CFFP #08 The Future of the Student Loan Crisis ft. Rob Bertman


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By Dominique Henderson, CFP® and Dominique Henderson. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.

Today we have Rob Bertman. Rob holds both the coveted CFA and CFP® designations and is a University of Michigan alum. As a senior consultant for Student Loan Planner, he helps borrowers rid themselves of student loan debt.

Rob is also a Family Budget Expert helping parents find the extra money in their budget to reach their financial goals.

Today we are going to talk in depth about the student loan crisis. Rob will answer: (1) Just how bad is the crisis through his first-hand personal assessment of the situation; (2) what the contributing factor(s) is/are; and (3) some potential solutions, practical tips and the student loan system in general.

Show Highlights:

  • The student loan crisis and why it is so bad (4:22)
  • What is the contributing factor to the student loan crisis (8:16)
  • How has COVID and Virtual Learning affected the Student Loan system (11:08)
  • Why are 18 year olds able to get into debt with thousands and thousands of dollars of student loan debt (14:11)
  • Rob’s Family Budget Expert, what that means and the philosophy behind it (19:33)
  • Rob’s advice on what to be on the lookout for on budgeting and repaying student loans (18:28)
  • The COVID relief for student loans, how it has helped (32:08)


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Conversation Transcript:

00:00:00 Dominique Welcome to conversations for financial professionals, a podcast to help shape the next generation of financial advice. I'm your host Dominique Henderson and today's conversation is with Rob Burtman. Rob Bertman is a senior consultant for the student loan planner, and helps borrowers rid themselves with student loan debt. I am so excited for this conversation today because we talk about the student loans crisis and how bad is it? Rob is going to give us some solutions. He's obviously got the stats because he and his colleagues over at student loan planner have counseled over 4,500 people in student loans. And over $1.2 billion of loans council. So he knows his stuff. You talk about solutions. We talk about fixing the mess and how this can be avoided in the future. When we start to think about the long-term ramifications of the student loan crisis, I want you to leave this podcast knowing, and feeling empowered not only as a consumer of financial services about there, the fact that there's help out there for you, but as a provider of financial services, to know that you can find experts in this area that will enhance the client relationship and take it to the next level.

00:01:17 Dominique So enjoy the conversation Rob Bertman, welcome to another episode of the conversations for financial professionals podcast, where we are shaping the next generation of financial advice. Today we have Rob Bertman Rob you hold both the coveted CFA and CFP designations and our a university of Michigan alum go Wolverines.

00:01:41 Dominique I have five from the, from way back in the day. That dates me.

00:01:44 Rob Yeah, I remember too. I remember, Oh my gosh, but you are a senior consultant for student loan planner where you help borrow.

00:01:54 Dominique

Rid themselves of student loan debt. I guess when you're not bulldozing student loans, you are known as the family budget expert, which is your brand to help parents find the extra money in their budget to reach their financial goals. Even if the cost of raising kids is breaking the bank and stressing their relationship. Having put two kids through college at this point for myself and working on the last one, I really wish I would've met you about six years ago. Welcome to the podcast.



Hey, thanks for having me Dominique and happy to be here.

00:02:24 Dominique

Yeah, man, this is great. You and I know,

00:02:28 Dominique A shared circle of individuals, Lauren Williams and Travis, and Megan, there's this like so many, really cool people that you're working with over there. I really, am happy and excited that you're here today talking to us about student loans and what I would, maybe don't, but the future of the student loan crisis. Right. Cause I do see it that way, but before we dig into that, tell me how's 2021 been going for you a, we all had a 2020 to remember how has the new year been treating you so far?

00:03:06 Rob Yeah, it's been okay so far. I mean, personally, fortunately we're doing okay. We're hanging in there, with three younger kids, it's always an adventure, but, fortunately I have a good relationship with my wife and my kids. That's about all I can ask for these days.

00:03:20 Dominique No, you're right. That's, it sounds like an attitude of gratitude, which is what you decided to kind of posture yourself as being, so I'm very happy to hear that.

00:03:30 Rob

Yeah, thanks.

00:03:32 Dominique Let's kind of dive into this. I think there's probably three areas that I think would really benefit not only consumers of financial services, but also providers of financial services. When we're talking about this subject of student loans, cause this is a fairly large gargantuan topic. If I'm thinking about it from the standpoint of how bad it is and what are some solutions and then how do we kind of fix this mess type of deal is kind of the way that I think people would get the most benefit about, doing this. You've been with student loan planner for a few years, if you're a few years now and I just want to get your macro take as a person boots on the ground. Am I, when I call this a crisis, am I overstating this? Or am I spot on?

00:04:22 Rob No, I think, I mean, you're spot on. I mean, a lot of people are hurting with student debt. I mean, there's one and a half trillion dollars, out there, which is, a million or 1.5 million, million is basically another way to put a trillion. In other words, I mean that's a lot of money and more importantly, it affects about 45 million people. I can tell you when I started, so I have a background investment management and securities analysis and financial planning, and I just thought of student loans, you just kind of approach it. If you can, you just do it the traditional way, line it up, cut your budget and pay it back as fast as you possibly can. What I learned however, is although we are in a crisis that actually the federal student loan repayment, guidelines and strategies are actually pretty accommodating for people and it doesn't have to be the burden that people think it is.

00:05:16 Rob That's something that I had absolutely no idea. When I started as a student loan planner three years ago. And, three years later, 900 consults just personally later and advising on over $200 million of student debt. I know that there is now a way, and I'm confident that I can help people, that there is a way to, instead of having to build your life and career around student debt, that there's a way to build the student debt and loan repayment strategy around the career in life that people want to live. That's been something that when we're talking with people individually, or when we get questions from people that it's such a burden for people, and it affects their lives so deeply that when they realize that and when they can see that it actually, I mean, you can just see the weight fall off their shoulders, drop the weight falls off of their back and they can now operate and feel good about it, but it is a big problem for sure.

00:06:08 Dominique

Yeah. I've, I've often compared this and it sounds like I've been right to do this. I've compared the student loan crisis to the housing crisis, except for the fact that at least with the housing crisis, you had a mortgage, you could actually go sell the property. Whereas I don't know that you can mortgage your brain. Like, there's like, there's no collateral. Like this is, one of those loans where the holder of the paper, which is maybe the reason why this thing has gotten securitized so many times and yada I'm the holder of the paper is really like, kind of SOL there's really nothing else you can do. But, I guess what I'm trying to say is the implications for what this may mean for taxpayers 10 or 20 years down the road, because in a lot of instances, it's not the private sector that backs these loans.

00:06:54 Dominique If I'm not mistaken, it's the federal government, which means taxpayers. So, what is your assessment of what this looks like at the current trajectory 10 or 20 years from now for, taxpayers?

00:07:07 Rob Yeah, it's a good question. I mean, the OMB, the office of management and budget, they only project 10 years down the road. A lot of these programs, there's different things you can do. Like, income-driven repayment plans where at the end of the 20 or 25 years of payments, based on income, whatever loans are remaining get forgiven. We, these programs are so new that they're not even 10 years out from people reaching that. We don't really know what it's going to look like, but, I think what happened is, when the federal government starts getting involved, started getting involved in student loans, it kinda gave universities a free pass to raise their tuition. What you're seeing now is the cost of education skyrocketing. I mean, it was, big back in the day when you were or I was in school and like the nineties and early two thousands, but I mean, the growth of tuition is just been insane, especially for graduate level professions like veterinary school chiropractic school, dentists, dentistry school.

00:08:06 Rob I mean, all of these post-secondary or I guess, graduate level professions, the cost of tuition is astronomical. And so go ahead.

00:08:16 Dominique No, no, go ahead and finish that. I was gonna, I was going to, it's a perfect segue into what I was going to ask, which was, what do you think is the biggest contributing factor? I was reading not too long ago. Some, some writings that, Thomas sold did, and he was basically talking about this education inflation factor. I just look at my own stuff, so I graduated in 98 with, I had all scholarships, but I think the cost of me going to school was something less than 10 grand a year. My son goes to the same school, but, Texas has flat tuition, but the point is it's like 26 grand and I'm like 250% over, less than 20 years. I mean, that does not make sense. I thought normal inflation if you're just doing the math of it. I guess my point is, and maybe you've answered this.

00:09:03 Dominique Hasn't really been consumer demand for education that has pushed the cost of education up, or has it really been, I guess the backstop of student loans being paid for essentially you're guaranteed by the government that has allowed these institutions to just jack up the education prices.

00:09:24 Rob It it's both really, I mean, college education is important for those that can do it. I mean, if you think about the top income earners in the country, and now the top income earners are concerned about how they're going to pay for their kids' college. To me, this is all really unsustainable because at some point, people, I think that the top schools like the Ivy league schools and stuff like that, they're always going to be able to increase their tuition because there's a demand for people that can afford it, or for people that get scholarships to go to those top level schools. What's happened is especially in, let's say pharmacy school or, chiropractic school, is that there are schools opening up all over the place. Even though there's more seats to fill there because the demand has been so great, they've been able to increase their tuition at the same time.

00:10:13 Rob You have more seats, rising tuition, college becoming less affordable. There's, something's gotta give at some point, I just don't know exactly what would, that would be.

00:10:26 Dominique My deal is just anecdotally, man, I don't know, in this gets into some of the solutions, I'm wondering how much A. COVID has help decelerate this xceleration if you will. Because if you're, if you raise the, if you increase the amount of seats increase the amount of tuition, obviously your top line revenue, just from a mathematical standpoint increases, it's like, where is this money going? Because there are universities right now. I know this, my daughter goes to Sam Houston, like these classes are being done hybrid or almost all virtual and the buildings are empty. Where's the money going? Like, is it going to pay professors? Like, I'm just curious, like, do you have any thoughts on that?

00:11:08 Rob I, I think that schools are building up amenities to attract students. It's becoming competition of going to the campuses and seeing who's got the best campus, the newest buildings, the best dorm rooms, the best off-campus housing, which is some of the decision-making. Also combined with the fact that, there are a lot of major colleges and universities that are really building up their endowments and you have some of the top schools with multi-billion dollar endowments. And, and you would think that in the COVID crisis that these endowments would be used to subsidize tuition or to help people out in these tough times, but they haven't done that. In fact, tuition has say the same or gone up even in this year. I, I, I think the, I don't really know the answer to that, my guess is that it's just going, I think the cost of operating these schools and universities are very high, but there's also a lot of profit in there.

00:11:59 Rob I think some people are going to get more wise too. I mean, so for undergraduate, we have to look at undergraduate degrees different than graduate level degrees, because well, just undergrad getting a college degree is, important in terms of the expected earnings over someone's career. And, but, once you get out of the top 25 top 50 schools, it doesn't matter that much as much of in terms of employment, where that degree comes from.

00:12:30 Dominique Just to clarify, you're just saying school number 25 in school, number 26, there's a marginal difference. If any, with your lifetime earnings, with going to the 25th or 26.

00:12:42 Rob Yeah. I mean, obviously you want to go to a school that has great, faculty and you get a great education. That's A number one, but the employability, the employment opportunities for people after getting a college degree, it's not what it used to be, right. It used to be that if you had a college degree, you get certain jobs. Before COVID hit, the economy, some employers because of unemployment was so low, some employers were saying you don't need a college degree, just, we need people to work. So just come and work. For graduate level degrees, it can really boost the income up even more. For example, the difference between a college graduate and a physician, or like a college graduate and a dentist, those are some really big differences. Paying a lot of money to go to graduate school like dentistry school or to medical school can actually really dramatically ramp up the income.

00:13:35 Dominique Are now, let me ask you this. Are you seeing the proportion of debt that you're counseling on is attributed mostly to the graduate studies versus the undergrad, if you had to divide it up in a pie?

00:13:48 Rob Yeah. Part of that is because there are caps on how much people can borrow on the federal program for undergrad, but for graduate level programs, there's essentially no cap. So, whereas someone might only be able to borrow, let's just call it a hundred thousand for undergrad. They can borrow 400,000 for Denis school, or 200,000 for medical school. And, so most of the six there's over 3 million people with six figures of students.

00:14:11 Dominique That out there and pause right. Quick, crazy, because I was just thinking, and I, and so this is not totally accurate, but okay. Let me add 40 years. You can have a, let's call it a 675, go score and barely qualify for a mortgage, which you can be a 22 year old grad student and qualify for 200,000 or $400,000 of money to go to school. Isn't this correct?

00:14:40 Rob Pretty much. I mean, there are limitations around it. I mean, for people that can't borrow through the federal program, there are, getting private debt to finish. The education is a little different, but then we get into get into large numbers, if someone's buying a car and let's just say they want it, they're gonna buy a car for 30,000. Okay. That's a lot of money. Now, if they, if someone wants to, get all the bells and whistles and have the car, and it raises the price of buying the car to 35,000 people, don't really blink at that because they're already spending 30. So it's another five. Well, it's another $5,000. When people are so invested in their education and then they see when they look at the projections of what school is going to cost, they say, Oh wait, but they're going to increase tuition every year.

00:15:24 Rob Oh, wait, the loans I took out, they're going to be accruing interest. Some of them along the way as I go. When I graduate, I'm going to owe a lot more. To have to take out a lot more at that. At some point you have to say, I just got to finish this thing. Cause I already, I'm already a hundred thousand in debt. Why not go 300,000 in debt or whatever. The law, what's the difference between a hundred thousand and 200,000 when you're in that mode psychologically, it doesn't seem like a lot, but when you're paying it back it is a lot.

00:15:50 Dominique No, I, Hey. I know, I think he bring out one aspect of this that I never thought about was the psychological aspect. Really the psychological trap of this when you started something, the human nature is since we're gold, striving beans is to finish it, no matter what the costs nominally on paper, black and white, I'm signing my life away. I think what I've heard too is, especially, I've heard this with lawyers where it's like, well, I'm going to be making X when I get out too. So, I'll be able to repay this, but then maybe kind of walk us through, well, yeah, you're making X gross, but you still got to, you got health insurance, you got taxes, you got, hopefully you're putting, well, you some money in your 401k and then you're getting a percentage of every dollar that you actually make.

00:16:37 Rob Yeah. I mean, unless people have worked before college or in college, it's hard to know what the paycheck's actually going to look like, because unless someone's had, has paid for their living expenses, it, you don't really know until you actually start doing it. And, and once that happens, all of a sudden making a hundred thousand dollars, it's only taken home four 5,000 a month, and that's a lot different and you make these choices based on a hundred K, but you're not taking that home. The good news is with student debt, is that, is these income driven repayment options. So, if we think of student loans, they can actually be treated more like a tax rather than a debt. What I mean by that is, the best repayment programs right now, you can pay based upon 10% of your income. If someone is going into, if someone's going to increase their income substantially by finishing school or finishing a graduate level degree, they have their state taxes and federal taxes, unless you live in Texas and you don't have state taxes, and sometimes local taxes.

00:17:36 Rob The student loan payment, if you think of it like a tax, if it's going to increase someone's income and we'll help them do something that they really want to do, it could make sense to take out the debt in order to do that.

00:17:50 Dominique And when you say. Thinking of it as a tax, just a portion, cause if I, I'm not W2 anymore, being self-employed, but the point is, there's a portion of whatever I make that I already know is not going to me. Right. I got money that goes over to a tax account. Cause I know that it was uncle Sam or whatever. Maybe almost kind of think about that. I don't know if you even advise that when your counsel was through the moment, it's like you almost create account to pay back your student loans. Like when your money comes in, you don't even see it. Like, that's almost like a, is a tax that you're paying. Just like your 401k or your medical benefits, is that maybe what you're referring to or something different.

00:18:28 Rob Yeah. Yeah. I mean the payment that goes out on a monthly basis to the loan servicer that is pretty much set in stone for 12 months, so you certify your income using a tax return prior to your tax return. Your payments are based upon 10% of that income. Now they take adjusted gross income. It's after, pretax retirement and any other type of pre tax deductions. There's also like another deduction on the back end of between 20 and 30,000, depending on family size. If you look at it that way, it may only end up being like another 7% tax, in the form of a student loan payment, the most important thing with, for any financial success. Again, I always say like, you got to optimize your investments if you want to make money. It's true if you want to grow your money, but the most important skill.

00:19:13 Rob This is why I started family budget expert started having money leftover at the end of the month. Whether it's going to debt repayment, whether it's going to retirement, whether it's building an emergency fund, anything that is a net worth building activity, and people forget that paying down debt is a net worth building activity. You're taking a negative number and moving it up to zero. The interest rate on that debt, if someone is going the traditional route is a guaranteed tax-free rate of return on investment. So, but people that struggled, they don't, they can't figure out how to get the money left over at the end of the month, even make the student loan payments or even, make them pay their credit card bills off and stuff like that. That's a real, a big problem, but I think what student debt has done it, one of the silver linings of it is that, if you take a look at the stats, millennials are actually better budgeters than the baby boomers.

00:20:03 Rob There are more millennials who often get a bad rap for being financially irresponsible, but the stats show that they're not, and I know you and I are like right on the cusp, we're millennial, gen X-ers. So, people are taking this seriously and they need to, because it's a lot of debt. So, but at the end of the day, having that money leftover and figuring that out is going to be the number one skill set that's gonna allow getting out of debt of any kind and building wealth of any kind.

00:20:32 Dominique No. I think this kind of points to some of the solutions and, or fixing the mess, because I think one component that I hear you saying, and you didn't actually name it, but it's there it's financial literacy, right? It's knowing how your money works and cashflow being a big component of it. I mean, I think you hit the nail on the head with, a lot of people have, more month than money, but that's sometimes not because the product of how much they actually may. It's just because they don't really know where their money's going. They don't, they're spending on whatever and they don't have some type of tracking or they're not working with somebody to hold them accountable to helping them keep a budget. Let's kind of talk about that because I mentioned, earlier about, having this 675 FICO and wanting to buy a house.

00:21:21 Dominique So, I get, buying a home is going to be, some of the things that people want to do to build wealth, but there's probably an order that they need to be in. Especially if they have a large amounts of student loan and we won't get into the weeds of that. What I do want to ask you are your thoughts, Rob, on financial professionals' approach to this, right? So you have a client come to you and they've got all this stuff going on and they've got student loans. I think this has been a particularly sensitive subject area for a lot of reasons. I think the main reason if I were to guess, is that although people may be doing well, nominally making six figures, doing all this kind of stuff, when they have six figures of student loan debt, to your point earlier, it's just a weight they got out.

00:22:08 Dominique They kind of can't even see, the forest for the trees because it's just right in front of them all the time. I wonder if you have any techniques for how you approach that as a financial professional, do you just say always outsource to like a student loan planner or is there some things that you can be doing as a financial professional to help ease that burden of people, even when you're sitting with them in that first meeting?

00:22:34 Rob Yeah. On the student loan side, at the end of the day, when people feel like they have a plan, a clear plan, they know their options, they know how to implement it. They know the path forward that clarity it on its own is a relief without the financial relief of knowing that they're going about it. The optimal way,

00:24:14 Rob People have a bunch of student debt, it's not necessarily about paying it back as much as having a clarity of how to pay it back. On the budget side and just general financial planning side, I always think that, we need the financial foundations. If we look at, Maslow's hierarchy, right? Which is the basis like safety and security and, basic needs to me, most people's food and shelter in the financial world, it's emergency fund and zero credit card debt. For people with student debt, you add in the student loan plan along that cause if people have cash, if they put all their money towards building up of a cash cushion, if they had zero credit card debt, because to me credit card debt is like the gateway drug into all sorts of financial ruin and any type of credit. Some people like, Oh, it's okay to just leave of a balance.

00:25:08 Dominique Well, that's like the toe over the line into that. So, people need to reset their thermostats of what they're comfortable with financially. Some people who are comfortable with, having a thousand dollars in the bank and of credit card balance, they need a really, like psychologically up what they're comfortable with. Because for example, let's just say someone's comfortable having a thousand dollars in the bank. Well, when they have $3,000 in the bank, they feel like they can go crazy and just, Hey, I got some extra money. I can spend it, but when their balances get into that zero, that puts a lot of stress on them. If they said I'm not comfortable with a thousand anymore, I only, I'm only comfortable. If I have 5,000 in the bank, then they'll get that fire burning to be more conscious of their spending until they get up to the 5,000.

00:25:51 Rob But, but in any case, if people have those three things, it's amazing, the relief that people get when they have a student loan plan, when they have no credit card payments other than, paying it off on a monthly basis. When they have a cash cushion in case something happens when those three check boxes are marked, I mean, they could, they feel like they can do anything.

00:26:09 Dominique And, Oh, I'm glad you said that because I think, 2020 Mark is a marker for, it's one of those things where, we'll look back I've made several just about this and that, me and my wife always go like, so what year was that? Like, we're not going to have that problem with 2020, but so 2020 handed us the global pandemic. I think to your point, some of the advice that I was giving my clients was like, Hey, if you want to double your emergency fund in a pandemic year, I'm not mad at you. Like we can sacrifice the six or 7%. I'm pretty sure we can make that up in the market. If you feel better by just upping that up and tightening the belt strings, because we don't know what's going to happen. This was like last March or April then that's cool. I think you give a lot of solid advice there because one thing that came to mind when you said the thousand dollars just made me think of Dave Ramsey, where it's like that, the baby emergency fund, but I mean, that could be gone so quickly, you might have to up that barrier.

00:27:08 Dominique What are some of the things that you think that people should be thinking about, in regards to, I guess, the psychology about that, I love the way you put that with mess off hierarchy or needs it, but just kind of, parried to the whole financial thing. There anything else that you would layer on top of that, those three things?

00:27:27 Rob Let me think about that. Yeah, I would say in terms of the student loans that, they kind of have, they can, it's okay to table them, even if it is a stress point, if someone has massive credit card debt, or they don't have a lot of money in the bank and their job could be at risk of going away or losing some income, then it's okay to pause the student loan payments and come back to it. I think at some point we have to pair things back, I would say like another thing along with that is just the mindset. There are people that obviously out there that can truly not afford certain things in life and not afford their pay, their rent or not afford their heating bill. That's a really terrible situation, but a lot of people use those words. I can't afford it when actually they can't afford it.

00:28:15 Rob Instead of using the word afford, I like to substitute, afford with choice, assuming that someone's in a situation where they do have a choice. So, because sometimes when we say afford, it's all, it puts us in a negative mindset that we are trapped and that we cannot do something that we want to do. If it's like, well, I could, go out to eat and spend $15 on lunch, or I could take that money and put it into retirement. It's about having that choice instead of saying, Oh, I can't afford to put money in my retirement, but because we're making decisions every day that we could actually choose to make a different choice. Especially with kids, you and I have kids and I'm very, we're in a position where obviously we can make choices. I'm very careful about using the word afford with them. I think just psychologically, when people have student debt, when they have credit card debt, when they have bank, if they're making it, when they've, low bank account balances, if you're really making above the poverty level and you can make ends meet, then stop using the word afford and start using the word choice.

00:29:21 Dominique

No, I love that. I think this is a reason why, and always get back to this theme. This is the reason why I think more often than not people need the accountability, the professionalism that is brought by a financial professional. It's just because it, and it may not because you're not a good investor. I mean, you might actually do well in the market, but as you're, as we've been having this conversation for the last 30 minutes, we've not even talked about investments, but all this stuff we've talked about are so crucial before you even get to the investment, because otherwise you may end up pulling out your 401k as good as it's doing in a year, like last year in 2020 to help subsidize your living expenses because you haven't done things in the right order.

00:30:16 Dominique

So, what I would really love for you to opine on, is this notion about having a financial professional?

Cause you said a couple of things there were so juicy. The first, the thing about choice, right? So I love the substitution of choice for four, because I think as financial professionals, what we are as stewards to help people take their limited time and money and spread that across unlimited choices. I think that's a beautiful way that you've put that. In regards to choice, let's talk about a specific strategy and I know you guys have some information on student loan planners that we'll definitely link up in the show notes. We got this whole thing with the zero interest moratorium. I've had clients ask me about that and strategize around whether I should refinance, but I'm in zero interest in blah. I think this points to let's talk to a professional, but I, since you are a professional you're boots on the ground, I want to get your opinion on maybe some strategies there or what the best next step would be for someone that has student loans, but we got the zero interest moratorium right now.

00:31:14 Dominique What are your thoughts on that?

00:31:15 Rob Yeah, well, it's been really great for people to have relief from their student loan payments and zero, not only zero payments with zero interest, like you said, and this goes back to, you've got to understand what the long-term strategy is best for you. If someone owes more in student debt than what they earn. Let's just say someone has a hundred thousand in debt and they're making 80,000, refinancing and paying it off might not be the ideal way to go. Believe it or not given that there's, income-driven repayment plans with loan forgiveness at the end. Or if someone is working for a nonprofit employer or a government employer, they could be eligible for public service loan forgiveness. Once someone refinances, those options are gone and they have to pay back the debt like they would engage with traditionally with debt. So, but for those people whose long-term strategy is to pay off the debt aggressively and get out of student debt and pay it off all the way.

00:32:08 Rob Because we're in COVID times and we're at the height of it seems like we're always hitting a new height. And, we don't know what's going to happen with local, what local municipalities and States are gonna choose to do in terms of shutting down. We know there's probably a massive mandate coming, but that doesn't, that could have actually helped open businesses back up. With that uncertainty kind of to your great point earlier is that, Hey, people should be taking this opportunity of zero payments to build up their cash. You know, their cash on hand. The 0% is going to be 0% until it's not. If someone builds up a bunch of cash in their bank account, and then at the end, when the 0% expires, they'd actually better off building up that cash. Right before the zero expires, then throw a huge lump sum at the debt rather than paying it off, because that way you're hoarding cash.

00:33:00 Rob If they extend the 0% in right now. Yeah. If Congress, now that we have a, a democratic Congress and president elect and vice president elect, they could extend it through September. Now, we think it's likely it's going to be extended through April may. So, in any case, it's okay to hoard cash and with zero payments and then throw a giant lump sum at it. Now for people who are in solid financial positions and they have their emergency fund, they're comfortable with their cash amount. It's okay. If they know their long term strategy is to pay back the debt in full to go ahead and refinance now, and you can go to, and we have some of the best cash back bonuses out there. Anyone with private debt, rates are at all time historic close or near that. Anyone with already private student loans should go to that website and explore if they can get an even lower rate because the game, when you're going to pay off your debt, all the way is get the lowest interest rate possible and pay it off as quickly as possible.

00:33:59 Dominique No, I agree. I, I, I highly endorse you guys. Whenever I have something out of my purview, I send my clients to you guys because I mean, I know the type of work that you go over to do over there. I know that the caliber of professionalism that, you and Travis and Lauren and Megan and all of those guys, operate with. So, highly recommend that because I think one of the things that I would like to say as a financial professional, that's been doing this for this is my 20th year in the industry is I think too often, we try to as financial professionals, whether we're entrepreneurs or working for a firm, we try to do too many things in house. There's not enough of collaboration and outsourcing to specialists. I, I don't do student loans. Well, like there's a whole world of that stuff that I'm supposed to know.

00:34:51 Dominique If I'm a specialist, but I'm not, so why not send them to somebody that knows what they're doing so that my client gets the best care. I think there's been this notion of, I say this, parenthetically I think there's been this notion that if you send your client away to somebody, then that client will want to stay with that person. What I would always say is the pushback was like, you must not be doing a great enough job. If you sit in your cloud away, they didn't, and they stay with someone. So, maybe that I hope for any financial professional, that's thinking about this a different way. Maybe you need to first start with your service model before you start thinking that everybody's trying to take your clients. That might be something to think about.

00:35:28 Rob To your point, I mean, three years ago, before I started working with a student loan planner, I would have given people horrible student advice. Cause I didn't know about it. I mean, it's like you have to do it everyday all day to understand the nuances and how to, in the rules of engagement, because it's not like any other kind of debt, there's not compound interest, you have income driven repayment, you have loan forgiveness options. You have, if you live in a community property state, like Texas, there's ways to take advantage of the community, property laws with splitting income. I mean, it's super complicated to understand everything, but giving the advice once we know all those details, it is, it becomes easier. So, it is a different beast. I think we work with financial advisors. We partner with financial advisors all the time, as and welcome the financial advisors to be on the call because the end client who has a student that has to be on the call, that's a must, but the advisor is more than welcome.

00:36:21 Rob

In fact, it's encouraged for them to be on there because they need to understand what's going on the rules of engagement on how it works with a specific client and they can give more commentary and color so that we can give even better advice. It actually makes the advisors look really good.

00:36:37 Dominique I'm glad you said that. And it made me think about something. If you're a newer advisor or you're just thinking about this a little differently, let me give you a little wisdom. Hopefully is that if you look at student loan planners and the professionals there as an extension of your team, this is part of the service model you offer for clients that are experiencing difficulty with a strategy to pay back their student loans. You look at Travis and the team and Rob over there as an extension of what you do for your clients and you attend those calls. It just reinforces the value proposition to the client. I'm, I'm a hundred percent sure on this, try it. And you'll be surprised.

00:37:21 Rob Yeah, I appreciate that.

00:37:22 Dominique Now, let me do this as we're bringing this thing in for landing Rob, and I really appreciate your time today. This is a podcast to empower tomorrow's financial professionals with tools to serve their clients at an ideal, or their ideal clients at a next, at the next level. I think what we've been talking about, especially in the last 30 seconds or so has really underscored that. In that context, what word or words of wisdom would you leave with that next generation financial profile?

00:37:54 Rob Yeah. I would say that, there's a ton of financial advisors out there and financial planners out there and the broader public doesn't necessarily know the difference. We're a commodity, whereas, Oh, I have a financial advisor. Well, you really have to show your value to people. The service has to, you have to focus on the service and serving your client probably more than ever, especially with investments being, with robo-advisors the investment piece is more commoditized than ever now for those who are like specialists and investment management and can earn an excess return of proven to do that's fine. But, advisors really have to set themselves apart, being value add. I think it is really important to highlight the fact that, if you are a fiduciary saying that and telling people what that means, that you are, you have their best interests at heart. You're not trying to do this to make money.

00:38:51 Rob I mean, you're doing this to make money, but you're not doing this. The advice that you give is in their best interest, not in your best interest. I think that's really important to highlight. You hit on a great point, the accountability, a financial planner and financial advisor not only helps implement the plan, but they're also like the coach and the cheerleader and an accountability partner, the other, and then just one other thing I would say is that a lot of times as financial professionals, I was definitely, this is we get focused in optimization. What's the optimal path from a numbers perspective, but understand that most clients don't operate optimally. Maybe if they're a successful business owner, they might be a financially optimal person. The goal of a financial planner and financial advisor is to give the advice, give good, solid, conflict, free advice that the client's actually going to implement.

00:39:43 Rob You can get rid of some of the optimization if it's not as optimal, but it's going to be good for them if they'll do it. The idea is to get them to do it. We don't want to create financial plans that, are going to stick in a drawer or stay on their hard drive somewhere. They'd never be accessed. We want a living breathing plan that you can hold them accountable to. That's going to get them in the right place. And that resonates with them. Forget optimization, get a solid plan that they're actually gonna implementation is more,

00:40:11 Dominique No, I love that implementation over optimization. I love that. I think that's a soundbite that I'll have to retweet once we air this episode. Great stuff, Rob. I really love your approach. I really love your dedication to what you guys are doing over there. Again, if people are listening, have student loans, what is the best resource to point them to, in order to get in console in contact with you guys?

00:40:42 Rob Yeah. If someone is looking to get a plan, if you're an advisor out there and you have, someone with six figure student debt, if you go to, that'll give all the information on the consult process and how to go through that the price will be based upon how much student debt they have, give you all the resources you need. Student loan, in general is a great resource for anything. If you're just wanting to get your feet wet and understand more about repayment and you have a client who is a particular profession, we have score. I mean, we have tons and tons of blog posts specific to certain professions, whether it's veterinarians, physician assistant, dentists, psychologists, whatever, if you go to our website and look at our blog posts, there will be some great resources for you to read up on. You can be informed when you're talking with your client about student debt.

00:41:32 Rob Yeah, I would say is the best way to go. Dominique, like you said, don't feel like you have to have all the answers for your clients. You definitely want to be informed, but it's kinda like hiring an estate planner or an accountant. Student loans are a separate animal and there's certain complexities there that might require someone who does this everyday, all day. We've done over one point, we advised we've done, I think 4,500 individual one-on-one consults as a team. We've advised on over $1.2 billion of student debt. So, we have experienced and we'll be able to see the things that maybe you're not sure about. It'll make you look good for your clients, to bring in a professional, like you would like an estate planner and an accountant. And, don't make, let me just say that, I think what you're doing is fantastic.

00:42:20 Rob You're trying to help raise the level of the profession. I think we need more people like you out there. Helping people do a good job for clients at the end of the day, we want everyone to be successful financially, and we want to get the tools in people's hands. That is helping, it starts by helping the people who are giving the advice, to do a better job. I think that's awesome that you're doing this.

00:42:41 Dominique No, I really appreciate that, man. It's a, it's a labor of love. And, and one of the things that I, I know for my own spot is that, based on your success, and I think I heard Tyler Perry say, this is that once you get to a certain level of success and, or comfort your job is to hold the door open for others. I try to live by that as much as I can, but I really appreciate your time. Really, really appreciate your time. Thank you for being on man, but this appreciate it.



Yeah. Yeah. Dominic, thanks so much.

212 episodes