---
title: "Financial Wellness Today with Todd Friedhaber (Student Loan Counseling Manager at Cambridge Credit Counseling)"
description: "Gordon Oliver and Todd Friedhaber, student loan expert at Cambridge Credit Counseling, break down federal student loan repayment and forgiveness options."
url: https://www.cambridge-credit.org/podcast-financial-wellness-today-student-loans-todd-friedhaber
publisher: "Cambridge Credit Counseling Corp"
updated: 2026-10-28
---
# Financial Wellness Today with Todd Friedhaber (Student Loan Counseling Manager at Cambridge Credit Counseling)
In this episode of Financial Wellness Today, host Gordon Oliver is joined by Cambridge Credit Counseling’s own student loan expert, Todd Friedhaber, to break down one of the most confusing financial topics facing American families: federal student loans. With over 43 million borrowers holding more than $1.6 trillion in federal student debt, understanding your repayment and forgiveness options is crucial to maintaining your long-term financial health

## About this episode

Financial Wellness Today is the podcast from Cambridge Credit Counseling Corp, a 501(c)(3) nonprofit credit counseling agency. Gordon Oliver hosts conversations about household money, debt, and financial stress. This episode runs 72:07.

## Listen

[Listen to this episode](https://serve.castfire.com/audio/8720953/FWT_Ep104_Student_Loans_Todd_Friedhaber_2026_mp3_2026-10-02-141253.128.mp3?rssID=6806) or [view the episode page](https://www.audacy.com/947wmas/podcasts/e7b51e8b598f2384876e938abc70bbbf/episodes/financial_wellness_today_with_-8720953).

## Full transcript

Welcome to Financial Wellness Today, the podcast dedicated to helping you master your money and live your best life. This show is proudly powered by the experts at Cambridge Credit Counseling, with your host, Gordon Oliver. Here's Gordon. Hello, everyone, and welcome to Financial Wellness Today. My name is Gordon Oliver.

You're a humble host of the show. And the show is all about bringing on experts or even just myself talking about current events, things that are happening in the world as consumers are working on their own individual financial wellness plan, whether it's our youth putting things together or mid-aged people putting together to start to get ready for retirement, or even people that are in retirement on fixed income. There's a lot of good things out there for people trying to provide themselves with a plan for financial wellness. And there's also a lot of bad things out there. So the purpose of this show is to bring some really good content, some really good guests, so that people can tune in and learn some information that they may or may not know.

And the one we're going to talk about today is extremely confusing and convoluted and has been for a while. And it's just a problem for people to really get tuned in on what their opportunities are to deal with what we're talking about, which is federal student loans. So today, our topic is going to be regarding the entire student loan platform, and even a little bit of the history of student loan borrowing on both the private side and the federal side, because it's a very important distinction to learn what you have available to you as far as options of dealing with them, or even planning to take out loans to fund education for yourself, or even for your children if your parents are a parent that's trying to fund your children's education. So the story we're telling is one of the largest government programs in American history. More than 43 million Americans have federal student loans.

The federal student loan portfolio now exceeds 1.6 trillion, but here's what's fascinating. Federal student loans were created to help students attend college. They were created because the United States was afraid it was losing the Cold War. My guest today is student loan counseling expert Todd Friedhaber, and over our time together, we'll trace the history of federal student loans from Sputnik to public service loan forgiveness, to the major changes happening right now in 2026. Todd, welcome to the program.

Thank you, Gordon. Not to be confused with Friedhaber. That's never happened before, right? No, never. Never.

Fryhoffer, how about that one? Isn't that a tasty treat? It is a tasty treat. Okay, so for our listeners, Todd and I have been friends for a very long time, working at Cambridge Credit Counseling, our national non-profit that helps people with debt problems, student loan counseling, housing counseling, bankruptcy counseling, anything that wraps around some challenges that relate to financial wellness. So before we get started, Todd, let's talk to the audience a little bit about you.

Tell us about your story. All right. Well, I was born in Chickadee, Mass., when there was a hospital in Westover Air Force Base. I grew up in Western Mass. I was probably about 13, then grew up in California, joined the Marine Corps.

And after the Marines, I moved back here to go to UMass, ended up meeting my wife, and we were married for almost 25 years. And this is where I'm staying. I have two children, and I've been with Cambridge. Let's see, I started with Cambridge in 1998, and I am still going strong with Cambridge. You certainly are.

We've been friends for a long time. A couple of things on the fun side, is there anything you could tell the audience that they don't know about you? Let's see. I am actually ranked internationally for pinball. I joined a pinball club, Western Mass Pinball Club.

I think I'm 5,358 out of 130,000 people that are active. I like to play darts. I like to play pool. So I like to do those things. I like to go camping and hiking.

I don't know if I heard that you are a self-proclaimed national air hockey expert. Self-proclaimed. Yes, self-proclaimed. But yes, I'm really good at air hockey. So if there's anybody out there that feels that they're a really good challenger for me, please reach out to me.

I'd love a challenge. Yeah. So serious and fun at the same time. But again, we're going to get into the student loan piece. Much serious.

And your expertise, and what you've learned, and all the work that you've done to really help educate people that really need to understand what their options are. People, I think, feel like federal loans have always existed. Not the case. History tells us, I mean, again, over time, things really developed where there was no such thing, all the way till today, where we're 1.6 trillion outstanding in student loan debt. How did we get here?

Exactly. How did we get here? If you wanted college back in the day, you basically relied on family savings and family paying for it, which back then, there was not a lot of opportunity for the general public to be able to afford such a thing. So college was considered a privilege, not a private investment. So what do you think changed?

Well, the major change in the 20th century was World War II. World War II broke out after World War II. Those that served were eligible for the GI Bill, college tuition, paid for living expenses for millions of veterans. It wasn't a loan. It was an earned benefit.

And this is something that was remarkable, something that was happening. Because of this, the country saw enormous economic growth, because more Americans were now being educated. But to take federal loans out still wasn't an opportunity. Correct. What really changed there was Sputnik.

In 1957, the Soviets launched the satellite into space before America, and people were getting scared. They were frightened. They were feeling that the Soviet Union was ahead of us in the space race, which they were at that time, and they really needed to start educating Americans. Fun fact for our listeners, over our time, I was a manager, and Todd, I actually managed Todd. So in his military background, being a staunch Marine, he decided to give me rank, and we refer to each other as I am Top, and Todd is Gunny.

Mm-hmm. Right, so Gunny, excellent information. But student loans actually started as a national defense initiative? Yep, exactly. The National Defense Act of 1958 created the first federal student loan program.

And what it was doing is it was introducing more people into careers such as mathematics, engineers, scientists, things that we needed, especially needed, if we were going to try and win this Cold War, this space race. And fast forward to today, again, we're going to keep going with a little bit of information. People have to wonder how we got to $1.6 trillion today, right? And we're going to kind of go through a little bit of the history and then eventually fast forward so we can get to today where the people that have that $1.6 trillion in debt, what are their options? What are they going to do with it?

And it's important we kind of frame how we got here because eventually it seems like there is some kind of opportunity out there to have a discussion. Will the federal government still be in the student loan business? Are colleges charging too much to go to college? Like, this is where we are today where we have to kind of figure things out. And knowing some of the history is so very important.

And the first federal loans weren't actually about helping individual students. They were actually about helping America compete. Exactly. That's some of the argument today, too, that our youth doesn't understand why they can't go to college for free. And that's a debate for another day.

And again, we'll see that play out over this administration, the next administration, et cetera, to see how college evolves, even with artificial intelligence now. How's that going to change the game? So it's good to have these conversations to give people some opportunity to understand it. So when did the mission change? The mission really changed in 1965.

That's when President Lyndon B. Johnson signs the Higher Education Act. And what this is, philosophy, was going from the national defense to more focus on economic opportunity. Basically, the government is saying college should be available regardless of family income, should be available to anyone. So that was what was different to go this direction. Exactly.

It becomes more mainstream. This is allowing reaching more families. It wasn't just a privilege, like you were saying in the beginning. It was considered a privilege in the beginning. This is now something that we're really pushing.

It should be available to every. Education should be available to everybody. And that's when one of the big names in student loans, Sallie Mae, entered the picture. Yep, yep. In 1973, Congress created Sallie Mae.

And it was their job to buy student loans from banks, give those banks more money to issue even more student loans. So they're expanding their touch when it came to the families and people that they could help and educate. So as we went through this timeline, when did borrowing to go to college or borrowing with student loans become normal? I'd say probably in the 80s. Because back then, college costs started climbing.

More families were borrowing. More students were borrowing. We had loans that were guaranteed by the federal government. So a lender, all they had to do was know that they were going to get paid and they could loan the money out to people. It's funny.

I went to college in 1987, just aging myself right there. And if I'm not mistaken, I think tuition for an entire year was somewhere around $5,000. Yep. And that was before any additional aid or whatnot. It was commensurate with the timeline, but not like it is today on what the actual ticket is. $20,000 median income, right?

So in the 80s, people got involved, more families borrowed, more students borrowed. And then student loan debt went from something that was rare to something that was actually expected. So student loans did or did not make college expensive? What's your opinion on that? It made it more expensive because the colleges kept on raising their prices because they knew that they could loan out the money and they were going to get the money back.

So it became more expensive. So just in trying to unpack that, essentially when businesses, which are what colleges are, know that the government is funding, then all of a sudden that gives businesses an opportunity to grow, expand, and become the mammoth industry that it is today. Exactly. So getting back to learning about student loans and fast forwarding to today, the biggest confusions, and I want to give some history from our organization, we've been in business since 1996 at Cambridge Credit Counseling and student loan counseling was something that we developed in 2014. Actually, myself and our CEO, Christopher Viale, created the student loan counseling department because when we were counseling people that are having debt problems against financial wellness, it started to become when we were doing budgets and pulling credit reports to see the debts that were owed, student loans were showing up more and more and more.

And more importantly, the size of them were growing and growing and growing, and today are still growing. So we had to do something to get into that where we could counsel people and give them a platform with a trusted nonprofit organization to give them their options and learn about what they have eligible to them as far as repayment plans. We're going to talk about public service loan forgiveness today. And what we learned a lot from that timeframe was a lot of consumers, which led to a lot of problems that we'll discuss today, were really feeling like they could never get their student loans paid off. You do a lot of that counseling.

I did a decent amount of the counseling back in the day. That was a common theme. It was, I'm never going to get these paid off. Why would I even bother? And one of the problems for consumers, there's the bankruptcy vehicle that you can take when you're way over your head in debt and you can't really do anything about it.

You go to an attorney, see if you're eligible, ask the courts for protection from your creditors, and then try to get a fresh start. Student loans were purposely, both federal and private, protected from it being included in a bankruptcy unless you could prove you were completely insolvent. And going to maintain that insolvency. You know? Yeah, and that's...

So attorneys that I've talked to about this issue, a lot of them would say, we wouldn't even bring it up. Right. Because it's not even an option. So even if you could file, you still have to deal with student loans. They didn't want to deal with it.

You still have to pay them. So essentially, you have that debt. The way you're going to get rid of it is to deal with it and figure it out. Right, figure it out, find out what the best opportunity to pay them off is, and then come up with a strategy. And sometimes it's short-term and long-term.

And again, when I started that department and you took it over masterfully as the manager of the department, things have changed. There were ways to handle things and now things have changed. We're going to get to that a little bit later in our segment. We're going to take a quick break and then we'll be right back when we get into things like repayment plans and other parts about paying your student loans off. This is Gordon Oliver, Financial Wellness Today.

We'll be right back. Welcome back to Financial Wellness Today. This is Gordon Oliver here with my guest, Todd Friedhaber, the Student Loan Counseling Manager with Cambridge Credit Counseling, talking about an extremely convoluted, changing platform where people owe money in federal government and also private loans from funded education at college and discussing what the changes are happening as we sit here today and things that people have to be aware of. And before we get that squared away, we have to kind of continue to talk about the history here so that people understand how we got to where we are. So the problem today is, or before recently, is financing was easy, right?

If a student had to go to college and the family was going to apply for federal aid through income and different information the family would provide, which is the FAFSA process, you would find out from a institution and you could apply to multiple to find out what the costs were going to be. But to simplify it in its simplest form, you would get back a report. It's called the Expected Family Contribution and EFC. So if the tuition for school was 80 grand, you would get back how much you get in grants, awards, et cetera. How much aid the student would get if it's undergraduate, because the student would get some aid, which is also known as loans, right?

Yes. I love how it's called aid, but it's actually- Aid, but it's a loan. Right, it's a loan. So that's some fancy aid. So you would get aid.

So typically, and I'm just going off some examples, if it was a four-year college, the student would get somewhere around 4,500 the first year and then it would step up 5,000, 5,500, 6,500. So essentially 25,000, let's use that as a round figure. And then the rest of what was left over, the family would have to fund. Correct. So there's multiple vehicles that people would choose to do that.

And it really came down to if you're parents, it's either you saved with a 529 or some investments that you would pay cash for the college, or you would borrow what's called parent plus loans. Correct. And they were borrowing from the federal government, which there wasn't much involved with credit, except if you were really in bad shape, you had accounts in collections. Adverse credit. Adverse credit, you might have problems borrowing.

But for the student, that's a- And you could borrow the cost of tuition. Right, the entire amount, right? Open end. So we've seen some pretty scary stories and we'll kind of talk about those a little bit. But now again, getting back to it, student loan debt did not blow up overnight.

But in the business that we've been in since 1996, if you think about the timeframe we're talking about, 96 to 2014, it wasn't really the biggest issue. But after like 2010, it started to show up. And that's why we, even as an industry, not just our company, but all counseling agencies that were involved, were working on trying to put some kind of counseling together for student loans. So it evolved to where we are for many reasons over decades. But this is like anything else, we're here now, how do we deal with it?

So when did the system start looking recognizable to what people are feeling today? I would say probably in the 90s is when things really started happening. Prior to 1993, you had two types of loans. You had a, well you had three, you had Perkins loan, you had a FFEL loan, a FFEL loan, Federal Family Education loan. Those are the loans that were, you received the funds through a third party, but they were backed by the Department of Education.

So that's why they're federal loans. And you could have received a direct loan. So once direct loans started coming into the picture, things started getting a little bit crazier, a little bit more convoluted. Because not all federal student loans are eligible for the different repayment plans, and not all federal student loans are eligible for the forgiveness option. So that's why it's important to know what type of federal student loans you have.

Super, super important for this conversation so that people understand. Family Federal Education loans are private banks that lend the money and the government guarantees the funds. Exactly. So if the borrower doesn't pay the bank, the bank has nothing to lose because the government was guaranteeing. Loan out to everybody.

That's right. So in 1992, when it became the direct loan program, and I remember doing research on this, it didn't take off for a while. Correct. Like people weren't utilizing that program. So when we started counseling people, there were a ton of people with those FFEL loans.

And that's a significant- That's what's being promoted. That's right. And that's a significant piece that we're gonna talk about in a little bit about loan forgiveness and how that works. So getting back to it, what this means, in 1992 when that happened, the government was positioning itself to become the bank. Exactly.

Using taxpayer funds. Exactly. And that's where it's all started. And again, it took some time to gain steam, but that's where we slowly but surely got to where we are today. So our biggest question that comes to us when we're counseling people is, the repayment plans are so complicated.

And how do I choose the right one as it relates to financial wellness? Because I have to deal with this debt. It was an investment. for my education or my child's education, how do I get out of debt? And this is where it becomes critical to speak with a student counselor because one, not every case is gonna be the same. Every case is gonna have their own parameters, what they're trying to do.

Am I pursuing public service loan forgiveness? Am I gonna pay this out in the long run? So it all depends on what you're trying to do. And that's why you need to speak to a student counselor so that that way you can sit down, they can go over a budget, they can see what type of loans you have, what you do for a living, what your balance is, and come up with the best strategy. Okay, something we have to, now this is the education part, right?

So there's two different paths when it comes to the federal loans of repayment. There's interest-driven repayment and income-based repayment or income-driven repayment. So let's talk about interest-driven first. Okay, interest-driven, as Gordon said, there's two categories, interest-driven and income-driven. The interest-driven repayment plans, those are payments that are based on your balance and your interest rate.

And there's several of those. There's a 10-year standard plan. If you don't call up your servicer and say this is the type of repayment plan I want to be on, then the plan that your service will automatically would have, and excuse me, I'm talking pretense here now because this is prior to, you know, this changes that we'll get to in a minute, but they would have put you on a 10-year standard plan. And that is the plan that will save you the most amount of money. It's the goal benchmark plan.

It'll get you out at the quickest and save you the most amount of money in interest, but it's usually one of the highest monthly payments. That most people, even earlier in our counseling, can't necessarily afford. Correct. A 10-year repayment plan and $100,000 loan is an expensive payment. Yes, it is.

And in tight budgets, obviously, this is part of the strategy. The reason that we're giving history here on this show is because we deal with all ages that are dealing with this problem. We've got people in the late 50s that still have a ton of student loans that they've been trying to deal with for years. So there's all different kinds of options. So it's important for our listeners to understand all of these pieces.

And most importantly, and I'll say this a few times, you can call 1-800-CAMBRIDGE, speak to a student loan counselor. Todd is tremendous at what he does as the manager of that department, and that counseling is free. So all this information we're given for everyone to understand as a conversation, to think about student loans as they exist today and where we're at, but it's also important to understand how we got there and what those repayment vehicles are. And that's really what this is about today, really, is if you don't know anything, this is the time, really, right now, to log into your account at studentaid.gov and really take inventory of what you have. Student loans are a killer.

They're a killer to your financial wellness profile, for sure, and the purpose of today is to help open that discussion, let people know there are opportunities to get information and help. So you've got your interest-driven plans, and that can be anywhere from 10 to 30 years. And the problem is, is even just, I wanna set just a quick context. There's two different programs on the 25 and 30-year side. One is a fixed repayment program where you have a payment that's gonna be that way for 30 years or 25 years.

Then you have also a graduated one, which is kinda like the frog in the slow-boiling water, where every two years, you start with a low payment, and when you begin, you're typically barely even covering the interest, if you are. So your balance isn't really going anywhere. And every two years, then, your payment goes up a little bit, and every two years, a little bit, and every two years, a little bit. So every two years, you're setting yourself up for an increase in payment. Correct, and the thought process there is that you're going to work on your budget, you'll be able to pay off some other debts, but as Boren was saying, keep in mind, a 25-year repayment plan, you will pay much more in interest than what you borrowed just to go to school.

It's a lot of money over time, and again, that's part of the counseling. We can make those numbers. So even if today it doesn't work, and you have to do it today, what's the strategy to shift eventually to cut that interest down? That's in everything that you do in credit counseling and student loan counseling, it's about what do we do today and how do we get to where we wanna go? So let's talk about the income-driven repayment plans, and this is a web of information, of different qualifications, and different reasons why you should be on an income-driven plan and which one you should be on.

So let's just start by explaining each of them. Okay, so back in the 90s, Congress realized that people were struggling with their monthly payments, so that's when they came up with income-driven repayment plans, and in an income-driven repayment plan, your monthly payment is predicated not on your balance or your interest rate, but rather on your household income and family size, and there is several of those. There's the income-based repayment plan, IBR. There's the ICR, income contingent repayment plan. There's the pay as you earn, PAYE, and there was the SAFE.

Everybody obviously watches the news and the saving on a valuable education, that was the income-driven repayment plan that the Biden administration came up with. It was a very generous repayment plan, unfortunately too generous, and then we saw what happened, that was stalled in courts, and that is no longer gonna be available. So the only income-driven repayment plans that will be available to certain borrowers are the IBR, income-based repayment plan, the pay as you earn, PAYE, as well as the ICR, the income contingent. Those are the only three income-driven repayment plans that will be available to certain borrowers, and we'll talk about who those certain borrowers are a little bit later. So there's a new one that we'll get into called the RAP plan.

Can you tell us a little bit about that plan? Yes, the RAP plan, repayment assistance plan. Now what this is, this is the income-driven repayment plan that the Department of Education has come up with, and anybody that has borrowed any student loans after July 1st, [2026], or, and this is important, if you've consolidated your loans, and that consolidation wasn't complete until after July 1st, 2026, then the only income-driven repayment plan that you're gonna be available for is the RAP repayment plan. And the RAP repayment plan is a, it's a repayment plan that, how it figures out your monthly payment, it takes your AGI, your Adjusted Gross Income, and your Adjusted Gross Income is all your income from various sources minus certain deductions, above the line certain deductions, like your 401K, your 403B, your HSAs, you take that away, and that's what your AGI is. So what they're gonna do is they're gonna take the AGI, and they're gonna determine what your monthly payment is, and there's gonna be a scale.

If you're making a certain amount between, let's say, 90,000 and 100,000, you will pay 9% of your Adjusted Gross Income. After 100,000, it's just a flat rate of 10% of your Adjusted Gross Income. That will be your annual monthly payment. Divide that by 12, and that will be your monthly payment. And that's what the RAP repayment assistance is.

So for our listeners, one of the reasons that we're going through this, and the reason we're doing this show is we're establishing very quickly for everybody how convoluted all of this is, and this is why people get confused, and this is why people have a difficult time understanding what their options are to deal with the student loans. Then you couple that with something we haven't touched on yet, but the reason that our industry got into this is because the services themselves, the vendors that are hired to collect and inform our consumers that owe student loans are difficult to reach, don't necessarily give education information, they're not counselors, they're debt collectors. So we've seen over time, and it's no fault of anybody's, this is just where it lies, it's difficult to get information, and if you don't know the questions to ask, then you may not get the answers that you need, and you actually might make some mistakes because you really don't know what your next steps are. That's what we've seen over time. Both Todd and I have been on with the vendors, trying to talk through a consumer situation, and again, we know what questions to ask, so it helps us guide the consumer to really narrow down what's trying to be accomplished.

So if you feel right now, listening to this podcast, that- Your head's spinning? Yeah, it's almost impossible. We do workshops on this, and while we're educating on it, we can't just cut it down to be simple because there's so many little intricacies and nuances that people have to understand, which is why we offer the free counseling at Cambridge Credit Counseling. Again, Todd does this day in and day out in helping consumers. So we're gonna take a quick break, now that we've unpacked some of where we are today, what the repayment plan options are, and then we're gonna kind of get into the specifics of public service loan forgiveness, what that means, what's different from public service loan forgiveness to what was being portrayed by the government for the last eight years about everybody getting their loans forgiven.

We wanna clear that up because it's important that people thought that they might have that happen, and we have been keeping up with all of the information to make sure consumers are informed when they call us or even information that we put out to help people make sense of what's going on. So again, this is Gordon Oliver with Financial Wellness Today. We'll be right back. Hello, everyone, and welcome back to Financial Wellness Today. This is Gordon Oliver, your host, with my guest, Todd Friedhaber, the Student Loan Counseling Manager at Cambridge Credit Counseling.

All right, Todd, tell us about, we're gonna talk about public service loan forgiveness first, then we're gonna talk about teacher loan forgiveness, then we're gonna talk about IDR. Okay, so public service loan forgiveness. Explain to our listeners what public service loan forgiveness is and who's eligible and how you can get to the finish line to get your loans forgiven. You got it. Public service loan forgiveness, PSLF, was created by Congress because they wanted more people in the public fields, more teachers, more firefighters, more non-profits, more government employees, and this was a promise that if you worked in one of these professions, that after 10 years, you would get your loans forgiven.

This was the Bush administration that this got created in, right? Correct, the first Bush. The first Bush, right, 2007, right? Exactly. Okay.

Yes, and really what PSLF did, the guidelines are, one, all my loans must be direct loans. As you remember, we were talking about previously when the student loans first came out, there was several types of federal student loans, but all my loans, if I'm gonna pursue PSLF, must be direct loans, and if they're not direct loans, I need to bring them into the direct program through a federal consolidation, not a private consolidation, but a federal consolidation in order to make them eligible for PSLF. So let me break this down into an example. I'm a borrower that has family federal education loans, and those are not eligible. Correct.

So eligibility for public service loan forgiveness is you must have direct loans. Correct. You must be working for an eligible employer. That's what I mentioned, yeah. We have to be a public employee, a public nonprofit, a government entity, anything like that, so yes, they have to be direct loans.

You must be working for an eligible employer, and then the third factor is you must be on an income-driven repayment plan where your monthly payment is predicated on your household income and family size. And what that really means is income-driven repayment plans have a specific formula that calculates what your payment will be based on your income and your family size. Exactly, the federal poverty guideline and your family size and your adjusted gross income. Now, I wanna use that information you just gave to give some examples when we started counseling people on how we were helping them and some of the pitfalls that came from that. And before I do that, quickly talk about teacher loan forgiveness.

You got it. Teacher loan forgiveness is predicated only for teachers. Teaching in a Title I school, a low-income school, you must be teaching for five consecutive years, and then you would submit the teacher loan forgiveness application. Most teachers will receive $5,000 forgiveness. I'm a history teacher, English teacher, art teacher.

If I'm a highly qualified teacher teaching either mathematics or science in a secondary school, or if I teach special ed in any of the grades, and that must be your main focus is teaching special ed, not you just have special ed students, but that's my main focus, then you can receive up to $17,500 forgiveness. So teachers have their special forgiveness options and for public service loan forgiveness. We'll talk about that because that's a strategic decision to make on which ones you're going to take and we'll get to that. And then lastly, what's IDR? IDR is income-driven repayment plan.

There is IDR forgiveness where, Todd, I don't work for an eligible employer. I work at the Payne section at Home Depot, but I've been on one of these income-driven repayment plans for 20 or 25 years, depending on which repayment plan and what type of loans you have, and I too, the Department of Education, will discharge any remaining balance that I have after 20 or 25 years. The difference between forgiveness, PSLF, and discharge is time, because for PSLF, it's 120 payments. Those payments do not need to be consecutive, just accumulative. For IDR discharge, it's either 20 or 25 years, and taxation.

For those that get their loans forgiven through public service loan forgiveness, they do not have to pay federal income taxes on the forgiven amount. For those people that get their loans discharged, they will have to, which we haven't seen this in a while, but they will have to pay tax on it. I want to unpack that, because this is an important distinction, and the problem, again, in counseling people, and this is why this discussion, while painful, is important for people to tune into. Financial wellness today, that's what we're talking about, how to get your financial wellness plan in order, and on an IDR forgiveness, I want to frame this for the listeners. There are pro people that have been on income-driven repayment plans that are paying zero dollars a month because they qualify for that because of their family size and their income.

So I want just for our listeners to think about this for a minute. So for 20 or 25 years, let's say I continue to qualify for a zero-dollar payment, the interest that is accruing on the loan is gonna make that balance grow tremendously over 20, 25 years. It's a daily interest. And you just said, and I want everybody to be clear on this, there are tax consequences when those loans are forgiven. Yes.

So if you are a low-income person with a family size of four, let's say, and you have a zero-dollar payment, obviously 20 or 25 years later, probably two of the four are going to be either on their own or moving out. So now, or even living at the home, it doesn't even matter. They're no longer the children, right? Now the family's being funded maybe differently. But now you think I'm getting the rest of my loans forgiven, which if the balance started at 50,000 and it got to 80,000, now you're like, wahoo, I got $80,000 forgiven.

And then, by the way, you have to pay taxes on that 80,000. And that's something that if people don't really know or understand it, that's gonna be a big shocking tax bill in the year where you weren't expecting it. And we will continue to raise this kind of education information. And that's why I continue to say the vendors that work for the Department of Education are not going through these things with the consumer in financial wellness plans. They're not.

They're just answering questions, collecting payments, that's what they do. Next call. Next call, 1-800-CAMBRIDGE. Talk to a student loan counselor. Learn what you're eligible for because these are the things that most people miss.

And now I kind of want to go backwards, Todd, to talk about the pitfalls that we've experienced. Number one, just to reframe it, we got into the student loan counseling business in 2014. Three years later, 2017 of October, was the 10-year anniversary of when people could file for public service loan forgiveness. First group. To reiterate, number one, to be eligible, you have to work for the government, city, state, municipality, 501c3.

Don't guess whether you work for an eligible employer. There's a form that you can fill out that you fill out your information and give it to your HR department. And then if they can complete the form, it's highly likely they're an eligible employer. So don't guess that. Ask HR if they are eligible or if they're not.

Now, if you work for a for-profit company, you're probably not working for an eligible employer. So that's the first thing to understand. So that's number one. That's actually the easy one. Number two, they have to be direct loans.

So do you know what kind of loans that you have? When we were counseling people, those couple years up till 2017, we were learning that people thought that they were getting their loans forgiven in 2017 to find, number one, they didn't have the right loans. Number two, they weren't on the right repayment program. So if either one of those existed, you can imagine how upset people were when we had to tell them, it's 2017 and you think you're getting your loans forgiven? You don't have one eligible payment towards the 120 that you need to get your loans forgiven and you basically have to start over.

So how we could help people fix that was by coaching them to take those family federal education loans, consolidate them into a direct loan, and then apply for an income-driven repayment plan. And that was the counseling that we were doing for quite some time and a lot of upset consumers that didn't know any better of what they had to do. So learning that they thought they were getting the loans forgiven and they actually now have 10 more years because they weren't one payment closer to the 120, 10 years worth of payments that they needed. You've been through that with people, I've been through that with people. Here's another example for our teachers.

I wanna make sure that we're crystal clear here. Teacher loan forgiveness is a vehicle and something that is a benefit, but before we got in the business, unfortunately, one of the things we tell people is try not to take advice from people that aren't experts because it might be a bad idea. And what was happening were people were telling teachers to take that $5,000 teacher loan forgiveness after 60 months. So five years you had to be working as a teacher. And once you hit that anniversary, you could file an application, get $5,000 taken off your loan.

Now, here's the pitfall. Let's say that teacher owes $150,000. And because their person that they think is an expert tells them, you're a teacher, you deserve that $5,000. Go get it. They go ahead and go get the $5,000.

Now they owe $145,000. And guess what? They're also eligible for public service loan forgiveness if they work for an eligible employer, which teachers do. If they're on an income-driven payment program, then they're eligible payments. And then once they hit the $120,000, they get their loans forgiven.

Well, by taking the $5,000, you can't double dip. Correct. So that $5,000 gets credited off your loan. Now you owe $145,000. But guess what?

If you didn't take it, you only have five years left to get your loans completely forgiven through public service loan forgiveness. And now because somebody told you to take the $5,000 because you earned it, now you have to go another five years. So 10 total years from that point of making payments again. 15 altogether. And I can't tell you myself, and I stopped doing the counseling probably around 2018, and that's when you took over.

I can't tell you how many people I had to give this bad news to. And that's why, number one, it's the same thing as always. Like the government hasn't given enough counseling on this. They just give information and hope people can read through it and figure it out. And we learned very quickly that because it was convoluted, it wasn't very simple.

Now you did the counseling and you have continued to do so. And that brought us to another position where a lot of changes have happened since 2017. So once 2017, and I remember the article burned into my brain like it was yesterday, 96% of people that should be eligible for public service loan forgiveness were not. So it was a 4% success rate after the inception of the program in 2007. That was painful.

And then, of course, 2017, now you start going into 2018, now we're getting closer to COVID. And when COVID came, there was a lot of changes that we're going to get into as well. So just to summarize where we've gone with all of this stuff, Todd. So student loans started. We did the history part of that.

Bring it to 1992, the direct loan program is created but isn't really utilized. Then they create the public service loan forgiveness program in 2007, which was also designed to make the government become the lender. Because guess what? Remember what we said, family federal education loans did not qualify. So you had to move that money from a private lender to the government now being the lender, right?

A direct consolidation, yeah. A direct consolidation. So that's what you had to do then. And then, of course, the income-driven payment plans, when that started, if I'm not mistaken, IBR and ICR were the only options. Correct.

And then pay as you earn, revise pay as you earn, and save. Both of those got killed, revise pay as you earn, R-E-P-A-Y-E, and save. They got killed, so they're no longer an option. Correct. So the evolution of understanding all of this is to help open the awareness of what you need to do as the steward of owing that debt and what your options are.

So in your counseling, and before, you know, we're going to take another break in a minute, but in your counseling, and we'll revisit this when we close up the fourth segment here, what's the best blanket advice that you could give based on everything that you've learned about helping people with this type of debt? Right now, if we're talking right this minute, Friday, I would say hold off and don't consolidate your bills right now. That would be number one. Because if you do consolidate your bills, you could really potentially be losing out on a lot of benefits that you could be receiving, and you would be really just taking yourself out of that option of getting forgiveness. I set you up there.

I just want you to know that. I set you up because that's exactly what we're going to discuss. Because now, today, fast forward from 2019, we'll talk about COVID a little bit, we'll talk about the things that happened through COVID, then we're going to close the show out by talking about, in today's world, with student loans, what's changed, what you need to be very, very clear on so you don't make mistakes, and then we'll summarize the show and close it out. And again, you know you and I could talk about this for days, and we're not trying to belabor any of this information, but we know how important it is and how this can destroy families if they make mistakes and they didn't know any better. We've seen enough of that in our life of counseling people where it's heartbreaking to know that if we just had an opportunity sooner to prevent people from not knowing or not making mistakes, we could have helped them.

But we did the best we could. Once they were where they were and we were talking to them, we helped thousands of people navigate this and eventually get home with getting their loans forgiven if they were public servants. And if they weren't, having a sound mind that they've developed a strategy to deal with the debt and that it's not going to go away and you must come up with a plan to pay it. So in our next segment, we're going to talk about COVID times, getting us to where we are today, what has changed and what's important to pay attention to, and then we'll wrap up the show. This is Gordon Oliver with Financial Wellness Today.

We'll be right back. Welcome back to Financial Wellness Today. This is Gordon Oliver, your host, here with my guest Todd Friedhaber. We're pretty sure that the audience by now needs to take a few ibuprofens after listening to all of this information that we're providing. And sometimes we have to get into it.

This is stuff that people don't know and themselves, their family members can get hurt in repayment of student loans by making mistakes because they didn't know any better. And it's not their fault. A lot of it's confusing. A lot of it changes. People don't know things are changing.

And that's why we're here. That's why this show exists. We're going to talk about all kinds of things on this show, the auto industry, insurance, mortgages, you name it, as it relates to consumers making decisions, because that all wraps around financial wellness as a whole. So Todd, we've talked about some of the dirty parts that got us to where we are today. And before we get into summarizing what's going on right now, because a lot of the information we're going to talk is still from a previous administration, the Biden administration, and the previous administrations thereof.

This Trump administration has been working to almost dismantle the Department of Education. And we're going to talk about that and what it means to the consumer, because this administration is seemingly trying to get the government out of the lending business. And that's obviously not an easy task. So before we get into all of that, let's talk about, we talked about 2017, and then not too far after that COVID hit. So in COVID, let's give a quick summary of what happened for people in the COVID times with their student loans.

All right. So March of 2020, until October 2023, there was a pause on all federal student loans. Now, if you had, remember, we talked about the fell loans, the federal family education loans, there were federal family education loans that were commercial and ones that were actually from the government. But if you had federal family education loans that were commercial, you still had to make payments on those. But everything that was issued by the Department of Education, direct loans, the FFEL loans that were government owned, and the Perkins loans, those were put on a pause, no payments were needed, and no interest was accruing.

And if you worked for an eligible employer, and you had direct loans, even though you didn't make a payment, you still received credit towards PSLF, as if you did make a payment, which is great, because if you're pursuing PSLF, then your strategy really should be, I want to pay the least amount, I want to pay the lowest monthly payment on an income driven repayment plan, I don't want anything extra, I want to pay more than I need to, because that would actually be taking away from when I'm going to get forgiven. Quick distinction, that might not be the strategy for IDR. Correct. Because there's going to be a tax consequence. Correct, yeah.

So you have to make sure that you understand, if it's public service loan forgiveness, and again, just to summarize, what am I going for? Right, if I'm going to get my loans forgiven, and I'm a public servant, I want the lowest monthly payment. I'm on an income driven payment plan, I'm going to do 120 payments, once that gets forgiven, there's no tax consequence, so why pay a single dollar if you don't have to. So you want the lowest payment. And by the way, on income driven repayment plans, every 12 months, you have to recertify your income to get your payment recalculated.

Because your payment could go up, it could go down. I got a raise at work, I lost income, we had another child. So, yep. Why is this important? Because if you don't do it, you will get popped onto a different repayment program, which may not be an eligible repayment program for the public service loan forgiveness.

Correct. So again, I always give this advice almost every episode. We always tell people, don't ignore your creditors. They reach out to you with something that you have to act on, make sure you take a look at it, because we've seen these mistakes too, where people didn't know any better, they just ignored the emails, they got popped on a payment plan, they didn't really pay attention, they didn't have a bank account attached, now their payments aren't being made, now they fall behind. All kinds of things can happen, so you got to pay attention to your creditor.

Exactly. Yep. So, public service loan forgiveness. So in COVID, one of the things that happened is people did not have to make payments. Correct.

No payments, you still received credit as if you did make a payment, which is fantastic. And that went on for, was it three years? Yeah, three and a half years. Yeah. And here's what one of the most important things were, was there was a waiver process that was put in place.

Yes. We have to talk about it for history, because that's what the show is about, education. The waiver process was the pain that we had about telling people when they were not eligible because their loans weren't direct loans, they were FFEL loans, or they weren't on the right repayment program from that period in 2000, 2017. Once we got past COVID, or during COVID, they put a waiver process in place where you could actually fix the things that made you ineligible. So example, take your FFEL loans, consolidate them, place them on an income driven repayment plan, and then the government would retroactively give you credit for the payments that you made that were ineligible.

Right. One time payment account adjustment. That's exactly what that was. For those people, as Grant was saying, had the older FFEL loans that were not eligible, or let's say they were on a repayment plan that was not an eligible repayment plan. If you consolidate your loans during this period, there was a period where you could consolidate them, then you would retroactively get credit as if you always had direct loans, and as if you were always on an income driven repayment plan.

Well, here's the thing, folks. Just think about it. People miss the boat a lot of times because they didn't understand what they needed. And Todd and I, and even people in our industry, have done everything we can to try to raise awareness of things that people have to pay attention to. And that's why it's never a good idea to ignore, or just put bills to the side and not pay attention to them and not have a plan.

Because what happened with the waiver process is it expired. And actually, they had it to a date, and then they extended it multiple times. They did, yes. Because again, they knew people were not going to pay attention to it, and people would miss the boat, so they gave multiple opportunities to go through that waiver process. Fast forward to today, now we're in a completely different world.

1-800-CAMBRIDGE, speak to a student loan counselor. It's free. And believe it or not, all the information we're sharing today seems like it's a lot of work. But really, when it comes down to it, our counselors are able to pretty much narrow down in 15 to 30 minutes or several sessions what exactly your plan is and what you're eligible for. So let's go back, in my mind, what we talked about today, the history, right?

Just like in 1958, just like in 1965, just like in 1993, just like in 2017, and now in 2026, there's going to be another big change that needs to be understood and discussed. Yes, because the OB-3, one big beautiful bill act. Yes. Notice how they made it sound like Star Wars, like it's another droid, like trying to make it sound friendly, OB-3. Yes, the ICR, the pay-as-you're-in, those income-driven repayment plans will be discontinued as of July 1st.

The repayment assistance plan, RAP, and the new standard tier repayment plan are open for enrollment. Those are the two repayment plans. If you have received any student loans after July 1st or if you consolidated after July 1st, those are the only two repayment plans that you are eligible for. If you did not consolidate, and I had, well, I've been making these payments for the last, you know, six, seven, eight years, you are still eligible to be on the previous repayment plans. We have the interest-driven repayment plans and the income-driven repayment plans.

You're still eligible for those. So the focus has shifted again. Today's debate on this isn't really about access, it's affordability, repayment, taxpayer costs, and long-term sustainability. So what about the grad? So you've got undergrad lending, you've got graduate lending, and then you've got parent plus lending.

So let's break each one of those down. Okay, so graduate and the grad plus loans are no longer going to be available. Those are gone. Grad students now, they're up to $20,500 per year, but they're capped at $100,000. Prior grad plus loans used to be able to take out the cost of attendance.

Those are now gone. Professional degrees, if I'm, you know, like, let's say a doctor, a dentist, something like that, I'm eligible to take up to $50,000 per year and $200,000 total. There is a new loan limit of $257,000 lifetime cap on all your student loans. So a couple of things with regard to that. Undergrad, not much has changed for the undergrad, other than they can only borrow so much.

Capped at $100,000, yeah. Right. So graduate students, they used to be able to do what? Grad plus, they could take as much to the cost of attendance. They used to be able to take out as much.

If I'm not mistaken, there was a consumer that you helped that had over $900,000 forgiven. So they're trying to prevent people from getting so far in debt. Correct. Because one of the things we talk about with people is, if you're going to keep borrowing, what's the return when you put that into your career path of the income you're going to make after living expenses to be able to pay this debt back? Let's talk about parent plus loans.

First of all, let's talk about, before we get into what's going on today, let's just talk about the parent plus loan in general. Okay. The parent plus loan, what that was, that was a gap so that the child would receive so much financial aid, i.e. loans, and then the parents were expected to cover the rest of the cost and they could take out parent plus loans to cover the full cost of the remaining tuition. Let me just jump in. There was a time where taking those out was better than taking out private loans for several reasons.

One was that the interest rates were lower, plus you had forgiveness available, and you could go on to forbearance or deferment. The federal government has a lot more benefits than private ones. And that's the key right there. When you take out a private loan, you basically are stuck paying it. There are some pitfalls.

Number one, if you're a parent, your child typically doesn't have credit to take the loan out on their own, so they have to cosign the loan. You have opportunity to find loans that you cosign, and then after three years of repayment, let's say, you can be released from the cosign responsibility. So there were other things about private loans that necessarily weren't as beneficial as they could be for a parent. So lower interest rate, potential forbearance if you had problems making payments. Forgiveness.

Forgiveness, deferment if you had qualified for a deferment plan. So those were the reasons why Parent PLUS Loans were a benefit. To take out as much as needed. To take out as much as needed, which isn't necessarily a good thing as we've seen so many times. But unfortunately, and if I could give a piece of advice while we're talking about Parent PLUS Loans, talk to your kids as early as possible about this and get engaged in the process.

You don't want to be making these borrowing decisions when your child is a high school senior and all revved with vinegar to get out into the real world and thinks they might have a game plan. Some people do and some people don't. We've seen many people that have taken loans out and have not even used the degree that they've got. So there's a lot of planning that has to go on in this. But again, back to the Parent PLUS Loans.

Now, today, in today's world, the interest rates have gotten a lot higher on Parent PLUS Loans, number one. So slowly but surely, they haven't become, in that regard, from a private lender as good as some of the private loan rates. So that's something to consider on the cost of the borrowing. But the other things that made it attractive, there are changes now in those loans. So let's go through them.

Yes. So now with Parent PLUS Loans, you can only borrow up to $20,000 per year and no more than $65,000 a year, or excuse me, a lifetime. And let me stop you there, because think about the cost of college right now, right? Let's just walk through it. If you're going to a college that's $80,000 a year, that's $320,000 across four years.

Subtract some grants, merit awards, whatever they can deduct off of that cost to get down and narrowed down to what the borrowing is. You have to know now, if you're planning with your children, you can't borrow the full amount from the government over the time that the child's going to go to school. This is one of the government adjustments to prevent people, number one, from getting into so much trouble with the amount of debt that they owe. And again, we could give story after story about seeing people that come to us that are parents with how much debt they owe in Parent PLUS Loans. So let's, again, another pitfall.

Yes. So you used to be able to take out as much as possible, but now they've changed it where it's only $20,000 and $65,000 for a lifetime. So where do I go to get the extra money now that I need? It's going to be the private sector. That's where you're going to end up taking out more money.

Now, are current Parent PLUS borrowers either where their children are out of school, are they grandfathered into the rules that they had under their loans, or are they going to have any of these stipulations? As long as you've already taken out all your loans and you're not taking out any more loans, then yes, you'll be grandfathered where you can still retain those benefits. But you cannot take out any more loans. You cannot do any type of more consolidation. or you would be left with either the standard tiered plan or the RAP plan, but the RAP plan is not eligible. Parent PLUS loans are not eligible for the RAP plan, so now you've just taken yourself out of contention for any type of forgiveness.

Okay, let's give an example so that we can simplify that in this situation. Okay, so I have a child that is a junior in college and I need to take out another loan to cover the remaining year of tuition. Let's frame it, let's frame it. Yep. Let's use me as the parent.

Okay. I have a child that's been in college for two years. We have two more years to go. Okay. I'm a public servant.

I work for the state of Massachusetts. I'm on the ICR plan. Yep. I've made, well, I haven't made payments yet because now I'm still in school. Yep.

But let's say that I had another child and I have other loans that are already in the process of repayment. Now I have two more years to borrow. I've already applied to pay for the fall. Got it. What's the pitfall for me there?

I'm borrowing new money after July 1st. Well, you don't want to borrow new money because after July 1st, then you'll get a new loan and then if you do that, you're not eligible to take the previous Parent PLUS loans already and put it onto the ICR plan. You're only eligible for the standard tier plan because the RAP plan, you're not eligible. So what you would do is you would either take out private loans or if you're married, you would have, if your spouse is not pursuing public service loan payments, have them take out the federal Parent PLUS loans in their name. Okay.

So I've already borrowed, let's say 54,000. I have two more years to go. I'm borrowing in the fall. Am I grandfathered in to borrow as much as I need to finish this child? You are, but if you take out a new loan, what happens?

A new loan has been dispersed after July 1st. That takes me out of contention for an income. Exactly. Because I have to be on an income-driven repayment plan. That's not such a big deal for people that are not public servants.

Correct. Correct. It's just you're grandfathered. You can borrow as much as you want. It doesn't impact you.

But if you are a public servant, you had dreams of getting your loans forgiven. Forget it. You just... So let's talk about what's next. So I put an application in, can I go withdraw that application?

You don't have to take that money. No. You don't have to take it. You don't have to take it. So then now if I'm listening to this and I'm this person in this situation, we know there's plenty of them.

Right. My only move then is either to pay cash or borrow from a private lender. Or have a spouse, if they're not pursuing PSLF, take out those federal Parent PLUS loans. That's important. So if you want to protect your public service loan forgiveness pass before July 1st of anything you borrowed, you need to either, if you have a spouse, have them apply.

Correct. To finish the education. Now are they grandfathered into the cost or are they new borrowers now? New borrowers. Okay.

So they would only be able to borrow $65,000. Correct. Okay. For our listeners, you can see why this is so convoluted. And I can't express enough.

We do workshops, Todd, our Director of Education, Martin Lynch, he does workshop after workshop. We do them for unions, we do them for state organizations, municipalities, to get this information out to help people know without having to spend hours upon hours upon hours, what their options are, what their eligibility is. Are they making a mistake? Are they not making a mistake? And again, the counseling is free.

If you have questions and you're not sure about the path you're taking, it's important that you call and talk to a counselor. They will help you and you will feel a lot better about knowing what the path is. And it's of course 1-800-CAMBRIDGE. And this is the time to do it. And this is the time to do it.

One other thing before we summarize the show, if you are a public servant, one of the most important parts of your process, every year when you recertify your income, you should be submitting a form that goes to your HR department to qualify how long you've been working for them and that they are an eligible employer. And that gets sent into the loan servicer and they will then return to you a letter that states how many payments you have eligible towards your public service loan forgiveness. It's important to get that documentation and keep it because administrations change, people change, records might get lost, you never know. And we've seen people have this problem where they thought they were eligible but they had no proof of it. And this is one of the things that as a steward of financial wellness for your own family and your own self, this is a process that we've seen people not take very seriously that they need to make sure that they're doing.

Absolutely. And also I have people that they've completed the 120 months, they submit their application. I speak to a lot of teachers and some teachers have correlated their retirement dates with making their last payments of the PSLF and then going to retirement not realizing that it can take six, seven months to get the loans actually discharged for forgiveness. On the application, it states you must be working for an eligible employment when you apply for forgiveness and you must be working for an eligible employer when the forgiveness is dispersed. I've had teachers have to come out of retirement, go back into teaching just so they can get their loans forgiven.

If you're submitting a PSLF application on a regular basis, hopefully when you submit your final application, the you of the future is not going to have to wait six, seven months because you're in this system, it'll only take maybe three or four months to get your loans forgiven. All right. So I'm going to make some statements and I'm going to talk about some myths and I want you to respond to them. Okay. So Todd, making my monthly minimum payments, I'm just going to hope for forgiveness.

No, that's a myth. You need to do your due diligence and make sure that one, you have the right type of employment, two, that you're on the right type of repayment plan and three, you have the right type of loans. Okay. So if you explain that in its simplest form, number one, you have to know that you are working for an eligible employer. Correct.

The right employer. You have to make sure you're on the right repayment program. Right. Then you have to make sure that you're- Right loans. Right loans.

And then you have to fill that form out once a year to get a letter of confirmation that you have X amount of payments. And obviously in simple math, if you started it today, in 12 months when you send the form in and recertify your income, because you have to do it every 12 months, you should be getting back the form saying you have 12 months towards the 120 that you need for forgiveness. Correct. Yep. You do both.

I'm doing the PSLF application and I'm doing the recertification. Recertification just to say, yes, I'm still making X amount. I still have this family size. The PSLF application, as Warren was saying, I'm just confirming that yes, I worked another 12 or let's say you do it every other year, another 24 payments going toward the 120 needed. I'm going to give an example of why that's important because save borrowers.

So when people were on save, there was a forbearance while they were figuring out the court cases. Were those forbearance payments counting towards the 120 payments? Some of them. I heard that some of them were, but after they weren't. I just heard just recently that there was a short little period of time, a certain forbearance and administrative forbearance where that would count.

But again, I haven't really looked into that, but I know the majority, no, it does not count. It was not like the COVID period. And how do you figure that out? You can actually just go and you can submit a PSLF application that will tell you and you can just see, okay, what periods was I on forbearance? I also recommend, highly recommend, please, if you're going to go on your account at studentaid.gov, download your NSLDS file, National Student Loan Data System file.

Awesome. Yeah. And that's another convoluted piece. It's gotten actually a lot better since we started counseling. It's the NSLDS file that has all of your student loan history in it.

Absolutely. You can download it, write your most recent downloads. You don't have to print it out because it is going to be a very text weird looking file and there's a lot of pages, but it has all your information. You should have that. I know that we've seen some people that thought they were going to be approved for save once it all worked itself out, but they need to understand that the recent changes are going to make them be forced to go pick a different repayment program.

Absolutely. Right now, people are receiving notifications from their servicers. It's going to go out in waves, but they're receiving notifications saying that you're going to need to choose a repayment plan within the next 90 days. Some people are saying, oh, no, Todd, it says right here until 2028 that I can choose a repayment. No, that's by law, the save plan has to be done and gone by 2028, but you're receiving notification from your servicer that you have 90 days or they will choose a repayment plan for you.

Okay. Before we close up here, I'm going to do a quick fun myth or money. You ready? Okay. All right.

Myth. Student loan rules never change. Oh, that's a big myth. How do you know that? They change weekly because I work every day.

It almost seems like daily. Okay. Myth. The government always intended student loans to become a trillion dollar program. No, that's a myth also.

Of course not. Right? Right. All right. So last myth.

If I'm a public servant, there's nothing I need to do. My loans will be forgiven in 120 months no matter what. That's the biggest myth of all. You need to do your due diligence, do your homework, go on to studentaid.gov. What type of loans do I have?

What type of repayment plan am I on? That's exactly what you need to do. All right. So after studying the history of federal student loans, what's the biggest lesson? And in the work that you've been doing, again, I have my own pieces of this too from doing it, but what's the biggest lesson?

The biggest lesson is just, again, to do your due diligence, make sure that you know what type of loans you have, have an idea, a game plan. Am I going to go for public service loan forgiveness? Am I going to go for IDR discharge? Because two different paths that I need to follow and I need to know that I'm on the right path. Because as Gordon said, when we first started doing this, there were people that thought they were ready to get their loans forgiven after making 10 years worth of payments to find out they didn't have one single payment that had accumulated toward the 120 needed for forgiveness.

And we've seen that heartache time and time again. And as things changed over time, there were different problems that arose from the changes. So it's all about being in the know. We post a lot of information about all of this. We share it with our partners so they can share it with their either employees or constituents so that people know what's going on and they don't have to spend a ton of time to try to figure it out because that's the job that we do to try to help people.

So advice that we would give, take 15 minutes, go to studentaid.gov, find out how much you owe, which repayment plan you're in, whether you're pursuing PSLF, which is public service loan forgiveness, whether your recent strategy has to change because of the changes that we've given on the program. And again, that's a challenge. And if you don't feel like you know, even if trying to study any of that in the next week, call 1-800-CAMBRIDGE, talk to a counselor, it's completely free. And student loans are again, more debt than credit card debt. Credit card debt's at 1.25 trillion, student loans are at 1.6 trillion.

And unfortunately with student loans, there's no way out as of now of getting out of repaying them unless you are insolvent. You have to face them, you have to know what you're eligible for, you have to make a game plan. And that's all about what this show is about. Financial wellness today is about how to get to where you want to go, where you eventually will live a debt-free life and not have any of bills like student loans that are just holding you back from reaching the goals that you want to reach along the way. And it doesn't matter what age you are when it comes to this, you can develop game plans when you're 20 years old, you can be in the middle of having a family in debt at 39 years old, you can be facing retirement and going on fixed income and have a game plan and having to deal with having to plan for being on that fixed income.

And that's what the show is all about. If you have any questions, please feel free to email me at gordonocares at gmail.com. You can find me on social media at gordonocares on Facebook and at gordonocares on LinkedIn. That's going to wrap up this show. Please feel free to get a warm compress for your forehead after listening to all this information that we provided for you because we understand it is confusing, it is convoluted, but that's the purpose of the show.

We're going to bring it each and every episode to bring meaningful information to help protect consumers from either things that are good for you, bad for you, scams that might be out there, try to take advantage of you if you're vulnerable and being knowledgeable is part of the battle. And this show is designed to help bring you information and resources that you can reach out to if you need help. This is Gordon Oliver with Financial Wellness Today. We'll see you next time.

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