Latest / Financial Survival Network / College Financing Hacks You Need to Know -- David Shutler #5848

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College Financing Hacks You Need to Know -- David Shutler #5848 · Financial Survival Network

0:00
And in the book, chapter twelve talks about how this came to be.
0:03
It's a very unusual and ironic rule. And the irony of it is that
0:06
in nineteen seventy six, newspaper guys ginning up a story got Congress involved to
0:11
eliminate student loan debt. Only student loan debt, credit card car debt,
0:16
mortgages. The only one that's in this category is student loan debt. And
0:20
then it snowballed over the years, and now in two thousand and three,
0:23
it's just impossible. In fact, one source told me that one out of
0:27
twenty five hundred applicants for relief of student loan debt gets it. Granted,
0:33
you're listening to Carrie Let's Financial Survival Network, where you get valuable information you
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just can't find anywhere else to thrive in today's trying times. You need the
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1:00
And welcome. You are listening to watching the Financial Survival Network. I'm
1:04
your host, Kerry Luttz. You know we talk a lot about finances,
1:08
personal finances, We've talked many, many times in the past about student loan
1:15
debt. Many of you out there, even if you don't have children,
1:21
you have relatives, You've got friends whose kids are basically virtual debt slaves from
1:29
here to eternity. Well, we've got somebody on here who can help you
1:32
with that situation. His name is Dave Shutler, Dave student loan Expert that
1:38
you are, you recommend that people avoid them your book Graduate Debt Free Escaping
1:47
the student loan Matrix, I would call it the student loan shackles really hits
1:53
hit home to a lot of people. So first student loans, it seems
1:59
like you get a sub to dies loan, you can go to a better
2:01
school than you might otherwise have gone to, you can afford to pay your
2:07
living expenses, and then when you get out and hopefully you get a good
2:09
job, you'll be able to pay for all this. What's wrong with that,
2:15
Well, what's wrong with the picture is that there has not been,
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for the longest time, a way to calculate that for your listeners who are
2:25
interested in the basically the financial analysis of this whole deal. Up until recently
2:30
twenty nineteen, the answer to the critical question in student loan debt could not
2:36
be found. Lawyers call it an imponderable and you can't figure it out.
2:40
But in twenty nineteen, Department of Education released a ton of public data and
2:45
you can now ask a simple question, what does an English major at Duke
2:50
University make upon graduation? Now that sounds very benign, but there's so many
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things that flow from that, because when you have that piece of information,
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you can go backwards to the true calculation that you need to figure out.
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So an English major at dwocuereies that's what I was. I can bust on
3:09
myself. You know, whatever they make that. We have a rule of
3:15
thumb that says that is your cap. And once you have your cap figured
3:19
out as far as what you're the amount of death that you can take on,
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then you can go backwards for it. There's a there's a lot of
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there's a lot of working through on that. But I point that out because
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it leads to the second key point for students in college, and that is
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pick your major first, then pick your school. Two reasons, you pick
3:40
the major because that's what you want to do when you grow up. And
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secondly, then you can find a school you don't want to grow up here.
3:49
Yeah, I'm never growing up here. Yes you are. You have
3:53
to. I'm trying to avoid it. So those are those are the background
3:58
things, particularly for your your listeners who are trying to think through this financial
4:01
deal. A book, of course, goes into a lot more detail about
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it, but that's the framework. M okay. So think you're at your
4:08
major and look, I heard stories people learning puppetry right going for their masters
4:15
in puppetry. Is there a way to figure out how much you can make
4:17
as a puppeteer or other than working for the government. There is, I've
4:24
got I've got a page in the book that to me is just exquisite.
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You pull up that page, a page that shows um from it's from indeed
4:34
dot com, but it shows um average salaries for this whole range of technical
4:41
to non technical. And why I find it exquisite is that you can go,
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Okay, well, I don't want to be a puppeteer, but I
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do want to be a graphic artist. Okay, what's a graphic artist make
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from the school that I want to go to overload? Maybe? And then
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you go backwards and you go, wait a second, a graphic art artist
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makes around forty thousand dollars. Well, if that's the case, then I
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got to be very careful to in the book, I got to be very
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careful to not exceed that. And so this is where a lot of students
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have gotten into trouble where they've gone to expensive private schools and they studied up
5:17
Tree or another course that floated their boat but didn't really produce the information that
5:26
they wanted. So this is the page in the book, and it is
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backed by Department of Education, indeed dot com, and it just takes you
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know, a mechanical engineer up the top and down at the bottom is a
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studio arts forty one thou for Studio Arts Engineering sixty nine thousand. So if
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you know this before you go into the enterprise, then you can say,
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okay, well I got to get that degree in a place that doesn't leave
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me with a ton of debt. And so again more in the book breaks
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it out. But for your listeners to know that that's the question they want
6:00
to be asking, what's the major they want? And then not the school.
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I want to go to an Ivy League school because I love the look
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of the school. I wanted to go to Harvard, they didn't have me,
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they wouldn't tab me. If you can believe that Schander shocked and saddened
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here ye. Anyway, so that gives you a framework for It's what the
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book is about, is turning this thing upside down. So if the students
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and the parents have a very good idea what they're gonna tour forget okay,
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and yeah, so you know when I always like in this the elderly senior
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citizens, if you want to take out a reverse mortgage on your home,
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you're forced to take a I don't remember how many hours, five or ten
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hour course online about all the ins and outs and the hidden costs of taking
6:54
out a reverse mortgage. But you know, for a student, an eighteen
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year old kids, seventeen year old, should they don't understand any of this
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and there there's nothing out there for them up until now till your book and
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with the research tools to actually figure out if this is a good investment or
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not, shouldn't they be forced to take at least a couple of week course
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on the intricacies of student debt and the non dischargeability of the debt and all
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of this. Well, it's interesting you ask that because we offer such a
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course. I've never seen one. I don't see anything. I'm to retired
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military twenty five years, so I have a federal background, private background.
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I'm a lawyer by training. Is this owner now? I've never seen anything
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any any of these. There is some stuff. There is some good information
7:47
from Indeed and a couple other sources. But this thing that you're talking about,
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we we identified a need that we think is pretty significant because there's nothing
7:59
that tells these guys, young els, what's going to happen to them.
8:03
And so that's the notion of what we're doing at But go back to your
8:07
comment about that you had to take a five hour course. What does five
8:11
hour course tell you when you're about to sign a way? You know you're
8:16
upside down basically, you're about to sign a way. And so my thought
8:20
on as you're navigating this is that if you have sort of the parameters of
8:26
it, what's going on, which is what the book intends to do,
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then when you go into the meeting with the loan officer or the lender and
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they say, okay, you're qualified for a fifty thousand dollars loan, and
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you go, well, how in the world, would I pay the ex
8:41
trifty thousand dollars very slowly? Right, we don't care. You just got
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to do it. And back to your point, indentured servitude. There's about
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one hundred and fourteen thousand people who are in indentured servitude. Is they're paying
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back an offset from the Social Security or from some other loan that they got
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years ago. So you want to be very very alert to that danger.
9:07
I'll just get to pass by a little anecdote, little story. Friend of
9:11
mine, Okay, he owed like sixteen hundred dollars, they lost track of
9:18
him, He lost track of them, and you know, he was not
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adverse to paying it back. Next thing he knows he filed for a New
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York state tax return and they grabbed it and it was for far more than
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the sixteen hundred dollars that he originally owed. I mean, you become a
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target, and this thing's for life. You know, most debts, we
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have what's called the statute limitations. You default in the credit card, they
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they got five years to sue you and get a judgment. They get a
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judgment, they have ten years or twenty years. But unfortunately, death taxes
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and student loans or forever. That's a fact. And in the book,
10:01
chapter twelve talks about how this came to be. It's a very unusual and
10:05
ironic rule. And the irony of it is that in nineteen seventy six,
10:09
newspaper guys ginning up a story got Congress involved to eliminate student loan debt.
10:15
Only student loan debt, credit card, car debt, mortgages. The only
10:18
one that's in this category is student loan debt. And then it snowballed over
10:22
the years, and now in two thousand and three, it's just impossible.
10:26
In fact, one, one source told me that one out of twenty five
10:30
hundred applicants for relief of student loan debt gets it granted. This is near
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impossible. And back to your friends, that's the issue is that these things
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are operating different different kinds of different kinds of realms that you didn't even know
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about. And sixteen hundred bucks, he could have paid that off and be
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done and then whatever whatever it mushroom to. That's that's where he is now.
10:56
And it's a state deal, maybe not even a federal deal, it's
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a state deal. Cells another story, I knew a lady who was a
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doctor. She was in her residency, and she wasn't a real good money
11:07
manager, and she had like quarter a million, three hundred and fifty thousand
11:13
dollars worth of debt. She defaulted and then it gets kicked into default interest,
11:18
paying like twelve percent a year default interest. And you know, she's
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gonna do well, but she isn't going to do that well. And what
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do you say to somebody like that. They just they were careless indiscretions of
11:35
youth. And you know, look, you buy a house, even if
11:41
you're in your early twenties, right right, you get disclosure after disclosure,
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after disclosure, you're actually getting a hard asset. Some value will fluctuate.
11:52
Sometimes it's going to go up, usually goes up, but there are periods
11:56
of time where it goes down, like during the mortgage crisis. But you
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got an asset. Human capital probably is the most valuable capital on the face
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of the planet, but it's intangible. And yeah, I went to law
12:13
school going to date myself. You know, when I went to law school
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back in the eighties, I paid a grand total of fifteen thousand dollars tuition,
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and literally I made back that fifteen thousand dollars in the first six months
12:31
of practicing law. But now it is you pay two fifty to be a
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lawyer, it's going to take you five to ten years to make money back.
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Is there a formula that you use to figure out potential income versus debt?
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How much debt should you take on based on income? That's bad question
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I've been puzzling with for a long time because focus in my book is sixteen
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and seventeen and eighteen year olds and their parents. So I'm trying to get
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them before the barn door, get the whatever, the horse before the barn
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door. Forget the barn, the horse in there before the barn door.
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Yeah, And the true puzzlement to me is the one you've just raised.
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And and John Rodino on your on your June eighth UM podcast raised a very
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incisive question. He said, when the federal government takes away the UM,
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you know that they're not they're not charging anymore, and then and that goes
13:30
away, and all these students, forty three million people you know, with
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this debt now suddenly have to make monthly payments where they hadn't accounted for it
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for three years. He said that it might precipitate a um a jubilee.
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Yeah, that's juvil. Oh, it's definitely going to I mean because sixty
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seven percent who never graduate and they've taken on the debt, they never even
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got the benefit of that degree that they were promised for whatever reasons, And
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we don't need to go into that, right, recession, recession, that's
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what That's what John said, he could precipitate a recession because there's so many
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of these people and it's not an insignificant debt. But that's the that's the
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issue that you've just raised and I don't really have an answer for. In
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the book, I give a couple of anecdotal things where people, you know,
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um just focused on the debt for a year or two years and lived
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in you know, lived in a trailer and did everything they could to get
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the debt. But the harder issue is all these people with all this debt
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and the limited capacity for them to earn additional funds to pay it off.
14:48
Right. So obviously, if you're going for a STEM degree, you're going
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to get a higher income at least in theory, right, So it might
14:56
work, it might make sense there. And if you're gonna potentially get a
15:03
income of two hundred thousand a year. So maybe one year is worth of
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income going into debt. But if you're looking at less than that in some
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other field. You know. The other thing is that a lot of you
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out there get degrees, but you never even get a job in that area.
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But just going to college has benefited you, remembered, Dave, when
15:28
we went to college. They said that the average college graduate, over the
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course of their earnings in a lifetime, makes a million dollars more than a
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non college rest. Now, I don't know if that's true or if that's
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that's very deal. Yeah, that's that is artically true. Let's break it
15:48
down as real quick. That's the Hamilton's study. It's in the book,
15:52
and what it says is that at the median, that's the magic word.
15:58
At the median, that the list that I showed you right at the middle,
16:00
at the median, college graduates make more than non graduates, and you're
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right, it's about a million, little over a million. However, the
16:08
study itself says that some college graduates will make less than some non college graduates
16:18
in the trades because the trades making seventy five thousand and this college graduates making
16:22
forty five thousand. So that premise that you're going to make more money by
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going to college is generally good once you realize that the thing they're talking about
16:33
is the median and you are not the median. You're either at mechanical engineering
16:37
or you're at whatever whatever of course that you go to. Does that address
16:41
your question? Yeah, so, and when you consider that, then you
16:48
should also think about, hey, you might better off in trade school learning
16:52
to be a welder. We're all make close to one hundred thousand first year,
16:56
and that's before overtime. And the welders aren't going away. Or a
17:02
plumber or an electrician or a carpenter. All these skilled trades what we call
17:08
well we call them different things, but just call them dirty jobs. With
17:15
dirty jobs. Often, Hey, you go to a trade school, you
17:19
don't even pay for it normally, all right, but even if you do,
17:26
it just could make a lot more sense than becoming the puppeteer. Yeah.
17:30
And there's a couple of statistics that I think you'll find various of your
17:33
audience will find very answers of late. Let's go back to two thousand and
17:37
nine and two thousand and nine seventy percent of students graduated from college this past
17:44
year. Sixty two percent sorry, went on to college from high school.
17:51
So high school students are walking and voting with their feet. They are going
17:56
to trade schools. That is a good to me, and that is a
17:57
good trend is that sixty two percent of graduates go on to college, but
18:03
thirty eight percent are going into trades, going into community college type degrees.
18:11
And the shift that's going on there is relating to the number of colleges that
18:18
are available because people aren't selecting him. And the most recent statistic is five
18:22
hundred seventy nine colleges. That's three years. That's remarkable. Well, the
18:30
colleges are going the way of malls, you know, ghost colleges, and
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look, you and I we go back to the Vietnam era. I'm a
18:45
little younger than that, but everybody. The trend to go to college took
18:51
off from there because you got a free deferment from the military. That was
18:55
a way to legally dodge the draft. And if you went to grad school,
19:00
at school, whatever law school, you could keep deferring. This created
19:04
a whole thing where college was the be all in the end all and look,
19:08
I went to college law school like you, and certainly it's been a
19:14
benefit to me personally, no question. But a I paid for college out
19:22
of current income because it was so cheap back then, speaking hundred bucks of
19:26
credit at Pace University one hundred twenty eight credits and then your miscellaneous fees.
19:33
It still came in under twenty thousand. Not that Pace was that great,
19:37
but even Ivy League would cost you fifty thousand back then. Now it's fifty
19:41
thousand a semester, and even PACE you wind up owing six figures when you
19:45
get done. Go back to the concept of community college. So my son
19:52
was pretty good student, and you know, luckily didn't have to take on
20:00
student loan debt. But some of the things he did was taking ap courses
20:04
in high school, which automatically give college credit. Then he took in the
20:11
summer a couple of courses at the local community college and they counted both for
20:17
high school credit and or college. So he got, yeah, hey,
20:22
you know this. I learned this from him, basically, and as a
20:26
result, he went to ut Austin. He graduated a semester earlier, so
20:32
that was back then, you know, whatever, it was a substantial savings.
20:37
He workforce six months earlier, so we had six more months worth of
20:42
income. And community colleges, a lot of them don't even charge anything.
20:48
They're free or their low costs. So even if you're going to go to
20:53
regular college afterwards, anybody who's having financial issues probably should go to a community
21:00
college. Overload the credits. Because you go to the state school like New
21:06
York, they have to take all of the community college credits, Unlike when
21:11
you go to a private university they can say, well that one, really
21:15
we can't give you credit for that, right and right so really makes a
21:21
lot of sense, doesn't it. It does, And I'll piggyback on a
21:23
couple of things that your listeners will be I think intrigued by. The basic
21:29
math is two hundred and fifty bucks tuition and fees for an hour semester hour
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of community college twenty five hundred for semester hour of private university. So it's
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ten times different. And the other feature of it is at many community colleges,
21:48
this is cool they use the same textbook as their stay in counter art.
21:52
Like you mentioned dut Austin. So here in Dallas, we have a
21:56
couple of community colleges, and you can look, you can say, okay,
22:00
what history book would reason? Okay, that's it. Now you have
22:03
the exact same great shall at one tenth the cost or thereabouts. And then
22:10
as you're as you're loading up, like your smart son, did you have
22:15
a launch? And look what he did? He finished it one semester early.
22:18
My son at NYU did it exact same thing. He took a whole
22:22
bunch of AP courses. He went to NYUM in his last semester. Because
22:27
of those we didn't pay. It was twenty five Thou's fifty thousand the year
22:32
at the time, but it's twenty five thousand, which we then gave him
22:34
to pay off his student debt. And these are features that you can just
22:40
you know, build into your process. You obviously did with your son.
22:44
But these are not rocket science, they're they're just common sense things that you
22:48
can do. So I commend that for your son. So what about the
22:52
concept these online colleges And obviously every college now combines online and personal instruction,
23:00
but online only schools often much much cheaper. Yeah yeah, so as prestigious
23:10
as private universities. But you know, you get the education. You still
23:15
get your degree. Yeah, I'm gonna I'm gonna take a step back,
23:19
one step back to launch into this. And that is that in the book,
23:23
I talk about education all a cart, which is you're a fast food
23:26
place, or you're a family food restaurant, or you're going to Walmart,
23:32
Argut or Starbucks. Okay, so this trifectic, keep that in mind.
23:37
That trifecto, through a program called Guild, offers to a part time employee,
23:45
a part time employee twenty hours a full degree. It's you know,
23:52
tuition and fees. So if I'm looking at this and I'm thinking, well,
23:56
I'm a limited means and I really want a degree. And by the
24:00
way, there's a couple hundred choices that you've got. So those online degrees
24:03
require one little thing that are different from going to regular school. I suppose
24:08
you'd say they require self discipline. Yeah, so's the fact that you can
24:12
do that trifecto. And each of those those like a Wendy's or content you
24:18
Very Chicken, I've got him in the book. They get the website,
24:22
the Kindle version. You click on the website, you go right to it.
24:25
Typically five thousand, two hundred fifty bucks. So you're working, you're
24:30
getting experience, you're getting ready to be an assistant manager. You're also going
24:34
to school, and you finish up four years with no debt at all.
24:41
So the notion that's of what's available now, I've never seen that stuff.
24:47
I've been researching this book for eight years. I never saw this stuff.
24:52
And I go, well, now it's phenomenal and and and so it's available
25:00
five thousand, two hundred and fifty bucks. I'll tell you one plicanic note.
25:03
UM. A guy that I was talking with in Tucson had a woman
25:07
who was forty years old, completely uneducated. She began as a began as
25:15
a janitor. She found out about this program. Then he had and um.
25:19
Within four years, she got her degree and got promoted to sales manager
25:26
for one hundred and forty K year as from a minimum wage. She said,
25:30
you can do that, and he goes, yep. So these things,
25:36
these things are out there. They're a vailor. Yeah, they're hacks
25:40
college education and the hack it's a hack. Yeah, it's a hack.
25:44
Hey tell you another one that you know, like, it's great when you
25:48
learn from your kids. When I do you, So, my son had
25:51
a talent for languages. He had learned Spanish in high school. Spanish was
25:56
fluent, and you know, he took communications advertising, that was his bent.
26:02
But he learned a couple of languages while he was in college. He
26:07
learned German and then shortly thereafter Dutch. And yeah, the thing is like
26:14
American companies want Americans who are multilingual, who can go to these countries in
26:21
Europe and around the world and understand the language and the culture far better,
26:26
because to really understand a culture, you have to speak the language. My
26:30
failings in life speak a little French, but that's it. But you know,
26:34
he was thinking of going to grad school and I said, Brandon,
26:37
just learned another language, it'll be worth more than even in Europe it was
26:41
fifty thousand dollars to go get a MBA and says, yeah, I'm not
26:48
really into management anyway. So now he's learning a couple of additional languages.
26:53
Every couple of years he learns a new language and his value goes up.
26:57
And not to mention, it's impressive when he an American who can speak five
27:00
or six different languages. Yeah, they're rare. So that that's another hack
27:06
that because it's not something that any career counselor is ever really going to tell
27:11
you, I thought he was crazy when he was taking German in college.
27:15
Why are you taking this? But you know, multiple jobs with big companies
27:19
IBM and a number of startups Amazon other companies that he's been with as a
27:26
result of his linguistic abilities. Yea, at something that I don't really talk
27:33
about. Well, it's interesting because it wouldn't necessarily be his major. It
27:37
wouldn't be, but it was his love. He was trolled by that,
27:42
fascinated by that, and there it goes. It becomes a career. Yeah,
27:47
so you could build skills that aren't in the traditional mold of stem or
27:52
whatever that can gear you up for success far greater than you ever thought possible.
27:57
And I will say that all three of my children more than paid back
28:03
the exorbitant cost of their college education. You know, my daughters were in
28:08
Boston private schools. They're enormously expensive. But you know, ten years down
28:14
the road, you know they may make it back any year now. But
28:19
all these things are available. So again, the book that you need to
28:23
go take a look at. If you have anybody you know who is thinking
28:27
of college, trying to figure out how to pay for it is graduate debt
28:32
free, escaping the student loan matrix. I would call it escaping debt slavery
28:37
or debt servitude. That was an early title. Yeah, that was an
28:41
early title, in ventured servitude. Yeah, and you know it's not bad,
28:45
but there's a lot of options out there. We've got a link in
28:49
the show notes to this interview to the book so you can obtain it.
28:53
If you've got a question for Dave myself, shoot us an email. Kl
28:59
it carry lets dot com. Make sure when you're at the site Financial Survival
29:03
Network dot com you click subscribe because you will learn all these hacks in every
29:08
aspect of finance in business, there are hacks. I mean, Dave,
29:15
I traveled. I used to travel pre pandemic a lot more than I do
29:18
now, just haven't really gotten back into it. But I had like every
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single travel hack that you could imagine and saved me hours and hours. You
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know, it really makes a difference. So if you know the hacks and
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you got some substance, it will take you a long long way. They
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appreciate you coming on. We will definitely talk to you again and be well.
29:42
Thank you appreciate it. Thanks for listening to carry Lets's Financial Survival Network,
29:48
your solution to today's trying times. For the latest, go to Financial
29:52
Survival Network dot com. Financial Survival Network now more than ever, one cross one