This Nurse Managing Student Loan Payments In Times Of Uncertainty - Ep. 45
These are unprecedented times, especially for all of us that work in health care. There is so much that is out off our control. The one thing that we do have control over is how we manage our student loan debt. I’ve brought in a student loan expert with the tools to empower you to navigate the student loan system so that it is working for you and not holding you down.
Brenton Harrison is a financial influencer and speaker who has spent over a decade teaching financial literacy and empowering people with tools to take control of their money. He is the CEO and Founder of UltraBorrowers Academy, a course for high-income earners whose lives have been impacted by a high student loan burden. He teaches strategies for overcoming the burden of debt, juggling family and money, and establishing a financial foothold for those who were never taught the principles of financial literacy. His work has been featured in publications such as Business Insider, Life Happens, Benefits Magazine, and AdvisorToday.
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TRANSCRIPT:
Naseema McElroy (00:01): All right. Nurses on fire. I have the honor of having Brenton Harrison join us. Hey, how you doing Brenton?
Brenton Harrison (00:09): I'm good. How are you?
Naseema McElroy (00:10): I'm doing awesome. So I really wanted to bring you on because I feel like this is an unprecedented time for nurses and healthcare workers in general as far as how this crisis is impacting our finances. And I know that you, are pretty close to some healthcare providers and so, you know, some things first hand or second hand, I really wanted to use this as a way to share resources with nurses who may or may not be experiencing financial hardships, but it's definitely top of mind. So first we'll just dive in with sharing your story and then we'll talk more about what's going on particularly in this financial crisis.
Brenton Harrison (00:54): Yeah, absolutely. First, thank you for having me. As you said, I have a pretty long relationship with people in the healthcare field. I was born and raised in Nashville, Tennessee and Nashville is already one of the healthcare hotspots in the country. Have a HCA here, a number of other healthcare corporations, a number of hospitals here. Uh, and we also have Meharry medical college, Vanderbilt school of medicine. Uh, just some larger medical dental schools where you have, not just physicians, but dentists and nurses, so on and so forth. So I came up in it, not just from a community perspective, but also my father is an emergency room physician and he married my mother who is a nurse and who has two sisters who are nurses. And my sister is a physical therapist. You know, everybody in my family is in healthcare except me. So, um, so, so personally, it's definitely something that's close to my heart. And when I became a financial advisor, which is what I do every day, uh, 11 years ago, I naturally just kind of gravitated towards working with people in that field, uh, which led me to actually starting because of, uh, just the struggles that they have with not just the particularities of healthcare, but particularly student loans to start an online course for people who aren't healthcare and owe a tremendous amount in student loans. Uh, which led me here today.
Naseema McElroy (02:24): Awesome. And we are super thrilled to have you, but it's, it's kind of bittersweet because, you know, I have seen some real like devastation that just happened like so quickly to so many people's finances unlike anything that I have ever experienced and I'm still relatively young. But I've gone through a couple of recessions and I feel like medical professionals have been insulated from a lot of, um, economic downturns except this time, like even like every time I talked to a financial advisor or anybody, they're just like, you're a nurse, you'll always have a job. Three months of emergency savings is just fine for you. But for the first time in my hospital in particular, we have floors that are shut down. Nobody's coming to the hospital. Emergency room utilization is low and doctors, anesthesiologists aren't even getting shifts because elective surgeries and elective procedures have been canceled. So this is kind of devastating for a lot of nurses. And even if we aren't impacted, like I said earlier, like it's top of mind. Like what if? So what do you say in the situation, this unprecedented situation? Like what people who are worried about income, not only just like finances in general, but if they're just going to be able to have the sustainable income.
Brenton Harrison (03:54): Right. And one of the things that you said, which is interesting is you're right, first of all, this hadn't happened before and in any of our lifetimes. And it puts you in an awkward position where if you are getting paid in healthcare right now, it's probably because your health is being put at risk because you're in a high risk department or you could be an area that you thought would never be impacted like the emergency room and you're not getting those shifts. And you're almost looking and saying, okay, how long am I not going to get these shifts? And would it be better if I were just able to get unemployment as opposed to getting one or two shifts a week and trying to figure out your pay. So for people in the situation where they're not getting those checks, it really does put you in their frame of mind where, you have to be proactive about communicating with any lenders that you might have. And just tell them, look, I don't know what my income is going to look like. What negotiation can we answer into in terms of deferred payments or interest only payment if you have credit cards, seeing if you can negotiate a lower rate. Uh, and then also mapping out your savings to see just how far can I go before I need to make some adjustments and figuring out what those adjustments might be. So you know, you kind of have the tendency when you're in a time like this to bury your head in the sand and not want to, to look up and actually pay attention to what's going on. But I encourage people to write out a plan of action. If this happens for the next 90 days, who am I going to contact first to make sure that I've negotiated the best scenario that I can.
Brenton Harrison (05:29): Yeah, I think that's great. The thing that's scary to me is that, you know the statistic that's out there that most Americans don't have any emergency savings or more than $400 in emergency savings. So we know that that's not going to cover a month of expenses. So if someone is, finds themselves displaced just in totally caught off guard, what are some resources that they can access to get cash right away? I know there are stimulus checks out there, but what are some things that some fast cash infusions,
Brenton Harrison (06:08): fast cash infusions would be more so in terms of saving money than finding a place where there's no strings attached to it. You know, one of the things that you're seeing people lean on is this federal stimulus check. Uh, and, and to be clear, getting a check is better than not getting a check, which you also want people to understand that that is simply an advance on your tax filing for this year. So what that means is, uh, for example, if you're due to receive a $1,200 check, uh, then if you were going to get a $1,200 tax refund for the year in 2020, you just won't get one now. That was an advance on your tax refund. So if you are getting a check and you don't have those cash resources, then I would save it. I would put it aside for a rainy day.
Brenton Harrison (06:56): But I would also check with your state unemployment office and your state small business office to see if they have any localized grants or resources available to people in the healthcare sector or for just people in your state in general. Uh, I'm in Tennessee and I know that they have put together a task force that's designed to help find and solicit funding for people who might be on the front lines. So you want to call your state small business office, even your mayor's office to see if there's anything that's locally available for you as well.
Naseema McElroy (07:27): I think unions also, um, if you're a union employee might have some resources to help or they might be a resource as well. But as far as like the advance for the refunds, what if like most people, I know you usually don't get a tax refund, but you've gotten a stimulus check. Well you have to pay that back.
Brenton Harrison (07:49): You will have to pay it back. And that's a great point. You know, um, I'm self employed so I have to pay my taxes every quarter. So you know, a person who has to pay their taxes every quarter or a person who doesn't but still just doesn't typically get a tax refund. You're now increasing what your tax burden will be. Um, so in the scenario of an entrepreneur, if they get a 1200 or a $2,400 check, they're just going to have to pay an extra $1,200 or $2,400 come tax time. So if you don't need the money, I would encourage you to just put it in the side, you know, put it aside for savings. But even if you do need it, I would just be aware, Hey, now I'm going to have to come up with a way to replace that before April, 2021 because that's going to be something that impacts my next tax filing
Brenton Harrison (08:37): Yeah. And what are the biggest things that people can do is decrease their expenses and like you specialize in, most people have huge student loan burdens, but there have been a part of the stimulus is forbeance on payments until September. Okay. Can we talk more about that as a way, you know, like you don't have these payments so now you can say or use that money to help you live.
Brenton Harrison (09:06): Sure, and as we do it, I want to make sure that I separate the type of loans that were impacted by the type of loans that unfortunately weren't impacted. So a lot of people, they heard, Hey, federal student loan payments were suspended until at least September 30th, 2020 well that's kind of a half truth because all federal student loans weren't impacted. If you have federal loans that are actually issued and owned by the federal government, which in most cases means a loan that you took out after the year 2010 then those loans you not only won't have to make a payment for the next six months, which you also won't see any interest accrue on your loans over the next six months. You get credit for forgiveness programs like public service, loan forgiveness and all of those things. So it's a really great deal. So if you have those loans where you don't have to make a payment, I would encourage you to treat it as if you do.
Brenton Harrison (10:01): And if you're able to put that money in savings over the next six months. So if you're, you know, fortunate enough that you're still able to put that student loan payment aside, I would put it aside for the next six months in your savings, not just for your own good, but also that when payments start up, you'll have that money set aside and separately. Now there are also a group of students who might have taken out loans that are not owned by the federal government. I mean they might be backed by the federal government, but they are actually owned an issue by a private lender. Those are typically loans that were taken out before 2010 they could be called Stafford loans, they could be called Perkins loans, which is a type of loan that many people have taken out. And unfortunately those loans were not impacted at all.
Brenton Harrison (10:47): You still have payments to make, you still have interest that will accrue on your loans. So for you, if your income has been impacted, I would encourage you to go through some of the steps that you can take to have your payment reduced. And we can go through some of those steps if you like, but you need to do anything possible to lower all of your bills and your student loan payments should be chief among them. So post 2010 you won't have to do any of those things. Matter of fact, if you made a payment after March 13th, you can actually get that payment refunded to you. But if you have loans that you took out before 2010, you might still have to make a payment and you need to do whatever you can to negotiate that payment down during this period.
Naseema McElroy (11:27): So I know when you are, when people apply for like public student loan forgiveness for example, they have to like with those older loan payments, they would have to consolidate those payments into the pay as you earn programs, right? Is that the same thing?
Brenton Harrison (11:45): So what happens is, uh, particularly with the type of loan called a Stafford loan, they're all these payment programs at federal government offers that are based on a percentage of what's called your discretionary income. Uh, those are pay as you earn plan, the revised pay as you earn plan, the income based repayment plan. There's one called income contingent repayment plan. Well there's one of those plans, the income based repayment plan that lets you sign up for it. Even if you have Stafford loan. And the problem with that is you're doing the income driven plan, but those loans are not eligible for public service loan for you. So you have a lot of people who think they're getting credit wait for it, but then they get kind of towards the end and they find out, Hey, this loan type doesn't count towards the program because only direct loans can be forgiven under public service.
Brenton Harrison (12:37): So the option for those borrowers is they can consolidate those ineligible loans into what's called a new direct consolidation loan. If they do that, they will now be eligible to start getting credit for public service loan forgiveness. They don't get any retroactive credits for payments that they made towards the loans when they were Stafford loans. That might be the right thing for that person to do. However, one of the things you want to realize is under the old type of loan, they still could have it forgiven after either 20 or 25 years under that payment program and they would lose all the credits that they made, uh, for payments that they've made to them. So you know, to put it this way, if you're five years from having your loans forgiven under just the general income based repayment plan, you would want to think twice before you consolidated them and started a new 10 year plan for the public service loan forgivenes.
Naseema McElroy (13:36): That's like super important information and I forgot that there were those other plans. What I meant to say was income based repayments, not the pay as you earn, but so for people that have older loans though in general, would it benefit them to consolidate their loans right now to be able to qualify for zero payments are, are they only doing that for people who were already had newer loans?
Brenton Harrison (14:01): Right. I mean unless you have just been on one of those plans for 11/12 years, I would say for most people it's going to benefit them to consolidate them. Especially I believe you're already in public service. Like if you consolidate the loans and to the new direct loan, not only will you not have payments until September 30th, you'll get credit for those payments even though you're not making them and you'll be eligible for public service loan forgiveness. So I would imagine that for the overwhelming majority of people, it would benefit them to just go ahead and consolidate. You just want to be aware of the fact that whatever payments you'd made on that old plan, to that point, you're going to lose credit.
Naseema McElroy (14:40): Got you. Got you. That makes a lot of sense. So what are some other, the services that you provide?
Brenton Harrison (14:48): So the name of my online course is Ultra Borrows Academy and it's a, it's a program that is, uh, a five segment program for people who we've coined, uh, as ultra borrowers, which is, in our words, just somebody who owns a mortgage worth of student loan debt. So we go all the way from federal loans to private loans with federal loans. We offer services such as figuring out whether you should refinance them with a private lender. Understanding how your interest rates work to make sure that you're doing the best you can to maximize your payments, how to make sure you have the lowest required payment for the income driven plans. And knowing how each of those four plans work so that you can understand which one is the best for you. So we start out and we give you the basics and we build all the way up into some complex concepts because the goal is not to tell you stuff that you can find online. Anybody can go on the federal student aid website and figure out how the payment plan works. Our goal is to show you how to strategize so you can form a plan that always puts you in the driver's seat. So in a time like this, I would want you to know how can I negotiate a lower payment using the rules that they put in place. Place a to my benefit. And that's the goal to teach you how to strategize based on the rules that they've laid out for you.
Naseema McElroy (16:07): You know, you say anybody can access it, but access in the federal you, you know how to read that stuff. And I have two master's degrees and I still, every time I go on there, I'm like, what? It's just kind of like me going to the IRS website. I'm like, what are they saying?
Brenton Harrison (16:25): Well, you know, that's a, that's a great point because they do put the information out there. Uh, but you know, for someone like myself, I'm a decade into it and I do have to read it two and three times at times to really understand what they mean. And that's another reason why we've offered this resource to say like, here's what it said online, here's what that means in the way that you and I are going to speak Monday through Friday. So here's a way that you can understand it and apply it to your benefit. And that's what we offer in the course.
Naseema McElroy (16:55): Yeah, I think that's an awesome benefit because most people in general have no idea of how to apply like all these benefits or lack thereof to their own personal situation because everybody, you know, even though most situations aren't unique, it feels, it feels super unique when you don't know what options you have available to you. I mean, for you in order to repay these loans. And also, I think it's super important what you're offering because it gives people strategies outside of just paying down loans. Like what should you be focused on right now? How should your money be spent right now as opposed to just, okay, well, you know, they're not, they're not charging you for your student loans this month. So, you know.
Brenton Harrison (17:43): Absolutely. And, and you know, and even for the people who are in a position where they have to make, you know, one of the things that I said about those income driven plans is they base the payment off of a percentage of what's called your discretionary income. And that typically comes from your previous year's tax return. So take a nurse right now who may have seen their shifts cut in half. Well their last year's tax return may reflect an income that they're not earning right now. So they might think, Hey, they asked me to tell them what I'm earning once a year and maybe that's not for another six months, so I just have to suffer through this high payment right now even though I'm not making what I was making. But if you actually look at the language on the student aid website, it says that you can ask them to recertify your income as often as benefits you essentially.
Brenton Harrison (18:34): So if you have any documentation from your employer that says, Hey, we're cutting your pay by 50% or Hey, we're reducing your shifts by two shifts a week, you can actually use that documentation and ask your loan servicer to recertify your payment so that you're not paying as much as you were when you were getting five shifts a week or four shifts a week. So taking the bull by the horns and using any of that documentation that you can is actually a way to reduce your require payment right now for those who still have one
Naseema McElroy (19:04): and do they actually recertify like every year. What do they give people? Like an extended amount of time to have this, a lower payment. Because when do they actually ask you to submit your income verification?
Brenton Harrison (19:19): Right. So for most people is based on when they initially started paying. So let's say that you graduated in may of 2020 and you have a six month grace period. So maybe in November they ask you to, you know, give them information saying what your pay is to calculate your payment or for you it may be now that every November moving forward they're going to reach out to you to certify your income. And for too many people, they go through a situation where they've had a negative circumstance that impacts their pay, but they don't call their loan servicer because the next November hasn't rolled around. But you actually, whenever you've had anything that's impacted your pay or impacted the number of people in your household. For example, if you are pregnant with a child, you now can call them and say that you have a new member of your household. You don't even have to have the child yet and it will actually reduce your payment based on the way that they do that calculation.
Naseema McElroy (20:18): Wow, that's so much game I think that I didn't even know and that's why you're an awesome resource. So how can people reach out to you getting contact with you and potentially join Ultra Borrowers Academy?
Brenton Harrison (20:34): Yeah, so the quickest way is to go to our website ultraborrowes.com we actually right now have a free resource there for people who go to our website and we have actually a cheat sheet for the different income driven, the plans we've talked about.
Brenton Harrison (20:48): So I encourage people to go to ultra borrowers.com and download that resource. You can also email us support@ultraborrowers.com with any questions that you might have about the program and we'll be happy to help you.
Naseema McElroy (21:01): That's awesome. Thank you so much for joining us. You just drop in all kinds of gyms. You're a wealth of knowledge, and I hope you guys in this challenging times in these challenging times can find a little bit of hope and know that there's resources out there for you and know that we got your back and you're feeling it too. So even if you aren't a nurse, a lot of people are out here impacted. And so just I appreciate you and what you're doing for the health care community and send lots of love to your family.
Brenton Harrison (21:37): You as well. Thank you for having me. Thanks.
Hey there I’m Naseema
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