We love to provide tools and information to help you work towards your journey of financial freedom. You can find tons of information on the internet to help you, we’re glad you chose our podcast to tune into to help you along and to inspire you.
On today’s episode, we will be talking with Travis Hornsby from Student Loan Planner about student loan debt and how to tackle it properly.
Travis has a lot of experience paying off a lot of student loan debt. He has shown plenty of people how to pay off student loan debt and he is here to help you figure out a plan of attack and give you good wisdom on how to begin your journey of paying off your student loan debt.
Buried in Student Loan Debt
When Travis and his soon to be wife had the “money talk”, he found out that she had six-figures worth of medical school debt. He thought it would be an easy process to just pay off the debt, but soon realized it was more complex than he realized.
He was frustrated at all of the fees she had accumulated by refinancing her loan so he decided to quit his job as a bond trader and start Student Loan Planner in 2016 to help others. His goal was to give them the advice they needed to pay their loans off more efficiently and not accumulate more debt than they needed to.
Initial Shock
After the initial shock wore off of the number of fees and loans they had to pay off, Travis went the route of a public service loan forgiveness program. Which means his wife could work at a not-for-profit hospital for 10 years and make payments based on her income and then the loans would be forgiven.
However, once they turned all of the paperwork back in they found out that they had only forgiven part of the loans and she didn’t get all of the correct advice on what she should have done to get the loans fully paid off. Instead, they ended up refinancing her loans for 5 years and did a variable loan payback.
Student Loan Debt Crisis
Our society has about 1.5 trillion people in debt with student loans. Typically people who have less than $80,000 in debt actually pay back their debt fast. If people owe more than that, that’s where people are really having some struggles.
The number of people who have over 6 figures in student loan debt doubles every 5 years. So there is a huge group of people that are going to owe more and more because the school can charge anything they want. This is because there are no limitations on the amount that you can borrow for grad school.
So anyone who goes to a grad school program is particularly vulnerable because of this. There are limits to what undergrads can borrow individually in their own name, but for parents, there’s no limit on what you can borrow.
Options For Further Education Fees
If you’re a parent and you do not have money set aside for your kids for college, you need to sit them down and have a conversation. Discuss with them about considering a state university and instead of a private one. Don’t get yourself deeper in debt just because you feel guilty about not saving enough for them to go wherever they want to go.
If you’re a high schooler and you’re not sure what you want to do, the best option for you is to go to the cheapest place possible so that you can explore what you want to do without spending too much in student loans. If you do know what you want to do then go to the cheapest place that specializes in the field you want to study.
An exception to that rule would be if you get the opportunity to go to a top university in the country you should take that because it would obviously be better for you in the long run. You just have to be really careful on what loans you take out when you’re looking at what programs you want to take in college.
WHAT YOU WILL LEARN IN THIS EPISODE
- When to take out student loans
- Why it’s important not to take on more debt than you’ll be able to pay back
- About different repayment options
- When it’s good to refinance
- Drawbacks to refinancing
- Whether it’s a good idea to go to grad school if you already have student loan debt
- What steps to take when you want to pay off debt
- Financial goals before taking care of your student debt
- Tips to accelerate the process of attacking student loan debt
- About consolidating loans
