19. Student Loan Strategy for Social Workers with Lauryn Williams, CFP® (2025 Update)

Taylor (00:00)
Hello everyone and welcome back to the Social Work to Wealth podcast. I'm Taylor and today we're going to be talking about the dreaded student loans. And I have a student loan expert here today to talk with us about all student loans and help us kind of figure out, you know, just some, some tips on how we can manage our student loans. So yeah, I have.
Lauren Williams here from Student Loan Planner. It's a student loan consulting agency. ⁓ But I'll turn it over to Lauren to kind of introduce herself and explain a little bit more about what you guys do there.
Lauryn (00:42)
Well, thank you, Taylor. ⁓ I am so excited to be here to talk to you about this very, very sexy topic of student loans. You know, it could be dreaded, but when you have clarity, you get to feel more confident and it's, you know, okay, it's not a sexy topic, but like I said, clarity can be a thing that makes student loans not as bad as, a little bit more palatable than we think they are. How about that? ⁓
Taylor (00:48)
I wondered if you'd say something like that.
Yeah, that's so true.
I love that.
Lauryn (01:09)
Yeah, let me tell you a little bit about myself and about Student Loan Planner and then we'll jump into the Student Loan stuff. So ⁓ I am a four-time Olympian turned financial planner. I was actually competing in sports, hired a financial planner, stunk at their job, fired them, hired another guy, thought that was gonna go better, it didn't. ⁓ All that to say it is relevant because it is what led me to starting my own financial planning company, ⁓ Life After Sport.
And so when I started my own financial planning company, the first person who came to me who was not a family member or a friend, because you know, that's how we all get started as entrepreneurs, was a young lady who had $365,000 of student loan debt and about $150,000 of income. And I was like, oh my goodness, what do I do? I don't know how to help her. Like, all these licenses and certifications and all this passion that I had about, you know.
Taylor (01:58)
Yeah.
Lauryn (02:04)
⁓ being a certified financial planner and creating financial plans and this was like the one aspect that like no one had taught me anything about. So I went down this rabbit hole to try to help her figure out her student loan situation and realized like gosh I have financial expertise and this is hard for me to understand. So how is this for someone who borrowed this money and has no financial expertise? ⁓ And so that's kind of where my love and my passion for student loans started to grow. Ran into Travis who is the owner of student loan planner a year or two later and he's like gosh I haven't met anybody who's excited.
Taylor (02:23)
Mm-hmm.
Lauryn (02:34)
as excited about student loans as I am. ⁓ You know, my business is doing really well. Would you wanna come over here and do some work in the meantime while you're building your business? And I said yes. And here we are, what, I think eight years later now, 2018 to now. Yeah.
Taylor (02:48)
Wow.
Lauryn (02:49)
And so at Student Loan Planner, we do 60 minute consultations to help you figure out what is the right path for you based on your particular situation. Because the one thing that I want you guys to take away today is that no student loan plan should be created alike the other. So don't do what your friend is doing. ⁓ Don't do what your cousin did. Don't do what your colleague is doing.
Do what is appropriate for you because you have a different family size, you have different life goals, you have different income, you live in a different state, you you name it, there are so many different pieces of the puzzle that make your situation custom to what you are trying to accomplish versus what everybody else ⁓ is doing with their particular situation.
Taylor (03:32)
Yeah. Yeah. I love that. That's, that's great advice. ⁓ I've just stood alone. I'm so glad you're here. I'm really, I'm so glad you're here, Lauren. So I have lots of questions. ⁓ and one of the questions is actually from our listeners. One of our listeners, Liv.
Lauryn (03:41)
You
Taylor (03:52)
So I think I just want to start off with kind of the general landscape of student loans now.
the big beautiful bill passed and we're all worried about this plan, you know, should I be on this plan? Should I be on the RAP plan? Should I like, what do you feel like social workers should know about kind of the current repayment options?
Lauryn (04:23)
Yes, so I'll start with, yeah, you're right, the OBBB, we're gonna say. I don't know, there's no easy way to throw it in there, but it passed and now we have some direction as to where we're going related to student loans and that's put people in quite a tizzy. They're like, my goodness, nothing's been happening for so long, now something's happening, but wait, what is happening? So that's what we're gonna work through today. So the first thing is there's a large number of people that have been on Save.
Taylor (04:30)
I know.
Right. Right.
Lauryn (04:52)
SAVE is an income-driven repayment plan. there was a court injunction for the SAVE plan because the two political parties are fighting. And so a lot of people, roughly eight million, have gotten stuck on this SAVE plan while the two political parties have decided to battle it out. Which really hurts my heart to see that in America we would let politics get in the middle of people's actual finances and their real lives. But that's for another day.
Taylor (05:12)
Mmmmm ⁓
Right, right,
right. So sorry, I wasn't on the safe plan. So, but I just want to get a little bit more clarification. So while people were on the safe plan, they weren't needing to make payments, right? I feel like I've heard that.
Lauryn (05:30)
Exactly. So they've not
had to make payments either from June of last year or August of last year, depending on when they borrowed. If they have undergraduate debt, then they have not made a payment since June of last year. And if they have only grad school debt, they've not made a payment since August of last year on the SAVE plan. No interest has accrued at all, but they also have not earned any credit toward PSLF or toward their 20 or 25 year forgiveness.
Taylor (05:38)
Mm-hmm.
Lauryn (05:58)
so you've just effectively been on pause for a whole year and not accomplished anything.
Taylor (06:01)
Gotcha.
Gotcha. Gotcha. Okay.
Lauryn (06:05)
So now what had happened was
they are saying that as of August the 1st, interest is starting to accrue. So they did not actually end, say, forbearance. You can stay on the forbearance. You can do nothing if you want to, but now you're gonna watch your loan balance go up. And that's causing a lot of people to worry. That's causing a lot of people to take action, as it should. Hanging out and doing nothing sometimes feels like the right thing to do.
you know, maybe you got some extra savings during this time, maybe you paid down some credit card debt, but not working toward forgiveness is not something that's gonna help you overall get, you know, get closer in the long term, exactly. So step thing, or thing number one that has resulted as, ⁓ I don't really know, ⁓ it's because of the OBBB, I think it's all kind of like all being lumped together because all happening at the same time, but thing number one that we need to talk about is that, if you're on safe, you probably need to get off safe.
Taylor (06:42)
in the long term.
Gotcha. And I feel like I've seen something where people are just going to get kicked off anyways, right?
Lauryn (07:09)
Eventually you will get kicked off anyway. It will either be when the court finally figures it out, when the administration forces you to get out or July of 2028 is the longest date that they have. said between July of 2026 and 2028 is when they're going to implement all the new changes. So, whichever of those three things comes first. Very broad, right?
Taylor (07:15)
Mm-hmm.
Hmm. Okay. So clear, so clear and helpful. ⁓
okay. So save is ending and what are the new options? What are you kind of like, you know, advising people on what's next?
Lauryn (07:50)
And that is the key piece of the puzzle. So save is ending, what else do we have? The OBBB has made quite a few changes to the plans that will be available to you going forward. So one, income-based repayment. There's a new version and an old version of it. Those are the two plans that are sticking around that look really stable that we can kind of count on for the foreseeable future. They have been around pre-OBBB, but they are...
Taylor (07:52)
Yeah.
Lauryn (08:18)
pretty much the only ones that will stick around post-OBBB.
Taylor (08:21)
And
what are those ones?
Lauryn (08:24)
That's the new income-based repayment and the regular income-based repayment. yeah, just to clarify, we're gonna do a little bit of alphabet soup here and I might not clarify, but income-driven repayment, IDR, is the name of the whole program. And then underneath the umbrella of IDR, you can choose IBR, PAYE, SAVE, ICR, or new IBR.
Taylor (08:28)
Okay.
Yes, please.
Mm-hmm.
Lauryn (08:54)
So all of those are different income driven plans that you can choose from. The two that I was just talking about, income based repayment, IBR, are the two that are sticking around for sure. Then there is pay as you earn, P-A-Y-E. If you borrowed exclusively after October 1st of 2007, you are eligible for that program. Doesn't necessarily mean that you're on it.
Taylor (09:04)
Mm-hmm.
Lauryn (09:19)
You can still get on it right now, but it is going away as a part of the OBBB. And so you need to plan to make changes if that's the plan you're on right now. The one other plan that is going away besides the SAVE plan is the ICR, which stands for income contingent repayment. I told you, it's an alphabet soup. ⁓
Taylor (09:41)
I
feel like they make it all confusing on purpose, but hey, that's a conversation for another day.
Lauryn (09:44)
Right, it all sounds the same, right.
So just beware, ICR going away, P-A-Y-E going away, SAVE going away. What does that leave us with? IBR new, IBR old, and the new rap plan that you mentioned.
Taylor (10:03)
for payment plan, old, income-based repayment plan, new, and the wrap plan, which is also new.
Lauryn (10:12)
Right. ⁓ And the rap is so new that it doesn't actually exist. So you couldn't, you know, listen to this podcast today and go online, you know, as of this recording and choose the rap plan. They said that they plan to implement it by July of 2026. So we will see. So we have some details about it, but you can't actively choose it as of yet.
Taylor (10:21)
Mm-hmm.
⁓ Okay. Wow. So I'd like to go in a little bit about the, with the income base repayment plans, both of those. Can you kind of talk a little bit about what those look like? What those mean?
Lauryn (10:48)
Absolutely, especially like I said, people are leaving safe, people are looking for options in general. Like I said, they're listening, they've had their head in the sand, ignoring their student loans. Today is the day to get out, get into action. so when we choose the new IBR plan, it is because you borrowed exclusively after July 1st of 2014. If you had any loans before July 1st of 2014,
You are not eligible for new IBR, you are only eligible for the old IBR. So the old is the one that's gonna be all-encompassing, the catch-all for everybody, and it is less advantageous than the new. So fingers crossed that you are eligible for the new, but the world doesn't end if you're only eligible for the old. You just need to do the math and understand how it affects you. So let me explain. The new IBR is a 20-year plan.
Taylor (11:38)
Mm-hmm.
Lauryn (11:42)
and it is based on 10 % of your adjusted gross income, whereas the old IBR is a 25-year plan and it is based on 15 % of your adjusted gross income. So old IBR, not as advantageous because you pay for five years longer and you pay 5 % more on a monthly basis. If we're gonna be on these income-driven plans or income-based repayment plans,
Taylor (11:54)
Okay.
Lauryn (12:10)
The whole point of being on one is to get forgiveness. Otherwise, you should be aggressive and be thinking about how to pay your loans off as quickly as you can. So we want to be on one side of the boat or the other. We're paying them off aggressively, aggressively, aggressively, trying to save as much money on interest as possible, or we're choosing one of these income-based plans and we're paying as little as humanly possible, not a dollar extra toward our loans because we're trying to maximize the amount of forgiveness that we're going to get.
Taylor (12:37)
Ooh, that's interesting. want to come back to that. Can you explain? So the new IBR plan sounds like we're happy. we happy about this? That sounds good. Sounds better, right?
Lauryn (12:53)
It's nice,
it's just hard because not everybody qualifies for it. So, like what year did you go to school?
Taylor (12:57)
Yeah, yeah.
I graduated, yeah, let me think. I was in school from 2011 to like 2018. So, yeah.
Lauryn (13:08)
Exactly. So you
borrow before July 1st of 2014. You can't get on the new IBR plan even if you wanted to.
Taylor (13:16)
Mm-hmm.
I think, but I think the loans that I have, because my first three years of undergrad was community college and my mother so graciously, thank you mom, was able to pay out of pocket for my community college. And then 2014, ooh, ⁓ I started fall of 2014, I believe, and I had to take out loans. So what's the date cut off?
Lauryn (13:38)
July 1st
of 2014, so you probably made it.
Taylor (13:41)
I might have made it. I'll have to look. That's kind of nuts. Interesting. ⁓
Lauryn (13:43)
Mm-hmm.
Yeah, so you would be able to
pay based on over a period of 20 years, 10 % of your income, whatever is left over at the end of that timeframe would be forgiven.
Taylor (13:55)
It's forgiven.
Yeah. Okay. Okay. So yeah, I mean, for some people who qualify, that is great. It's less amount of your income for a shorter period of time. We love that. ⁓ the rap plan, which stands for what?
Lauryn (14:08)
Mm-hmm.
⁓ Repayment Assistance Program.
Taylor (14:15)
Okay, can you explain what you know about it so far? I realize that there's not a lot of information about it, but yeah, what do you have?
Lauryn (14:24)
Yeah, so it is also based on your income. What they do is they do 1 % of your adjusted gross income for every $10,000 that you make. So basically if you make between 10 and 20,000, you pay 1%. Between 20 and 30,000, 2%, and so on and so forth. Once you hit a, exactly.
Taylor (14:42)
of each of those brackets of your income.
Lauryn (14:46)
so yeah, if you make $120,000 a year, you're gonna have 10 % of that number, so that is $12,000 divided by the 12 months in the year, $1,000 a month. So if you make $120,000 a year, easy to calculate your payment, it's $1,000 a month. Which I don't know if people are gonna think that's a good number or a bad number, but that's how they calculate it.
Taylor (14:54)
Mm-hmm.
Lauryn (15:09)
And so that's the thing you need to be thinking about with the rap plan. The other thing that is important to know about it is that it's a 30 year plan. So, I know, right? So we just talked about this. After 30 years. ⁓ And we're unclear on whether or not it's gonna be tax free or taxable. Like I said, this should work just like the others and be taxable at the end, yeah. ⁓
Taylor (15:16)
And that's when you get forgiveness after 30 years.
When you say it's taxable
or tax, the other ones, when you get forgiveness on the kind of 20 year plans or more, it's not taxed or it is.
Lauryn (15:43)
Nope,
all of them are taxable. ⁓
Taylor (15:46)
Okay.
Lauryn (15:46)
And
so that is a key piece of the puzzle for everyone as well because so many people listening to this podcast are like, oh, my payment's $100 a month, I can afford it, whatever. Well, if your payment is that low, it's because you're on an income-driven plan, you're going for forgiveness, and you might not realize that once the loans are forgiven, you need to pay taxes on the amount that they forgive. So you might have borrowed $75,000. By the time you get to 20 years from now, your loan balance is gonna be $125,000 because of interest
your payment was so low based on what your income was. So the good news is that your payment was always affordable because they calculated it based on your income, but the thing you didn't know was that you weren't paying enough to even cover the interest so it was piling up on you. Your loan balance is bigger.
Taylor (16:29)
And then when it's forgiveness,
and then when you get it forgiven, they're like, here's, I don't know how much, what's the percent, like what, do they tax it? guess it depends on when you're, where you live.
Lauryn (16:38)
as normal
income. like in my example, you get 125,000 forgiven. It's gonna look on your tax return like you made an extra $125,000 that year.
And so you need to be able to do the math to say like, what is my tax liability going to look like? And also how much do I need to save on a monthly basis to be ready for that tax liability? And that's what we do at Student Loan Planner is help people figure out those kinds of things. Because when I tell you it's on almost nobody's radar, people aren't thinking about this. People don't have $500 in the bank for an emergency. So they're definitely not thinking about a tax bomb.
Taylor (17:11)
No, and that's, I feel like that's not even really talked about when we're talking about forgiveness or even on, I don't know, it's just like, I'm going to get them forgiven. You know, like the mess, there's no messaging or just, I don't know, making sure people are prepared on that end. ⁓
Lauryn (17:25)
Yeah.
I'd say
the one thing, you know, because your audience is social workers, like, you guys frequently qualify for public service loan forgiveness, which is a different type of forgiveness. Yes, and that one is tax free, so that's the first thing we'll say about it. Yeah.
Taylor (17:36)
Yes. Let's talk about that.
Yay, yes, yes, yes.
Okay, so for people who aren't familiar with public service on forgiveness, can you give us your spiel for that?
Lauryn (17:52)
Absolutely, so four requirements. The first one is that you have direct loans, which if you borrowed after 2010, you definitely do. But if you borrowed before 2010, there's a possibility that you have something called FFEL loans. You need to look at your loan profile and see. But the requirement for PSLF is that your loans are direct.
Second requirement is that you work at a nonprofit agency or a government agency, like I said, which is very popular in the world of social work. So that's usually a pretty easy one to do. Any government agency, any 501c3 qualifies. Third requirement is that you're on an income-driven repayment plan. So that's what we spent some time already talking about. All that alphabet soup that I gave you earlier, you have to choose one of those plans.
Taylor (18:19)
All
Mm-hmm.
Lauryn (18:39)
and while they are 20 or 25 or even 30 year plans, if we're talking about RAP, you would only do it for 10 years. So that's the fourth requirement is that you make 120 qualifying payments and once you've made 120, which is the equivalent of 10 years, then your loans are forgiven that wrong and say, hey, if you are PSOLF qualified, we're gonna overlook some of the criteria to help you get your forgiveness.
Taylor (18:59)
That's pretty cool.
What do
you feel like? there any big misconceptions people have about PSLF or things that people really get like hung up on that you're often finding that are confusing?
Lauryn (19:03)
and that helped a lot more people get it. So it is a real program. You can get forgiveness. You need to meet the criteria and know it is not going away. So those are my little piece of the puzzle related to PSLF.
You need a consultation Liz. That's what she's trying to tell you.
Liz, is, Liv, L-I-V, yes, yes. Liv, I think you should continue to pursue public service loan forgiveness. It sounds like you're a ways into it.
All right, so, I mean, she's already told us. She knows that she would pay literally 50 % of what she borrowed over the course of 10 years. That sounds like a really good deal to me. It's usually more like what we feel like our education is worth when you pursue the PSLF route. So if I could pay 25,000 over 10 years instead of 50,000 over 10 years, that's 25,000 that I can put toward my retirement, put toward my kids' education, home down payment.
Taylor (20:59)
I love that you said that last part. No, it's not going away. So now I'm going to get into Liv sent me a question. and she said,
Lauryn (21:11)
You know, my financial stability and other aspects of life, so public service loan forgiveness makes a lot of sense. And I don't think that they're gonna pull the rug from underneath you, Liv. I think that it is safe to pursue.
Taylor (21:11)
is it better to pay off my loan? I recognize that we only have a small piece of the puzzle and you can't completely fix our whole situation, but we're going to try.
Lauryn (21:23)
Like you're already working at a PSLF employer. ⁓ There's not really a way for them to back out and say like, okay, you're seven years in, now you gotta pay your loans back in full.
Taylor (21:24)
Liv does need a consultation for sure, which the link will be in the show notes guys. I'd highly recommend working with student loan planner. did. And I
think what Lauren said earlier, like in the beginning of just, yes, they're dreaded, but when you have clarity and confidence about your plan, I mean, the relief that you can have with, with all of this is, is, I mean, can't put a price tag on that. anyways, Liv says, is it better to pay off my loan in full?
or try for PSLF. I'm scared it will get canceled.
Live, live, L-I-V, mhm.
Lauryn (22:02)
It's hard to have faith in
our government right now. That's just the reality. With all the different things that have happened, we've seen, like you said, the rug pull from under people in various ways, whether it be their work, their employment, resources for programming. ⁓ And it is really hard right now to have faith in our government, but there are things that are written into statute and there are things that are executive order. And I think that's the big difference. PSLF is something that is in statute.
Taylor (22:08)
She said she, sorry, let me see. She said, I just started making payments last month. I would be paying around half over the course of 10 years if PSLF pulls through in 10 years and forgives the rest. Right now she has 50,000 of student loans and she makes $60,000, has no state income tax in Tennessee.
Lauryn (22:30)
It wasn't something that was just like made up. And so you actually have, like a lot has to be done to undo PSLF despite the various talks and the things that they come up with. And so I think our worst case scenario is that something new comes out, which they're not even talking about right now. ⁓ And it would be like, if you borrow, you know, after July of 2028, as an example, just making up a date, then you're not eligible for PSLF.
Taylor (22:38)
Mm-hmm.
Lauryn (22:57)
So it'd be like, well before you borrow anything or you go to school, you'll know that that's off the table. But the people who are already on it would be grandfathered into it.
I feel confident that Liv should pursue PSLF. Don't pay those loans off in full. I mean, the other thing to think about Liv is like, hey, how fast can I pay them off? Can you pay them off in two or three years? And what is it gonna take? How much more are you gonna be putting toward the loans? You're gonna pay the full 50,000 plus interest. And I just made up three years assuming that you're gonna just like eat beans and rice and like get really aggressive, but that's three years you're not putting money toward retirement probably.
Taylor (23:18)
I was gonna say, can we talk a little bit about this? Like, I feel like a lot of us, especially in social work and just we're seeing the impact of this administration and how it's impacting the communities that we work with directly, like we are really seeing it. And so I think we have this fear that this could be something that can be overturned. And so I
don't know. I mean, yeah.
Lauryn (23:44)
You know, you're maybe living with a roommate because, you know, 60,000 only goes so
far in any part of America nowadays. So it's gonna be a tough swing to pay off 50 grand when you earn 60. And of course they're taking taxes out of that.
Taylor (23:50)
Right.
Lauryn (24:17)
It's sad.
Taylor (24:25)
Mm-hmm.
Yeah, okay. That makes me feel good. And of course, I know you're like, I can't tell the future, but like, from what you know, and from what you've seen, you're the expert here and I trust that. ⁓
Lauryn (24:50)
Absolutely. So the thing about these income driven plans is that they are tied to your income. So you should always have a payment that is semi affordable. You know, it's getting harder and harder nowadays. So I mentioned that old
IBR plan being more expensive than the new one. You know, imagine paying 5 % more on a monthly basis than you were. Sometimes that is the number that breaks people, you know, and that's the only one that's the only plan that's available. So, but the idea
on these income-driven plans is that that monthly payment is affordable despite how much you owe. It's based on how much you earn and it should be something that you should be able to swing. If that's not the case, then I mean, you have to figure out like what other options you have. I mean, that's really something more like forbearance. ⁓ But it's tough right now if you can't swing that monthly payment. But if you can swing the monthly payment, then it doesn't really matter if it's...
Taylor (25:35)
Yeah.
Yeah. Mm-hmm. Yeah. Thank you for that. Liv, I hope that helps.
Lauryn (25:48)
⁓ 100,000 of student loan debt or 300,000 of student loan debt, the payment is the same based on what you earn. And I think that's the thing that gets missing sometimes is people get really stressed out because their loan balance is so high, but it's really more about what you earn. And this is not me discouraging you from earning money. Earning money is good. That's gonna help us reach our other goals.
Taylor (25:50)
So social workers, know, talking about salaries, know, Liv just said she's making $60,000. Girl probably has a master's degree. It's ridiculous. But again, conversation for another day. Social workers who are coming out of the field.
Lauryn (26:08)
So the more you earn, the more you'll have for your other goals. But it is also true that the more you earn, the more you will pay towards your student loan because it is an income-based repayment plan.
Taylor (26:08)
and they have low salaries, how do you see people tackle their loans when they have a high balance,
but we're making, know, coming out of grad school, I'm making 60,000, but maybe I have more than live and say I have 100,000, 150,000, 300,000. Like how should we be thinking about our loans when we're coming out of grad school?
Lauryn (26:40)
Yeah. So generally, once you start to earn the same amount you owe, you want to take a really close look and see if forgiveness is going to be relevant to you. ⁓ Because that's when it starts to flip and it usually makes more sense to pay your loans back. know, put an asterisk by that because we just talked about Liv who earns 60 and owes 50. When you're going for... Right, she's close. She earns a little bit more than she owes.
Taylor (26:59)
That's a lot.
Lauryn (27:06)
⁓ But when you go for PSLF, it pretty much always makes sense because the timeline is so much shorter. ⁓ If you're gonna be stretching this out over the 20, 25, or 30 years across these different plans, and you earn more than you owe, it generally does not result in you getting forgiveness. And so therefore you need to look at one of those quicker payback options, and like I said, just trying to get it off your plate as quickly as possible. And so that's kind of the litmus test. Do you earn more than you owe?
and how long have you been earning more than you owe is another piece, and then also do you qualify for public service before you jump over into the aggressive payoff bucket.
Taylor (28:03)
Mm-hmm. Yeah. And you had mentioned earlier, can you talk a little bit more about like when you're supporting people, you're like, okay, are we going towards forgiveness or are we going towards or are we paying it off? And what are some things that you're helping people kind of walking people through with like with that? So can you kind of explain that a little bit?
Lauryn (28:04)
Absolutely, so both of them by definition are you not paying on your loans, but usually for two different reasons. So forbearance is like, ⁓ I can't pay on my loans, I don't want to pay on my loans. ⁓ And so could you please put a pause on it for that. Whereas deferment comes with like a, am in school, and so in school deferment, you do not
pay on your loans. That's like a mandatory type of deferment that you have for what you're currently borrowing for.
Then there's also like a military deferment. Like I am being deployed, therefore I can't focus on this right now. I'm trying to save the country. ⁓ And so like deferment comes with a reason. I have a hardship of some sort, a financial hardship. They would let you defer your loans sometimes in that case. So deferment is you not paying on the loans. Interest does accrue. Usually on your subsidized loans, interest does not accrue, but on your unsubsidized loans, it would accrue.
Taylor (28:46)
She's close.
Yeah.
Lauryn (29:02)
and on forbearance it would accrue for all of them. So they are both you not paying on your loans, but it's like for different reasons. ⁓ With forbearance you get three years of it in the federal system. So there's three years that you could just like put them on pause, ignore and not have to pay regardless. I don't want to, right, right. No, you shouldn't and you would be surprised the number of people who are just like, I just forbear because I just didn't want to deal with it.
Taylor (29:29)
Hmm, interesting. Okay. Thank
you for that. ⁓ I'd like to talk about forbearance and deferment and again, words that we kind of know about, but we're not really sure. Can you explain both of those please?
Lauryn (29:46)
You can do this. You can do this.
You can do this.
We gotta break it down for the audience,
Yes, ⁓ subsidized is going to be loans that, like I said, ⁓ do not accrue interest while you're in school, and then if you're out of school ⁓ and you're on, like I said, a deferment, they would also not accrue interest while you're in that deferment. ⁓ Unsubsidized means they will accrue interest. So you get out of school and your loan balance, like you borrowed 50 grand as an example, your loan balance is already 55, because while you were in school not paying on the loans, the interest started to pile up on you.
You exit school already owing more than you borrowed because you didn't pay on them. ⁓ And then, like I said, by definition, you have to be in deferment when you're in school. It's called in-school deferment, so.
Yeah, some of it is financial aid, some of it is like you said, what your FAFSA says. Then there's also these plus loans, like I said, where you can just take out like unlimited amounts of money and those actually don't even have to stay in this in-school deferment I'm talking about. So sometimes people are like putting those in forbearance or they're paying on those loans while they're in school. It's just like a little bit of a hodgepodge. That's why I said no two student loan plans are the same.
Taylor (31:02)
Just be like, Hey, I can't do this right now. I don't want to. Hmm. Interesting. I should look into that. No, I'm kidding. I'm kidding. I'm kidding.
I just don't want to think about it. Yeah. Which I feel like
we as social workers know that, you know, just putting something on the shelf and not addressing it is not healthy for us, but sometimes we use it as a coping mechanism, but let's bring it back. Let's bring it back and book and book a consult with Lauren. We can do this. so briefly, I feel like I'm just hitting you with like these definitions, like, please explain this, please explain this. ⁓
Lauryn (31:18)
No matter how similar you and your friend are, you guys are not gonna have the same plan for these reasons.
hardship.
Taylor (31:46)
Yes, unsubsidized versus subsidized.
Lauryn (31:59)
It depends. ⁓ know, yeah, you really gotta look at your situation and see why you can't afford it. Because the other thing we didn't talk about is that on these income-driven repayment plans, you could have a payment of zero and be on the payment plan. So let's say you make $15,000 a year. You're working part-time doing social work because, I don't know, you just had a baby, yeah.
Taylor (32:29)
I feel like when I got my student loans, it was like some of them were subsidized, some of them were upsubsidized. Like it just randomly happens. How does that work?
Lauryn (32:30)
Exactly. That's a perfect way to say like 15,000 is not enough to pay all my 150,000 of student loan debt. You sign up for the
income driven plan. They ask you what your family size is. They ask you what your income is and they assign you a payment of zero. So now you're on income base repayment or new income base or pay, you know, the options that we've discussed today. But your actual payment is zero. You're not in forbearance. You're not in deferment.
and now you're earning credit toward that 20 or 25 years toward forgiveness. So you don't always need to choose a forbearance or deferment and frequently you don't need to choose one. Now flip side, the question was like, when would I choose that? Like maybe you make $120,000 a year ⁓ and you, I actually talked to someone recently, their mother was really sick and so they've been flying back and forth. They've been spending a lot on that. ⁓ They also have a child with special needs.
Taylor (33:10)
Yeah, absolutely. Is there a time when you would recommend like forbearance? Cause it sounds like the deferment you, you have to, like you said, prove like I'm, I don't, I'm, I'm being
deployed or I have this hard, this financial hardship. Let's maybe let's talk about that one a little bit. Like if, if people are like, whatever their payment is, whatever the plan they're on, they're just like, I literally cannot afford this.
Lauryn (33:27)
in addition to living in a high cost of living like New York City, you know, city. like, while 120 sounds like a lot of income, with those three things going on and you know, just the regular aspects of life, that
person was living kind of very paycheck to paycheck. ⁓ And so if they went to sign up for an income driven plan, the income driven plan is gonna say, nope, you can't do it. ⁓ Here's your payment of a thousand dollars as an example. And she's like, I can't add another thousand dollars to the mix right now. ⁓
Taylor (33:40)
Do we defer? Do we go on forbearance? How do you like... Yeah.
Lauryn (33:56)
that's someone who would need to choose a forbearance or deferment.
Taylor (34:01)
Hmm.
Lauryn (34:05)
⁓ Just depending, yeah, she has the hardship deferment she could ask for, or she could ask for forbearance, right? Provide. Exactly, or you can literally just log into your servicer and be like, nope, not paying general forbearance, and move on with your life, yeah.
Taylor (34:08)
You have kids and yeah, yeah, you got a spouse and they're bringing in most of the income, but yeah, you're still working a little bit.
Lauryn (34:30)
Forbearance. Deferment is like as they say,
Taylor (34:47)
Right.
Lauryn (34:53)
Yeah, we are entering a season where refinancing is once again becoming more popular. Pretty much during COVID, 90 % of people were advised not to refinance. ⁓
It was getting, right, you didn't have to pay on your loans. It was getting counted. There was an interest free timeframe, but also like just all the different things that were rolled out. The IDR waiver was helping people get closer to forgiveness faster. Pre-COVID, I'd say, you know, 70 % of people, this is, you know, me making up a number, but had to go for forgiveness and 30 % maybe refinance. During COVID, it was like 90 % should go for forgiveness or, you know, at least stay in the federal system.
and then 10%. And now we're going back to, because the payment plans are changing, a lot more people are only gonna have income-based repayment available to them. We're headed back to the days where 70 % of the people should be going for forgiveness, and now there's a much bigger number, 30%, that should be going to refinance. Because after 25 years, and after paying 15 % of your income, there's not gonna be anything left.
Taylor (35:40)
Yeah.
Hmm. Yeah, okay. Well, how would she decide?
because you have to like give, you have to like prove it with documents and
things like that, right?
Lauryn (36:01)
And so it makes more sense
to get a better interest rate, which you can't do in the federal system. So that's the reason that you would refinance. You can't negotiate with the federal government your interest rate. That's what you do with a private company. Hey, I have 7 % with the federal government. I'd like 5%. I've got good credit. And you you go off and you pay your loans based on 5 % interest.
Taylor (36:05)
Forbearance. I want forbearance. Okay, gotcha. And I think you said this already. You get three years total of deferment, of forbearance. Okay.
as needed or yeah, as they grant
it to you. ⁓
Let's talk about refinancing and.
Lauryn (36:31)
Negotiate is a strong word. Like you put in your information, they look at your credit score and your income, and then they give you an interest rate. Yes.
Taylor (36:32)
Yeah, your tips for people on refinancing or not.
Lauryn (36:43)
But you can, yeah, so you can call these companies and say, I don't think you took my full situation into consideration. I'm a really good borrower. I am, I mean, this is that we're on a social work pocket, but like I'm a physician and you know, looks, I look broke on paper, but I'm not actually broke. Like more so, yeah. So that is an option. It doesn't generally work, you know, everything is AI and formulas now, but.
Taylor (36:50)
Well yeah, because I feel like we didn't have to pay on our loans and it was getting counted, right?
Lauryn (37:08)
closed mouths don't get fed. So if you don't call and ask, you definitely don't get a better rate than what they are offering you. But the other thing too is that you're not loyal to a company. You're loyal to whoever's gonna give you the best interest rate. So instead of spending your time calling them and arguing about it, like I would go through the five different companies, you know, most popular and see who has the best interest rate there and know that like you're probably, that's it. There's not really a reason to argue with anyone because if this gave me 4.8, this one gave me 4.3.
Taylor (37:21)
Mm-hmm.
Lauryn (37:37)
4.2 and 4.1 is just like, I'm probably not gonna find better than 4.1, even by arguing with someone.
Taylor (38:10)
Wow. Wait. We can negotiate with these loan people? With these loan companies?
Lauryn (38:13)
This is a tough one. ⁓ It is
really hard to hold them accountable, which has been one of the biggest problems in the system. That we have very little rights as borrowers. They say that you have rights, they give you these options and these things to do, and then they just kind of like ignore you. So the two things that this person can do is go, one, go to studentaid.gov slash feedback and file a complaint there. And then the second place is to go to CFPB.
Taylor (38:21)
And then they give you an interest rate. Okay. I can't, I can't come back and be like, ⁓ that's cute. But like, this is what I want. Can I?
Okay.
Lauryn (38:41)
⁓ and file a complaint there. The problem with the CFPB is it's one of the things that was dismantled as a result of the new administration. I know. And so, I was seeing the most...
Yes. CB, CB, right, PB, consumer finance, there we go.
Taylor (39:06)
period.
Lauryn (39:15)
So there's that, right? And they were actually doing their job. like I said, mm-hmm.
Taylor (39:27)
Mm-hmm. Mm-hmm. Yeah. Okay. I had someone who, excuse me, I had someone who reached out and said, how do you hold student loan servicers accountable for illegally overcharging false credit reporting? They had reported her as having missed payments.
Lauryn (39:30)
Yeah, that's what this person could have done was go to someone like them and say like, hey, here is what has happened. This is not right. This is unfair. And they would get them to move to action. A lot less true with studenta.gov. It's like, we've received your response and we don't really care. Bye. Like the number of...
Yeah, mean, sometimes the responses are literally incoherent. It's like, I asked you what day of
the week it is, and you wrote back and you told me the recipe for spaghetti. And you're just like, this literally has nothing to do with what my inquiry was. They're just required to respond. It's so sad.
Keep from crying.
Taylor (40:34)
Lord. My gosh. yeah, that's the that's the center. That's the center for like consumer. What is it? What is it? Yeah.
CFPB, I have to look it up. have the Consumer Financial Protection Bureau. The bureau that is trying to protect us as consumers in this financial landscape has been dismantled. Love that for us. Love that for us. They were killing it. I did listen to a podcast of a guy who worked there. Podcast, yeah, and I was impressed. Anyways.
Lauryn (40:49)
Absolutely, so you can use the link in the show notes, you book a call, pretty much you'll receive an automated response that says, hey, we need your TXT file, which is a document you can get from studentaid.gov. You send that on over to the person that's gonna be your consultant. So we'll have that ahead of the meeting to be able to look at, and then we'll also convert it into something slightly prettier than what you see. Everyone's like, this document is ugly, like what are you gonna do
with it? Don't worry.
We've got a magic tool to make it look better, but it's like your credit report for student loans. So we walk through that document first, and then we move over to looking at a calculator that's gonna tell us which of all these different payment plans, all this alphabet soup that we talked about today is the most appropriate for you. And I think it's a lot easier to understand those payment programs when you have a visual in front of you that's saying, like, okay, if you choose this, your payment's gonna be this, and your payment's gonna be this on the other plan, and it's gonna cost you this much over time.
Taylor (41:35)
Because no one's holding them accountable, right?
Lauryn (41:45)
and this is how much is forgiven. So, like I said, we walk you step by step through what is appropriate for you.
Taylor (41:57)
Gosh, I'm laughing because if not, I will cry. Exactly. You get it? ⁓ wow. Okay. This was awesome. And I need to have you on the podcast like every year, just so we can just get some updates, get the tea, get the student loan tea. I just want to talk like end with the process of if someone wants to work with student loan planner, what's that process look like? Like give us the.
Lauryn (42:00)
You
And it.
Skyward Consult, 60 minute consultation, and then you also
get three months of email support. So we don't just abandon you after the call. If you have additional questions that come up, we try to get those answered for you as you're implementing the plan that we made during that consultation.
Taylor (42:26)
the inside scoop of all the things that you need from the person that wants to work with you and what you provide to them.
Lauryn (42:44)
⁓ I think, you know, as a closing thing, would say, like I said, don't stick your head in the sand. You're here, you're listening to this podcast, which means you're taking some sort of action towards your finances. ⁓ I know student loans can be scary. I know they're not sexy, even though I said they were. But not doing anything could be costing you tens of thousands, if not hundreds of thousands of dollars. And what you don't know can really hurt you. So.
You know, it's not so much about booking with Student Loan Planner as it is about you taking care of yourself and feeling like you're worth investing in. Because, quick story to finish out yet, the most amazing thing that's happened this year, a gentleman called me about two weeks ago. He was getting ready to use the proceeds of selling his home to pay off $347,000 of student loan debt. And he booked the call and he was just like, I don't really know. I just want to be done with it. You know, my wife said I should call you. She saw this on the internet.
Taylor (43:32)
Yes.
Yes. And I have gotten a consult
specifically here with Lauren. have seen this spreadsheet. It is gorgeous. And I, I feel like I, people call me the spreadsheet spreadsheet queen and I could not touch this amazingness. Like this spreadsheet is so awesome and detailed and tailored. Yeah. Just for you. So our consult.
Lauryn (43:40)
Like he was not like excited. He was like definitely being forced to like, I didn't want to spend this money on his consultation, but I'm here. This gentleman had been working at a PSLF employer for 23 years. His loans are immediately eligible for forgiveness. I saved that man $347,000 that he could go retire early. And he was not like, they're not in the best shape for retirement. weren't, you know, they weren't ready to do everything they need
to do financially in life, but they were like, well, this is the next step.
Taylor (44:06)
I don't know.
Lauryn (44:09)
to financial freedom, use most of what we just got from our house to pay off student loan debt. And he didn't have to pay a penny of it.
Taylor (44:24)
Awesome. Anything else you feel like we need to know?
Lauryn (44:38)
or social workers income, right?
Taylor (44:39)
Mm-hmm.
Hehehehehe
That's so true.
Lauryn (45:40)
And that is exactly my response. Exactly. Is that there are a lot of scams out there. So you can see where that point of view comes from because not all companies are created equally. You know, I've had people come and they're like, well, this company told me if I just pay them $200 a month, they would just fix everything for me. And you know, now they, there are $2,400 for the year. You know, this call is 600 bucks. It's not cheap, but it's a one-time call. And all we do is try to point you in the right direction.
Taylor (46:03)
Wow. Yeah. And I think so for everyone, like the consult
is usually five 95 with my, um, this, you know, my affiliate link discount, get a hundred dollars off. So it's four 95. And I recognize that that can be a lot for people, you know, to just be like, I'm paying four 95 for this, but I think the
Lauryn (46:09)
other people are stringing you along collecting every dollar that they can. So, you I can see why people have that hesitancy. It's the same thing with financial planners, with accountants. You know, people would rather try to do it themselves than to be scammed because they don't know, you know, really how to spot the scammer. ⁓ And so I understand that, that, you know, hesitancy, but at the same time, you need to do a little bit of research. You need to find
people that you trust. Like you've been listening to this podcast. You've been seeing the value from it.
Taylor (46:31)
we're paying for this expertise, we're paying for this clarity, you're paying for this plan.
Lauryn (46:35)
You would know that Taylor did some due diligence before she just let anybody come on here and talk to you. You just gotta use your noodle a little bit. Like I said, you can try to do things on your own, but imagine, people are trying to cure their cancer on their own, they're Googling things. How much time do you have, will be my first question, to do whatever it is that you wanna do on your own. That's the reason that.
Taylor (46:36)
You could save so much more than that ⁓ by booking this console. So I just wanna say that. Last thing, I'm curious about, there's people, I feel like I see people online, sometimes on Reddit where they're like, don't ever pay for student loan advice. You can do it on your own and this and that. And maybe you don't have a response to that, but I just.
From what I've seen from learning from you guys and the content that you share and everything that we've talked about today, I think it can be worth paying someone who just knows the ins and outs of it and not having to figure it out on your own. And it's not a scam. feel like there's other, there's things I've seen on Reddit too where it's like, if you pay for student loan help, like it's a scam. just like, this is all so confusing.
Lauryn (47:29)
Absolutely. If by all means you're like, I can't afford it, like go listen to our podcast, go online, look at our blogs. We have a ton of free resources and you can build your own plan, but I would say you need to invest at least 20 hours of research time to build one that you're going to feel comfortable with when you could pay for one hour of time and move on with your life and keep those 19 hours to do something else.
Taylor (47:33)
That's fair.
Lauryn (48:01)
Yeah, so we are studentloanplanner.com. The podcast is the Student Loan Planner podcast. Instagram is Student Loan Planner. You name it, if you just type in the word studentloanplanner, ⁓ you should find us in pretty much all realms of social media and the internet sphere.
Taylor (48:02)
Yeah.
No, we don't have the time, we don't have the energy. And as social workers, we know the value of, know, whatever we do, whatever field we're in, whether it be hospital social work, therapy, you know, all the things, we recognize that we have an expertise that we're bringing and the value that we're bringing and people should pay us for that, right? And it's the same here. Like if you need help for student loans, it's okay to pay someone to...
help you with it. It's worth the investment and you're worth it.
You do. You do.
Yeah, absolutely. All right, well, thanks so much, Lauren. Yeah, can you share the podcast and the blog and all the places where we can find Student Loan Planner?
Yeah, yeah, OK. Awesome. This was so helpful. Thank you, Lauren. Thanks, everyone, for listening. As always, rate, review, share, all the things. And we'll see you in two weeks.