![Student Loans Got You Stressed? Here’s How to Navigate the Chaos [BA QA] - podcast episode cover](https://assets.metacast.app/images/episode/artwork/1zSl88Kr)
There's seventy eleven different repayment plans. So the opportunity for bad actors to call you on your phone and be like, oh, have you applied for the federal student Loan Forgiveness program? Those types of scams can proliferate. Then no one's making sure that loan servicers are giving borrowers the right information so they're not getting scammed.
Yeah, it is. It's like when you don't have a trusted source to go to, and even the people working they're confused, is what's going on? Like what are you supposed to do?
You got people who go to a school to be a teacher and they got one hundred and twenty thousand dollars a student loan deb because they, you know, they were just told college s Cottage College, college, you know, go to a good college, go and get your graduate degree. There was never a framework for them to understand like realistically, there's a certain amount of money that at that point, it's just it's a hard no because financially you're putting yourself in the red.
Hey, ba fam, welcome to the Friday BAQA where we take your questions and try to give you some answer. Now, just keep in mind because I am not your financial coach, your dedicated advisor. I am just your financial bestie on these here internet streets. Don't sue me. That would be nice. Take everything in this episode with a grain of salt. I want y'all to start thinking about some of the
ideas that I share on the show. But at the end of the day, you really want to seek out professionals who have a holistic picture of your finances before you make some big financial choices. I'm very excited about today's episode because it only was a few weeks ago that I got together with my girls. Yeah, Nellie Espinal, frequent Brown Table guest. She is the author of the book Mind Your Money, insightful stories and strategies to help
you reach your hashtag money goals. And then Nasiman McElroy, who is a registered labor and delivery nurse by day and financial pro and Mama Bear by day and night by all the time. That's because we never take that hat off from do we Mama's So anyway, I had
them both on. We talked a lot about the student loan situation right now, because repayments for student loans came back after many years of being paused at the beginning of May May fifth, to be precise, and at this point it's been a couple of weeks, but some stuff has changed. So this week, instead of taking a specific listener question, I got on the show me and jan Nelly and I brought back Chris Browning of Popcorn Finance.
We all three sort of talked about what has changed, what borrowers need to know moving forward, and where some of these loan forgiveness programs stand today. So if you're someone who has been hit by student loan repayments after all this time of not having to worry about it, this episode is for you. And also, if y'all have specific student loan questions or any personal finance questions, really
hit us up. You can email me Brand Ambition Podcast at gmail dot com or you can slide into my dms at Brand Ambition Podcast on Instagram and we will definitely add you questions to the list for future BAQA episodes. So, without further ado, here is our show all about student loans. Have we talked about student loans recently? Y' all like the student loans repayment restarting.
We talked about a little bit Mandy last time you and I were on with Nasimo. But really, oh.
Yeah, that's right. We talked about like getting a student
loan coach for example. Yeah, that was one of the things I was talking to CNBC about and there I didn't think of it this way, but a lot I think the like the shock of having a student loan payment at all for people like coming out of the blue, and like how they're not used to doing that, and like where are they going to find the extra money and their budget with is an even more difficult challenge than what I thought was the biggest challenge, which is
there's seventy eleven different repayment plans. Some of them are being ft with by the Trump administration, some of them still exist, and like how the hell does one understand if they're even in rows a plan?
Yeah, especially given that the Detro student loan portal is a mess right now.
It's rough.
You might even just have to get on the phone, which I know people hate to do, but you might have to.
But then they're laying people off. I've read that like because that was my advice too, which is like get on the I remembered from like a decade ago, when we were all talking about the student loan bubble and the trillion dollar student loan debt crisis and all of that, and at the time, experts were talking about how you would call your loan servicer and you'd get someone on the phone and they would tell you something different than
the next person. So, like I've talked about calling a couple times and then double check, cross checking that with what you see on studentad dot gov. But exacerbating that is the fact that they are the Department of Education is being like systematically dismantled, and then you have the consumer watchdogs like the CFPB, which is being gutted. Yeah, has it been gutted. It's like a shell of itself,
if anything at all. So the opportunity for bad actors to call you on your phone and be like, oh, have you applied for the federal student loan forgiveness program that's offered by the US government, Like give me your social and five thousand dollars, and it's you know, those types of scams can proliferate, and like the no one's making sure that loan servicers are giving borrowers the right information so they're not getting scammed.
Yeah, it is. It's like when you don't have a trusted source to go to, and even the people working, they're confused, So what's going on? Like, what are you supposed to do? My brother he has huge student loan debt from graduate school and he's like, you know, one minute, he's like, I was in the safe program and then now it's going away, so now the payments are paused.
And then he way he was working, he was in the process, you know, working towards getting like student with a public student loan forgiveness, which you have to work there for ten years. Now it's like, is that going away? But it's in their contract for where they work, so can they take it away? It's like he's just constantly confused.
He didn't know what's happening, and it's like it's and he's just one of you know, millions of people dealing with is where you It's so hard to stay on top of what's happening when they just keep changing thanks constantly without any real reasoning behind it.
Oh, good old Mark Kantrowitz. Don't you have you guys? Do you know that name? Prolific? He must be one hundred years old. Yes, of course, He's like, but because he's been doing student loan compred right, sorry, like a little inside baseball. But yeah, okay, ba fan, We're going to take a quick break alol wusaw and be back with more of the baqa All right, ba fan, we're back.
He's the one that made up the one X rule. I think if I'm not mistaken, which is when you graduate high school and you start to look at student loans and you're starting to take him on, you don't know like how much is healthy or too much or unhealthy amount. And so what he said was to look at what your potential industry of work is going to be, and how much the entry level salary for that career path would be.
So let's say, for.
Example, for me, I'm looking at teaching. I became a third grade teacher after a graduated college. So as a third grade teacher in New York City, I was making about forty thousand dollars a year. So that one year of my salary as an entry level teacher, forty thousand dollars should be the maximum total for all four years of college of student loan debt that I am willing to take on if I want to have a healthy debt to income ratio. And I had never heard anybody
talk about that. Like, you got people who go to a school to be a teacher and they got one hundred and twenty thousand dollars a student loan that because they you know, they were just told college, Scottish Statish college, you know, go to a good college, go and get
your graduate degree. And they were never there was never a framework for them to understand, like, realistically, there's a certain amount of money that at that point, it's just it's a hard no, because financially, you're putting yourself in the red for so long, right, And I think he was the one that really coined that, Like the one X rule is something that needs to be taught in high school students who are considering college so they can actually crush the numbers and maybe go dang, it is
their parents and their parents and the college.
Counselors the one who may even help us. That's right. Oh, this is just y'all's reminder to check out your And you know, I just remembered I was interviewed on NPR about this.
Yes, girl, you better go ahead and get on NPR.
It was very stressful. I'm not gonna lie, I'm a pretty cool cucumber when it comes. But I had to talk about student loans with NPR and I was.
Schweting ages so much to know. That's why I.
Had to be honest. And maybe I'm too honest in interviews, but I was like, listen, if you're confused, so am I. And I'm willing to admit that because there's a lot of stuff going on. The best thing you can do is just get on student Day dot gov and keep listening to the news and yeah, this time is calling a it's calling for a lot from us. We got to be able to step it up.
And at the same time, like, I'm giving so much grace to everybody with student owns because I understand in tent frustration. And at the same time, I will say, be real with yourself about what you can do that you're not doing, because that's the one thing everybody needs a little tough love. And when it comes to debt, it's it's so it's so easy to get tied up in the world of like, oh, but but it's the debt crisis, but it's the unfair system and all that stuff.
But be real with yourself, step outside of your situation and look at the numbers and look at what you have, and look at what's going on, and be real. Do you need to downgrade your car? Do you need to get a roommate? Like, just be real, because I mean, I've been on the debt journey. We've all been on the dead journey before. And at the end of the day, there were so many sacrifices that I made to pay off my credit card debt that of course I didn't
want to make. But I wanted to be debt free, and I wanted to really get on a path where I could start generating real value, real like a business and actually have retirement money in my retirement accounts like I wanted. That was the light at the end of the tunnel for me that I knew I wanted to get there, and I knew that if I just kept living how I was living and just spend more on the credit cards, it wasn't going to help.
Me get there.
So just try to be real with yourself, Like, yes I am, I'm giving you all the grace, but at the same time, I want you to be honest.
And be real.
Is there or two? Is there two things? Is there one thing that you can change that would help you just free up a little bit of money that you can put towards these loans so that you're not in default, so that they're not garnishing your wages, so you're not ruining your credit and affecting your home ownership opportunities and prospects. Just you know, a little bit can go a long way.
Yeah, because you know what, I've been seeing a lot of the comments and videos online, like TikTok videos when ever comes to a student loans, people just like I'm not paying this, I'm not gonna pay this, And look, I get it. You ever heard of wage garnishment, That's what I'm saying, Like.
Now they have.
Now they have consequences this generation.
That's the thing, because you can you can say I'm not gonna pay it, and I get it. Like sometimes it's unfair, and you know, they get people into the income driven repayment plans where they're just they're not even making it. The balance is going up every month because they're not paying enough and they just don't know that
that's setting them up for failure. But like, not paying is not an option, even if you feel it's unfair, and a lot of times of the system is unfair, they'll still come for you, and they will come get their money one here another and ruin your life financially and you can't. I think it's easy to fall into that because it's so you know, you like the group think of everyone's complaining about it and saying, well, what if we all don't pay? Trust me, now, everyone's not.
You're not gonna everyone's not gonna do this together. It'll be people who are paying and the sum of you are and the ones who aren't are gonna be left in as deaf spot.
That's right.
Same thing with taxes. They're gonna get their money. They will get it.
Up, they'll find you.
Why don't they come up with a different envelope for the tax doc for the tax letter. So like, if it's just gonna be a letter telling me that you received my request to change my address or whatever, like that letter should be like, let's say a bright pink or a yellow something friendly. Yeah, And then the ones that are like, hey, you screwed up, you owe us eighteen fifty two, it should have like an envelope that's green.
Like it's a bit of a mistake, but it's a small one, so I kind adjust like my stress level before I'm mean, but then.
But then everybody's gonna see your business. When you got a green eyes letter coming to the mail, I don't care.
I'm streress.
So much. I've gotten that that I R S. Later where it's like, oh, we have dated your address. I'm thinking, oh god, the coming for me? What I'm like, you could have just said that this could have been an email? Why did you need to mail me this?
Yeah, I just like, why isn't my CFO.
Hey don't email?
Don't It's true, they don't email O. Yes, should say that they were not. The r S is an email that you don't for people.
They don't call. They don't call you, they don't only send you email.
That's true. Yeah, I r S.
Oh.
There's one thing we didn't mention jan Ellie when we talked about student loans last time. Well, I did say, go to the student a dot cup, But they have this loan simulator that you can play around with, which will actually so what we talked about getting a coach, which is great and all of that, but if you can't afford a coach, or you can't find a free service and you know, it's not a bad option. You
can check out the loan Repayment Calculator. There's there's still resources that were written by people who did work at DO at one point. They may not be there anymore, but their resources are there. So I'll about the different
payment plans. You can even simulate what if I take like if you're in college right now and you're needing loans to finish your degree, and you're worried that the loans you thought you'd be able to pay income based, you know, after school, like you're wondering like what would that cost you? You can simulate how much more loans would impact your monthly payment and the cost of your loans. So that's a fun little tool.
Definitely check that tool out. We actually use that tool, y'all know. I work with MGPF a lot to do
financial literacy curriculum for schools. In the free curriculum, we have a unit called paying for College and we actually have high school students go in and take on like personas in different scenarios to just like role play and they go through the simulation and go through the tool to actually see how much they would graduate with, how much debt, what would that look like as a monthly payment, because the reality is is sometimes the first time you're
looking at that monthly payment amount is when you owe it. And that's just that's really a red flag. So trying to get them younger and younger to understand what they're about to get themselves into is so so important.
Earlier the better.
So, yeah, I use those tools, but don't you afraid to sit down with your with younger teens and students too and do it with them as well, so they just see the reality of these numbers.
Yeah, and y'all are probably wondering too, like what about these forgiveness plans? This is changing all the time because there are legal challenges against something called the Safe Plan and the pay Plan, which basically had a shorter timeline to forgiveness something like twenty years versus the up to twenty five years that an income based repayment plan you know, offered.
And I was reading the New York Times, so they say that processing income driven IDR income driven ME payment plan applications were on hold because of this legal challenge, but that as of last week, servicers have begun processing applications again, and there's a backlog of one point nine million applications, so maybe you can on that program. But in the meantime, but still there's income based repayment plan.
Somebody got to like call your servicer because the income based repayment plan is pretty much it's similar to these plans. The difference is your loan payment could be as low as zero dollars, and the repayment like the amount of time you have to make payments not pay them off, but the amount of time you have to make on time payments in order to qualify for forgiveness is longer.
It's like that twenty five year mark. But yeah, the real like wait and stop before you decide to do that moment is when it comes to like deferment and forbearance, because when you are deferring your loans or you have a temporary, you know, unemployment issue, when you're stressed out, then you can end up where you're not making payments.
You're stressed free because you don't have payments. But because you're not making any payments, even if they were five dollars or fifty bucks whatever they might have been under one of these other repayment plans, you're not making any progress toward qualifying for forgiveness down the line, because you're in this like I'm not making any payments and even then you're having to deal with like interest accruing while you're getting by scott free without making these payments, which
so great in theory, not be good anything else on student loans. What am I missing?
Yeah? If you're stressed out, that's you know, you're not alone. That's the other thing is go online and like just you know, connect with other people. Don't sit in a silo and just go through this and frustration because there's a lot of resources online, a lot of other people sharing their stories and commiserating together, and that just makes it a little less lonely.
But don't let them. Don't let them talk you into not like paying your bills.
Yeah, exactly. Ignoring you is not gonna make it any better.
Definitely, I know. Okayva fan, thank you so much for listening to this week's show. I want to shout out to our production team, Courtney, our editor, Carla, our fearless leader for idea to launch productions. I want to shout out my assistant Lauda Escalante and Cameron McNair for helping me put the show together. It is not a one person project, as much as I have tried to make
it so these past ten years. I need help, y'all, and thank goodness, I've been able to put this team around me to support me on this journey and to y'all bea fam. I love you, so, so so so much. Please rate, review, subscribe, make sure you're signed up to the newsletter to get all the latest updates on upcoming episodes, our ten year anniversary celebrations to come, and until next time, talk to you soon via buye