And now it's time for our segment stretching at your
dollar where we give you tangible tips to help you
make the most of your money, especially in this
environment. Well, whatever the outcome and Supreme Court
, with the fate of President Biden's student loan forgiveness
plan, millions of Americans will have to repay the
debt later this year. And with the cost of
living soaring mid inflation, borrowers need to prepare as
soon as possible for when that day comes. So
joining me now is Jake Falcon, founder and advisor
of Falcon Wealth Advisors. Jake, thanks for coming
on the show. What are some steps that student
loan borrowers should be taking to prepare? Well,
thank you for having me Kristen and this isn't something
many student loan bars are excited about, but there
are some great things you can do. Number one
, we would suggest that you start redirecting some of
your monthly cash flow and the amount that you estimate
to have to repay into a money market fund savings
account somewhere out of sight and out of mind,
what this will allow you to do is check in
on your cash flow and see if you are running
out of deficit or if things are tight after that
, then you can truly define what are your values
and is your money properly lined up with those values
? The second quick tip I have regarding what you
can do now is check in with your loan provider
. The last thing you want is for your repayments
to start up and you have a different bank account
, a new address. So make sure all of
your contact information is up to date and that you
understand the terms of your repayment. Is it possible
jake in any scenario for people to put payments on
hold? It is you can certainly apply for what's
called deferment or forbearance. Now remember when you do
this, you're ultimately just kicking the can down the
road, you're still gonna have to pay the money
back. But if you need some temporarily relief,
you certainly can apply for that. But again,
it's subject to approval from your student loan. Are
there other repayment plans that might offer a lower monthly
payments? Jake that our viewers should look into?
Yes, that's a great question. Most people when
they apply for a student loan are set up on
the standard plan, which is a 10 year time
horizon. You can actually extend that and you want
to go to student aid dot gov and look at
different options. Maybe you can push that out 20
or 25 years. Again, you may ultimately end
up paying more money back in the form of interest
. But again, if you need that relief now
and want to lower those payments, that may be
an option for people. Any other forgiveness options out
there, jake there are, if you work in
the public sector for the government or nonprofit, you
may be eligible through the public service loan forgiveness program
to get some forgiveness. There. Also, there's
a program for teachers and also if you have a
degree and you're an industry where perhaps your income isn't
as high as you expected. Sometimes you can apply
for something called an income driven repayment schedule where they'll
base those repayments on your income. Again, these
aren't a one size fits all and you do need
to apply for them. But there are options available
is filing for bankruptcy and option jake. Is that
something people should consider if they do find themselves struggling
to make these payments? I don't like that particularly
for young people and you certainly have that as an
option, but it's not an automatic that it will
be forgiven. There's another program out there called the
Fresh Start program. That may be a better alternative
Christian for this. Uh for example, it may
help you avoid creditors or be still eligible for a
mortgage. So I would certainly look at other alternatives
before filing bankruptcy. We typically use that as basically
the last resort, but I wouldn't, I wouldn't
start with that at all. Okay. That's good
to know. Well, we know repayments, as
I mentioned earlier, Jake set to resume. How
should borrowers prepare as those repayments are set to kick
back in. Yeah, number one, if you're
working with a fiduciary wealth adviser, you certainly want
to check in with them and start to look at
your plan and develop a plan for this new cash
flow. Don't forget to pay yourself first. There
can be a balance between paying off debt and saving
for your future, whether that's in your 401k or
your Roth Ira, we certainly don't want to see
somebody stop saving for their retirement because they have student
loans. Um You know, you can categorize your
interest, also pay off your high interest first and
categorize what's most important so that you pay the least
amount and interest. Um And then also Kristen,
I did want to bring up that with unemployment numbers
still being very low. It could be an opportunity
to ask your employer for a raise or go out
in the job market. If you're tight on your
budget, maybe this is time to get a new
job paying you more money to help with this cash
. Jake Falcon, founder and advisor of Falcon Wealth
Advisors. Jake. Thank you.