Robert Leonard

Yeah, so what exactly are you doing these days?

Travis Hornsby 2:05
Great question. So I mean, I live in St. Louis, Missouri. So my wife’s a physician now at a medical school. She’s sort of professor, right? So I work from home. I got a virtual team. I got five other consultants besides me, and then we have writers, we have PR people, social media people. So it’s really grown to be a real business when I was not expecting that at all. I was actually thinking that I was gonna be early retired from bond trading. I just like quit and traveled the world and saw like 40 countries in my 20s and it was really amazing.

And then I really started this off of a threat for my future father-in-law, basically, he’s like, “He needed to make an income. I don’t understand this retirement thing for somebody in his 20s. I don’t think it’s legit.” So he was like, “You want me to come to the wedding, you’re gonna make an income.” Most people think about rich in terms of income, right? Very few people think about rich in terms of assets. So that’s a really interesting kind of way to think about things and you know, just kind of shows that’s most people think like in terms of *key via provider… is not key you produce passive income from your assets. It’s like do you actually have work that you’re doing that brings in money? That’s the way most people define monetary success. It’s kind of interesting.

Robert Leonard 3:11
Now, before we dive into a tactical conversation about paying off student loans and entrepreneurship, I want to talk about how and why the current student loan crisis came to be. Studying student loans and working with thousands of people with student loan debt, how did we end up in the current situation we are in, with regards to student loans?

Travis Hornsby 3:30
Yeah, just unlimited borrowing for school. You have the ability to borrow anything you want, sarting in 2006. There’s no longer any underwriting at all. You can borrow for any degree as much as the school asks you to borrow. You can borrow for living expenses, you can borrow for covering family expenses. If you have kids, you can borrow up to the cost of attendance and the school can inflate that in cost of attendance by adding on ridiculous fees and unnecessary expenses on top of tuition as well.

So in my view, what really caused the horrendous student loan crisis, like there would not have been a student loan crisis in general, because the value of higher education had been going up for so long. The schools were basically just interested in capturing some of that, right? If you think about, like, any kind of business out there that helps you get more money, like what do people do a lot of the time, right? Like hedge fund investors, like that’s where two and 20 came from. It’s because they’re helping people be so much more successful. So they want to capture some of those extra gains for their own profit, right?

So honestly, university started to act, in my opinion, a little bit more like corporations and hedge funds than actual not for profit institutions. And the government enabled this by throwing gasoline on to the fire and the gasoline was on capping borrowing in the mid-2000s. And so that’s where you see student loans going from about 300 billion, which is still a large amount, but you could argue that that debt would be classified for most people as good debt because that’s debt that’s funding, you know, a valuable education that has higher returns than ever, right? Whereas now, we have this 1.6 trillion debt and you have a lot of really questionable degrees being funded.

And a lot of it are degrees that are legitimate but are just frankly vastly overpriced. So, you know, you’ll have all of these online degrees from regional state schools, you know, MBA programs, for example. And is an online MBA from a regional state school worth 10 to 20 grand per year? Absolutely not. In most cases, it’s probably worth, I don’t know, a few thousand bucks and yet, we’re having situations where schools are charging 10-x that and people are just paying it because you can get such easy access to credit.

Robert Leonard 5:33
What happened in 2006?

Travis Hornsby 5:35
There was this program called Grad PLUS. So Grad PLUS got past this type of loan, and Congress passed it. And you know, in 2007, they passed IBR. And so it was kind of a vicious cycle, because if you have Grad PLUS, you have unlimited borrowing, but then they had no way to pay based on income. So they hard-settled these defaults, right? Because you can have all this debt but you can’t have a way to pay it back. And so in 2007, then they passed IBR, which really didn’t get installed until 2009.

And so it’s interesting because this huge amount of debt they got passed, the question was not how can we help people pay this back? They just said, “Let’s have, you know, IBR is the solution because if people can pay based on their income, and they’re not defaulting.” Well, that’s kind of a silly metric for success. Why should we be measuring success as people not defaulting? Like that’s, you know, that’s kind of a ridiculous metric, right? If you think about it, like not defaulting is an awful metric. Imagine, you know, the metric of success for an investment that somebody made being that you know, they didn’t default in the loan that they used to buy their rental, like this had a successful investment. No, I’d say it could be a really terrible investment. You just happened to suck it up and deal with your mistake, right? But so I don’t know. I just think it’s just a perfect storm of problems.

Robert Leonard 6:47
So how did it look up until 2006? What did the student loan process look like? What did somebody have to go through to get a loan?

Travis Hornsby 6:53
So FFEL loans basically, where the way that most people got their debt prior to 2010 and that was basically a bank program where the banks would issue the debt, but the government guaranteed it. And so people were getting interest rates as low as 2-3%. And you know, the amount you could borrow was a lot lower. So a lot of people, you know, there were positions really were getting much lower amounts of debt and total and they didn’t have access to these forgiveness programs, but the debt was a lot smaller. And so prior to 2010, student loan debt was really more of an annoyance rather than a crisis.

Robert Leonard 7:25
So sounds like it was kind of like a mortgage.

Travis Hornsby 7:27
Yeah, it was a little bit like a mortgage except that, like I said, that the debt was guaranteed by the government. So it was never really a thing that people securitized and made derivatives off of. And yeah, you didn’t have all these really bad mortgages that were on the balance sheets of private organizations. So you know, that’s really why the student loan crisis is going to be very different from the housing crisis when it eventually does pop, is that all of the bad debt is actually with the government and all of the good debt is actually with private lenders, because private lenders are the ones that pick off the best borrowers to offer lower interest rates to, and the government is mostly stuck with people utilizing forgiveness and people who are not able to pay and are in default.

Robert Leonard 8:08
So for some context, I’d love to get some data from you in regard to the current student loan crisis based on all of the research you’ve conducted, can you share the most interesting and impactful data points you have regarding the current student loan crisis?

Travis Hornsby 8:21
Obviously, the most interesting thing to me is just that the number of people who have six figures is doubling around every five years. So that’s really quite a statistic. So there’s 3 million people that owe over $100,000 today, and that number is probably going to be 6 million people that owe over $100,000 five years from now. So that group of people owes about 40% of the debt overall. And then the people who owe your typical balance, which is like a $30,000 balance, you know, that group of people is it’s closing in. Student loan debt is closing in on your first year earnings as a college grad. So people tend to say that it’s worth it to go to school if you can get a degree with a first year earnings that’s over and above what you’re going to owe, and so probably within 10 years, the amount that you owe is going to be more than those first year earnings. So that’s really I think, where you’re going to see an inflection point in the crisis, is when you pass this huge number of people that owes more than they’re earning, that’s when the wake up call of higher education is really going to hit a lot of people in the face.

Robert Leonard 9:20
Although most people are still choosing college over untraditional methods of education. There is a growing trend of people starting to go a more unconventional route, such as through coding boot camps or other new formats like Lambda school, if you’ve heard of that. Or some people are just foregoing college all together. How do you see this trend playing out? And how will this have an impact on the future of student loans?

Travis Hornsby 9:43
You know, it’s a great question. So there’s all the other coding boot camps. And there’s other things too, I mean, in reality, like the coding boot camps, I feel like are a pretty nice thing. It’s pretty hard to just go to a program for a couple months and then make a significant income and have that kind of a positive ROI. So in the future, I think of higher education in a broad level is going to be people that want to get a certain degree like, you know, if you kind of signing up as an online student to some level, what’s the marginal cost of that extra seed? Not a lot, right. So if higher education institutions truly had to compete, I think what you would see is some schools would be extremely aggressive with their pricing.

And I think that they would add on people to say, you know, bachelor’s of business programs, where there’s really no reason why you have to be on campus to learn that stuff. And you could get a bachelor’s degree from, say, Penn State or something like that, if these institutions would actually offer that. And then I think that, you know, you’d start to see programs like that where people would come out with the say, $10,000 of student loan debt. I think that’s kind of the future is online education and competition from other programs and also a lot of schools, frankly, shutting down. So that will be part of the thing that I think will happen is when you start having people sort of second guessing the value of education. I think a lot of sort of second tier universities are going to close. And that probably, frankly, needs to happen. I think we probably have too many degrees being produced right now at too high of a price. So I think we need a new equilibrium.

Robert Leonard 11:10
What about for someone who hasn’t yet accumulated student loan debt? What is the best way for them to become ready for their career and be competitive in the job market if they don’t want to take out student loans?

Travis Hornsby 11:21
Yeah, I mean, just get really high scores on things like the PSAT and the SAT, be involved in your school extracurriculars. Try to have a really good college application that you have, and then try to apply to universities where you are better than the median student. And if you do that, you’ll probably get significant merit-based aid. And even if you don’t, even if you just barely get in, your state university is going to present an excellent value in most cases. There’s some states where this is not the case.

But in most states, you can go for around $10,000 a year or less to your state’s flagship public university. And that kind of a degree is something that’s very valuable that a lot of people in your state will recognize, and employers in your state will recognize and want to hire you at really high paylevel compared to if you just had a high school degree. So I would just say apply to a ton of scholarships and really focus on your standardized tests and take a lot of AP courses. And if you do that and do well in those courses, then there’s a really good chance that you will get some sort of scholarship and come out with a very limited amount of student loan debt.

Robert Leonard 12:18
What about somebody that doesn’t want to go to college at all? How can they become more competitive in the job market?

Travis Hornsby 12:24
I think that you need to get more involved in virtual teams and sort of the new economy and learn about skills that you can do in a virtual setting. You know, things like search engine optimization, SEO, digital marketing, email marketing, social media management. There’s all kinds of things like executive assistant work, VA type work. There’s all kinds of jobs that people don’t really know exist. And you just have to Google basically jobs that you can work remote, and you can go live in Thailand for $5,000 a year.

So if you have a little bit of savings at all, even if you’re 18 years old, you could go to one of these foreign countries and live abroad and try to develop your career. If you’re motivated by just teaching yourself, it didn’t really take that much effort, honestly. I think compared to going to university and writing all these essays and trying to keep up with, you know, all these clubs and things like that, I mean, there’s all kinds of options if you don’t want to go to school. I think Mr. Money Mustache has a really good post, like 50 jobs at a high school degree that pay over $50,000. So there’s all kinds of articles that I would encourage people to read.

Robert Leonard 13:24
Yeah, that sounds like a great resource. I’ll put a link to that in the show notes so everybody can go check those out. Now, I’d like to dive into a more tactical conversation about actually tackling current student loan balances. Let’s start by talking about someone who is in school and has a growing student loan balance. What is their best course of action if they’re at the point where they don’t want to finish school because they don’t want to take on any more debt? What can they do to keep their student loan balances under control?

Travis Hornsby 13:50
Honestly, that’s probably like a psychological block, like you need to finish one of the biggest problems with student loan debt is actually people who default because they did not finish. So at all costs, once you’ve borrowed, finish your degree, it’s pointless not to finish your degree. So maybe the only exception would be if you’re at some ridiculous scam of a school then obviously, don’t finish your degree. But if you’re you know, any kind of normal university, you need to get the degree even if it costs you extra money.

In terms of what to do when your balances growing, there’s not a lot you can do other than and try to be as frugal as you can. Don’t go out to eat so much. You know, try to have roommates, try to drive a clunker car mean, the normal college kid stuff, right? Drink Natty light instead of craft beer. I mean, I’m joking a little bit. But that’s the kind of stuff you want to be cognizant of when you graduate. That’s when the opportunity is really large. So when you graduate, you generally need to sign up for something called revised page word because it can give you a 50% interest subsidy on your interes, and a lot of people don’t know that. So you can do that for probably about 12 months after graduation.

And then you either need to go for a forgiveness-based plan or you need to refinance, pay the loan off. So that’s one of the areas that we have links for that will get people cashback bonuses. So basically, you can refinance, get you know a few hundred dollars, in addition to your lower interest rate as an incentive bonus or like a welcome bonus credit card miles when you sign up for an airline credit card, and then you can pay that off as fast as you can. Hopefully you’ll be debt free if your undergrad student loan debt only in five years. If you get a graduate degree, then it might be more necessary for you to think about a loan forgiveness program.

Robert Leonard 15:21
Now, of course, it’s going to vary but in general, for someone who has student loan debt that they’d like to start paying down, what is the best way for them to do that? What strategies or tips have you discovered?

Travis Hornsby 15:33
So there’s something called the student loan refinancing ladder and this is a strategy where you start off with a long repayment program. So you refinance for example to a 20 year term. And if you owe you know, it depends on what you owe. So like some of the lenders give different bonuses for how big your loan amount is. So say you refinance to one that has a $300 bonus, right? So you sign up for… You have a $50,000 loan amount, so you sign up for a 20-year repayment plan. So your monthly payment is $300 a month. So you get maybe a 4.5-5% interest rate and you pay way more than you actually have to pay. So you pay $500 a month or even $1000 a month.

And even though you’re only required to pay $300, and then when you pay your loan down to say $30,000 or $20,000, now you refinance it to like a five year so you cut your interest rate a lot doing that. And because you pay down a bunch of your balance, the required payment is not that much worse than what you started with. And you get an additional cash bonus as well. So there’s a little bit of refi bonus churning, that happens, you know, it’s not something that you need to go overboard with. But you know, if you have a decent sized five or six figure loan balance, then you can cut your interest rate, which is the main savings, but also get these welcome bonuses that will help you get out of debt really fast.

Robert Leonard 16:46
When somebody goes to refinance, is there any thing they need to look out for because, and the reason I asked that is, because I know when you have federal student loans, you have certain benefits of having those loans and then if you refinance to a private lender, you will obviously lose those benefits. So what types of things should somebody look out for if they have federal loans that they’re looking to refinance?

Travis Hornsby 17:07
I tell people not to refinance unless you work in the private sector and you have an emergency fund and you can easily afford to pay at least 1% of your balance every month. So if all three of those things are not true, then refinancing is not for you. But you know, if the converse of all those things is true. You work in the private sector, you have an emergency fund, you can easily afford to pay 1% of your balance every month, then refinancing is a good idea because the federal loans have forbearance available for up to three years.

So meaning you can pause your payments completely for three years, you can also put your payments on an income-based plan where it’s no more than a certain percentage of your income. The downside of those federal programs is a lot of times you’re paying $6 or 7% interest, instead of paying a lot lower interest because you’re working with a private lender that views you as a lower credit risk. So that’s kind of the calculus for refinancing. You’re just trying to figure out do I care more about the ability to pay based on my income and have forbearance? Or do I care more about having a lower interest rate? So usually, that’s the thing that people need to decide between which one of those two things is more important to them. And then you know that’s for people that are trying to pay it off, right? And so some people might say, “Well, I’d rather have that peace of mind that I could stop payments for three years instead of private lenders, it will only give me three months.” So you know, just depends on if it’s worth paying a higher interest rate for that protection while you’re paying it off.

Robert Leonard 18:23
Do all or almost all federal loans have that three-year hold feature?

Travis Hornsby 18:28
Pretty much and you have to get approved for at 12 months at a time. So it’s not like it’s an automatic thing. You can just say, “Yup but the payments on pause for three years.” But it’s something that most all federal loans have and you can even get an additional three years by consolidating so it really is very generous for people that don’t want to pay a few in their loans, if you want to stick to federal.

Robert Leonard 18:46
And what types of things qualify somebody for that three year hiatus from payments?

Travis Hornsby 18:51
You basically just ask your loan servicer for it. The loan servicers are really, really good at putting people in forbearance. That’s what a lot of the lawsuits about them kind of highlight, is that the loan servicers basically like put people into forbearance when they shouldn’t have. So all you basically have to do is just plead poverty and call your loan servicer and ask them to put you in that 12 month forbearance and they’ll do it. Not a good thing. You know, you’re not getting credit for one forgiveness, you’re not paying your debt off, your interest is capitalizing and kind of compounding on you while you’re doing that. So there’s not a good reason, from a cost perspective. The only real benefit is if you’re going through really a painful time in life, financially, where you know, your income is not zero. So you can’t qualify for zero IBR payments, but you can’t afford what they’re asking you to pay and maybe have some credit card debt you’re trying to clean up. So there’s some reasons to use forbearance, but I like to discourage people from using it.

Robert Leonard 19:39
So you don’t have to lose your job or anything like that. You can just call them and they’ll do it?

Travis Hornsby 19:43
Yep, pretty much.

Robert Leonard 19:45
But the interest continues to accrue, correct?

Travis Hornsby 19:47
Not just accrue, it compounds. So I mean, that’s the downside of forbearance is you’re going to rack up a ton of fees. It’s not a thing that I would do, if you can avoid it.

Robert Leonard 19:56
Yeah, I mean, I have student loans and I look at the interest charges. I mean, I pay mine every month, of course, but I see the interest start to, you know, accrue pretty quick. So I can’t imagine what that outstanding interest line might look like, if you were to take three years off. Through your experience helping thousands of people play down their student loans, what have you found to be the biggest challenge? And how can people overcome that?

Travis Hornsby 20:17
A lot of people actually need to go for forgiveness and not refinance. So a lot of people owe a lot more than their income. And they feel like they could never pay their laons back, start a family, buy a house, have a car, and go on vacation too. And so people kind of feel paralyzed. And so that’s kind of where the planning comes in. So most websites on the web, financially, have a really strong incentive to tell everyone to refinance. That’s kind of the end goal for a lot of websites is just a refinance your loans because we get paid if you do that.

So that’s one different approach that we take is being able to, you know, charge for making a plan for somebody and also making less money than everybody else does in refinancing because of the cash bonuses that we give people. It allows us to try to find the best plan for someone so that’s kind of the surprising thing I guess, to answer your question, is just a lot of people don’t need to pay back their debt. And that’s not a message you hear a lot on popular personal finance shows. You mostly hear the pay off your debt at all costs kind of mentality. And that’s really bad advice for a lot of people.

Robert Leonard 21:16
So that kind of leads into my next question that I have. And it’s one that I love to talk to financial experts about personal finance because it’s hotly debated. And I like to get different opinions on it so that people can hear and make their own decisions. So should someone start investing or pay off their student loans first?

Travis Hornsby 21:33
Start investing because if you don’t start investing, you might never actually be able to retire ever. So I mean, in terms of should you be in default, or should you invest? Well, obviously don’t be in default, right. So if it’s a question of like, do you make your first investment before paying your loans when you’re going to go into default, if you don’t pay your loans? Like that’s an obvious answer to me, is pay your loans. But in terms of do you pay your loans off first or invest more and take a slower path to paying off your debt?

The answer is do whatever it takes to develop the habit of investing. That’s what makes someone wealthy is that recurring monthly contribution to retirement and a non-retirement account. Very few people even get beyond retirement accounts. So if you’re putting money into real estate or mutual funds or ETFs, or something, you know, stocks bonds besides retirement, you’re already in probably the top 20% of Americans just at that level, which is kind of absurd if you think about it. So I would encourage somebody to learn how to invest at a very young age, even when you have student loan debt. And the student loan debt, if you want to pay it off fast, great, fine, doesn’t really matter that much as long as you have a high savings rate.

Robert Leonard 22:33
So when we talk about investing, you don’t mean investing through a retirement account, 401k or IRA, you mean investing outside of those accounts?

Travis Hornsby 22:43
I mean, both like you need to do both. Like most people understand their retirement is important at some point, they get *religion on that in their 30s or 40s, when they realize that they’re not going to be able to retire, unless they get serious about it. But for people with non-retirement accounts, most people never get there. It’s because nobody shows you how to put money into a brokerage account or a rent a real estate property. It’s just not a thing unless somebody in your family already did that, then it’s kind of hard for you to know how to do that.

Robert Leonard 23:07
Yeah, and you mentioned rentals there. And I’m glad you did, because that’s something I actually wanted to bring up and get your viewpoint on, because what I did with my student loans, and one of the reasons why I haven’t personally refinanced is because I was able to find two investment properties that I was able to put downpayments on as rentals and those downpayments, they were large, so they’re not necessarily easy for everybody just graduating college to do and I didn’t just graduate college, I’ve had some time to work up to it.

But what I did was I took those down payments and I bought two rental properties and that downpayment was much less, it was about half of what my student loan balances. And now those two rental properties cover my student loans plus some profit on top of that. So now I have my rentals that are paying off my student loans and giving me net income on top of that, and I had to pay less for that than my student loans. So ultimately, at the end of it, I’m going to have paid much less for my student loans than I actually borrowed, and my tenants are going to pay that off, on top of, you know, the additional profit I’m making. So what do you think of that strategy?

Travis Hornsby 24:09
You’re just showing what happens when someone’s 10% yield on rentals beats of 4.9% yield on student loans, right? You know, I think that you’re kind of illustrating the point that investing at a young age is very important, and putting money into non-retirement vehicles is equally as important as putting it into retirement accounts. So that’s a great lesson for anybody listening to this, is I don’t want somebody going off and putting a bunch of money in Bitcoin, like instead of paying down their student loans, like I believe it or not, I’ve had somebody that did that. And it worked out well for them, but that was luck, not skill.

So go put your money in something that you’re expecting to get a positive long term return. And it’s all about savings, right? That’s the key is if you’re putting a lot of your money away into your future into income producing assets and just growing your assets over time. It’s going to work out great. You can save a lot of money if you have the right plan. Don’t get me wrong, but you know, that’s kind of one of the things that we like to stress is we can translate anybody’s student loans into what they want to do for their life.

Robert Leonard 25:11
Now, I have to ask, did that individual who made money in Bitcoin, did they take that money out of Bitcoin before it crashed and put it into their student loans?

Travis Hornsby 25:19
So I used to be bond trader, right? So, you know, I used to be really into just like the trends of things and just what the markets were kind of saying, and I made a lot of bad calls on Bitcoin. I mean, just because I don’t think it’s something that has a fundamental value. And so things that don’t have a fundamental value is just to me, don’t impress me as investments. So I told him, I didn’t think it was a quality thing to invest in when it was only $1500. And obviously, you know, from a price perspective, I was very wrong.

But then I called him again, when Bitcoin was at $20,000. And he had I think, a lot of money in Bitcoin, like a lot, like a seven figure amount, and I begged him to sell enough to just pay his loans off. You know, at least do that for yourself, and he didn’t. And now I think it’s like $8000 or something, you know. So it’s just a classic kind of behavioral bias that when we win in something, we never want to diversify and take some of our poker chips off the table. We always think it’s going to go to… went up this much, it’s going to go up even more, right? It’s just the classic sort of fear versus greed of investing you have to watch out for.

Robert Leonard 26:22
Yeah, we actually just recently had behavioral finance expert, Daniel Crosby, on the show. So definitely go back and listen to that if you haven’t already. But we talked about the psychological biases you have when investing, specifically about Bitcoin. So definitely go check that out. Now, when you are working with somebody to develop a plan for them, what types of things are you looking at? What goes into a plan for somebody?

Travis Hornsby 26:45
Well, we want to make sure that they have an emergency fund. They have the best payment plan selected, the best tax filing strategy selected. They’re using the right retirement plan that’s going to reduce their income the most, to reduce their student loan payments the most. We want to make sure that they understand the implications of refinancing. Their shopping around at least the minimum number of places they need to shop to get a good rate. And we want them to save as much money as possible and not have their life impacted by this stupid debt. So I mean, student loan debt sucks. And some people are just like, it is what it is. And people just get really stressed by it.

Robert Leonard 27:15
Other than maybe some of the resources and blog posts and things of that nature, articles that you have available that you wrote or your company wrote, what are some other resources that people can use to help them find creative ways to pay off their student loans? I’m a big reader myself. I read about 50 books a year, and I have never come across a book or a highly-rated book on student loans or strategies to tackle them. So what kind of resources do you recommend for someone to check out?

Travis Hornsby 27:43
Reddit student loans is basically a section of Reddit that people will get a lot of advice. Some of which is good, some of which is not. You know, I think that also Ben White is a physician who wrote a book on Amazon about student loans. So if you just type in Ben White student loans on Amazon, you’ll find a really good book. About how to pay it, in terms of other blogs, you know, I think probably stick to Reddit, Ben White’s book, and our site. I think that will give you plenty of free resources, if you’re looking for the free resources. The problem is the free resources take time. And so it just depends on what is your time worth? And what’s your personality, if you enjoy doing things yourself then great, do it yourself, right? But if you got a complicated tax situation, you have a business or your spouse does, you have loans, your spouse does not. You owe more than you owe. Like I said, these things can be very complicated, and people don’t even realize how complicated it is.

Robert Leonard 28:35
To wrap up show, if you had a close friend or family member that came to you for advice about their student loans, what is the number one piece of advice that you would give them?

Travis Hornsby 28:44
I would say savings rate, if you have the perfect student loan plan and a bad savings rate that is not nearly as good as having a bad student loan plan and a very high savings rate. And that savings rate, if it goes into investments is going to allow you to become wealthy one day, if that savings rate results in you having a large amount of cash sitting around, eventually somebody is going to come around and sell you a whole life policy and make a huge commission at your expense.

So I would say that, you know, if you want to pay your debt off great, try to refinance, shop at a lot of places, get the lowest rate, you can get a welcome bonus. If you’re going for forgiveness, optimize everything, file taxes the right way, max retirement, maybe even become a professional real estate investor and reduce your AGI that way. There’s all kinds of weird hacks available that people are not aware of to reduce your student loan payments. So I guess pay as little as possible or pay as much as possible and figure out which one of those cases you should be.

Robert Leonard 29:34
You’ve mentioned a couple times taxes. And just before we end here, I want to talk about that a little bit because admittedly, when I look at my student loans, or when I consider my student loan situation, I don’t really give much consideration to my tax situation either. So what is the big deal of taxes when it comes to student loans?

Travis Hornsby 29:52
Yeah, and like say you’re a teacher that a not for profit employer and you owe $50,000, and you’re married to somebody that has no student loans. So if you select the revised pay-as-you-earn plan, which is going to be what every loan servicer will advise, then that counts your spouse’s income no matter what. And instead, you could strategically maximize your  403B at work and reduce your student loan payment because you’re reducing your income that the student loan payment percentage is based off of.

In addition, by choosing the right repayment program that allows you to file your taxes separately as a married couple, you can legally exclude your spouse’s income from the payment calculation. So for example, that teacher that’s at that school could be paying $100 a month, they optimize their student loans and set up for forgiveness tax free on their student loans based off of where they work. Alternatively, if they didn’t get any kind of planning for their student loans, they could easily be in a situation where they’d be paying six or $700 a month and being on track to get nothing forgiven. So that could be the impact of 10s of thousands of dollars for somebody that owns a relatively modest balance.

Robert Leonard 30:55
Awesome, great advice there, Travis. For those interested in learning more about you and all that you can offer, where can the audience connect with you?

Travis Hornsby 31:03
help@studentloanplanner.com and then also studentloanplanner.com/help if you just want to visit a page and learn about what we do. So basically, flat fee student loan planning few hundred dollars is our main service. And then we also have on the website, if you look at the menu bar for that refi bonus, we’ve got all these cash bonuses that people use to refinance. So that’s the main two things that we do. And that’s how we help people.

Robert Leonard 31:27
And I’ll be sure to put links to all of Travis’ resources in the show notes, as well as all the books and other resources we talked about during the show. Travis, thanks so much for your time. I really appreciate it.

Travis Hornsby 31:37
Thank you for having me, Robert.

Robert Leonard 31:38
This has been another episode of Millennial Investing. If you enjoyed this episode, you can really help the show grow by taking just 30 seconds to leave a five-star rating and review an Apple podcast. This really helps more people discover the show and allows me to continue to bring on the absolute best guests for you all. I greatly appreciate the support and I look forward to seeing you again next week.

Outro 32:01
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