• Emlen Miles-Mattingly

Student Loan Debt & Your Future

Missed the audio version of this blog? No worries. Got you covered here.

Sure, I’m a fee-only financial planner. But like many of you, I’m also someone who [has/had] student loan debt.

That’s why I wanted to sit down with Frank Shields, who is a certified student loan specialist.

Not only was I was curious about why he chose this niche, but I also wanted to pick his brains about the burning question that we all have: How do we tame the beast?

The question is: What is the most efficient way to get rid of our student loan debt?

If you wanted higher education, then you were probably forced to take out some loans. The problem is paying them off isn’t as straightforward as we imagine.

That step becomes with the anxiety and uncertainty of paying off loans that in some cases can be larger than your mortgage.

Let’s let Frank teach us how to make student loan debt a little less painful.

How did you get into this specific niche?

My passion for personal finance began during my tenure with the Social Security Administration. During that time that I really started to see how personal finances can enhance a person's ability to live their best life.

I began to notice this huge wealth disparity and how individuals that had financial resources in conversations seem to live a better quality of life. Those that have limited financial resources are struggling. That experience really got me interested in personal finances and I started to seek out ways in which I could become a financial planner and help clients secure their financial future.

I specialize in helping student loan borrowers create and implement the optimal student loan repayment plan for their personal and financial circumstances.

The student loan niche grew out of pure demand.

When I first launched my firm back in February of last year, the majority of prospective clients that I was meeting had student loan debt.

I decided to utilize financial resources and my time to acquire the advanced knowledge that I needed to serve these individuals and make student loans my first technical niche.

When Frank and I spoke he mentioned that he had to pay his own student loans back. He borrowed for his undergrad and then struggled to find a job. He was able to start paying them off during his tenure with the Social Security Administration.

He then took out loans for his graduate degree (MBA). Frank stated that he’s no different than the 45 million other student loan borrowers out there.

He knows where you are coming from!

Who can you trust?

Frank recommends that you seek out the professional help of someone that can provide competent objective student loan repayment advice such as a Fee-only Certified Financial Planner, preferably one that has a Certified Student Loan Professional designation.

This specialist is someone who can assist in creating and implementing the optimal student loan repayment strategy for your unique personal and financial circumstances.

What are the benefits of an Income-Driven Repayment?

Frank explained that the income-driven repayment was designed to make repaying your student loans back a little easier.

It’s one of the many repayment plans that’s available to borrowers that have federal student loans.

Your monthly payment is based on a percentage of your discretionary income which is based on these factors:

  • Your income

  • Your family size

  • Loan distribution dates

  • Type of federal student loan debt

Frank looks at several different things to determine whether an income-driven repayment plan, is a good fit for a student loan borrower.

The indicators are if the student loan borrower is having a difficult time repaying their student loans under their current repayment plan, they work for an employer that qualifies for Public Service Loan Forgiveness, and their student loan debt is twice their annual income.

Having student loan debt is a huge burden. It can be confusing and scary. I want to tell you do not hide from the student loan.

If you don't have a financial advisor that you're working with you can call the Federal Student Loan Services. I'm not saying that they're going to give you the greatest information, but whatever you do, don't let your loans go into fault!

What if you’re not making enough money to pay your student loan debt?

Frank indicated that instead of deferring your loans (for later payment) that borrowers should try to get an income-driven repayment plan.

Why is it better to pay something rather than deferring your loan?

Some of the income repayment plans offer interest subsidy. For example, Revised PAYE, for example, is one of the income-driven repayment plans that will waive the interest for the first three years that you're enrolled in a repayment plan for your subsidized loans.

It will also cut half of all unpaid interests for the life of all your loans.

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