The State of Student Loans - Expert Edition Episode 5

Our student loan expert Stanley Tate joins us to talk about what’s going with student loans in this new year. This is an unprecedented time in regards to loan repayment options. There are going to be some massive changes come summer. Check out this episode to learn more about what’s in store. 

About our expert:

Here are the stats. Tate has been in the game 8+ years fixing student loan problems. He has managed $1B in debt for clients, negotiated $30M in student loan settlements with an extra $700 million in projected loan forgiveness. 

He has helped hundreds of people from all walks of life — bus drivers, nurses, teachers, lawyers, doctors, CEOs, accountants, and so on—get out of default, qualify for loan forgiveness, access affordable monthly payments, negotiate settlements, stop garnishments, and discharge student loans in bankruptcy. 

Check him out at https://www.tateesq.com/

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TRANSCRIPT:

[00:00:00] Naseema: All right. Happy New Year to everyone. Welcome back to the Financial Intentional Podcast. I'm super dues to be joined by Mr. Stanley, ta, student loan expert, our student loan expert. And first of all, what's up, Stanley?

[00:00:18] Stanley: Y'all chilling. What's good with you? How.

[00:00:22] Naseema: I'm doing great. I should say Sail Tate esquire and put some respect on his name.

[00:00:26] Stanley: I work for it, but I don't hold it out like that. I see people that do this kinda crazy.

[00:00:30] Naseema: I see it all the time. ,

[00:00:33] Stanley: yo I never lead or follow up with that joint. People do it for me. Cause always felt like hella weird cause mostly because I was in. If you're out and about, gathering and whatnot, people would like to lead with their accomplishments instead of their value as a human being.

And so I'd rather start there and let everything else fill in the blanks. That ain't my job, .

[00:00:55] Naseema: I heard that. And that is super important. Yes, people do like to lead with their title, which is neither here nor there. But I do wanna put respect on your name because I just need people to understand who.

Listening to. But anyway, can you give us a little bit of background on what you do in the student loan space?

[00:01:13] Stanley: Yeah. So by nature, by trade, I'm a lawyer, right? But I happen to be someone that focus specifically on student loans and student loan debt for borrowers. It's, you don't need a lawyer, is what I tell people.

But you need someone that really understands these complex things. Although I'm a lawyer, think of me more as like a student loan coach, student owner, advisor, someone that is by your side to say, okay, do this, do that. Don't do any of that, and put you in the best position possible so you can go out and live your dreams and do everything you're trying to accomplish.

Even if you owe a hundred, 200, 300, or even a million, like some of my clients do, like whatever, we can get it done. That ain't no. .

[00:01:55] Naseema: Yeah. I love it. I like that you said you're a coach. It makes it less intimidating. People are thinking about working

[00:02:02] Stanley: with you. Yeah. I, it's it is one, it's a scary thing.

Anyway, it's like dealing with student loans and they're like, oh man, do I really need a lawyer? And I'm like, nah, you don't need a lawyer. You need someone that knows what the hell they're. The added advantage of having this law degree thing behind me is I got this whole ass license that I worked hard as hell to get that I have no desire to lose.

And so I put that on the line. Every time I say I'm gonna do something for someone I have to follow on that, or I put my license in jeopardy and I like nice shit. So I wanna make sure I don't put that in jeopardy so I can continue to acquire. Nice.

[00:02:38] Naseema: We know you like nine step . I'm here for it. I'm here for it.

But I really wanted to talk about like the current state of student loans because this is a very interesting time in student loan history. We are now going into what year three of loans affirming these loan forgiveness battles, all this kind of stuff that's going on. And a lot of people are just in limbo because again, this is undocumented, unprecedented, like things that are happening.

So I just kinda wanna bring to everybody up to speed on what's going on now in 2020.

[00:03:16] Stanley: Yeah, so huge reset of everything, right? For most people with federal student loans, right? Which is the vast majority of people have federal student loans. I should say the vast majority of people who have student loans that have federal student, Most of them, they've had their loans on pause for the last two plus years.

There have been some people who've had to keep paying on their loans throughout the pandemic, and they're either going have federal loans that are made under older loan program that don't get the same benefits. These are people who went to school before 2000. 12 for the most part. And then you have people who have private student loans and they also didn't qualify for the now.

That's the big confusion here is like just kind get that in your mind. If your loans been everything I'm about to say to you later on, for the most part, you're gonna benefit from. But if you had to keep paying on your loans throughout the pandemic, then you may need to do something. To qualify for some of these relief programs we're gonna talk about.

Cause you don't automatically qualify or you may not qualify at all, but for privacy loans, alright, so that's the framework. We got three loans. We got the ones with the government. We got the ones that's kinda like the government, but not really with them. And then we got these privacy loans. We ain't gonna talk shit about privacy loans right now.

Let's just focus on these two groups. Alright, so forgiveness, big one. Biden says, I'm gonna wipe out $10,000 for people. 20 crime. Who said it before? Midterms. Boom. It gets challenged now it's on hold. Supreme Court has it. They are doing hearings later in February. We'll get a decision sometime this summer is probably what we're looking at.

One way or the other, you're either gonna get it or you ain't. I don't know what's gonna happen. Legal experts say, we're probably not gonna get it. Just looking at the composition of the court. That said, if you don't get that forgiveness, for many people, it's not gonna make a fundamental difference. For a lot of people who owe 10,000, that's what they need.

They're gonna be crushed. They're gonna be, oh, I could have been done. I dunno what to tell you there. But during that time, while we're waiting to find out what's going on with that forgiveness program, the Department of Education, they, or the president, he extended the pause on payments until at least a summer, really.

So we're gonna continue with another six months or so. No payments, no interest on department owned loans, right? Who? That's a huge win because during that time you're not making payments. You're also continuing to get credit towards two other forgiveness programs. There's public service loan forgiveness, and there's income driven repayment, forgiveness.

Now, public service, everyone's like with that for most part, which is work for the government or nonprofit. The loans get wiped out after 10 years when you make payments. They've done a lot of changes over there. People have gotten a lot of forgiveness under that program. But the more interesting one is this income driven repayment, forgiveness and what we'll refer to as IDR forgiveness.

This is where the government writes off your loans after to five years of paying on your debt. Now, for many of you who've had debt for 20 plus years, you're like, they need to white mine out. It's probably gonna happen under this program, but we have to wait on this review that they're doing to take place.

Now, what is this? Basically, many of you who went to school back in 2000 ish or before, these repayment options didn't exist, where they would forgive your loans after a certain number of years. The government instituted them years later. Many of you enrolled in them, some of you didn't. The government's saying, you know what?

Look, we messed up our fault. We're going to give everyone credit towards this repayment plan. Forgiveness, even if they were never enrolled in this plan at all. We're gonna give you credit towards it, and we're gonna count your payments you made. We're gonna count the time spent in forbearance. We're gonna count the time spent in deferments and we're gonna count all those up.

And if they hit two 40 or more payments, your loans are at the stage to be wiped out potentially. And two 40 payments, that's 20 years. If you only borrowed loans for undergraduate educat. If you borrow loans for grad school, even if it was just one loan, you're looking at 25 years or 300 monthly payments, so you're gonna get credit for every payment you made, no matter what plan you were in.

You're gonna get credit for your time spent in forbearance, and you'll get some credit for time spent in deferment. They're gonna finish all of this review stuff by the end of the summer, supposedly. That's gonna have some people right there on the cusp of getting their forgiven or gonna have some people that already gonna get their, this program's, these things that we haven't talked about.

Cause everybody's caught in's cancellation. Oh my god, this, oh my god. Huge opportu. This larger opportunity is waiting

[00:08:05] Naseema: so I like, By the end of the summer, it sounds like a lot of people are going have their loans forgiven, so we're gonna see a lot of people saying, okay Finally it's done without, that's without having this Biden loan forgiveness

[00:08:20] Stanley: program. Yeah, exactly. Cause it has nothing. Yeah, it has nothing to do with it.

Biden's Cancelation is one thing over here that's small potatoes for a lot of people, like . Yeah. Great. You went to like cosmetology school or whatever. You owe 10,000. Your loans are gonna be written off if that ever gets pass. , but for the people who've been battling debt for two decades, plus this IDR forgiveness is the much bigger opportunity that has the capacity to wipe out your entire student loan balance or push you much closer to getting your loans forgiven under that program the previously were.

Cause again, you're getting retroactive credit even if you were never in one of those income driven repayment plan. .

[00:09:05] Naseema: But the key is that people have to wait until the end of the summer because the, all these loans are under review right now.

[00:09:12] Stanley: Yeah. Cause the de the department, the president and the Department of Education announced a bunch of stuff over the past year.

It ain't like they increased their team to make all these things happen. So like they announced them and cool, but they still have to implement them. And there's 43 million borrowers they have to deal with. So like order of priority has been public service, loan forgiveness. Let's get those wiped out.

Then it was, okay, while we're working on those, let's get this 10 to 20,000. Because if we can get those people off our books that we're, we know are gonna be completely wiped out, that frees up even more before we get to this last review, which is going to be the one that's really transformative. The problem is that lawsuit happened now at cancellation on hold.

So the government said, okay, cool. Let's finish up the public service forgiveness stuff first. Then we'll start working on the review for everyone else, and it's before we get finished, we're they're looking at accounts or so I think we just need to chill out and for many of. What's the harm? Yo, it's like another six more months of waiting.

You've been waiting three and a half years and you are getting something you otherwise wouldn't have gotten. But for the pandemic

[00:10:28] Naseema: so like I know that I have seen people under public service loan forgiveness, actually, like they're emailing me like we've gotten forgiven. Like they've gotten, my friend got a hundred something plus in loans forgiven already. So are you starting to see more and more of that too, like when did public service loan forgiveness, first start isn't this kind of like when most people start, are starting to qualify like these last couple of years?

[00:10:53] Stanley: So the publisher, Sloan Forgiveness program. October 1st, 2007. So the fir first people that would've been eligible for forgiveness would've been October, 2017.

But the problem was the rules were really like strict. You had to have the right type of loan being the right repayment plan, pay on time, yada, yada, yada. There was a problem with the student loan services where people were getting bad information and there were some people who just assumed, Hey, look, I work for the government or nonprofit, don't get my loans wipe.

So there were a bunch of people who didn't get their loans forgiven. Very few people actually got their loans forgiven until the government changed the rules during the pandemic to say, you know what? No matter what type of loan you have, no matter what payment you were in, we're gonna give you credit towards public service loan forgiveness.

Now, that waiver opportunity ended on Halloween, but they're still processing that paperwork and there have. Thousands of people have been getting their loans forgiven. I just had a bunch of my clients, they got their debt wiped out over Christmas, right before the new year. Kind of department does it as stages.

They have what's called a direct to discharge list, and so they, like every week or so, there's like a new batch of people that are coming along. And I think the tally today is like 36 billion of student loan debt has been forgiven under that program, and much of that has just been in the last six months.

And so for those of you who have applied for it, it's coming. It just takes. I've had some clients get it done in four months. I've had some clients get it done in a year, and it really comes down to the paperwork you've generated over time, like if you had already been applying for it and they have record of your employment, it's gonna be a little bit faster for you if you ain't find out about it until right before the deadline and that's the first time you turned in everything, it's gonna be a little bit slower for you.

I'm seeing the timeline of about four to six months on average for the vast majority of my clients. All

[00:12:55] Naseema: I think that's the perfect holiday gift for a lot of people. . I wish I had that gift. I personally just hate off my loans. I feel like that was one of my biggest money mistakes.

Cause I was on public service loan forgiveness and I was just like, I'm tired of messing with these people, so I just hated off. And if I just waited, I could have gotten.

[00:13:13] Stanley: Yeah. But I think it's, that's the hard part though, is separating out the emotional kind of decision making that goes into it.

Because like, how do you put a price on wellness, right? Yeah, you put a price on it, you paid off your student loans. The fact that you ain't been thinking about 'em and it's taking up space in your mind. For many people, it's you know what? It's worth it. I would, I could have done that. And other people, they're like, you know what?

They're gonna forgive these loans. All I gotta do is follow these rules. They learn to look at it like it's monopoly money. It's not real. I'll just wait. And there's no right or wrong answer there. It's there's the financially, like here are the numbers, but how do you weigh out the emotional component of how it makes you feel?

And that's where it gets tricky. You have to do what's in your best interest. So for you, you did what's best for you. You could have waited, but think about like how much better you may feel over these last several years when you didn't have the debt.

I

[00:14:10] Naseema: know I definitely do not miss dealing with those loan servicers, and that alone gave me so much peace of mind.

Do you have like general rules for people to pay off their student loans, . I've heard if your student loans are less than one year of your annual salary, then like less than your annual salary. You should just go ahead and just aggressively attack them. And then if you are like looking at loans like in the six figures, you should try to seek out somebody to help you with your loans.

[00:14:40] Stanley: Yeah, my general framework and again, just generally cause everything kind of matters is that if you owe more than like 1.25, like it's a 1.25 to one ratio of what you owe versus what you bring in a year. So if you bring in a hundred thousand a year, you owe 125,000. You gotta have to weigh.

Is it better for me to pay as little as possible and get my loans forgiven in the long run? Or do I try to aggressively pay this off? And that's like the general starting point I go into it with, because many of us who graduated like in the mid two thousands, whatever, You didn't really start getting into your real bread until, maybe the last 5, 6, 7, 8 years.

We talking a whole decade plus after you left school and during that time you had to prioritize savings and all these other things. And so you may be halfway on your way towards repayment plan forgiveness, and it makes no sense for you to attack your debt even if you have a one-to-one ratio, cause you're about to get the loans wiped out.

10 years possibly. Just pay it. Find out, okay, how much will I pay over the next decade? Can I tolerate those payments and can I put that money towards other things? And I come into it. That framework is just okay, what's in your best interest at this stage? And understanding that your plan may shift over time as your resources change and student loans.

Thankfully, federal student loans, I should say. They're the most flexible debt you have when you think about it. Your mortgage, they don't let you change your payment up. It is what it is, right? You may be able to refinance, you may be able to postpone one or two payments. They're not let gonna let you put it on hold for a whole year.

And if your finances fall apart, they don't care. They want their money. Same thing with a car loan. Federal student loans, on the other hand, they allow you as your financial situation changes up or down, you can adjust a payment to fit your. The cost of that is you may end up with a lot more interest than you originally borrowed because you prioritized other things in your life at that time.

No judgment one way or the other because we gotta make it, I didn't have no home, like I couldn't go back and stay with my parents after I graduated college and concentrate on paying down debt, which is what in like these business insider stories. They'd be like, oh, this person paid off 200,000 in four.

You look into it, their kinda resources were unparalleled to anyone else. So like for the vast majority of people, they're like, yo, I graduated at find a crib, atte Furniture, ATT car. And we ain't even talking about like when you take that one vacation to the Dominican Republic on your Groupon and now you end up trying to upgrade cause that bed was trash.

Like we don't even talk about all these other luxurious expenses. You kinda layer in because you feel like you need to reward yourself for the work you've. So what's the general framework? If you owe more than what you borrowed, we need to look into forgiveness. However, if you've been in repayment for several years, we may still wanna hold off on paying it back and see where you stand with this forgiveness.

Now, privacy loans, we struggle with those as a whole nother conversation.

[00:17:53] Naseema: And I was gonna ask you about that too, because a lot of times people are like should I just go ahead and consolidate? Refinance my loans into a private student loan because the interest rates are lower. But when you refinance into a private student loan, what are some things that you're giving.

[00:18:12] Stanley: Yeah. So when, if you have a federal loan that you're refinancing with a private lender, you're gonna lose these income driven repayment options. So if your income changes due to job loss, sickness, whatever, your private lender's not going to be as flexible working with you, whereas with the government say, okay, cool, you're unemployed, your payment's gonna be zero, you're protected.

Your private lender, they may offer you a forbearance or interest only payments, but they're only gonna do it for a short period of time. You may get six months at a time, maybe a year at most. At some point that bill is going be going to come due and they're gonna say, you need to pay us X amount of dollars per month and ain't nothing we can do about you.

I can't afford it. And then it just is what it is. And now your credit's gonna take a hit and things like that. That's just the nature of it. So you're gonna loses access to repayment plans that are flexible. You're also gonna loses access to forgiveness. So if you work for the government or you work at a hospital that's qualified for public service, you have to ask yourself, does it make more sense to keep with the government and just ride out?

Sorry, keep with the federal government for your student loans and just ride that out until it gets forgiven. Or do I really care about the interest? And that's such a huge thing because like we're applying. The rules we use for our mortgage, our car notes, and our credit cards to student loans. As far as, oh, I should pay off the loans with the highest amount of debt, the interest rate, whatever.

I get it. But I think you need to look at your student loans a lot different and be more critical about, okay, with federal loans, how close am I on getting my loans forgiven with private? If I refinance with a private lender, am I confident that I will have job security that'll allow me to aggressively pay off this?

Under these terms, understanding they're going to be unwilling to work with me as the federal government does.

[00:19:55] Naseema: I think that's great advice. Lastly, I wanna ask like, why are, when should somebody seek out help when addressing their student loans?

[00:20:06] Stanley: I think if, let's break it down in groups. If you're someone who has student loans and you are just trying to figure out how to navigate your life moving forward, think about it as part of your overall financial planning. I think it makes sense to sit down with a professional kinda walk. You can say, oh, you can get free advice from the student loan service and everything like that.

These are the same people where the government's trying to correct the things that they messed up on, and to be fair, they know some things, but a lot of times you're getting a rep who is not as well versed in the rules and understanding of how these things work, not just with student loans, but also how your other stuff works financially in your life.

And so it makes sense if you are someone who has significant amount of. That is looking to get their holistic finances in order to talk with a professional. It's worth it to save you, whatever. Now you can work with me, you can work with whoever. Just get someone that you trust from that standpoint.

The second group of people are those who are entertaining going back to school or your parents that you are a parent that's borrowing loans for your child, or your child may be borrowing loans. It's helpful to have this conversation on the back end with someone to talk. Real life scenarios because still to this day we get plenty of people that are like, yo, I just signed what they put in front of me as if like we, we don't have two decades of experience knowing, ooh, this is not the thing to do.

And so I see a lot of parents who are digging themselves into financial holes, taking out loans for the child, expecting their child to contribute on these. And then it don't work out like that because it never works out like that. There's always a period where someone is trying to find themselves in this world and they ain't got the finances to pay these loans because they trying to figure shit out.

And you don't wanna be that person that can't retire or feel like you can't retire cause you are way more on student debt. I got plenty of parents that owe 300, 400,000 for their child's loans on top of the hundred they owe for their loans. And you be like, that's crazy. But it's also like this is our system and how it works.

And I think we need, there are a lot of benefits to this system. There are a lot of trade, like negatives about it. But if we're operating with smart, we put ourselves in the best position possible to be able to do all those things. Take out the two loans, travel, buy a house, save for retirement. You can do all those things, but it does take.

[00:22:38] Naseema: So if someone wants to work directly with you, how can they get in contact with

[00:22:43] Stanley: you? Ah, man, that's easy. Just go to tate esq.com, tt eq.com, schedule a call or website. We'll go ahead and get the general information through, and then if I feel like it makes sense to have a further conversation and put you in the best position, develop a strategy, I'll walk you through that process as.

I

[00:23:02] Naseema: was on your website navigating back and forth. Anyway, ,

[00:23:08] Stanley: Hey man, we put some work into that website. That website looked dope, so

[00:23:12] Naseema: I love it. I feel like everything you do is like top tier, so you know, I can't complain. Thank, I'll never.

[00:23:21] Stanley: It is one of those things being like one, a black business person in this particular field.

It is just me for the most part. Yeah, there's a couple other people that say they do it, but not on this level. And I try to make sure, like we put out something that says this person cares about what they're doing.

[00:23:42] Naseema: Yeah, I can tell it looks lovely, . So make sure you guys just check out family's websites.

Hate sq if you wanna work with him, if you think he's a good fit if that's what you need. I just think that. , it's irresponsible right now, especially if you don't have a plan around your student loan debt to not have a plan around your student loan debt. Because like you said, I feel like a lot of people use this debt to hold them back in life unnecessarily.

But if you can create a plan, I feel like it frees you up. To live the life that you really need, really wanna live in and really deserve to live. And I, but that, like in general, like personal finance, finances in general, like creating a plan really frees you up to live your life by intention. ,

[00:24:30] Stanley: I, I hundred percent agree with that especially because, I see so many people, they hold on to old rules in their brain, old thinking, even though new information is coming out that could actually benefit them.

And they're doing themselves a disservice I guess. Some people are like, oh, I can't get forgiveness, I can't get a lower payment. I'm just gonna payments. And I look and I'm like, yo, I could save you $15,000 a year if you just do this and your loans are gonna be forgiven. And they have so much mistrust.

They have so much hurt. And there really is like student loan PTs, if we're being real about it, because of those bad interactions with the servicers, the bills are, And I just tell people, yo, if you just listen, I got it. I had this call last week with this woman in Ohio. When I say she couldn't hear me until I cussed her out, I was like, yo, would you just shut up for a second?

I promise. And that snapped in her brain. And then she was like, okay. And I hate doing that, but sometimes we have to pierce through. What's that old information so they can actually hear you and put themselves in the best position possible to win? Cause I promise you, I got people that owe over half million dollars in student loan debt that make 60,000 a year, and they still, when I'm bought a house, they still are able to live every day and know what I tell 'em.

Learn to ignore the balance. Concentrate on the process. We will get the debt forgiven. We just need to follow the process. Wow.

[00:26:01] Naseema: I love that. And I just don't, I wanna like really emphasize the fact that you're talking about , you're saving people thousands and thousands of dollars in their student loan debt.

But I also wanna emphasize the fact that student loan debt, just like any other debt, is super unique to who you are. So personal finance is personal, and I think that a lot of times people wanna listen to these TikTok experts and these people that generalize things about student loans. And it's specific depending on like how you file your taxes, what state you live in, where you.

So I think like it's worthwhile to get in front of someone who actually knows this information, knows the up to date information, because it's always changing. So I always recommend somebody work with someone unless you've only got a couple thousand dollars student loans and you just need to tag that.

Stop playing games.

[00:26:55] Stanley: I promise you I get calls like that. They, people call me about 2000 and I'm like, how much you make a year? They'd be like a hundred thousand. I'm like, if you don't, shut the hell up talking to me and just pay that off. But those people are the ones that, in my experience, that are actively looking at ways to find the best deal for themselves, and I appreciate that mindset.

Because they're not just putting their head in the sand. They're saying, no, I wanna do this, but I wanna do it in the smartest way possible. And I appreciate it, but also it's a very easy phone call, girl, if you wanna just pay off that and stop talking to me, .

[00:27:30] Naseema: But then I do understand the trauma of student loans, especially if you have $500,000 in student loans and you just being so overwhelmed by it that you just don't know what to do.

[00:27:40] Stanley: Definitely.

[00:27:42] Naseema: All right, so you guys know what to do. Make sure you reach out to Stanley, make sure he goes to his website. Tate eq if you wanna seek his help, but he is our student. Expert here on the Financially Intentional Podcast. And Stanley, thank you so much for your time. So many gems dropped, so I hope that people get value and we'll see you back soon.

[00:28:09] Stanley: All right. Thank you so much. I appreciate you .

Hey there I’m Naseema

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