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