All About Public Service Loan Forgiveness (PSLF) with Nika Booth

Published Sep 30, 2022, 7:00 AM

As the deadline for the Public Service Loan Forgiveness (PSLF) Waiver draws near, we offer you an important episode breaking down the myths, steps, and ways to get your application approved. If you remotely think you might be able to benefit from this or are on PSLF and there are payments you donโ€™t think qualify, you have to listen to this episode. Weโ€™ll get to hear straight from Nika who is working within that program and is in her debt payoff journey, a comprehensive explanation of PSLF and the things we need to be aware of. 

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Episode to all about Public Service Loan Forgiveness with Nika Booth. Welcome to the Frugal Friends podcast, where you'll learn to save money, embrace simplicity rights, and liver with your life. Here your host Jen and Jill m m mmm. Welcome to the Frugal Friends podcast. My name is Jen, my name is Jill, And today we are really honing in and focusing on p s LF Public Service Loan Forgiveness because there is a deadline coming up on October one, and so many more people qualify for PSLF than have in the past that may even know about it. So if you even remotely think you might be able to benefit from this, or are on PSLF or there and there are payments that you don't think qualify, you've got to listen to this episode. If you have friends in public service, you've gotta listen. You've got to share. This breaks down a lot of myths, a lot of steps ways to get approved. It's just a really important episode on PSLF, and Nka knows all about it. She herself is working within that program and is in her own debt payoff journey, so we get to hear straight from her. An explanation on it the things that we need to be aware of. So if you're all confused by this but you think you might be eligible, let's do it. Let's talk about it. And if you're a teacher, hang out with us until like the very end end and end of the episode, because Naka shared more off the recording that will summarize for you absolutely. But first, this episode is brought to you by hearing your bill of the week. So we air every bill of the week we get, and that's a lot, and even the bill in our early days, remember this Jill that just went podis love that one. Because of that, it can take a little while to hear yours, sometimes six months. But if you don't want to wait, we now have a way for you to skip the line by throwing money at the problem. I mean taking us out to coffee. You don't even have to be there for the coffee. Actually probably won't be there for the coffee. But by joining our Patreon for five dollars a month, you get priority placement for your bill of the week, and not only that, you also get a bonus member episode every month where you ask us the questions like our first question that we got, what are Jill's favorite frugal smoothie recipes. Can't wait to talk about that one, and you'll get a free Frugal Friends bumper sticker. So if you love Frugal Friends podcast and you want extra perks from the show, then enjoy the fun at Frugal Friends podcast dot com, slash Patreon. It what a cool, fun, low cost way of getting more if you want more, absolutely and who doesn't always want more? Aside the fact from we're we're trying to teach you contentment and to reject the notion that more is better, but here more actually is better. So if you are not super familiar with PSLF, we're not going to go into the nuts and bolts of it. So we have a few other episodes that talk about that. We've got episode thirteen, which is how to Save on Student Loans, where we go into a lot of the student loan forgiveness, refinancing, paying off student loans, and then we have episode fifty with Travis Hornsby, and that's about That's the full breadth of public Service loan forgiveness as it has been for the last several years. Um. In the last year and a half, there have been some waivers that have updated it, and that is what we're diving into in this episode. So definitely episode thirteen and fifty those are good to to listen to after this if you want more comprehensive knowledge. But with Nika, we're talking about the really pertinent updates that expire October thirty first. And there is literally no better person to talk about than than Nika Booth. She is an award winning debt expert, personal finance content creator. She's fire on Instagram, and she's a founder of Debt Free Going to Be. You can find her on Instagram at debt Free Going to Be. So she is currently paying off her student loans. She has already paid off eighty thousand dollars of credit card and UM tax debt and now she is working on getting her student loans forgiven because she has worked um for the federal government for twelve years. So she's already worked so hard to pay off so much debt as a single woman, and now she's helping others to get as much loan forgiveness as possible. And through her great research, we hope you will benefit. Nika's awesome Let's learn more from her. Nika Welcome back to the frugal friends. Let's up. Thank you for having me. We are so thrilled to be chatting with you. You brought so much to the table and to our listeners last time, so we couldn't not have you back again, especially to talk about such an important topic that can be so confusing and convoluted for so many And I think you can break down these concepts in a really relatable way. So excited to get into it, Let's do it. So let's start. Let's start there with the complicated complex part of it. Can you speak to this, like, in your estimation, how complex is student loan debt as far as terms costs, rates, program rules, current status is? Like? How complex? Would you say? Student loan debt is extremely? Like it's absolutely ridiculous. UM. I was in a coaching session with one of my clients not long ago, UM who is pursuing the borrower defensive repayment program for defarted students. UM who's been misrepresentative, misrepresented UM by their colleges and universities. And there are fourteen different repayment plans. Fourteen that's a lot. That's just with repayment plans exactly. UM, So I understand just with that alone, why there's so much confusion um around student loans and around the updates and the announcements that continue to come out seemingly every week or every month about student loans, and why people are so computed and it's hard to tell, Well, do I need to pay attention to the to this, does this call up you know? Does this apply to me? Does this not apply to me? Or does it apply to someone that I know? You know? Yeah, I mean there are new things coming up every year, and I think with the pandemic, it just it kind of really messed I feel like it messed things up. And I've been so out of writing about student loans for such a long time that I feel like I know nothing now. So what are what are the updates to specifically? So specifically we want to talk about Public Service Loan forgiveness because that's the one with the has like a pending deadline. UM, So what are the updates to PSLF that people should be aware of right now? Um? And how do people know if those updates affect them? Absolutely? So, the updates related to PSLF are outlined in what's called a PSLF limited waiver. So last year in October, the Department of Education announced this once in a lifetime limited opportunity to basically help propel or push people towards PSLF like actually getting their loans forgiven. And this is because in previous years, like the approval rate which just absolutely ridiculous, it was anywhere between one and two of people who actually qualified for PSLF being denied. So the department is removing the red tape. They're offering these kind of like retroactive credits towards the payment requirement for PSL left. So they are allowing prior periods of repayment, whether you made a payment or not, whether and so what that means if your payment was zero, including during the pandemic, right not making a payment counts toward the payment require and it's for PSLF. They're also allowing you to get credit if you made a lump some payment, a partial payment for the payment was even late. So under the regular rules of PSLF, you have to make a payment, you have to make your minimum monthly payment within fifteen days of your due date. Anytime you fall out of those fifteen days, even though you make that payment and you satisfy the minimum payment that's due it doesn't qualify for PSLF, which is just completely ridiculous. Um. And so they're allowing late payments so to speak, to apply towards the payment count. In addition to that, they're also allowing periods of forbearance, which is a game changer. And this wasn't originally included in the PSLF waiver. This was something that came out later actually, I think it came out this year. Um. But they are allowing a minimum of twelve months in forbearance to count towards the payment requirement. In addition up to three months, so I mean, I'm sorry, no more than thirty six months. So it's a twelve minute, twelve month minimum, no more than three year maximum, Okay. In addition to that, they're also allowing periods of deferment, any deferment military deferment, but not in school deferment to also count towards the payment requirement for PSLF. Wow, it sounds like that's big. It's huge, absolutely absolutely. And there's one more thing. Let's say you let's say you're still working or you're no longer working in public service, but you had years in public service you were denied for PSLF. They're re reviewing and almost automatically giving people forget this for their time spent, even if you can, even if you made payment that qualify for PSLF but consolidated, they're also allowing you to get payment credit for at And it's crazy because shortly after that announcement was made in October of last year, I had a coworker who said, all right, I'm gonna put my payment in. He had been in federal service for over ten years. This man receiving checks from the Department of Treasury, just money back as a refund for over payment with you know, because he met the employer. The employer, you know, qualification. That's the one thing that hasn't changed the waiver though you still have to have employment um for a public service organization under PSLFT. Yeah, and and the ten year mark is still and it's yeah, it's still absolutely yeah. It has to be one payments, but they don't have to be consecutive payment, so it could be more than ten years for people. So if somebody has left one of these, they they find out, oh, previous employment is applicable, then how do they go about getting that? The rified or what if the what if the nonprofit or even our friend worked at a charter school that no longer longer exists anymore, Like, is there a way for them to get credit for that? Yeah, And that's the tricky part um. So I haven't had that experience or dealt with anyone who couldn't get a signature. But what I have seen in my research is that you can actually certify your own employment, and they just think yes, so and so you would do the same thing. So you would utilize the form it's called like the public it's called PSLF or Temporary Expanded PSLF. UH. It's the same application or the form that you would use to certify your employment. So you would just follow the steps along the application. You would you know, uh, input your own personal information and then your dates of employment, and then you would actually sign it both as the borrower and the person who certify. Now, I'm not saying that everyone should be going out here to certify, you know, being their own qualifying employer on their certification form. But if you find that you can't find a coworker or anyone in your organization to sign, you can sign if you're the say, only person who is available to actually certify your employment. But be prepared because the Department of Education will ask for additional information or documentation to help verify that this was something that took place. Yeah, surely. And if you have like a tax return with that officer too, Yeah, that's fantastic. Yeah, that's fantastic to know. And so when are the deadlines for people to fulfill these Um, this new updates yesterday, It's it's October thirty one. It's October thirty one, And I just want people to kind of, you know, maintain their expectations or manage their expectations because there is a lot that is taking place within the Department of Education. They are still moving borrowers from fed Loan, who was once was the only servicer for PSLF, who is now they are now moving borrowers to Mohela. The last little bit, because I'm in that group, you know, there's a lot going on, and there are other changes outside of PSLF that are taking place. So when you submit your paperwork before October thirty one, UM, it's going to take some time for you to receive that initial letter that says that they've received your information, and even more time before you actually get the next letter that talks about Um, these are your payment counts to date, you know, in reminding you to make sure you certify your employment on a yearly basis so that they can keep counting your payments towards PSLFT. Wow, that's great. What have you seen, Nika regarding some of the most common reasons that people would get rejected for PSLF. Yeah, first and foremost is not actually working for a qualifying employer. So for example, UM, you would think people in public service roles such as doctors or nurses or even law enforcement would automatically qualify for Public Service Loan forgiveness because they're in public service. But it's not the role that qualifies you, it's the organization that qualifies you. So it's possible to be working in public service but be working for a for profit organization, which wouldn't qualify for PSLF. So, unfortunately, I've seen people not utilize the PSLF help tool on stud a dot gov or the the new employer search tool that they have or you can actually search. They've like expanded this database and it's it's way better than what it was in years prior. People aren't using that to help them determine whether or not they qualify for uh, their employer qualifies from PSLF, and they're not asking their employee, hey, what's our tax status? You know, does the I R S consider us to be a not for profit organization? Um? And so that's the number one thing. So people have been submitting applications assuming they qualify, and then they don't and they're getting that rejection letter. The other common eason that I've seen. I've seen a lot of people be so upset about this and it's trivial. But I also understand when you are signing your four there are two places to sign. The person who is certifying your employment, which is usually someone who works at your organization, and then you the bar work have to sign well. As as Jen said, COVID kind of change things right. So a lot of people are remote. There's no going into an office for a lot of people. But the signatures have to be wet signatures, so they have to be actually drawn on. It cannot be tight you know that. You know, you can find these fonts that kind of look like their signatures. You can't string your name together with that font and assume that it's going to be okay. Um, And it can't be like a digital stamp or like a signature certificate. Like a lot of people who work in public service also like work in these organizations where they have digital signatures built into the to their daily work that they do. That is a no go. Uh you will get rejected. And actually I was one who got rejected when I first submitted. When I submitted right after the waiver was announced because I worked for the federal government. We use digital signatures all the time and that they're considered legit. Right, Um, you get to type in this code and everything in order to apply your digital signature, and the privat of education was like absolutely not. So make sure the signature is wet either actually drawn on. You know these days you can take a picture with your camera phone up up you know, to to scan so to speak. Or it can be a drawn on. Um, it can be the signature can be on a piece of paper that's been uploaded and then placed in the signature place. But it just cannot be any type of stant or typed signature. So bizarre. Yeah, that and that is something I would have never thought about, Like, of course, yes, I'm gonna check my organization make sure it's got the right time status I would never think that you could not use a digital signature, would not specially this this year, what has transpired and where we are with technology. But that's super helpful. I could see that being a barrier for people and just all of these things to check off and know and research. And you're certainly breaking it down and helping us understand it more. But like, would you say, it's worth it, Nika, to kind of understand this, to do the thing, to be calling getting wet signatures with the potential of rejection, is it worth it? It's worth it. It's worth it more now than it was before. Like I said that, the approval rate was absolutely grim. This you know, politics aside. You know, every administration has its thing, but this administration has the right people in place to help get borrowers out of student loaned at one way or another. And what we noted up until this point, they're really using existing programs, existing legislature to try to push people closer to forgiveness. So I definitely think it's worth it. Listen, I actually stopped certifying my employment because of how grim their approval rates were. I've been in public service for twelve years now and I am probably a year or less away from having my loans forgiven because of this waiver. It's absolutely worth it, worth it even if you don't. Even if you submit your application and you won't have one D and twenty qualifying payments, that's fine. If you're still in public service and you don't see yourself leaving, take it, then leaving at least anytime soon. Take advantage of this waiver. This waiver has the potential. I mean, it's changing lives. It already has changed lives. So I absolutely think it's worth pursuing this. This might be a silly question or already embedded in what you've said. I don't know much about PSLF store, but if I were a person in year six seven, eight nine of working in public service, are you saying I could go if I had not done any of the paperwork up till that point. Could I go back and verify my employment and do all the paper work now and have the previous six seven, eight nine years count towards the ten requirement? Sure? And the one thing I do want to just point out though, is that in my case, I've had the same employer, so certifying has been easy. I can certify, you know, those twelve years for one employer. But if you've had multiple qualifying employers through whatever time that you've been in public service, you do need a form for each of those employers. Okay, that would be the only kind a wet signature. So you're gonna need to find a facts machine and sure, yeah, I mean, well here's the cool thing. They even have online facts machines now, So they do. I mean they do, like technology is in saying these days, you know, so there's a lot that you can still do without having to physically leave your home, which I couldn't. I mean, talk about a barrier if you actually have to leave your home to get somebody to sign a form and then go to Keikos or something to fact. Yeah, yeah, I don't want my home anymore for what I do. Whenever I need to fact the I r S something I do go Staples just because I don't. I don't trust anything when it comes to the IR facts, the I r S things. Oh, you have to you either mail it or facts to the I r S. Yeah, yeah, I don't trust the mail. Even with the I r S. It's the I r S I don't trust anyways. Okay, So let's let's recap the updates that people should be aware of. So it's the twelve to thirty six months of forbearance. You got minimum twelve months of forbear commultated thirty six months. Okay, deferment is that? Does that have a minimum maximum? Nope? Okay, it's the same. Excuse me, it's the same in max as the forbearance, except for in school deferment. In school deferment does not apply. So that is, if you are let's say you're you have loans already and you're pursuing a graduate degree and your loans are in deferment because you're enrolled in school at least have time. That period of time does not count. Okay, uh. Late payments and are people able to see which payments are late in their loan service or website. So that's the tricky part about Okay, all right, and don't don't forget where you are so that we can come back to to the updates. So for people who have had fed loan or mohela, it will be easier to keep track of your PSLFT progress and those dashboards they actually break down your loan details like most services like Also there's do. But you can also see which payments are qualifying, which payments are eligible, and we can talk about the difference between the two UM. And then what you know when you were in these things like so when you were in forbearance or when you were in deferment, and you can see the type of forbearance and deferment you you were in, and so you can keep track of UM. They've got these progress bars UM that you can see like you can like a great snapshot to be able to see, Okay, out of one hundred and twenty payments, I have one hundred or whatever the case may be. Unfortunately, it's different when those when fed loan or mohila are not your loan service or you're basically waiting on a letter m HM. So like I had Naviyant, So Navant would have to send me a letter and tell me which payments are late. Your letter would not come from Navant. Your letter would come from Public Service Loan for the PSLF owner administrator. So in this case it would be Mohela. Now that's who would get that infant who would give you that information. So it's even more important to do this as soon as possible because you're going to need a letter to absolutely absolutely Now to go back and answer your question, now you may actually should you will be able to see if you pay a payment late, but I don't think if they would capture as PSLF late payment, it would just be your general you know, your general payment. But hopefully everyone was on FED loan anyways because that was the only service or that was the only service, okay, But but not everyone was. Unfortunately they were waiting. They were waiting, and then some of the people are still waiting because not everyone under PSLF went to Mohela unfortunately. Yeah. So ideally, best case scenario world, you were on FED loan, and FED loan should tell you if a payment is you said, eligible or or qualified Okay, Like Jill, we were already talking about how confusing, so like and now they're right, it's complex, and so now they've got these different terms even within the Public Service Loan Forgiveness program. So a qualifying payment is a payment that has been counted towards your uh ON payment requirement. An eligible payment is a payment that can become qualifying like it meets all these other criteria, it was on time or under the under the waiver, it doesn't matter if it was on time or not. And I think I forgot something else, honestly, but I'll come back to that. But what the eligible payment is missing is your qualifying employer certification. Well under that web signature. So under under pslf UM, you know you have to make these qualifying payments UM, but you also have to uh yearly re certify your employment to ensure that you are still working for a qualified employer in order for those payments to count. So oftentimes what borrow walls you will see is that they've got a qualifying payment account of one thing, but an eligible payment account of another. And if they're just waiting to get updated employer information to be able to capt make those ineligible payments qualifying. All right, So we're looking for the word qualified. We're looking for the word qualify. Now, if you have a debt, if you're if you have mohela and within your dashboard you see eligible payments and they're waiting for your employeer certification and you have not submitted this form submitted yesterday yesterday. Can I go back to the other thing that I forgot under the waiver? Yeah, And this is key to because this is something that I get to I was able to benefit from. So under the regular rules of PSLF, you have to be in specific a specific repayment plan. You have to be in an income driven repayment plan and let and if you're not, then again that payment also does not count towards PSLF. Under the waiver, you can be under any repayment plane. So when I was talking about how yeah, exactly, So when I was talking about me not certifying my employment for years because of the repruival rate, I essentially kind of dropped out of PSLF because the repayment plans they that I needed to be in for PSLF, I couldn't afford them. So I had to go to the repayment plan that I could afford, because if if I had to stick with their repayment their repayment plan, my payment was a thousand plus dollars a month. I couldn't afford that at the time, the crazy come driven repayment you think it would be the most affordable exactly, Wow, And I'm sure you are not the only one that had that could not afford to do PSL. O. Absolutely, that's insane. Never thought about that. Yeah, that's what I mean, that's helpful. So take the opportunity. Like I've been talking about this, You've seen it. I've been talking about this at nauseum. Take the opportunity. Get your certification form in by October thirty one. You just never know you at least take I mean, this is basically free, you know. I don't not want to say it's free money or you know, free credit, but essentially it is, especially if you weren't making a payment at all. Yeah, I mean not without costing you something. You're working in public service for ten years making payments, yeah, yeah, yeah, it's crazy. So okay, so we've got the late payments. Now we know even if you weren't in I d R you can still get that. And even if you had it certified employment before, you can now back certify absolutely any other that we've forgotten. The recap. H M. I think I think that's majority of Okay, yeah, I think that's I think that's the majority of it. But that's very comprehensive. I think that's enough to say there's enough changes to it that makes it worth it to at least try to at least try. And the approval rating has gone up so drastically that it is worth trying. It is, and so this is definitely one like, even if you don't have federal student loans, right now, go share this with somebody who might share this on your Facebook, share this everywhere, like save a life, because it is truly life changing. You know, we we've talked about student loans before and you know you've done you've done research. You know, student loans are suffocating, their crippling they have there are people who haven't been able to do things like start a family, by a home. We're it's hire even, um, So you know this has an opportunity, as well as the other changes that are coming to student loans, to have the opportunity to really really give people that that leg up that they need to be able to do regular human things. Yeah, absolutely all right. So I have one more question for you, um, and it's about the new Student Loan Forgiveness Plan. How is that interact with PSLF. Well, it kind of it does, and it doesn't like their independent programs, right, So if you qualify for both, you get both. One's gonna happen sooner than the other for a lot of people. So the ten to twenty dollar forgiveness that was announced in August will probably happen, you know, within the next few months before any PSL left forgiveness. You know, it takes place, especially as the Department of Education rushes to roll out that forgiveness plus close the deadline for the waiver and all then roll out all the other changes. And that don't forget, payments are resuming January one, so the payment pause and the interest waiver expirer on decaset and we know they're resuming January first. There's no ambiguity this time, no and no ambiguity whatsoever. So they are definitely resuming in January. Um So there's gonna be a lot there's gonna be a lot of movement taking place. Um So the forgiveness, the tow K will probably happen first. So it just means that if you know, if you do pursue PSLF and you get public service loan forgiveness, you just may have ten toys less of outstanding balance that needs to be forgiven. That's the only that's the only thing they are truly independent of one another. And this loan forgiveness. Correct me if I'm wrong? Is uh? Still like taxes are forgiven as well, just like PSLF, yes and no. So on a federal standpoint, you will not be taxed, so the I R S will not be coming for your loan forgiveness. They will not be considering this UH loan forgiveness as taxable income. However, there are some states. There are some states that will tax student low forgiveness, any student loan forgiveness, any so PSLF and the student loan. Yeah, and I don't have I don't have that data here. I do have some some resources on my on my Instagram page, but I don't have those resources right here where I can actually say who will and who won't. But I will say that there have been state at least I know we're talking about PSL left, but at least with the other student loan forgiveness plan, they have come out and said that they've changed their tax law and they won't be um imposing a state income tax. So that's good. So hopefully more states, you know, kind of follow suit. So, but this isn't one where you would avoid the ten to twenty forgiveness in order to prefer the PSLF. I think the most UH. I think at the time, Hawaii was probably the state that was going to have the most in tax liability at like a thousand dollars, again a thousand dollars in comparison, and then they've announced that they're not going to tax. So there's that. So just take advantage of all of advantage. Absolutely, And is there a deadline? There is a deadline for the new student loan Forgiveness plan, correct, there is, So there's a couple one's kind of arbitrary, but the application should be available in October. It'll probably be available on the student a Dot of website. UM, so definitely, you know, keep your eye off for that. UM. The deadline to apply for that forgiveness if you have to apply, actually isn't until UM December thirty one, okay forgiveness. The Department of Education is saying forgiveness takes about four to six weeks for it to be reflected in on a borrower's account. So if you want the forgiveness before the end of the year, you should apply by November fifteen, So application comes out in October, apply by November fift if you have if you have to apply by November fift to see it before the end of the year. And then the regular you know deadline for is December, okay, but if you don't need it by the end of the year, then really, any time, any time in next year, okay, fantastic, And any wet signature is needed for that oneure for that one, great to hear. You know what else doesn't need a wet signature. And we'll take this year, next year, in the following year, and beyond digital any time. I don't care what form the week, that's right, it's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you've paid off your mortgage, maybe your car died and you're happy to not have to pay that bill anymore. That's bills, Buffalo bills, Bill Clinton. This is the bill of the week, Nika. Every week we invite our listeners are guests to share with us their bill of the week, and we would love to hear yours. Oh okay, cool. So my bill of the week is a medical bill. So earlier this year, so I have a help savings plan, help stavings account, so earlier this year. I actually had to go to the er because I was having like some serious heart palpitations, Like I was like, am I in't here? Having a heart attack. Who I need to go to the hospital. It's crazy anyway, seeing all that to say, my h s A wasn't funded and I had met my deductible for the year yet so all of a sudden after like I've got a flood of bills from the hospital, from the cardiologist to the residents that met me in the e er like anyway, your hand and I mean sincerely, right, seriously, So I finally pay eat that bill off. I mean it was thousands of dollars. I finally paid that bill off. So that is my bill of the weekend. I will say that I am feeling much better and my heart is under control. This PSLF stuff and the student loan stuff probably isn't doing anything stress. After October thirty one, I think you'll feel a lot better. Absolutely, in the midst of all this other debt. Having paid off this medical bill is such an accomplishment. While don Nica, thank you so much and I'm so glad to hear that you're feeling better. That's so scary. It was stress, stress and caffeine. They were like, nope, you gotta cut them both out. My no to not to cutting out caffeine. Yes, to cutting out. That is a recommendation I can take from the doctor. I guess if you don't have any stress, maybe you don't need caffeine as much. I'm sorry, I've cut down on my stress because I also I get seizures when I'm stressed, and I've cut down on my stress. But I see the coffee in the mound in the air. Listen. As soon as we're done, I'm gonna go make me a nice cup of beak coffee. Trick yourself. Oh, if you are listening, have a bill that you want to submit. If it's about paying off medical bills, not paying medical bills, whatever it is, visit Friends podcast dot com slash bill, leave us your bill, And now it's time for the lightning round round, all right in today's vulnerability segment. I don't know why vulnerability and lightning go together, but we we asked that question every week and we never change it. So what's I love it? There we go, alright, so today we're gonna talk about biggest struggle in paying back student loans, biggest struggle, and Nico, we will we will let you go first as our guest and as the person who's most who's closest to this because you will have the best insight. Mm hmm, you ready, i'm's already. It's the interest. The interest is the biggest struggle. I shared on Instagram not long ago a post it note about how much interest my student loans accrue every single day. And when I tell you this number, you're gonna be like, what, Okay, you ready? Twenty And I think, like fourteen cents every single day? Down. That's not even the part that hurts the most. The part that hurts the most is my minimum monthly payment doesn't cover the interests that accrues, so there's always outstanding interests that then capitalizes and for anyone who doesn't know, capitalized means it's added back on and added onto the principal loan balance, and then it continues to recruit interests day after day after day, so that daily number goes up. That daily number essentially goes up. Yep, this is so exploitive. I can't. This is why I had that before. When I was when I was just paying the minimum before we got married, so I could pay for the wedding, and then we then we focus on paying off the student loans. I was paying the minimum it did not cover the interest. Gosh, I think the I think the minimum payment because I was making so little, was like thirty four dollars a month. That's what I was like, that's maybe a week of interest. Yeah, they do that um intentionally. That's not an accident because no other financial product will let you do that. Correct. This is the only financial product, financial loan product where this occurs. Now, I will say kudos again to the changes that are coming to student loans. Part of the new rule that's going to be implemented in July of next year is actually going to limit interest capitalization events. So if you come in and out of forbearance, that's typically when your interest is capitalized or uh, once you come out of school, They're going to minimize that I'm out. So that is also going to be another game changer that's going to help people tackle their student loan principle faster and more effectively than being you know, basically covered and suffocating in all of this interest where your payment only knocks off a dollar or some change and some change off of your prince every time you make a patent. Yeah, and unfortunately that's thanks to the exploitative practices of former loan servicers that would encourage people to go into forbearance and deferment to increase the life life cycle of that person's debt. And it's like keeping them as a customer since they were very much profit over people. Absolutely, yeah, so but thankfully it's it's changing so future borrowers don't have to go through that. But yeah, it was very exploitative and it's things where you're like, of course I won't take out a payday loan. I know that that's bad financial choice, while the same practices are being like taken out on are like normal young people. So yeah, really looking forward to change in the student loan space for sure. Yeah yeah, and thanks for letting us know what's available to us in the mid stuff this overwhelmed and how injustice it's so angering. Yeah, okay, you go. My biggest struggle was patience, like my own self being patient in the process. I felt once I felt the weight of it and was making efforts to pay it back, I felt the weight of it and I just wanted it gone. I think many people can can relate to that, and even hearing Uniqua share about the interest, it just it it's so heavy and oppressive and debilitating, and I think just the even though I was taking steps towards paying it off, I just I couldn't get it off of me fast enough. It really truly felt like a burden. And being patient in the process and patient with myself to say it's okay that this is going to take time. It's almost like once I'm aware of it, I just I want to solve it immediately. But it just wasn't possible, especially as a as a social worker making very minimal amounts of money annually. I was doing the best that I could, but it took years and years. So just the patience along the way was really difficult. But we got there. It does happen. There's a light at the end of the donnal. Yeah, and yours was not like a quick success story. It took you like what four years, seven years to seven oh plus. You were you were cash flowing, your masters and we took out a loan for our vehicle, which was our home. So all of that combined. Yeah, in the student wants and doesn't have to be I paid off a million dollars of debt in two years, like you don't have to have that story. Yes, yes, speaking of people who have that story, Um, I think so that kind of plays into my biggest struggle because we paid off seventy eight thousand dollars in two years. And I kind of had two biggest struggles. So the first was actually in getting started. I didn't think I was capable of paying off more debt than when I made in a year. I just thought, Okay, I can't do this, and that was really where it stopped because I just didn't think, like in my socio economic bracket, people like me could pay off that much debt. I thought it was impossible, and because nobody around me was doing it, and I just didn't see the possibilities, mostly because I was very like I was in kind of like a bubble of people who were exactly like me, and nobody was doing anything different. And it really took meeting my husband two like interrupt that line of thinking and let me see a new and different route. And once we got started and we were working together, then we were on fire. Um, and we were a little too on fire, which leads me to my next struggle, which was shame. I felt like intense shame for two years for being so dumb to take out so much debt, and that was a lie. I was not dumb. I was nineteen years old, um, and I just like didn't know. I was not educated on financial and loan products because I didn't get that class in high school on loan products. And nobody would have given me a business or a mortgage loan with that little working at the gap, like with no assets. So it was it was I had to truly like come out of that shame too after it wasn't was not until after we paid off the debt that I came out of it, um. But I lived in it all two years the whole time, and it made me less gracious to other people with debt because so it didn't just affect me and how I felt miserable, but I judged other people and that I regret as well. So so those were the biggest struggles for me. I appreciate your honesty, John. Hopefully that will be helpful for others to reject the shame because it can come internally as well as externally. There's a lot of opinions out there about student loan forgiveness, primarily from people who never had student loans. Isn't that unique? Uh? Placing, or that have paid off their student loans, which is worse, or or that went to college and the tuition was way less than it is today. Yeah, yeah, you're so, if you've got student loans and you're looking for forgiveness and you want forgiveness, that's your journey. Like the rest of us can shut up. Um that's I mean, yeah, that's how I feel about it. Yeah. So, just shame in general is never the best most beneficial motivator. So even if others are shaming us, I hope that your story gen can help others to recognize what to reject, what to lean into, because it's not beneficial for us or those around us if we are utilizing and accepting shame as part of the motivator in this process. It's yeah, my my judgment came from my own insecurity and and guilt and shame. So know that that if you're feeling like the subject of somebody's judgment, that that's prob I mean, I can't guarantee that's where it's coming from, but it most likely is. So it's not your fault or your story. Well, for those who want additional help in this journey and more helpful knowledge on student loan forgiveness, other debt free information, Nico, Where can they get more from you? On the Graham? You can connect with me, follow me on Instagram at debt Free gonna be that is where I live. You're gonna be, oh yeah, through for celebration when that absolutely I'll be ready with my my paper, my comfetti popper and everything. Oh yeah, I can't wait. I've been envisioning this day for a long time, either through PSLF or tackling my loans on my own. That that was originally the plan once I became credit card debt free and then the uh the waiver came out and I'm like, oh my goodness. If I'm reading this right and I understand this right, I'm going to be rid of my student loans. Yeah. Celebrating you and cheering you on Nka, thank you, thank you well. Follow Nika's journey at debt Free gonna be on Instagram and can't wait to have you back on to celebrate. I can't wait. That was so illuminating. I so for you and I and I think we kind of touched on this in the episode. We are debt free, so of course we're not fully diving into all of these loan forgiveness programs personally, but we recognize that many of our listeners are and this could benefit them. But even from an outsider who who helps people to pay off debt and understand the resources that are available, this was super helpful for me. And any time we can have somebody just break down some of the complexities explain it in a simpler way, I enjoy that and I think Miko was perfect for that. Really helped me understand what's on the table right now, what should people be paying attention to. And yeah, I I mentioned that for anyone who is eligible for PSLF, the is super relevant. Yeah, And with our episodes, we always we always think of one person that we're really trying to help as best as possible. Like with our Breath of episodes, we're trying to help as many people as possible, but each episode we want to help one person as much as possible. And I told Dica this before we started recording. I was like, this episode is for my friend Jessica. Our friend Jessica, who is a teacher who's on PSLF but has some payments that she thinks don't qualify. And I just think I think they have to qualify and so this is UM. You know, this is for her. And so after we got off the recording, she had a few more ideas for our friend Jessica, the teacher um. And so there's something also if you are a teacher called Teacher Loan Forgiveness, and that's a five year program, and previously you could not overlap those five years that qualified for the Teacher Loan Forgiveness. You could not relap those with qualifying payments for PSLF. Now under the waiver, all five years of those payments count for PSLF. So if you took advantage of that program or want to take advantage of that program. But we're choosing between the two, you no longer have to choose between them. You can use both. She she mentioned anything else, Jill, and no, that's that's what I remember just looking into. If you are a teacher looking into teach your Loan Forgiveness in addition to PSLF, you could do both at the same time, which gosh, if you're a teacher, I mean take the next day of school off and fill offwork. And every teacher is like, no, it's gonna be harder for me to take the day off than it wouldn't for me to just stay up all night paperwork, because that's what Jessica says. Get on it though. But yes, I mean even if you don't think your payments qualify, or you can't find like like our friend Jessica who's she worked at a charter school, that charter school doesn't exist anymore. She has nowhere to go to get a signature, self certify, have as much proof that you actually worked there as possible for when they come question you. Um, and just try. I hope that's what we're getting at is, however you feel about forgiveness, just go for it. Just try and and if I can go back to what Nika said, it's worth it. This is a lot of Yes, it's work, it's extra work, it's paperwork, it's figuring things out. None of us love that it's life admin. But if you get thousands of dollars knocked off of what you owe, how amazing. So yeah, it's worth it. Technica's word for it. Amen. Al Right, everyone, thank you so so much for listening. As you all know you've been listening to us. You know we've got a private community d where we do monthly money challenges, there's accountability groups. There, there's even more community, and we want to congratulate one of our members for a recent win. Debbie shared with us when I decluttered my PJ bras, etcetera. The storage space went from two drawers to one. Just purchased some new items in this category because they won't fit in the new smaller space. I did what I always promised myself I would will do, but didn't. One in, one out. Yes, well done with new rule, Yes, way to stick to it too. Recently, get them did that de clutter challenge, which, as we all know, when we de clutter, it's not just about the stuff. We come across new learnings about ourselves. We can see financial benefits. So that was a fun, recent, actual tangible challenge that we did. And congrats Debbie. Thanks everyone for listening. If you want to check out our monthly challenge community, head to Frugal Friends podcast dot com slash club to see what challenge we have coming up next. We'd love to have you join us. It's a lot of fun. We'll see you next time and again, share this episode with whoever you think might benefit from it and fill out that PSLF waiver stuff yesterday. My Frugal Friends is produced by Eric Sirianni. All right, Jen, you want to hear about my frugal fail. Okay, let's preface this was saying, we record episodes out of order, so the frugal you had a frugal win and a frugal fail. You asked which one I want to hear first, and I said the frugal win. That episode has not come out yet, and you said, next time, I'll share the frugal fail. And this is that episode, though it is probably four to five weeks earlier. Well, and you know what, I love that. And here's why it's complex. It's complicated. It's difficult to understand, just like student loans. Yeah, yeah, you're right, so this is fitting. You might get confused, but here it is. I said, frugal win or frugal fail. So wait four more weeks for the frugal win, which is okay fail. So I really like Maduro's food, which is plantains that are frat me. A second to remember is like, do you like the beer but that's madello, yes, like mudros and we've you know, there's been times when I have made them myself fully from the plantain there are times when I will get the frozen bag. Well, recently I got it in my head that I'm going to make rice and beans, because as much as we joke about we don't have to live a rice and beans life, I really enjoy rice and beans. I've learned how to make them pretty pretty well, and it's so yummy. Uh and and if I'm feeling extra creative and and spicy and luxurious, I will also pair that with some maduros. Well, recently I had it in my head that, Okay, I'm gonna make rice some beans this week. I'd love to throw in some of these fried plantains, and I'm going to make it from plantains, real plantains from the produce section. Got the plantains, I'm like, I'm being so good, I meaning some ruinal got the plantains so inexpensively, I'm gonna make it myself. Well, the thing about plantains is it's really hard to tell when they are ready to be utilized. In the Internet tells you it's great to use them unripened. So I'm like, all right, no matter what stage these plantains are in, I'm going to use them. Slice it open for anyone who has made fried plantains themselves. You know that they are very different from bananas. They don't peel apart like bananas. It's much more difficult to get the skins off of the plantain. I have done this before, and I've done it without injury to myself. But this time around, as I was peeling off, the skin was really not coming off the plantain, so it must have been very unripened. But I was already so deep into it. The oil was already getting hot, and like, we're just gonna go for it. We're gonna see what happens. Well, I am using my thumbnail to scrape off the skin of the plantain from the flesh of the plantain. And after like a minute of doing this, and like, oh that hurts, Like plantain skin was getting like shoved up into my nail, so I pull it out. I'm like, all right, I'm done with that. I'm going to scrape it off with a knife. Well, two days later, my thumb is thraw bg with I guess plantain skin that is still lodged in between my thumb and my thumb nail, like like shards of glass in there, got infected swollen. It like kept me up at night I could not sleep for two nights straight because my thumb, and also I need my right thumb. I use it for a lot of things. It was like really hard to brush my teeth. I can't really do much with my left hand, so it was it was a fail. No, not with my left left your left thumb. Yeah, And my takeaway this might not be everyone's takeaway because you might be better at cooking than me is I'm just going to do the frozen stuff next time. It tastes better and I probably won't get an infection. But that felt like a fail, a really hard fail, and I advocate for pres days later. That is not for me, and I don't even think it saved me that much money. I felt better about myself, like, oh, I know the ingredients that I'm cooking with, there's no additives here. And then being so good jokes on me, get a thumb infection, can't sleep for two days exactly. Oh it was so rough for fail. I'm so sorry that that happened to you. Um all over a plantain. I know. Here's the thing. My injuries happen in the kitchen. You would think all of the renovations we hung dry wall on the ceiling that same weekend with a lift that we rented and power tools and things above our head. You would think that that's when I get injured. Nope, cooking plantains that concern there. And Eric knows what he's doing still, well yeah, technically, but he gets injured too. He gets he gets injured with the renovations that we do himself. He cuts arteries. It's really crazy and insane. And then that the other time, you know my like classic story way back in the archives of the medical thing that happened to me when we had a renovations business. And I should have gotten stitches, but I didn't. That was during a renovation, but it was when I was cleaning dishes. Like the glass broke in the bathroom sink sliced me up, almost fainted. Wow, did my own stitching with super glue. And see, this is what happens when you try thing. This is what happens when you try and be in the kitchen. I shouldn't be there, the no, you should just like stop trying and just take the easier way out. Food. Don't do the dishes, get frozen food. Mm hmm. Yeah, that's the moral of this story is stop trying so hard, and that's the brand of frugality I promote. I'm here for it. That's frugal fails. Yeah. By

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