Justin Harvey is a brand new team member here at Student Loan Planner. As a student loan consultant, he’s hit nearly a hundred consults. He’s been in the financial industry since graduating from Villanova University in 2010. After seeing the student loan debt his wife had as an anesthesia resident and how it’s impacted their lives, he launched his own firm in 2017, Quantifi Planning, which focuses on anesthesia and pain physicians with student loan debt.
In today’s episode, you’ll find out:
- How Justin began working in the financial industry
- Why he decided to launch his own firm
- How he ended up consulting at Student Loan Planner
- Why it’s imperative to know what you’re doing before refinancing or consolidating your student loans
- When hiring a student loan planner instead of relying on your student loan servicer might be a better option
- Why “follow the money” should be your go-to phrase when choosing a financial planner
- Justin’s thoughts on poor student loan advice
- A few of his favorite anecdotes from consulting at Student Loan Planner
- Why he tells people to “question the assumptions” before incurring student loan debt
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Episode 18 Transcript
Travis Hornsby: [00:00:01] Welcome to the Student Loan Planner Podcast. I have my friend Justin Harvey with us today. Justin is a brand-new team member of Student Loan Planner. He’s almost hit a hundred consults and probably record times. That’s just amazing. Justin, welcome to the show.
Justin Harvey: [00:00:15] Travis, it’s a pleasure to be here today.
Travis: [00:00:17] Let our listeners know a little more about you. Who is Justin Harvey?
Background as a financial planner
Justin: [00:00:22] I’m a financial planner. I’ve been in the industry since I graduated from Villanova University in 2010. I started in the industry working for essentially, like, a family office, which is industry parlance for an investment management company for the ultra-rich. And I was really lucky to work with some super smart people. Really grateful for that opportunity I had there. And eventually I got to a place where I wanted to do a little bit s outside of work. And that particular role was very demanding, and I didn’t have any time to do things like read books and have friends, which were things that I did eventually want to do.
Travis: [00:00:55] Wait, you’re telling me the rich are demanding?
Justin: [00:00:57] It depends. But some of them definitely are, and employers particularly can be demanding. I took a similar role back in 2012 doing the same kind of thing, financial planning but with a company that gave me a little more breathing room. During that time, I was very business-minded, wanted to, like, build for the future financially. And I did a little bit of house hacking, which I know that you’re familiar with BiggerPockets and have been on that podcast probably. So I was a BiggerPockets nerd. Loved learning about investment real estate. So I was on the hunt. I was convinced I needed to do a house hack, and I wanted to buy a house and live in it and renovate it. And I was fortunate, you know this job that I was working at the time gave me a little more latitude to be able to do that. So I did all that while working on a CFP and continuing to get financial credentials. Eventually got to a place where I had done this home renovation. I was becoming proficient in financial planning, and I was about to turn 30 years old. Kind of like a third of a life crisis thinking, oh my gosh like, what am I building for myself now and for the future? And I was trying to decide, do I want to really double down with my current firm? I had always had dreams of entrepreneurship and was interested in examining that at least. And after doing it for a while, I decided at the end of 2017 to launch my own firm, which is called Quantifi Planning. I should also mention at this point in the story I met my now wife Sarah a few years ago, and we got married this past June. Sarah is an anesthesia resident here at the University of Pennsylvania in Philadelphia. And I know Travis you’re also married to a physician, so you know a little bit about that life. So as Sarah and I got more and more serious, and I began to meet many of Sarah’s friends and see what a lot of the challenges that resident physicians face. And seeing, you know, how many of those are financial — taking on massive student loans. And now me personally being integrated into that student loan situation, I wanted to orient my practice towards serving this cohort of people. My practice in its current form — Quantifi Planning — is designed to help anesthesia and pain physicians address the personal and financial challenges of early-in-my-career physicians. That’s obviously very oddly specific, and I get this question all the time: why do you work with anesthesia and pain? What’s the — Why can’t you just work with doctors? Isn’t that pretty specific? And you know, it is. But what I found is that with pain doctors and with anesthesiologists specifically, there’s a number of specific market dynamics and employer considerations and business opportunities, things that these specialties specifically have to address. And so with pain, 70 percent of pain doctors are anesthesia residents. Both of these cohorts are by and large going through anesthesia residency. Then there’s a lot of big job decisions that they have to make as they’re growing their income and moving ahead in their career. And they need to understand different types of practice models and different types of compensation models. How do we optimize for taxes if I have a buy into an ambulatory surgery center? Or, what should I think about if I’m looking at a small partnership and joining a couple of doctors who are in small pain practice? Or, what’s the difference between the big anesthesia company employers and who should I be looking at? These types of questions that young physicians in this space are asking. So what I’m really throwing myself into right now is to learn as much as I possibly can about all these different questions and bringing that intel to bear in the lives of my clients, which I just couldn’t be more happy and excited to be doing what I’m doing, especially because not only is this impacting my clients, it impacts my wife and my family and my very own future with financial planning and that stuff. And with the student loans I feel very much like I just love what I do.
Travis: [00:04:25] That’s great. So one thing that you have to know a lot about if you’re going to have that kind of a niche market is you have to know about the Public Service Loan Forgiveness Program, right? And you have to know about refinancing. You have to know about student loans. Listeners might be like, these guys sound like they kind of know each other a little bit. And that’s because we do. So Justin and I know each other from way back when I was a bond trader in Philadelphia. And you know, we knew a lot of the same people, were kind of in the same church circles, so we were kind of acquaintances/friends from back then. And then you know, you started getting involved and you try to write your own firm. Justin, maybe you can tell folks if it’s hard or not start your own financial planning firm. I think it might be a little bit.
Justin: [00:05:04] Yeah. It’s deeply challeng— It’s like anything worthwhile in life. It’s incredibly, incredibly difficult and deeply rewarding. And if you’re planning on doing it, take whatever you think you’re gonna spend in the first year and multiply it by three.
Travis: [00:05:16] Yeah.
Justin: [00:05:16] And whatever you think you’re going to earn and divide by two.
Travis: [00:05:19] Right. Like this entrepreneurial spirit 101. Or lessons 101, right.
Justin: [00:05:24] That’s right. That’s right.
Travis: [00:05:28] The thing that I’ve kind of been doing with Student Loan Planner is trying to identify people that are extremely interested in student loans when we do have a need for more people on the team. And I’ve basically — My strategy up until now, just to kind of be transparent with all of you, is basically finding people who are in the midst of growing their businesses, their planning practices, people that are really talented. And you know, filling up a financial planning practice can take five years. I mean, it’s a very slow-moving process in finding folks like Justin that have capacity, that understands student loans. I was basically able to work with Justin, and we were able to go through the process of training him on how to do student loan consults the Student Loan Planner way because you already were helping people figure out their student loans. That’s kind of been what we’ve been trying to do. So that’s how Justin sort of fits into the puzzle with Student Loan Planner. You know, you are one of our core people that helps people with like $50k to $200k of debt right now?
Justin: [00:06:14] Yeah.
Travis: [00:06:14] That’s just been awesome to see your passion for helping our clients and helping them with just general financial planning stuff because a lot of our folks, like, are not going to hire a $5,000 a year planner, right?
Justin: [00:06:25] Right.
Travis: [00:06:26] So maybe you can talk a little bit about people that can’t afford the $5,000 a year plan, or how you’ve been able to help some of those folks with Student Loan Planner.
Justin: [00:06:33] Yeah, absolutely. And you know for many, many even eventually could do something like that. But you know, if you’re in med school or if you’re a resident or if you’re just a young professional — You know, I do a lot of work with teachers and early career chiropractors and veterinarians, and for many of them, that type of engagement doesn’t make sense. But for all of them universally, student loans are something that they have to learn how to navigate and understand what their options are.
Consider carefully before refinancing or consolidating
Justin: [00:06:56] So I would say for anybody listening there’s two big lines of demarcation. Once you do this thing with your loans you can’t go back, so make sure you know what you’re doing. And that’s consolidation and refinancing. Whenever you’re doing that, you’re doing this thing that can’t be undone. And so a lot of people come to us when they’re asking these questions of, oh man, should I refi? Should I be paying less interest? Or is consolidation — I heard it’s an option. What does that mean? People who come to us with this specific question. I’m really grateful even for the existence of Student Loan Planner. And Travis, having met you and seeing all the great work that you’re doing. And I couldn’t be happier to be a part of this team and helping these people answer these specific questions.
Justin: [00:07:33] I can just give kind of a couple anecdotes. You know, as you persist in this business, it’s like every day, it’s a new — it’s a new story that you could tell on a podcast. But routinely, people are just getting bad advice. In some cases from loan servicers or poor service that ends up costing them potentially thousands. And often we’ll field calls and — you know this, Travis — we’ll field call saying, my servicer said x. Does that sound right to you? Is this really the only option? Or am I really gonna get kicked off of IBR? Or should I really be on Revised Pay As You Earn (REPAYE)? And these questions where sometimes they’re getting advice from the servicer who doesn’t know anything about their personal situation and is telling them very specifically in some cases, this is what we ought to do. To be able to step into that and help bring clarity and help bring a sense of, you know, here’s the real landscape, and here’s the real options based on all of these factors. Based on your income. Based on your marriage status. Based on your employment trajectory. And helping unpack these personal factors that are going to be incredibly integral in optimizing your student loan situation. We can draw this out and help somebody feel like, man, you know, the Student Loan Planner team, they really did their due diligence. They know the facts about my situation, and they can really give customized advice in a way that’s going to be beneficial for me and my family. So I love being able to do that.
Travis: [00:08:49] Yeah. You know, I want to give an example. I get really angry sometimes with the stuff that happens in this industry because people are just out to make a really quick buck, and that’s — That’s what they care about, is money. And in general, in my life, like, people that only care about money and have no purpose behind what they’re doing. It’s just all about the profit. And you know, whatever customers, go screw yourselves. Those people make me really, really upset.
Justin: [00:09:13] Yeah.
Travis: [00:09:13] Just my personality. A lot of these consolidation scams have been moving around and changing their dynamics because the Department of Education’s been cracking down on them. And so some of them are at law firms, and professional people that are doing this as a side hustle or something. And so I ran into this one recently where this person, she had consolidated her FFEL loans. These are loans before 2010. So she had done that already by herself, and she had been making payment credits on her loans since about like 2012, 2013 kind of timeframe. Right? She had built up about four years of payment credit under an income-based plan. She hired this group to give her advice on her student loans. And you know, think of this as being any sort of well-meaning group of individuals that don’t have a deep level of expertise, right? And so what kind of happened was this person was given blanket advice to consolidate. Well, it just so happened that she had three or four or five years of credit already towards loan forgiveness. What happened is they took a bunch of Direct loans that already qualified for loan forgiveness and already qualified for all the repayment plans, and they turned it into a situation where they wiped away all of her years of credit that she’d already built up for no reason.
Justin: [00:10:34] To travesty.
Travis: [00:10:35] Yeah. Yeah. And that’s amusing that my name is present in that word, right? Travesty.
Justin: [00:10:40] Nope. No pun intended.
Travis: [00:10:41] Yeah, I know. And so this person, she was basically out four additional years of payments at the end of her career. I calculated the impact of that. It was almost six figures. It was a very large amount of money. And still, loan forgiveness was still — And I say loan forgiveness, I mean the 20 to 25 year Pay As You Earn (PAYE), REPAYE kind of loan forgiveness where you have to pay income taxes. That was still the right solution just because her debt was so large. But I just thought the debt was so unbelievable that they would have done that without having any clue about what they were doing. And then the crazy part is I told her to request all of her money back because she’s paying a monthly fee. I suggested that because I was just like, if they screwed you over with almost a six-figure mistake, they should at least refund things. And the person was totally clueless on the other end. Basically the person was just like, but I don’t understand. Your payment was much lower than it would have been otherwise.
Justin: [00:11:33] Wow.
Travis: [00:11:34] If you had not done an income-driven plan, you know, you would have been in deep trouble or something like that. And the worst part is, like, they didn’t even understand the mistake. They didn’t even understand how bad they screwed this person over. I’m sure you have a lot of examples like that, but —
Justin: [00:11:46] Yeah.
Travis: [00:11:46] I think it’s just unbelievable how bad the advice is. It’s something that — Consider Justin, if we’re talking about the student loans consults, it’s like, $295 to work with you or Lauren. And it’s up to $595. Like, so the price is basically $300 to $600 bucks, right? And if they’re going to hire you as a planner as a physician, they’re going to pay, you know, a few thousand dollars a year.
Justin: [00:12:06] Yep.
Travis: [00:12:07] But you’re willing to call a customer service representative making $15 an hour and trusting them with your financial future.
Justin: [00:12:16] Yeah, and it’s really sad. I had a similar situation. Instead of the consolidation question, it was around refinancing, and it was a physician assistant. It was a similar engagement: some kind of company that was giving them advice on the young lady’s loans. They said, you should definitely refinance. You know, everything’s at 6.8%. And you can do better on the private market, and there’s a lot of incentives. Something listeners should be aware of is companies have incentive to push you to refinance in some cases because they have essentially a kickback arrangement set up with the refinancing companies. If you can click through on their platform, then they’ll get paid, so they can pressure you into refinancing because that’s how they can make more money. So this could have been one of those types of situations where they’re saying, you know, you, young lady, would be best off refinancing in this case. And she had about $150k of loans at that point. Meanwhile she was about to switch jobs. She was about to start working at a 501(c)(3)-qualifying hospital, a not-for-profit. So, as Travis can tell where this story’s going, she’s gonna become eligible for PSLF, Public Service Loan Forgiveness, which is this plan, you know, on an income-driven plan, working for a 501(c)(3) for 10 years of qualifying payments, with the right type of loans you can get whatever balances left over at the end of that 10 years and get it wiped away tax-free. So this PA was in this place where she was right at the precipice of hitting that refinance button, crossing that bridge and passing the point of no return. And she would have been out of $130,000 ultimately that she was going to have forgiven, we projected. And she almost lit that whole pile of cash on fire based on this bit of bad advice. Fortunately after she got that advice, she had some kind of like spidey sense tingling moment like, this doesn’t feel quite right. I want a second opinion. She decided to pay us the $295, and we saved her a six-figure number. This happens all the time. That’s not even an outlier. And remember, like, consolidation or refinancing, those are both points of no return, as Travis pointed out. Before you do that, before you hit that red button, make sure that it’s what you want.
Travis: [00:14:10] I think another case, it was a Ed Jones, Northwestern Mutual, spends a bunch of money on sports advertising, kind of — kind of financial planning organization that made its money on commissions that told this veterinarian that I advised early in my career helping people with student loan debt that she just needed to buy whole life insurance policy. Had a couple of cases like this. One said, you know, you need to buy a whole life insurance policy, and then the commissions kind of trailed off on the policy. And then they told her to buy another policy. Her yield on her whole life policy was going to be like 4 percent if she did everything right, and the debt interest rate was like 8 percent. It was just a classic case of a so-called adviser locking in a negative arbitrage situation just to make money because that’s all this person cared about. This person would be the kind of guy that would, if you were dying on the street corner from thirst, he would give you water, but he would make you sign away, you know, a year’s worth of labor to him. That kind of scum of the earth kind of person. I know that’s kind of, like, extreme. I’m not saying at all that commission financial advisers are the scum of the earth. That’s not what I’m saying. I have a lot of friends that are commission financial advisers that are not fiduciaries. That’s not at all what I’m saying. I’m saying that certain people operating within incentive structures that are flawed can do some really, really bad things. So let me just clarify that before I get a bunch of hate mail because, you know, I don’t want to — I don’t want to spear anybody’s good name. You know, like, if you’re a used car salesperson, you can be a good used car salesperson, right?
Justin: [00:15:38] And we need those people.
Travis: [00:15:39] We need those people. There’s nothing wrong with that. And to be honest, like, yeah, there’s some people that make $30,000 a year. They’re never going to be able to afford to hire a fiduciary planner. And so those people, are they better off getting some kind of like super high-fee financial product than nothing? Yeah, they are. But in this case, this was somebody that could have afforded a fee-only planner, and she bought these policies because this guy was like, this is the only way I get paid, and so I’m not going to tell you that I can’t help you because then I won’t make money. So he sold her this, and it cost her, like, $20,000 or $30,000 of interest that she could have gotten back instead. And she needed to cancel the policies to get the money to pay the loans too. Because they were so expensive. She lost all that money from contributing to the policies, and she had to get her loans being paid down. So it was just a big mess. That’s probably one thing that I get in trouble a lot with, Justin, is I have a loud mouth, that I can’t shut up. I’m too opinionated. So I just, like, sometimes I just let people know what I think of them. And that’s probably not smart. But yeah.
Travis: [00:16:32] So that was that was an interesting case. And then there was like a — I shouldn’t say the name of the firm too. They’re going to be mad at me. But you know, it was one of those kind of firms, right? Just like an Ed Jones, Wells Fargo, you know, one of these kind of firms that makes commissions. They had a $100,000 inheritance, right? And they were like, what should I do with my $100,000 inheritance. This person sitting around with like, a $130,000 of student loan debt. They were like, you don’t need to put that money into your student loan debt. You should put it into the, you know, wonderful American Patriot Growth Fund of America. This fund had a 6 percent commission on it, so the person paid for the 6 percent commission fund. So the adviser just got a check for six grand. Then the fund, you know, besides having super high fees, the fund just super underperformed. So it went from, you know, $100,000 to like, $80,000. Meanwhile she needed to refinance her loans anyway. And this person was not super risk loving, like, clearly didn’t go through the risk questionnaire either. I’m just kind of sharing some stories to show why — That’s one of the things you said was really good. You said they just want to get you to refinance all of these cases. So there’s groups out there that will give you free advice, but then they will basically give you no cash back bonus and make refinancing their main product. So there’s groups out there like that. And there’s also groups that don’t give any help on the student loan front, and they just basically say, make up your own mind. Here’s a bunch of refinancing links. Click on them. You don’t get into cash back bonuses. So that’s why I structured the business the way I did so that people can hire someone like yourself for a fee because I want you to know what you’re paying for. And I want you to have it be a clear fee. And then also, yeah, we earn referral bonuses at StudentLoanPlanner.com forward slash refi. But we’re also giving the majority of that back to you in the form of a cash back bonus, which very few people do. If I get hit by a bus, Justin, maybe I can try to buy out the company. But if somebody buys that, I think — I think the first thing they’re going to do is eliminate those cash back bonuses and make, you know, a bazillion more dollars a month.
Justin: [00:18:24] And I always harp on this in the financial planning space, but it’s true anywhere is, like, understand where the money is going, where the money is coming from. I like to point to the phrase “follow the money,” which was made famous in “All the President’s Men,” one of my favorite films from back in the day starring Robert Redford. “Follow the money.” And in this case, we’re talking about implicating Richard Nixon in the Watergate scandal. But if you don’t understand how the person who’s giving you advice is getting paid, then there’s significant conflict of interest built into that system. Not to say that good advice can’t still happen, but any financial planner or attorney or student loan planner or whatever, anybody operating in that environment has to significantly swim upstream go against a compensation model in order to give you the right type of advice. If the compensation is transparent in the way that you’re paying somebody and you’re getting something and there’s an exchange that you can see everything on the table, that’s when you can know that as best as you can, you are mitigating or eliminating conflicts of interest.
Travis: [00:19:20] And you know, Justin, I love offending everybody. So you know, apologies ahead of time. But you know, the recurring revenue model. I mean, I don’t have a problem with it because you’re providing recurring value. And if we find out a way to do that in a way that I feel ethical, we might do that at some point at Student Loan Planner. But I’ll say I need another monthly bill like I need a hole in the head.
Justin: [00:19:37] Yeah.
Travis: [00:19:37] That’s one thing that I love what we’re doing right now at least, is right now we’re able to be profitable. We’re able to serve a lot of people without having to do that, commit to a recurring, you know, charge on your credit card every single month. So I love the fact that we’re able to make someone like you that’s really knowledgeable about student loans, that can create a life-changing plan for somebody, but we can do it for not this big recurring fee where somebody has to have this awkwardness where they feel like it’s just another giant, you know, cable bill or something.
Justin: [00:20:06] Totally agree. And you know, for people who have an ongoing financial planning engagement, like, that’s not right for a lot of people. A lot of people don’t need somebody that can hold their hand every step of the way every month, every quarter. Some people just want to know. Tell me what to do. Send me on my way. And I’m good to implement this strategy, and many times, save thousands, tens of thousands of dollars. And that’s absolutely a deeply valuable business model to be able to offer consumers.
Handling a spouse’s physician student loan debt
Travis: [00:20:30] So my wife says that I need to be more positive. So you know, we both have physician wives. So I’m going to try to be a little bit more positive here, Justin, and stop going down my warpath. So tell us — tell us a situation where I’m imagining, you know, you and Sarah started getting more serious, and you had a money conversation along the way. How did that go, and what kind of things did you discover? Did she have debt? Did you expect that she’d have debt? Did her friends have debt? You know, that kind of stuff.
Justin: [00:20:54] So let me start off by saying one of the problems with financial planners is that they frequently don’t know what they don’t know. So I’ve been the financial planner in the past who said, ok, we’re going to take the Dave Ramsey approach to paying back your Direct loans. Take them all and put them in descending order of interest rate. And start at the top and throw as much money at them as you can. And I’ve been that guy before I came to know all the things that I didn’t know. Everybody starts there, and I know that med students often start there. And with Sarah, it was that kind of situation where we talked about finances early on, and you know, she has six figures of med school loans like most med students out there. And that was something that we had to — It was part of the whole landscape. And obviously physicians have a very unique financial landscape, where they — they make no money. Undergrad: potentially get some debt. Med school: take on a ton of debt. Residency, you know, make between $50k and $65k. And then there’s this event where they make a ton of money, but they still have a negative net worth sometimes approaching half a million dollars or more.
Justin: [00:21:52] Yeah. That was something that we had to work through was, you know, with merging our finances and understanding. I was very fortunate to graduate undergrad without loans because of some scholarships and things, and it was something new for me. And honestly, since it is something that does intimately impact my own life, that’s one of the reasons that I started to learn more about it. And then it was impacting my clients, and it was just the first domino. And then Travis and I became better friends, and I love the work that Student Loan Planner is doing, so it’s very much a part of my story. And we’ve made mistakes in the past about the way we handled it and about refinancing, consolidation and those decision points where I now know don’t do these things unless you know what you’re doing. And that hasn’t always been the path that we’ve taken. So I’m all the more grateful and determined to allow people to make good decisions and have the right information at the right time to be able to save themselves from a big four- or five-figure mistake.
Travis: [00:22:45] Is Sarah doing PSLF?
Justin: [00:22:47] No. We’re not going to be in a place between our income and how much she owes, we’re not going to be in a forgiveness situation.
Travis: [00:22:53] Ok. Is the plan to eventually refinance? Or are you guys using —
Justin: [00:22:56] Yeah, well, it’s a combination of private debt and some family loans that we’ve — We’re going to work to just pay off is, essentially throwing as much money out as we can over the next five to 10 years. It’s great to go into med school, like, having all the facts. And that just wasn’t what happened with Sarah and I. It’s always a question of like, what can we do right now that’s the best you can with the circumstances that you have? And that’s what we’re doing, and for us, that’s going to mean just knocking it out as quickly as we can.
Travis: [00:23:22] The dreaded family loan. That’s what I thought when you said that because some of the worst setups that I’ve ever seen were second generation immigrant kids that are in America that — They’re American citizens that were born here, but their parents might have come from, you know, Southeast, Asia, China, like, Africa, like, whatever it is. And the mentality is the parents are going to make sure that you’re taken care of and that you get that awesome education and that you’re going to take care of the parents. And this is, you know, generalizing is always a dangerous thing to do. But like, I’ve just seen this story very many times. And what’s happened is, you know, you’ll have somebody who’s in California, and the parents have some home equity, so the parents cash in $200,000 of home equity. And they pay for a large portion of a, you know, University of the Pacific Dental School with that $200,000. And the kid takes on $3,000 of student debt. That’s obviously a really bad situation because you took a forgiveness case that’s still a forgiveness case with, you know, $300k, $350k of debt with a $120,000 income as a dental associate, right? And then on top of that, layered on an additional $200,000. You basically undid the fact that they were mortgage free going into retirement.
Travis: [00:24:34] I’ve seen some really, really bad decisions happen because of family loans. Luckily, you know, if she’s going to be an anesthesiologist, she’s gonna make enough money to take care of things, and if it’s a modest amount, it will be ok. But I know that Christine, my wife, she’s second generation. You know, her parents came from Canada. Before that, they came from Hong Kong, so they had that, you know, similar kind of expectation about education and who’s gonna be responsible for it and how they’re gonna help. And they helped a lot. They really sacrificed to help her come out of medical school with a lot less debt than she would have otherwise had. But the reality was, is like, if we’d gotten all the right advice, like, actually they should’ve kept all of that money, and Christine could have budgeted even less. And just under Public Service Loan Forgiveness, which is just — It’s hilarious, but it’s also sad just because I’m thinking, well, here they sacrificed so much to have her come out of school with minimal amount of student loan debt, and yet that effort is just completely unrewarded with the loan structure that exists right now. At least, you know, in her situation because the fact that she wanted to do an academic career.
Always question the assumptions
Justin: [00:25:32] Yeah, no question. And I think questioning the assumptions is always something good to do. So you know, I was working with somebody just this week who said, we’ve got $100k of our own loans. And this is a couple whose probably in their early 40s, and they’re trying to knock out student debt from 20 years before. And they’re like, yeah, we’ve got kids that are like 13 and 15, and we’re staring down the barrel of upcoming undergraduate tuition for them. And I encouraged them, like, I know there’s this massive pressure. I remember what it was like, Travis, maybe you do too, of like, congratulations, Travis Hornsby, the class of 2005, graduating and going to XYZ university. Like, we’re so proud of him. And there’s this pressure, this social pressure to say like, look at how amazing I am. I’m going to this private school or whatever it is straight out of high school, and I’m really happy to do it. Many times what they don’t talk about is Travis Hornsby taking on, you know, $35,000 of debt to go to X University, when in reality, I was encouraging this young couple with $100,000 of their own loans, like, let your kids a) let them have some skin in the game with regards to their education. And B) don’t look past affordable options like state school and community college and getting credits before you transfer somewhere that’s gonna be very expensive in order to optimize your costs. The best way to get out of debt is to not get in it in the first place. And if you can nip that in the bud, I’m a huge proponent of questioning the assumptions. Does little Johnny or little Sally really need to go to private school XYZ, especially if you’re going to be paying, you know, the lion’s share of that tuition? And even private state schools are also very expensive. There are absolutely more affordable ways than four years of undergrad where you’re gonna get a degree that may or may not translate into significant earnings, and you’re gonna be owing a lot more than you might have to otherwise if you had questioned some of those assumptions.
Travis: [00:27:06] I really want to publicly apologize to the University of Florida, and I need to write them an apology letter because when I graduated from undergrad, I graduated with honors, that was so cool. And so I’m like, do I get to wear something cool at graduation, right? So I go to the bookstore, and I’m like, ok, like can I get these cords for graduation? And they’re like, ok, which ones are you? You know, Cumma Laude Magna or Summa? And I was like, Summa. They’re like, ok, well Cumma Laude’s one set of chords. Magna’s two. Summa’ three. You have to pay us for three cords. And I’m like, are you freaking kidding? Like, the university that has, you know, a billion dollars in its endowment fund can’t give people, like, a free set of cords that they, like, worked their tail off? And you know, like, they’re like, woo, I graduated with honors. That’s so cool, right? I feel like I just need to be like, thank you so much, you know, that the fact that you only —Like, the worst thing that happened to me was that I got hit up for, like, 40 bucks, you know, because nobody was creative to think like, maybe we could just have one set of cords and be different colors or something, you know? I’m showing my privilege right now, too, right? I mean, just even saying this, but it’s just amazing because, like, I was clueless. Like the only thing that saved me from having tons of student loan debt is that I was just really interested in finance and personal finance and money, and I just, I wasn’t gravitating towards a field that needed a degree. If I had been interested in one of those fields like, you know, our spouses or a lot of the friends that we have, I would have come out with a lot of debt too. Another thing a lot of people don’t realize is a lot of these higher cost schools, they’re more aggressive with recruiting too.
Justin: [00:28:33] Yeah.
Travis: [00:28:34] Like in undergrad — I was talking about this with my buddy yesterday. You might have had some similar happen. Did you ever get any, like, letters in the mail that an undergrad program, like, accepted you without you applying? And you know, gave you a scholarship?
Justin: [00:28:44] I don’t recall. It’s definitely possible.
Travis: [00:28:48] Yeah. Like, if you check the box, like thinking, you know, they can release your scores or something. I think you just automatically get letters from people. And like, a couple of the programs that did that, they were like, you know, you’re automatically in. Here’s a scholarship. So I was joking with somebody like, you know, the acceptance rate for pharmacy schools is 84 percent right now. Give it a couple more years, it’s gonna hit 105 percent. You know, some of these schools, you’re just going to start sending letters out to people, like, you’re accepted. You know, come to pharmacy school, and congratulations. And that’s the scary part is there’s schools out there that are fantastic pharmacy schools that are very competitive, that are producing wonderful graduates, and people are getting a great education. And there’s schools that are literally there to just get a paycheck. Some people have told us Justin, what we should do is just go start a law school or go start a dental school somewhere with what we know.
Justin: [00:29:29] Yeah, and as long as the government’s offering more and more and more loans that kids can subsidize these educations with, it’s — oh gosh. Frankly, I mean, we see this with all the forgiveness kind of coming down the line. It’s a little bit like a Ponzi scheme with the American taxpayer left holding the bag. I’m interested to see — My expectation, and I think yours as well, is that the PSLF program as it exists and the taxable forgiveness for people who are already on track for that, they’re going to, most likely based on the current congressional and executive climate, is going to continue to receive those benefits as promised. But for, you know, down the line, eventually the music’s going to stop. And you got to wonder, you know, who’s going to be left standing when everybody else grabs a chair.
Travis: [00:30:07] I think there’s a couple of ways this could go. You could either have a snap back and have all these schools close and the borrower actually have to feel the cost of the education for graduate school again. In which case, you know, that would sort of be more of like a market-based approach. And then the other approach is to simply say, kind of like what’s going on with healthcare, is sort of like, hey, the system that we have right now is super irrational. It’s not serving anybody but very interested profitable stakeholders well. So let’s completely eliminate the cost of healthcare. Let’s raise taxes and have free health care, which is, you know, that’s a political debate. That’s not something that’s necessarily in my purview to discuss. But-but I think that that’s the potential path that you’ll see with education in the future is either this is a step along the road to not charging tuition for programs in general. Or some sort of even more generous system where it will have a tax regime that looks more like an EU. Or we’ll have a market correction. And you’ll have a lot of these schools close. The supply of professionals in these areas will dry up a lot for a certain number of years. And then things will reset over time, and it’ll be pretty painful.
Justin: [00:31:08] Yeah.
Starting at Student Loan Planner
Travis: [00:31:08] Another question I had for you: how did you join the Student Loan Planner team? What did that look like?
Justin: [00:31:14] Yeah. So I — Travis and I, we had been friends for a few years. We met at Fin Con most recently after having not seen each other. Travis lives in St. Louis. Obviously, I’m in Philly. We met at this Fin Con conference, which is for financial bloggers, writers, content producers of different stripes, and some financial planners there. Obviously, Travis was there, and he was talking about, you know, business is really growing. Have an expanding need to add to our team. I had started Quantifi Planning, my firm, this time last year, and we’re still building things. And I really liked the idea of working with Travis, who had done, personally done over a thousand student loan analyses himself. And obviously for me, the opportunity to continue to learn from him, to work with other young professionals who needed loan help and to make a side income while the business is still scaling. This was very much going to be a core competency that I wanted to continue to develop because any physician, you know, 32 or under, I would venture to say 85 percent of them have some kind of meaningful student loans. And many of them, it’s $200k or more. And to be able to really be an expert in this space is something that I felt very strongly about. So that’s one of the reasons that I joined the team and it’s just been an amazing experience.
Travis: [00:32:25] That’s great. So what are some of your favorite examples or cases you’ve had in the past week or longer that you think are just really neat?
Travis: [00:32:33] One that always sticks out in my mind, there was — There was a young lady who went to a state university. It was one of the not-so-cheap ones, and so she was about $85k in the hole after three years. And due to, I think was there’s some kind of health issue, maybe it was mental health. For some reason, she was unable to continue and finish her degree. This is a really unfortunate situation. She’s $85k in the hole. She can’t graduate. And she’s not going to be able to get a job that a graduate would be able to attain. She was, you know, working as a clerk at a grocery store or something, making $17-ish thousand dollars a year and owed this massive amount of money, and her family was totally freaking out. How are we going to pay for all this? What are our options? And I spoke with several family members all on this conference call because they were attacking it as a group and jointly. And rightly so, very concerned. You know, the mom was trying to approach retirement, etc. So what we ended up uncovering was that, you know, all these loans, they’re all Direct loans. And so she was going to qualify for an income-driven plan. And I pointed out, you know, if you’re on Revised Pay As You Earn, and you make $18,000 a year, household of one — Travis, you can do this math. Once you remove the federal poverty line times one and a half, your expected payments going to be about zero. So they went from getting a letter in the mail that says, oh, your Standard Repayment that’s due on February 1st is x dollars. And that caused a great deal of consternation. We said, well, if you get on an income-driven plan like Revised Pay As You Earn, in this case, you’re going to enjoy the interest subsidy. You’re going to have an income-adjusted payment required, which right now is going to be zero. And for as long as you make an amount of money kind of like this amount, like $17K, in that ballpark, your payments going to continue to be zero. There is obviously, you know, a tax event 20 or 25 years down the line that we have to address at some point, but it’s no longer an imminent danger. And this young lady could then take her time and continue to try to piece her life together because obviously there was other traumatic experiences happening. It wasn’t just the loans. It was whatever that caused her to withdraw from school. There was —It was a lot of turmoil. So for me to be able to say, hey, good news. Income-driven options in this instance are going to uniquely benefit you and take the pressure off so that you can try to pick up the pieces in these other areas was a really, really gratifying experience. So that’s one that’s always going to stick with me.
Travis: [00:34:45] One thing that’s interesting too is obviously, she could have got that advice free if she called her loan servicer and asked, you know, hey, how can I lower my payment? Oh, you can do a zero-dollar a month plan. Actually, the loan servicers got in a lot of trouble because of this scandal where they were suggesting forbearance to people instead of an income-driven plan because the forbearance conversation is, you know, a five-minute conversation. Income-driven repayment is like a 20- to 30-minute conversation. So since they are solely judged based on the time they spend on the phone with you, that’s their main metric. Then people were basically just responding to incentives and not doing things in people’s best interest. One thing the servicer is not going to do is that Revised Pay As You Earn plan. If you have a zero-dollar monthly payment, that effectively cuts your interest rate in half while she is working on getting her life in the direction that she wants it to be instead of a 7% interest rate or a 6%t interest rate. She’s looking at, you know, 3%, 3.5% interest during this period while she’s paying zero a month. And a lot of people don’t understand this. The difference between accrued interest and compound interest is huge with student loans because simple interest is what happens with student loan debt that’s federal because it just grows at a linear rate instead of a compounded rate like any other kind of debt that’s growing because you’re not paying the interest off every month. So that person is dealing with a situation where she could literally put money in a high-yield savings account because that’s compounded and probably beat the interest equivalent growth on her loans over time. So that’s — That’s cool that she could probably do that. So in other words, like, a zero-risk way to beat the interest accrual on her loans. I’d have to do the math to just be sure. I think that’s, you know, it’s about that. Also, she’s getting her interest cut in half so that she can focus on the things that are important.
Travis: [00:36:24] One thing we do: we have this, like, site channel between the consultants. We’re always throwing stories in there. It’s just amazing. You know, we’ll see people that are saying they’re doing some things with their student loans in the media, and we’re like, wow. One recent was this person who moved to India and who was kind of bragging. It seems like, that they had defaulted, and it was so wonderful to have defaulted because they don’t even think about their loans anymore. And I’m like, well, that person could have used the foreign earned income exclusion to have a zero-dollar income and then signed up for REPAYE and had his interest cut from 7% to 3.5%. And he could not be in default and accruing, like, 16 percent collection fees and compounding his interest. But you know, it’s like, ok, like yeah, I get that you’re glad that you don’t have to deal with it. But there’s actually a way better way to not have to deal with this that’s totally legal. It’s just unfortunate that the loan setup is so complicated that people don’t really know how to figure this out.
Justin: [00:37:15] Yeah, no question. And I think you kind of pointed this out, there’s so much misinformation out there in the media. And I’m sure many people you talked to, Travis, are like, there was that article about how 50,000 people applied for PSLF and like, 32 of them or 58 of them were accepted. And 99.5 of them were rejected. And there’s very much this — and this is media in general — but it’s a scare tactic to buy clicks and raise ad revenue, which is a major pet peeve of mine.
Justin: [00:37:39] The point is that’s another reason that I’m really grateful to be able to participate with Student Loan Planner on this team, to be able to push back against a lot of that misinformation that ultimately ends up costing vulnerable people thousands, tens of thousands in some cases. And to be able to bring information and bring clarity, that’s absolutely the most rewarding part of participating with you, Travis.
Travis: [00:38:00] One of the reasons why we decided to do different costs for different levels of working with folks is just because I have wanted to have that $300 consult be there and be accessible for people who really, really need it. Like the story that you’re just describing because that person probably would look at a $600 consult fee and think, I just can’t — I can’t justify that. I can’t afford that. So I’m just not going to — I’m not going to pay that. So then I’m not going to get the help.
Travis: [00:38:27] One of my friends sent me an email. He’s like, I know you’re — you’re always changing up the business model and everything. But he said, please please please please keep your $300 consult because it is a major societal benefit. And I thought, well, okay that’s pretty cool that people think that of that consult. So you know, we do have different levels of consults, basically to try to roughly correlate with, like, how complicated the situation is. That’s why we give guidelines, so like we do, you know, $295, $449 or $595. Any other favorite stories that you have, like, that come to mind? Any amazing days that you had? I know you had one day last week where you did, like, seven in a row, which I thought was a little superhuman.
Justin: [00:39:06] It is really satisfying when — I think that was this was just the other day, stacking up a bunch of consults and being able to say, I did seven or eight of these. And it was, consulted on $1.5 million in loans. And saved a collective $200k between all these — these different clients. That happens not infrequently. I only do this a day or two a week. It’s funny, with student loan planning, it’s such a stressor. When you talk to someone, you palpably just feel the weight of debt just sitting on their shoulders, crushing them down into the earth. And to be able to have someone — You start a call, and they’re like, oh my gosh, like, this is the ball and chain I’ve been dragging around. And to be able to 57 minutes later say, ok, here’s a plan. Here’s a quantified cost. Here’s the verified process where we determine that this is economically most advantageous for you. Whenever you present that and kind of gift wrap it and give it to these people. And to know that that weight, you can hear it in their voices, the weight has been lifted up off their shoulders. And they’re like, well, we still owe $180,000, but we’ve got a plan. And we know that this is the economically-optimized plan. And now, instead of being in the boxing ring or in a blindfold and not knowing where to punch and getting hit from all sides, the blindfolds been taken off, and we know where the enemy is. And we know how we need to direct our attention. It just it changes everything. That’s not an uncommon occurrence. That happens to me once or twice a week. And to be able to have a vocation that is so deeply impactful, I just, I feel really lucky. It’s an amazing thing. So, all the time, to answer your question.
Justin’s advice for those with student loan debt — and those considering it
Travis: [00:40:35] That’s awesome. I was gonna try to make an analogy to “Birdbox,” you know, but then-then I tried to go down that rabbit hole, and I realized like, wow, there’s no good way to, kind of, use that analogy to explain what we do. Dang it. Any kind of last things you want to share with our audience, just about, you know, getting a plan or tips that you’d have for them or things to watch out for?
Justin: [00:40:55] Yeah, a couple tips. One is with these two significant bridge-burning moments of if I’m gonna consolidate or if I’m going to refi. Before you do that, you’re burning the bridge. You’re closing off options. So make sure before you do that, that it’s what you want to do. And the second thing, I would say I alluded to this earlier, is just question the assumptions before you incur debt. In some cases, make sure that it’s worth it to go $100k, $150k, $200k in debt or more to be able to get whatever is at the end of that road for you. Because if it’s to fulfill some vague sense of, like, societal pressure or something, because everyone else is doing it, don’t do it. Like, take a break here. Do a trade school. Do-do something that’s going to allow you to earn a good income right now, and in some cases, like, quickly move into business ownership and have a totally economically different situation and better in that case, rather than running with the other lemmings off the cliff as much as possible. Question the assumptions. Think for yourself, and evaluate. Does this really make sense for me, for my situation? Because often the answer is no. But people sometimes don’t think critically or just succumb to that social pressure to do the four-year degree when it doesn’t make sense. And then you’re kind of, 22 years old. You’ve dug a big hole, and you know, you’re not beyond help at that point. There’s still options. But if you can address it beforehand, you’re gonna be way better off.
Travis: [00:42:10] That’s awesome. Justin, where can our folks learn more about you and reach out to you about their student loans? Or you know, if they’re anesthesiologists about the financial planning?
Justin: [00:42:19] Yeah. If you’re a pain or anesthesia doctor, my website is Quantifi Planning.com. That’s q-u-a-n-t-i-f-i. F-i at the end of Quantifi. You could drop me a line there. Or obviously at StudentLoanPlanner.com, you can reach out to me and would be glad to get to work with you.
Travis: [00:42:35] Yeah. And that’s Justin@StudentLoanPlanner.com is his email address. If you have $50k to $200k in debt, definitely reach out to get a plan. Just to throw out a little disclaimer here, all the stuff I said about all those companies earlier and their financial planners is totally my opinion and doesn’t reflect anyone’s opinion but my own. So hopefully I can try to do a better job of focusing my efforts on helping our clients and the team deliver amazing student loan advice. And I can not get so angry when I see these things happen. I just can’t help it, Justin. You know that.
Justin: [00:43:05] Yes, that’s right. That’s what makes you you, Travis.
Travis: [00:43:07] I know. So hopefully, you’ll get a little bit of joy and entertainment out of it.
Travis: [00:43:12] And that’s the end of today’s show. If you know that you need a student loan plan, get one set up today at StudentLoanPlanner.com slash book. If you know that you need to refinance your loans, check out StudentLoanPplanner.com forward slash refi, r-e-f-i, and get a cash back bonus. You can start saving money on your interest today. And finally, if you like the show, leave us a review in the favorite place that you listen to podcasts, or share it with someone who owes more than you.