Raising Financial Freedom
Raising Financial Freedom
How Can Your Child Avoid Student Loans with Brad Baldridge
#047 With inflation and gas prices at an all-time high, it’s time for us to become more aware of our spending, avoid unnecessary expenses, and decrease the amount of debt we’re incurring. One of the major types of debt Americans incur comes in the form of student loans for higher education… and they often stick around for many years! So, how can we help our children avoid student loan debt? Today’s guest is going to teach you!
Meet Brad Baldridge, a college funding specialist and college planning expert who helps parents navigate college planning and expenses through his private practice, blog, and his podcast, Taming the High Cost of College.
In this episode, Brad explains why it’s so easy to get into student loan debt, how to find the best college for your budget, and realistic ways to help your child pay for college without incurring a large student loan debt. Is it worth going into debt for a college education? Listen in to hear Brad’s candid thoughts on the value of a college degree compared to skipping college and going right into the workforce. Plus, Brad shares a few tactics, like hiring a coach, that will help your kids plan their college education, pick their major(s), and get the most bang for their buck.
“It’s a complicated game and you’ve got to understand the rules so that you can use the rules to your advantage… Colleges are a business. It’s their job to help you go to college but it’s not their job to keep your costs as low as possible.” - Brad Baldridge
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Listen to Taming the High Cost of College
[00:00:00] Eric: Welcome back. This is raising financial freedom and I am your host, Eric yard. I hope you're feeling good cause I'm feeling good. My family's good, but the world is not good at this present with inflation and gas prices at an all time high it's time for us as consumers to tighten up our spending and decrease the amount of debt we are taking on at the present.
[00:00:25] And one of those debts I'm going to be talking about today. Education. This is a major debt that we take on in our lives, which sticks around for quite a while to our adult age. So what we're going to talk about today is how can our children avoid student loans all together. And our special guest today is going to help us out with just that joining in on the discussion today is Brad Baldrige with a college funding specialists.
[00:00:51] College planning experts. Brad has been helping parents for about 20 years now and he has been doing it to his private practice log [00:01:00] and also being the host of his own podcast, taming the high cost of college. I know when I was looking to go to college, my way of avoiding student loan was not to even go to college or get a scholarship for the full ride, but never fathom that it could be done.
[00:01:16] So if you want your child to skip educational debt, I think it would be in your best interest to listen, especially to be hearing it from someone who's been doing this from since 1988. Before we get into the show, I wanted to talk a little bit of financial literacy news. It seems Florida. And Senate pass legislation requiring high school students to take financial literacy and money management class in order to graduate, the bill is now headed over to the governor's desk to be signed.
[00:01:45] That will mean in order to graduate high school, you would have to pass the first finance class or money management class, which will be half a credit. So kudos to Florida. It's definitely a start, but you and I know it's not. [00:02:00] But I guess he got to start somewhere, right? They say the class would teach about types of bank accounts offered opening and money, managing a bank account, basic principles of money management, completing a loan application and local tax assessments.
[00:02:14] I'm not too thrilled with that combination, but I, but I don't think that is set in stone. So we'll see. But that was state you reside in parents should definitely urge legislation to start something like. If there's no financial literacy in that state at all, because it needs to start and even taken even further than later on.
[00:02:34] So as we try to get in a word from our sponsor, dad,
[00:02:38] Host daughter: mom, get him.
[00:02:49] My dad is taking too long to start the show and I'm taking over as the producer. So let's start the show. Now,[00:03:00]
[00:03:02] Introducer: have you ever wondered why some people seem to have it all financially do well off parents simply hand their children. Or is there more to this welfare? Welcome to raising financial freedom. The podcast, we are here to talk about everything you never knew to teach your children when it comes to starting their financial future, the principles behind wealth and methods that are out there.
[00:03:22] The teacher checks. Personal financial freedom. There was no real tricks to earning other than money. We are here to discuss, teach and grow with you. Raising financial freedom, the podcast with your host and concerned parents, Eric yard, let us get right into today's show.
[00:03:45] Eric: So now everything right now is really. Gas vehicles, food, even known interest rates have gone up and current inflation is adding fuel to this flame. So now than ever is the [00:04:00] time to stop budgeting and even avoiding certain expenses that could slow down your money goals. Now life still moves on and your children still need to go to school.
[00:04:12] Now, whether or not the child wants to go to school is a decision that the child must be. Now, when it comes to college, we all know it comes with a cost and we've all heard horror stories from our friends. Maybe we've been a part of it, but when it comes to school loans, why is it so easy to get heavily?
[00:04:32] Brad: The challenge of student loans is in some regards, they're almost unlimited. So it's the easy solution for a lot of families where they just say, figure anything else out. So we're just going to sign up for the loan. So I guess as far as the state of the loans, there's been a lot of politics around getting them forgiven, which doesn't make a lot of sense in many ways, because if they're so bad that we should forgive them, then we should stop issuing them.
[00:04:56] If we stopped issuing many people, wouldn't be able to afford to go to college [00:05:00] anymore. So. That's a challenge,
[00:05:02] Eric: seeing how easy it is to get alone and how quickly it can get out of hand. Now you're thinking, how can I skip that whole scenario itself? But let's put it out there. It would be great if your child can have taken out loans for college, we all know having our child, not having to worry about that after they finish college and they start the adulthood gives you the parent, a warm feeling on the edge.
[00:05:30] Because it is one less debt that they will have to worry about later on in life, which we all know sticks around for a long time after we get out of college. So if your child is not getting a full ride scholarship through college, you need to be realistic. Come up with a budget and a plan also to remember that you and the child are a team.
[00:05:52] Brad: For sure. If you work together as an example, scholarships. One avenue to help pay for [00:06:00] school. Now, the likelihood of a typical student getting enough scholarships to make school ultimately free is very, the ads are very small. It's not likely, but they can help. And a lot of the private schools, as an example, typically you can get scholarships for at least the right students can get scholarships that make.
[00:06:19] Reasonably competitive with some of your other options, maybe the flagship state school or the flagship state school in many states would be between 25 and say 28,000. And then maybe you can find us private school that will also be 28, 30,000 a year. But if you think there's something of value at the private school again, my son looks.
[00:06:39] Our state school and here in Wisconsin, university, Wisconsin is big and overwhelming and he looked at it and he was just never interested. So he wanted to look elsewhere and find something that was a better fit for what he was trying to do. Other people look at that big state school and say, oh man, I'd love that idea.
[00:06:56] They got the big football team. I can't wait to be a part of that [00:07:00] crowd. And that's what gets their jazz by that. You know, again, that's part of the challenge as well as your everybody, not everybody drives. Four-door sedan or a minivan or a pickup truck. Everybody has their own tastes and desires, same thing around college.
[00:07:15] And so finding the one that's a good fit, but also at a good price, I think is the challenge. So I guess first is to realize that it's a complicated game and you got to understand the rules so that you can use the rules to your advantage. I think that's where most people don't realize that colleges are a business.
[00:07:34] It's their job to help you go to Kyle. But it's not their job to, you know, keep your costs as low as possible. Every dollar that they save, you costs them. So they want to get the cost down to where you'll come, but they don't really want to go any lower than that. Just like our salesman, right? If you'd have bought the car for 30,000, why would he sell it to you for 28?
[00:07:53] He can get 30. But if you know the rules, you understand how the car system works and you got [00:08:00] 28,000 really is the fair price. Eventually you might get there with the car dealer because the rules. With college. Most people don't know the rules and they stumble through it. So I guess that's step number one is to figure out if you want to avoid loans, but don't set yourself up for a disaster.
[00:08:16] Find the schools that there's two steps to the process. One is find a school at a good price. And then the second step is pay for that price efficiently. Know if you bought a car, a four door sedan for $50,000 and you were really happy. But then you discover that the, essentially the same car was available across the street for 25,000.
[00:08:35] All of a sudden you say it doesn't matter how good of a deal you got. So to speak and be like, but I could have done that's college. Right? Most families don't know the price of all 36 colleges in their city or town or whatever, or within an hour drive of where the. They have no idea. And again, they might be able to look up the published price, but what they don't really know is what the price would be for them after scholarships and after grants and [00:09:00] after federal aid and after all the different pieces.
[00:09:03] And so starting there, will I qualify for need-based aid like wildfire for merit aid? Do I understand those three major types of scholarships? There's the know scholarships from the institution. So for the colleges I'm attending, when they come in. Merit and they come in need based. And then there's the scholarships from everywhere else.
[00:09:23] You know, I have this scholarship guide for busy parents that kind of walks you through because you don't want to spend a lot of time chasing scholarships. That just aren't a good fit. You're not likely to win them. And again, you'll spend a lot of time spinning your wheels and you want to focus on the scholarships where you do have a good.
[00:09:39] And understanding what, you know, based on your students' academics, based on your financial situation of the family, you might be more likely to get married. Eight are more likely to get need-based aid, or maybe you're not going to get any of those things. And you need to focus on the outside scholarships or maybe all three make sense.
[00:09:57] So that's, so I have a course [00:10:00] where we help families figure it out. And I, in that course, the first step is to come up with a preliminary price. At your local state school, just cause again, there's not a lot of aid typically at the state school. But for many, for most states, they're probably the low cost option to start with.
[00:10:20] So, as an example, here in Wisconsin, university of Wisconsin, Madison is about 27,000 all in as tuition room and board books, fees, beer and pizza. It's the whole cost of a typical student going to that school. And it's the top school, right? It's in the top 50 top 75, something like that. So it's a good challenge.
[00:10:39] As many Wisconsinites, aren't going to be able to attend that school because they don't have the grades to get accepted. Because again, they take the top 10%, top 15% of the kids at a particular high school. Then that day they can't take everybody. So they have to be selective. But if you can get into that school, you know, it's going to start at 27,000 and that covers everything, including [00:11:00] personal expenses and that type of stuff, but actual tuition.
[00:11:03] Room and board would be more like 24,000 or 23,000. Let's say now we already know the student can borrow 5,500. So now we're from 23. We're down to about 18 typical student. What's reasonable kind of student earned three or $4,000 a year, working summers and weekends. And maybe during the school year, maybe not during school, but somehow.
[00:11:22] Three or 4,000, if you say, okay, that's possible. Okay. So now we're referring to 18. Now we're down to 14, so that now we're running out of options. Now we could do some scholarships maybe for that. The parents could contribute for that grandma and granddad could help kick in for that. Or we could borrow that.
[00:11:38] So now all of a sudden it's not quite so onerous now, Madison isn't the lowest cost state school. Madison is probably the most expensive state school here. So you could go to some of the other state schools. For three or 4,000 less. So we got, I forgot what I just said there, we got it down to what, 14 or something I said, so now maybe you can get it down to 10 by choosing a lower [00:12:00] cost state school.
[00:12:02] And then you can get into there's other strategies around living at home or starting at a two year school and all that kind of stuff and all that's legitimate. You need to, you know, so maybe that's an even lower cost option, but if we say, all right, the target is what I just mentioned. The state school.
[00:12:18] Parents need to chip in 10. And again, the students already bar on the 5,500 and well, maybe we were for facil five shorts. Maybe we shoot for some scholarships for that, or maybe grandma and grandpa, or again, maybe we have to borrow them a little more than that. Or maybe mom and dad borrow it in their name and they pay that loan.
[00:12:34] And again, every family it's a little different, but that's the reality. That's that's again, that's the price to beat now sometimes. Private school or get states. Cool. Can be in that neighborhood sometimes better than that. Oftentimes five or 10,000. More than that, it's not unusual to have your state schools be net 15,000 or net fit 20,000 or net 10,000.
[00:12:56] Some of your other choices, be 5,000 more than that, or [00:13:00] 10,000 more than that. And again, it's just like buying a car, right? Is it worth $60,000 for that car or this car over here is 50, but in that car where there was 40 and that one's 30. Why would I spend 60 when I can spend 30? Because there's something that you like about the more expensive.
[00:13:16] Or realistically, you wouldn't do it right? If you like the cars equally, why wouldn't you take the cheap car? And that's the same thing with college, right? If you like the low cost, well, life's good. You picked a low cost one. That's not the reality often where you roll into in doing say this. I like this school and it's got smaller class sizes.
[00:13:32] It has the exact major I want. Et cetera, et cetera. I really love it, but it is 5,000 more than another option. Okay. Well, is it worth 5,000 times, four years, $28,000 to make it happen. And then as a parent, again, if you're trying to avoid the loans, you can essentially say, that's not my money you're spending.
[00:13:48] It's your money you're spending. So I'm going to, co-sign a loan to help you borrow to make this happen. And again, we don't like loans, but that's the reality. We don't have the
[00:13:56] Eric: money. And there it is with the steps that [00:14:00] Brad just taught you about. You need to get that college bill to close to zero, as much as you can leaving loans as a last resort.
[00:14:08] At the end of the day, you might be taking out a loan from five to probably $10,000. Maybe what the brain point is, is to exhaust all means necessary before looking to take out. And if you and your child choose to take out loans at the end of the day, it must be treated as the most important financial decision that your child would be making to make them understand the seriousness of the situation.
[00:14:36] That this is real money that needs to be paid back at some point
[00:14:40] Brad: in time. So here's the rules, by the way, when I co-sign alone, you pay back that long. You are not allowed to not have a roommate until you've paid off this loan because I co-signed it and I need to pay it off and you're not allowed to buy a new car.
[00:14:55] I see situations. And what really drives me crazy is [00:15:00] working with a parent who's delivering pizza on Friday night because they overextended themselves. And so wait a minute. Why isn't the student delivering pizza on Friday night? I think you got, we've got this little confused here. Something's wrong.
[00:15:12] There there's a lot of parents, although that bullied. That paying for college is their job and they'll do whatever it takes to get it done. Uh, often almost again, lots of some, and again, some of the students that were parents are working that hard and doing that to make it happen. But some of those students appreciate it, but I've seen situations where it doesn't seem like the student really does appreciate it and realize, again, the typical teenager just doesn't really understand finances in the real world.
[00:15:44] And it's the parent's job to talk about it and put some reality around it. But another is another great example. Is do you have kids if your own, by the way? Yes,
[00:15:53] Eric: I do. I have a little girl, 10 years old, 10 years
[00:15:56] Brad: old. Okay. So. Does she have her [00:16:00] first phone yet? Nope. Nope. Okay. So the freshers going to start mounting soon and every birthday and every Christmas, all that going to cross your mind, if was it time?
[00:16:11] Should we, at some point they'll probably get on the phone and I didn't, I don't know when, I didn't know what you believe, but a typical teenager gets a phone somewhere and then sometimes, sometimes. 16 or 17 or 18 in some households, you know, gee, mom, if you tired of dragging me around all my activities, if we had another car, I've kept my license.
[00:16:30] Now I can take myself as some parents like, oh my God, that'd be so great. And the next used car shows up in the driveway for the kids to drive around. Right. And so the typical, and again, this is the typical suburban family where, you know, now that kid has no idea, the a thousand dollar phone or the $10,000 car.
[00:16:47] Just appeared because he thought it would be a good idea for it to be around their general mindset is the next step is college and college should just appear like the phone did and the car did, you know, you just shaped the money for your [00:17:00] dad. That's how you. I think, I don't know how it works and they don't really understand that a thousand dollars and $10,000 and a hundred thousand dollars.
[00:17:07] There's just so appreciable differences around the sacrifices involved. But to them, they're all big numbers. They'd never seen that. They'd never earned that kind of money. So it's not a monopoly money to them. Okay. We do it on purpose. We want to protect them from that. Those worries.
[00:17:23] Eric: This is the reason why raising financial freedom was started.
[00:17:26] The parents, us teach the children about the numbers. They must teach their children financial literacy. So they know the difference between a thousand, 10,000, 50,000, and more importantly, that interest as being tied to these loans that will boost the actual amount. Which is the true number that you will be paying back at the end of the loan.
[00:17:49] And it's up to us as parents to make sure their eyes are wide open with financial literacy. Remember big business is trying to get as much money as they can out of. [00:18:00] Can you remember the last loan you've taken out, where they told you the bottom line of the loan you can't. Cause they're not going to tell you that is something you are going to have to figure out every time you take out a loan.
[00:18:12] And once you see the real number, you might just change your mind, picture a price of a home being changed to the bottom line or the car that you. Price changed to the bottom line at the beginning of the deal, a lot of people will have second thoughts and also might even change their mind. Once you see the $400,000 house that you're paying for is actually closer to 600,000 after the loan or the car that you're paying for, which is $30,000 is actually closer to $55,000 after the loan that you agree to pay.
[00:18:51] Now what if you're a parent just trying to figure out how can you pay for school or help your child pay for school with the rising costs of school [00:19:00] every year, knowing without a shadow of a doubt that they do want to go to school.
[00:19:05] Brad: Right? And again, I think there's a, there's no simple do this for everybody.
[00:19:10] And that type of thing, I guess in general, I think it as an example, a typical. Student that's rolling into college from high school is going to have to report mom and dad when they fill out their financial aid forms. And as incoming freshmen, the most they can borrow is 5,500 as a sophomore 6,500 and as a junior and sees me or 7,500.
[00:19:30] So the most that they can borrow is about 27,000 for the four years of college. Now on top of that mom and dad in co-sign loans. So that way the student can borrow more mom and dad can actually borrow so they can. Sign up for a plus loan or get a private loan of their own or use their home equity here.
[00:19:48] And there's lots of ways that you can borrow some are student loans specific or college specific. Some are just general debt, right? You can put college on a credit card if you want. And again, I don't recommend it obviously, but so there's lots of ways to [00:20:00] borrow for college and it's, but the typical student is not the one that's causing this a hundred thousand dollars.
[00:20:07] We hear you. We hear about that. The student has a hundred thousand dollars in student loans. Somebody helped facilitate that. Or that student went on to a master's degree or something along those lines. And we can't have it both ways right now they make it relatively easy for people to borrow money so that they can afford to go to school.
[00:20:27] And part of that process is also, they make it relatively hard for you to discharge them in bankruptcy as an example, because if you could discharge them in bankruptcy, then the interest rates would be more like credit cards and nobody would be interested in loaning money to a stupid. Who then clears the slate by immediately filing bankruptcy so that doesn't work.
[00:20:46] Nobody would want to be the lender in that situation. So there's, it's not as simple as people will lay it out to be first of all. And yeah. And so the parent now the parents, they're the ones that have unlimited access or nearly unlimited [00:21:00] access. So the parent plus loan, which is a loan to the parents paid back by the parents.
[00:21:05] That's the loan where you. Myra, whatever you need to cover the whole cost of college. So if your student gets accepted to Harvard, but you could borrow the full $80,000 as a parent to help your student go to Harvard. And again, I'm not saying you should, I'm saying you could. So the other thing is one of the pieces that most people don't realize is a typical.
[00:21:23] Student's not getting this in this mess all by themselves. And there's probably a parent or someone that was co-signing or something, someone facilitated the mess. And I think that's the challenge. And up until. 2000 2005, 2010. Most college degrees were quite a bit more affordable than they are not. And most of them paid well enough that it didn't, it didn't matter that much.
[00:21:47] You could go to school for four or five years, probably get something, some sort of reasonable pay because you have the degree and, and the, and it made out you made out, cause you had to, your pay would be higher because he had the education and it still [00:22:00] works that way. And a lot of the quote, unquote, higher paying majors.
[00:22:03] So if you gotta have an engineering degree, there's a lot of room to make mistakes. Cause you start out at the reasonable salary and it climbs pretty. And so if you have a 500 or a thousand a month loan payment, that's not really the end of the world. You're probably making a thousand a month more than the average, Greg.
[00:22:20] So theoretically you should be able to afford it. But again, that's really just covers up for the bad planning and colleges realized that while they can raise the prices and kids still come, so why wouldn't they raise the prices? And then the government got involved and said, now, not only do you have to provide this service and that service, but we want additional services for people that needed extra tutoring, and you need to have a police force to keep these kids safe.
[00:22:45] 24 7, your response. If a 20 year old is on your campus and they go do something stupid, we're going to hold the college responsible. So now the colleges have to have their own police force and figure out how to manage their students and that type of thing. [00:23:00] And more regulations around again, colleges have a bunch of old buildings.
[00:23:03] They get declared a national monument or whatever, and now they can't tear it down. And if they repair it, they have to make it compliant for all disabilities and that kind of stuff. So now they're trying to figure out how to put an elevator in a building that was built 200 years ago. Of course. So they have a lot of extra expense.
[00:23:20] They have healthcare and mental health care and all kinds of stuff. That's all part of the college process. And quite frankly, a lot of the customers, the parents and the students. I appreciate that stuff and want that stuff. But now they also have to pay for that stuff. If it was just, we're only going to give you the core classes so that you can get the job that you're desiring and we're not going to do all this other stuff.
[00:23:42] We're not going to figure out where to, how was you are not going to figure out how to keep you safe. We're not, we don't have tutoring services and all that kind of stuff. All that stuff is extra for you. Or just not available. It would be a different situation. And the other interesting thing of course, is nobody designed it this way.
[00:23:58] Nobody said, oh, this is how we're going to [00:24:00] make college work. It was again, lots of people rolling out of world war II that they realize that. There was a lot of workers that could use a better education. It was getting it more and more obvious that more education was needed for a lot of the jobs that were coming online or on things like engineering and managing corporations, then accounting and all kinds of different things.
[00:24:20] Just, we need more educated workers. So they invented the GI bill and a number of different things and put things out there to help, and then more things out there to help and then more things and then loans. And then. They just kept adding things as, until we got to where we are today and nobody necessarily went back and said we had this program and that program, and they don't really work well together.
[00:24:43] What should we, they just, again, kind of bolting things on and adding things and subtracting things and politics would of course get involved where someone would say, if you're willing to do this, then we can allow that as well or. It had to go through the political process, which often allows politicians then to add or subtract [00:25:00] something that maybe didn't make a lot of sense, but they needed it for some political and, and wow, here we are.
[00:25:06] Where, and of course there's another more complicit in this as well, which is again, the, the typical employer and looking for employees where they can now. Put it out there that you must have a college degree and they still got plenty of qualified applicants. And matter of fact, they got the higher quality applicants, typically, because if you said just high school, then again, these days high school is not necessarily that challenging many high school kids have a tough time reading and doing basic math.
[00:25:35] And so if they said, we're going to raise the bar, you have to have a four year degree and they still get enough qualified candidates and they don't get in trouble for discriminate. It's a win for them. Now, this is what I get, and this is something that's been going on for years and years
[00:25:47] Eric: now, just hearing that she got to access self, is it even worth their time going into debt to get a job in order to pay off that debt?
[00:25:57] That doesn't sound right to me. So at the [00:26:00] end of the day, is the juice really worth the squeeze
[00:26:03] Brad: just recently with many corporations struggling to find work. They're not realizing that other college degree that we require isn't necessarily needed for the job. It's just a way for us to get higher quality applicants.
[00:26:17] But now that we're not getting enough applicants in general, we now have to be more willing to look at people that might have the experience doing the job, but maybe didn't get the formal degree. So there's that cohort. And then the other part of that is also where I can't get the next promotion without having a four year degree.
[00:26:34] So now people are saying, I'm not good. I know the job I can do the job. I, nothing I need to learn in college. I just need the damn piece of paper. So now there's people out there just saying what's the least amount of money and the least amount of effort to get the piece of paper so that I can say I have a degree so that I can get the next step, whatever that might be.
[00:26:51] And we see some of that going on where, you know, is that education that you're getting even worthwhile? Probably not, but it's [00:27:00] again, part of the system. So. Ideally, my education is for education, but that gets convoluted and confusing. And again, the math works. If you say, if I have to borrow $50,000 to get my degree finalized.
[00:27:14] Hmm. I get the next rung up on the promotion ladder and it pays me an extra 15,000 a year. I'll do you know? I guess it's worth it. Cause I, my loan payments will only be 500 a month or whatever it is. So doing the math I'll come out money ahead and let's go sign up. I always use the example. There's two ways you could get involved in nursing.
[00:27:32] If that was your desire, your chosen profession, so to speak, you can, there's various levels of nursing. One of them. Prizes. So to speak is to have that four year nursing degree. And there's a two year nursing degree and there's shorter and easier nursing degrees than the four year degree. And then of course you could also go on for a nurse practitioner and advanced degrees on top of nursing.
[00:27:51] But if your goal is maybe first goals, I need to get a four year nursing degree. One option is if, especially if you don't have a lot of funds and so forth, you could say, well, I'll just start with. [00:28:00] The associate degree or even less, I'll just get to go get the nursing certificate. That'll get me in the door.
[00:28:05] I can start working at the lowest levels at a hospital or nursing home or work. I can use that and then use that money and go to school part-time and after working hard and living like a college student for eight years, I'll have my four year degree and then I'll not have any debt. I'll have a four year degree, I'll have a good salary and then I'm off to the races.
[00:28:22] But mathematically, you could also say, well, just go borrow whatever you need to do. Get that four-year degree. Once you have the four year degrees, you start at 25 or 35 or $45 an hour. And depending on where you are and that type of thing. So you make good money and you can work overtime a lot of the time and you can work a swing shift and work nights and holidays and get paid even more.
[00:28:43] So it was a good chance you can make good money and pay back all those loans, especially if he's continuing to live like a college student. Cause remember, we're comparing this to the eight years of living like a college student. So if you live like a student or for eight years, which means you graduate with a four year degree, but you continue to have three roommates [00:29:00] and eat Mac and cheese all, if you did that.
[00:29:02] You'd have a lot of extra money to pay down the loans. Now, the reality is most recent college graduates won't do that, or didn't do that because once you work hard and get your degree and you have good income, you immediately need a car and an apartment by yourself. And. Sure to put it in the apartment and you got to go out with friends and you can learn how to spend the money.
[00:29:24] Before we go back to that first task, which was take care of those loans before they get out of hand. So, so loans are a challenge and sometimes they're a necessity too. I often talk about families that spend crazy amounts of money on college, and there's nothing inherently wrong with that. People spend their money, how they many foolish ways colleges, one of the many potentially, and then maybe even be foolish in some people's.
[00:29:46] There's cars out there. That'll get you from point a to point B for 30,000, $40,000, shiny and new, and there's cars out there. That'll get you from point a to point. At 125,000 and they really do the same job, but yet they're [00:30:00] three or four times as much. And a lot of people say, well, that's not worth it.
[00:30:03] I'd never spend that kind of on the other car. And that's true. Many people wouldn't, but some people do so obviously they think it's worth it. And is it wrong that they think it's worth it? No, it's good. And one guy's opinion and there's many different reasons in sky. You gotta say the same thing about school.
[00:30:18] Now. It's one thing. If you're giving up the lake home so you can spend your money on college. It's another, if you're saying, well, I'm going to bury myself in loans in order to do this college, then you know, you really got to understand the consequences. And then I think the other challenge, which just frustrates a lot of people, and then you also have to live with those consequences, where again, people haven't done their homework and they spend a lot of money to get a, an expensive, fancy degree.
[00:30:42] You only do to discover that it doesn't qualify them for work. That pays well enough to warrant the kind of money they spent. So the whole is college. When you started doing the math equation and that's another slippery slope in that it could be worth it for some and not others, even the exact same program that [00:31:00] if the exact same school, it's exact same price because of what you do with it and how hard you're willing to work.
[00:31:04] You know, there's more to it than I got a degree from the school. But what else did you do while you were there? What kind of network did you. How hard did you work once you got out of school to get the promotions at work and that type of thing. So I think there's many paths to, if you went and talked to, I don't know, say 10 successful engineering managers that, uh, you know, like Google or apple or someplace, that's got a lot of veterans.
[00:31:28] And chucked to 10 managers and learned about their path. There'd be 10, probably dramatically different paths that they took to get there. And they all had to the same place. So may have cost more than others. Some may have been easier, so to speak than others, but in the end, when you talk to them, A lot of the people around them, that type of thing.
[00:31:47] Most of them say maybe it wasn't the, it was the right path for them because they can't imagine how they would have gotten there any other way, because that's what they know. And, and that's the reality. Talk to generally you talk to successful people when they, they have [00:32:00] these twists and turns in their career and their education, et cetera, et cetera.
[00:32:04] And they didn't know they were coming. And what they took advantage of what they could when they could. And it got them to where they are now, it's bread
[00:32:11] Eric: hidden, so many key points. You can hear the experience behind his explanations. You can also hear that there's repetition behind his scenarios, which means he's seen it time and time.
[00:32:23] Which makes you wonder why is he doing this? Is this something that he enjoys doing? I got
[00:32:28] Brad: involved in the financial industry. I actually have an engineering degree and of did a sharp left turn 25 years ago or so, and said, I think I'm going to get involved in the financial industry instead of engineering.
[00:32:40] And I enjoyed it and worked in it. Part-time in the evenings and then got more and more involved. And then about 15 years ago, it was when. Really started to come up on the radar, where talking with some of the people I was working with college would come up and it's getting to be more expensive than they were starting to talk about.
[00:32:56] Or should I save more or how can we afford this or we [00:33:00] didn't save. And now we're stuck is really expensive and then it just kept getting worse. So it'd be a bigger and bigger piece of the puzzle for most fans. And I realized as I started working with families, that there's a lot you can do, but most people don't really understand, again, no need-based aid, merit aid, scholarships loans, when you've got two or three kids at home and they're all teenagers.
[00:33:21] The last thing you want to do is sit down for a Sunday afternoon and try and figure out all the gobbledygook around college. At least for many families. Again, some people enjoy it and they jump in. I enjoyed it. I jump in, but again, Everybody's thing, right? Just like some people I'll get I'll date myself a little bit.
[00:33:38] There was a time when you would change your own oil, because it would say save you a little money these days, almost nobody does it. Or even change your brakes, or it was possible to work on your car. You didn't need to have all the fancy equipment, so you could do stuff at home if you wanted. And if that was your thing, And you enjoyed it.
[00:33:54] And some people did well, then it was, it didn't seem quite like a chore. Well, cleaning the house, kind of the same thing. You can [00:34:00] either clean it yourself. Or of course your kids are kind of your kids or pay your kids or hire an outside service to come and clean your house. And some people say that's money well spent because either I wouldn't, I wouldn't do it.
[00:34:12] And I get myself in trouble with my spouse. So I better, I'm better off to do. Make sure someone comes and does it for me. And that's where the business was launched is I realized that many people needed the help. It's very confusing. I can add a lot of value. Often I save a lot more than I cost, started building resources and courses and podcasts and all that stuff to get the word out there.
[00:34:33] And I think that's our biggest challenge now is a fewer. Student came to you or your daughter came to you and said, dad, I think I really loved to learn how to play piano. Do you know how to play piano? No. So you say, all right, well then I guess I'm going to go learn how to play piano so I can teach my daughter or maybe that doesn't seem reasonable.
[00:34:53] Maybe I'll hire a piano instructor, someone that has the expertise already and not necessarily someone that knows how to play the piano. [00:35:00] Someone that knows how to teach the piano. Again, there's a difference, right? You could be a fantastic piano player and not know the first thing about teaching a typical ten-year-olds how to play the piano.
[00:35:09] So you, but when we can start talking about college, there's a whole, because it's gotten more expensive and the cost of a year of Coggin. As an example, when I went to college, it was not unusual to have someone that was in their sixth year of college. Cause they changed their major three times. College wasn't so expensive.
[00:35:26] So it didn't matter that much that they were attacking on a Euro tech here and there because they couldn't figure out what they wanted to be when they grew up today. If you don't know what you want to be, when you grow up and you add a couple of years of college, that's a very pricey challenge. It's probably worth it to spend more time to try and get it right the first time.
[00:35:42] Again, no guarantee you actually will, but at least maybe you can try and maybe you can reduce it by one iteration. So the changing it four times, because I worked at the first time and now I'm all going to do it twice for the undecided or whatever it is, putting the time and effort in the head of time, because it's such a high price.
[00:35:59] If we can [00:36:00] save 10 or 20%, but gets to be a big. And worth our time and effort. Now, again, many people don't have the expertise or the patience or whatever it might be to actually get involved in it. And that's where, again, there's people out there now that will help students with testing and test prep. If that's what they need help with, help them choose what and figure out what they want to be when they grow up.
[00:36:19] How. Choose colleges and career paths that are appropriate for them, just like theirs. In the old days, we played baseball by taking our stuff to the local park and whoever showed up, play baseball. Now parents have Lee organized leagues and higher umpires and coaches. And then for the kids that are really into it, we can, if we choose, take it to the next level and hire a batting coach and the pitching coach.
[00:36:41] Get on a select team that travels and competes at a higher level. And you know, the same could be said about college. Now, if you can hire the expensive coach, you can hire the general coach. You can hire someone like me that helps you with finances. You can take a course or read a book, but it's not, again, it's one of those things where most people either are [00:37:00] going to have to learn how to do it so that they can do it for themselves or outsource it in some way.
[00:37:04] And again, if you don't have to, you can just do what has been, and that's where. Um, to the student loan issue, that's where, you know, a lot of the student loan problems have come from is didn't know what to do. Didn't do it well. But here at the end of the process, the college says I can borrow another 35,000 and we'll I problem solved.
[00:37:26] Oh, well, I guess we're stuck. We have no, we're not canceling college. So I guess we signed here and it happened that way. It's not like they intended to go out and overspend on college. They just didn't know what they were getting into and didn't do it as well as they could of
[00:37:38] Eric: bread. I want to thank you for coming on the show.
[00:37:42] Where could a parents reach? And how can they continue this conversation with you and what future projects do you have going on in the future? Sure.
[00:37:53] Brad: So everything is at taming, the high cost of college.com. So we've got a newsletter you can sign up for where we [00:38:00] send you some relevant stuff and breaking news and all kinds of good information.
[00:38:04] There's a number of free resources. There's a scholarship guide for busy parents. Which will help you understand a little bit more about scholarships, so you can put a plan together for your family. Got the cost of colleges by state, where we have the net cost. So bliss price. So you can find the net cost or what it actually costs based on.
[00:38:25] You know, so there's this. And again, it's not the answer for everyone, but it's the average cost of a particular school at a particular income, but at least as a place to start, and it shows you the variability around what price is. Actually, our list price is not a good thing to go by because a lot of people pay a lot less.
[00:38:41] What else do we have there? A net price calculator. If you're figuring out, if you're going to qualify for need based aid, we have a course called college planning jumpstart. That helps plan. You know, get started on this process and learn how to do things. So there's again, lots of resources. And then ultimately you have their contact form where you use, you can our work with Brad, [00:39:00] where you can send us an email or sign up for an appointment.
[00:39:03] And there's even a phone number there. You know, if you're old school and want to actually pick up the. You use it to talk to somebody, then you can do that too.
[00:39:11] Eric: Uh, about that bread. Thank you for coming on the show. And we will definitely look out for your future projects coming up in future and give you a dial.
[00:39:23] Now, if I was you, which I've already done myself, go to Brad's website and bookmark his website, go to Brad's podcasts and subscribe the amount of value that he just given to us in this. Show is only the tip of the iceberg. What you can find on his website and on his podcast, I have more than a couple of episodes downloaded from breads, um, podcasts stored away for reference for when it's time for my daughter to start going to college.
[00:39:53] Because I need to be reminded about certain points that were made. My thoughts on this topic is that let's help [00:40:00] our children not start off their lives in debt. This nation is built on debt, but that doesn't mean we have to follow. The chain must be broken. At some point, I want my child to have a clean start now.
[00:40:12] And as a parent, I know that you want the same next month is financial literacy month. And we will be on deck for that. Stay tuned on our social and on this show for everything that's coming up on that month, we would definitely love if you would subscribe and leave a comment on our website. It's real simple takes about 10 seconds.
[00:40:35] On raisin financial freedom.com until next time, stay safe and give the gift of financial freedom.
[00:40:43] Introducer: We really hope you enjoy this episode of financial freedom. The podcast stay connected with us directly through raising financial freedom.com. You can also join the discussion on social media, which you can also find links on our website.
[00:40:58] If you would like to speak with us, [00:41:00] please send us an email through info at raising financial freedom dot. And as always thank you for pushing your mindset towards a better reality. This concludes the most thought provoking portion of your day. Don't forget to please like, and subscribe to stay fully up to date until next time.
[00:41:16] Be kind to yourself and each other. .
