

Unknown Speaker  52:42  
Sorry, welcome. Thank you so much. It is it is a big topic. And it is a it's a lot of money that they're talking about. And it can it can actually change people's lives. Because I know that the the the numbers are higher if you're making 125,000 and stuff, but there are a lot of folks that are in their mid 20s that are making 25 30,000. And they're not they're not they don't have to climb

Unknown Speaker  53:06  
up that corporate ladder or in your profession to get to, you know, the spot where you're making, you know, good money. You don't graduate for the most part as in start making six figures. That's nice, but not the norm.

Unknown Speaker  53:23  
I wish my son had a friend that I wished that her parents had talked to you first because they didn't have the money to put her through school. And she accumulated over six figures in debt, because him but she wanted to be a physical therapist. Now I know

Unknown Speaker  53:41  
we kid who wants to be a physical therapist, and his parents have no money, but I'm planning on getting him close to a full ride. We're looking.

Unknown Speaker  53:48  
See now that is music to me. That would be music to her ears because she ended up going to school and and you I don't know about you back back, back East. But physical therapists do not make 100,000 or 200,000 a year.

Unknown Speaker  54:04  
No, and then they have to go to grad school. So you got to you know, stretch that out. But you got to know where one how talented is your, your student and to where is that talent going to be appreciated monetarily? Exactly. The school doesn't have it to give to you, you're not gonna get it.

Unknown Speaker  54:26  
Exactly. And we've only got about 30 seconds left. So I want you to tell our audience anything that you would like them to know.

Unknown Speaker  54:33  
Well, if they ever want to contact me directly, they can go to nod at personal college counseling.com There's only one Ellen counseling, or you can find me on the web or Instagram. And also my numbers 5086225 to five oh,

Unknown Speaker  54:50  
save again,

Unknown Speaker  54:52  
slower, slower 508

Unknown Speaker  54:55  
I can't write that fast. To 508

Unknown Speaker  55:00  
Oh 508-622-5250 You told me I only have 30 seconds. I was talking fast.

Unknown Speaker  55:08  
I know we've only got about 10 seconds. No, I got I got 20 seconds left in time enough for me to say thank you for coming on the show tonight. You have been very helpful to a lot of people. Eric, thank you for being a class engineer. Holly, thank you for joining us. And by the way, be kind to one another because you know, each other is all we got. We'll see a Friday at noon. Have a great day, everybody