How to pay off college debt

Thursday, April 20th

00:19:33

Get tips from Paul Celuch, of College Assistance Plus. 

Transcription

How much do you know in college debt is there a strategy. To pay it off quicker it's seven figures and seen Watters Chris canyon is here you can have seven figures we all Ken but it's more than just that number. It's a goal to have financial in a chief financial independence in each week we're gonna get closer to it today were talking college tuition which is big for all of us right we'll cash in with the expert. Paul sell from college assistants bus college assistance plus dot com his company's. Helps families like yours to figure out the best strategy to pay for college. We'll leave you with one major thing that you can do to dead aim at least one thing to think about ending the episode where. Your return on investments at Chris. UN I came from and the league different background and we approach debt. I was convinced for a long time that I will always have debt and I've been holed up before from people my age or people older than me so that was the way. And if so why else on your parents though did you did did you try to figure environment or. Did you grow what just. Always. This hearing your parents talk about and I mean loud and I knew how I knew that the mortgage was high and I didn't know how high I didn't know what it was supposed to be had though for how long we're gonna have it but death for the most part we didn't really know why it cost one. My didn't know my step that would come home from plumbing calls and and Scottish lay money on the table he made 2000 dollars off one job so we thought. He was making a mint but that was just that day or that week or whatever it was so. It was hard excited to kind of figure it out when you're young. I'm -- week is on the oldest of six kids but with a lot of conversations in your family about finances and how to whom we know tackle finances are that would size that that would say stuff like learn the value of a dollar unplugged OK okay us to a lot of very well. My Brothers and I when we went to work with him we would make sixty dollars for the day at thirteen which is armed astronomical amount of money yeah ninety's growing up when your only thirteen so. Learn about every dollar but here's a bunch of money that you don't need so. Practice what you precise thing was there Islam is balanced they're looking back and Mullen was awesome idea sixty bucks a thirteen. I don't know if there's a right way to do this I think every parent struggles with it but man I am so. Grateful. In saying no and I realize that I'm very fortunate because my dad in. He Cilic a lot of people in this area and he moved here from Italy often though with nothing and he loves to tell the story at a school in a place finish I'm an Allen. Cardboard boxes that copy to kind of at a sport spoon. And that's big. But he said he worked really hard to make it to where he is today so I watched him. The frugal he'd call achieve whatever. Heat practiced when he preached and he taught us that hey you're only gonna buy something you can afford to pay with keen cash. In is you can't then you're gonna not chip away at that bill you're gonna chop away at that. This temptation is to it's too hard I'll admit it it's too hard. There's too many things out there this too much fun. To be had there's too much technology gadgets to buys too much experience to have you know to me like maybe. How to wanna cry that it's hard I don't wanna pull the millennial Clark fried and it's harder nowadays and it was back then it is now it's the exposure of all these things that we can spend what little money we have on as oppose it is Biddle. That we kind of archivists were gonna have forever but it's either paid the student loan. With my girlfriend has student loans and and you know she's been told to. Q by her friends to just pay the minimum and live your life because again this debt forever and a kind of starting to agree with that because. Instead of spending her whole twenties. Paying his bill that she's still have a third is the season. Live heard live deliver mining giant I don't enjoy Ireland Italy and dad turnaround murder impossible to say no when you grant FaceBook gives you two always commercials that we have about experience go to Cancun for 12100 bucks. But in a lot that you cannot see you this okay. Maybe it is a little bit more attempting now shore and maybe college tuition without a doubt I mean with out a doubt their higher than they've ever been. So maybe it is indeed a bit tougher now. It's impossible. To really get rid or try your hardest to get rid of that dat so what is the best strategy we cashing in now with our expert Paul Silas is from college assistance plus college assistance plus dot com. And this is what you do you do you help families strategize those college loans right. Well we do in and this is becoming more and more of a loan consulting business Russert even though we help of other aspects. Of the college process how we tackle our jet my well won it one of the things that's difficult for most people understand this college that is not like mortgage that are Carlin that right. I Carlo when you can or mortgage you can get a payoff amount it's almost impossible to get in college that amount. The lenders are not very receptive to somebody dying off they want to add interest an inch front end loaded with the interest so. We have clients who have paid back. 7080000 dollars over fifteen years in only tackles fifteen thousands at a college that. It's like this this amorphous in this guy that nobody can talk to I mean you you read about these situations in an all out all the papers about people. Say gosh I paid so much on them I haven't even moved the needle on it. But my girlfriend has 50000 dollars that bomb and I saw her statement for the first time recently and I'm no expert at finances I have a bad credit score on just getting back in my feet we didn't respected dollar until about a year ago and started making the right moves. But hurt payment to break it down and I'm sure this is not uncommon. She pays about 380 dollars a month and over 200 of that is just interest exactly I've taken all the pens that she owns away should not allow the sun anymore documents very low ready. Is it like any signal on when you have and you don't have a house she apple when you look at the propeller when you look at the interest Cilic with my match ban the principle and to be our. How much you can go to go under and say I wanna make this principle payment that has. It was impossible that you can't today Chris college Christmas morning out agreed. Great. Respect them honest. And and you know here here's the dilemma. We live in a full disclosure state U when you buy car you sign a statement you know six they have feet long and say you know full disclosure of everything truth in lending that's what they call. College loans are not like that you just signed a one page. In this as you've got the long. There's not a lot of background and information given to lenders the other thing is. Your girlfriend wanna go to college it's the only way she can go to colleges borrow the money and in the college said you don't want to pay back a six months if you graduate and by the way you'll have a great job then and you'll be able to pay about lazy now if you buy almost statements and they all come true. Now maybe you you've and created a good a good transaction for yourself. We find that's not the case. Kids aren't finding green jobs. They're not and and mode there's two of situations that you can do what college longhorn is difference the other is forbearance. That means basically the clock stops. The interest keeps going but the clock stopped self. We had I had a family this about ten years ago are now their daughter went to Boston university and that would limit the highland diner. And she put her loans and forbearance which was just as I said the interest. She started out weigh a hundred grand in loans here and a 580 Brandon Long and I'm on so what do you tell your client studio. And it's refinance through and how many times are you able to refinance or as long as you have a sixty feet credits or we can get to refine. And because you leaky we'll financing we do our part we we lump all our clients together so that we mitigate the credit score if you know what I'm saying so. We can get better loans because we're a massive wonder. You did a bonus of 5000 dollars graduation you hit your sales bone bruise. Would you recommend that you put that 5000 dollars. Towards the college if you debt figure out how to do it it's not easy to make your car how well the media or did it make additional pain instantly. Dealing many 1040800. Number Landers who do it's hard to find them I mean you're you know try to pay something you really want you guys day in debt have you ever tried. Actual money into it and just keep refinancing early and well read and understood there's two things don't make it four because one point is really germane I can't resist. If you cosigned fears honored orders student loan yeah you wanna make sure you have term life insurance out of my student. We have a situation where a student was killed three years after that are there they graduated college yeah. Did these are both retired parents they're paying meg 85000 dollars in student debt on that student all night so yeah action and life insurance for a young person is peanuts. And we that's the first thing we recommend if you're gonna percent of loans protect yourself Vinson that nobody thinks that's why we prop posture. Well I heard Jake it's important to cure me and I mean we we say to people listen we have the entire relationship and your kids who takes term life insurance. The media. Do you get when you marry and start families and get mad insurance yeah yeah so. You know. I think the fallacy is these are loans that were used to you know you can go to a lender usually as you suggested Indians like. Let me put 5000 down on the principle. And that's the way you pay off your literally right UN are you pay etc. is yet you we we employ. Which it's hard to do that on student loans are almost impossible when Chris mentioned the statement. Look for some some contact information on the State's crazy it's crazy as high as it's. So it is it's really not truth in lending a site as we know it in. It's terrible I mean that's why we have that problem we have everybody loves your kid everybody wants the album. How B album and and how expensive Marty schools and many schools are going up. You know 5% a year I mean is the deal largest raised their price is 66 for room board tuition. What that means is if Chris goes to deal Mars a freshman and a fall he's gonna be pushing 80000 miles a year in his senior year. Think about that and isn't. Those numbers are staggered so. You know it's just not like I did that we're used to. It which we all ever familiar with you know collar credit card to cars mortgages college loans are just not the same into. At a college loans those for sensible cites federal student loans to they go get your credit score if you default on them or beat him pay them late or just like anything else well. Great question you know you first thought you can't. Default on federal law to take it at your paycheck right right it's not discharge it was through bankruptcy he non collateralized. Apologies to degrade imagined said he met someone coming taking money out of your paycheck and that sum of money includes interest on something how old are defeating does that does that and there's no solution but yeah I whichever followed up prevalence can drive it won't you always get into your. All year or that you can't get it's hard to get student loan if you're under 660 credit score so this is just a vicious cycle than if I had to buy. Need to lower my payment for my private student loan because I can't afford it I can't refinance it because my credits not big enough because I can't for the initial payment. But what you what you can do there's a couple of solutions one is called income based repayment if you're making so little. Or less than the payment so say you know Chris 3300 dollars a month there's too much right sir your make your 2000 bucks a month. You can get an income based repayment plan with the government that they attenuated. The the loan itself for years and years they drag it out rights are now. You're gonna pay a lot more interest but you're gonna pay back. You know two to 10% a year that is why it took 200 bucks a month. And in that you're supposed to get offered in ten years but boy it's a long ten years. If you're making so little. That's why he's the decision about college what you're majoring in you know you'd assuming that user accounts in order in a major we find one of the biggest challenges is. Kids don't know they wanna do and are seventeen so we do we sit and now we say okay. What are your interest where your passions what are your gifts you know anybody who has a lifestyle you wanna emulate. And we get into conversations with the students that their parents never award because we say wedeman now we're gonna we're gonna. Tried to drag out he'll what you wanna do in your life as you guys know if you don't like what you do here you're working if you love what you do it's not work. And the other the other problem is when people are college they're partying. Thinking about a job afterwards and that's. These are huge decisions that were who were placing on 171819. Year old people. Independents well abdicated. Where do you think the future is going to be consistent. Bubble pass to Byrd. That's is Purdue presidential it's a prediction that my girlfriend jokes about all the time she is the college. So it's a college loan situation is going to be the same thing that happened today housing market and meet that knowing anything about finances of stocks that trade whoever. I dead sound. Risk the only evidence says the only differences. When we had the housing bubble. So let me give your metaphor so Chris you bought a house up for 500 grand in Las Vegas just before the bubble popped. You you took out a 300000 dollar mortgage now that house is worth 200 grand jury upside down and house right when you have a house. There's no collateral behind the student loan. That's the danger last year the federal government made 68. Billion dollars on student loan interest. Think about that and he's six well and that's why you're not gonna go away because you know you can't take him he'll never going you don't foresee anything changing. Well first of all think about the lobbying pressure we have we have private colleges are up in arms now because Cuomo even mentioned. Tuition free SUNY schools. Is going to all of a sudden become. Just the norm is ignoring them but I mean really we're not even attempt where he would try to pay China and other because it's just yeah. Aaron you know are you here Ian here like Bernie Sanders you know say for we need for college I mean and tough and Canada we're different colleges as a government and their government schools that's a good question because like right now. I don't know what the war the proper terminology is but I classify my bills into things that can be ultimately ultimately paid zero. Or and then things that will never gonna ever know it'll never not have a full cellphone billion can't pay off the cellphone bill tour to where you won't get one every month right to prepare forever short but you know I'm talking. About nothing so maybe that student loan will be in that category know what happens when you hit an age where you still them pay off your lungs and and digger you can assure you know you you passed away all the ticket on your sources and I and it's somebody goes on for if there are a lot of the East Coast idea Democrat senator. You know ERU students can't coast on frozen moisture from the students can only take your sons or daughters can only take 129000 dollars a year over four years after that they need to goes OK so I'm dad. My parents I asked. They take out your state. Tell you that awful awful awful awful away from everything he's Fortier is just like the analogy I use is this like owning iris money. If you are a few bad experience yeah right after the IRS money. They can they have the right to Gordon sheet they can take every cent a year I mean you work on a plane with a they can take every senior parity there in front or your creditors so Chris as a car payment. Mortgage and he owes us money airs jumps right and everybody in fact they take it right on his paycheck before even sees itself. That's the that's is that when people are so it's just that federal loans with private as well. Dottie federal law only a but but I don't have not collateralized either I mean Al Gore if you just as any creditor well. I mean. So yeah so the solution here is what is the solution and there some Asian and I finally as a solution Wednesday and then your feet I mean in our lifetime because. Personally I got huge amounts of pressure you know use senator earlier about your aspiration for children. Nobody has kids sing and I are gonna college. Yeah yeah I would like why are as well so and so effective because we should be able. We're educators were pencils or educate me luncheon you know there's ways to do this without destroying it like financially and guess what if you go into this naively thinking. I'm gonna do my neighbors do you know sandy and I talked earlier nobody at a popular party says. You know I'm I'm on unbelievably burden my student would you in the country's number as my kids don't ill Harvard Princeton whatever yeah nobody talks about how much it cost. It's it's. Dirt has simply retire how is our flow generation. Chris how do you any your friends how are they supposed to retire when this this debt will never viewing. We will go to you know millennial gathering point Mike I started off the conversation I think there's anybody here. Not have a student loan not a hand went up these are people twenties. Number one complaint I hear about ready to socializing with people my my age I'm lucky enough to. I was looking at the drop out of high school sympathetic or let's say that it's alarming when OK you are in the age group of your friendship tested on mice made it becomes alarming way and my friends and and I don't know about your friends palm that they still have the student loans and now they're about to vote to embark on their kids. Well listen to this I had to I had a client and it actually is under three doors up. I won't tell you what to professions however these are 249. Year old people. She went to the University of Pennsylvania Wharton school of Morton schools of north at best MBA program we can have. They don't if he's at he's professional in the medical field they have 500000 dollars and student loans or mourn their loan 3900 dollars a month. They're 49 years old a member beyond that. And I said how did this happen. He Somalia ars from buffalo I could've gone UB instead went to toss she said that you know she's working. Not knock and his vision where does that tax repair she's got. 220000. Dollars in student that he's. I know it's just looking at right now at this points in the conversation. I feel defeat. We he consider. A focus of this is too. Make everyone feel like yeah can achieve financial independence it's time to get return on investment area dedicated time to this pod catcher what is the one saying. The our ally. You can give these people that it. Don't go to somebody who's expert in this and Annika asked them to come up with a strategy to refine into loans. But previous to that if your if your kids early enough like yours are Cindy. You've got to use their right strategy to get them to college you can't let. Young people go to the school owner dreams one of the things we who year old time as I really worked hard and high school so I should be able to go to my dream school. Kids can't okay can assimilate that. So refinance finance. If your kids are about to go. Threw it high schooler made sure you match you are talking early finally you you referred to it earlier and I missed podcast is. A life insurance policy on laurels and huge is probably the biggest takeaways that I have dollar. A month and it's like oh man don't you know oh we hate we we have not had that happened since we had this scenario backed him. 06 I think it happened this is New Jersey couple we know tell us. Says at all not out but. We do we protect ourselves we get us. 100% protective manly. And it is seven figures also Alex thank you so much for coming in calorie assistance plus college assistance in class dot cap. Thank you so much.