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Category: Student Loans / Podcast

YFP 056: Rapid Fire Student Loan Q&A w/ Tim, Tim & Tim

Posted on by yfpadmin

 

On Episode 056 of the Your Financial Pharmacist Podcast, Tim Ulbrich puts Tim Church and Tim Baker on the spot with your student loan questions in a rapid fire format. If you are looking to get started with a game plan to tackle your own student loans, check out the YFP free Student Loan Quick Start Guide at yourfinancialpharmacist.com/studentloanguide

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 056 of the Your Financial Pharmacist podcast. Excited, this is a rarity. Excited to be alongside Tim Baker and Tim Church as we record in-person here as we’re in Rootstown, Ohio for the weekend doing some strategic planning for YFP. We’re excited about all of the excited content and resources we’ve got planned for you for the rest of 2018 and ‘19. So a rarity to have the three of us together. So Tim Church, back here at your roots in Rootstown, Ohio from your time here at NEOMed. How’s it feel to be back?

Tim Church: It feels great. So many changes here at the school. And everything that I got to miss out on once I left, right?

Tim Ulbrich: Absolutely. I mean, we have a Dunkin Donuts now in town. That’s like legit stuff, right? So for those of you that aren’t familiar with NEOMed and Rootstown, Ohio, I think we have three traffic lights, about 7,000 people. So when Dunkin Donuts comes into town, it’s a big deal. And Tim Baker, what’s your takeaway here on Cleveland and some of the things we’ve been doing this weekend?

Tim Baker: Oh, man. I’ve been doing the Tim & Tim tour here. After the Fourth of July, I drove up to Tim Church’s hometown and spent some time with Papa and Mama Church. And they were really nice. And got to see where Tim grew up. We were crushing some work there and then drove down to Rootstown and got to meet, Tim, your boys for the first time, Sam, Everett and Levi, who are awesome, and spend some time with Jess. And great hospitality, but yeah, I’m loving the Tim Ohio tour.
Tim Ulbrich: Yeah, it’s been a ton of fun. And we had a great night last night, shoutout to the RealEstateRPH.com, Nate Hedrick. We had him on previously on the show, and we’re planning some greta content around home buying and real estate and real estate investing. So stay tuned. Throughout the rest of this year and next year, I think we’ve got some really exciting stuff for you. And we’ve heard loud and clear that home buying and real estate investing is a topic that we know that you, the YFP community, are interested in. So stay tuned for some of that coming forward. So here’s the format of what we’re going to do with this episode. I’m going to put Tim Church and Tim Baker on the hot seat. We’ve taken questions the Facebook group, we’ve got questions into our email at [email protected], all questions related to student loans. So we’re going to do a rapid-fire Q&A related to student loans. We’re going to throw out a question, we’re going to answer it quickly and move on. Obviously, if you have other questions, things that we didn’t answer, shoot us an email — [email protected], and if you’re not yet a part of the YFP Facebook group, make sure to head on over there today and to join that community. Alright, Tim Baker, first question from Katrina in our YFP Facebook group. The question is, what’s the best way to balance high student loan balances? I’m talking multiple hundreds of thousands with other financial goals, i.e. savings, investment, retirement, down payment, so on. What are your thoughts?

Tim Baker: Yeah, this is a great question. I think it’s one of the ones we get often. And one of the things I don’t see listed there would be the emergency fund, which I think, you know, we talked about I think in Episode 026, baby stepping into a financial plan, so important to have that there. But you know, Tim and Tim, it’s kind of like one of those things where if a patient comes to you and they’re talking to you about what’s going on in their medical history or their life, it’s hard for you to like give advice without kind of the full picture. So you know, I think it’s hard for me to answer these questions in a silo. But you know, I think really trying to get to the core of what you’re trying to do with your finances and really in life. And there’s a need for prioritization there. Like you have to figure out, OK — because I think what often happens is people come in and speak with me as clients, and they say, I want to do a thousand things. And I’m like, OK, well let’s cut to the core and really focus on one, two, maybe three things to really be zeroes in on. And then knock those goals down and move on. So obviously, a lot of people, you know, student loans are a big thing. So I think it’s kind of taking that inventory of what you have and who you have to pay back, but also the inventory of how you feel about the loans. You know, and comparing that to a lot of these other financial goals that we’re talking about. In the student loan course that we have, you know, we have a strategy specifically for that high debt-to-income ratio and how you should tackle those loans in that situation. And it’s a tough strategy to kind of get to because there are a lot of different moving parts with that in terms of how you optimize that and you know, the whole forgiveness piece and things that are surrounding those programs. So I think ultimately, talk to an objective third party, which could be, you know, a partner, a spouse, maybe a financial planner, and really kind of cut to the core of what is important and how you want to take down the student loans among all of those other goals that were outlined in the question.

Tim Ulbrich: So Tim Church, as I look at Katrina’s question, I can’t help but think, this was really the situation for you and Andrea. So very high student loan balances, and obviously you have other things that you guys want to do — retirement, down payment. But you guys have really chosen — you’re in a renting situation, you’ve really chosen to go all in on your student loans. I mean, what was the thought process there and how did you guys work through to get to that solution to say, hey, we’re not going to really balance all of these things, but we’re going to try to do this one thing and do it really well and get these loans paid off?

Tim Church: Yeah, I think that that’s a great question. And what we kind of thought is yes, it’s going to take us a number of years to really get through all of the loans. So I knew it wasn’t going to be a 2-3 year solution, this is going to be more of around a 4-year+ solution. And given the situation that we were already in, really our two major goals was let’s put some money towards investing and then also be very aggressive with the student loan debt. And so what we’ve been doing is getting the match through our employers and then also maximizing our Health Savings Account because there’s a lot of great options there for tax savings but also the ability to invest what’s in the HSA.

Tim Ulbrich: Awesome. Alright. So Katrina, thank you for question. Second question, Tim Church, comes from Alex via email. I’m currently enrolled in PSLF, however, I only have about $100,000 in debt. Could you provide any insight into when making the minimum payments over 10 years as opposed to aggressively paying them off, such as in three years, ends up being similar. What are your thoughts there?

Tim Church: So first off, I think this is a really cool situation to be in because you have student loan debt that’s less than a typical pharmacist would. You know, we look at the average is around $160,000 and even higher for those who went to private institutions. So first off, that’s pretty cool to be in that situation. I think the other question you have to ask in this situation is what is your goal? And do you really want to have student loans around for 10 years, even if you’re going into the program versus kind of knocking those out and moving on with your life. What’s interesting is that if you look a three-year versus a 10-year PSLF, the total amount that’s actually paid ends up being fairly similar when you do some basic surface calculations. So if you make payments based on your adjusted gross income over 10 years versus paying really aggressively over those three years. So it’s about $2,000 or more difference that you’re going to pay extra if you want to knock them out in three years. And so that could be very attractive to say, hey, my student loan debt’s done. It’s out of my life, I can move on. But you also have to look out, OK, what would be the benefits of doing PSLF and going that route. And so if you look at on a surface level, you could say, OK, the overall payout could be similar, but are there things that you could do to lower your adjusted gross income? And so we talked on Episode 018 about maximizing the benefits of PSLF, and we really go into where you can contribute to your 401k, you can contribute to an HSA and do some other things that actually lower your AGI so your total amount that you’re going to pay over that 10 years could be a lot less than if you did nothing to sort of do that. So I think it’s very interesting, and there’s a lot of calculations from a math standpoint to say, what is the actual difference? But I think you have to really add in those emotions as well. So I don’t think there’s really a clear answer to this. And a lot of times, we’re seeing people that have very high debt loads where it kind of points people to say, wow, PSLF definitely is the better choice and there’s a lot more savings that’s there.

Tim Ulbrich: OK, so our next question comes from Jordan via email. After graduating from pharmacy school in May 2017 with $265,000 in loans, I’ve been working tirelessly for the past nine months at two hospitals and saving tremendously. Currently, I’ve saved over $90,000 to pay for future expenses such as a house or car. My student loans are through the PSLF program and are fairly cheap in regards to my monthly income. I’m curious to your thoughts on paying for a house or car in cash in the future or continuing to save in case the program falls through. So Tim Baker, what are your thoughts on this one?
Tim Baker: Yeah. I love this question because I love that this particular person, Jordan, that you didn’t kind of buy into the whole, hey, we’re pharmacists, we make good incomes and kind of resting on your laurels. Obviously, you’ve been hustling. I think that’s a great thing. I think with regards to this question, again, I’m looking at it from kind of the lens of a financial planner and looking at the big picture. You know, I see $90,000 in liquid assets, you know, maybe some financial planners would say, invest all of that. Again, that kind of goes back to the question that we had from Michael in Ohio about follow the money. But I think, again, it all goes back to goals. What is the goal here? Is it to maximize the amount that’s forgiven? Is it to get out from underneath the loans as quickly as possible? Is it to minimize what you’re financing between a house and a car? So I think those are super important. To me, I think the exercise from there is to really earmark that $90,000 at present and really going forward, for those particular goals. So if it’s to peel away $60,000 for a down payment on a house — and I think as a team, we believe a 20% down payment is best practice to avoid PMI and really have a decent equitable stake in your home, is I think the best thing for the balance sheet in home buying. I think cash can be king, especially if you’re in a competitive market. Maybe you earmark another portion of that towards a car, and I think referencing Episode 047, Best Practices for Car Buying, which Tim Ulbrich did, I think would be a great place to start there and really not, you know, let some of those dollars evaporate in that transaction I think is important. But I think also, one of the things that, you know, for the question kind of pertaining to PSLF and its longevity, you know, I think from — and this is kind of my opinion — is that I think that the PSLF program, it does have legs. Meaning I think with some of the things that are going on in Congress and earmarking dollars for kind of the PSLF mishaps, which, you know, have been documented quite a bit in the news. I think that at the very least, if we decide, if the government decides, hey, this isn’t a program going forward, they would at least grandfather you in. But again, that is me. And I’m not the one basically making the budget decisions. But I think with that money, if that were a concern — and again, this is also something that we talk about in the student loan course — is maybe you earmark part of that money and then contributions going forward into a fund that can kind of offset that, that is kind of like a rainy day fund in case the PSLF program, you know, falls through. So that would — again, it kind of goes back to the goals and really parsing those out and trying to figure out the best way to deploy those liquid assets that you’ve accumulated, you know, very aggressively and then to have a plan for that going forward in terms of where are you going to contribute that. And I’m a big proponent of basically segmenting those things out, whether it’s a car fund, a home fund, an index fund for, you know, your rainy day PSLF falls through scenario. So that’s kind of where I would start.
Tim Ulbrich: Yeah, and just to kind of shoutout to Jordan, to do the work to save up $90,000 in cash, thinking about some of these strategic things around house or car or being ready if PSLF were to fall through, that’s no small feat. And obviously, in the question, he references hustling for the last nine months, working two hospital jobs, so good work, Jordan. Obviously, you’ve got a student loan situation that you’re trying to get out in front of. But certainly it appears like the work ethic is there, and the future is going to be bright. So Tim Church, Jessica from the Facebook group says, if loans are still deferred while still in school, is it worth paying on the interest? What is the best strategy?

Tim Church: So I think the answer is maybe, but likely yes. So if you look at federal loans, which typically have interest rates of 6-8% and if we’re talking graduate school loans or professional school loans, these are going to be, by and far, they’re going to be unsubsidized loans, which means the second that those loans are activated, are dispersed, every day, interest is accumulating on those loans while you’re in school. So it just keeps building and building and building, and eventually will capitalize once you are post-grace period. And so I think that anything you can do to first off minimize the debt in the first place in the amount that you’re going to take, it is something that you should do. But then yeah, if you get access to other funds or find opportunities, then of course, making those kind of payments are going to help reduce that interest that’s going to eventually capitalize. Now, the one caveat with that is that if you feel that you’re going to be pursuing PSLF or even non-PSLF forgiveness, then it may not make as much sense to actually put extra money towards the loans because the reality is is that if you’re all-in on one of those programs, you want to minimize that you actually are going to pay out-of-pocket over time. And that’s just the way to maximize the effectiveness of the program. And so, if that was your strategy, any additional income or funds actually may be going towards investments or some of your other goals that you’re going to pursue and then just sort of after that grace period, you’re going to figure out ways how you actually minimize those student loan payments. And I think a lot of people may be in the grace period right now, we just had a lot of pharmacy graduates complete their PharmD program. And I think it’s so important that you have some sort of game plan in place because right now, all of that interest is getting ready to capitalize once that grace period ends. And so having a strong game plan and knowing exactly what you’re going to do and how you’re going to attack your loans is so important. You know, because Tim Ulbrich, you and I, we talked about how a lot of mistakes that we made just because we didn’t have a game plan right from the get-go, and we kind of had to learn from some of the mistakes that we made. But I think we do such a great job in the student loan course to just really helping you get a strategy in place and feel comfortable about it, but then really taking it to the next level to make sure that you are getting the most savings. So if you’re interested in checking that out, you can go to YourFinancialPharmacist.com/student-loan-course.

Tim Ulbrich: Yeah, I couldn’t agree more, Tim Church, about being intentional in this period. And you know, putting myself back in the shoes of graduation comes, there’s that excitement around graduation, you’re thinking about trying to pass the NAPLEX and the MPJE, maybe you’re starting residency. If not, you’re starting your job. And I think in that time period, there’s so many pieces and parts and moving things that are going on that it’s easy to just wander through that and all of a sudden, you get that notification for first payment, and you’re like, what am I actually going to do, right? We’ve got all these federal options, we’ve got refinance, forgiveness or not, and so I think really being intentional in this period — residency, no residency, doesn’t matter — new grads of saying what’s the one best repayment option and strategy for my personal situation? And as Tim Church mentioned, I think we do a great job of that inside the student loan course at YourFinancialPharmacist.com/student-loan-course. OK, Tim Baker, question from Miranda in the Facebook group — and I might be setting you up for failure to try to answer this depth of a question in a rapid-fire format, and we’ve talked about this before in terms of balancing investments with paying off student loans — but Miranda says, with talking to my preceptors, a lot of them recommend paying yourself first or saving. Being a numbers person, I’d be interested in learning a formula for what percentage of income should be dedicated to savings, emergency fund, the loans, expenses, etc. What are your thoughts?

Tim Baker: Oh man, this is such a tough one. And I hope listeners are not getting upset with me because I’m not giving like this is what you should do, and technically, I can’t do that. It’s so hard because, you know, I think people want to know like where do I fit compared to like — what am I spending on my cat or dining out versus like the norm of what you see? And I kind of have those ideas in my mind, but if you’re at a different stage of life, took more of a nontraditional route through school, I mean, it could be completely different. So you know, I actually just got done reading the book, “You Need a Budget,” which is written by — I think his name is Jesse Mecham, which is the You Need a Budget founder, which is kind of a budgeting tool that rivals Mint. And you know, he kind of echoes this same point is that, again, there is no cookie cutter solution to this. Everyone is going to be a lot different than the next person over, even it could be in similar situations. So I think, you know, for me, if I could kind of look very strategically and high level at a case, it’s obviously, again, it’s like, what are the goals? What are the feelings towards the debt? And then beyond that — you know, I think that drives the train a lot — but then beyond that, it’s like, make sure you have that emergency fund. And it could be kind of like a base-level emergency fund, so maybe $1,000 covers a lot. Most emergency funds, if there are emergency situations if you’re single, it’s $5,000. But then you know, building upon that, but then beyond that, make sure you’re absolutely getting the match from your employer and then get that free money. But from there, it’s kind of like a choose-your-own adventure. And again, I think that’s where kind of peeling back some of the layers of what’s important is so vital because it’s really going to drive your decisions. And I think it’s easier to kind of adhere to a plan when you say, OK, I am doing this because of y in the future. And I think those high-level things are make sure the consumer debt is taken care of, make sure you have an adequate — and I put “adequate” in air quotes — emergency fund that you feel comfortable with because the textbook is going to say 3-6 months of those non-discretionary monthly expenses, so if you have rent of $2,000 and a loan payment of $2,000, that’s $4,000 right there just in that, you know, and if you’re single, times that by 6. So that’s pretty substantial. But I think, again, this is why stepping into it and being intentional about this, there is no percentage. But I can — if I look at your situation, I can tell you, yeah, that is high and maybe cut back or — again, the other piece of this is how can you grow your income? How can you look at Jordan’s situation and hustle and elbow grease. And you look at the Patterson episode with Adam and Brittany Patterson just crushing their debt because of like the extra shifts, so yeah, there’s a lot of nuances, and I hope some of that helps. But there is no cookie cutter; there is no right answer.

Tim Ulbrich: Good stuff. So Tim Church, Dalton from the Facebook group — and Dalton, we had on Episode 048, Mo’ Money Mo’ Problems — Making the Financial Transition into the New Practitioner Life, if you haven’t yet checked out that episode — he has a question around refinancing. What should I look for in a refinancing company such as if they have prepayment penalties? And so when I think refinance expert, I think Tim Church. So talk us through what people should be looking at when it comes to refinancing.

Tim Church: Yeah, so I think there’s so many different companies out there, and it’s a very crowded space. And so a lot of people, they’re spending a lot of money to market to people, especially pharmacists who have large debt loads to get you to refinance your loans. So there’s definitely some things you want to be looking out for to make sure you protect yourself. And especially because there’s been a lot of scams around consolidation companies and people thought they were with reputable companies, but the reality was that they were defrauding people. And so you have to protect yourself. So a couple ways to look at that to make sure is the Better Business Bureau to check them out to make sure that the company is No. 1, that they’re legit and that they don’t have substantial complaints against them and making sure that you’re comfortable with a lot of those reviews and the rating that they’re giving them. NerdWallet actually has something called a watch list where they’re putting any companies with very shady business practices or have lawsuits against them on a database, so I think that’s another place to check. So if you’ve never heard of the company before, those are probably things you want to check out for. Some other things that I think are really important — there really should be no fee for you to refinance your loans. They’re actually competing for your business, and they actually — what they’re doing is giving you money to come over to them and to be part of their community and their program. So they actually offer cash bonuses to you, but there should be no fee that you’re actually paying. The other thing I think is important is that there’s no prepayment penalty. So if you say that you’re going to refinance for a term of five years, seven years or 10 years, but you want to pay that off faster, then there should be no penalty for you. Now, obviously, the way that they make their money is at the interest that you pay each and every month. And so if you pay off your loans faster, obviously they’re going to get less money than intended originally. But most companies, I haven’t seen any issues with this that they have no special clauses or anything, so you’re going to be OK for the most part if you want to pay it off faster than the term. So some of the other things that you want to look out for — now, obviously if you’re pursuing any of the forgiveness programs, you do not want to refinance because you’re going to automatically disqualify yourself for any of those programs. You have to keep your loans in the federal system. And then the other thing, a lot of people, they talk about when you move your loans out of the federal system into a refinance company that you’re losing all of those protections. And the idea is that yes, is that there are some things that you’re not going to get, and that’s going to be income-based repayments for the most part. So if something happens to your income, and you can’t make that monthly payment, and you have to go down to some small payment or you want to put it in deferment or forbearance, that may not be offered by a refinance company, so it’s something that you want to look out for. And then the other things is that loans within the federal system will be discharged if you die or become permanently disabled. Well, that’s not the case for every refinance company, but there are some that still have that protection. So something just to keep in mind if you have strong policies in place that may not be as much of a concern to you but something that you still want to take a look at.

Tim Ulbrich: Good stuff. So 29 and 30, episodes 029 and 030, Refinancing Student Loans Part 1 and Part 2, we talked a lot about that topic, so if you’re a listener who’s thinking, is refinancing for me? Is it not for me? Who should do it? Who should not do it? What does that even mean? Head on over and check out episodes 029 and 030. And we’ve also built out a great refinance resource page at YourFinancialPharmacist.com/refinance where we have a guide that can walk you through a lot of what Tim Church just talked through, making sure you’re really answering the question, who is refinancing for? Is it right for me or is it not? And then ultimately, start to get some quotes and get the cash bonus if you were to pursue that in the future. So again, that’s YourFinancialPharmacist.com/refinance. So Tim and Tim, great stuff, thank you so much for coming on, excited that we could do this in person. We’re hoping to do much more of this in the future. And again, if you are hearing these questions around student loans and you’re trying to think where should I get started? Check out the YFP free student loan quick start guide at YourFinancialPharmacist.com/student-loan-guide. Again, that’s YourFinancialPharmacist.com/studen-loan-guide. And if you have a question that you would like to have answered on a future episode of the YFP podcast, send us an email at [email protected]. That’s all for today’s episode. Have a great rest of your week.

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YFP 052: 5 Steps to Crush Your Student Loans

Posted on by yfpadmin

On Episode 52 of the Your Financial Pharmacist Podcast, YFP Team Member Tim Ulbrich walks through 5 steps that you should take to crush your student loans. More specifically, these 5 steps will help you begin to develop a payoff strategy and plan that is best for your personal situation. This episode is filled with lots of action steps that have been summarized in the YFP Student Loan Quick Start Guide that is available to download for free at http://www.yourfinancialpharmacist.com/studentloanguide

Mentioned On The Show

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 052 of the Your Financial Pharmacist podcast. I’m flying solo this week, and I’m going to be walking through 5 steps that you can take to put a plan in place that will help crush your student loans or if you’re seeking loan forgiveness, will help you to maximize forgiveness. Now, as a reminder, as I mentioned in the intro, there is no need to take notes. We have compiled all this information we’re going to talk about on this episode into a quick start student loan guide. So I don’t want any driving or biking casualties to happen because of the YFP podcast. I really don’t think we have the right insurance in place to cover that. So anyways, head on over to yourfinancialpharmacist.com/studentloanguide. Again, that’s yourfinancialpharmacist.com/studentloanguide to get a copy today and so you can begin to put your own plan in place.

Now, I want to give lots of credit to Tim Church and Tim Baker. As you know, YFP team members had lots of input into this guide and into this student loan course I’m going to talk about a little bit later on this episode. So here we are again, talking about student loans. Now, I think that’s no surprise. We obviously just graduated the class of 2018, so we have lots of new graduates that are there, thinking about, what should I be doing with my student loans and as we hear from the YFP community and the YFP Facebook group and through emails that we receive, over and over again, this topic of student continues to come up as a point of stress, as a point that’s causing people to be overwhelmed and frustrated. And so we want to continue to bring you valuable content to help you with your own student loan payoff plan and strategy.

Now, Tim Baker, on last week’s episode had mentioned that he and I just got back from USC out in California, had a great trip out there, working with their students, and we were really impressed just with the program and the school. Overall, just great hospitality, and it reminded us again that we could continue to see and hear this feeling from soon-to-be graduates, this feeling of being overwhelmed, this reality setting in that, you know what, I knew I was going to be making a great income, but I really didn’t anticipate this level of stress when it came to my student loans and what I’m going to have to pay back and how it is going to impact my other financial goals that I’m going to be achieving.

Now, I know for many listening that maybe just graduated, this is obviously the grace period for many of your student loans, if not all of your student loans. And I think that term, the grace period, often lulls people into inaction. And more than ever, the grace period is the time when you should be taking action, thinking about what repayment plan or strategy is best for your personal situation and maybe even making payments because for all those unsubsidized loans, obviously your interest is accruing during this grace period. So if you’re somebody who’s listening, just graduated, you’re thinking grace period, I’ve got some time — yes, technically, you do have time. But what a good time to be taking action to putting a plan in place.

Now, I can attest just from personal experience that having a plan, having clarity around what you’re trying to do with your student loans is so important to having peace of mind. I think back to the journey that Jess and I had where we were paying off $200,000 or so of student loans, and for the first few years after I got out of residency, we were really wandering through that repayment plan, always wondering, how long are these going to be around? Are we balancing these appropriately with other goals? And the second we put a plan in place, we may still have been frustrated that it was taking so long, that we wanted to do other things, but that clarity of having a plan was so important to us having peace of mind and to us being able to move on with executing that plan and thinking about other financial goals. So if you’re listening today, whether you’re a new grad, you’ve been out five years, seven years, 10 years, and you’re feeling frustrated, our goal with this episode and the content we’re bringing you around student loans is to help you put a plan in place that provides clarity and hopefully, we can be the inspiration and motivation to you doing that.

Now, we talked a lot on this podcast and on the blog and in speaking engagements that we’ve done, we’ve talked a lot about the landscape of student loan debt. I would refer you back to episode 004 and 005. In 004, we talked about the landscape of student loan debt. In episode 005, we interviewed Dr. Joey Mattingly to talk about the impact of student loan debt on new graduates. And obviously, we’ve talked since then about getting a plan in place on some level, getting organized, we’ve talked about Public Service Loan Forgiveness, we’ve talked about refinancing. I’ll link to all of these in the show notes. But here today, I’m going to walk through a 5-step process that brings a lot of these pieces together that I think will help you put some clarity to the plan that you need to put in place and that you need to execute.

Now, I’d be remiss if I didn’t quickly paint the picture of what new graduates are dealing with when it comes to student loan debt. So we’re still awaiting the most up-to-date data from the class of 2018, but from the class of 2017, we know that the median amount borrowed for those that went to a public school was about $130,000. For those that went to private school was about $200,000. Now, anytime I mention that figure in a room of pharmacists, I literally get no emotional reaction. And I think that really speaks to how normal we feel like this situation is. Now, you’ve heard me talk before on this podcast that we need to get ourselves out of that lull of this is a normal situation, because if we look historically in terms of the pharmacist’s salary relative to indebtedness, we’re in a relatively abnormal period of time where debt loads are outpacing salary increases in a very significant way. And this should be getting all of us fired up to have more conversations around this topic. And really, in reality, salaries aren’t even keeping pace on average with inflation, let alone thinking about the debt component and what impact that’s having. And so what does that mean? That means, as we talked about in Episode 005 with Joey Mattingly, that means that a graduate coming out today, the purchasing, the ability of their income is less than it was five years ago, 10 years ago or even 15 years ago. Has the salary number increased? Yes, of course it has. But when you account for inflation and you account for the significant rises in student loan debt, the purchasing power of a pharmacist’s salary is eroding each and every year. Now, what does that mean for you that’s listening? That means that we have to do some more work with, be a little bit more diligent, with having a plan in place so that we can attack these student loans and have clarity on how we’re going to pay them off so we can move forward with achieving the rest of the financial plan. And so whether you’re somebody that’s overwhelmed with your loans, you’re not sure if you have the best plan in place, this podcast is going to help you with the 5 steps that I really think you need to take to start putting that plan in place when it comes to your student loans. So let’s jump in to those 5 things.

OK, No. 1. If you’re somebody that’s listening, and you’re thinking, I’m not even sure exactly what I have when it comes to my student loans, the very first thing that you have to do is inventory your federal loans and then inventory your private loans. And then third, we talk often about you have to inventory any loans you have from what we call “The Bank of Mom and Dad,” so family members or friends or other people that have loaned you money, this is the time to get clarity on what are their expectations with getting that money back? So let’s talk about inventorying your federal loans first, then your private loans, then of course, you can talk with family or friends about any other loans or any other money that you have borrowed. So when it comes to your federal loans, these are loans that are owned by the U.S. Department of Education, and the easiest way to get ahold of these is to go to the nslds.ed.gov or go to the studentloan.gov repayment estimator, and I’ll link to both of those in the show notes, and you’ll be asked to log in with your FSA ID, what’s known as your Federal Student Aid ID. Now, if you don’t know what I’m talking about, you don’t know what an FSA ID is, or you can’t remember one, don’t worry. You can quickly create a new one. And once you log in, that’ll get you into the system, and you can then see the total balance of your federal loans, you can see a weighted average interest rate of your loans, and then you’ll begin to see all of the details of your individual loans. What’s the loan title? What’s the interest rate? Who’s servicing those loans? And what’s the balance of those loans? So the first step is we need to inventory and get a list of our federal loans. Then you need to do the same in the step of inventorying your loans, you need to inventory your private loans. And we believe that the easiest way to start here is to pull a credit report from annualcreditreport.com. Now, if you’re not familiar with annualcreditreport.com, this is a website that’s authorized by the federal government to issue a free credit report from one of three companies, Experian, TransUnion or Equifax, once per year from each one of those three companies. Now, this is only updated every 30 days or so. So all this is a great starting point to see all debt that you may have and to just check your credit activity. I would then suggest once you identify a private loan, to go to the individual lender, whether that’s Chase or Wells Fargo or Citizen Bank or whomever you’re working with to get the most up-to-date information on the balance and the interest rate of the loan. So let me say that again. Go to annualcreditreport.com, get an overall picture, make sure you’re capturing everything, you’re not missing anything, you can get a complete inventory of your private loans, and then you can head to the individual lender that’s mentioned on that credit report to get the final details. So Step. No. 1 here is inventory your loans — that’s your federal loans, your private loans, and then “The Bank of Mom and Dad.” Now, what I always tell people when it comes to “The Bank of Mom and Dad” — and I love my parents — but if they were to loan me money, and they were going to forgive that money, I’m only going to ask the question once, and then I’m not going to ask it again, right? Now, if they are expecting that money to be repaid, I cannot emphasize enough the importance of getting clarity and having that difficult conversation. When do they want that money back? Are they expecting interest or not? What specifically is the agreement between both parties so you can make sure that nobody’s getting upset and that you can account for it in your repayment plan with your other loans?

So here you are, after Step No. 1, you now have a complete inventory of all of your student loans. Now, in our student loan course, which I’m going to talk about a little bit at the end of this podcast, we walk you through exactly how to get an inventory of your loans. We walk you through screenshots and then we walk through the process of making sure you have all of your federal and your private loans and making sure you understand all of the details that you’ll find through those sites. So Step No. 1 is inventorying your loans.

Step No. 2, then, is to determine the options that you have available to you as you begin to think about the repayment options. And there’s really three buckets that we think about here. There’s tuition reimbursement, there’s forgiveness, and then there’s non-forgiveness. Now, tuition reimbursement — so there’s some fairly well known tuition reimbursement programs that are offered by the federal government and the military. But a lot of people also may not know that there’s state-specific programs that are available. And we actually have a supplemental resource in the YFP student loan online course for pharmacists that highlights state-by-state what those programs are, and I think a lot of people are probably and potentially leaving money on the table that they’re not aware of. And these state programs vary in structure, vary in terms of the length of service and what’s being exchanged, but ultimately, typically requires that the borrower pay a specific amount out-of-pocket and then they essentially will match that amount for a certain number of years for service. So what I always tell people, if there’s tuition reimbursement programs that are on the table, whether that be with the VA, the Indian Health Service, maybe a state-specific program, maybe a military program, that typically is going to be the first option that you want to take. Then, you start to evaluate the other options that are available. The next one I mentioned was forgiveness. So most notably here would be the Public Student Loan Forgiveness program, and I point people back to Episode 018 where we talk about that in detail. And also, a lot of people don’t know that there’s a non-PSLF, non-Public Student Loan Forgiveness program, that’s available within the federal loan repayment system as well. So here you need to determine, am I going to pursue forgiveness or not? If you decide forgiveness is the right amount that you may pursue, you’re then looking at the Public Service Loan Forgiveness program, which basically says if you work for a qualifying employer, so federal government or agency or a non-profit 501c3 organization, if you work for them, make 120 payments, the payments do not have to be consecutive, and ultimately, after a 10-year period if you work full-time and you meet all of these requirements, your loan balance is forgiven, and it’s forgiven tax-free. Now, again, I’ll point you back to Episode 018 because we talked about some of the pros and cons of this program, and so I’m giving a very short synopsis of that program here. What a lot of people don’t realize is that there’s actually a forgiveness option that is not PSLF but is also found within the federal loan repayment options. And we’re calling that the non-PSLF forgiveness. Now, what this essentially says is after you make a certain number of years of payments — typically it’s 20-25 years — you are forgiven a balance of your loans, but it’s not forgiven tax-free, so that’s the downside is it’s not tax-free forgiveness. But the upside is it doesn’t have the restrictions of a qualifying employer that does the PSLF program. Now, some of you may be thinking, why in the world would I want my loans to be around for 20 or 25 years? And what we have found is that generally speaking, those that have a very high debt-to-income ratio and those that are not working for a qualifying employer, this is an option that you at least want to evaluate to see if it makes sense. So let’s say you’re somebody listening who works for a for-profit company, maybe a CVS or Walgreen’s or another for-profit company, and maybe you have $300,000 or more of debt. This may be a program you want to at least look at the math amongst other factors to determine whether or not this repayment plan and option is best for you. And we talk in a lot more detail in the course and walk through the scenarios where this would and would not make sense. So first, you’re thinking about tuition reimbursement programs. I mentioned those with the federal government, the military or state-specific programs. Then you’re thinking about forgiveness options, either PSLF or non-PSLF forgiveness in the federal repayment system. And then finally, you’re thinking about the non-forgiveness options. So when I talk about non-forgiveness, this simply means you just pay them off, whether that be you stay in the federal system and you pay them off in five years, 10 years, 15 years, depending on the repayment plan, or you could potentially refinance your loans with a private lender — and again, you could get a five-year refinance, a seven-year, a 10-year, a 15-year, a 20-year, and that really varies by the different lenders. Now, if you’re thinking is refinance right for me? What exactly is refinance? How should I balance this against other options? I would point you to our refinance resource page, which is at yourfinancialpharmacist.com/refinance, where we talk all about what a refinance is, who should consider it, who should not consider it, and then we’ve got some great cash bonuses for you for those that it makes sense to move forward with a refinance. As I’ll talk about at the end of the podcast, if you’re hearing these options and you’re thinking, there’s a lot to consider, we talk in detail throughout the course of getting to the point where you have clarity on the one payoff plan and strategy that makes the most sense for your personal situation. So here I’ve really mentioned three buckets: tuition reimbursement, forgiveness or non-forgiveness. And for each person listening, the course of action and the path forward and what’s going to save the most money and make the most sense in the context of other financial goals that you have is very individualized from one person to the other. So Step No. 1 was inventorying your loans. Step No. 2 was determining the loan options that you have available, repayment options.

Step No. 3, then, what we’re thinking about here is looking at doing the math to determine what the difference is between these options. And one of the common mistakes that I think we’re seeing a lot of people do is as the repayment plans — especially with the federal repayment system, and even in a refinance situation — we tend to fall into the mindset of looking at things on a monthly basis. So let’s say you’re looking at your federal loan repayment options, you’re looking at payee, re-payee, the standard, the graduated, the extended programs that are out there, we tend to think of things in a monthly basis in terms of what is this going to cost me per month. Now, that’s not inherently bad, and I think that’s something we all need to do to make sure that it fits within our monthly budget, but I really want you to take a step back and calculate the total amount that you’re going to pay based on the different repayment options and plans that are available to you, inclusive of all the interest and of course, the original balance on the loan. Now, we have a repayment, some repayment calculators on our site that I think would be great, the repayment estimator at studentloan.gov, which I’ll link to in the show notes, also will help you do this. But you want to get to the point where you can all of these different options and say, ‘This is what it’s going to cost me per month. And this is what it’s going to cost me when it’s all said and done at the end of the life of the loan.’ So if we were to look at a fairly normal situation, a borrower that had $160,000 or so of student loan debt at graduation, let’s assume 6% interest rate on their loans, and they were to choose the 10-year standard loan repayment plan. In that situation, their monthly payment would be approximately $1,800 per month, and they would make that monthly payment for 10 years. Now, when it’s all said and done, their $160,000 would become over $200,000 that they were to pay back. And if they were to take that out to 20 or 25 years, that would become beyond $250,000 that they would pay back because of the interest that’s accruing and compounding on that loan. So again, this is one you really want to look at. What’s the monthly payment? What’s my total amount going to be that I’m going to pay out? And if you’re going to pursue a refinance, you absolutely want to do the math to see how much you would save on a refinance. And we’ve got a calculator and a tool that will help you do that, yourfinancialpharmacist.com/refinance to make sure that you’re really looking at the numbers and evaluating your options that are available. Now, the other piece you really need to think about here as you’re doing the math is what can I afford each and every month to put towards my student loans. What can I afford each and every month to put towards my student loans? Now, if you’re somebody that says, I’m going to go all in and pay these off, the goal is here is obviously as you’re thinking about your monthly budget, your monthly spending plan, is to maximize what you have available to throw at your student loans. If you’re somebody that says, I’m really going to pursue Public Service Loan Forgiveness, and I’m going to go all in, then the strategy shifts, obviously, and you’re trying to minimize the payments to then maximize the forgiveness and move on and pursue other goals that you’re working towards. So the monthly spending plan, the budget piece, is so critical here as you’re evaluating your different repayment options. Should I go with the 10-year standard repayment plan? Should I go with an income-driven plan? Should I go with a refinance? If so, how many years on the refinance? Is Public Service Loan Forgiveness or non-PSLF forgiveness right for me? You cannot answer that question adequately and confidently until you know exactly how much you have available each and every month to put towards your student loans. So the budgeting piece here is critical to making sure you can get to that point. And we talk a lot inside Module 1 of the course in Lesson 5, I walk you step-by-step exactly how to do that so you can make sure and you’re confident as you pursue determining what the right repayment strategy is.

OK, so we’ve talked through three of the 5 steps so far that are going to help you crush your student loans. We talked about inventorying your loans, we talked about evaluating the different options that are available, and we talked about doing the math as you start to begin towards choosing one of those options. Now, the fourth factor is probably one that’s overlooked the most, and this is really thinking about the factors beyond the math, beyond the numbers. Now, most people you talk to, we sit down and we’re really digging into the numbers, we’re digging into the weeds — well, what’s it going to cost per month? What’s the total amount that I’m going to pay? All of that is important, but if we remove the emotional piece of this, we’re going to fall short in making sure we’re choosing the best repayment plan and strategy. And this is the variable where for every person listening, your attitude towards your student loan repayment, your family situation, your other financial goals, your career components, all of these differ from one person to the next and therefore, is going to influence which repayment plan and strategy you choose in addition to the math.

So think about this as the window in which you’re viewing the math, right? But you have to first consider these components. So what is your feeling towards your student loans? Are you somebody that looks at your student loan dead and says, ‘No big deal. It’s a second mortgage, I’m going to have it for 30 years.’ Or are you somebody that loses sleep over student loans and it’s stressing you out? How you choose your repayment plan and your repayment strategy based on those two answers obviously could be very different. What’s your family situation? Are you and a spouse or significant other, do you have the same philosophical beliefs towards that debt? Do you feel the same way about the repayment plan? How is this impacted by your family situation in terms of other goals that you’re trying to achieve? As you think about those other financial goals, where are you in terms of prioritizing those goals? Are you somebody that maybe is in their mid-20s and doesn’t have a family and really is just getting started with 40 years ahead, and you may say, ‘No big deal. I can go all in on my student loans knowing that I can catch up with other goals.’ Maybe you’re somebody that’s listening that’s more mid-career, that has a family, that’s trying to balance a mortgage, trying to balance kids’ college. And obviously, how you choose your repayment strategy and plan may be different. And what about your career? Are you somebody that’s eligible for PSLF? Or are you not? Do you have tuition reimbursement plans that are available or not? All of these components in addition to the math are critical to helping you choose the best repayment plan.

So then we get to No. 5. And the final piece here is you then determine your payoff strategy. So here you make a decision, and you commit to that plan that you have. Now, those first four steps are obviously leading us to this point. And as I start to think about all of the different repayment plans that are available, as I’m sure you’re feeling right now, it can become extremely overwhelming, and often, I see people get paralyzed by this feeling of frustration. I know for me, it’s exactly what happened. I graduated, I did residency, I had many of my loans at 6.8% fixed interest rates, and I did nothing. And I stayed there in the 10-year repayment plan, which might have been — maybe not — but might have been the worst decision that I could have done. I probably should have either refinanced to lower my interest rate or working for a qualifying PSLF employer, I probably should have pursued PSLF. But what did I do? I was overwhelmed, I didn’t know what repayment plan or option I should choose. I didn’t understand interest rates, I didn’t understand what subsidized and unsubsidized was. I didn’t understand the implications and who should refinance and who should not refinance. And so instead of taking the time to really understand that and dig into it — and I didn’t have somebody teaching me that — I ultimately was paralyzed and paid way more interest than I had to through that journey. So as I think about the different repayment plans that are available, here in Step No. 5, a loan just in the federal system, you’ve got more than eight repayment options available. You’ve got the standard 10-year repayment plan. You’ve got the graduated, the extended, the extended fixed. And then you have all of your income-driven repayment plans, ultimately give you a monthly payment that’s based off a percentage of discretionary income, and that varies by the plan. So these are the things like income-based repayment, IBR, old IBR, new IBR, income contingent repayment, ICR, pay-as-you-earn or payee, revised pay-as-you-earn or re-payee. So even there alone, for those of you that are either in active repayment or those of you that are in the grace period, how do you choose one of those plans? What are the strategies to making sure that you have the best one in place? Then you think about on top of that, you have factors of well, should I pursue forgiveness or not? Should I pursue PSLF or non-PSLF forgiveness? Or what about a refinance? And then as you evaluate a refinance, you think about refinance Option A, B or C in terms of three different companies. And then within each of those companies, you have multiple different quotes based on the years that you’re going to be repaying those loans — five years, seven years, 10 years and so on. And so ultimately, as I think about all of these different options that are swirling, as I mentioned, it’s easy to get confused. And it’s no wonder that you start to see people thinking, what are the mistakes that I might be making here? And you can start to begin to see that there’s potential pitfalls if you choose the wrong repayment option or strategy.

And just to give you an idea of how important this decision is, in some of the recent presentations that we’ve been doing, talking about student loans, we walk through a case study of a graduate named Adam who’s single, he makes $125,000, he’s got $160,000 in student loans with 6% interest rate, most of his loans are unsubsidized that are accruing interest, he works for a nonprofit, so he’s PSLF-eligible. But he’s somebody who feels anxious and frustrated about his student loans. He wants to get them paid off as soon as possible. And what we do is we actually walk through a case scenario, exactly what we do in the course, where we outline all of these different repayment options in one table where you can see all the numbers. So what would it look like if he pursued Public Service Loan Forgiveness? What would it look like if he did not pursue Public Service Loan Forgiveness? What about refinance options? And the amazing thing about how important this decision, as I alluded to earlier, you need to not only look at the monthly payment; you need to look at the total amount that you’re going to pay over the life of the repayment period. And in Adam’s case, he might pay as little $137,000 with PSLF because some would be forgiven to as much as $264,000 on the 20-year refinance. Again, that’s a range of $137,000 of out-of-pocket money versus $264,000 that he would pay on a 20-year refinance. So I use that example to say to people, this decision — and Adam’s example, which is a very normal example — this decision to choose the best repayment strategy and option can cost tens of thousands, if not hundreds of thousands of dollars.

And so that’s why we’re so excited to be building on what we just presented here, what I just presented here, and to introduce the YFP student loan online course, which is officially now live at courses.yourfinancialpharmacist.com. Now, you know we’ve been talking about it on the podcast recently. We’ve been building this for — gees — six or nine months, and we’ve had it beta tested, we’ve got some feedback, and we’re so excited to now finally be live with this student loan course because we really feel the No. 1 stressor, the No. 1 frustration that we’ve heard from students, residents, new practitioners, even people that have been out 10 years, is that ‘I can’t get a handle on my student loans, and I’m not sure. And I don’t feel like I have the right plan, and I don’t feel like I have clarity around the plan to make sure that I’m really able to put something together to get these paid off and start achieving my other financial goals.’ And so we’re excited to get this course into your hands.

And here’s what this course offers is 14 different lessons across three modules, about four hours of just awesome content. And as you finish this course, you’ll be able to have a complete inventory of your loans. You’ll have clarity on the one payoff strategy that is best for your situation. So here, I talked a little bit about all these different repayment plans and strategies that are available. And for each one that’s listening to this podcast, what you choose is different than somebody else because of the combination of the math, all the repayment options, and then your attitudes, feelings, family situations, employment situations, all that together means you need a customized approach to getting to the one payoff strategy that is best for your situation. And that’s exactly what we deliver in the course.

We talk about strategies for optimizing payoff. We also are excited — we have a private Facebook group for those that are enrolled in the course so we can engage in discussion, encourage one another, build that community, and then obviously just peace of mind when you ultimately have a plan in place. The other exciting thing about this course is that we’ve got some awesome resources that are involved with the course. We’ve got a workbook that will guide you from start to finish to make sure you achieve the goals that I just mentioned. We’ve got a PSLF checklist to make sure you don’t miss anything if you pursue that. We’ve got a payment tracker for PSLF to make sure that you’re lining up all of your ducks, getting ready to get that amount forgiven. As I mentioned earlier, we’ve got a resource around state-specific loan repayment programs. We’ve got an extensive budgeting template, and then we have an awesome — props to Tim Church for building this — an awesome refinance comparison table to make sure you’re evaluating the best refinance option if you’re pursuing that route. So head on over, again, to courses.yourfinancialpharmacist.com. You’ll see all of the information about the course. You’ll see some success stories of people that have taken the course. And I think for many listening, this course is going to be a game-changer to helping you get clarity around your student loan payoff plan and helping you to ultimately come up with a plan that’s going to get those things paid off or maximize forgiveness if you choose forgiveness and to help you get on the path toward achieving your other financial goals and on the path to achieving financial freedom.

Thanks for joining me today on this episode of the Your Financial Pharmacist podcast. Excited to be here to talk through 5 steps to help you crush your student loans. Again, head on over to yourfinancialpharmacist.com/studentloanguide to get a copy of all the things that we talked about on this episode so you can begin to put your own plan in place. Until next week, have a great rest of your day.

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YFP 050: One Couple’s Journey Paying Off $197,000 of Student Loans in 28 Months

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In celebration of the 50th episode of the Your Financial Pharmacist Podcast, we have a special Debt Free Theme Hour for you where we interview Jill & Sylvain Paslier about their journey paying off $197,000 of student loan debt in 28 months. They share how they practically accomplished this goal, their strategy for working together to knock out this debt and what is next up for their financial future now that they are debt free!

About Our Guests

Jill Paslier graduated with a Doctorate of Pharmacy from the University of Minnesota College of Pharmacy in 2014. During the past two years, Jill has been involved in developing workflows and clinical services for a brand new specialty pharmacy with Banner Health. Her professional interests include working on projects to improve patient safety, optimize pharmacy workflows, and improve pharmacy quality. She leads the pharmacy Quality Council and precepts pharmacy students and residents.

Sylvain Paslier works as an Enterprise Customer Success Manager at Reputation.com.

Mentioned on the Show

  1. Financial Peace University

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 050 of the Your Financial Pharmacist podcast. We have a special treat for you in this episode as we celebrate making it to 50 episodes of this podcast. So as we approach 50,000 downloads of the podcast, and as we celebrate the 50th episode, on behalf of Tim Church and Tim Baker, from YFP, I want to say thank you for your support. It’s the encouraging discussion in the YFP Facebook group, the emails and support that we receive from you, the listeners, about the positive impact this podcast is having with regards to your own finances that keeps us excited about getting you a new episode each and every week. As we approach this mark of 50 episodes and 50,000 downloads of the show, I want to use this as a chance to ask you to help us share the good news with your friends and colleagues and to leave a review in iTunes or whatever podcast player you use, that will help more people learn about the show. And finally, if you have a story to share, a question we can answer or a topic you think we should address on a future show, shoot us a message inside the Your Financial Pharmacist Facebook group or by email at [email protected]. OK, let’s get started with today’s debt-free story.

Tim Ulbrich: Jilly and Sylvain, welcome to the Your Financial Pharmacist podcast. So glad to have you on the show.

Jill Paslier: Hi. Happy to be here.

Sylvain Paslier: Thanks for having us.

Tim Ulbrich: Awesome. So Jill, why don’t we start with — I had a chance to get to know you a little bit, actually recently. I was in Tucson, Arizona at the University of Arizona doing a financial talk and got to hear a little more about your financial story. And as the listeners are going to hear just like I did, really an incredible story of what you and Sylvain have done and done together as a team. So why don’t we start with just giving us a little bit of background about where you graduated from pharmacy school, where you and Sylvain met, how long you’ve been married, and I think that will be a good kickoff to the episode.

Jill Paslier: Sure. So I am a 2014 of the University of Minnesota College of Pharmacy. Sylvain and I actually met in 2008 when I was in my senior year of undergrad. I did a study abroad in France, and we met in France at the church there. And we kind of just kept in touch long-distance for a couple of years, started dating in 2010 and then get married in 2012, so right in the middle of my schooling. And then so from Minnesota, we moved out to Arizona for my first job out of school.

Tim Ulbrich: I think that was probably a good choice going from the weather of Minnesota to the weather of Arizona, so that’s a big plus. And Sylvain, tell us a little bit about the work that you do. And I’m also curious, just as a follow-up to that, knowing that you grew up as a French national, tell us a little bit about student loan debt and how that’s different and obviously, from what I understand, you voluntarily opted into marrying Jill with all this student loan debt, right?

Sylvain Paslier: Yes, that’s correct. When I said, “I do,” I said, “I do to the student loans as well.” Yeah, so, you know, in France, higher education is subsidized, so I was privileged to pursue an education for free, essentially. You know, paid back in taxes. And so obviously, that was pretty different moving over to the U.S. and realizing that most of my peers had a lot of financial baggage. So I’m very fortunate that I did not have that. And so it was quite an adjustment to get into that, understanding how to pay it back, obviously. And to your question, I currently work for a tech company. I do account management. It’s one of these dotcom companies, headquartered in Silicon Valley, but they have an office in Tempe here.

 

 

Tim Ulbrich: So Jill, take us back all the way to 2014. You graduate from pharmacy school, you get your PharmD, you look up, you’ve got over $180,000 in student loan debt. And obviously, that number would accrue some additional interest. I mean, at that moment, take us through what you were thinking and how that debt load impacted you and obviously secondarily, Sylvain, when you were a new graduate.

Jill Paslier: So I didn’t really keep track of my student loans while I was a student. I did a private undergrad. I took an extra year in the middle where I kind of worked and did some prereqs for pharmacy school and then, of course, the four-year PharmD. So I knew that I was taking out a lot of loans because a lot of times I would max it out. Almost my entire education was financed. So I knew it was going to be a lot, but I really had no idea what that number was until I graduated. So that summer, I got the paper that says how much it is. It was $187,000 right out the door from pharmacy school. So I just thought that was like a huge number. At first, I was really optimistic, you know, we’re getting a good salary, and we’re going to be able to pay it off really fast. But it was a lot harder than I expected.

Tim Ulbrich: Absolutely. And I’m glad you brought that up because you mentioned kind of the lack of keeping track and awareness of it. We’ve talked a lot on this podcast about, you know, step No. 1 for students and new practitioners, residents, whomever, is really just inventorying your student loans and knowing what you have before you can obviously start to put a plan together to attack them. So Sylvain, talk to us a little bit about the journey of when that moment hit you guys of saying like, wow, we’ve got to pay this off. And obviously, as I alluded to in the introduction, you did it relatively — not relatively, you did it really quickly, I mean two years and four months — but what was that moment where you guys said together, wow, there’s got to be a different way of doing this. And then a little bit about just practically, what did that look like in terms of adjusting other expenses to attack those loans?

Sylvain Paslier: Yeah, absolutely. So at first, it was very overwhelming to realize the amount of student loans. But at the same time, it was almost numbing. And there is such a normalization of student loans that we didn’t feel any pressure to attack it very quickly. So it’s only through a series of events that made us aware of the issue and of the opportunity in our lives that would emerge from paying it off quickly that we took action. And some of these steps were becoming educated around personal finance and then modifying our lifestyle to increase our income and reduce our outgo lifestyle choices. So it’s really been kind of this series of events that — basically all that to say, we didn’t get it all at once. It was a number of little things that got us to the point where we realized we needed to work at it very hard.

Tim Ulbrich: And is it fair to see — Sylvain, were you guys kind of both on the same page from day one of we’ve got to attack this? Or was one of you taking the lead and then the other person caught up over time?

Sylvain Paslier: So we were in it together. You know, as soon as we got married, we combined our finances and you know, this is what we think — what we thought and what we still think is the best for our marriage. So you know, when Jill and I got married, Jill had two more years of pharmacy school to go through. And so I was the breadwinner of our household. And you know, there’s times when maybe one of us is not going to be able to work as much, and it just — basically, we need to be a team in good times and in the bad times, and so there was no doubt that Jill’s debt had become my debt, as much as I didn’t like that, and that we were going to tackle it as a team.
Tim Ulbrich: Yeah, I love that, and I’m thinking even back to previous podcast episodes we’ve had, Adam Patterson is coming to mind from Episode 031, Allen and Ethan Coe (?) is coming to mind as well. And I think both of those podcasts really resonated this idea and power of team and how important it is to say, this is our debt. This is our issue that we’re going to tackle. And I don’t know how you guys feel, but once you get through that, the thing that my wife and I felt is, you know, when you’re going through that process of paying down student loans and in some regard, almost grinding it out together, when you get on the other side of that, you’re like, wow, we did that as a team. Like we accomplished that, and now what’s next? You know, what other goals are we after? What are we trying to achieve? So Jill, I’m doing just some quick back-of-napkin math, and the numbers are really unbelievable. I mean, you think about that debt load, you mentioned graduating 2014, $187,000, obviously that would go up a little bit with interest, you pay that off in two year and four months, that’s a lot of money per month that you guys are throwing at these loans. Can you share a little bit about just what that looked like each and every month and how you practically carve that money out? I mean, was that side hustling, earning extra income, working extra shifts? Was that cutting expenses and budgeting? Or was it a little bit of both?

Jill Paslier: So it’s a little bit of both. So we both kind of worked two jobs for about two years. So we didn’t really dive right in for the first couple of months after I graduated. I only started working in October, so there was a few months where, you know, we only had one income and we were putting tiny bits of money towards the debt, but we really started in October after I graduated. Shortly after, I got kind of a second job code with my company so that I could work nights and weekends on additional projects, I guess. And then Sylvain was also working two jobs. So I think we were both really motivated to work extra, try to get our income up. Another way that we were able to get our take-home pay up so that we could put it towards the debt is that we actually minimized anything coming out of our paycheck. So for example, retirement, we did not contribute to retirement for the first year since we weren’t getting the match. The second year, as soon as we were eligible for the match, we only put in that 3-4% for the match, nothing else. And then for health insurance, we are choosing like the HSA plan so that we have the lowest monthly premiums. And I think those things altogether really help to increase our take-home pay, which is what we could use to pay off that debt. I can also talk about like some decreased expenses, like what did we do there. So when I graduated, you know, we see our friends on Facebook, and we see them buying new cars, maybe getting a house, you know, going up in lifestyle right away. It was tempting to do that, and I would still like a bigger kitchen to this day because we’re just in the apartment that we started off in. So we’re still in a very modest apartment, it’s the same rent as what we were paying when I was a student, for the most part. We haven’t moved up in our cars; we have the same cars we were driving as students. We limited kind of other expenses, things that we like to do like eating out and traveling. We really reigned those in, and we said no sometimes, even when we wanted to. So those are kind of the ways we were able to decrease our expenses. One other thing I’ll just mention quickly is that we got really into an idea called minimalism, which basically means that you’re living with minimal items, I guess the amount of items and things that you need, but not excessive. So I think that that helped us to stop shopping as much because we realized that we were giving it all away to Goodwill a couple months later anyways. So that definitely decreased our expenses, just like we didn’t want to buy things anymore because we knew, you know, we probably wouldn’t use it in the future, and we were much more selective on that too.

Tim Ulbrich: So much wisdom there. I mean, I love the practicality of what you guys did, and I think one of the pieces so many people struggle with is, you know, they hear all those decisions about you know, giving up on potentially some of the house things or the car things or vacations or eating out or whatever. And I think a key piece there is that, you know, those can be, but they’re not necessarily forever decisions, right? So you’re a 2014 grad, you know, you’re approaching that four-year anniversary from graduation, now you’re in a position of debt-free from your student loans and obviously the doors are wide open in terms of what you guys can do. And I’d be curious to hear your opinion — I know one of the things Jess and I felt, my wife and I, as we went through our journey is that you get to the end of this journey of paying off all of your student loan debt, and you start to realize that over those years, you build these disciplines and these behaviors that carry on obviously beyond that repayment period. So how are you guys practically — for lack of a better phrase, like toning it down, you know, now that you have all this debt repaid? Or have you just said, we’re going to shift this money we were paying towards student loans and we’re going to now put it towards other priorities such as retirement, giving, home buying? How have you made that adjustment to that post-debt life?

Sylvain: Yeah, so the irony, first, is that the day that you pay off your debt, sure you jump up and down and you’re so excited, but the reality is after all, not much has changed. And so you’ve essentially practiced over a number of years, discipline and contentment, and I think those are huge investments in our personal character. And so really, one key is to realize that although yes, paying off debt is a really big deal, once you do pay it off, you know, you’re still waking up and going to work and trying to find meaning in your life. And so that meaning was found solely in consumption and keeping up with the Joneses, then achieving that threshold is not going to be fulfilling.

Tim Ulbrich: Before we continue with the rest of today’s episode, here’s a quick message from our sponsor.

Sponsor: Hey guys, Tim Church here. You know, the younger, better looking Tim? Student loans are a big problem for pharmacists with graduates facing interest rates above 6%, it can be hard to get traction and make progress. If you’re not pursuing the Public Service Loan Forgiveness program, and you don’t need income-based repayments, refinancing can be a great move and could help you save big. Refinancing twice over the course of my loans helped me save thousands in interest and gave me a lot of momentum. So check out our refinance page at yourfinancialpharmacist.com/refinance where you can calculate your savings and check your rate with one of our partner companies that are offering exclusive cash bonuses to the YFP community of up to $500. That’s yourfinancialpharmacist.com/refinance to find out your savings today.

Tim Ulbrich: Now back to today’s episode of the Your Financial Pharmacist podcast.

Tim Ulbrich: Absolutely. And I think it’s — I mean, as you guys are now on the back end of that — and I couldn’t agree more on the focus of consumption, and actually it’s — Jill, I think you used the term “minimalism,” and we’re actually right now in a small group studying the discipline of simplicity. And I think same kind of idea there. And there’s so much power, I think, and value in that, but there’s also, you know, I think a balance point where you can enjoy some of that. And are there specific things, Jill, that you guys are now looking at and saying, OK, we’ve done this, we’re maybe toning down the two jobs each or we’re now shifting this towards retirement or giving or vacations? Or are you still in that period where it’s like, oo, it’s hard to tone this down, we’re so used to this mentality of grinding it out and paying off the loans?

Jill Paslier: So we’re no longer working two jobs each. We’re just doing the one. That was easy enough. As far as actually spending money, we still do not spend a lot of money. It’s funny because before, when we had the debt, we would say, OK, what are we going to do when we have an extra $6,000-8,000 a month? You know, what are we going to do with this money? Because that’s how much we were putting towards our debt sometimes. And you know, I kind of joke at this, but Sylvain said he wanted some fancy muffins, like from the nice grocery store. Like it’s just simple things, you know? And like, we’re not looking to buy extravagant, expensive things. So I think we’re finding some excitement in those little expenses, maybe eating out a little more, you know, we still travel a lot, and we do have an international travel to Europe usually at least once a year to visit with Sylvain’s family, so that’s where some of our money goes. Our other main goals now, we fully funded an emergency fund, so we have a good six months of emergency fund buffer in case anything happens. And then we’re really focusing right now on saving for retirement. So I told you we kind of postponed that a little bit while we were paying off the debt, and of course I wasn’t saving while I was a student, so we feel a little bit behind. So actually for the last year, we’ve been putting about 25-50% of our gross income into retirement because we weren’t using that money anyways. So it’s easy enough to just shift it from the debt now to retirement, and then we can actually see the money growing in our account, which is actually pretty nice. We thought about having more of that money funneled towards like a down payment on a home, but we don’t necessarily want to buy a house right now. So we figured the best place to put it is retirement, some of those tax-favored accounts, just let it grow there. And then when we’re ready, we can save up a down payment I think pretty quick once we re-funnel the income a little bit.
Tim Ulbrich: And just to clarify, I think what I heard you say earlier is that when you were in the beginnings of employment, that first year while they did not offer a match, you temporarily suspended any savings toward retirement. But then when the match was offered, you took that match, but nothing beyond the match. And now, you guys are obviously going at it aggressively. Is that correct?

Jill Paslier: Yep, exactly.

Tim Ulbrich: OK. So Sylvain, tell me, probably one of the most common questions we get through the podcast and the blog and the Facebook group is, should I be paying off my debt? Should I be investing? Should I be doing home buying? Should I be doing all of them? And obviously, you guys strategically made a decision that, we’re going all in on our loans with the exception of that retirement match. And obviously you’re also carved out and said, we’re going to wait on the home buying piece. So for the two of you, what was it philosophically that you guys said, you know what, we’re going to get rid of this debt. Was it your beliefs around debt? Was it the amount of it? The weight of it? The interest rates around it? I mean, what was the decision point for you guys to really attack that portion solely.

Sylvain Paslier: Yeah, absolutely. So basically, we discovered another resource, which I don’t know if I’m allowed to mention on the podcast, but Dave Ramsey’s Financial Peace University, which was instrumental for us to get started and have a methodology to basically start that journey. And so that was the, again, the game plan to start budgeting and then attacking the debt in the specific order. So that was the methodology that we used.

Jill Paslier: And I’ll share — I can add something to that. So kind of our mentality around the debt, we were paying — our minimum was about $1,100 a month. And $1,000 was going towards interest, and $100 was going towards the principal. So as soon as I really saw those numbers, I got so angry, and I said, those banks are taking all of our money, $1,000 every single month. And we just got really kind of fed up with like shelling out that $1,000, and we’re like, we’re going to be in debt, they’re going to get so much money that we have to pay in interest. And I think we just got really motivated and fired up and started to hate the debt. So I think that really helped with our kind of motivation. Like every single month, if we could pay an extra $1,000 or more towards the principal, we knew that was going to be saved from making an interest payment later.

Tim Ulbrich: And Jill, I recall when you and I met, I think I remember you saying something about you were originally on the pathway of 8- or 10-year payoff, and obviously that happened a lot faster. So was that moment where you kind of said, wow, yes, we could make this $1,100 payment, but we’re going to go much more above that? I mean, was that sort of the catalyst, the defining moment that allowed you to start accelerating that payoff?

Jill Paslier: Kind of. I would say budgeting was even more useful in that because we were already kind of fired up. And I remember we were paying $1,100, and I was like, what if we could pay an extra $1,000 per month? Oh my gosh, we’re paying $2,000, this is so great, we’re doing such a good job. And we laid it out, and we’re like, oh, we’re going to be done paying this in eight years. That will be so good. And once we really got ahold of our budget and seeing where the money was going and like actually choosing where it went and getting our incomes up and our expenses down, we saw that we had a lot more than just $2,000 a month to put towards the loans. So I think once we really got control of that, you know, we were able to put up to $6,000 and sometimes $8,000 a month towards the student loans.

Tim Ulbrich: Awesome. So since you brought up budgeting, let’s talk budgeting for a minute because I think — and the listeners know I’m a firm believer of that being the catalyst for a financial plan, and obviously for two people working together, a budget can often be the most difficult thing. So Sylvain, let’s talk for a minute about budgeting in the Paslier household. So what does this practically look like for you guys? I mean, is this something month-by-month, you’re sitting down? Is one of you taking the lead? If you could give listeners kind of a behind-the-scenes look of how you two go through the budgeting process and how you come to consensus and maybe even the tools, if any, that you use for budgeting.

Sylvain Paslier: Yeah, absolutely. So first, it was helpful to understand some guidelines around what percentage of your income should go towards rent, towards food, towards clothing, entertainment, etc. So we found some of these resources online, and then we tracked our expenses and realized that they weren’t aligned with these “best practices” of budgeting. And so we slowly — you know, it took a few months, but we slowly realigned our budget with what our goals were in order to have extra in our budget to allocate to debt or whichever other maybe short-term goal was happening. Practically speaking, Jill is very good at, she’s very analytical, she’s good at mathematics, and she loves spending time in Excel. And so she’s taking the lead on kind of drafting that monthly budget, and then we review it together. And so that’s kind of what that looks like. Typically, I mean, ideally, we should do that before the first day of the month. You know, sometimes we’re a few days late, sometimes we’re a few days early. The big idea is that we’re trying to be intentional towards the beginning of the month to set it in month for the rest of the month.

Tim Ulbrich: And I’m guessing Jill is a FPU, Financial Peace Univeristy, fan and my understanding — I think that you’re teaching a course as well. I’m assuming that you guys are using more of a zero-based budgeting process. Is that fair?

Jill Paslier: Yep, that’s what we do.

Sylvain Paslier: Correct.
Tim Ulbrich: OK. And do you keep it all in Excel? Or do you then translate it into a tool like Mint or Everydollar or something like that?

Jill Paslier: So we usually do actually more like a paper budget first, just so we can see the numbers and we can edit them together. And you know, the main categories are housing, food, transportation, I guess we don’t have — we usually don’t have a lot of healthcare or shopping categories. Now we have pocket money, which we didn’t really have when we were trying to get out of debt. Those are the main categories, and we put — basically, we write it out on paper and then we put it into Mint so that we can track our progress throughout the month. The categories pretty much line up, so we can see what our goals are and how close we are, you know, if we’re halfway through the month and we’ve spent half of our food budget, then we know we’re on track. You know, if we’ve spent more or less, we know how to adjust. So yeah, we use Mint. I think when we were paying off the debt, I probably looked at Mint like every other day. Like all the time because I wanted to see, is there any way we can spend less in a certain category or free up some money to pay off the debt so I think we’re a little bit more relaxed now but still on track to meet some of our longer term goals.

Tim Ulbrich: And when you say and use the term pocket money, are you referring to the concept of kind of discretionary spending money that each of you have that doesn’t necessarily have to have a specific money? So my wife and I call it blow money. Is that kind of the same idea?

Jill Paslier: Yep. Same thing. Sylvain and I get a little bit every month. Like we’re such savers at this point that we barely even spend it, really. So it just rolls over to the next month. That’s what we do.

Tim Ulbrich: Awesome. So Jill, let me ask you a question. I mean, if you could kind of put yourself in the shoes of a 2018 graduate coming out, you know, what advice would you have for either current students or new graduates this year or coming out or recently came out? What are a couple things that you’d recommend to them and those that are listening that are coming out with a debt load that maybe looks very much like yours?

Jill Paslier: I think I would just want to encourage them that it’s possible to pay it off. I mean, it’s a huge amount of debt, you know, if you’re up there around $150,000 or $200,000. But we’ve been there, and other people have been there, and it is possible to pay it off. And I would just recommend, you know, learning how to do a budget, really see where your money’s going, kind of maximize your income if you can. You know, if you’re married, work together with your spouse. If you have a roommate, hopefully that helps a little bit on the housing cost so if you can bring any of your kind of living expenses down, you’ll have more money to pay towards the student loans and really pay those off faster.

Tim Ulbrich: That’s great advice. And I find your story incredibly inspirational. I’m sure other listeners are going to as well. And you know, one thing to hit maybe as I’m just kind of thinking here of what we’ve talked about is Sylvain, you used terms I think earlier around — you said something like it felt numbing, and it felt overwhelming. And what I love about your story is I feel like your hustle, both of you working two jobs for two years, I can tell there was obviously a commitment to learn about this topic, whether it’s podcasts, books, Financial Peace University, whatever, and a commitment to do this together. And I think there’s so much wisdom there, and I appreciate you both taking the time to come on the show and share your story. So Jill and Sylvain, thank you so much for coming on the podcast, I appreciate it.

Jill Paslier: Yeah, thanks a lot. It was fun.
Sylvain Paslier: Thanks for having us, Tim.

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YFP 046: The 5 Big Mistakes Pharmacists Make With Their Student Loans

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On Episode 46 of the Your Financial Pharmacist Podcast, YFP team members Tim Church, PharmD, BCACP, CDE and Tim Ulbrich, PharmD tackle the most common mistakes that pharmacists make with their student loans. Whether you are a student pharmacist or a practitioner in active repayment, this episode will help you avoid the common pitfalls surrounding student loan repayment.

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to Episode 046 of the Your Financial Pharmacist podcast. Excited to be here alongside Tim Church to talk about common mistakes that pharmacists make with their student loans. So Tim Church, not that we would have any experience when it comes to student loan mistakes, right?

Tim Church: Oh, not at all. I did everything, executed it perfectly and right on the right path. No, actually, it was funny when I was thinking about this episode. And we talk about common mistakes that pharmacists make. Really, it’s the five mistakes that Tim Church made. I mean, we could have made that the name of it.

Tim Ulbrich: Seriously, it brings me back to when you and I were writing the “Seven Figure Pharmacist,” and we wrote all that student loan content and much of the other content based on the mistakes that we made. But I had, actually, the pleasure this weekend to go to Mercer University in Atlanta, Georgia, and talk with a group of their graduating students about personal finance and transitioning to new practitioner life. And as I was going through the section on student loans and had a chance to share from the mistakes that I’ve made and all the wisdom that you’ve shared and the YFP community has shared, all I could think was, man, I wish I would have had this information, right? When we graduated. Wouldn’t that have been nice?
Tim Church: That would have been great. There’s so many things I wish I could go back and do because I would have saved a ton of money in interest and just the amount I’m going to pay over the life of my loans.

Tim Ulbrich: And stress, right?

Tim Church: Yeah, definitely.

Tim Ulbrich: So where are you — quickly — where are you at in the journey of the payoff? So the Church household, where are you guys at?

Tim Church: So me personally, I have about $8,000 left. My wife, she’s got substantially more. But we’re looking at probably within a year, year and a half, we’ll knock it out.

Tim Ulbrich: So $8,000 left of how much? How much have you paid off on yours?

Tim Church: I think with capitalized interest, when I started residency and after the grace period ended, I think it was about at $189,000.

Tim Ulbrich: Wow, that’s incredible. That’s awesome. Great work.

Tim Church: Yeah, it’s a good feeling to kind of be at this point. It’s taken a lot of sacrifice and hard work just to get there.

Tim Ulbrich: So before we jump into common mistakes, and we’re going to walk through that Top 5 list, let’s just talk about current landscape. And we’re not going to go too far in detail here. I would reference listeners back to Episode 004 and 005. Episode 004, we talked about the landscape of student loans in pharmacy education. Episode 005, we had on Dr. Joey Mattingly to talk about the impact of rising student debt on a pharmacist’s income. But you know, we’re not trying to be gloom-and-doom here, we are optimists, both of us I think by nature, but the reality is new graduates are really facing an uphill battle, primarily due to rising debt levels. So Tim, kind of give us the really high level situation of what pharmacists are coming out with now and what they’re facing.

Tim Church: If we look at the most recent data from the AACP graduating survey, pharmacists are now coming out with an average $163,000. And actually, that number’s quite low. If you went to a private school, it’s actually much higher. If we go back a couple years to 2010, that figure was approximately $100,000. But one of the big problems is that if you look at pharmacists’ salary over those years, it’s not keeping pace with the average debt load that pharmacists are facing. And so this gap actually continues to widen. And so you and Joey Mattingly had talked about that before that you look at every new generation of pharmacists that’s coming out is they actually have less available income. So it’s really important, you have to a good strategy in place.

Tim Ulbrich: Yeah, I’m glad you mentioned the salary piece. Because I think obviously, the debt load gets a lot of attention — rightfully so — but one of the variables we’re always looking is, well, if salaries are keeping up with the debt load, not that that’s good that debts are still going up, but still, at least it’s accounting for that increase. But the reality that we see, as you mentioned, is salaries aren’t even keeping pace with inflation for the most part — oh, and by the way, you’ve got the interest rate component, with many students dealing with these unsubsidized loans with 6% interest rates, private loans that are even higher. So all of this to kind of give you the backdrop that we know it’s a problem, we know it’s increasing, and all the more reason that we have to be diligent in terms of those making that transition into new practitioner life to say, ‘What’s my game plan? What am I going to do to tackle these loans? And how can I avoid some of the common pitfalls and mistakes surrounding them?’ So Tim, let’s walk through five common mistakes that pharmacists make when it comes to student loans. No. 1 is not knowing all of the options that are out there. So just quickly, walk us through the options that are out there. And we’ve obviously talked about some of these on other episodes, but helping especially maybe those that are listening about to graduate or even those that have been out for a couple years and haven’t thought about this or even younger students who are trying to get ahead of this. What are the major options that are available to graduates when it comes to repayment of student loans?

Tim Church: Well, I think the first one and the most important one is you really want to look at are there any tuition reimbursement or repayment programs available where you’re currently working. There’s a lot of federal programs out there, such as the VA or the Indian Health Services and some of the military programs. And then a lot of states actually offer reimbursement programs. And those are essentially free money because you’re going to work for an employer for x amount of years. In exchange for that service, they’re going to help pay back some of your loans. So I think that’s really the first thing to look for. I know one of our friends, Alex Barker, he actually was able to get through the VA in his position something the Education Debt Reduction program. He was able to save a lot of money because the VA picked up a lot of the bill there. So I think those are the programs you want to look for first. And then if you’ve kind of exhausted that and say, ‘Hey, I’m not really eligible for that,’ it really comes down to two options. It’s forgiveness or non-forgiveness. And when we talk about forgiveness, really we’re talking about the Public Service Loan Forgiveness program in which you work for a government or a nonprofit 501c3 company, and essentially if you make qualifying payments over 10 years, you can have your loans forgiven tax-free. There’s also an option to get forgiveness through non-PSLF where you make income-driven payments for 20-25 years, and your loans are forgiven. Once you kind of go outside of that, it really comes down to do you keep your loans in the federal system and pay them off based on the term? Or on your term and pay them off at a pace that you want to accomplish that? Or do you refinance them out of the federal system and try to get a better interest rate?

Tim Ulbrich: Yeah, and I would reference your point about PSLF, I’d reference listeners back to Episode 018, where we talked about maximizing the benefits of the Public Service Loan Forgiveness, talked in a little bit more detail about what that program is. So just to recap what you had said there is first, you’re really looking for the tuition reimbursement repayment plans that are out there. So is there free money available? You gave the example of the Education Debt Reduction Plan. And then if not, you’re really looking at forgiveness or non-forgiveness. Within forgiveness, you’ve got the PSLF or non-PSLF forgiveness. And then with non-forgiveness, you’re either going to pay them off inside the federal system or you’re going to pursue a refinance. And we’re going to talk a little bit more about refinance as we go through these five options here. So Tim, as we were working on the course — and I think Tim Baker and I have talked about this to the listeners, but I don’t know if I’ve talked about it with you is that we’ve really laid you out there as the mastermind of this student loan course that we’re getting ready to launch. And we’ve certainly helped along the way, but you really have been the brains of getting this thing together. And No. 1 thing you were talking about not really knowing all the options. We spend a ton of time inside of the course walking through this. Would you say that’s fair?

Tim Church: Definitely. I mean, this is really the bulk of the material that we get into because it’s also going to determine how much you pay over the life of the loans.

Tim Ulbrich: Yeah, absolutely. And I think as I think about the big takeaways of that course, this is a big option is knowing, making sure you know all of the repayment options that are available to you and then making sure you can walk away with clarity to say, ‘This one repayment option is the best for my situation.’ And as we’ve been working through that course, what we have come up with, which I think is probably one of the biggest takeaways of the course, is what we’re referring to as the YFP Decision Table. Talk us through what that is and why that’s so powerful in terms of coming to the best decision for a payoff plan.

Tim Church: Well, I think one of the things that it does is first of all, it brings all of the options to the table. So it really lays out everything that you’re eligible for. And then once you’ve put those in place, actually do the math. So over the life of the loans, whether you’re refinancing through a specific term, whether you stay in the federal government, whether you’re going for forgiveness, is to really calculate over the life and figure out from a mathematical standpoint, what is going to be your best option? Now, as you and I talked about it, math is definitely important and a lot of times, the most important thing. But there’s a lot of other factors that go into that kind of decision. And I think that’s really a key component of what we break down in the course is how do you combine that math with all of the other factors that you’re facing?

Tim Ulbrich: Yeah, absolutely. And I hope if there’s students listening to this episode right now, even if you’re in your first or second or even third professional year, I hope you’re hearing that, hey, now is the time to really kind of learn what these options are, talk with your financial aid officer, begin to learn more about what is forgiveness? What is PSLF or non-PSLF? What are the income-driven plans? And for those already in active repayment, you know, it’s never too late to make sure you’re in the best repayment plan. And I think that’s really what we’re honing in on in a big way with the course. And I’m speaking here out of mistakes that I’ve made just wandering through the grace period without any intentionality, which really takes us to our second common mistake and the second thing we address is not being intentional. So the idea here that people kind of are passive and not having a plan. So talk to us, Tim, in terms of what you’re seeing with graduates and what you’re hearing with graduates about not being intentional. And what are some things that they could do to be intentional?

Tim Church: I think the thing to keep in mind is that if you have federal loans, you’re going to get dropped right into the standard repayment plan, which is a 10-year term. What’s interesting is that I think we pulled up that article from Credible, and they were estimating that pharmacists will take on average 14 years to pay off their loans. So keeping that in mind, it could be even extended further than the standard 10-year repayment plan. But what I tend to see is that whatever repayment plan kind of starts, whether that’s standard or maybe something less aggressive, either graduated or extended, is that people tend to stay in those repayment plans, and they’re just making the minimum payments over time. But the term itself is not, in my opinion, really a strategy. It’s just the default in terms of what you have to pay. But if you take that a step further and say, what is my game plan? Is it to pay the loans off faster than the term in order to save money in interest? Or do I have a low interest rate, and I’m trying to make sure that I’m putting enough in retirement, putting enough for a down payment on a house? There’s a lot of those variables that go into play. And so I think you have to really look beyond that term.

Tim Ulbrich: Yeah, and as you’re talking here, Tim, it reminds me of you know, when I graduated — and I’ll humbly admit to the audience, I couldn’t tell you a single thing, not really much at all about my loans. I didn’t know if they were unsubsidized, subsidized. I probably didn’t even know what those terms meant, didn’t know the interest rates, didn’t know repayment plans. So I wandered into the standard 10-year period. I wandered through the grace period without really understanding what that meant for interest accruing. And one of the things I look at in hindsight is that I could have either refinanced or I could have probably done PSLF. And looking at my situation and kind of beliefs and wanting to get those paid off, I probably would have went with an aggressive refinance. But because I wasn’t intentional, I basically sat there for 10 years with most of my loans at 6.8%. And that hurts when I know I could have refinanced probably below 5%, and I think that just speaks as one example about the power of doing your homework and trying to make sure you can put a plan in place and take advantage of at least trying to minimize the interest you’re paying or for those that choose forgiveness, making sure you’re intentional about going after forgiveness as well.

Tim Church: Yeah, I mean, I think about that for my personal situation. Here I am, I’ve worked for the VA now for about seven years. And had I known about — No. 1, had I known about PSLF, I would have made the right moves at that time to figure out what I had to do to accomplish this because really, I’d be looking at three more years, and I’d have all my loans forgiven.

Tim Ulbrich: Yeah, and remember when we were in Baltimore back in February, I think you and I after we both had the realization we could have done PSLF, we went back and did some of the calculations to say, hey, what if we would have actually lowered our AGI? What if we would have went all in on retirement savings? What would that have been? What did we come with? It was like a few hundred thousand dollars, right, was the swing?

Tim Church: Yeah, it wasn’t a small chunk of change.

Tim Ulbrich: Yeah, lesson learned, but that’s OK. That’s OK. Alright, so moving onto No. 3 here, we have choosing the wrong repayment plan. So I mean, we’ve kind of alluded to that a little bit already, but what — is there a wrong repayment plan here? Or what is the meaning behind this common mistake?

Tim Church: Well, I think definitely if you’re pursuing forgiveness, whether that’s through PSLF or non-PSLF that you have to be in the right repayment plan to make sure that you’re getting qualified payments, and you’re getting those to count. And a lot of people that haven’t been doing that, they’re actually a lot of the payments they’ve made over the years don’t actually count, and the clock has to start over. So I think that’s one area where it could be a mistake if you’re not in the right repayment plan. And then I think a big one is during residency. And again, this is another mistake I made. I actually put some of my loans in forbearance because I didn’t feel like I could make the payments, but in reality, if you use some of the income-driven repayment plans, even if you don’t make a payment, even if it’s $0 or a very small amount, there’s some really perks with using some of those plans to actually minimize the interest, depending on what your overall payoff strategy is.

Tim Ulbrich: Yeah, and I think this goes and feeds nicely into what we talked about there, point No. 2 about being intentional because if you’re doing the math and you’re doing your homework and you’re learning about these plans, you’re more likely going to be opting into the right strategy. So you gave that example of PSLF, you have to be in a qualifying plan to ultimately obviously eventually have that money forgiven. So if you’re intentional and you’re doing your homework, you’re going to pay sure that happens. OK, No. 4, which I know you and I both talk about a lot between each other and we’ve talked about it on the podcast. And I would reference our listeners back to Episodes 029 and 030, which was all about refinancing student loans. So No. 4 is not considering refinancing. Now, we specifically put here considering because for some people, they shouldn’t refinance. But for many others, they should at least evaluate it. So talk to us about just briefly refinancing and why this is a common mistake that you see.

Tim Church: Well, when you refinance your loans, your main goal is to really get a lower interest rate. You’re trying to pay less money in interest over the course of the loan. I think the big thing is is that if you’re going to plan on staying in the federal loan system and pay off your loans because either you’re not eligible for forgiveness or you don’t want to be in debt for 20-25 years using non-PSLF forgiveness, you have to take a strong look at refinancing. And I kind of go back to your situation, Tim, where most of your loans were sitting at I think over 6% you said, but you probably could have been getting anywhere from 3-4% during that time. And you would have paid substantially less in interest. But the faster you make that move, the less you’re going to pay over time, obviously. I think one of the big things is there’s a lot of myths out there about refinancing. This may have been true a number of years ago, but a lot of people, they feel that they’re losing all of the protections of the federal system when they refinance. And it’s true. There are some things that you’re probably not going to have if you make that move. One of those is access to income-driven plans. So if you have a situation where your income’s not steady or you plan on changing jobs and you have some uncertainty, then yeah, that’s something that you probably don’t want to give up. The other thing is death and disability. So this is interesting because some companies offer that same protection. So if you die, your loans are forgiven in that event or if you become permanently disabled, so that’s same with the federal government. Others are not. So that’s certainly one thing you have to keep in mind. Obviously, one of the biggest ones is that if you’re currently pursuing PSLF or you plan to pursue PSLF or forgiveness, for that matter, you definitely don’t want to refinance because you disqualified yourself. But again, if you’re not going for any forgiveness program, then it’s probably going to be a great option again, going back to the interest that you’re going to pay.

Tim Ulbrich: Yeah, and I would point listeners back to yourfinancialpharmacist.com/refinance. We’ve got a great page about refinance education, what to look for, what are must-haves before you sign up with a company, who should, who should not. And we’ve got a great calculator on that page. So if you’re thinking, how much would I actually save in a refinance after you get a couple quotes, we’ve got a tool on there that will help you figure that out, determine if it’s worth it, and so I would highly encourage you to check that out. And even thinking, Tim, back to the course that we’re building, I think that’s one of my favorite parts is we talked about the decision tables, it’s really helpful to see everything from PSLF all the way to a five-year refinance, which is very aggressive. And I think that’s what we’re trying to do is get people to see all of the options, weigh the pros and cons, look at the math, and then as you mentioned already, layer onto that math the emotional component and other factors that will ultimately determine the best payoff strategy. But refinance has to be at least considered in that mix, correct?

Tim Church: Definitely. I mean, I think it’s probably the single most powerful strategy for tackling your loans if you’re not going to pursue forgiveness because if you look at current interest rates in the federal loan system are 6% or higher, even now you can get interest rates, I’ve seen quotes in the 3’s to 4’s. Even that change by a couple percentages, depending on the balance of your loan, I mean, we’re talking $20,000 and up. I mean, it depends on your balance. I mean, the bigger your balance you have, the bigger the savings that you can get. And I know for me, I think I’ve calculated over time because I’ve actually refinanced my loans twice and was able to get a better interest rate each time, but I know my savings over that point of starting out with $180,000+, it’s probably been about $30,000-$40,000 in interest that I’ve saved.
Tim Ulbrich: Yeah, and I think you’ve done that calculation before. I’ve seen it either on the website or one of the resources that if you take the average indebtedness of a pharmacist and you assume, you know, various interest rates that are normal with what’s in the market right now, the average pharmacist could probably be saving somewhere around $30,000. Now, obviously that’s highly dependent upon personal situation, interest rates, debt-to-income ratios, what rate they get on a refinance and so forth, how fast they want to pay them off or not. But I think the point being here is that it is for some people, it is not for other people, but it at least has to be a consideration and a part in evaluating. So again, yourfinancialpharmacist.com/refinance. And we also have a lot in the course about refinancing and making sure you’re considering it amongst other options. OK, No. 5, hopefully Dave Ramsey is not listening to this podcast. I’m pretty sure he doesn’t listen to our podcast. But No. 5 we have here is not taking advantage of employer match while paying off loans. So obviously, I’m giving Dave Ramsey a hard time. I like a lot of his content. But this is one that he would disagree with us on. So why are we adamant of the employer match, even in the midst of that time period of paying off loans?

Tim Church: Well, I think you really want to take advantage of that free money. And if that’s a tool that’s available to you, you’re really missing out if you’re not getting that free money each and every year and taking advantage of compound interest. I think one of the things with Dave Ramsey is that a lot of the people, they don’t have the same debt load as the average pharmacist, and so we’re looking at — we talked about that Credible study that the average pharmacist, they were talking about 14 years in debt. And obviously, that depends, and there’s a lot of factors involved with that. If you do absolutely nothing for retirement for over a decade or several years, you’re going to be way behind where you need to be if you’re trying to plan on retiring before the age of 90.

Tim Ulbrich: Yeah, and I think I was having a discussion with a student at Mercer this weekend — and I know we talk a lot on this podcast about this balancing of debt versus investing. And I think it’s such a hard question for lots of reasons. And here, I think this is a no-brainer. You take the match is what we both I think philosophically believe in. But you know, then the question becomes, what beyond that? And to me, one of the variables is where are you in your trajectory of retirement savings? And how much you either have and what’s your timeline to retirement? So there’s a fair number of nontraditional pharmacy graduates that maybe it’s their second career, and their answer to that question looks very different than a 24-year-old graduate, right? So I think putting all those factors together and not just making this a black-and-white answer, but certainly I think the match is a no-brainer, although it seems like, Tim, would you agree — you know, I’m thinking of discussions in the Facebook group and others — it seems like most companies are still offering a match, but it seems there’s actually a decent amount of variety between companies, and it seems that that match component has actually gone down over the last few years.

Tim Church: Yeah, I don’t know. I think it varies so much because I feel like you guys in academia and hearing from my wife, you get these pretty awesome matches like 8-10% I’ve heard. So I think it just varies in terms of what company you work for. But I think you bring up a good point is that that number’s going to be variable, and then sort of beyond the match, that’s probably one of the most controversial topics in personal finance. And everyone has an opinion on that, and I think there can be a mathematical answer, but again, there’s so many different factors that play into that.

Tim Ulbrich: So is there any reason, Tim, you can think of why somebody wouldn’t take a match? So I’m thinking of situations like somebody who has lots of credit card debt or has no emergency fund. Like is there any situations where you could say, maybe it would be in their advantage to really focus on these other things? Or do you think pretty much across the board, it’s a good general rule of thumb?

Tim Church: I’d say probably for most people, it’s going to be a good idea. But like you said, if you have credit card debt at 14-15%, you’re probably better getting the return on knocking that out first before you start putting in towards the retirement. I think that for most people, it’s definitely a great idea. You want to take advantage of that free money. But if you’re swamped in credit card debt, and you’re having trouble even making your bills every month and putting food on the table, and you’re in some extreme situation, then yeah, maybe temporarily you don’t even put anything towards retirement until you can get to a point where you can actually breathe.

Tim Ulbrich: Yeah. And I would add to that too, you know, because I think somebody might hear that and say, ‘Well, even if it’s credit card debt at 15% or 18% or whatever, like I’m getting 100% free money.’ And maybe Dave Ramsey would like this part, but I would add to this discussion is don’t forget about the behavioral components of this, right? So if I’m contributing let’s say 3% towards retirement because my employer is matching 3, even if I’m doing that, that’s on autopilot and I’m not necessarily taking a very active role in that process. If I’m intentionally taking money and paying down a credit card bill, and I’m seeing that reduction happen, that is a piece that I’m taking a very active role in. And there’s power and value in that process. So again, all the more reason that these aren’t necessarily black and white answers, but what we’re saying here in point No. 5 is that for most people listening that the employer match, even in the event of student loan debt, is probably going to be a good play. Alright, so there we have it. Five common mistakes that we see pharmacists making, many of them we have made ourselves. So we hope this has been insightful, and I would just point you back to this is a very small sampling of what we are going to be talking about in a lot of detail in our student loan course that we’re getting ready to release very soon. And as I mentioned, we have 14 lessons across three modules. It’s packed with lots of content taught by Tim Church, Tim Baker, myself, we’ve got a Facebook group that’s going to be exclusive to the people that are in the course, so lots of great information, all really designed to give you confidence in having a repayment strategy that is going to be best for your personal situation and getting clarity on that strategy. So as a final reminder, if you head on over to courses.yourfinancialpharmacist.com, if you use the coupon code LOANRX, that will be good until Friday, May 4. We’ve got 19 seats left in our beta testing group until Friday, May 4. At the time of this recording, 19 seats left, and we’ll take the remainder of those at first come, first served. Have a great rest of your week, everyone.

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YFP 042: Ask Tim & Tim Theme Hour (Student Loans)

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On this Ask Tim & Tim episode of the Your Financial Pharmacist Podcast, we take two YFP community member questions about student loans. We discuss strategies for managing student loans during residency and how soon to refinance or consolidate student loans after graduation.

If you have a question you would like to have featured on the show, shoot us an e-mail at [email protected]

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Hey, what’s up everybody? Welcome to Episode 042 of Your Financial Pharmacist podcast. We’re excited to be doing two back-to-back “Ask Tim & Tim” episodes. And between this week and next week’s episode, we’re going to be featuring four listener questions: two this week about student loans and two next week about investing. As a reminder, if you have a question that you want to have featured on the show, shoot us an email at [email protected] and as a small thank you, we’re going to give you a super comfy YFP T-shirt. So Tim Baker, before we jump in to talk about student loans and get to these two questions, which are two really good questions, we need to share some awesome news with the YFP community. Last night, Derek Schwartz, if you remember our guest from Episode 014, 2014 graduate from ONU, Ohio Northern University, currently works with the Kroger Company in Cincinnati — last week, he made his final student loan payment. Three years, four months, paid off $192,000. So just an incredible story.

Tim Baker: Incredible.

Tim Ulbrich: And I still remember that episode and how fun that was.

Tim Baker: Yeah, it’s incredible. It’s amazing what you can do in a short amount of time. You know, I think for a lot of our listeners and a lot of clients I work with, they look at that six figures worth of debt, and they think it’s unsurmountable. And you know, this is another great example of someone that’s putting in the work and elbow grease to get through it. So kudos to Derek. Yeah, I’m just interested to see where he goes from here.

Tim Ulbrich: Yeah, Derek, congratulations. We’re obviously pumped for you, we appreciate you coming on the show and what you did in Episode 014, and we’re excited to see what you do with this lifestyle post-student loan debt. And I’m sure the YFP community’s going to be following that journey as well, so thanks for sharing that good news with us. So Tim Baker, we are here again obviously talking student loans. We’ve talked about this many times on the podcast. But I think it highlights we know how how important this topic is for our listeners that are struggling, obviously, with unprecedented amounts of student loans that they’re coming out with upon graduation. And I think this is a good chance — we’ve highlighted, mentioned, a couple times that, hey, we have a student loan course that’s going to be coming early this summer. And we’re actually getting ready to launch that course with a small group of about 50 beta testers. And for those of you that are interested in learning more about that course, potentially becoming a beta tester, you can head on over to yourfinancialpharmacist.com/studentloans. And Tim, do you just want to give them kind of a quick sneak peek preview into exactly what they’re going to get from that course?

Tim Baker: Yeah, I think the idea behind the course is to really answer a lot of these questions that we get about student loans, so I think there’s a lot of just such haziness about how to even take the first bit of the apple. So really what we’re going to talk about in this course is how do you inventory and just get a proper picture of what you owe and then really how do you assess all the strategies, whether it’s a forgiveness strategy and the PSLF program or maybe a non-PSLF forgiveness strategy, and then really how to optimize that. So when you walk away from the course, the idea is for you to know very precisely ‘This is my student loan strategy. I can walk confidently with it.’ And you know, kind of go down the road of a Derek Schwartz or not. You know, if your move is forgiveness and just be confident in that approach.

Tim Ulbrich: Yeah, we’re super excited about this. It’s been a labor of love with me, you and Tim Church has really taken a lead on a lot of this. And he’s just crushed it. And what I love about the course is I think what we’re hearing from the community members is that there’s so much uncertainty, there’s so much confusion, there’s so much stress around these student loans; ‘I don’t know what to do, I feel like I’m somewhat paralyzed.’ And I think what we’re going to be able to provide in this course is walking away with clarity of, ‘This is the repayment plan, strategy, the best option for your personal situation.’ So again, if you want to learn more what it means to become a beta tester, head on over to yourfinancialpharmacist.com/studentloans, and we’ll get some more information into your hands. Alright, let’s jump into our first listener question that comes from Bethany in Greenville, North Carolina.

Bethany: Hey, Tim and Tim. This is Bethany from Greenville, North Carolina. I had a question about consolidating and refinancing my student loans. How soon after graduation can I do this? And is there a limit to how many times I can refinance? Thanks.

Tim Ulbrich: Alright, thank you, Bethany, for taking the time to submit your question. We appreciate it. It’s a good one. Lots of people wondering about refinancing and consolidation. And obviously, I think your question’s specifically when to do it and is there a time limit to do it is certainly a good one that many others are probably wondering as well. Before we jump into answering, let me just reference listeners back to Episodes 029 and 030, where we talk about refinancing student loans in a lot of detail. And we’re going to hit some of the key points here in addition to answering Bethany’s question directly. So Tim Baker, I guess probably first since she mentioned both refinancing and consolidation, give us the quick breakdown of the difference between those two.

Tim Baker: Yeah, it’s a great question. And sometimes these are used synonymously, and that’s a misconception. I think the difference, you know, so define consolidation. Basically, when you consolidate your loans, you are taking two or more of your federal loans, and you’re making them one. And what happens is is that the loan that is consolidated takes the weighted average of your interest rate. So the example that I give is if you have $100,000 at 5% and then you have another $100,000 at 7%, when you consolidate those two loans into one, you’ll have $200,000 at 6%. So it just takes the weight. So it doesn’t really help you in terms of like you know, getting a better term or better interest rate. Most people do this for convenience sake, or even more importantly than that, they’ll consolidate their loans, so say like a Stafford loan to open up some of these income-driven plans. The income-driven plans would be things like pay-as-you-earn, revised pay-as-you-earn, ICR and IBR. Refinance, on the other side of this, is really when you go out into the marketplace, and you work with companies like SoFi or Earnest or CommonBond or LendKey, so these are some of the private student loan companies that we like. And you go out, and you submit your income and your credit, and they basically come back and say, ‘OK, right now, you’re paying 6%. If you refinance down to a five-year plan or a ten-year plan, we can get you down to 5% or whatever.’ So you’re basically going out into the marketplace to get a better rate. Now, the big thing with this to be aware of is that you are moving from the federal, the rec loans, to the private sector, which is important to know. But those are really the big difference. Consolidation is more of a convenience play/opening up more of the federal repayment plans, the income-driven ones. Refinance is where you’re throwing up the deuces to the federal system and saying, ‘Hey, I’m going to take a look at the private side and see what I can get there.’

Tim Ulbrich: Yeah, and I know Bethany’s question directly being how soon after graduation can I refinance is a good one because I know it seems like students, residents, new practitioners are more aware of refinance options, I think because of the higher interest rates that are out there on some of the federal loans right now, but also probably these companies doing a little bit better job on the marketing side of things as well. So what exactly are the requirements? I mean, how soon can somebody refinance after graduation? And I’m guessing there’s a technical answer to that question, but then maybe there’s also the reality of them being able to qualify for a loan.

Tim Baker: Yeah, so dependent on what strategy you choose — and again, we talked about the two overarching strategies that are out there are forgiveness and the basically nonforgiveness — dependent upon what you choose, is going to really define your timeline. So as an example, if you are looking at the PSLF, and you have a variety of loans, which most borrowers, most clients that I work will have a plethora of loans out there, you’re going to want to consolidate and get your loans into a loan that can get into one of the income-driven repayment plans and start paying or go into repayment as quickly as possible because the idea is to pay, you know, your 120 payments over those 10 years as quickly as possible. So once you graduate and you’re in the grace period, you want to look to get into the active repayment as quickly as possible. Refinance, on the other side, so this is typically where you’re not looking at the public student loan forgiveness program or any forgiveness program. Refinance is probably going to happen a little bit after that because what these private loan companies are going to want to see is income — so obviously, if you are — they want to see a history of income and maybe a history of repayment, so they want to see maybe a couple months of you actively repaying your loan in the federal system for you to get the best rate. Some of these refi companies will honor things like grace periods and that type of thing. But typically in the private refinance, you’re going to have a little bit more of a runway than you would if you’re going through consolidation and public student loan forgiveness.

Tim Ulbrich: Yeah, so I think technically the answer is yes, you can apply as soon as you want after graduation or if somebody’s in residency, but the caveat being it may be difficult to qualify because ultimately, they’re going to want to see probably a track record of payments being made. And also as you think about getting a competitive interest rate, obviously that’s in part determined based on a debt-to-income ratio. So unless there’s a situation where maybe somebody’s coming out as a student, and they have a spouse who aren’t working or a higher income-earning spouse and they can qualify, yes, you can apply, but ultimately, it may be difficult to get those loans over time. What about the limit? Is there any limit to how many times somebody can refinance?

Tim Baker: There isn’t. And, you know, there are some clients that I’ve worked with that have kind of hacked this a little bit. So they will either go out to each of the refi companies that we like and do a deal that way, or you can refi again and then refi again and then refi again all of your loans. So there’s really no limit to that. It will affect your credit score, you know, if you continuously refi because you’re basically doing a hard check on your credit when you go through the refinance program, but there really is no limit. And it’s kind of the same thing if you think about people that are homeowners out there. You can refi your home as many times as you want. Now, you’re going to be paying closing costs and things that aren’t necessarily present in the student loan refi arena, but the idea here is there are companies out there that understand that we have I think $1.3 trillion in student loan debt out there, and there’s interest payments to be had, so they’re going to compete, even actually offer those cash bonuses, so it’s nice for the consumer to be able to look at the landscape and say, ‘OK. Let me choose the best rate available and maybe get a bonus as I’m doing it.’

Tim Ulbrich: So you can hack the system Tim Church-style, right? And do a multiple refinance?

Tim Baker: Exactly.

Tim Ulbrich: I think he probably knows the rates to a T, the most competitive rate that’s out there, he’s got it nailed.

Tim Baker: He’s a machine.

Tim Ulbrich: He is a machine. And I think that’s the play is like, obviously, you want to consider the impact on credit. Just getting rate quotes will not impact your credit, but obviously, going through the process and ultimately refinancing with a company will impact your credit, so I think that’s a good point to be made. But ultimately, you can do it multiple times. Obviously, these companies do offer cash bonuses, so you want to weigh the benefits of that. And obviously, for some people, depending on maybe you were in residency and you decided to refi or shortly after school and your debt-to-income ratio didn’t look great — fast forward two years, rates may have changed, debt-to-income ratio looks difference, obviously, you’re a more competitive applicant in that process. I think it’s also worth here maybe for a minute just talking about what some of our community members may see in a refi is ultimately, these companies will typically throw in front of you a fixed interest rate, which doesn’t change for the life of the loan. So let’s say that’s 3%, 3.5%, 4%, whatever. That’s 4% for the time period that you’ve agreed upon: five years, seven years, 10 years. Or you’ll see a variable rate and actually even some hybrid rates that are out there now. And a variable rate meaning that can change during the life of the loan. So what advice do you have for people in terms of thinking about is a fixed rate the better play? Is a variable rate? What are some of those factors that should be considered?


Tim Baker: I think the big thing is basically the time horizon of the loan. So obviously, the longer that goes out — seven, 10, 15, 20 years — the more risk that you have, you know, interest rate risk. We are in a rising interest rate environment, meaning interest rates are probably going to go up since I guess the Great Recession, we’ve been stuck in lower interest rates, and they’re now finally starting to climb, which is good for savers, but not necessarily great for borrowers. So I think when you’re weighing the variable versus the fixed interest rate, obviously fixed, the information that you have there is known, so you know exactly what you’re going to pay over the course of the term. The variable interest rate, it might be tied to some type of index that will be adjusted annually to some type of index. If it is, it’s a three- or five-year or whatever, if you know that you can pay them off confidently, you might go for the variable just to kind of as that short-term play because you know you’re going to pay them off, so someone like a Derek Schwartz out there. If it’s going to be longer term, to me, if I was counseling a client, I would meet that with a little bit of pause, knowing that probably the rates are going to go through the roof. So it’s one of those things where you take a risk of getting a better interest rate in the near term, but you know, those particular rates could be jacked up, especially if the time horizon of the loan goes out further. So, you know, it’s not necessarily a bad thing to do, but you mentioned the hybrid loan. So the hybrid rates are kind of where you — if people understand what an adjustable rate mortgage is and arm, you basically, it’ll be fixed, the rate will be fixed for a set period of time and then it will adjust annually after that. So that’s another little bit of a hybrid model that will give you some fixed interest and then variable. So you could look at that particular solution to get a lower rate as well.

Tim Ulbrich: Yeah, absolutely. I agree on your input on the variable rate and evaluating that against the fixed. Other things I would throw out there would be looking at what’s your emergency fund situation? Know you have some extra cash if needed. What’s your appetite for that payment potentially changing? Do you have wiggle room or not in your budget? So if you look at your budget right now, and you’re looking at a fixed rate and that payment and say, ‘I’ve really got no room to squeeze out an additional,’ then obviously, that variable rate could be tricky. The other thing I would say is do the math. And we’ve got a great calculator if you go to yourfinancialpharmacist.com/refinance, that’s our page where we have all of our resources associate with refinance on there. You can run the math. So do the math and see, OK, best case scenario, the low end of the variable rate, if this were to stay as is — which to your point, in a short repayment period may be a good play — how much would I be saving against a fixed rate? And is that potential savings worth some of the unknown in the variables that you mentioned?

Tim Baker: Yeah, and I think looking at that dollar sign, you’re basically saying is $10,000 or x amount, is that worth the risk of, you know — and I think to quantify that in some regard can be very powerful.

Tim Ulbrich: So one of the things I want to end on here is if you go to our page, again yourfinancialpharmacist.com/refinance, we’ve got lots of educational resources that will help you out. But there’s some things that we fundamentally believe you should look for in a refinance company. And the good news is as these have become more popular, I think we’re seeing a lot more consistency in the market amongst some of these big players — SoFi, Earnest, CommonBond, LendKey, etc. The things that were looking at are, there should be no origination fee. So in fact, many companies are actually going to give you a cash bonus. But at minimum, you shouldn’t be paying anything to get this loan started. No. 2 is there should be no prepayment penalty. So if you take on a 10-year refi, and you want to get this done in five or seven because you got some extra cash or some additional money, you want to get it done faster, you should have the ability to do that without any penalties for making extra payments. Many of these companies are also going to offer you a lower interest rate with autopay. So if you can do that, of course take advantage of it. And one of the ones we’re always trying to hit home and we think is really important that you evaluate is ensuring that it has protection and a forgiveness clause in the event of a death or long-term disability. So if you only have federal loans, that protection is there for you. If you refinance with a private company, that can be dependent upon the company. And so you want to make sure 1, does the company offer that protection that those loans would be forgiven in the event of a death or permanent disability. And if not, do you have the insurance protection in place, whether that be from a life insurance policy, a disability insurance policy, to cover that in the event that it would occur? And then obviously, you’re going to see some nuances and differences between these companies about types of repayment options that they’ll give you. But ultimately, again, on that page yourfinancialpharmacist.com/refinance, you’ll see all of that information, you’ll see a guide that we have available, and we have links there where you can also click out and get some quotes with companies in a very short period of time. And we’ve got some really competitive cash bonus offers if refinance is the right play for you.

Tim Ulbrich: Alright, let’s take a quick break and hear a minute from our sponsor, and then we’re going to jump into the second listener question focused on student loans.

Sponsor: Student loans are a big problem for pharmacists. With many graduates facing interest rates above 6%, it can be hard to get traction and make progress. If you’re not pursuing the Public Service Loan Forgiveness Program, and you don’t need income-based repayments, refinancing can be a great move and could save you thousands of dollars in interest. Check out our refinance page at yourfinancialpharmacist.com/refinance where you can calculate your savings and check your rate with one of our partner companies that are offering exclusive cash bonuses to the YFP community of up to $450. That’s yourfinancialpharmacist.com/refinance to find out your savings today.

Tim Ulbrich: OK, let’s jump into our second listener question, which comes from Nate in Ohio.

Nate: Hey, Tim and Tim, this is Nate from Akron, Ohio. My question is, what is the best way for me to start managing my student loan debt during residency? And early in the career, what is the most appropriate balance as far as investing and managing student loan? I appreciate any input you have. Thank you.

Tim Ulbrich: Nate, thank you so much for taking the time to submit your question. We appreciate you’ve got a good one, actually two questions here around the best way to start managing student loan debt during residency, a question we get a lot, and the second question, which might be the most common question we get: What’s the most appropriate balance as far as investing and managing student loan debt? So your first one, what’s the best way to start managing student loan debt during residency. I think it’s a great question. You look at the average resident salary out there, obviously dependent upon geographic location, somewhere between $40,000 and $50,000. But we have an average indebtedness now of graduates of about $160,000. So that’s a common thought, and a question that comes out is can I afford residency training? Obviously, what are the financial implications of that? And if I’m in residency training, what do I do about these student loans? So Tim Baker, as you hear that question, obviously you work with a lot of clients that are residents as well. What are you thinking in terms of strategies around paying off student loans during residency training?

Tim Baker: I mean, I think it follows — and I think Nate, this would be a good chance to maybe look at the beta group test for the student loan course — I think that the very first thing, whether you’re a resident or not, is really to look at the inventory. And I break this down in terms of an inventory of what you actually owe and who you owe it to and then also kind of an inventory of your feelings toward those loans. So a lot of people, you know, unless we ask ourselves the questions, how do you feel about these student loans? If it’s like, ‘I feel OK about them, I know they’re going to be around for awhile,’ versus ‘Tim, I can’t sleep at night. I get anxiety.’ And these are things clients tell me about their loans, that’s really going to dictate, I think, how you approach them. I think in residency, the beautiful thing about residency, especially dependent on the approach you take in terms of your strategy, whether that’s, again, the forgiveness play or the non-forgiveness play, is that you can do some damage in residency for both strategies. So to me, the best way to start is to do the inventory. And basically what dictates that is going to be really two things. It’s going to be your NSLDS, basically your report, which basically is an inventory of all your federal loans, and then also your credit report, which is going to basically outline all of your private loans. So I think once you kind of inventory your thoughts and feelings toward the loans and then actually the amount you owe and the interest rate you’re paying, I think that is going to be the first basically jumpoff point to kind of begin the process of saying, ‘OK, how do I begin to, you know, peel this thing back and figure out the best way forward?’

Tim Ulbrich: So once you do your inventory of your loans and you assess your feelings, to me, the question then becomes, are you pursuing Public Service Loan Forgiveness or not?

Tim Baker: Yes.

Tim Ulbrich: And I think that’s a critical question. Nate, your question around residency — what we know about residency training and pharmacy is that about 90 percent of all residencies are in a hospital, health system setting. And of the hospital health systems that are out there, about 80 percent are considered not for-profit institutions, which obviously would be qualifying organizations for residency. So Tim, why is that question of PSLF or no PSLF so important when you think about strategies of attacking student loans or not in residency?

Tim Baker: Yeah, and I think again, one of the things that is not necessarily, you know, completely laid out in front of you is the information about your forthcoming career. And what I mean by that is, you know, if you do a residency, and you work for a 501c3 nonprofit, which is basically what qualifies an institution to be part of the PSLF program, you’re not necessarily sure that you’re going to be, you know, if you’re a PGY1, if you’re going to be nine years in the public service or a PGY2, if you have another eight years in public service. But if you’re pretty confident that you are going to be in the public student loan forgiveness program, and you’re going to be in one of those 501c3, you should start basically your repayment as soon as possible because the way that your repayment is calculated is going to be based on the previous year’s income. So if you’re a PGY1, how much did you make in your P4 year? Probably not much. So that means your payment is going to be close to zero, but you still get qualified payments toward your 10 years. And the same thing when you are a PGY2, it’s going to look back at your PGY1 year and basically look at your income. And your payments are going to increase, but not in terms of what you would normally make as a pharmacist. So there are ways to really optimize your situation to get through really the first third of the PSLF program if you’re in a two-year residency program and you’re working for a nonprofit. So that’s super to note because I think the default in the federal system is if you have a grace period or a deferment period or whatever it is, most people take it because they think it’s in their best interest. Like, ‘Oh, the government is offering this.’ It’s the same thing with some of these repayment plans, which a lot of these federal repayment plans are actually garbage. And that’s one of the things that we talk about in the course is we give you a little bit of shortcut of the ones to look for. But just because the government says, ‘Hey, you know, take these grace periods or these deferment periods,’ doesn’t mean that you should. It’s not necessarily in your best interest. And on the flip side of this, if you look at it from a non-forgiveness play, you know, if you’re a resident, you’re probably not going to want to go into the private refinance sector because it’s going to look at basically your principal and your interest rate, and you might not be able to afford those payments, especially if you’re looking at an average indebtedness of $160,000. That payment’s going to be in the $1,800 range in a standard 10-year plan. So for residents making $40,000 or $50,000, it’s probably not going to be the best move. So, you know, this is kind of where you have a bridge strategy where you’re looking at the income-driven, you know, similar to what you would do in the forgiveness strategy where you would just do an income-driven plan and then when you have more information, you can either pivot and, you know, stay in the federal system or pivot out and refinance at that higher income level.

Tim Ulbrich: Yeah, just to reiterate what you said early on in that response is remember that just because you’re in deferment — or even if you’re making an income-driven plan, depending on that calculation — it’s likely that your loan balance is growing. And I cannot emphasize enough to not just react to the payment that’s put in front of you without thinking about what your overall strategy is. So what do I mean here is obviously, many if not all of your pharmacy student loans are unsubsidized, accruing interest while you’re in school, through any grace periods. But then even if you go into an income-driven repayment plan, because of what Tim mentioned and how they’re looking back into your P4 year to calculate that payment, that payment — depending on your total debt load — probably isn’t going to even cover the interest that’s accruing each month. So I think to the point that was made, if you’re not pursuing Public Service Loan Forgiveness, what can you do to try to at least keep that total balance at bay so when you get out of residency, you can then really start to attack those loans without that loan balance growing during residency training. So I’ve personally seen way too many situations — and obviously, some of them are not preventable because of whatever variables — but too many situations of somebody graduating at $180,000, $190,000, finishing two years of residency, and all of a sudden, that balance is $210,000 or $220,000 because it’s grown over that two-year period.

Tim Baker: And I, you know, have a story with a client I’m working with. She had about I think $75,000 in debt. And that’s what she thought she had. But over the course of all these deferments and periods that she’s taken advantage of, you know, air quotes “taken advantage of,” you know, when I actually did the inventory for her, it was upwards of like $90,000, $95,000. And she was shocked because she’s like, ‘Well I only thought I had $70,000.’ The problem is that the interest has grown, and then kind of a gut punch on top of that is when she basically goes into repayment, now that $95,000, that interest that was capitalized is now going to be interest on top of interest. And that’s kind of a difficult thing to swallow, especially for some people that they look back at their situation and they say, ‘Oh man, I probably could have paid down some of that interest. Or I could have been more mindful of my loans when I was in this period of flux.’ So yeah, super important to be aware of and not just to take kind of the programs or the different status of your loans as they go through, don’t take those just at face value.

Tim Ulbrich: So for those of you that are listening that are either current students or residents or those that may qualify or think you qualify potentially for PSLF, if you’re looking to learn more, Episode 018, we talk about maximizing the benefits of the Public Service Loan Forgiveness program, so we’ll link to that in the show notes. Tim, what are you hearing on the latest and greatest with PSLF? It seems like it’s actually been somewhat quiet for awhile and then there was news that came out last week about some action as people are actually starting to seek that forgiveness.

Tim Baker: Yeah, so the latest news is that was put out is that Congress has authorized or basically earmarked $350 million to borrowers out there that thought they were enrolled, properly enrolled in the PSLF program but then were probably, that were actually in the wrong repayment system. So it’s kind of a two-step process to get into the PSLF program. So this is encouraging, I think, to me because as much as the Department of Education has fumbled this whole program since it was initiated in the Bush administration back in 2007, this is one of the first I think steps where you actually see money set aside, and this sounds like it’s oops money for that, you know, subset of people that raised their hand and said, ‘Hey, I want to be in the PSLF program,’ and thought that they were in it but just didn’t do the, I guess the logistic step properly where they needed to move from a standard or an extended standard into an income-driven plan. So to me, it’s somewhat encouraging. And some of the chatter that I’ve seen is that the $350 million might not be enough, and I guess it depends on who actually that $350 is for, but we’re starting to hear more chatter about people that are actually being forgiven. So the stats that I heard was that 13,000 people applied for forgiveness since you could in October of 2017, only 1,000 was expected to actually be forgiven or be qualified because of some of these errors in the program. So that’s a 7.7% rate, which to me that means that we’re failing in terms of this program. But it sounds like this particular earmark spending will capture some of those people that thought they were in the proper repayment plan but weren’t. So that’s good news.

Tim Ulbrich: Yeah, and one of the things that gets me so fired up about the course that we’re working on is that we really spend a lot of time and detail helping those going through it decide is PSLF the right move or not. If so, what’s a strategy to maximize this? And then really getting into the nitty-gritty of what are the numbers? What do the numbers look like? And if I’m going to assume this risk, what’s the potential upside? So again, those that might be interested in learning more, helping us with beta testing, yourfinancialpharmacist.com/studentloans. So Tim, the million-dollar question, which is Nate’s second half of his question, what’s the most appropriate balance as far as investing and managing student loan debt? And here, obviously it’s also in the context of residency. So what are the factors that somebody needs to consider knowing this answer is highly dependent upon the individual in terms of how might I balance student loan debt versus investing for the future?

Tim Baker: It’s such a great question. I think it’s one of the questions that we get asked the most. And you know, the stock answer that I give is it depends, which is kind of the worst answer to a question ever. And I think one of the things that, you know, in Episode 026, we talk about baby stepping into your financial plan, the two things to focus on first. And really, the two things that I focus on when I look at a client’s financial picture is what does their consumer debt look like, so credit card debt, and what’s their emergency fund. So the student loan piece is a completely different animal, and I think dependent on the strategy that you take I think is going to dictate when you get into the investment world. And there’s lot of different opinions out there of when to invest and when not to invest and how do you do that with student loans. So some of the factors that I would look at in terms of should I be investing or not is what does your debt situation look like. So if you have credit card debt, which a lot of pharmacists will take on credit card debt as they go through school, I see that more and more, if you have credit card debt, go ahead and fold up your investment policy statement, your investment plan and stick that in your back pocket until that is completely paid off. I think the other thing that we have to be mindful of is just what is your attitude towards the student loan debt. So if your attitude is, ‘Man, I need to get out from underneath this as quickly as possible,’ or if you take kind of a Dave Ramsey approach to debt, and you think that most debt outside of the mortgage debt is bad, then you probably are not going to want to invest anytime soon. The other thing is just like interest rates. So if you’re fortunate enough to have loans that your interest rates are super, super, super low, and you’re kind of, ‘Eh, I can deal with the debt,’ then maybe wading into the waters of investing is more important. And I guess I say this all in the context of, you know, also your employer, what they offer in terms of retirement. You’re probably, nine times out of 10 — and this isn’t investment advice — but nine times out of 10, you’re going to want to probably at least put into your 401k or your 403b what your employer is matching because that’s basically a 100% return on your money. So if they match 4%, you probably want to put 4% of income in there. And that’s typically a general rule of thumb. Some other things to be aware of is — I’m trying to think. So one of the stories that I recently saw too is that — I don’t know if you saw this, Tim — is about 20% of students are using parts of their student loan money to buy bitcoin.

Tim Ulbrich: Yes, oh gosh.

Tim Baker: I would probably say that this is not a smart thing to do.

Tim Ulbrich: The crypto lovers are going to send us hate mail, by the way.

Tim Baker: Yeah, so. But yeah, if you were a client of mine, I would probably advise against that. Not because I don’t like cryptocurrency. I think that there is some longevity there, but I don’t think it’s necessarily looked at as a good investment in terms of using money that you’re 6 or 7% on to then put that there.

Tim Ulbrich: I think what all the things you’re saying is why the answer is depends. And to me, this is why it gets me fired up a little bit when a debate’s going on within a Facebook group or something about this topic because for everyone, the answer is different. I mean, there’s so many factors you just outlined: interest rates, philosophy or feelings toward debt, you know, in terms of what options, do I have a match, do I not have a match. Other ones I’m thinking about are what’s your horizon and timeline for saving? So if you’re a nontraditional student, and maybe you’re coming out, starting your career at 40, this answer might be different than somebody who’s graduating at 24. Are you pursuing loan forgiveness or not? If you’re going Tim Church-style, and you’re throwing massive student loan payments on a short period of say a five-year refi, and you can get your rate down to 3.5 or even less, that might differ than if you’re not doing that. So so many variables that come into play, and I think this also speaks to me the power of working with a really good planner that can help ask all these questions and help determine the answers to these. And we didn’t even talk about I guess your tolerance toward risk as being another one here.

Tim Baker: Yeah.

Tim Ulbrich: You know, and it can really help you wade through, you and/or a significant other to come up with a definitive answer to this question, to come up with a plan that can help you work through this and can feel confident in that plan going forward.

Tim Baker: And I think one thing that you kind of, that maybe we didn’t hit on completely is — and I think we’re seeing this now — is if I look at my student loans, and I’m paying 6%, but then I look at what the market has done over the last year, and I’m like, well, it’s up whatever, 15%. You know, isn’t it a no-brainer just to basically pay the least amount on my loans and then go into the market and get my 15%? And it’s not necessarily — I guess the rebuttal of that is it could easily be down 15%, the market could be down 15% next year. So it is a cyclical thing, and you know, right now, people are saying invest because it’s a no-brainer. But then, you know, if we go through kind of another dip in the market, that’s not necessarily a no-brainer. So the no-brainer in terms of what are the facts that I know is that if you pay off — your loans, they’re going to charge you like clockwork 6% every year. So that’s a given. But when you go into the investment market, you do take risks. So you’re not necessarily going to get that elevated return that you think you’re going to get. So although you can make a case that over the long-term, the market is going to take care of you, and it’s going to return 10%, that is true. If you’re looking at your student loans, that’s not necessarily a no-brainer that you’re going to get the return that you’re looking at in terms of the market.

Tim Ulbrich: And I think where this debate gets a little bit interesting is with some of the refi rates we’re seeing out there with people that are getting, that have top credit, that have a really good income-to-debt ratio and that are willing to pay it off in a really aggressive period, you’re getting rates down that low. Still, it depends, is the answer. But obviously, that becomes a little bit different discussion depending on their personal situation. ‘

Tim Baker: But usually if you get rates that low, it means that your $1,800 payment is now — what does Tim Church pay? $3,800 or $4,800? So there’s probably not a lot of money left over to actually go into the market and invest.

Tim Ulbrich: Great point.

Tim Baker: I think his thought, and I think we see this with a lot of millionaire pharmacists that we’ve interviewed is, you know, if you can train yourself to have the behavior to make massive payments towards your debt, you probably can do the same thing towards your investments. So any of that opportunity cost or any of that lost time that you invested, you can probably make up fairly quickly. And again, it just depends on your situation, your appetite for risk and all that. So it’s definitely a murky picture.

Tim Ulbrich: Yeah, don’t forget your timeline, right? So if you’re going to knock these out in three years, that’s a much different situation than if you’re waiting to invest because you’re going to pay them off over 10. So obviously that timeline and compound interest and time that could be lost is a critical factor as well. So Tim, great stuff as always. Thank you again to Nate and Bethany for submitting a question to be featured on this “Ask Tim & Tim” episode of the podcast. And as a small thank you, we’re going to be sending them a super comfy YFP T-shirt. And again, if you have a question you’d like to have featured on the show, make sure you shoot us an email at [email protected]. And we hope you’ll join us again next week as we feature two questions on investing.

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YFP 039: One Pharmacy Entrepreneurs Journey to Maximizing Income & Paying Off Student Loans

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On Episode 39 of the Your Financial Pharmacist Podcast, we interview Dr. Blair Thielemier, creator of BT Pharmacy Consulting, The Pharmapreneur Academy and the Elevate Pharmacy Virtual Summit. During this interview, Blair shares her personal and professional story including the financial hardships that inspired her various entrepreneurial ventures that have, in part, resulted in additional income to pay off her student loans and be on track to achieve her financial goals.

Elevate Pharmacy Virtual Summit

The 2018 Elevate Pharmacy Virtual Summit is presented by the NCPA Innovation Center and hosted by the founder of the Pharmapreneur Academy, Blair Thielemier. The Summit features 24 all-new interviews with pharmacists and experts discussing collaborative opportunities, team training, marketing, and profitable services in community pharmacies. The free 5 day event is March 21–25th and there are 11.5 accredited CPE hours available for pharmacists and pharmacy technicians. Go to ElevatePharmacySummit.com to register for your free ticket!

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YFP 036: A Pharmacist Couple Working to Row Their Financial Boat in the Same Direction

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On this episode of the Your Financial Pharmacist podcast, we finish our month long focus on how couples work together on their finances.

In Episode 36, we speak with Andria and Tim Church who share their story about how they first met and how their approach to their finances evolved over the course of their relationship. Andria and Tim share their wins and their struggles and impart valuable advice to other pharmacists and couples that are working together on their finances.

Featured on the Show

  • How Tim Church used Andria’s interest in primary care to court her
  • The Church’s struggle with budgeting, combining finances
  • Their “gazelle intensity” towards their student loans enroute to payoff and acquiring the Church family cat
  • How being budgeting, being frugal, side jobs and student loan refinance helped along the way
  • Advice to other couples
    • Live like a student for a few more years
    • Know what your goals are
    • Educate yourself on personal finance
    • Don’t take out more loans that you need
    • “It’s our money…it’s our debt.”

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YFP 034: Working Together to Walk Through the Valley of Debt

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On this episode of the Your Financial Pharmacist podcast, we continue our month-long focus on how couples can work together to manage their finances.

In Episode 34, we interview Ellen & Ethan Ko who chronicle their journey walking through the valley of debt as a young couple, how they have managed to work together through financial hard times and what they are doing differently to be on the path towards financial freedom. Ellen is a 3rd year pharmacy student at VCU School of Pharmacy and Ethan is a physician that is trained in internal medicine with a subspecialty in nephrology.

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YFP 030: Refinancing Your Student Loans Part 2

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On Episode 30 of the Your Financial Pharmacist Pharmacist Podcast, we continue this two part series discussing the ins and out of refinancing your student loans. Specifically we discuss:

  • How to choose a reputable refinance company
  • Key features to look for when refinancing
  • Minimum requirements to refinance
  • Types of interest rates
  • Cash bonuses that are available for being a new customer

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YFP 029: Refinancing Your Student Loans Part 1

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On Episode 29 of the Your Financial Pharmacist Pharmacist Podcast, we kick off a two part series discuss the ins and out of refinancing your student loans and how to determine if it’s a good move for you. In part 1, we discuss the benefits of refinancing, how to determine if it’s a good option for you, and some scenarios calculating the potential savings in interest.

Student Loan Refinancing Page

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