Ep. 138 What Happens When You Move States as a Student Loan Borrower? | Student Loan Planner

Hello and welcome to another episode of the Student Loan Planner Podcast. This is your host, Travis. I hope to be fully back doing this podcast on the regular now that I am a little bit more stable of a human being. There are a whole lot of things that happened in my life the past couple of months. Moving the family across the country was the most intense of those. I drove a U-Haul truck from the 2000s not to do the move. Thank goodness. That was just to pick up a bunch of furniture in town. We put an offer in on a house and then they accepted it. So scary. I don't know if that's actually going to close. We'll find out. I'll update you in a future podcast episode. But wow, moving is really stressful. And so I thought I would dedicate today to an episode of basically what happens when you move to different state as a student loan borrower? What are some things to consider that you might not be really that aware of? Right. So that's what we're going to talk about today is what happens when you move. So many people are moving now just with the economy reopening again. New job opportunities taking people different parts of the country. That's certainly what happened in our case. My wife got a new job and we had to move because of it. So a lot of you are probably in that same boat or maybe you're thinking about it, at least. I want to do like a separate episode on all the real estate stuff that I've encountered because I think it's also really super interesting. But I want to kind of avoid scope creep and just focus on that one main topic today of like what things to consider when you're moving as a student loan borrower. Before I do that, we have a lot of good speak pipe voicemail messages. So remember, you can leave one of those by going to studentloanplanner.com slash voicemail. And the first one we have today is from Ali. Hi, my name is Ali, and I'm a graduating medical student. I have a question about PSLF. I filed my taxes at the very beginning of March, but they're still being processed. I'm wondering if this will have any impact on my ability to consolidate my loans after graduation and then get zero dollar payments for my first year. I know with COVID and everything, the IRS has been slow to process things this year, and I'm sure I'm not the only student in this situation. I did also file taxes last year, but I'm not sure if they would look to this or what they'll do if my refund is still being processed at the time that I consolidate. Anything you know about this and any advice that you have for my situation would be really appreciated. Thanks. Wonderful question. So the issue is, is what happens if the IRS is slow to process your return and you need to use it for consolidating your student loans? The simple answer here is don't worry, because you can still consolidate your student loans, even if your tax return isn't ready yet. So if Ali hasn't started getting a paycheck yet, what I would simply do is just click through the consolidation application and just say my income zero and you can just basically attest to it and they'll take it. Now, if you have a tax return from the prior year, as I believe she does. So, for example, 2019, it's always you're using your most recent available tax return. So if they don't have 2020 ready yet, you do get to use 2019 because it's kind of on them. Now, they might ask you to provide a paper copy. Potentially it might get a little annoying, but you can certainly provide an old tax return. That's not a problem. So I would just say just go ahead and go through with it. If you're a graduating medical student, consolidating is a great idea because it skips that six month grace period following graduation and gets you into PSLF qualifying payments significantly faster. And that's even with the situation we're living through right now where payments of interest were suspended, right, or are suspended. So that's even true even right now. So really good question from Allie. Go ahead and consolidate. Don't stress about it. And now a question from Miguel about paying back nurse practitioner student loans. So I just recently graduated with a doctor of nursing practice degree, and I will be taking my board exam to be a nurse practitioner. I have accepted a position as a nurse practitioner resident at the VA, and I have $280,000 in student loan debt. So my question to you is, what should I do in order to tackle this debt? What would be the best option for me? I don't know if it's the public service loan forgiveness program or if any programs at the VA would be more beneficial to me. I know that there's so many options out there. I'm just not really sure which way to tackle it. Also, the first year I'll be a nurse practitioner resident. So technically, I will still be in a learning environment. And from my understanding, I may or may not be required to start paying back my student loans. So if you can give some clarification on that, I would greatly appreciate it. Thanks. Interesting question. So $280,000 of student debt is certainly, you know, above average for a nurse practitioner. It's nowhere near the average for a lot of our clients. But in the nurse practitioner field particularly, I think it's on the higher side. I think that perhaps that's partly because DNP programs are a little bit faster completion than some of the other ones out there. But I completely believe that you could easily get this amount of debt, too. It just sort of depends on the program. If you're working at the VA, there is a program called the VA EDRP program. It's the Education Debt Reduction Program. Gives you up to $200,000 in loan repayment up to five years. It's $40,000 a year. Now for a $280,000 amount of debt, it might actually make more sense to think about the Public Service Loan Forgiveness Program being your primary program. There's no reason that you couldn't try to see if you could pair the VA EDRP program with PSLF. So the way I would try to go about pairing any loan forgiveness program with PSLF is figure out first, will this loan forgiveness program just basically give you money as a lump sum or not? If it does, then you could take the lump sum and apply it to your student loan payments, which can pay up to 12 months of your student loan payments that count towards PSLF. So let's pretend that Miguel here has payments that are, you know, obviously as a resident, his payments would be very low. But let's say he's a nurse practitioner at the VA. Let's say he's paying $1,000 a month in student loans. Let's say he would receive something like this VA student loan program that gives him $40,000 a year towards his loans. So what he could do is take that $40,000 and put it on his loans. And then that would cover 12 months of payments towards PSLF for that year, because that's the maximum you can count. And then also because, you know, $1,000 a month times 12 is $12,000. So that $40,000 would easily cover that $12,000 in student loan payments that he'd have to make. Now, he'd have to take that remainder and put it towards his loans. And that would kind of pay off loans that would be forgiven via PSLF, maybe potentially unnecessarily, right? But what I think is kind of interesting about that is that EDRP program or any kind of scholarship program can now cover with a lump sum up to 12 months of payments in a calendar or a not a calendar year per se, but a 12 months of payments in a certification year. Whenever that does start, whenever you're having to certify your income, it can count for up to 12 months of payments. That was a big change back in the day. We had to give people advice of it was hard because the $40,000 you can make as a lump sum on your loans and they would literally only count that for a single month of credit towards the PSLF program, which how silly is that, right? They changed the processing of this where you can get up to 12 months of credit for PSLF with lump sum payments, assuming that lump sum covers X amount of months of payments and you can't take $40,000 and have it count for a thousand monthly payments at 40 payments. You can't do it that way, unfortunately. They do limit it to the maximum of 12 months at a time. But I think that's kind of nice. If he didn't get this EDRP program through the VA, let's say you were just working through a nonprofit, then public service loan forgiveness would certainly be the right call. You want to kind of think, is there a chance that you might end up going to work for profit, like a private practice group? If there is, then I would maybe sign up for the repay program because it'll help you with interest subsidies. Although I will say for 280K, for most nurse practitioners, they're going to make a low six figure sum. I would lean towards going with Pay As You Earn Forgiveness via PSLF or not PSLF. In other words, 10 years with PSLF is the most likely outcome because most nurse practitioners work in the nonprofit world, but then 20 year Pay As You Earn Forgiveness, if you don't, if you end up working at a for-profit private practice, you're probably a better candidate for loan forgiveness, even in the private sector with 280K for a nurse practitioner. So a little bit of a deep dive there, but there's a lot of options that you have. Now we've got a question from Ashley, who is a kind of master's in social work, and we're going to hear a little bit of a story about trade-offs with when it comes to student loans and achieving other financial goals. Hi, Travis. My name is Ashley. I have a master's in social work and I live in the Metro Boston area. I am currently working at a nonprofit clinic where I supervise other therapists. And part of the reason I work for this clinic is because I was the recipient of a grant-based state loan repayment program where in exchange for four years of work at a nonprofit clinic, 30 grand of my student loans were forgiven. My contract ends in October of 2022, which would mean I am no longer obligated to work for a community health center after this date. I am also in the PSLF program and I've completed about five years of that. All of my loans are federal. The interest rate is around 5.3% and I have about 48,000 left. My initial plan was to pursue PSLF, but at this point, I'm wondering if it's really worth it to stay in nonprofits until 2026 for 48,000, when I could potentially increase my income by at least 50% by beginning a private practice or finding a private sector job. When my contract ends next year, my current salary doesn't even break 60 grand a year and my wage is impacting my ability to achieve other financial goals I have like investing for retirement or paying off my mortgage early. I would love any feedback you have on this. Thanks. This is a tough one because basically the right answer from a financial perspective is always leave a low paying job and take a higher paying job from a pure financial standpoint. It's actually quite unusual for PSLF to be so good where you have to stick to that job financially or else you just be making a terrible decision. It really does tend to work out this way. Maybe the only exceptions would be some low paying fields where you have so much debt that just the adjusted wage that you're getting with PSLF, if you stick it out a few more years, it's just so good, you just really can't pass it up, but I wouldn't necessarily say that's the case here for Ashley. So let's say that you've got, she said 2026, so I'm going to assume that she's got four years left on PSLF to actually get the whole thing forgiven. So let's assume that Ashley's got six years of credit towards PSLF. So if you're making, let's say 50,000 just off the top of my head, she said less than 60, but let's just say you're making 50,000. So you're going to get a roughly $20,000 deduction in terms of 150% of the federal poverty line for a family size of one, this is like really rough math here, because I don't want to get too technical, right? But 50K minus 20K is 30K. And then take 10%, like pay as you earn, 10% of 30K is three grand. And then take that three grand and then just divide that by 12, right? So three grand divided by 12 is 250 a month. So does it make sense to pay 250 a month for four more years? Well, 3,000 times four is $12,000. So in other words, $12,000 in payments would get 48,000 of student loans forgiven. Let's say that she has to pay this back. You know, she takes a private sector job. So let's say that 48,000 just is roughly 55,000 in principal and interest. If you took a private sector job and paid it all back, this is just kind of making these numbers up at the top of my head, honestly. But if you take that 55,000 and subtract the 12, that's a net benefit of about 40-something thousand. Divide that into four years, it's maybe like 10 or 11 grand a year. 10 or 11 grand a year grossed out for taxes is maybe about 14 or 15,000. So can you go out and make 15,000 a year more than being working in the social work world, right, or the counseling world? For most people in that world, the answer is definitely you could make more than that, particularly in like a high skill metro area where there's lots of good jobs. So I think that the real question is, do you want to be, and I don't think Ashley said for sure that she was a social worker with her social work masters, but do you want to be a social worker, yes or no? If the answer is yes, then it's going to make sense to pursue PSLF and do all these things because that's what you want to do. But if you're saying, I don't really feel like I could achieve my goals if I stay here and I stay on this path, I can't really pay off my mortgage. I can't really save for retirement. I'll be working forever. Well, then that is an issue. And so maybe the right answer is, let's say you're working for a nonprofit that doesn't have a pension. Well, if you switch over to a public sector job with a pension, then suddenly your retirement problem is probably fixed, right? So that's what I mean by, if you want to be a social worker, you can make it work. Now, maybe the right answer though, is I want to make a higher income because I want to pay off my mortgage early. And that's really important to me. In which case that's fine. Like I would say, go get a different job. And then just, you could, once you get that higher income, then you could go ahead and refinance that 48,000 and try to pay it off as quickly as you can. And you could be done with student loans. You could be paying down your mortgage in a good clip and everything. You know, it's hard to say what to do, right? I think you just have to kind of look, look inwardly and just say, what's most important to me? What do I want to be doing for the next four years of my life? And realize that that time that you have is extremely valuable and that you should make the decision based off of what you want to do and not what the right financial choice is. Because I think if you make it based on the right financial choice, I think there's a chance that you wouldn't be as happy as you would be otherwise. So for example, I was a bond trader, right? I made really good money. It was dumb, really dumb of me to quit my job, but I did it anyway. And I didn't do it because it was financially the better option. I didn't have a financially better option at that moment. I did it because I was unhappy and I really felt like I needed to do something else where my skillset would better help others. And I didn't know what it was, but I quit my job because I felt like it was the right thing to do. I took about a year or two off traveling the world, kind of bouncing around, writing random blog posts and things like that before I discovered, Hey, my skillset could really help people with student loan debt. And let me go start a company doing that. And then that worked out. You know, I'm not saying that this would always work out for everyone. It was a lot of luck that it worked out for me. But that ended up being financially a much better decision. But I don't think it was because I made that decision financially. It's because I think I made that decision based off of what I wanted and what I needed to feel like I had, I needed to change. So that, that would be the guidance that I would give others is if you feel like you need to make a change, do it, and it'll probably work out financially. And now a question from Christabel. Hi there. I'm really interested in advice for solopreneurs. I'm a self-employed person. I'm not one of your dentists, lawyers, veterinarians that you talk about. And yet I have the same student loan debt as one of those professionals. I have federal student loans for $200,000 and now I've moved in a totally different direction as a self-employed person. And I have an LLC with an S corp tax filing status. My loans have been in default for 20 years, pretty much, maybe 10. I've been in denial and I'm just finally picking up the pieces and trying to create the best strategy. And what I'm kind of gathering is that the repayor income contingent payment plan after consolidation and looking to forgiveness in 25 years is probably the best approach given my, I'm doing what I love, but I make very little income. So my hope is to enhance my credit report in the best way possible and to fulfill my obligation while also paying the least amount of money back and maximizing my deductions and credits as I move towards that 25 year forgiveness moment. So I'm just open to any insights that you have, as it seems like a lot of the episodes of your podcast are focusing on these like super high income earners who have high debt. How about those of us who, you know, we don't, we aren't high income earners. We followed our passion as solopreneurs and yet we have massive liability from defaulted loans. Thanks for any insights that you have. So I really appreciate the comment that we do focus a lot on high debt individuals with high incomes. I know also that high income is relative for a lot of veterinarians. They don't think they have high incomes, but actually $70,000 a year is a really high income compared to the average American. So I really do appreciate, you know, folks that share this. Hey, remember that there's a lot of us out there that have this big debt that don't have these large professional incomes of 50,000 and above, you know, a lot of people do have low incomes. And what do you do when you are saddled with that amount of debt? What I would say is for somebody who's been in default for 20 years, before you do anything, I would probably consult with a student loan attorney just to make sure that there's no way that your debt could be gotten rid of. And what I mean by that is you have to satisfy several different points of the test for discharging, you know, student loan debt, especially if it's federal student loan debt, you basically have to show that there's no way you can ever make enough money to pay it off. A lot of times you have to have some sort of like disability or you have to just have basically no possible way that that could ever get taken care of. I would think that that would be worth a few hundred dollars with a competent student loan attorney in your state, just to make sure that's not an option. Right. Assuming that it's not, you've got the student loans that have been in default for 20 years, and if you had a low income, you're thinking, Hey, I think I probably need to go for this 25 year forgiveness thing. One thing I would say next is what kind of student loans do you have? Do you have FFEL student loans, FFEL loans, which are from before 2010, or do you have direct student loans, which are eligible for everything? If you have direct student loans, because this pause payment and interest cycle has given you credit towards loan rehabilitation, you have nine months needed for loan rehabilitation to get your loans back into an income based repayment plan without loss of credit towards forgiveness, without even impact to your credit score, which is great. You know, the problem is, is you just have to have direct loans. If you don't have direct loans, which I doubt you would, if it's been a default for 20 years, then that means that you might need to consider consolidating the FFEL loans, if they are FFEL loans, to make them direct so you get all those good income based programs. I don't want somebody getting their loans forgiven under income contingent for, you know, old loans, because the programs that were built for back then were such a mess that it's really difficult to tell even when you're going to get forgiveness with it. So I would say, you know, assuming that there's no credit really towards forgiveness, probably consolidate that, probably get direct consolidation loans, pay 10% of your income with revised pay as you earn, which is probably the best one you're eligible for. That depends on, of course, if you're single or married, right? If you're married, there's some scenarios where you would use income based repayment instead. But, you know, most likely revised pay as you earn. And if your income is really low, remember that your payment on your student loans is really low as well. So let's say your income is 50,000, if your income is 50,000, your payment's only probably going to be around 250 a month, 250 a month is not cheap, but it's also kind of like a, like a low end car payment, you know, it's like, it's pretty doable for a lot of people. I think if you're making even less money than that, let's say you're making 30,000, you might put a scenario in place where if you can afford to make your living expenses and maybe even throw in a little money into an IRA, then you could pay almost nothing, maybe $50 a month on your student loans. And that would completely cover your student loan debt, right? So for a solopreneur, I would advise a student loans that they're very worse or an income tax. I say that on the podcast a lot, but worst case scenario, it's an income tax of 10% of your income with a deductible of 20,000 ish, if you're single and even more than that, if you have more people in your family. So you get that bare minimum of living expenses before they take anything. And then everything above that level, they take 10%. Well, that's just an income tax. And if you're a solopreneur, hopefully you have a lot of write-offs. You have a lot of business expenses. You have things that you can deduct from your income that make your income look to be lower than it might be otherwise, right? Which means that your income based repayment number would also be lower, which would be great. So I would just advise, you know, our listener here to not get discouraged. There's great solutions to your problem. I would say, if you Google on our student loan planner website, there's a little magnifying glass icon in the top of our menu. If you click that, you can type in absolutely any keyword and you'll find articles relevant to what you're searching for. So I would just advise this person to go to studentloanplanner.com slash blog. You'll see that little magnifying glass icon in the top right-hand corner. If you're on a computer on your mobile phone, you just have to click the little hamburger menu and you'll see it at the bottom there. So just click that and type in default or student loan lawyers, and you'll see some contact information for some student loan attorneys that can just make sure that you can't get it discharged if it's been in default for this long. And the other thing I would say too, is remember that when your loans are in default, that that's actually really bad because they'll garnish your wages at 15% of your income. In contrast, revised pay-as-you-earn is only 10% of your income. So in other words, the government's going to forcibly take more money and not give you credit towards loan forgiveness compared to paying less money and getting loan forgiveness if you sign up for the revised pay-as-you-earn. Which is really stunning. You would think that, you know, if they're going to garnish you, they would at least give you credit for forgiveness or something, but they don't. So really the most important thing is just to say, okay, give yourself permission to feel bad about your situation for like 30 seconds and then say, you know what? I have the tools to reverse this situation. I have the tools to fix this where this no longer burdens my family, where this no longer stresses me out and gives me crippling anxiety. I can tackle this. If I'm very poor and I can't afford anything, then your payment's going to be zero a month. All you have to do is just call the Department of Ed, just Google like Student Loan Default Resolution Center phone number, and you get that phone number and call them and just explain that I need to get on to revised pay-as-you-earn. Do whatever it takes to get me on revised pay-as-you-earn. Do that if you're totally broke. If you're not totally broke, get a student loan attorney to review your situation if you're deep in default for years. And then if they say to, hey, we can't do anything, then you can even spend a few hundred dollars in hiring us and getting a student loan plan for paying it off and making sure you're doing it the right way, but there's help for anybody, no matter what level of the economic scale that you're on. And I would say good for you for trying to take a risk and start your own small business, because that is a smart thing to do, even if you have tons of student loan debt, because if your student loan debt's just an income tax, then you're an entrepreneur, but you're just like an entrepreneur with a slightly higher tax rate as if you were an entrepreneur in Europe or something like that. So very courageous, very brave of you to record that voicemail for us, and thank you so much. Okay, now for the main idea of today's show, which is what to do when you move states as a student loan borrower. So the biggest and most disruptive thing that can happen is if you move from a community property state to a non-community property state, or vice versa, if you move from a non-community property state to a community property state, this is a little bit confusing, a little bit chaotic, and a lot of people are totally unaware of this, including many CPAs that we talk to. So community property states, there's nine of them. There's Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. And Alaska is a state you can opt into community property rules in. So that might be the 10th, right? But you've got basically the West Coast, think about it like pretty much the entire West Coast, except for Oregon. And then if you draw a line from New Orleans to LA, basically all of those states are going to be community property states. And remember, what does this mean? What it means is that when you file taxes separately, you're supposed to equally distribute your income across both spouses. So for example, if you've got a dentist making $150,000 married to a spouse that doesn't make an income, that's an income of zero, then that $150,000 of income, instead of being $150,000 and zero, you split it in two, and each spouse makes $75,000 on paper. Now, if you're paying on a 10% of your income program, then paying 10% of $75,000 is much better than paying 10% of $150,000. So very frequently we see people's student loan payments, how they can drop from say $1,200 a month in a non-community property state, if that person's having to file jointly, to maybe let's say $500 a month in a community property state, you know, let's say they moved to Texas, if they file separately and split their income evenly. Now, every now and then I'll get an email from somebody who's really freaked out, who's a former client, and their CPA said something like this. Double check that this is actually worth it, because I'm calculating, you're filing separately, penalty is $25,000 a year. And what kind of student loan benefit could you possibly be getting to justify paying an extra $25,000 a year in income taxes? And whenever that email arrives at my inbox, I know that the CPA almost never does a separate return at all. And the reason is because if you're a CPA in a community property state, you should know that if you split income by like separate on a community property state, you're required actually to split it evenly down the middle instead of all in one spouse and none in the other spouse. So that tells me that CPA often doesn't really actually know the rules. And you'd be surprised. CPAs overall are very knowledgeable and you could really trust them on most things, especially if you're, if you have a tax situation that's more straightforward or you're filing jointly or something. But once you throw in more unusual things, unusual circumstances like filing taxes separately, there's not really a good tax reason to almost ever do that. There are some situations, but I would say in general, filing separately is something you mostly only do because you think your spouse is doing something illegal or you are in the process of separating or your spouse is disappeared or you are a student loan borrower, or there's some weird, like for example, this year, there was some weird extra unemployment tax-free money you could qualify for if you filed separately instead of jointly. In general, it just doesn't make sense to file separately though. And so a lot of times we'll see CPAs mess this up and just give people bad advice when they're in one of these community property states. So what you need to do if you're in a community property state is file form 89 58. This is a form that equally splits your income across both spouses that you can fill out and add to your tax return. This is something that if you have a CPA, you need to physically point to it for your CPA and say, Hey, form 89 58, please fill this out. CPAs are not necessarily specialists in everything. For example, my CPA actually didn't, I don't think knew that we needed to file a form with solo 401ks that you have to fill out once your solo 401k has certain characteristics. And if you don't fill it out, the IRS can really kind of hassle you. So you just have to fill out whatever forms that you need to fill out. And sometimes CPAs are more generalists and it's probably better to work with a specialist. So if you move to a community property state, a lot of people would be better off on pay as you earn, because that's a plan where you can file separately and split your income down the middle and exclude your spouse's income. So we do tell people often to do pay as you earn in community property states. So if you're moving from say New York to Texas, you'd want to evaluate this because you might be able to change your repayment program, change your tax filing status and save tens of thousands of dollars a year on your student loan payments. Now sometimes somebody might make less income than the person who has no student loans in the marriage. In that case, you can basically use alternative documentation of income and show something like a pay stub or something like that to show that you actually don't have the same income as your spouse to get a lower payment. What we'd like to tell people is stick to one income certification method and be consistent with it. So in other words, don't go back and forth between tax returns and pay stubs. If you're in one of these community property states, tell your loan servicer, this is the way I want to show my income and then stick with that. So if you are in a state like Texas and you happen to move to New York, going from a community property state to a non community property state, or let's say Texas to Florida, then you might need to reconsider your filing status and your student loan strategy. So if you make that move, you need to consider, do I still go for forgiveness? Do I go for refinancing now? What should be my new path, right? So it's all individualized. It's all specific to yourself as an individual. I can't get blanket advice, but it's something that you need to be very, very aware of. So if you're moving to or from Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, any one of those states, if you're moving to there or from there, you probably need to do either a student loan consult. If you have six figures of student loan debt, or you need to do a followup consult if you are already a client of ours, just to double check that you're not missing anything that can save you a lot of money. So a couple other scenarios when you're moving, let's consider new income. So a lot of times you move for a higher paying job, right? So if you move for a higher paying job, you know, what do you want to do? I mean about paying back your loans or going for forgiveness. Sometimes it might make sense to go for refinancing when you get a higher income because your debt to income ratio becomes better. That's another thing to consider and evaluate is, Hey, maybe I do need to pay my back my student loans now that I have a new job. Another issue that we see for healthcare practitioners is the divide between rural and urban. So for example, if you are a dentist in New York city, you were loving life and you met somebody and now you're going to get married. And one of you is from a small town and you've always thought, how it'd be so great to go back and be the dentist in that small town and just be Dr. So-and-so and everybody knows me. Well, you go back there and you go to that small town and you set up shop. I've got some good news for you. Your income is probably going to be double what it was in New York. Not only that, but housing is actually going to be fairly affordable compared to the big city that you've come from. And that's another thing that can influence going for forgiveness versus refinancing. A lot of times I talk to dentists and have real honest conversations and physicians too and other healthcare practitioners, right? Pharmacists, et cetera, the chiropractors. And I just say, okay, you know, you're going to make X amount of dollars in a urban environment. And then this is your top end salary that you might expect to make. Could you make more than that? Sure. But is it likely? No, because it's extremely competitive market with high overhead. It's harder to compete. But if you plan to move to this more rural area, then your income is likely to be X. And so let's look at that new debt to income ratio and then say, do you still need to pay back your debt or not? That's a real consideration. That's something that you really want to reflect on. If you, if you move from a kind of a more population dense area to a less population, dense area that might have less competition. So what if you want to move and you want to buy a house, this is something that is top of mind right now. After I put in an offer in a house with my wife and we got it accepted this housing market's kind of crazy, right? To, I would say still just try to buy a house. It's less than two times your joint household income. If you can't buy a house with that ratio, I would highly advise waiting until you can. You can put an offer in on a house where you do have that two to one rule being true, right? Like, you know, you, maybe you see a house that's slightly outside of that range and you're like, Oh, should I put an offer in? Go ahead and put an offer in. You never know. I'll give you an example. The house that we ended up buying, we got it for about 45,000 below asking price and a market where the typical home in that neighborhood was going for a hundred thousand dollars over asking price. How did that happen? Am I some smart person? No, far from it for real estate. I feel like I'm an idiot to be honest. What we basically did is we put in an offer on a house that had been sitting for a while because it was simply mispriced. It was simply overpriced because it needed a ton of renovation work and everybody knows how scary renovations are right now. So nobody wants to buy a house that needs lots of renovations. So say you're going to buy a house as a student loan borrower moving to a new place. Well, remember you have FHA mortgages, which are basically available to everybody with very low down payments. You have PMI on those, but the positive is you can put down three something percent and they will look at your income driven monthly payment in determining whether or not you qualify. So as a student loan borrower, you can qualify with those FHA mortgages and you can also qualify for what's called a conforming mortgage, which is a mortgage. I believe it's up to 548,000 and you put 20% down. So if you back up to the purchase price, what that is, it's about 680,000 or less. So if you have a lot of cash, you can go with a conforming mortgage from, it's going to be like purchased by Fannie Mae or Freddie Mac, the government sponsored mortgage companies and you could buy a house through that program. And then for a lot of you who are physicians and dentists, the program that we use to buy our house is actually called the physician mortgage. And a lot of the big banks out there have these. Basically they are no PMI low or no down payment mortgages. And a lot of the interest rates right now are actually bordering on the same rate that you would get from a conforming 20% down mortgage, which is really quite interesting. So in our case, what we ended up doing is we actually did and, you know, hold your breath. I hope you're sitting down, you know, like Dave Ramsey Susie Armand are going to lose it on me if they knew what we did here. But we used a hundred percent finance to mortgage. We put zero down. Wow. Am I crazy? What is Travis, uh, you know, what kind of substances using to do that you might say, right? Well, consider this mortgage interest. If you itemize is tax deductible. If you know you're going to put a lot of money in fixing up the house anyway, unless there's a massive crash in the housing market, if you put a fair amount of money into a house that desperately needs renovations in a good neighborhood, it's most likely going to be worth more than what you paid for it. Right? So that's why we ended up doing that is just because we had the money to put down the down payment. But I felt like, well, if we can get a little bigger tax deduction and put that money into home renovations instead, this is sort of a way to finance home renovations in a tax deductible way where we can just feel better about putting more money into the house without having to liquidate any investments. So there's all kinds of things you can do when you're thinking about buying after moving to a new state. There's also new state programs for loan forgiveness. I'll say that this is disproportionately true in blue states more so than red states, although a lot of the red states will have really good programs for rural type loan forgiveness. I'll say that a lot of these blue states have these programs with really generous forgiveness terms that I would certainly look into. So you definitely want to check when you move to a new state. Is there any kind of new state loan forgiveness program you're eligible for? Also think about new retirement plans and health insurance. For example, you might have an old health savings account that you might try to transfer over to a, you know, fidelity, for example, and new retirement plans, you can roll them over into an IRA, but better yet, if you have a good retirement plan and your new job, you can take your old retirement plan and roll it over to your new jobs retirement plan, which is really generally a pretty good idea. Assuming that these are still pretty good because then you just keep fewer accounts. It's always better to have fewer accounts rather than more accounts. Trust me. There's also occasionally some state specific rules in place. So for example, I believe Florida has a stamp tax where they will take a percent of your loan for really anything. So if you refinance, you actually have to pay a 0.35% tax to the state of Florida. I think they might finance that into the new loan. I'm not entirely sure, but that's a rather bizarre rule, but it is a rule where, you know, if you were planning on refinancing before moving to a state like Florida, it would be in your interest to refinance before moving to Florida versus waiting to refinance until you've already moved there. So there's also another just little weird, you know, nuance about student loan policy, right? There's all of these little small things that you're not really that aware of until they happen. And then you'd take note of it and try to remind yourself to tell people about it. Right. Let's see. There's also some states that'll even pay you to move there for student loan borrowers. Like there's a, I think we have a blog post on our site that talks about 10 different cities that'll pay for your part of your student loans in exchange for you moving there. A lot of times it'll be some sort of property tax relief or down payment relief or something like that to try to convince people to move to some place. A lot of those places that offer this benefit or, you know, sort of rust belt kind of places that are desperate for new residents. Right. But there's all kinds of different things to think about when you move states. It's a little confusing. It's a little stressful. I would always suggest having a tax professional with you to help you move, because I have to admit moving from one state where you're paying quarterly taxes to a new state where you pay quarterly taxes. I'm very grateful that I had a CPA that can help me contact the state government and tell them that I, you know, had moved out of the state ahead of time. So they're not saying, Hey, where's this guy's, you know, third quarter tax payment. Right. If you're a small business person or you have a 1099 type of job, that's something to also consider. So hopefully I've given you some things to chew on a lot of different things to do and think about when you move states, just know that it should be an opportunity for you to save money. Cause it's an opportunity to look at your insurance plans, look at your what kind of rents you're paying, looking at what kind of a student loan strategy you're using, how much money you could save if you made little tweaks to it. So if you are one of these folks that's just moved or about to move or thinking about it, or it's already happened, consider that it might be worthwhile to get a dust off of your student loan plan, which you know, you can always get a new one from us at studentloanplanner.com slash help. One more announcement to make. We have a fully updated release of our flagship investing course, six figure debt to six figure net worth. Every several months, we sometimes do a hundred dollars off sale on this. And we are going to do that starting July 26th. So I'm pretty excited about that. Plus we're going to have a lot of new content in that course specifically on what to do with investing when every asset value is extremely inflated, which is certainly the case right now. Housing stock market, all of these sort of crypto mean stocks that are a little bit more speculative, right? Basically any asset you can think of is extremely highly priced. And what do you do? How do you successfully invest and make money when you're in that kind of market environment? So we're going to talk about that. Remember that course comes out is released July 26th. Thank you so much everyone for listening to today's show. If again, if you have any questions or you'd like to ask studentloanplanner.com slash voicemail, certainly we'll be covering a lot of the student loan servicing transition in the coming months with FedLoanServicing trying to bow out. There's a lot going on in the student loan world. Plus by the time this comes out, perhaps we'll also have an announcement as to when the final student loan interest pause will actually be ending. We'll know when that's going to end for sure. So reach out with questions studentloanplanner.com slash voicemail and just hit us up if you need anything at all. And thank you everyone for listening.