0:00 way to wow i am so hold on we gotta record hi everybody hold on and good afternoon and welcome to the way to wow show where i least eagle bring you incredible speakers that are professionals in their field to give you content and value and how to be prepared financially in every situation thank you to my producer rabbi kevin bemel and i want to just give a little um
0:36 give you some ideas of why do i have this thing on my head why am i having a pink hair i did not accidentally put the wrong color dye i did not decide to go pink even though i think about it from time to time but today is a special holiday it's called purim and it's a day in which we reflect on the miracle where we were once going to be destroyed but miracles happen and in the last minute lives are saved things are turned around upside down beyond comprehension and it's a day where we dress up we give gifts to each other and we celebrate and it's a special
1:11 holiday tim for me um not only is it my birthday week it's always been my favorite holiday um the idea of dressing up it's not just about being in disguise it's about you get to choose who do you want to be right dreaming big and also remembering that at any moment when you feel despair and you feel hopeless it's not over yet there's a chance for things to be turned around and i know that in this time jewish people got together they came together as a nation they prayed and they fasted and they were actually able to turn around the fate and queen esther saved the day and it's it's a very
1:46 meaningful day i i will encourage people to look it up and connect with something in there and so that's why i've got the wig i feel i want to bring purim to you guys so that you could feel the joy that i feel with my family today i'm actually in a new location i'm in san diego visiting family and i want to give a little recap on last week's show before we dive into today's show last week we had a chance to have dina michael ceo of impact leadership network and we had a great conversation about women empowerment women and leadership success principles what it's like to be a
2:23 business owner coming out of that employee mindset mentality and to really give people valuable information that they can use every day to make quick changes to get ahead financially save better not procrastinate like most people tend to do and so if you did not have a chance to join us last week please go to our youtube channel the way to wow and check it out with dina michael and today i bring to you someone who i learned so much from who i know personally has helped a lot of people uh that i work with and clients of mine and her name is brenda cramer her specialty is helping
2:59 you understand your student loans and what your options are and you're going to learn a lot i would say grab a pen if you know someone who has student loans you're going to want to tell them about today you're going to want to send them this clip and your or point them in this direction there's so much that we can learn and we're going to dive right in and i want to introduce you brenda thank you so much for taking the time on a thursday afternoon at one o'clock you could be having lunch with a girlfriend you could be strolling the beaches uh but you're here with us today so thank you and i wanted to just i guess we'll start introducing you you'll introduce
3:34 yourself tell us how did you know that you this is what you want to do help people figure out their student loans what is so special about this topic that excited you to get involved well first off thank you so much for having me and my story is one that fits really well with putting your finances in order and understanding your finances so many years ago i was married i was a stay-at-home mother and had never worked and my son was in college and my husband
4:09 passed away suddenly and he had done zero to prepare because he passed away so young and so i was faced with finding a way to keep my son in college so the financial advisor at the school said oh here you can take out these loans we can take out these in your son's name and these in your name and you don't have to worry everything's paid for nobody explained to me that after my son left school what was going to happen with those
4:45 loans so approximately 10 years later as i'm starting to rebuild my life the government takes my tax return and i went what happened i called the irs and found out that those student loans were not my son's responsibility they were mine so they had never been paid on they went into default and since i had moved because i lost my home i had no idea so i found a gentleman who helped me with the process of putting my loans
5:22 back into good standing with the department of education and getting me on an affordable payment plan so that it didn't reoccur and i was you know as the years went by and i decided i wanted to retire i moved to nevada and retired and realized retirement at my age i was only in my 50s just really wasn't working for me so i went to work for him and he trained me on everything about student loans and i work with financial advisors through this process
5:57 because i have such a passion for everybody women men to have a financial plan that protects themselves and their family because i did not have that and so i learned through this whole process that you can take the funds that you're paying on student loans in and most of its interest and redirect those funds into building and creating your wealth and your retirement and i've worked with so many people from doctors all the way
6:34 down to single mothers who are cashiers at the convenience store find a better way to manage the repayment of their loans and that's why i have such a passion for it because it was it's such a deeply personal subject for me i don't want anybody to find themselves in their 50s still not having the ability to retire because they have things like their student loans and they haven't been able to invest and now they find themselves well what do i do
7:09 and i help with in partnership with their financial advisors to find those answers wow brenda this is amazing and you know a lot of people their whole lives they're questioning what's my purpose what am i going to do and sometimes it's that harshness and that rock bottom that hits us that causes us to find what it is that we can do to make a difference and you're doing that you're doing that every day i'm sure you know you wish it didn't happen that way and that you found it another way but at the same time you now can feel what other people can possibly go
7:45 through and you're helping so many people through your story so thank you for sharing that it's and and i'm so sorry for your loss and you are an incredible mom raising you know children on your own and it's not it's not an easy thing and i'm sure there were other parts of your life aside from student loans that you wish were taken care of and it's for another time but right this is a really powerful statement that you said and so thank you for that and i have so many questions and i also have a list of questions that other people wanted me to ask you but we're going to do one thing at a time okay number one
8:20 people say oh i don't need anyone to help me i'll figure this out on my own so tell me your thoughts on can i do this by myself so it is difficult for some people to want to pay for another's expertise so i like to compare what i do as an accountant is or h r block is to your tax return everybody can do their own taxes right however if you employ an expert then it's their job to take your
8:55 information and present it to the irs and to prepare that paperwork so that you pay the least amount in taxes or you get the highest refund so a lot of people do they fill out their own tax return and that's great if it's a very simple situation i i applaud anybody however the reason that accountants exist to help with the irs is because it is such a convoluted and
9:30 complicated process and it takes a tremendous amount of knowledge to understand all the different rules and regulations and it's the same thing with the department of education the government does not give away anything for free easily right so they make you jump through a lot of hoops in order to get that lower payment the other thing is with the department of education you're not dealing directly with the department of education you're
10:06 dealing with one of their servicers so a servicer is the company that manages the loan payments and questions from the borrowers for the department of education so when you're speaking to your servicer you're speaking to a private company individual now some of them are commissioned based on the amount that they collect from you so now you're dealing with a double layer you're dealing with the servicer who may not have all the knowledge and
10:43 understanding of how the student loan programs work versus directly with the department of education and you're also dealing with a salesperson i'll give you a very quick example of how the servicers look for their own interests as opposed to the borrowers i have a client she was just graduating from college and she called the servicer to discuss how to set up her payment plan and make her payments and they were explaining to her
11:20 that she had accrued interest during the time she was in school and if she wanted to lower her payment she could make a lump sum payment on her loans before they were even due so he convinced her to take her four thousand dollar graduation gift from her parents and pay it on her student loans now number one she was eligible for a 10-year forgiveness plan right
11:57 and so we were able to go back and get that money refunded to her wow and then put her into the plan where her payment was maybe ten dollars a month to start and she was going to get 10-year forgiveness so this was the servicer that did this another story which amazes me and this is during the pandemic there's a teacher at yavina day school and i used to teach there did you know that okay well this was this is in um
12:33 i can't i think she's in philadelphia or boston yeah there's a yavin in cleveland too okay so they convinced this woman who'd been paying on her loans for 20 years and they were loans that she had taken out for her child's education to give them 30 000 dollars okay under this plan her loans were eligible for immediate forgiveness she didn't owe them any more money
13:11 and they conned her out of 30 in my opinion it was a con okay let me preface that um but they talked her into making this thirty thousand dollar payment and what we did was we got her 30 000 back and we got her loans immediately discharged so how did she find you i mean because she had already shot a different how did she know she needed to continue the search so her son was friends with a team member of elevated i think it's elevated jeremy cheryl yeah so
13:46 who's okay and this was an accountant that had met him at a networking event wow years later and this was years later he reached out to me and we were able to correct what i considered to be just an atrocity to this for this woman i mean she's in her 70s and they they took 30 000 from her we got it i mean and that's enough probably to keep her alive for a year i'll tell you something
14:21 you are a miracle worker and thank god we are out about and talking to people jeremy is actually one of my partners and it's so important to have these conversations just a simple question do you know anyone who has student loan debt or any stories to share around the stress of student loan debt and where it can lead to no joke there are people that make 30 000 a year and and she had to give that up unbel unreal well i like happy endings so thank you for sharing those two stories um a lot of people have questions like
14:56 how will this affect my credit does it affect my credit and a negative negative impact no so student loans are a need-based loan and what that means is they are not given or repaid based on your credit yes this department of education servicers report to the credit bureaus things like late payments but when you're paying back your loans or you're taking out your loans they don't have any effect on your credit score
15:33 a large student loan can be an issue on your debt to income when trying to obtain other financing but again we've got solutions for people in these programs that when they go to take out a mortgage if there's issues because of their student loans we have some options that can help to get them improved and even get a higher mortgage if they so choose wow yeah they're everything is tied together you know there's a financial picture right that we take of people on their
16:08 debt to earned income ratio is a big factor when it comes to you know being able to get all the other things they want in life and people believing that they can afford it you know having the trust of a creditor how does one know if their loans are federal i i sit with people and they say well i don't know if it's federal i don't know if it's private is there something easy that you can tell us so there's a website called studentaid.gov and all federal loans are stored on that website so if you went to fafsa
16:46 to take out the loans then they're federal if you went to a bank then more than likely they're private but this is where you can check to make sure they're federal right now all federal loans are on hold because of cobid private or not there are some federal loans that are not covered under the cares act so we can always go and log into studenta.gov and if the loans are there they're federal if they're not they're private okay
17:21 tell us in a nutshell about uh the public service loan forgiveness program like if someone says well what is that okay so the big picture is income driven repayment plans where your payment is based on your income a sub program of that is the forgiveness program so if you work for a non-profit or a government entity city county state federal you have to make 120 payments and you can apply for forgiveness if you work for a private company or
17:57 you're self-employed it's between 20 and 25 years so qualifying payment is the key here every payment you make while working for a non-profit or the government counts towards the 120 credits when you can apply for forgiveness so it does not matter if you are the janitor or if you are the ceo of the organization it's who the employer is
18:32 not the occupation and that's what confuses people they think you have to be a nurse or a teacher or a police officer and that's not true i just enrolled the night janitor or custodian i apologize at a school district into the program because she qualified for public service and she didn't think she did because she wasn't a teacher but yes it's the employer not the occupation that's really important to know because there's so many roles that
19:07 help make an organization run smoothly and if anyone's employed there regardless of what their title is right and they happen to have the need for the student loans and and there are a lot of questions regarding the differences between repayment and forgiveness programs right what are the different options when it comes to repayment so the department of education offers everybody that is in school when they leave whether they leave before they've graduated or after graduation everybody is put on a standard 10-year
19:42 repayment plan so i use an average of 50 000 because that's really what an average bachelor's costs so if you graduate with 50 000 in debt your payment will be approximately 500 a month for 10 years or 120 payments and at the end you've paid 60 000 and your loans are finished they also offer an extended fixed so that's where they lower your payment by about 60 percent
20:18 so a 500 payment would be 200 but you have that loan now for 25 years and having a loan for 25 years and consistently making payments is a very difficult thing because life happens but if by a miracle you were able to do that you would pay the same 60. then there's the income driven repayment plan so if you have somebody that has 50 000 in debt and they're married with two children it brings their payment to approximately
20:54 eighty dollars a month and if all things stayed consistent and stable over a 20-year period they would pay back about 20 000. and the 30 thousands forgiven [Music] all of the remaining principle and any accrued interest is forgiven now jumping back to public service another benefit of that program is when your loans are forgiven it is a tax-free forgiveness if you are working for a private company
21:30 or self-employed as of right now you will receive a 1099 for cancellation of debt upon that forgiveness right now biden's put a hold on taxes on forgiveness on certain programs i personally think that it's setting a precedent the first taxable forgiveness is not even available till 2027 so it's going to be an unknown whether
22:05 or not they're going to hold everybody to those taxable consequences or not but we do tell everybody to prepare and there's different ways to prepare for that and the taxes on forgiveness are never going to be more than you would pay if you paid off the loan in full with the interest okay there's a lot to know around all this you know it's not so simple and there's a lot of factors and variables to find out which plan is best
22:40 um and income is certainly one of the biggest factors here i meet attorneys that have you know quarter million in income and a half a million dollars in student loan debt and it's been years and they haven't even made a dent and uh it's it's definitely something that's a wake-up call for people who are thinking about well what should i be doing what should i be looking for when i'm applying for these loans right we think we're going to get this windfall and just land an amazing job my first year out of school right and then
23:16 take care of all that but there's also living expenses there's so many other things aside from those student loans right people also wanted to know what happens if i get disabled i pass away does this debt automatically become my family's responsibility no under disability discharge if you become disabled whether it is your direct loan is the student or whether your parent took out the loan for you the loans can be immediately discharged under 100 disability
23:53 if god forbid something happens to the student the loans are discharged if a parent took out a loan for their child's education and god forbid something happened to that child the loans are discharged if something happens to the parent the loans are also discharged okay and what if they stop going to school right or the school closes down so there's a program called borrowers defense to repayment and for those of you who remember corinthian college in california or itt
24:30 tech or everest there's a program where you can apply to have your loans forgiven because you felt you were defrauded right it's not an easy um case to win it's a limited amount of funding there and it takes years to actually get your case put through i've seen some very successful cases we had a woman that received um forty two thousand dollars in refund on her
25:06 payments and had the balance of the loan discharged so it's a 25 year i'm sorry 25 page application and we do help people with borrowers defense however we also in conjunction will put them into the program so that if their case is lost they're at least on that forgiveness program and they're still moving forward to forgiveness i've seen it be successful i've seen it a lot of denials
25:41 so we always go for it but we never depend on it speaking of denials you know someone mentioned to me once well i've already been denied what should i try again yes tell me more about that conversation so public service loan forgiveness the first time that could be applied for was in 2017. 97 of the applications were denied because they were in the wrong program they had the wrong type of loans
26:18 they didn't have all the documentation with the department of education so on a very short term basis president biden has put in a special program that ends october 31st 2022 where if your loans were in the wrong program if you your loans were the wrong type of loans or the most famous one is the servicers consolidated your loans and you lost your credit and told you
26:53 you had to start over that program fixes all that it allows you to reapply for the forgiveness and go back and get the credits that you should have been so i would probably i probably have eight people right now that we're working on who were denied originally and were going back to get those um those loans forgiven and i know we'll be successful i'm a hundred percent positive i love that but it's limited
27:28 it's only until october of 2022 unless of course again he extends it which he should he should make it permanent i mean you hear people say all the time biden's going to forgive all the student loans no he's not and i'll tell you why this is a statistic that i can't um tell you exactly where to go to verify it however student loan interest is the second largest income to the department or to the united states government second only
28:05 to foreign arms sales wow so the department of education earns under normal circumstances covet is an exception approximately 50 million dollars a month in student loan interest so 50 times 12 is 600 million the government is not going to give up a half a billion in income especially now that they're spending something now and
28:40 excuse all of those loans because how do you excuse the loan of the doctor who's making 400 000 versus the woman who had to quit working to stay home to take care of her children and has no income so i don't believe for a second right that's gonna happen that that's gonna happen because they have these programs in place this is the option to getting your student loan
29:16 managed so i personally okay don't think it's ever gonna happen and if you have a hundred thousand in debt fifty thousand forgiveness is great but you're still left with fifty thousand right and it's growing um when is the right time is there a special time one should enter a program and maybe sweet spot immediately there is no res i'm sorry but there is no reason to pay the government any interest if you don't have to because student loans are front loaded on interest
29:51 and i have a philosophy you should take your money to earn interest instead of pay interest so there is no reason not to enter these programs immediately if your circumstances change and it's no longer applicable then that's fine then you start you know paying off the loan but right safety net just in case okay and speaking of not being applicable anymore i i hear people say all the time i'm not making money now or i'm not making what i want to earn now but i know it's going
30:27 to change in six months to a year so do these change if it's you know they're looking at your income and they're looking to see what you qualify for how often and is it on the person who is in the program to report that they have an increase or a decrease in income how does that work so the the requirement of the program is that you report to the department of education once a year on your income and your family size if there's been a change the department of education is going to adjust your
31:02 payment up or down accordingly right now just an fyi most recertifications have been put on hold so a lot of people who are supposed to recertify it's been pushed out until 2023 using the program is a safety net because you can report if your income decreases but you're not obligated to report if it increases that's awesome so if you lose your job you can go to the
31:37 department of education say i'm unemployed and they take your payment to zero if you get a job two months later you don't have to tell them until your recertification date it's just a loophole okay that makes sense yeah i want to kind of pivot over to some more success stories and you're welcome to share if you have anything to show us i know we talked about case studies and why are these important what do you think happens right when you are meeting with someone and i know on my on my end you know i talk to people
32:12 and they're like i don't really save much because i have all this money going to my mortgage and i have money going to my car payment and i have money going to my student loans and when i finish paying off my loans and i'm trying to make these big payments to my mortgage right right and then i'm going to start saving for our my retirement or my child's education and so i know if we were able to free up some people's money right what would that look like imagine you mentioned uh uh i think you said it was a 600 or 800 a month payment being reduced to 200
32:47 well they're already used to throwing this 800 somewhere now we have this 500 we just found money right so talk to us about some things you want to share some some success stories some case studies so first i want to give you a statistic from the department of education for every dollar of student loan debt it equals ten dollars in lost retirement savings because you're waiting the ten years to start retiring or to to really you know focus on your retirement so if you have
33:23 a fifty thousand dollar loan you're reducing your retirement fund by five hundred thousand dollars it's one of the reasons the government created these programs they recognized that people were so focused on student loans because of how aggressive the interest is they're walking into retirement with significantly less money so now they're dependent on government resources social security medicaid and all these other things and the government realized they're chasing
33:58 their tail right so that's why these programs were instituted so i'll give you an example i have a woman who is a single mother she's a doctor she's in seattle and she makes about 78 000 a year and she had about a hundred and fifty thousand dollars in student loan debt so they put her on something called an extended graduated program so her payments were starting out very low but over the 25 years they were set to go to
34:33 between two and three thousand dollars a month to pay off the loan so her hundred and fifty sixty thousand she was going to be paying back close to three hundred and seventy five thousand she works for a non-profit hospital right so we we were able to get her payment down to 78 okay and as and it hurt she's a researcher so she's gonna be staying at that hospital so she's gonna pay approximately 78 a
35:09 month not a 25-year loan but a 10-year loan wow so the amount that we saved her made the difference between her being able to and i had this is one of my calls where the agent was on so she realized i only have a 78 dollar payment i can afford life insurance for my to protect my child i can get a real long-term disability policy i can get a policy on my child
35:45 and that agent closed on three policies on that call that it was going to make all the difference in this woman's world and protecting her family wow don't you know let's not forget the government was happy to take it all from her right absolutely those are those are powerful right there and if you're listening to this and you're saying to yourself like where do i go from here right we're going to make sure that people can get a hold of you um we'll have your information in the
36:20 notes um because this you don't do you charge for people to have a phone call a consultation with you how does that work our consultations are 100 free and my consultations are not very salesy and and leah's been on calls with me i educate the people and the borrowers first on how does student loan debt and repayment plans really work most people do not realize that they are
36:55 in the wrong program and will end up paying more over the term of the loan than in a different program so i don't always you know not everybody it does this program work for but what does work for everybody is the knowledge of how student loan repayment works because sometimes and for some people and i can't tell you how many if they weren't able to pay their loans
37:30 and they went in default the government is taking their tax returns they're garnishing their wages they can't even feed their families so when that happens we can help get them out of that default get them their tax returns for the next year get the garnishment stopped so that they can buy groceries and i had a crossing guard whose social security check from 834 dollars was being garnished 152 for his student loans from 30 years ago
38:05 this man was a 10 hour crossing guard and he just happened to be the crossing guard in front of our office wow we're able to help him so the government there's just so much you can do with the money that goes to student loans sometimes you know it helps you invest sometimes it helps you take a vacation but for some people it's the difference about what food they put on their table if your loans are in default and you are a federal employee you will lose your
38:40 job if you are a federal employee that requires security clearance and your student loans are either in default or you are behind on the payments you have a certain amount of time or you will be terminated wow okay some states nurses will lose their licenses if their student loans are in default the government is vicious with these things wow i mean i my head is like circling you know what if someone enters a program and even then after entering a program campaign
39:16 you know what if i'm not working anymore there's there's so many things but i know that um we have some questions from people that are with us now and i want to make sure we have enough time to answer those so i'm going to hand it over to rabbi kevin bemo my producer who has some questions for you thanks leah so um brenda first of all your presentation is eye-opening i had no idea you know back in my day i think there was one student loan program and you know of course i borrowed a whopping eight thousand dollars to get my
39:51 undergraduate degree it still took me ten years to pay it back but uh you know it's nothing like what people owe today it's just a completely different world so first of all can you give us an idea of how many different programs are there because it sounds like there's you say there's a lot of confusion about people being in the wrong program so how many different programs are there so the standard programs that have nothing to do with income there are three there's standard which is a 10-year program there's an extended fixed which is a fixed payment for 25
40:28 years or there's an extended graduated where your payment increases every two years until you pay that loan off so your payment could start out at 400 but as it gets closer 20 years later it could go to 3 000. then there's the income driven repayment plan and it's an umbrella and under that umbrella there's five different plans there's and it's it's really based on your loans there's um repay
41:03 payee ibr um icr and then there's one that's never used it's for new borrowers but all the income driven have the same two basic characteristics your payment is based on your income and forgiveness is given at the end as long as you meet the terms and conditions of any remaining principle and any interest that's accrued so so in other words there's uh eight nominally but seven different
41:39 programs and okay so that i mean that that alone is is a i mean it'd be like there's seven different you know income tax codes right exactly yeah so second question is um when you were talking about um people who are in um government service now would that include people who go into the military yes it does okay all right well that's that's great because a lot of people go into the military with with loans outstanding and the military doesn't always there are some programs where you join the military they'll pay your loans off but
42:14 i'm not not everybody okay um so the last question i had is you know you mentioned a couple examples where people had paid lump sums and had gotten them refunded so is there a time limit um after which you can't go back and refund them or is it basically you know like if i made a lump sum 20 years ago would i would you be able to go back and recapture that money for me what is the time no both of those situations was within 30 days so it was very very quick that
42:50 you know i think what happened is it woke them up you know the when the mother made a 30 000 withdrawal from her retirement fund the son said what did you just do and and came to me and they immediately jumped on it the other was the same thing the daughter told her parents that she spent her graduation gift to pay down her student loans she was really proud of herself and her mother went no and found us so both of those instances it was relatively quick 30 days is the deadline or i it's really
43:26 hard to say i just i'm not 100 positive i just know both my situations was within 30 days okay okay um the last thing i wanted actually one more question came to mind lastly so you mentioned the situation where um you took out loans and your son took out loans but in the end you were responsible for all of them i know when i went to college my parents had nothing to do with me getting the loans i i took them out as far as i know they had no responsibility for repaying those loans i mean i was the one who signed the papers and
44:01 everything how how would a parent versus a you know a student know who is responsible for repaying their loans so a direct loan is a loan that the student takes out through the department of education and those are the students responsibility a parent plus loan is where the parent goes to the department of education or the fafsa website and the parent takes out the loans those loans although they're for
44:36 the child's education are the parents responsibility you cannot combine the child's loans and the parents loans together they will always stay separate okay okay and if i could add in and i'm not sure if this is a standard rule across the board if the child is under 18 they need to have an adult over 18 sign on the loan there is something similar like that happens to my child um but then when she turned 18 we put the loans back in her name right so if they were federal
45:11 what it is is because she was under 18 as a minor you're not allowed to sign those loans so the parent will give approval for the child to take out the debt but the debt is still the child but if you had taken out a parent plus loan that can never be transferred to the child there's a difference and brenda this is the scary piece right here because before i was in this industry and talking to families and understanding money i had no clue i still this is not my field of
45:46 expertise which is why i have you the expert here but i remember that i signed because my child was 17 at the time and then when they turned 18 we moved it over but i have no clue if it was a parent plus but probably the way you're describing it was probably me giving permission but people don't know and there's not usually a conversation when you're sitting across the desk in the federal in in the aid right and there is no education it's sign here sign here sign here um how does you know so entering the programs that you have
46:22 you mentioned seven or eight choices how does one know what's best for me is that something that you decide based on hearing my story hearing my looking at my income looking at my expenses looking at my tax bracket you then choose the best fit because it seems like there's a lot of variables so just to kind of clarify what i do is i looking at the situation the loans the income the family size i will let the client know what the options available are and then we go over the long-term
46:58 ramifications of those options i make a recommendation but the client ultimately will make the decision on what is best for them because i don't know you know student loan and debt is emotional all debt is emotional there are some people who no matter what they want to pay those loans and that's fine and then i will go over the different payment plans so they pay the least amount of interest if you come to me and you say i'm never paying on
47:34 these loans i'm not giving them a dime i'll say thank you very much but i can't help you because i can't guarantee that you took out the loans from the government i can offer you the best options to pay the least but i can't get anybody out of a student loan i mean unless it's a disability but leia one thing that's really funny most people don't know is there can be a limit or a cap on the amount of federal student loan a student can take out the financial aid officers are at times paid commissions from
48:10 private banks to promote private student loan debt and the parent does not know that they're being pitched private debt above the federal right they can walk away having money in both places wow especially elderly people because a grandmother can take out loans i saw a grandmother stuck with 87 000 in private student loans and she said but i went to the school we took these out at the school but the financial aid officer
48:46 actually also worked for wells fargo so this woman and i hear this all the time yeah so you have to be very careful yeah is this true even at non-profit universities i can't i i'm not 100 positive about that i i'm really not wow you know it's uh just always do your due diligence ask questions if you're taking out loans you would not go out and buy a car without knowing what your interest rates were what your payments were how
49:22 interest was what happens if you pay off the loan you'll ask a million questions right well some people not that's the scary part brenda i have met people that got into cars and homes they're looking at my monthly their monthly payment they want to know can i afford this they're not thinking the down the road the interest rates they're not everyone is you and i are right probably everyone on who's here lives but people watching might not they want that instant gratification and they're not thinking of the ramifications that come the consequences of having high interest rates um
49:58 if you had something else to add on that topic i have two more questions so i didn't mean to interrupt them but there are people that don't really look at every factor no they don't so i'm just one of these you have buyers beware even though it's for federal loans honestly make sure you understand first if not then i'm always here when judgment day comes and you have to start paying judgement day yes well speaking of which so i have two questions that stood out number one people might ask what about my spouse's income does that get factored in in my loan
50:35 absolutely 100 no so the department of education changed the rules and regulations years ago even if you file a joint tax return even if you have a joint bank account you even if you have no income and your spouse has 200 000 an income it is a very simple question does your spouse want to contribute their income to the calculation of the
51:12 student loan repayment amount if the spouse says no you simply explain to the department of education i do not have reasonable access to my spouse's income it is one of the biggest miss yeah i i haven't had a spouse say yes yet it is the biggest misconception that there is that you have to file a separate return the department of education corrected that because it was discriminatory that's very helpful that's that's they get a clap for that right
51:47 give credit where credit is due so here's another question what would you advise this individual to do you meet an individual they're making a nice income maybe they're making a hundred thousand dollars a year they have some old student loans 50 grand it's it's been deferred for some time right so you hear people say i'm in deferment i'm good temporary right so but then they have some inheritance that comes their way and that will easily handle the entire 50
52:22 000 loan what would you tell this person to do would you would you recommend let's go ahead and take 50 000 from this hundred thousand dollar inheritance this way you're you're debt free you're you'll have nothing to worry about um and then you'll save or invest the other 50. um or would you still tell them to try and figure out what's best what's next for these loans before taking 50 grand and just giving it to this debt so that's a really simple question because i just dealt with that with a friend who had a large inheritance
52:59 so the first thing i would say is you need to talk with your financial advisor to see if you invest that 50 000 how much is it going to earn you each year now will that money earn enough to cover the payments under the income driven and you still have your 50 000. so i would never recommend anybody to do that because these loans get forgiven car pay car loans don't get forgiven
53:35 mortgages don't get forgiven no other debt gets forgiven so under the program unless your income is so high that you're going to pay off that loan and all of the additional interest i would say no park your 50 000 let it make money take that money and make your student loan payment and i just experienced this with a friend who had an inheritance was going to pay cash for a car and i'm like please don't do that here talk to this advisor take that money now she's using the
54:11 money the interest from her inheritance to make the car payment and she still has the lump sum so unless somebody has exceptional wealth i have a a client well i don't have them as a client is three hundred thousand dollars in debt his father is a major attorney and real estate investor in la and the father looked at me and said i can pay off these loans the same way you can buy a cup of coffee
54:47 at starbucks right but i still won't okay i mean and i said sir everybody has to do what they feel is best for them i'll go buy my starbucks you know and keep my money so there are some people that the program and there's some people the program won't work for because it won't lower their payment based on high high income but even somebody making 250 000 with a 3 000 a month student loan payment the program is going to help
55:22 them making 350 000 and making a 3 000 a month payment still a string at least i think so and in california if you're making a hundred thousand and you're in podunk iowa making a hundred thousand no offense to people in podunk um your money goes a lot further than it does in california so high income does not always mean the program will not work right that's a common misconception and i love you know there are people that are just allergic to having debt so when
55:57 they find money they're just like i'm gonna put that in there right what if an adult wants to go back to school the program is irrelevant the loans go on hold they go to school and they go directly back into the program when they graduate wow now you don't earn forgiveness during that time but you don't owe a payment and except for again this historic time with covid student loans always are an interest they're always accruing interest you know people think i'm just kicking the can down the road but it's you're
56:33 kicking the can that's collecting a lot of things along the way um yeah your soup pan is going to turn into a garbage can by the time you're ready and it's gonna stop you from from going much further eventually i i tell everybody you know these programs are the light at the end of the tunnel and it's not the train coming at you wow and and can you are can you try and negotiate the interest rates to get them lower student loan interest is set by congress
57:09 right even if you consolidate your loans it does not affect the interest rate they use a weighted formula there is no such thing as negotiating a federal student loan you cannot lower the interest that's for private student loan debt and again there is maybe one in a hundred thousand circumstances where you should take your federal loans private and it's usually on smaller debt right you know is there a minimum that you help people with
57:44 we start at 10 000 the more the debt the higher the payment the more we can help um or if you are in default it doesn't matter how what your loan amount is or if you are in public service set up a conversation so we can make sure you're getting those credits you're not guaranteed those credits unless you do the work with the department of education to get them so a lot of people think that oh i've been working 15 years really your loans would have been forgiven five years ago if you know things were done correctly
58:21 so let's have a talk yeah well thank you so much brenda this was so valuable i know i'm constantly learning from you you know these these rules and i'll probably ask you a lot more questions when we help more people together but i love it you're the expert so thank you for today i'm sure we're gonna have a lot of people press replay on these on these talks and joining us next week you have you're in for a treat because we have our very own producer here rabbi kevin bemel is going to be our um guest and the topic that we're going to talk about is what do you do when life throws a curveball life happens
58:57 things surprises right whether it's the passing of a loved one whether it's going through a divorce whether it's a loss of a job a change of a job something happens and how do we prepare so a couple things we're going to talk about how do we prepare before during after how do we rebound how do we come above right how do we rise above it what are some of the necessary steps that we can take when it comes to things that are unseen and um being really prepared so i'm excited to have that tune in let people that you care about know about the show next thursday one
59:33 o'clock pacific time i want to thank you all have a phenomenal rest of your thursday thank you thank you