Ep. 125: Part 2 - Navigating Student Loans with ​‪@fitbux‬

Timestamps

00:00 - Introduction to Student Loans and Financial Freedom
03:01 - Understanding the Current Student Loan Landscape
06:00 - Navigating Repayment Plans and Forgiveness Options
08:48 - The Impact of Recent Legislative Changes
11:53 - Exploring Parent PLUS Loans and Their Implications
14:57 - Strategies for Managing Student Loan Debt
18:08 - The Importance of Professional Guidance
20:58 - Future Changes and What to Expect
24:05 - Conclusion and Resources for Listeners

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About Joseph

Joseph Reinke is a Chartered Financial Analyst (CFA) and the founder of FitBux, a revolutionary financial planning platform that has empowered young professionals to manage over $3 billion in assets and debts. With a passion for finance that began at the age of 12, Joseph has built an impressive career spanning student loans, mortgages, wealth management, investment banking, valuation, stock trading, and options trading. As a sought-after speaker, Joseph has been featured on hundreds of podcasts and invited to speak at universities across the country, where he shares his expertise with soon-to-be graduates. His mission? To make financial planning accessible, actionable, and impactful for the next generation of professionals. When he’s not helping others unlock their financial potential, Joseph is busy innovating ways to bridge the gap between technology and financial wellness. Connect with FitBux:    / @fitbux     / fitbuxofficial     / fitbuxofficialgroup   

About Michelle

Michelle Gage, MA CCC-SLP, embarked on her journey in speech-language pathology during her undergraduate studies at the University of Mississippi, where she also worked at North Mississippi Regional Center, gaining invaluable experience in various therapy approaches. Following her Master's Degree in Speech-Language Pathology from the University of Central Florida, she has dedicated 25 years to empowering children and families in improving language skills and overall development. Currently residing in Mississippi, Michelle extends her expertise through telehealth services. Additionally, she proudly serves as the host of the SLP Full Disclosure podcast.

Outside of her professional commitments, Michelle is the proud mother of Mia, an accomplished middle school math teacher and all-around amazing human. In her leisure time, she indulges in her love for travel and cherishes moments spent with family and friends.

Transcript

Speaker 2 (00:00.078)

Hey y'all, it's Michelle with SLP Full Disclosure. Thank you so much for joining us today. We are joined again by our friend from FitBux, Joseph Renke. And I am gonna be friends with him because he has so much information that I want from his brain into my brain. So we did a podcast and I encourage all of you guys, if you have not listened to it, to go back and listen to part one with Joseph where he talks about the FitBux app, the benefits, what his professionals at that company can do to help you guys as young professionals.

with financial information, financial knowledge, and financial freedom. So today, when we had our intro call a few weeks ago, Joseph mentioned something about student loans. And we talked very briefly about it. And he said, wait a minute, I think we might need to do a podcast dedicated solely to student loans. So that is what the podcast is about today. So Joseph is going to be the one providing this information. We've got a few little questions on here.

Because I know back in the day, you know, I went to Ole Miss and I didn't have any undergraduate loans, but I did have graduate student loans and I did the student loan forgiveness, you know, working in the public schools and got the majority of those loans forgiven, which was great for me. But now I am personally in with Parent PLUS Loans because I put my daughter through four years of college, 100 % by myself. So I'm hoping that we get some information on Parent PLUS Loans.

Why did you think it was important that we do a podcast dedicated directly to specifically for student loans? Because you said there's a lot changing.

Up until like three, four weeks ago, was like this topic already needed its own podcast just because there's so many different things with federal loans. There's, you know, on top of that, I refinance or not? How do I pay these things? How does it affect retirement? How does it affect, you know, saving for a house and how does it affect mortgage qualification? Like just that alone can be chopped into probably five different podcasts.

Speaker 2 (02:00.598)
And then you throw consolidation in there. Should I consolidate? Should I do all these things? And who knows? That's what you're going to tell us today.

Yeah. And then on top of that, about three or four weeks ago, they passed the budget reconciliation bill, the OBB, the one big beautiful bill or whatever they're calling it. And there was a part of that that completely changes the student loan system. And so you can go buy both of those. And so it's like, what's here now? What is coming down the pike? It's like, yeah, that's its own episode. It's, it's, it's mind numbing to go through this stuff.

So.

Okay. So how are things changing? So since you and I spoke, things have changed.

yeah, yeah, they passed the bill. It's going. We have some tentative dates of when things are going to be changing. mean, because of these changes, just like the last week and a half alone, I've personally been on like 240, 250 phone calls with people because of all the changes that are coming down the pipe. Yeah.

Speaker 2 (03:01.496)

So what is the most pertinent information? Because our audience, as you know, this is an SLP podcast. So we've got young professionals that maybe just got out of graduate school. Maybe we've got kids that are in graduate school currently who are in that student loan process where they're taking out loans every semester. What is the most pertinent information that they need to know about student loans currently today?

So I'll start with- Which possibly change, I guess, next week.

Yeah, I'll start with students because others are the easiest. And when we talk about new grads or people in repayment is when it starts getting, it's going to be a lot longer because there's a lot of things that are moving parts on that.

Okay, so we'll talk about students.

Yeah, first. as a student, like if you're in school right now, you're already in your program, you will fall underneath the old system of graduate plus loans, meaning basically whatever your school says, the cost of attendance is plus cost of living, you can borrow all of that. Okay. There's no cap on that on what you can borrow. and so if you're in school, that's what it is now.

Speaker 1 (04:15.11)
If you don't enter repayment before July 1st of next year, okay, so like if you graduate, say May of next year and you're not on a repayment plan yet, after July 1st, you're gonna be on the new system for repayment that we're gonna be talking about coming up in a few minutes. If you graduate like right now, maybe you just graduated in May, you're in your grace period and you start repayment in November, you can still get on the old

repayment plans, which you probably want to do. which I can guarantee you that you want to do. And so that's the big difference for students right now. After July 1 of next year, so like if you're starting your program after July 1 of next year, you will no longer be able to get an uncapped amount of loans. Okay, now there's two systems that they are coming up with for like doctors and

and master's programs. If you just go to undergrad, the most you can take out in a given year is going to be $20,500. And the most you could take out lifetime is $100,000. Okay? And that's the same for a master's program. Your combined amount that you can take between undergrad and master's is a hundred grand. Okay? If you go to a professional school,

Then you can take out $50,000 a year and the most you could take out in federal loans is $200,000. Okay. So the big question mark for future students though, getting their SLP is what's considered a master's program and what's considered a professional's program.

was just about to ask you what's the difference in a master's program and a professional program.

Speaker 1 (06:01.422)

And they didn't define that in the bill. So we're still waiting to figure out what that is. But in the past, the way they defined a professional program was there was a couple of different things. The two that we always focused on was is it a between undergrad and professional school? Does it take six years or more to do? And is there a licensure exam at the end of it that you have to take before you can actually go into your field? Those are two out of like six or seven different things that they use to help qualify for it.

Some people in the industry still think that that's what they're going to use to define a professional program. professions like a PA or an NP, because it doesn't require six years, they're going to be considered a nonprofessional program. It's going to be a master's program, and they're going to be capped at $100,000. Programs like DPTs, OTDs, MOTs, potentially SLPs, they should be the bigger one. That is not in stone yet, though. We don't know.

on that. But that is only going to apply for students starting after July 1 of next year.

Okay. All right. What about those students who are in repayment right now?

That's the crazy part.

Speaker 2 (07:14.782)

Okay. All right. Let's get into that. I don't even know what questions to ask. mean, because there's a million different questions. So I don't even know what's the most pertinent question to ask to get the most relevant information out there.

Yeah. So I'm going to start with the history of this because every president, starting with Bill Clinton, has changed something to the student loan plan. Some of it has been just done through their own actions, just with pen and a paper and writing stuff out. Some of it has been done through Congress. So the results over the last 25 years, 30 years is like this

Frankenstein type of student loan system of this. This piece is here, this piece is here. If you have debt on here and you took out loans here, then you qualify for this. But if you have one debt from this date, you don't qualify. You have to go here. it's just, you know, so a lot of people blame the loan service. It's just like, they're doing the best they can. Like, this stuff is so confusing.

I was joking around with someone the other day from 2016 to 2020 was probably the best time in student loans that we've had because President Trump was the only one that never changed anything. He just said, this is what I inherited as a president. This is what the student loan system is. So we knew exactly what was going on. And those up until COVID was really smooth. And then COVID hit and they put everything on like COVID forbearance. But then the loan servicer started implementing them. It's just this whole chaotic mess.

And then basically last July, when one of the programs got put on a stop because of the courts, the Biden administration just stopped processing paperwork. So there's like just this massive log of people trying to get on the repayment. And, you know, the new administration is trying to get caught up. But they also have, you know, some of their hands tied because of some of these court decisions. And it's like, so who's to blame? It's like, well, you know, blame the last 30 years of garbage.

Speaker 1 (09:17.868)

being put into this thing, right? So very confusing, but that's how we got here. Okay, so what is going on now? And that's key to understand what's going on now, because there are things called income during repayment plans, IBR, pay as you earn, save, old repay, ICR. And then with IBR, there's IBR for new borrowers, IBR for old borrowers, right? So to make this- my word.

Yeah, to make this simple, what we do is we just say, look, think about this from a financial planning standpoint. Like, I don't care about the names of the programs. I care about financial planning strategies. Okay. You're either going to pay off your loans or going to go for loan forgiveness. That's what you got to focus on. If you decide loan forgiveness, now we've got to decide what tool you use of those repayment plans. But from the big picture, what am I going for here? Loan forgiveness or paying off my loans? That's the key. Paying off your loans are simple.

like with your federal loans, the current programs are either the 10 year standard plan or you can extend it out to 25 years so the payment drops and then you can make prepayments. Okay, so that's their way right now. In terms of the standard plan, what's changing coming up here in the next year or two is it's gonna be based on how much you owe. So like if you owe less than $25,000 as a 10 year standard plan, if it's 25 to $50,000 that you owe, it's the 15 year standard plan.

50 to 100,000 is 20 years and then over 100,000 is the 25 year standard plan. So that's what you'd be going in. So the payoff strategies are very simple to understand. Okay. That's also where refinancing comes in. Refinancing is where you go from the federal government to a private lender once you graduate because you're trying to get lower interest rates and you're trying to save money.

You throw, then you throw that word consolidation in there.

Speaker 1 (11:05.902)

Yeah. And consolidation means just merging of the loans. So you can consolidate some of your federal loans if you want to do that. But a lot of times when you refinance them, you also consolidate at the same time, you merge them together. that's where that comes in is in terms of consolidation and refinancing. But that's the payoff strategies. You're basically saying, which plan do I want to go on right now? Like if you're currently in repayment, you have that choice and then look into refinancing and if it makes sense. And you only want to look into refinancing if you're paying off your loans.

Because once you refinance, you can't qualify for forgiveness anymore through the government. So that's the big decision is, do you refinance or not? So that's the payoff strategies. And I'm going go through loan forgiveness because that's the big beast that.

Yeah, because there's two different types of lung forgiveness.

Yeah, there's many different types of, but yeah, the two main, there's two main ones. Yes. Yes. but I'll pause there. see if you got any questions on pay on like the student stuff or the payoff strategies. Cause those are the two easy ones before we dive into like the, big picture of the student.

Two main ones.

Speaker 2 (12:06.574)

I mean, I don't even know, Joseph, what to ask. Like, just give us the information, and then I'm going to refer all of our listeners to FitBux and tell them to come to you, because I don't even feel knowledgeable enough to even ask questions. I just want to get this information out there, because you're right. When I went online to look at it, within five minutes, I was overwhelmed. And I'm a smart, educated person, and I've got, you know, what about Parent PLUS loans? Because I have Parent PLUS loans when I put my daughter through college.

Yeah. Well, we'll talk about the Parent PLUS loans because that's a whole other set. right. So loan forgiveness or income driven repayments as they're called. So I talked about this whole Frankenstein system. First of all, income driven repayment plans are a combination of three different types of financial products. Like instead of just picking one, the government decided to piece three things together. So they're a mess. Like, and how they're even designed. Okay. And I know people on Wall Street that can't even explain to you how these things are actually work.

my goodness, yes.

Speaker 1 (13:04.488)

That's how complicated they are in the internal guts of how they work. That's how complicated they are. So when you say like you're educated and you had a hard time, don't feel bad. Because like I said, I people on Wall Street that can't even figure that

Okay, yeah, that did make me feel better. And do they purposefully make it this complicated or is it just the happenstance because of all of the changes over the course of the last 20 to 20

It's all the stuff over the last 25 years where they came out with one and then it's like, well, that's not affordable for these people. So let's change this and then let's change that and let's change this and this sounds good. That doesn't sound good.

Let's change this piece. Do you think there's somebody at the student loan world that knows everything there is to know about all of the different aspects of student loans? Probably not. No.

There's some, I met a few that are older that have been through it the whole time. So they understand all of it, but they just throw their hands up and it's like, we don't know.

Speaker 2 (14:02.528)

All right, so student loan forgiveness.

Yeah, so I'm going to talk about normal loan forgiveness because everybody can qualify for this is because it's based on your income and how much you owe. Okay. It's not based on where you work or anything like that. It's just based on every, just your income and that's it. These are called income driven repayment plans. So I'm going to talk about what's there now and this will probably take a few minutes to walk through and then I'll talk about how it's changing coming up next year.

And the reason why I want to go through these now because everybody that's in repayment right now can qualify for these. Okay. That's the big deal. You need to get onto a repayment plan because if you don't, you're not grandfathered in after the date passes.

after July 1st of 2026.

maybe. I'll touch on that date in a minute.

Speaker 2 (14:46.478)

Alright, cause you said something about July 1st earlier.

Yeah, yeah, yeah, yeah. There is a date for July 1st, but we'll see. I'll touch on that in a minute. So let's go through how these things are built right now. Okay. So let's just say I owe $153,000 in student loan debt based on an average interest rate of what we typically see. I would have what's called an interest charge of about $900 a month. That's how much my loans and interest are being charged every month. Okay. So whenever you have a loan, you're charged interest every month. Right.

Okay.

Yeah, let's do that.

Speaker 1 (15:18.766)

In my case, it's $900. Well, these payments, let's just say I'm an SLP, I'm making $65,000 a year. If I'm on one of these plans, they might tell me, hey, your payment's $300 a month. So if my income's three or if my payments are $300 a month, but my interest is $900, my payment is not enough to cover the interest on my loan. that $600 of interest I'm not paying, it doesn't just disappear. It gets added onto the loan balance. Okay.

So when you're on these plans, your loan balance will continue to grow for like 90 % of people. Your interest is, your balance is gonna continue to grow. Depending on which plan you're on, it's either 20 or 25 years, at the end of that time period, your loans will be, whatever you owe is completely forgiven by the Department of Education. Okay, so my loans can grow from 153 grand to 200 grand. It's gone, the 200 grand is forgiven, okay?

However, as of right now, when you have your loans, any type of loan forgiven in this country, you have to claim it as income in that tax year. So let's just say I'm on a 20 year plan and I have $200,000 forgiven 20 years from now. I have to claim $200,000 of income and pay taxes on it. I'm going to owe like $60,000 in taxes in that tax year. Okay.

I had no idea. Yeah.

mean, our polls, about 80 % of people on these plans have no idea about that. And so when you're building out, of course, we talk about financial planning, right? So when you're building out your financial plan, we call it a required minimum amount to save for the tax bomb. You have to save that. So like in that example, if I started saving about $175 a month, and I did that for 20 years, it would hit that $60,000 that I owe. I can write a check, but that's just part of my financial plan at that point. Okay?

Speaker 1 (17:14.67)

Now there's a few things that you need to be highly aware of what can change those plans over the long term because it's every year things change because you got to certify your income. How you save for that tax bomb. Do you use a Roth IRA to do it? Do you use a taxable investment account? Do you use a savings account? Like those are all questions that need to be answered. And then from there things like what if you get married? How you file your taxes affects how that payments.

Not only that, but what's your spouse's federal loans can affect that. And then if you say, if I file separately, it's a lower monthly payment. It's like, yes, but you can no longer contribute to a Roth IRA. You might have to do what's called a backdoor Roth IRA, but then you might fall victim to what's called the pro rata rule. So like when you're asking like in our previous podcast, like, you know, why should a, my daughter's a teacher, why should she come to you for this? Or why would an SLP come? Just on that topic alone.

Right.

Do you make the wrong decisions of how you're saving for that tax or you make the wrong type of contribution to your Roth IRA? I mean, you're already talking about fines and penalties and loss of money all over the place just on that. And we're not even talking about other things in your finances. Yeah. And so that's how loan forgiveness or income driven repayment plans work. Now, the second type, as you said, there's two types, right? Public service loan forgiveness is the other.

really popular one, especially among SLPs. A lot of you guys work for nonprofits. And basically what that is, a lot of people get confused. They think public service loan forgiveness is a repayment plan and it's not. like when you go on to your loan servicer, which your loan servicers who basically collect your money and answers your questions, okay. If you go onto their websites and you're like, I'm trying to find the public service loan forgiveness plan, it's not gonna be there. It's not a plan.

Speaker 1 (19:06.688)

The actual plan is what we just talked about. Like it's the income driven repayment plan. service loan forgiveness is a feature of those plans. And what that feature says is that if you work full time for a nonprofit and you make 120 on time payments, then that's 10 years. After those 10 years, your loans are forgiven. So you don't have to wait 20 or 25 years and you owe nothing in taxes.

That's 10 years.

Speaker 1 (19:33.762)

So you have like regular loan forgiveness, which is 20 or 25 years with a tax. And then you have public service loan forgiveness, which is 10 years, no tax. It does not have to be consecutive 10 years. It doesn't have to be at the same nonprofit or anything like that. Like it just has to be working full time at a nonprofit and making payments on an income driven repayment plan. And so that's what's out there right now. And what the big news is right now that came out like three weeks ago, one of the big things.

is one of the plans that was called SAVE. That was what was being challenged in court. While it was going through court, President Biden said that people could be on what's called forbearance where you don't have to make a payment and that no interest were to accrue. In February, they actually struck down everything in SAVE, which should have got rid of that and it didn't. But earlier in July, the Trump administration said, we should have done this months ago. We're doing it now. August 1st, interest is accruing again.

So for a lot of people that were waiting, there's no longer a reason to wait. Like you should be switching. So that's the system there right now. And I'll talk about the changes and repayment coming up here. again, I'll pause there because it's a lot of information that I digest.

I have no idea. have no idea what to even ask. Like seriously, this is so much. I think I'm just completely in shock about the tax that if you get your loans forgiven and you have $200,000 forgiven that you have to pay income tax on that. Why did I not know that? I'm so glad that I'm part of the 80%.

Yeah, I

Speaker 1 (21:05.488)

yeah, a lot of people don't know about that. we, so a lot of people don't realize back in 2008 during the mortgage crisis, when people were getting foreclosed on, a lot of them had actually taken out like cash out refinances and stuff. When they got foreclosed on, they had to pay taxes on that money on top of getting foreclosed on. Like a lot of people didn't realize that. They didn't put that in the news very often. And what Congress did, they actually had to make a special law for, I think it was two or three years.

that would allow people to go through foreclosure and not have to pay taxes. Biden put a three-year moratorium on that tax when he was president for student loans, because he was trying to get the massive amount forgiven, like the 25 or 50 grand, and he wanted it tax-free. So he put a moratorium on it for three years, but because it's not written by Congress, it goes away after two years or three years. So it's already gone right now.

So where are we now? So we've talked about the different repayment and we were just talking about student loan forgiveness. All right. So where do we go from here? What other information do we need to know? That's the question I'm going to ask. What should we know now?

Yeah, so the new bill that just came out, it is now basically changing the standard plans, which we already talked about. Okay. But it's also changing the income driven repayment plans. And it's basically saying, if you start repayment prior to or after July 1st of 2026, you can either go on a standard plan or there's only going to be one income driven repayment plan. And that's it.

not five, not six or anything, there's just one. That new plan is called RAP, the Repayment Assistance Plan. And it functions a little bit differently. And I'll go through the quote unquote good part first, because this is what a lot of the media is actually talking about. But then they're not talking about the back end bad part of this repayment plan. And so going back to that example I gave earlier, I have $153,000, and let's just say my payments are

Speaker 2 (22:49.966)

Okay.

Speaker 1 (23:11.534)

going to be based on my income. The way they base this now is they change that percentage of my income. Okay, it's a different calculation. Before it was a flat, like 10 % or 15 % based on what's called just gross income with a bunch of deductions and all this type of stuff. It was pretty confusing to calculate. Now they're saying they're just going to look at AGI adjusted gross income. So that's like a tax, like things like line 11 on your tax return. That's what they look at.

Okay. And they say, for example, if you make 30 to $40,000 is 3 % of that. That's what your monthly payment is 3 % divided by 12. Okay. If you go up to 40 or $50,000 is 4%. 50 to $60,000, it's 5%, 60. So it keeps going up 1 % for every $10,000 that you make an income. And then if you make over $100,000 or more, it's 10%. And it's capped at that.

Okay.

Speaker 1 (24:08.352)

So it's 10%. Even if you make 200 grand, 300 grand, it's capped at 10%. So that's the first big difference that's coming out on how these are done. Then the next piece is going back to that example. Let's just say earlier I said my interest charge was $900 and they tell me that my payment is now $300. So that $600 of interest, they're forgiving it right away with no taxes. So it's done.

So the new thing is that if you're on this plan, your loan balance will never grow. In addition to that, for most people on this, the government is saying if your payment doesn't reduce your balance by $50 a month, they're going to reduce it $50 a month. So everybody on this new plan should see their balances going down something.

Okay.

Speaker 1 (25:08.18)

every single month. month. Okay. And so a lot of people are looking at that and it's like, wow, those are pretty good benefits and those are the good benefits of this plan. The way it's structured is if you compare it to the old plans, lower income individuals will actually save money on their monthly payments. People that are making higher incomes will end up paying more because of the way the calculations are done.

And so that's that component of it, payment and the quote unquote good feature of interest subsidies and government paying part of it. What's really bad about these is that they're 30 years long. So on the income germaring payment plans that are out there right now, they're either 20 or 25 years. This new one's 30, that extra like five or 10 years can cost a lot of money.

So when we already start comparing these for people, it's like, yeah, wrap, that new plan is gonna cost a lot. And so everybody that's in repayment right now, you have to make a decision because if you're in repayment, they will grandfather you in to the existing plans. And you have to try to go on to, the best one to go on to is income-based repayment for new borrowers. It's 20 years long.

But the, the confusion is, that they haven't implemented this stuff yet. So some people can still qualify for pay as you earn, which if that's what you can qualify for, then you go on that. just know in the next year or two, you're going to have to switch over to try to get over to IBR for new borrowers. But if all you qualify for is for IBR for old borrowers, that's a higher payment and it's 25 years long. So everybody on that has to really look at it and say, do I go on IBR?

Like if that's all I qualify for is old borrowers or do I switch to this new wrap plan and go the extra five years?

Speaker 2 (27:08.056)

So basically what I'm hearing is everyone who's listening to this podcast and has a student loan and are currently in repayment, they have decisions to make.

Correct. Correct. So I think in the last podcast, I was telling you, or I've been earlier on this one that like, so I don't get on phone calls very often, but I've gotten on them in the last like two weeks and I've had like 240 phone calls. It's because of this, like, like people are like, what am I supposed to do? Like which plan do I need to go on? and I mean, people that are having to make this decision right now, just because of

of what's called save forbearance. It's something like 7 million people just off of that. And so, yeah, it's a big decision to make and it's confusing decision to make because it's like, well, which one do I qualify for? New IVR or old IVR? Well, we think it's this, but they haven't changed it yet. So we really, we don't know yet. So we'll see what happens in the next year, but that's what we're walking through. Primarily most of our phone calls are all about that right now.

And when will people like myself and all of the listeners who have student loans, when will those decisions have to be made?

that's where the confusion comes in. So if you don't start repayment until after July 1st of next year, the decision's easy because you don't have a choice. Like it's either the new payoff standard plans or a wrap. You don't have a choice. Okay. What the bill says is that everybody's in that's in repayment right now. It says the Department of Education has to have them switched by July 1st, 2028.

Speaker 1 (28:51.736)

So it has to be done before that. So we know it can't be done after, but that doesn't change. That doesn't mean like, you know, the department of education could come out and say, you have to do this by December of this year. Because it's still following. Yeah. So that's what we're saying is the people, you know, get onto it as fast as possible. And I think what's going to end up happening is the administration is going to do one or two things. They're going to say July 1st of next year.

Okay. In other words, we really don't know.

Speaker 1 (29:22.146)
You got to make the decision. Or they're just going to say, July 1st, 2028, that's the deadline. That's in the bill. You got three years to make the decision. They're going to move on. that's where it's kind of laying at. I'm hoping to have more answers coming up here in August because there's another court date that's coming up. So we're hoping that they finalize some of this stuff for the old plan that should help answer some questions about the new one coming up. that's where we're at right now.

I think my advice is anyone who's listening and has not reached out to a professional at FitBux, do that immediately now because they're going to be able to help you make the right decision for you based on your personal financial situation, correct? And I think that $18 a month is well worth having someone help you make this potentially life altering decision. If you make the wrong decision,

Correct, yeah, and that's the whole point.

Speaker 2 (30:19.616)

then you're going to be in a heap of mess.

Yeah, and even with the new ones, like so for example, once you're on the new rap plan, you can't switch off of it. Like that's a big change as well coming up. Currently you can switch plans, not anymore. Once you're on it, you're on it.

Okay. All right. So I know some of our listeners are probably wonderfully in my age gap and in my demographic. They're not all 20-somethings. So there may be listeners out there who have Parent PLUS loans. Let's talk briefly about Parent PLUS loans and how all of this impacts that.

Yeah. So currently on Parent Plus loans, like you can go on this thing called ICR, which is like a 25 year forgiveness plan. Most of the time it doesn't really make sense because the payments are so high. And so the only time we really saw it is if the parent worked for a nonprofit and they could get their loans forgiven in 10 years and there would still be something forgiven. Or sometimes we saw it for people that were retiring and their income was low. So they can go on ICR.

and the payments were really low. The new bill gets rid of ICR. And actually, I shouldn't even say the bill. It's the court that got rid of ICR. And so that's not going to be there anymore for people. It's gone. The date that they've set on that is July 1st of next year. And so a lot of people are saying, if you want to go on an income journey repayment plan, consolidate your student loans into a new direct loan.

Speaker 1 (31:55.66)

then they might be able to qualify for like IVR or one of these plans that you can get on. So you can stay on an income journey payment plan. We personally are not recommending anything on that. And the reason being is because a lot of those changes were done by the Biden administration, not by Congress. And so it's like, well, that's what's all being thrown out right now in the courts because it wasn't passed by Congress. So we don't want to tell somebody

something to do and then have it turn around and it not work and it messes up the entire repayment plan. It's like, man, like so that I know a lot of people in the student loan industry are telling Parent Plus borrowers to do that if they can get it done and don't wait. But after this takes place, it's only going to be the standard plans that are available for Parent Plus loans. you're the Parent Plus loans are going to

I'm going into year four of just the standard repayment plan. I think it's a 10-year plan. That is the standard plan. Yeah. Do I need to...

The other option from there, there's two, no, you don't have to make the decision, but the decision you have to make is what a lot of parent borrowers have to make is there's actually two or three decisions. Depending on your financial plan, you can also try to extend those loans out to the 25 year plan or the 30 year plan. can't remember what it is for parent plus loans, how long it is to drop the required payment. Because if you want to make that money go towards something else, maybe you have like

car interest rate that you want to pay for or something like that, you can do that. So that way you can just move money in your financial plan to where you want it to go towards. But the other two choices are you can refinance it into a lower rate and you can do that into your name and you're just paying it. Or you can also refinance it and put it into your child's name so that way you're no longer liable for it. so those are...

Speaker 1 (33:46.68)

Primarily when we work with Parent PLUS loans, that is what we are seeing is refinancing in one form or the other. Because as I mentioned, a lot of the income journey payment plans, they don't help parents anyways. So that's typically what we're seeing right now.

so much information in such a short amount of time and my mind is blown. Where do listeners, where can listeners go to get the most up-to-date information regarding student loans?

Yeah. So there's two areas. Like if you're looking for our stuff on social, we tend to put everything on YouTube, just at FitBux. That's our channel. I try to put stuff up as often as we can. Plus we put a bunch of other financial videos up there as well. And then if you guys actually want help, it's just FitBux.com, sign up, build your profile. As I mentioned, you can use the tools, the technology yourself, but we highly emphasize scheduling a call with us to walk you through everything and making sure that you're doing everything correctly.

Wow. Joseph, thank you so very much for all of this information. we'll have all of your FitBux, we'll have all of that linked, we'll have your YouTube channel linked, and I'm going to definitely go to that and start listening. And guys, if you're listening, reach out to FitBux. Get someone out there to help you. Don't just start making these decisions willy-nilly. Get a professional like Joseph or someone at FitBux to help you walk you through this student loan process.

I'll use a nice word. So thank you guys. Thank you, Joseph, so much for joining us and thank you guys for listening and we will talk to y'all soon. Thank you for tuning in to SLP Full Disclosure. You can learn more about this episode and our show on our website at amnhalthcare.com. If you enjoyed this episode, share it with a friend and subscribe to our show on your favorite podcast platform.

Speaker 2 (35:37.164)

You can also find show updates and SLP opportunities on our Instagram at AMNAli. Special thanks to AMN Healthcare for making this show possible. See y'all next time.

 

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