Today, we’re going to dive into student loans, the moratorium, and types of debt. Student loans, although they are considered a “responsible” debt, can still seem crippling.

Here are some things to consider concerning student loans:

1. If your loans aren’t federal, then the moratorium on interest and collections does not apply.
2. If you refinance or consolidate your federal loans, the moratorium won’t apply.
3. If you continue to make payments through the moratorium, there will be less principal to charge interest on when interest does kick back in.

If you’re considering college right now, get in touch with alumni, people in the field you want to work in, and the financial aid department at a local community college before enrolling. Make sure that it makes sense for your goals and your situation. More schooling doesn’t automatically mean more pay.

We’ve been gifted some flexible time to revamp how we want to prioritize our debts, so do your research and understand that the college-to-career path isn’t the only valid path.

We cover ALL of this in the “Get Your Finance Sh*t Together” self-study course at confidentmoneypodcast.com!

Now Open: Money Mavens group coaching program! There’s a special prize for anyone who signs up in the first week at confidentmoneypodcast.com.

Enter to win a free strategy session with me!  Leave a 5-star review and include your IG handle to enter. We draw the winner at the beginning of each month. 

FTC/Affiliate Disclaimer: By using some of these links, at no extra cost to you, I may earn a small commission or referral fee, which helps me continue to produce content like this, support my business, and my team.

DISCLAIMER: I am not a financial advisor and this is not financial advice. My podcast is for educational purposes and is my personal opinion only. To make the best financial decision for your situation, please do your own research and if needed, seek the advice of a fee-based, fiduciary.

Music credit: Neon Fairies by Wolves 

A Podcast Launch Bestie production

Welcome back to the confident money podcast.

We have Brock here as special guest for our third episode with him now

Brock and I are going to be talking all about student loans and it's a little

bit of everything, a little bit of the moratorium, a little bit about making,

you know, the best choices and informed decisions, and also how student loans

play into the bigger picture into refinancing into debt and mortgage plans.

So Brock welcome back.

Hey, glad to be.

Yeah, so Brock you and I were talking before we got

started, because I am really lucky.

And I don't know if a lot of our listeners know this, I have gone

through mortgage debt, divorce, debt, credit card, debt, car loan, debt.

uh, but I do not have any student loan debt, but you do.

And the majority, I think of millennials have student loan debt, and it's something

that has felt really crushing at times.

So

I wanted to just kind of talk about what that looks like and you know,

like what you did for schooling.

Yeah, absolutely.

So I went, um, which I think was great for me.

And I think you also did.

Um, I did my first couple years at a community college, uh, just

did my generals and everything at my, um, around my hometown.

Um, it was great because it really did help with that

transition into the college life.

But also I was able to get my first two years done pretty much debt.

There's a lot of different public programs out there.

A lot of good grants and everything available at the community

colleges for the courses.

Um, so I was fortunate to leave with zero, but I did, did go to an

out-of-state college in Arizona after.

So, um, my last two years of my undergrad and also my graduate

program were at Arizona state.

And I did leave there roughly around like 122,000.

And then obviously interest is accrued.

I did do some different repayment programs early on in my career when I

wasn't quite making, uh, at the level that I am now through that repayment

and navigating that and everything.

I have also since consolidated, which I do think that we're

gonna touch on, um, different consolidation options and everything.

and currently I am actually still making payments even though of the Mo moratorium.

And that's just because I'm just trying to cut back at that debt.

That's my main, my main debt that I, that I have myself before I,

I get into the mortgage realm in, uh, hopefully the next couple years

No, I think that's really smart.

And I think.

We can actually just segue into, I, I, I wanna talk about the moratorium

first and what that looks like with payments since you just brought that up.

So I'm a really big proponent.

I know that there are people out there that are just, when you're feeling crushed

by student loan debt, and you don't feel like there's a way out, or you have that

and you have credit card debt and maybe you have a mortgage or you just have

all of these things and it feels like nothing's ever going to be paid off.

It can be really nice.

If you are in a spot to be paying off debt, especially right now

with the moratorium on federal loans to be using this time to

prioritize debt payoff accordingly.

And we talked about debt payoff in an earlier episode, I think in season two.

And in season two, we talked about.

Listing out your debts, listing out your interest, rates, your balances

and your minimum, monthly payments, and prioritizing your payoffs

based on the highest interest.

And if you really wanted kind of a win right out of the bat, sometimes you could

pick your lowest balance, get that one paid off quickly so that you have a win

to kind of, you know, tucking your pocket.

And then dive right back in with your highest interest and start

chipping away at that, because that saves you the most money.

You know, another good point on that too, is if, because we have this

freeze on the interest, on everything, on your repayment, collections, anything

like that, what's happening to your credit at this point is it's, you're

getting this account and it's extending your credit life, which is great.

My credit life is the number of accounts I have and the.

Is great because of my student loans, they are my longest accounts.

Um, and so what they've done is they've built my credit history

because I haven't missed any payments and it's a responsible debt.

So by freezing that right now in the moratorium, all I'm doing is helping

myself almost because it's getting my credit profile to be more strong.

And they're seeing more payment history, even though you're not making payments,

you're not, not making payment.

And so it's really helping that credit profile as well.

And I agree, Caitlin completely like student loans are responsible

debt, much like a mortgage.

Um, they're not looked at the same way that, you know, vehicle loan, debt, uh,

personal loan debt, you know, all your other debts credit card debt of course,

out there, um, which isn't viewed as of.

I wouldn't say it's irresponsible by any means, but it's not a responsible debt.

Um, and so when we pay all those other ones off our debt to income does get

is helped a little bit because we're getting all of that other high interest,

high yield debt kind of paid down first.

So I completely agree holding off on making payments on, you know,

your responsible debt, do it.

You're freezing your interest.

You're not accruing anything you are accruing on your other.

Right.

Exactly.

And I think that for a lot of people, if this was a time where with the

moratorium, maybe you feel like you have a little bit of breathing room

for the first time in a few years

And we need to.

Right.

No, it's, it's a big sign though, that you should be taking the time

while you have it to look at, are you building that side hustle?

I know that that's the quintessential thing to be doing right now, but

are you building that side hustle?

Have you advocated for yourself?

Have you job hopped, have you found a way to increase your income while

simultaneously setting yourself up to be in a better spot when

those loan payments do resume?

and I know that you and I were talking about this Brock, we do anticipate,

and of course we don't have a crystal ball, but we do anticipate that this

moratorium will most likely be extended.

Again.

We've seen it extended, I think four times now.

Um,

it's officially, I think about just over two years old at this.

Yeah.

Which has been great for so many people.

And we've, you know, seen some things tossed around, like maybe

there's gonna be a $10,000 student loan forgiveness, which for a lot

of people is a drop in the bucket.

It's still absolutely better than nothing.

And might help chip away at some of that interest that you've accrued.

Because I think that's really the kicker for a lot of people.

And that's what really.

Chases me is your interest.

If, if your balance would just be what it was and you had a low interest and

you could pay it down, that's one thing.

But there are people that have been paying on their student loans for

20 years, that owe more than they owed when the student loans began.

Oh, I I'm a perfect example.

I owe, you know, more than when I started, um, more recently I've been able to

make bigger payments and everything, but a lot of these are interest.

Um, luckily, you know, when you do have those federal loans and everything, you do

get an interest cap and it's not variable.

Um, but that's not all loans.

I mean, there are some federal loans out there, especially like plus loans,

graduate loans, everything like that with a variable interest at over time.

So you need to look at whether your loans subsidized, not subsidized.

And then on, in addition, we have had two years.

Of not having to pay for these, but what's happened in those two years,

our housing prices have gone up.

Gas has gone up.

Food has gone up.

I mean, the, the stocks have gone down.

We have all of these other costs as a result of COVID and just the general

economy that this hasn't been in people's budgets for the last two years.

All, you know what I mean?

There's a lot of people who did take advantage of this Mo.

And for them to end that moratorium, it's gonna be very political, honestly.

No.

Absolutely.

And my, I mean, hope upon hopes would be that with inflation,

with looming recession, with everything that we're seeing, that

they will continue to extend it.

Otherwise, it feels like everything will just be piled on all at

once, which I think will not help any of our economic situations.

So with that, and with, you know, again, these only apply to federal

loans for the moratorium currently, and it's a freeze on payments on interest

and collections, which is great.

But for a lot of people that may or may not impact you at all,

because you may have consolidated, you may have private loans.

And so I know we wanted to talk about, um, a consolidating and B those offers that

you get in the mail brought, cause you brought up a really good point about that.

I think all over.

Um, and they, they do, they know who, who to target, you know, your

recent college grads, you're, uh, people who are struggling to do

the repayments and everything.

And, um, there's a lot of private companies out there that will kind

of claim to reconsolidate your loans.

But in essence, what you're doing, you're also refinancing and you're

refinancing with a private lender.

So essentially what they're doing is they're paying.

Your federal loans, and now you have a loan with them.

Um, the problem here is now the federal moratorium and everything

that's outside their scope.

They are not, you know, they don't have control over freezing those loans.

So your repayment terms are much less flexible.

So definitely be cognizant of when you're looking at these offers

to consolidate and refinance.

Student loans, make sure it's it's in your benefit and it works for your, you know,

how you project to pay your loans back in the, you know, in the coming years.

I think also another thing is that they, you know, we keep hearing

about student loan, forgiveness and everything like that.

And I would err on the side of caution to, to, uh, consumers

that, you know, it's a lot of talk.

I don't believe that it's gonna apply to hardly anybody.

Of course, different sectors and different industries are gonna

have, you know, much more ability to forgive some loans than others.

Um, but I will say it's not a debt to kind of think is gonna go away.

It's just, you know, it's a lot more flexible of a debt.

Well, and I think with that too, Brock, if your student

loan interest rate is relatively low, and we're looking at that grand

scheme of like your finances and your.

I don't see anything wrong for the most part, depending on your personal financial

goals with not prioritizing paying those off, if you've paid off your credit

card debt, if all of your other high interest debt is gone and you're in a

good financial spot paying what you need to be paying and just kind of letting

it do its thing, like it, it just is.

push it out at least 20 years.

We know that repayment terms get a lot better after the 20 year mark

Yeah, no, I, I think that that can be.

Overlooked by people, because I think they're, despite it not

necessarily being a bad debt, right.

Because I don't, I don't believe in good or bad debts necessarily.

There's not like an inherent moral value, uh, which, but I think so many

people attach a moral value to student loans, to, you know, having debt to their

student loan debt, continuing to increase.

Cause like, like I said, that's the thing that just like kills

me is it just keeps increasing.

And so it can feel like there's no way out.

And so if you decide, which I think a lot of people have.

Hey, this just, isn't a huge priority.

If I'm making my payments, when I need to be making them, if the interest

rate's not something ridiculous, or if you've refinanced or consolidated or done

any of these things so that you have a rate, that's, I'm gonna say tolerable.

I.

I'm not looking to pay my mortgage off because my mortgage

interest rate is under 4%.

I'm investing that money instead.

So I'm making my money work in other ways.

And I look at student loans that are lower interest.

Now you have something that's like 10 or 11% different story, you know, that's kind

of in between mortgage and credit card, depending on that rate, I'd probably look

at trying to pay that off or refinancing or doing anything along those lines.

But I think because of that brought so many people are

jaded when it comes to student.

And what really bothers me.

I'm gonna get some hate on this.

Probably.

Dave Ramsey is such a big proponent of, you know, you

shouldn't take out debt for school.

You should be able, you should wait until you can pay it outright.

If all of our doctors or medical professionals or, you know, anyone that

requires significant schooling were to wait until they could afford school.

A it's super privileged.

B, like, how are you going to do that?

How are you gonna have access to three, $400,000 that you can just drop on school?

Like that's a house in many PLA or half a house, depending on where you are.

Um, you know, how are you just gonna be able to drop that on schooling?

And then you've lost so much earning potential.

And so I think when you're looking at student loans and taking them on.

Because you and I have both had experiences with this, you know, I had

a friend that was a lawyer that made, had over $200,000 in student loans.

And everyone thinks that being a lawyer is lucrative.

It's not necessarily lucrative unless you're working for a large

firm or in certain industries.

And so weighing like social work as well, right.

Weighing the pros and cons.

Of your career path, your desires, your income against what you're looking

at, taking out in student loans and what that's going to look like for

yourself, I think is important to make an informed decision because

student loans are a tool to get you an education and you need to be the one

to assess if that's the right path.

very similar into like a mortgage.

We can't wait to get a house until we save up enough money for a house.

It's just not, it doesn't work.

And it also doesn't work for us.

Like, like you mentioned, these student loans and everything, um,

they allow us access to get the education we need, get to our earning

potential a lot earlier on in life.

And then in addition, Student cost is just gonna go up.

We've seen tuition, just keep skyrocketing.

See, since we, even us were in college, you know what I mean?

So you wait any much longer and then those you're gonna be waiting forever.

And then life gets in the way, everything like that.

So my, my advice, and I think you, you share this already is be informed,

be informed, know what, you know, you kind of wanna get outta your career,

do the exploration, do the tourists, talk to professionals in that industry.

That is what I.

can't stress enough is talk to professionals in the industry.

You're looking into ask them about their experience.

They'll probably be more than happy to, you know, go

through what they went through.

Um, and, and kind of let you know, and make sure that, you know, when you do get

outta college, that there's a, a direct need for what you're doing, because too

often, you know, and colleges, don't kind of warn you about this is they.

They'll gladly give you loans and everything for these, uh, you know,

professions or industries that really might not be, hiring as much as, as

other professions and you don't wanna really necessarily take out so much debt

for something that you're gonna have a, you're gonna struggle the whole time that

you're in this career to pay it back.

It's unfortunate for some, because you know, some people are very, very

passionate in the fields that they go into, but they're very expensive.

Um, you know, just, just be informed.

Well, and I, I think too, I know that that's something

that I've seen a lot of the financial independence groups that I'm in are.

You know, people that are in social work or in a lot of, unfortunately

these caring positions, right.

Where there's absolutely an inherent value, but unfortunately there's not a

monetary value that matches the amount of work education, et cetera, that it

takes to make it in that career path.

And I think that.

You brought up a really good point of talking to people in the

industry, because if you're gonna go to a college, colleges are gonna

want to make themselves look good.

Like we have, you know, these great rates we have, you know, this is the

number of people that are employed within one year in their field.

This is everything that goes with it.

And I think talking to people that are actually doing it and getting an idea

of what their day to day looks like.

Because I think I know that when I was 18, actually I started college in 17

when I was 17 and I was going to school.

I had completely different ideas of what working in the field that I was

going to school for would look like.

and I didn't realize, and we have the internet, like we had the internet then,

but we have the internet so much more now.

And so many more connections that reaching out on LinkedIn or reaching

out to the alumni, you know, that graduated from your school.

There are so many things that you could be doing to make sure

it's the right path for you.

And I think with what you did and what I did.

As we both did our general education at a community college, a it was less

expensive B it allowed me time to grow and mature and decide a little bit more.

If the path I was going down was right.

And I was also able to move out on, well, this was 2008.

I was able to move out on my own with roommates and afford to make it, um, my

same apartment that was $700 is now 2100.

I don't even wanna talk about.

So I couldn't have done that now, which kills me a little bit.

It kills me a lot of bit inside, but that being said, community college

allowed me to not have student loans from those first few years, which was great.

And it, let me take it at my pace.

Actually take a ton of online courses, which was amazing and it let me mature.

And I think that was really important because who I wanted to be at 18 was

different than who I wanted to be at 20.

And it changes so much during that timeframe.

took 10 college graduates, Aged whatever and asked them, did

they end up graduating with what they went their first major or what they

thought that they were gonna graduate with when they started college?

Nine out of 10 of them will tell you?

No.

Um, I think that those first couple years, there's a reason that they're

general, you know, go in, figure out what you like, figure out the profession,

find where you're passionate about.

A lot of us don't even know where we're passionate.

We're still growing.

Um, but those, you know, keep in mind that you're pulling out these loans and to you.

It's for great it's for great, uh, education, but make sure it's,

you know, applying to what you want to for the rest of your life.

but you know, there's such great career advice and everything.

Um, either through college or just general financial aid offices at,

at the college that you're looking at, um, they're pretty transparent.

Uh, a lot of them do work directly for the federal, um, government funded programs.

So they will kind of be you.

Black and white with you.

Um, as far as what the repayment looks like and everything, and you know, it,

there's always reform there's reform all the time with, uh, how student

loan, uh, loans are set up through the government and everything like that.

So I think we still have yet to see, um, even more changes in the future.

No.

I agree.

And I, I think that at the end of the day, a I'm really over vilifying

debt, I think almost all of us.

And I don't have the percentages on that, but so many of us have, or have had debt

and student loans are such a big part of that for gen X, gen Z.

To an extent and millennials.

And I think that while we have seen a resurgence in individuals not getting

college degrees, which has been so interesting, and starting businesses

or, you know, doing things on their own or becoming a TikTok influencer, like

there are so many paths to create a life that works for you that works for your

personality, that works for your finances.

And there's also no reason.

For you to blindly get a college degree if it's not necessary for your field

or, and you and I have both seen people do this, uh, to continue going to

school for higher education, because you automatically equate it with higher

wages and you need to do the math on.

Okay, cool.

I've gotten my bachelor's.

That will make me X, Y, Z in this field.

And for a lot of jobs do not get me wrong.

I have had to have a bachelor's degree as a check.

In completely unrelated fields at a lot of places, which is a frustrating

sticking point for me, but I had it, but it's a gatekeeping exercise.

And then if I go to look at a master's and I've toyed with the masters so

many times, cause I love school, it wasn't gonna help me in what I needed.

I had the real world experience.

What I was doing did not require a master's degree and it wasn't like

the cost benefit was not worth it

I think especially in our industry, you know, in finance,

accounting tax, whatever it may be, um, we all go through school and we

learn everything conceptually, and then we start and it's a completely

different world once you're out there.

And you, you do realize that sometimes.

Um, and you know, I'm not speaking for anything specifically, but that education

that you, um, you got isn't as applicable.

Um, and I think that you're completely right.

Like, I think it's, we still are much a merit based society as far as our

levels and, um, how employment goes, but we are steadily opening other doors

outside of just secondary education.

And, you know, as we change and we grow in everyth.

people are getting educations overseas and some people are going into different

trades and everything like that.

And I think I more power to 'em do not just incur the debt just to incur it.

You know, but if, if it is necessary, then I, I I'm for it completely.

Um, it, it just really depends on your industry.

And I, again, I think just getting inform.

And figuring out what you wanna do and talking to other people in that

field, maybe 10 years, your senior, 20 years, your senior, um, and just

kind of getting their run on things.

But, you know, we are changing all the time, too.

Yeah, I, I think that's the biggest thing, right?

Is just like your personal financial journey, your personal, you know,

education or your career path or all of that feeds into it.

And so a trade school may be perfect for you.

My dad was an electrician for his entire career.

He made great money.

He knew exactly what came with it.

Like he was very well versed in it, and it was, we're gonna say stable with

quotes, like any trade, depending on the economy may or may not be stable, but

it allowed him a really great living.

And there are other people that, you know, my mom didn't have to get

her bachelor's until just recently.

And she's been a nurse for 35 years.

And for her, that was a really low barrier to entry to a career that

had a pretty good financial payoff.

And I think being able to find something that you want, that,

you know, ven diagram, right.

You're interested in it.

You're good at it.

And it pays what you need.

And that may be college that may be, you know, becoming a medical doctor, which

incurs a lot of debt, but also comes with generally a much higher earning potential

and some really fantastic loan options.

Like there are some really cool things for, you know, medical

doctors when they go through school.

And you could also do trade school.

You could also do no school.

You could also, you know, become a technician, do something in between.

Like there are so many options.

And I think the more that you learn about those and the more that you

figure out what works best for who you are, what your financial goals are.

And.

How you best function that you can then make an educated decision, but

taking funding out for any of those, there's nothing wrong with that.

You know, taking a personal loan out to start your business

or using a credit card.

Like it happens.

We've I'm sure.

Probably all done it.

Take a credit card out and go do your thing.

there are reasons and granted it's a little bit different,

but the concept is the same.

Debt is not bad.

Necessarily, because we have these conglomerate corporations,

they have to have debt.

They want debt because it keeps them as a strong company.

Debt gets you further, you know, um, most small businesses can't

start without small business loans.

You know, we don't all have that rich grandpa.

and, you know, so I think that pulling out debt, but being informed about

what your debt, the debt that you're getting yourself into is very important.

You never want to go to college for two years and end up finding

out that you're not passionate about what you're doing now.

You've incurred this debt and everything like that.

Um, but like you mentioned, a lot of the passions that people have these days,

college doesn't have to be a require.

There are so many trades out there.

I have so many friends that, um, you know, are not necessarily a college graduate or

went into a completely different field.

Two, three years after graduation.

We're ever changing.

There's always new things happening in the world.

And as we're seeing we're, you know, even our nation alone is, is changing to where

there's new jobs coming up all the time.

Like, especially in the social media space.

I mean, content creators, you're not gonna go.

To college and learn a lot of the things, um, that you, that you're

going to be able to apply, like a lot of the real world learning out there.

And I think the reason that we have success in our careers

is because of that hands on.

So it wasn't all college.

but of course, every, you know, everything is different and, and really just doing

your, your research ahead of time, I think is probably the best tool.

But to, to get back to the actual student loan payments and everything.

I think free zone, you know, hold off as long as can get

some of the other debt paid off.

use this time as a flexible, a flexible time to kind of just revamp

and, and, and get your plan together as to how you wanna approach, uh,

you know, the next coming years.

So that could be a little bit unexpected as to how the economy works.

Mm.

Absolutely.

Well, and Brock, I wanted to touch on what you said because we didn't

talk about it at all, but there are a lot of people that I know.

That went to school for something graduated, have student loan debt

and are not working in that field.

And there is a lot of shame or should haves.

Um, you know, I, I went to school for this.

I should be in this field.

I should be doing this.

I shouldn't have done that.

And I think that if that's you and you're listening right now, and you

are satisfied with the career path that you are in at this point in time

that we need to forgive ourselves.

any of the stories we have around those student loans, because

those student loans were a tool.

I'm sure that you grew and developed as a person during that time.

You learned what you did and didn't want.

And I think that if we look at that instead of a failure or something to be

ashamed about, because it's absolutely not, we look at that as something that

was a barometer to let us know, you know, what we wanna do more of, or less of.

And I know that that is something.

That needs to be talked about more often because I, you know,

everyone's on and on millennials have avocado toast and $5 lattes and

student loans and everything else.

and I think it's time that we just drop all of that shit.

And finally do what makes you happy.

And do you know, I'm not saying like go to Bora tomorrow and spend $5,000 a week when

you don't have it to spend, but like go by the latte, absolve yourself of the shame

that came with, you know, going to school for a degree you're not using right now.

As long as you are making forward progress in whatever forward

progress looks like to you.

I'm like who the fuck else cares?

Exactly.

I could not agree more.

Absolutely.

We you and I even, and I hope, you know, I, I really think that this is changing.

We're told go to high school, go do your sat acts, get into a good college, get

your college degree, go to your career.

That is not the path anymore, necessarily.

It is a path, but it doesn't have to be the only path I knew and was told

from a very early age when I understood schooling and what college really was.

This is the path you follow.

And I really am so happy to see that the newer generations and the younger

generations are embracing that, that doesn't have to be everybody's

path, that the world is changing.

And if you don't wanna do college, or if you did go to college and you, like

you said, are in a different career path in everything more than, okay,

it's way more critical that you're doing what you're passionate about.

Even if it's not something that makes you the absolute most money

in the world, passion is what is gonna matter at the end of the.

absolutely.

I couldn't agree more.

Well, Brock thank you.

I'm sure you will be on again in the near future.

For everyone listening.

We have a really exciting group program coming out called money mavens.

If you go to confident money, podcast.com, it'll link directly to that.

It's going to be covering all of the things that you wish you would've learned

in high school, like how to read your tax return, how to prepare for a recession.

you know, how to understand your retirement, how to get

started, where to start all of those things that just can feel.

So exhausting.

And especially if you are neuro divergent, or if you just, this

isn't your forte, we're here to help.

And we're setting it at a really, really low monthly price because we

want this to be super accessible.

So check it out.

We are launching it on.

The fourth and that's when this comes out.

And so there's gonna be a special surprise for anyone that signs up

during the first week that it is out.

So make sure to check it out and sign up.

And then up next, we have a mini season with Kyle C.

Graves of win the house.

You love talking all about home loans and what you need to know to best prepare.