(Ep. 151) How To Protect the Next Generation from Student Debt

Hey everybody. Just a quick note. This is Travis from student loan planner. We are absolutely going to have a whole podcast episode about the Biden administration's recent action on expanding the public service loan forgiveness program. So this is a really big deal. We just want to make sure that we get all the information first before we have this podcast episode, I would expect that that's going to come out next week. So today we're going to do our regularly scheduled podcast episode, but stay tuned, keep listening weekly. We're going to have a massive amount of updates, but all the flurry of activity that's going on with student loans right now. So thanks and enjoy this week's episode. Hi everybody. Welcome to the student loan planner podcast. Today we are going to be talking about how to protect the next generation from student debt. Molly Lauder here, and I'm here with Lauren. Say hi, Lauren. Good day, everyone. I hope that your day is off to a good start and that you're going to enjoy listening to me and Molly talk all things next generation of student loan debt. You know, if you're listening to this, you've probably had some sort of student loan debt, or maybe you're married to someone with student loan debt. What happens with the next generation? It certainly hasn't gotten better over our generation. So we're filling in for Travis today to just talk through some of the issues around whether you have kids or think you might have kids in the future, or maybe you already have young kids. What are some things you can do to protect them from this massive debt burden that a lot of us are leaving school with? Yeah. And I think an important point is even if you don't have kids, our actions will affect those who come behind us. So this next generation will be affected by all that everyone does economy and consumer wise. So this is an important topic for everyone. Let's say if anybody's listening right now and they are thinking about having kids or maybe they have grandkids, they're thinking about what can we do from day one or even the 10th birthday of a child that can help get ready for college. Let's start kind of at the beginning. Well, from the very beginning, you know, I would say save a little, think about when that child is born and just putting aside 25 bucks a month, even if it's not with an intended purpose. I have many clients that open up a savings account to say, I'm just going to get started putting something aside and then I can decide what I'm going to do with it later or what my child might need it for later. So it's never too early to say, and there's never too little to save I think is a starting point. Yeah. I think the habit is important. You know, the structure that both of us talk about in our lives outside of student loan planner would be a 529 plan. And I was actually looking in anticipation for our call together today to see, you know, we live in 529 land where this is sort of a common thing for us to talk about. But I was looking at an investment news article and apparently Edward Jones had a study done that only 36% of Americans were able to identify a 529 as an education savings tool. And only about 20% of parents say they have used a 529 or are even planning to use one. So even though we think these are pretty common types of accounts, I think it's probably important to talk about what a 529 is. Every state to my knowledge has one. So for example, Lauren, we live in Texas and we don't get any benefit from a state income tax perspective because we don't have that right now so far. So we can choose any state's plan, but some states have benefits from a state tax perspective of using their particular 529 plan. Basically if you're in a state that doesn't have state income tax, you can kind of shop around and look for the cheapest or look for an advisor to manage a 529 for you or try to sort of automate it and do it yourself. There's a lot of 529 plans out there and companies like Vanguard or American Funds are pretty popular. Companies offer these 529 plans. I don't know if you have any thoughts on that. Yeah, I think the important parts about a 529 plan, if you're new to it is that it's for education expenses. So when your child makes it to the point of going off to life after high school, generally the 529 plan has been meant for that post high school graduation kind of education. However, now you can actually use it for the, what's that, elementary, what do you call that? Primary K through 12. Right. K through 12 education. And so there's education expenses now and there's education expenses later. So one of the things I always hear people talk about is, Oh, what if my kid doesn't go to college? What if they do something different? Well, one of the things that you can think about is 10 years old, they become a piano prodigy and now you think they're definitely going to get a scholarship because you can start using that for private schooling, you know, from 10 to 18 and start drawing down on that account. So there's lots of strategies to be used. Yeah. I don't know about your opinion on this. Generally speaking with the clients that I work with, probably don't tap into it for K through 12 if you can handle that from a cash flow perspective, because just like a retirement account where we save some money up front and then it grows dramatically over time, we want to give that money you invest when your baby is zero to five, as many years as possible to grow so that it's available for college. You know, just looking at some of the financial planning software out there, we're estimating the average cost of a public college in school is about 25 to $30,000 a year today for a private school, it's 45 to 60,000 a year. And so I think when we're talking about debt for the next generation, so far, the numbers aren't looking any better. The inflation is still going to be kind of ridiculous. Inflation is a thing, but I think there's some things you can do to mitigate that as well. And I always say, get out there and have your voice be heard. So it sounds a little cliche, but it does matter that we chip in as a community and start talking about how poor the education system is from a standpoint of cost. So when time comes around for you to be able to vote, we know that the system is broken and Travis talks about it all the time. So, you know, writing to your Congressman, making sure that you show up at the polls on the day that something is going to be there to be voted on is an important part of us revamping this system as it is. But these 529 plans, I think are a great way to kind of be able to mitigate the risk of what is it going to cost for my child to go to education? And I think it's better to start, you know, maybe you don't fund the full education, but it's important to be able to put something aside and say, all right, we're working on this. We're headed in the right direction because as you were mentioning the compounding interest aspect of it, or the compounding earnings aspect of it is a really key feature. Get started now. So there's a couple of different ways to do this 529 universe. You can, you know, for example, open a Vanguard account and save 500 bucks a month or something like that. There's also something called a prepaid plan based on if you grew up in Texas and you went to a certain college in Texas, I will keep that anonymous, but there are some big college fans in every state. But say, for example, you know that your kid is going to the college. You went to, and you know that that is a public school in Texas. You can prepay the tuition earlier rather than later. The positive of that is that you're going to lock in how much you pay for college, and you can buy a certain number of units or there's different ways to do it. And most States offer this. If not all the downside is if your kid decides to go to Harvard instead of your Texas state school or whatever state you're from, you can roll some of that money out. But generally speaking, it's not going to be the dollar value you were hoping for. Generally speaking, what I say about prepaid plans is unless there is zero doubt in your mind that the kid will go anywhere else, probably choose a more traditional 529 where you're just saving money for any amount of school. And that's for tuition fees, room and board, a laptop for school. I mean, the definition of what it pays for is much more broad. The other benefits are all of the earnings within the 529 grow tax free. And then when you take the money out, it isn't taxable as long as you pay for qualified expenses, which is room and board. And those things we were just talking about. And one of the things you mentioned earlier is that depending on what state you're in, there may also be a tax deduction on the spot in that year that you make contributions. So I know Pennsylvania is a state where that is definitely the case you put money in and you're not getting a deduction for federal tax purposes. So you said a place like Texas, we don't get any benefit whatsoever, but in a state like Pennsylvania, putting money aside, it's going to allow you to lower your state tax liability as well. So you're getting an added benefit there. And then one of the other key features of 529 plans that I really enjoy is that they, you know, with technology created these ways to be able to gift into a 529 plan. So what I do now, you know, as a financial planner, if someone's kid is having a birthday, I don't bring a toy. I asked them if they have a 529 plan. If the parent says yes, then I asked for that gift link because I can now contribute and make, you know, my partner, like I said, whether or not you have kids, we get to make an impact on this next generation. And this is a cool way to be able to do that. And if they don't have a 529 plan at all as a financial planner, I'm like, Hey, let me help you set up one. And this can be ready for the birthday party and we can start getting this kid some education funds set aside. Yeah. And there are total contribution limits to 529 plans over the life of the plan, but we're talking hundreds of thousands of dollars. So on an annual basis, let's just say any married couple can give $15,000 each into a 529 plan. So say you've inherited some money or you've got a really high savings rate and you've just got some cash sitting aside. If you have a child born or if you just want to give money to a niece or a nephew, you alone can give up to 15,000. A married couple can give up to $30,000 a year into these things. So you're talking about, you know, giving gifts to friends. I don't know that we're going to give our friends, kids 15 grand a year, but here's the other weird thing about it is if the parents wanted to put 15,000 in the grandparents wanted to put 15,000 in, and then a very, very, very generous friend wanted to also put 15,000 in. That's all okay. There's not going to be any kind of gift tax implication for that. So you can fund these very heavily, or you can put 50 to a hundred dollars in. If that's a gift you wanted to give for somebody's two-year-old birthday, for example. Those are all really great points. And one of the other things is people might be listening to like, Lauren, you just said, it's pretty expensive to pay for college. We talked about the inflation of all of this. What's going to happen if I can't fund my kids 529 plan? Well, I think this is where you start thinking about getting a student loan because what if you have student loans right now, you're trying to avoid getting them for your child or someone in the next generation of your life, but you are not doing the most cost-efficient thing on your student loans. And if you could save two or 300 bucks a month there, that's an easy way to reroute money to something else. So if you're not clear on your student loan plan, then that could be something else to think about. Yeah, like exactly right. I couldn't agree more. Not a lot of us have 15 grand sitting in our back pocket. You know, if we're thinking I can't even put a hundred dollars into this thing because I'm paying so much on my student loans. So say you're leaving with $125,000 worth of student loans, the standard plan for you, which is the standard 10 year payoff plan, your payment would be about $1,400. Well, that's a really high payment. It would be really hard to save for a 529 with a $1,400 payment per month. But with a student loan plan, depending upon what your income is, whether you file your taxes jointly or separately, what if you could get the actual monthly payment for your loans down to four or $500? Those are the kinds of strategies we're talking about where, what if that could free up a thousand dollars a month to put into a 529 and try to shield your kid to the extent you can from the pain you're in because of your student loans. And there's a lot of different options. I think we've kind of beat the 529 plan, of course, if you will. Yes. They're great options. I think people definitely should consider them. There's tons of information on the internet to find out more about 529 plans. Some of the other things I think about as I think of like how we can help this next generation. I think it's by starting to have proper conversations with them. Those that are not yet in college have the opportunity to kind of plan ahead and say, what is it that I want to do? What do I want to be? Where do I want to go? And I think as parents and as adults in their lives, talking about things like community college is an important place to start. Yeah, you know, it depends on the parents and how they want to talk to their kids about education. But I don't think I was talked to very much about all of the different options in terms of education. I think it was just, you apply to places and you go to places. And so if that's still the case for anybody out there, as we know, college is not free. It all depends on your GPA and your SAT or ACT scores. When it comes to applying for college, parents and students have to fill out a FAFSA, the form that kind of looks at what your expected family contribution is to paying for college and whether or not you feel like you have the money. They kind of decide how much they think you could contribute. And so that's a really important part of, you know, if a kid wants to go to kind of a rock star college and it's going to cost a lot, what are our alternatives? Is there a place that would get you the same experience, but maybe not cost quite as much? It's really hard when, especially if you go to a really competitive school, if you have your mind set on something. But if a kid has their mind set on something freshman year, they're doing better than I was. I didn't even know where I wanted to apply until senior year of high school. And I really leaned on my college counselor for that. But there are actually, you know, softwares and things out there that can calculate approximately what each school will cost. You can also go onto each school's website. But, you know, when it comes to talking about college, I think making kids aware could help them choose the right school. I mean, these softwares go crazy in terms of you can even choose what major you think you want. So you can choose the school. And then based on that school, they can talk about the average salary coming out of school based on an engineering major or any kind of major that you choose. So there's a lot of help tools out there that I'm not sure people are aware of. But I think involving your kid in that conversation can be really helpful in terms of how do we narrow down which school we want to choose. And community college is a great point. If I love to work on cars or I love certain kind of trades that can be accomplished or you can get the education you need in more of a junior college or community college or even a trade school, I don't know that you have to go to the traditional path of you have to go to college and then you have to go to grad school. And probably a lot of our listeners are cringing hearing that. And I did all of those things. So I totally get it. But I think that every senior in high school is different and there might be a path that they want to take that doesn't require taking on all this debt. Yeah. And when I think about community college, you know, it's not even so much that you have to only do community college. What a lot of people doing now as a strategy is taking the first couple of years and attending a community college. You get those basic courses out of the way and then they go off to big school X, Y, Z. So now they only have two years at big school X, Y, Z to pay for much more affordable. And guess what? When they get the degree and someone's looking at their resume, they graduated from big school X, Y, Z. It doesn't say community college plus big school X, Y, Z. You know, you got the big name on your resume and that's where you ultimately ended up graduating from. Exactly. So it's a great strategy to use. And I think we also kind of just need to normalize it being OK. Like community college is not a bad thing. Just like public school is not a bad thing. What's the right fit for the person that is getting ready to get this education? Speaking from personal experience, I transferred twice during college and one of those was one semester at a community college. I'll tell you that I transferred from USC in California and I moved to Austin, Texas, where I went to Austin Community College for one semester. Almost nothing transferred from USC. Almost well, not almost all of my community college credits transferred. So like that's something that I started in architecture. I decided I didn't want to do architecture. So it's just really interesting that like community college. This was the first time when I got out to California that I experienced a lot of people, at least in Southern California, that I talked to mentioned that it's normal to go to junior college or community college for the first couple of years. And it makes total sense because all of those general credits, your English and math and things like that will generally transfer to any school, which is really nice rather than something specific like architecture that cannot transfer. This brings us back to the point of communication being such an important piece of the puzzle to have those conversations with your children about the various ways that things could go in and consider it like we don't know what tomorrow holds for any of us. But having conversations about the possibilities will help them make more educated decisions. And I think the other thing, too, is sometimes putting your pride aside as a parent because you weren't able to save in the way that you wanted to. And you're like, well, my kid got into big school ABC and I just got to figure out how to take care of it. Because what happens then is you can borrow a certain amount of loans federally for your undergraduate degree. However, it's very limited. So what ends up happening is either that child takes on private debt to be able to cover big school X, Y, Z, or you take on parent plus loans as that prideful parent that says my child deserves to go here. And now you might be six figures in debt in your late 40s, early 50s, maybe even closer in your 60s and getting ready for retirement. And it throws off your retirement plan because you have six figure debt, because you really, really wanted to be able to give your kids this opportunity. The conversation starting in middle school, continuing through high school can help set expectations for them. And good parenting is maybe not falling on the sword for them, but showing them that there is a cost to education. There's a cost to the decisions you're going to be making. And so you want to all make those decisions together as a family. And communication is a key aspect. Yeah, we see a lot of consults, generally speaking, more frequently than we'd like, or at least I've seen a lot of these where the parents are maybe three to four years from retirement. And we do have a lot of blog posts and a lot of articles and podcasts about how to handle parent plus loans specifically. But the hardest case is when you're just a few years from retirement, maybe because of college costs, et cetera. You don't have the retirement savings you'd hoped for and you're sort of relying on pensions and Social Security. So you're already on a limited income. And as it stands now, we are hopeful that there will be more parent plus repayment options available soon. But as it stands now, we're very limited without doing a really complex strategy to have a good income driven plan. I mean, basically, you don't want to have half of one of your pensions going to student loans because you decided your kid could go anywhere they wanted for college. I mean, there are a lot of other options. We understand it's sort of an impossible ask to say, no, why don't you go to community college instead of the school you've been dreaming of your entire life? But it kind of stinks because within the FAFSA, if you make too much money, they show you the option to have the student borrow a very small amount and then they just say, oh, in parent plus, they're right here. Take all these parent plus loans, all the loans you need. That can be a really scary situation when you're getting close to retirement because they don't care if you don't have an income. You know, Social Security or a portion of that is taxable. Your pensions are taxable. There is taxable income in retirement and the student loans will need to be repaid. You can't just pause them forever or go into forbearance forever or tell them you can't pay. I mean, they're they're one of the hardest types of loans to get out of once you have them. I mean, those are all really good points. And I think, you know, while our education system is flawed, you know, no one is going to say that it isn't on the student loan planner team. We definitely need an overhaul. It is important to not just lead with your heart and ruin, you know, possibly your child's finances for the future and your finances for the future by not knowing something. But instead, as we talk about how to protect the next generation to kind of say, I got to get me deep into this. I got to really understand the possibilities of what exists for my child because I want what's best for them and what's best for them. Maybe making them sit at that computer on a Friday night and apply for those scholarships. I think the scholarship robust mentality is a great one to instill in your child, because what if they, you know, spend an hour writing an essay and they get a thousand dollars? They effectively just made a thousand dollars an hour. Right. So think of it more as income being earned when they apply for those scholarships. They might not like you in the short term, but they may not have a really good understanding of what the cost is of this education and the value of being able to apply for grants and scholarships and other things that can help get the cost of the education down. Be the mean parent in the moment, but they'll thank you for it later when they don't have a boatload of student loans. When I think just like you said, investing your time to look for things like scholarships, I think that also investing your time and applying to multiple places can also be helpful because, for example, in undergrad, I ended up getting a half scholarship from the school for me to come to a certain school for engineering. I had no idea what an engineering program was. I hadn't expressed any interest in it, but sometimes schools are looking for a diverse school and maybe they had all men in engineering and they were trying to bring women into engineering. Sometimes that can happen as well. I didn't end up taking them up on it, but I think that had I not applied, I never would have known that I could have gotten a half ride to a really prestigious private school if I'd given engineering a shot, which is pretty cool. So, I mean, I think that spending some time to apply to five to 10 schools as opposed to one or two can also give you some financial maybe merit aid or things like that. Yeah. And as we talk about like investments and savings, you know, maybe you didn't have enough to save for education to fully cover the cost of attending a place. But those application fees are another thing. So I'm always saying if 10 schools, you're like, oh, my goodness, the fees for 10 schools, that couple thousand bucks to be able to diversify your opportunities and see what grants and scholarships are available via those schools could be incredibly worthwhile as opposed to you didn't get to save. And, you know, now we're talking about taking on debt. We could just save a little bit and have that set aside to be able to cover the application fees, to have more options available that could yield huge returns over time. Let's put our student loan planner hats on for a second of, you know, how to protect the next generation from student debt. The whole topic of this podcast is to protect from it. I think the other piece is, you know, we can put some faith and put our vote next to the idea of making this whole thing simpler. That sort of puts us out of a job, right? I was like, if there was one repayment plan that was super fair based on income, then maybe you and I don't get to do consults anymore, which would be super sad. But at the same time, you know, knowing that there are companies out there like Student Loan Planner who are here to help and who are here to look at not only what your student loan situation is after you have your six figures of student loan debt, but we also do pre-debt calls. So it's trying to strategize and figure out what are the ways that we can help you utilize the FAFSA. We can tell you as a family, is it worth you applying or not? Generally speaking, everybody should do the FAFSA, whether they think they make too much money or not. You never know what you're going to get. It's the only way the school knows that you are interested in aid. So you need to do the FAFSA. But like we can talk you through that and then talk you through how much loans you're thinking about borrowing and what that might look like four years down the road. So talk about education. I mean, I took loans out for my MBA and I just took the loans I thought I needed. I didn't have any idea what that would mean when I got out. And then I got out and panicked. And I think we hear that all the time. And so I think that to the extent of spending a little bit of money on a pre-debt call and being able to talk through, OK, if you borrow one hundred thousand dollars from the school, here's what that looks like. If you get a half ride and only have to borrow fifty thousand dollars, here's what that looks like. Depending upon your career choice or what you think might be your next career, we can talk about whether or not, you know, maybe going to that more expensive school is worth it or not. Because that was the scariest thing. That was the scariest thing for me was for the first several years after finishing an MBA was crap. Was this worth it? Why did I do this to myself? And I think a lot of the consults that we talked to and a lot of people maybe listening have felt that way. You know, like why? Why did I take out six figures when I don't necessarily love the job I'm doing? I don't necessarily love the fact that I'm handicapped by this basically mortgage payment every month. And those are the fun ones. If we're able to figure out a way to get your payment from a mortgage payment to like a car payment. Those are fun. But anyway, I think just the more you know, whether it be pre-debt with us or afterward, that's not going to protect people from debt in the future. But just know that there are resources out there and that you're not alone when you get out of school. I'm so glad you brought up the pre-debt because it's like you said, yet another small investment in your child's financial future and education or in your financial future for education as you think about things that can go a really long way. And so somebody may be saying, oh, there's so much free information online. I think it's time that we stop valuing these kind of false heroes, TikTok influencers and say, I'm just going to go get it for free in 30 seconds on this thing. There's celebrities that are saying things that are not proper and decide that we are going to be our own hero because every one of us has our own hero inside. And if you are the parent of someone or you are the adult in someone's life, who is that next generation, we need to normalize being the great example that these children will see the great example of what it's like to have organized finances. You know, we don't want that do as I say, not as I do thing to be carrying on forever because we know that they're seeing what we do. And so if we are leading by example and saying, hey, it is worth investing in yourself and I'm going to invest in you to help you get the information that's necessary. They're going to see that and value it in the future going forward. And they can make better decisions in all aspects of their life. What would you say were your best one or two lessons you learned about money growing up, if any? I think for me, it was the work aspect of it, that in order to receive income, you have to put in some level of effort, which is yet another thing that's all the rave right now, this passive income, that money is just going to fall out of the sky. Mailbox money. Yeah. Yeah. Get rich quick. They're all over the place. But, you know, my work ethic, I think, was the biggest thing is that I'm willing to do three different jobs in order to make sure that I can meet whatever my goals, my vision and my values are versus I'm going to do this one thing now and hope that I get rich later or, you know, try to put all my money in this one thing and hope that I can catch up. It's really about this idea that I'm earning and then with what I earn, I have responsibility to make sure that I set some of it aside and do something responsible, be a good steward of my money, basically, is the thing that was always said in our household. Put some money aside, make sure that you're organized. But first step is go earn an income. And I think it's given me the confidence, you know, later on in life to be able to ask for what I feel is my value and my worth and negotiate because the work that I'm doing is hard work and it's valuable. So how do I get compensated accordingly is another thing that I think I learned from childhood. Yeah, we were listening to a presentation recently about the amount of blogs that are actually successful. What was it like one percent make more than ten thousand dollars a month or something like that? I mean, when you see things on TikTok or or any kind of celebrity that gets one million dollars for one ad on Instagram or something like that, that is one percent of the one percent of the population. And so, yeah, it's not it's just not a hard work is part of the deal. I mean, it has been for generations upon generations. I think we live in a very interesting and strange time where we're seeing people who are putting lip gloss on and making money doing that. I mean, it's just a crazy time to live in. But I would say the biggest thing that I was taught growing up, which is interesting based on the fact that I'm a student loan planner consultant, was that I was basically allergic to debt. Like if you can avoid any kind of debt. And that was as a result of my parents. There was a time when credit card interest was deductible on your tax return. And so everybody was using their credit cards like crazy. So once that stopped, once that tax benefit turned off, like what a way to stimulate the economy. Right. Just have everybody rack up credit card debt. That's fraudulent. I never knew this. Once that went away, it was a big awakening to everybody of credit card debt is not a good thing. It's a really bad thing because you can't deduct any of that. I mean, imagine we have a student loan interest deduction. Imagine if you could deduct credit card interest. It's crazy to even think that was possible. But it was, you know, work as hard as you can and keep your debt to a minimum. Well, that's ironic because a lot of what we talk about on our calls is it depends. You might actually want to keep your student loan balance out there and pay the least amount possible and go for public service loan forgiveness or for long term forgiveness. But I think that for anybody out there listening that didn't grow up with good money messages, I think that a hard work ethic and paying attention to and understanding your debt, those are two really powerful things. Yeah, I think they're incredibly powerful. And like I said, the debt is something that is overwhelming for so many people that, you know, they're taking on some celebrity who likes to say eat beans and rice and get rid of all your debt strategy. But it's not the most appropriate thing for everyone to be just paying down their debt, constantly, fearlessly tackling it and then not making any headway in any other aspect of their life. So, you know, we talk about what we call the tax bomb all the time. So you're paying your student loans on an income driven plan and you're getting ready for that tax bomb. And some people are like, well, maybe it's going to go away, so I'm not going to save for it. No, no, no, no, no. As the rules are written right now, you need to save for that tax liability. But the cool thing is that this forgiveness is like something that we're pretty confident is going to be here for, you know, for a ways to go. And you're 20 and 25 years down the road. There is an end to this. And by having that small payment, you can have other things in your life. So you can start saving for that home down payment. You can say for these kids, 529, the tax bomb and the student loan payment seldom end up being the same amount as what it would be to, like you said, attack it, eat beans and rice, have no life, have no retirement savings and be debt free. I actually had a call recently where a young lady was going really, really hard toward her student loans and actually had no retirement savings. And so she said that she wanted to retire in 15 years and was nowhere near being able to retire in 15 years. And I talked to her about, like, you're making all this headway on your student loans. You're tired. You're telling me you don't want to do this anymore. This doesn't seem fair. Well, what if you started to pay what you were supposed to pay toward these loans and actually started redirecting? She was paying close to $10,000 a month on her student loans. Wow. She was literally doing the beans and rice like all of her income was going to the student loan debt. And so she still wasn't going to be done for like seven or eight years, even at that high, high rate. So she had a lot of student loans. Let's just put that out there. And then seven or eight years from now, she'd be seven years from retirement as per her plan, but with zero retirement savings. So guess what? We we all know that she was not going to be able to retire in seven or eight years. Yeah, exactly. So that's where some of these conflicting messages can come up of, you know, the FIRE movement, the what is it? Financial Independence Retire Early. Yeah. OK, so for the FIRE movement, I've actually had a consult very similar to that where it's I'm really interested in the FIRE movement, but based on any way we worked out her, you know, her income numbers and how much she was wanting to throw towards these loans, I mean, you have to have both competing priorities, which is really hard to figure out how much do I save for retirement? Fortunately, saving for retirement and pre-tax accounts does reduce your AGI and gets you a lower student loan payment. But you still have to make sure that that's the right fit for you. I think the example we used earlier of one hundred and twenty five thousand dollars of student loan debt, fourteen hundred dollar a month payment. If you could somehow get your payment down to four to five hundred a month, you could split that between five twenty nine savings and between retirement savings. We generally say start by paying yourself first. So that is save something for retirement, have something in place. Ten thousand dollars or three to six months for an emergency fund. You know, everybody's got a different time limit of how much you want to save in your emergency savings account. Trying to just set up a lot of those things automatically makes them a lot easier. So I can't tell you how many calls I have where people are saving one hundred dollars a month in their retirement account or three percent in their retirement account, but they get a five percent match. I mean, you got to get the match. That's the first thing. Right. Step one, easy low hanging fruit. Yes. I mean, I personally understand the paying off the loans as quickly as possible. It's called the fast and furious method. And that's what I did. Not sure it was the right fit. I'm not sure I would have done that in hindsight. It does feel incredibly good to be finished with your loans sooner than expected. But you miss out on saving for retirement. Potentially, you miss out on purchasing a home on, you know, if you see your friends going on vacations and becoming TikTok influencers themselves, you know, you can have a little bit of fear of missing out or FOMO in there. It is something we hear about. It is still a viable strategy. But if you you want to talk through, for example, with one of us, what are your competing goals and how can we help you accomplish as much as possible on all the goals, not just paying the loans off or just saving for retirement and retiring early? We try to cover as much of that stuff as we can in our one hour with people. I want to talk to the fire people listening right now, because you brought up a really good point about how to set yourself up if that's something, you know, we hear about the fire movement and that people say they just want to retire early, but they don't get the concept of like what needs to be done. So one, it is living off a lot less, understanding what your expenses are so that you can hit that early retirement age. But one of the things, like you said, where that conversation about paying debt comes into play for fire people is, you know, if my expenses are low, if I don't have a mortgage, my expenses are lower. Therefore, my fire number is lower and I can, you know, say less related to that. So they also put that student loan debt sometimes into that bucket and say, well, I don't want to have this student loan payment as an expense. I don't want to have to calculate to be able to cover that. But if you think about it, most people that are really serious about fire have pretty low living expenses. So if you have low expenses and let's say all your other debt is gone and you need $36,000 a year, $3,000 a month to live off of, that's going to yield you a pretty low student loan payment. So you can have low student loan payments while you fired if you have a bunch of student loan debt. It's not a debt that necessarily has to be paid off before you can reach your fire number. OK, so to sum up what we've talked about today, we've kind of gone off on our little tangents here at the end, but how to protect the next generation from student loans. We walked through, you know, what can parents and grandparents and family members do? That's that 529 or any type of savings you can save. You know, that's step one. If we have a long time ahead of us and maybe our kids are just being born or they're toddlers, saving a little bit per month and then letting that grow tax free is an obvious way to protect from debt. Will it be enough? You know, who knows? We don't know what the future of what college prices will be, but that's one option is to save. The second thing we talked about was educating both parents, educating yourself and educate your students on what is the student good at, what does the student want to do with his or her life, and how does college align with that in addition to what a different colleges cost? And also don't forget about scholarships, you know, the importance of investing the time and looking for the free dollars that might be relevant. So like you said, if you're a high earner, there may not be a lot of FAFSA or like grant money or income driven money available to you. However, there's scholarships for being left handed, scholarships for, you know, being able to do nails. You name it, there's pretty much a scholarship for it. So that's another key thing that we talked about as well. Absolutely. I think that, you know, the importance of voting and of paying attention to how this is being talked about, given the administration that's currently in office, do what you can to try to control or curb the cost of college. I mean, this has got to be something that in the next 30 years is going to continue to be incredibly important, because right now we're seeing with the millennial generation that people are delaying what they're saving for retirement. They're delaying buying houses. There's a huge economic impact to the debt that's hitting the millennial generation right now. So you have to imagine 20, 30 years from now that we've got to see more change happen in the cost of college because this isn't sustainable. And then the last thing we talked about was, you know, not chasing all the distractions that exist out there. So the false heroes, the influencers, all the crazy narratives, but getting a plan in place for yourself based on your customized situation is a key aspect of being able to change the trajectory of the people coming behind you for the next generation. So whether that's you getting a student loan plan in place or you working with the members of your family to be very proactive and intentional, you want to go and get good information. And good information sometimes requires the investment of dollars, requires the investment of time, requires the investment of communicating with everybody around you and not just watching a 30 second video from someone who has a conflict of interest and maybe doesn't have your best interest at heart. Exactly. So I guess we can end with, you know, you can always go to studentloanplanner.com. We have a before you take out debt and an after you take out debt section on our website. So that'll link you to our pre-debt calls or our post-debt calls. You know, the majority, the lion's share of the calls that we do are after people already have the debt. But the pre-debt is a lot less known, I think, and could still be really impactful and really important. And it starts a conversation with us that, you know, you can continue keeping in touch with us and we can help you with your student loans over time. So, Lauren, thank you for your time today. I hope we were helpful. I hope we got through to some people out there that are putting off doing the FAFSA for college next year. And thanks, everyone, for listening. Take care.