GMB Ep #145: Everything You Need to Know About Biden’s Student Debt Forgiveness

Last week, President Joe Biden announced a new student loan relief program that promises to cancel $10,000 of student debt for low- to middle-income borrowers. Since then, this topic has become somewhat controversial and has ignited a fair amount of debate online. This week on the podcast, Grant dives into the provisions of this new student loan relief program, eligibility criteria, and some of the planning opportunities that have emerged from the program.

Show Notes

[03:31] Background – Grant shares the details of President Biden’s new executive action and why it’s considered controversial.

[06:35] Qualified Loans – Grant explains the types of loans that are qualified under the provisions of the student loan forgiveness program.

[08:42] Income – Income is the most prominent factor that determines eligibility for loan forgiveness. Grant breaks down the numbers of the income levels that qualify for this program.

[14:05] Income-driven Payments – Grant shares his thoughts on the differences between income-driven payment programs that were introduced earlier and President Biden’s new program.

[20:00] Planning Opportunities – Grant discusses some of the tax planning opportunities that may allow you to qualify for the new loan forgiveness program.

[29:58] Earlier Programs – Grant shares some highlights of the provisions that were included in the income-driven payment programs that were introduced earlier.

[35:00] Enrolling in a New Program – Grant shares his take on the pros and cons of enrolling in a new income-driven repayment program.

Resources

The College Payment Puzzle For High-Earning Families

Those four years when your child is in college can be a rollercoaster ride, but the scariest part for high-earning parents can be figuring out how to pay for it. It can be tempting to put your own goals on hold while you shoulder the big-but-temporary new burden.

A better strategy for paying for college while keeping your goals on track is to build the right short-list of colleges together with your child and maximize financial strategies. For families that make too much to qualify for financial aid, college funding likely won’t come from just one source. It’s about putting together a plan that draws from several buckets:

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Mistakes are Expensive: A New Generation Embraces Financial Planning at the Mid-Stage

Financial planning has evolved beyond investing assets. The old model limited comprehensive planning to a wealthy few with high levels of manageable assets. For many people, their first engagement with a financial advisor was when they needed to create a retirement income plan.

The new fee-only model allows financial advisors with experience and knowledge to assist across the landscape of financial life. And a new generation with very different goals is taking advantage of all the elements to create plans that work for them.

Retire early, create “work optional,” or work part-time
Save for kids’ college
Enjoy life now – and save for the future
Invest in a second home or rental property

This generation has created high income and realizes they do not have to wait another 20 or 30 years to have the lifestyle they truly want. They understand that financial planning is all about tools, tactics, and strategies that can be deployed in tandem to help them keep more of what they make and actively grow their wealth.

It’s about understanding the options, making the right choices for a highly individual path forward, and solving problems.

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GMB #136: Taming the Cost of College With Brad Baldridge

Properly planning for a college education has become one of the crucial decisions that could define the future of a young adult. This week on Grow Money Business, we’re joined by Brad Baldridge, a licensed financial planner, consultant for college funding, and main podcaster for the “Taming the High Cost of Education.” Brad assists families in preparing and saving for college by offering individualized planning services and insights on the most recent tax, cash flow, and academic strategies. Throughout the episode we discuss many important strategies for reducing the cost of college expenses.

Show Notes

[01:54] Background – Brad describes how he became interested in college planning and shares some thoughts on why it is so expensive.

[05:23] Sticker Price – Brad explains the evolution of sticker pricing and how it impacts college planning.

[21:24] Process – Brad walks us through his advising process on how he helps individuals apply, enroll, and select the best school for them.

[27:16] Strategies for Business Owners – Brad explains what company owners should know about planning and paying for their children’s college education.

[45:36] Common Mistakes – Brad outlines several common mistakes people make when planning for a future college education.

[50:22] Best Choice – Brad explains how to differentiate between applying to a college with a reputable financial aid office versus one that may not be as transparent.

[59:42] Taming the High Cost of College – Brad describes how his college funding company serves its clients.

Resources

Financial Fitness – Mid-Year 2022 Check-In

Summer will officially be here soon, but before kids get out of school and all the vacation planning you did begins to come to fruition, it can be a good idea to take stock of your financial picture and make updates where necessary. Below are a few things you should consider to keep your plan in shape. We’ve organized them by life stage, from having small kids to being closer to retirement. We’ve also included charitable giving, as that happens at every stage.

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GMB Ep #93: Managing Student Loans When You’re Over 50 With Erik Kroll

Having outstanding student loans at the age of 50 versus earlier in your career will have a very different impact on your financial status. In today’s episode, we have a distinguished guest who specializes in helping people over the age of 50 to repay their student loans. Erik Kroll, Certified Financial Planner® and the owner of studentloansover50.com joins us to explain different strategies to manage your student loans, as well as how that approach changes with time.

Show Notes

[02:02] Student Loans Over 50 – We start the conversation with a brief review of Erik’s background, the work he’s doing as a financial planner, and what lead him into specializing in student loans.

[04:45] Age and Student Loans – The differences between having student loans as a fresh graduate versus having student loans at the age of 50 and how our life priorities in come into play.

[08:28] Forgiveness – Erik dives into important considerations for student loan forgiveness, including different options, qualification criteria, and taxation.

[15:12] Accumulating Debt – Common patterns for individuals over 50 with student loans, including Parent Plus loans, post-graduate education, and career changes.

[22:03] Double Consolidation – Erik explains the process of utilizing consolidation and other strategies to reduce monthly loan payments.

[29:10] Rehabilitation – The path to rehabilitation and qualifying for forgiveness after your loans have gone to debt collection.

[34:18] Student Loans Over 50 Playbook – Erik shares his thoughts on what led him to create his eBook and what readers can learn from it.

[37:11] Recent Developments – Erik shares his take on some of President Joe Biden’s recently proposed loan forgiveness provisions.

[41:07] Private Loans – The pros and cons to a private refinance, and important things to consider when making this decision.

Resources

Connect with Erik:

LinkedIn: linkedin.com/in/erikkroll
Website & Ebook: studentloansover50.com

Past episodes on Student Loans:

Episode #34: Why College Is So Expensive & How to Pay For It With Robert Farrington
growmoneybusiness.com/podcast/why-college-is-so-expensive-with-robert-farrington

Episode #90: This is Exactly What to Do With Your Student Loans
growmoneybusiness.com/podcast/this-is-exactly-what-to-do-with-your-student-loans

GMB Ep #90: This is Exactly What to Do With Your Student Loans

With roughly 44 million borrowers that collectively owe nearly $1.7 trillion, student loans, the second-highest consumer debt category, has become something that’s pervasive for young people in the United States. We dedicated this episode to exploring some of the ways borrowers can make their student loan repayment manageable. Throughout the episode, Grant dives into how the interest rates and other characteristics vary depending on the lender, repayment options, income-based repayment, federal student loan forgiveness, and more. Stay tuned until the end of the episode, where Grant shares some strategies to reduce your monthly payments by suppressing your adjusted gross income.

Show Notes

[01:43] Background – The pervasive nature of the U.S. student loan programs and why they have become pervasive.

[05:10] Who Lent You the Money – Grant explains how the interest rates and repayment options may vary depending on the institution that is underwriting a student loan.

[07:38] Repayment & Refinancing – Once students have graduated and their forbearance period has finished, it’s time to paying back the student loans. Grant explores some of the options available for students at this point and how to decide whether to refinance with a private lender.

[10:19] Staying in the Federal System – Although it might make sense in some cases to refinance with a private lender, staying in the federal system has its own benefits. We talk about what these benefits are and how students can take advantage of staying in the federal system.

[13:07] Income-based Repayment – How the income-based repayment programs work, requirements for eligibility, and how they help people make their monthly payments manageable.

[18:13] Forgiveness – One of the features in income based-repayment is being able to get your debt forgiven after a certain number of years. Grant dives deep into how debt forgiveness works, how taxation comes into play at the point when the debt is forgiven, and what to consider when deciding whether to pursue forgiveness.

[22:32] Administrative Forbearance – As a part of the stimulus package introduced under the CARES Act, an additional forbearance period was introduced for student loans. Grant shares his thoughts on how to take this into consideration when making decisions about student loan repayment.

[27:15] Strategy for the Federal System – Grant shares some strategies for those who are in the federal system to make loan payments manageable by suppressing their adjusted gross income.

Resources

Episode #34: Why College Is So Expensive & How to Pay For It With Robert Farrington:

https://podcasts.google.com/feed/aHR0cHM6Ly9ncm93bW9

Episode #67: How & Why to Employ Your Kids In Your Small Business

This week on Grow Money Business we talk about a powerful long-term tax planning opportunity available to business owners. Employing your kids in your business gives you and your kids numerous benefits in terms of taxation and retirement savings. Throughout this episode, Grant dives into what these benefits are, how you can contribute to your kids’ retirement savings, and some tax planning opportunities related to employing your kids.

We’re planning to post another mailbag episode in the next few weeks. If you have specific questions you’d like Grant to answer in an upcoming episode, visit growmoneybusiness.com, and drop your questions in the Mailbag section.Continue reading→

Episode #47: Mailbag! What Grant is Doing With His Kids’ 529 Plans, Spousal vs. Survivor Social Security Benefits, and Whether Value is Dead

This week on the Grow Money Business podcast we have another mailbag episode. Grant covers four questions from our listeners about Social Security benefits, the future of value investing, distribution strategies for retirement, and saving for your kids’ higher education.

If you have more questions you’d like us to cover, visit growmoneybusiness.com, and drop your questions in the Mailbag section. Grant will answer your questions in a future episode.

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How to Determine How Much Life Insurance You Need

Many people I work with realize that they need some kind of life insurance once they start having kids. The purpose of life insurance, of course, is to ensure that everyone in your household can maintain their standard of living if you die prematurely. And as soon as other people start relying on income you haven’t earned yet to live, it’s probably time to consider some coverage.

The problem seems straight forward, but the options are confusing. First, there’s more than one type of life insurance. Whole, variable, universal, and term are the predominant options available. While insurance agents love to sell the first three (because they’re the most profitable to the insurance company, and therefore pay the greatest commissions) term is the least expensive and usually the best fit.

I’ve written in the past about why most people seeking life insurance should steer clear of permanent insurance policies. But what about the second part of the equation: how much do you really need?

There are two predominant ways to figure this out: human life value and a life insurance needs analysis. Today’s post will explore both methods.

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