Digest

This episode of the Money Love Podcast dives deep into the complex world of student loans, featuring Kathleen Boyd, a student loan advisor with Student Loan Planner. The episode covers a wide range of topics, including the current state of student loans, the new SAVE program, loan consolidation, the IDR waiver, and student loan forgiveness. Kathleen provides valuable insights and advice for borrowers, including how to navigate the SAVE program, the benefits and drawbacks of consolidation, and the importance of staying informed about student loan policies. She also offers guidance for those considering going back to school or parents who are planning for their children's education, emphasizing the importance of having a plan in place before taking out loans. The episode concludes with a discussion about Student Loan Planner's services, including their one-hour consultations and six months of email support, which can help borrowers develop a customized strategy for paying off their loans or achieving forgiveness.

Outlines

00:00:00

Introduction

This Chapter introduces the Money Love Podcast and its host, Page Pritchard, who discusses the importance of understanding and managing money. The episode focuses on student loans and the need for expert advice.

00:00:18

Episode 150: Student Loans

This Chapter introduces the topic of student loans and the episode's guest, Kathleen Boyd, a student loan advisor with Student Loan Planner. Kathleen's expertise and experience in the financial services industry are highlighted.

00:09:32

The Current State of Student Loans

This Chapter discusses the current state of student loans, highlighting the complexities and uncertainties surrounding the topic. Kathleen explains the recent changes in student loan policies, including the restart of payments, the introduction of the SAVE program, and the expiration of certain income-driven repayment plans.

00:14:26

The SAVE Program

This Chapter delves into the new SAVE program, a more favorable income-driven repayment plan designed for low to moderate income borrowers. Kathleen explains how the SAVE program differs from traditional IDR plans and its benefits, such as a larger family federal poverty deduction and a built-in interest subsidy.

00:24:27

Loan Consolidation

This Chapter explores the concept of loan consolidation, explaining the process and its potential benefits, such as simplifying loan management and potentially lowering interest rates. Kathleen clarifies the difference between consolidation and private refinancing, emphasizing the importance of understanding the implications of each option.

00:36:19

Student Loan Forgiveness

This Chapter focuses on the student loan forgiveness program, particularly the Public Service Loan Forgiveness (PSLF) program for borrowers working in government or nonprofit organizations. Kathleen outlines the requirements for PSLF and provides advice on how to avoid common mistakes that can hinder forgiveness.

00:42:57

Planning for Student Loans

This Chapter offers advice for those considering going back to school or parents planning for their children's education. Kathleen emphasizes the importance of having a plan in place before taking out loans, including understanding the different types of loans available and their implications.

Keywords

Q&A

• What is the current state of student loans?

  The student loan landscape is currently complex and uncertain. Recent changes include the restart of payments, the introduction of the SAVE program, and the expiration of certain income-driven repayment plans. There is also ongoing debate and uncertainty surrounding forgiveness programs and the future of the SAVE program.

• What is the SAVE program and how does it differ from traditional IDR plans?

  The SAVE program is a new income-driven repayment plan that offers a larger family federal poverty deduction and a built-in interest subsidy, resulting in lower monthly payments and preventing unpaid interest from accruing and capitalizing. It is considered more favorable than traditional IDR plans like Pay As You Earn and Income-Based Repayment.

• What is the IDR waiver and how can it benefit borrowers?

  The IDR waiver is a provision that allows borrowers to count periods of forbearance and some periods of deferment as actual payments towards forgiveness. It can be accessed by consolidating federal loans and can significantly expedite the forgiveness process.

• What is the difference between loan consolidation and private refinancing?

  Loan consolidation involves combining multiple federal loans into one or two new loans with a different loan servicer. Private refinancing involves taking out a new loan from a private lender to pay off existing federal student loans. Consolidation keeps loans within the federal system, while refinancing moves them to the private sector.

• What are the requirements for Public Service Loan Forgiveness (PSLF)?

  To qualify for PSLF, you must work full-time for a qualifying employer, make payments on an income-driven repayment plan, and make 120 qualifying payments. You can work for multiple qualifying employers and the Department of Education now defines full-time as 30 hours a week.

• What are some common mistakes borrowers make with PSLF?

  Common mistakes include not certifying work history regularly, not being on an income-driven repayment plan, and leaving qualifying employment before receiving forgiveness. It is crucial to stay diligent and follow the program's guidelines.

• What advice would you give to someone considering going back to school or parents planning for their child's education?

  It is essential to have a plan in place before taking out loans. Consider the different types of loans available, their implications, and your ability to repay the debt. Explore options like income-driven repayment plans, PSLF, and the potential for working for a qualifying employer.

• What does it look like to work with Student Loan Planner?

  Student Loan Planner offers one-hour consultations with a student loan advisor, followed by six months of email support. During the consultation, you will discuss your financial situation, develop a repayment strategy, and receive personalized guidance. The cost is $595, but discounts may be available.

• What is the biggest piece of advice you would give to someone struggling with student loan debt?

  Remember that there is a light at the end of the tunnel. Stay informed about student loan policies, develop a game plan, and seek help from experts when needed. The student loan system is complex, but there are ways to navigate it and achieve success.

• What are your thoughts on the future of the student loan system?

  The current student loan system is broken and inherently problematic. Many believe that widespread forgiveness is the only solution. While complete forgiveness may not be feasible, it is essential to continue advocating for improvements and reforms to make the system more equitable and sustainable.

Show Notes