(Ep. 94) The Good, the Bad, and the Ugly About Student Loans and Your Personal Finances

What's up, everybody? Welcome to episode 94 of the Student Loan Planner podcast. I'm Justin Harvey, one of the Student Loan Planner consultants. I'm here with the squad. We are doing a consultant takeover this week because Travis, our fearless leader, is away on paternity leave. I just happened to notice that I dropped a note in our Slack channel the other just a few minutes ago, and he responded to me in like 30 seconds. So hopefully Christine isn't listening to this, and he might not actually be off the grid quite yet. But we're excited to be coming to you without him. And so we can give you the real scoop on everything here at Student Loan Planner. All right, guys, I want to say hi. Sure. Hey, everybody. It's Rob Burtman. I am, I guess, employee number one of Student Loan Planner. I am also the senior member just because I'm 41 now. And so I'm definitely older than anyone else that works here. Three kids, you know, been working at Student Loan Planner doing consult consults for nearly three years now. That's me. And I'm Lauren, everyone. I have been at Student Loan Planner for two years now. It'll be two years in October. So employee number two, lucky number two. I am roughly at around 600 consults. So I've talked to 600 people and hopefully change 600 lives and also run an RIA where I'm helping people organize their finances when I'm not working with SLP. And I'm Justin, as you know, I think I'm employee like two and a half. I think Lauren and I came on right around the same time at FinCon 2018. I have also consulted with somewhere in the 500s of people through Student Loan Planner have had a really great time. I also run an RIA called APM Wealth, focused on financial planning and investments for anesthesiologists and pain management doctors. You might say that's strangely specific, Justin. My wife is an anesthesia resident here in Philadelphia, and I really enjoy working with those physician clients. And I'm Megan Landris. I am the baby of the crew. I just joined back in, I think it was November officially of 2019. So coming up on my year. But I have done about close to 400 consults now with Student Loan Planner and I couldn't be happier. I'm loving it so far. And I run my own coaching practice. I help folks with the foundational areas of financial planning. So cash flow, budgeting, debt reduction, starting to get savings up and going. So looking forward to this podcast, guys. Yeah, it's funny with Megan. She says she's like the junior member here, but she's got all this unique experience and all of these highly technical filling out the forms and all these things about weird things that the servicers do. And I find myself frequently asking what I should do in those weird situations. I guess I just like to get into the weeds a little bit, which I know some people don't have patience for. I don't know how I have the patience for it. Maybe it's just I don't know. It's a little investigative to me in a way. Totally. Yeah, it's interesting. I mean, I think between the four of us, we've done, I think, nearly 2,500 consults. You know, I've done over 800 and Travis has only done 1,800. So between the four of us, we've actually done more number of consults. Obviously, Travis is the master. But I think even though I was the first person that came on board, that I actually know the least about student loans coming on board compared to the three of you. I think all three of you, every time that you've come on board, I'm like, man, these people really know their stuff where I didn't. So those first few consults, sorry about that, everybody. So to start us off, we were talking about doing a couple of tales from the trenches. When you talk to as many people as we do, you see the good, the bad and the ugly. You have some where you really knock it out of the park and you have somewhere you see some really tough situations. And although we do our best to leave people better off than when they found us, I think they're always better off. But sometimes you just wish you could do more. But student loans are, as everybody knows, like a huge problem in this country. And we do see some very desperate cases. So we want to take a few minutes and tell a couple of stories about some recent people with whom we've interacted and show you, just give you a little glimpse behind the curtain of some of the people with whom we've been working. I guess I'll go first. The best consult I had recently was with a woman. She's a veterinarian. She had was thinking about making a career change because being a veterinarian is really tough work. And also the student debt that comes along with being a veterinarian. They have some of the highest debt to income ratios that we see out there. When she came into the call, she was wanting to make a career change, but she wasn't sure if she could do it because of her student loans. And a lot of times people feel this way. They feel like they have to make their career choices around their student loan situation with student loan rules the way that they are. You can actually pick your life, the life that you want to live and the career you want to lead and design a student loan plan around that. And so we talked through a lot of the issues. She was had taken her loans very seriously. So she was pretty knowledgeable about the rules and everything like that, but didn't quite understand some of the nuances. And after explaining that, she just felt totally relieved and that, Oh, I can make this move. That's going to be better for my mental health. And my student, I know exactly how to plan for my student loans. I can make it happen. That's always such a good feeling to know that you're empowering people, not only to get a clarity around their student loan situation, but also to let them understand the freedom that they have to live the lives that they truly want to live. That's always fun. On the other side, like I said, it's really important for people to understand their student loans. And some of the rules behind it were there for you, even if you have like no understanding of student loans. I had a consult with a, with a guy and he was a little bit of a know-it-all and that's totally fine, but he was kind of given some wrong advice and some wrong direction, and I was trying to redirect him to a better path. But he kept on cutting me off. He's like, no, no, that's, that's not going to work. I know how this works. And, and at the end of the day, I gave a recommendation that was going to save him, I think it was like $70,000 paying back his loans. And he was like, I'm not interested. This consult has not really been worth it. And at that point, it's like all I can do, you know, obviously that's few and far between. There's plenty more on the good side than there are on that side. But that was one that really stood out to me. And I think that was a few months ago. Rob, when you were talking about the financial freedom thing that comes with having a plan, I think a lot of the intimidation that comes with student loans is just the fear of the unknown, the fear of this huge thing hanging over your head and you're like, Oh, what do I do? Is this going to crush me? And that when there is clarity on the best way forward, and that's what we try to provide is the optimal path out of debt, whenever you understand what the optimal path is, even if it is a bit of a tough road, as it is for many people who have to pay 10, 15, 20 years of a chunk of your income, it's much more manageable because the way forward is clear and because that clarity helps. You know, you can understand your finances and then you can understand what your life's going to look like. And it's a huge weight lifted. Totally agree. Seen it many times. I mean, that's why they call it financial planning, right? You, you make a plan, you have that clarity, and then you feel so much better in light of being able to have something to follow. I'll jump into with my kind of toughest story that I've come across. I think it's really important that we drive home the point of getting customized advice. And that's what people are doing when they're reaching out to us. The gentleman that Rob mentioned was getting advice from somewhere, but maybe not from a professional. And when people decide to reach out to us, it's because they're looking for something that is specific to them. And so with that, my worst story is about a young lady who reached out looking for clarity on how to sign up for public service loan forgiveness. We get a lot of calls, a lot of people that are very interested in knowing a lot more about public service. Is it real? Am I actually going to, you know, is this going to be around in 10 years? How do I get into it? I just found out some of my loans don't qualify, et cetera. So this young lady wasn't very knowledgeable, but she knew she worked at a nonprofit. And so therefore assume that she had public service loan forgiveness available to her. Uh, just a few weeks before booking the call, she went to brunch with some of her girlfriends. And one of the girlfriends was saying about how she just got a new low interest rate and it's so wonderful. She was so sick of paying that 7%. And now she's down to 4%. You guys should get a better interest rate too, because that's how you save money on, on your student loan debt. Uh, and so she took our friend's advice and went to the same website and signed up and refinanced her loan. So she left the federal system, her loans that were federal and previously qualified for public service loan forgiveness were now private loans. And then she booked the call. Like I said, just a few weeks later. So the toughest call that I've ever had to do was explaining to someone that you now have private loans and your only option is pretty much to pay those loans back. Especially when public service loan forgiveness was going to offer a ton of savings. So couldn't drive home the point more that is important to get a customized plan. Refinancing may have been right for her friend, but it was not appropriate for her. And that's why you don't want to just take kind of random advice, but you want to make sure you understand it in the full scope of what your financial plans are. Yeah. The two things you never want to do without having a reason to do it, refinancing and consolidation. So if you're doing it, make sure you know why and, uh, read a couple of our blog articles, the student loan planner, just to make sure that the rationale you're employing is good rationale. Megan. I'll say I do hear that being a common trend. And I think this is something that maybe financial advisors used to say, because they didn't really have a better answer on how to tackle student loan debt. And it was either consolidate, which just, just means combine your loans within the federal system. It doesn't improve your interest rate and it can actually erase payment history that you had towards forgiveness, even the long-term forgiveness. And then the other is refinance and people constantly get those words confused too, which, you know, they're, they're used interchangeably, unfortunately, but refinancing is also a permanent decision. You can't go back to the federal system once you've made that choice. And like your case, Lauren, they, they learn the hard way, unfortunately. So that's, that's how tedious things can get. I think with federal loan planning. Yeah. And right now there are so many benefits that are really apparent. A lot of the times it's like, uh, you know, if I die, they go away. You know, if they're federal or if I get hurt, they go away if they're federal, but if they're private, maybe I'm not sure what that means. And it depends on who the private services, but right now what's happening with coronavirus is a perfect example of how much more beneficial in certain ways, these federal loans are because right now it's $0 payments required, 0% interest as of right now, through the end of the year, as of the other day with Donald Trump's executive action, they may extend that further. And Congress may jump in and say, you know what? We want it to be until March 31st or September 30th. I heard one Congress person proposing December 31st of 2021. If you have federal loans and you have a year and a half almost or more of zero interest, that's way better than any refinancing deal that so far or anybody else is going to give you. So if you're, if you're in federal loans right now and they're at 0%, you should probably just sit on your hands and wait until this coronavirus 0% term is over before considering the refi, if that's what you ultimately want to do. I think you bring up a really good point too, about the federal loans, the 0% interest and it, you know, being something that's very attractive right now, a lot of people are taking advantage of those 0% or that $0 payment and stacking their savings. What some people are doing though, is getting really aggressive about paying their loans back. And this is one of the areas too, where there's an opportunity for planning, because if you know, you're in a refinance situation and you know, you're in a situation where you can pay your loans back in their entirety, great time to start throwing extra at 0%, but if you know, there's no real opportunity for you to get to the finish line as it pertains to those loans, you could be throwing money away by paying extra toward the loans. If you pay an extra 500 bucks a month for the next 12 months, and it ends up being, you know, $6,000, but you put a $6,000 dent in your $300,000 student loan debt, it might've better served you to put that $6,000 into your 401k or into your emergency fund or something like that. So once again, I cannot drive home the importance of having a customized plan specifically for you. I'll add on to that. And maybe, maybe I'll use this as one of my good stories, but I had a consult last week where, uh, it was a clear long-term forgiveness case where typically, you know, this is the route you should be entertaining. If your balance is much greater than your annual income and will be with federal loans, each of the income driven plans has a maximum repayment period. And this person graduated maybe a year ago. And during this payment pause, she had a grace period post-graduation. When she entered repayment initially, she had no payment. And that's common when you graduate your last year's tax return, you probably made no income. And so it generates a $0 payment, but she had continued to pay even when the 0% and payment pause was implemented this past March, and she started throwing a lot more money towards it over these past, uh, I guess we're getting close to six months now. And she called us because she saw her balance continuing to grow. And she said, I don't understand. I'm throwing so much money towards this. You know, I'm trying to pay it off. I'm trying to do the right thing, but it's going the opposite direction. And so, and I felt for her and I said, let's talk through a better strategy for you, you know, that's maybe a traditional way to think about debt for your situation, we need to think about treating this as a tax and going towards forgiveness. And the great thing was you can ask for a refund for any payment that you've made since March 13th. And so she got almost 15, $16,000 back over the past six months that she had dumped into the system. And so that was amazing. What a huge win. It was a big win. So I told her, you know, one of her other goals was she wants to move out. She wants to buy her own place. And I said, throw that towards your house goal, make sure your emergency fund is funded. But, you know, don't waste it, essentially throwing it into that black hole of, of your student loans. And so I thought that was a really good case for the times. Totally. Yeah. That that's incredible, Megan. You know, it's one of the things that like, you know, I've been in the financial industry for like 15 years and I started my own company called family budget expert before signing up with student loan planner, and so I'm helping people with stuff and I can tell you that student loans, the rules of engagement are so different and I remember when Travis was teaching me about this back in 2017 about it's actually good to let the balance grow sometimes. I was like, wait, no way. Is that even possible? Like, how can the math be right on that? And I remember really asking him and like digging in on the questions and I'm like a numbers nerd, you know, math guy, financial guy, once he showed it to me, I'd say that's one of the hardest part of the consults is when we take them through the projection of where their loan is going to go and they see that balance going up and they get nervous about the, like the potential tax bomb. But you obviously did a great job explaining that to them, Megan, because they're, they were comfortable enough to take the money that they'd paid in out so that their balance would go back up because they then understood like how mathematically it is so much better to pay as little as possible and save aggressively on the side. So, and you changed her life. I mean, she can move out now, right? So that's, that concept was so hard for me and I know it's hard for a lot of people to understand, but in the consults, when we can really dive in and show people the math behind it and how to prepare for all that, it's like life changing. It's really, it helps people find the freedom that they need. So nice work. Yeah. And it's, it is, it's not a traditional way to think about debt and that's what's so hard for some people to wrap their heads around because they've been told since they were probably little, like never have debt, pay down your debt, like your hair's on fire. But with federal student loans, it's just, it's a different ball game. Throw your logic out the window, throw what you know about debt or finance out the window. Basically it's just, it's a different route. I had a similar situation where right after, right before somebody called me, like we just took 25 K out of savings and we like dropped it on our loans and anticipation of like trying to build momentum, you know, for this call to like show you we're doing the right thing. And you know, with your loans, you either want to pay the least possible and get it all forgiven or pay the most possible as fast as possible. Generally, one of those two paths is going to be the mathematical best answer. Now in the real world, there's different flavors of that gradient, but for these folks, they were like sort of starting off down one path and it turned out that, well, we actually want to do forgiveness. So I was like, you got to call your servicer and see if you can get that 25 K back because, um, cause we don't actually want to fully repay this debt based on the math. So common theme, if you're going to start throwing a ton of money at your loans, make sure you know why and make sure that it does make sense. Cause it might not actually be your cheapest way to get out of debt. Yeah. I think it's so much, like I said, important, like, what are your values? What are your goals? What are you trying to achieve? And how debt averse are you? You know, as a financial planner, he said, I know how to run the numbers, but I'm also a very debt averse person. So like a house paid off in full, I've done a whole podcast about like why I paid for my house in cash. You know, you have to sit and you talk to someone and get to really understand what is this going to feel like if it stays with you for 20 years, uh, despite this being the most mathematically correct thing to do. And I did recently have someone that was thinking about, well, if five years from now I could do, you know, these other things and I could be as aggressive. Like if I throw my, if I throw as much as I can at my debt for the next five years, I'm already used to not having that money available to me. And so therefore I can do the next 15 years and still retire early by living the same kind of lifestyle. And so they were very much, you know, we call it on fire, uh, where they could pay off this debt in 20 years, they would be 40. They were like fresh out of school. So, uh, with a really good situation, they'd be 40 completely retired and debt-free. So that was an important thing. Even though, like you said, mathematically we could have gone the forgiveness route. Going back to Lauren's point about how making sure to get a customized plan. I had a, another console that just came to mind as you were talking. And this couple had, I think they had like a two times debt to income ratio. I think they were making about 300 and had like 600,000 in debt or something like that. They really, really, really wanted to get out of debt and like as fast as possible. And I was like, well, I don't know, you know how much, what's your take-home pay? And it was in the five figure range, take-home pay a month. And I said, what are your living expenses? Cause before someone even considers it, I want to walk them through that option so that they can see that it either will work for them or it won't. And they said, well, we're only spending $3,000 a month. We were planning to put $12,000 a month toward the loans to have it paid off in three years. And I was like, really? Like run me. I was kind of skeptical. I was like, run me through your numbers, you know, so we can be sure, like, are you sure you're only spending that? And one had recently graduated. So that's where they got the bump up and take-home pay. And sure enough, they could pay off their loans in like four years and be out of debt. In that case, it's like, well, the mathematically better option is to the money and put as little as possible toward the loans and save that money. But you'd have to wait 20 years. And on the flip side, if you can get out of debt in four years and be super aggressive and that's the way they felt, that's the way they wanted to go well. And Hey, I don't want to stop them from getting out of debt 17 or whatever, 16 years before they otherwise would. It was important that they like, really, we worked through the numbers that they knew what that looked like. That's a great story, Rob. I'm curious for you guys. Did you, have you run into recently any instances where there was like the math answer and then the what's actually right for your life answer? Cause I find that whenever people know that there's two options and one is the math option where like, Oh, I can drag this out for 22 more years, but then I've got to deal with this, like the Zoloft commercial, like the little cloud hanging over your head for the next two and a half decades, or you can aggressively pursue repayment, like what Rob just described and get out sooner, even though the math doesn't make sense, that can be a really transformative moment for people. I had one that was a little interesting that there are cases where it is kind of down the middle, like I can argue both ways, depending on someone's income trajectory and their lifestyle choices. And so I had a case where they could go the forgiveness route. It wasn't necessarily as efficient as paying it off faster if we were to refinance it and have a really intense pay down schedule. We talked about it and we talked about how staying, going the longer term forgiveness route, you know, there was still going to be a forgiven balance. It probably wasn't going to be mathematically efficient if we included the tax implication savings, but it preserved her options and it preserved her living the lifestyle that she wanted to live now. She's, she was not someone who was, you know, on fire. She wasn't for that movement necessarily. She loved to travel. She loved to do things. With her cashflow and paying down student loans aggressively was not what she wanted to do. And so even though mathematically that may have made more sense, we still massaged it in a way that was still good for her. And as long as her savings rate was in a good place, she wasn't going to be hurting herself long-term. So that was something kind of interesting because you can be in between. And I think we can argue it both ways. And it does really come down to, uh, like Lauren said, your, you know, your prerogative, how you feel about money, what you're okay with living with over time. I think that's a great point, Megan. And something that we try to do is have real world solutions that actually work for real people in their real lives. And we, we sort of make jokes that there's nobody who knows anything with greater certainty than a 23 year old CFP about what the right answer is for something. And they'll tell you until they're blue in the face. But then once you help enough people, you realize, you know, what, what the calculator tells you doesn't always translate into a real world solution for a real person. And sometimes what that means is keeping your options open for a period of time, particularly if you have a lot of debt and maybe you're in a period where you're going to earn just a little bit for a while longer, meaning like you're doing fellowship after med, after med school and residency, there's maybe a two year fellowship, or maybe you're a dentist and you want to do additional specialization. And there's a couple of years of fellowship where you're going to be making less. And you're not sure, like, am I going to go into a private practice and make half a million dollars a year? Or am I going to do like an employed model and be making much less than that? In these types of situations, we can't say, okay, here's what you should do. Here's what the calculator says, because in real life there's uncertainty. And so the correct approach often is, you know, what I would recommend if these people were not married and it was a matter of like keeping options open, it's like, let's stay in the federal system. Let's maybe get on revised pay as you earn if you're not on it already. Let's capture that interest subsidy. Keep your balance as low as possible. We're going to continue to make those income driven payments for a little while. But the goal of this analysis and what I'm trying to position this borrower to do is keep your balance as low as possible for as long as possible with as many options as possible so that you can pay your bills and you can make your student loan payments and you can not be stressed and have all the career options available to you so that if you say, okay, I'm done with my whatever fellowship and I'm going to buy into a private practice and make 600 K a year and I want to just refinance and fully repay. Then for a couple of years, we've captured a decent interest subsidy from repay and kept all the options open. Whereas if you say I want to do a academic role and make a quarter million a year, and I'm in a PSLF trajectory now, then we haven't lost any time we've continued to make progress towards PSLF and at the outset during the time of the analysis, it's impossible to say what the correct approach is because you just don't know what's going to happen with your career. I love that. And I think that's what planning does too. It does give you the option to pivot your plan. Like if we're going one direction, but life doesn't necessarily work out that way, or maybe we need to reconsider. I mean, planning is all about kind of building in some options as well and preserving those options for maybe as long as you need them to be available. So a lot of our planning, I know we do helps people preserve those options. And then if they finally decide, nope, PSLF is not for me, that's not the route I want to take my career. Or they decide, you know, nope, going the longer term route does not make sense for my mentality. I'm going to pay this all off. You know, the goal is to help preserve those options as best as we can for as long as possible until they maybe have some more clarity because a lot of people we talk to are right out of school. It's hard to know like exactly where your career is going to take you at that point. Yeah. I was actually just talking to a guy today. He, he is an anesthesia resident and he was, I was asking him about his career goals and he was like, oh, definitely like a, you know, pain fellowship and probably private practice. And I think he knew like, ah, he didn't know. Cause he was, cause it was his first year. He was, he hadn't even been doing anesthesia yet necessarily. And so he probably had no idea what his sub specialization of choice was going to be and what his odds of private practice versus academic are going to be. So the importance of keeping your options open, especially if you can do so with very little cost, it's hard to overstate that. I've got one other thought on this best worst cases that maybe ties in taxes because marital status, how you file taxes does impact your student loan plan. I am convinced that anyone who lives in a community property state and they're married should have a console with us. I'm just convinced at this point, what I mean by that. So if you live in a community property state, that means you live in Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, or Wisconsin. These states have an interesting tax filing. So you can file taxes with your spouse joint or separate, but in these community property states, the way you can file separately has a really big, potentially positive impact on your student loan plan. If we're pursuing forgiveness in any form or fashion, it has a big impact on what your payment's going to be. It has a big impact on your trajectory over time. So does anyone have an interesting story on a community property state case? I'll throw that on y'all. It happens all the time. I've talked a lot, so I'm going to let somebody else talk. I actually just had a recent community property situation where the gentleman was going to be earning roughly $250,000 a year, and the spouse was going to stay at home, and so you would think right out the gate, you know, with such high earnings and someone else having no income that, you know, marry filing separately would be a terrible idea. It's going to be incredibly painful. And when you don't live in a community property state, that is in fact true. However, he was going to end up in a situation where whether they did marry filing jointly or marry filing separately, they would be getting forgiveness. So I explained, you know, here's what the numbers look like. Here's what forgiveness looks like, even with your income as it is now, here's what you can do to reduce your income even further to take advantage of forgiveness and, you know, even maximize this opportunity more. But if you do marry filing separately and you dump half of your 250 K over into your spouse's bucket, you now made 125 K on paper. This looks a lot better to, you know, be able to calculate your payment on an annual basis. Here's what are going to be your numbers instead. And he would just mind blown at the amount of money that he was going to save and less money coming out of his pocket, which is going to be able to help him with his family even more because the wife was staying at home. There were multiple children in the household and, you know, you've got lots of college funds to, you know, to fund if you're interested in taking care of your kids and making sure they don't have student loans. In addition to regular expenses, they were living in California. So we know that that's a higher cost of living place. And so this is not cheating the system. This is creating a really nice life for you and your family and building a really strong foundation and using allowable laws and a tax filing status to be able to do so. And he was just through the moon to learn about this strategy and how it was going to be able to help him and his family. Yeah. And for a little bit of background on how that works, maybe a vanilla explanation on how this works is when you live in one of these community property states, they take your household income, you and your spouse, and they divide it in half. And so on your tax return, you are showing half of your household income and your spouse is showing half. But if you only have the student loan debt, that's going to impact you. It's going to lower your payment potentially. There's also the reverse breadwinner loophole that we've talked about before on this podcast, where one of my cases I was thinking about maybe touching on today was I had someone in California, her spouse was making maybe three times, three or four times what she was making. She was in public service. And so her income was very low compared to her spouse's. She loved her job, but she was the one with student loan debt. And so they called and they had been filing taxes separately already in California, but they were not doing it via the community property state split. And so they were paying thousands of dollars in tax implications that they didn't need to be paying because they could have split the income, which virtually eliminates a lot of that tax implication. So I told them, go ahead, go back, amend those tax returns back from separate to joint, recoup what you've lost. Going forward, you need to use that community property state split. Find a CPA who's experienced in that. And it's not uncommon for CPAs to still not run it that way initially in a community property state, because filing separate is abnormal. It's not as, you know, most people will file joint when they're married. There's only certain circumstances and student loans are a big circumstance in my mind that it makes sense to file separate, but the community property state split is huge and it can really help. Eliminate the tax implication while also really positively impacting your loan trajectory and maximizing your forgiveness. For sure. And definitely talk to your CPA because there are implications, especially in California for filing separately. So like every situation is unique. So I'll do the Travis disclaimer there. But I will say Megan, to your point that I read the stat that I think only 3 million households, which I think is below 2% of the U S households file separately. So that means like 98%, even if there's an accountant that lives in a community property state, one of the nine that you mentioned, they might not have ever had or like understand this rule. So if you talk to your accountant and you ask them about, you know, do you know about the rules for filing separately in a community property state? If they're like, uh, uh, maybe, you know, find a new accountant. If this is going to be a strategy, it's going to work for you because, uh, you know, we can help with student loans, but we can't really help you with the tax advice. So make sure you're with someone who knows what they're talking about there. And I think this is a good time to bring up to the idea of investing in yourself. You know, a lot of times we get, um, you know, I don't know if this consult is going to be worth it. And, you know, we're talking about accountants right now. That's yet another expense. People are just like, well, I can just use TurboTax and I'll hit this Mary filing separately button. Of course, it's going to be fine. And, or, you know, whatever kind of tax software you want to use. But this speaks to, you know, people spending a lot of time to gain expertise, to be able to help you save thousands, sometimes tens of thousands of dollars because of that expertise and having spent that extra time versus like, uh, I don't want to spend 400 bucks on an accountant right now, even though it could save me $4,000 because I'm doing the things wrong. So just to be mindful of thinking of investing in yourself, as you look at all the different things that you want to accomplish in your financial life. Absolutely. While we're on the topic of taxes, that reminds me of an interesting consult I had a week or two ago. I'm sure we probably have done whole episodes on like weird tax strategies, but there's this thing called the foreign earned income exclusion, where if you're living abroad, meaning you're a U S citizen, you're living somewhere. That's not the United States. You have the ability to exclude a certain amount of income up to right now, it's about $107,000 from your AGI or adjusted gross income. Now your AGI is the first factor in the equation that calculates your loan payment. So if your AGI is a hundred thousand dollars and you can, and you're living abroad, we can exclude that entire amount. Your loan payment goes from some substantive number, $7,800 a month to zero. So I had a situation where someone was going to vet school. They were taking us federal direct loans to go to vet school abroad. And was thinking about marrying somebody from their vet school. And because that person was a local to the vet school, they were only paying a tiny fraction of what she was paying as an out of country, a tender of that school, and I was explaining to her how this repayment was going to work and saying, you know, like, it's not a bad idea if you guys wanted to like, you know, live in Ireland or somewhere, you know, in Europe, uh, for a while, because the expected payments on her very, very substantial loans into the 400 K range, we're going to be zero because of the way her income was calculated due to the foreign earned income exclusion. So obviously seek qualified tax advice for your specific situation where applicable. But this is a, an interesting, frankly, it's a strange incentive, like the government saying, if you don't live in, if you owe a lot to uncle Sam move somewhere else, and then you don't have to pay us when you start using that income, the income that has the foreign earned income exclusion built into it to certify your AGI, because when that happens, your payment drops precipitously. So it's going to get even more interesting. I was just talking with my colleagues here before we jumped online about what's going to happen with the tax bomb. Travis, I think is pretty sure the tax bomb is going to go away. I agree with him based on it's the easiest way for Congress to kind of get rid of this pending. I describe it as like Congress is like standing on the beach, looking out to sea, there's this huge tsunami that's going to hit us in like seven or eight years of all of the people that haven't saved for their tax bomb, whenever taxable forgiveness starts to hit. And Congress doesn't want to deal with that. So they can just say, let's legislate it away. Let's say, just kidding. You don't actually owe taxes on the tax bomb. Now, if they did that and they just did a carte blanche tax bomb is gone. Then the weird implication in this discussion is to say, well, if I owe a bunch of student loans, I'm just going to move to Ireland and literally never come back. And then the tax bomb goes away and I never owe anything that I'm hoping that our Congress people can discern that the best way to deal with student loans isn't to encourage all of our best and brightest to literally leave America so they don't have to pay on their loans. But that is a real time development that will keep you posted on. It's so funny because I thought we were going to run out of things to talk about and we've covered so much. I am always impressed with what we know and what we've developed as it pertains expertise as student loan planners. But I also know that we were not always this smart. So I have a question for you guys. What was it like when you encountered your first six figure debt? Because it was terrifying for me. Can you do you have a story about like the first time you actually interacted with a six figure student loan debt and what happened? The first time I was the 23 year old CFP, I knew everything. Is that what you're asking? Yes. Yes, exactly. I remember distinctly I had a physician friend who had all these federal direct loans and I, this is before I had met Travis and I, I didn't know anything about anything other than what the CFP curriculum taught me and I love the CFP and I am a CFP. So put your knives down people. I'm just kidding. But uh, yeah, I was like, oh yeah, you know, you've got these loans at, oh wow. This is med school is expensive. Holy cow. 6.8%. That's kind of high. Well, you know, being the good Dave Ramsey that I was at the time, put them in descending order of interest rate and just start at the top and work your way down and just kind of gut it out. Now in this instance, it ended up being that that was the, the behavioral answer for this friend of mine was that that was what they wanted to do anyway. But that was not remotely the right math answer the way that I thought that it was. And I didn't even present any other options. And eventually I met Travis and then I actually met Lauren like a long time ago at a Heather Jarvis and other fellow student loan nerd was doing a session at one of these financial advisor conferences. And, and then you, you sort of start going down the rabbit hole and realize, holy cow, I, I at least began to understand at that point how much I didn't even know at the beginning. I didn't even know what I didn't know, at least in probably like 2017 I began to understand how little I actually knew. And that was quite a humbling experience. Let me tell you. I'll say, I'll tell you my first experience in the career was at a financial planning firm working under two CFPs. It was very similar to your experience, Justin. It was, I was prepping for the case. If you ever have downloaded the loan information from like FedLoan or Navient and just in the PDF format, it is horrible to go through, to pull all of that information, the interest rates, the balances. Oh, so that's what I did though, to prep for this meeting that we had coming up with a client. And that was our strategy. We were going to tell them to take the mathematical route and attack the highest interest rate, but this person had a laundry list of loans. And so again, not the right answer necessarily in the student loan planning world, but the second time I encountered it, it was when I had left, I'd gone out on my own and I was specifically doing coaching. And I remember continuously running into people at my previous firm with jumbo sized student loan balances. And our response was always, you know, pay it off. Like your hair's on fire. You know, let's get this out of the way. Let's start investing. And, you know, I ran into a chiropractor for my first client, my first coaching client, and this was her biggest stressor in the mix. And she had, I believe it was like 315,000 of student loan debt. And, you know, she had started her own practice making under six figures. I was just thinking there has got to be a better way to plan around these loans. And so that's when I started digging into it and started to nerd out like on studentaid.gov, like really going through all the fine print stuff. And yeah, so that was my first, or I guess my second experience, but my first like more in depth look at things. Rob, what about you? My first one was actually my very first consult with Travis, like with student loan planner back in December of 2017. So Travis had trained me in like for a couple months and I'd been sitting in on calls and finally I get on my first one. And the process wasn't as sophisticated as today. It was plenty sophisticated, but nothing like it was today. So I didn't have all the loan information. I didn't know, you know, so like the person who signed up, I thought they had like under a hundred thousand dollars of student debt. Well, it turns out that not only did the client have more than 200,000, but their spouse also had 250,000. So this is like my very first consult and I got a couple who has $460,000 student debt. Travis is like sitting right next to me, you know, or like in a conference call and like a conference room kind of, and I'm thinking, holy cow, like, can I do this? You know, fortunately because of the training and everything, they were on IBR. So they were paying 15% of their household income. They weren't eligible for pay as you earn. So repay ended up being a good option. You know, thank goodness, like actually cut their payments down by a third, showed them how to save for the tax bomb and everything was okay. But again, without the training from Travis and like, and repay at the time was new because I think repay came out in what, like 2016 and Travis knew like everything about it. And after the call, I was looking at Travis and you know, he's a lighthearted guy, but he doesn't look that way sometimes in person. So I'm just getting this like serious look, you know, I think he's like, you know, the whole time I'm thinking, am I even doing this right? And when I get off the call, I'm like, Travis, how'd it go? He's like, that was perfect. You know, he did great. I was like, oh, thank goodness. You never, you kind of never know sometimes. And because sometimes he has that, like. Just a bushy eyebrows, just kind of looking at you. What about you, Lauren? What was your first experience? Oh boy. I am similar to the others in that trial by fire was like, oh boy. So it was, it was my, uh, I just opened my RIA and it was the first client that came to me kind of organically. So, you know, when you're trying to start something, you're helping your family, you're helping your friends. You're trying to get the word out as best you can. Uh, this young lady found me on her own and she was making $150,000 as a single young lady and a low cost of living state. She was in Michigan and had 365 K of student loan debt. She was a pharmacist. All I wanted to do was cry. I was so excited to have like, they're finding me. I'm going to help people. And then I was like, I have no idea what to do. She has a really big, nice house in student loans and she can't live in it. So I immediately started to scour the internet for all the information I could find. I had heard a little bit about Heather Jarvis at this time, but didn't know a lot and kind of circled back to her and actually ended up paying her for a consultation to, you know, help me figure out the student loan debt. Uh, so I told the young lady, you know, please hold, you know, we worked on some other parts of her finance and getting their budget down and other things like that. And I said, you know, give me a little bit of time to figure out, you know, what's the best situation here. Let's just, she kind of went off the map for a while. We, you know, I was like, okay, you know, I know what to do. Let's get together. And she had refinanced all of it. Oh, no. Even though I said, wait, so I wasn't quick enough. And to this day, it's like one of the things that I, you know, remember most as like, oh man, like I got off to a rough start, but I was glad I just didn't give her the advice to refinance. I just wasn't quick enough. And I was like, I have to have answers for people when they come with these kind of, you know, burning, big pain point kind of questions from that day forward, like I said, I ingrained myself with Heather Jarvis, uh, bumped into Travis and, you know, student loans has been a really huge passion of mine because I just remember what she felt like at that time. Like, this is a great income. People are, are excited to earn six figures. It's kind of like a, a milestone in life. And then you get to the six figure mark, but you can't even make a dent in your student loans on a month to month basis. I think this is a good point for us to wrap it up. It's clear that student loans for just huge swaths of humanity here in the States is this huge. It can just really be all consuming and, uh, it can be hard to deal with mentally. And I mean, we've, we've done surveys to show like mental health impact, people delay relationships, people delay having kids there's, there's literal real life implications to significant student loan burden. And anybody out there who's wondering like, oh, is this the real deal? These just four people talking on the internet. Can I really trust them? Go to studentloanplanner.com slash rev R E V short for reviews. And you can see awesome, true testimonials of people who are, I was just screenshotting into our little Slack channel the other day, Lauren and Megan, in particular, if you get one of them, you'll be really lucky. Um, who it's in all caps, you know, like Megan changed my life meeting Lauren was literally the best thing that ever happened to me, like zero exaggeration here and the proof's in the pudding. You can see the impact. You can, you can just see the enthusiasm and the way that people write these things, frankly, I'm like a little embarrassed when I realized they're talking about me sometimes that can be, you know, a great place to just see the experience of others and understand if I'm thinking about shelling out several hundred dollars to some stranger on the internet, what am I going to get? What can I expect? That'll give you a good idea of what you can expect. So we'll wrap it up there, guys, Lauren, Megan, Rob, thanks for joining today. Travis. Hello. We love you and miss you. He's going to be listening. This doesn't count as like work. I think if you listen to the podcast, as long as he's not reporting them. So we will be getting his feedback. That's right. Hope we did a good job, but hope eternity leaves going well and everybody out there. Thanks for listening. And we'll talk to you next week.