Student Loan Payment Strategy

Summary

---

Podcast Summary: Jill on Money – "Student Loan Payment Strategy"

Host: Jill Schlesinger, CFP®
Guest: Logan from Missouri (Listener call-in)
Date: September 22, 2025
Platform: Audacy
Main Theme: Navigating the current uncertainty with student loan repayment strategies, especially for those close to potential loan forgiveness.

---

Episode Overview

In this episode, Jill Schlesinger takes a listener call from Logan, a 47-year-old from Missouri, who is grappling with a major student loan burden while making up for a late start in retirement savings. With the recent rollback of several student loan repayment programs and ongoing legislative changes, Jill walks Logan through his possible strategies as he nears the milestone of loan forgiveness. The conversation underscores the confusion and frustration many face in the current student loan landscape, as well as practical, actionable tips on building financial resilience.

---

Key Discussion Points & Insights

1. Logan's Financial Snapshot

• Age: 47
• Status: Partnered (finances semi-separate, jointly budget household expenses)
• Home: Jointly owned, worth ~$350k, over half paid off
• Mortgage: Estimated 3% interest rate (refinanced, originally partner’s purchase)
• Income: $104,000/year (full-time), plus $24,000/year VA disability
• Retirement Savings: $60,000 in a Roth 401(k), contributing 15% after a late start
• Other Savings: $8,000 in savings, $6,000 in checking (with intention to build emergency fund)
• Student Loan Debt: $98,000 (primarily graduate school), 15 years of on-time payments

---

2. Student Loan Repayment Dilemma

• The Biden-era repayment plan Logan relied on has ended.
• Remaining federal repayment programs are uncertain; likely to be reduced to 2-3 basic plans: standard and income-based.
• Currently, Logan’s repayment (due to COVID-era moratoria and disability income exclusion) is set at $0 until August next year.
• Logan is uncertain about his future payment amount and whether to pay aggressively now or continue making minimum payments until reaching the 20-year forgiveness mark.

Jill (07:10): "I'm inclined not to pay it all off. That's so unlike me because I like certitude... but... you can take that 24 grand a year of disability and sock it away and create kind of a sinking fund so that if you had to..."

---

3. Actionable Strategies Suggested by Jill

a. Emergency Fund First

• Build up an emergency savings fund to at least $30,000 (half a year’s spending).
• Do not invest savings in a Roth IRA yet—liquidity and easy access are more important.

b. Where to Save

• Keep funds in high-yield savings or CDs for accessibility and small gains.
• Credit unions may offer attractive rates; consider online banks as well.

Jill (09:02): "I would like you to have access just in case. Right. That's what Emergency reserve is."

c. Disability Income Management

• Continue saving the VA disability income as a “sinking fund” to prepare for possible lump-sum payments or unanticipated student loan costs.

d. When to Revisit the Student Loan Issue

• A crucial decision point will come when repayment resumes and actual payment amounts become clear.
• If it turns out to be unaffordable or forgiveness looks likely, strategies may change.
• Jill advises, “Touch base with us in a year when you know the payment amount.”

Jill (12:01): "That's going to be your next decision point... let's see what it comes back with. You know, we don't know."

---

4. Student Loan Forgiveness: Take the Wait-and-See Approach

• Logan is about five years away from possible 20-year forgiveness.
• Rather than paying off aggressively right now and forgoing the possibility of loan cancellation, build flexibility via savings, wait for regulatory clarity, and keep all options open.

Jill (13:52): "I'm just gonna go Zen with you, man. Five more years."
Logan (13:54): "I know. It's so close."
Jill: "It's so close. And so much can change, as we've just seen over the past five years, when it comes to student loans."

---

5. Estate Planning for Unmarried Couples

• Jill reminds Logan that, as an unmarried partner, state law can complicate inheritance and property ownership after death.
• She urges both partners to have basic estate documents: wills, power of attorney, and healthcare proxy.

Jill (13:12): "You should do that. You know what? You're a grown up now. Now you have to do it, I'm sorry to say."

---

Notable Quotes & Moments

• On the ever-changing student loan landscape:

Jill (12:24): “This is insane—this is insane to switch policies like this midstream on people. It really is. So I'm sorry you have to go through that.”

• About managing anxiety with uncertainty:

Jill (11:36): “If you, you know, if you have the wherewithal to just be able to carry this emotionally, I think you're going to be fine. And even if not, we will be able to figure out a plan before then.”

• On planning for emergencies:

Jill (08:19): “You need to have access to your money. You really do. So I think that until you get to this $30,000 savings level, I wouldn't put the money in a Roth. I just would like you to have access just in case. Right?”

---

Important Timestamps

• [02:40] Logan outlines his main concerns: high student loan debt and late retirement savings
• [06:03] Logan explains current student loan status and uncertainty about future payments
• [07:10] Jill details her pros/cons for paying off loans now versus waiting for possible forgiveness
• [08:43] Conversation shifts to emergency savings targets and how to structure accounts
• [12:01] Jill identifies the next big decision point: reassess plan when repayment resumes
• [13:07] Estate planning reminders for unmarried partners

---

Takeaways for Listeners

• When facing student loan uncertainty, maintaining cash flexibility and optionality is key; don’t rush to pay off if forgiveness is possible.
• Build a robust cash reserve before focusing on tax-advantaged or higher-yield investments, especially if large future expenses are unpredictable.
• Estate planning is crucial for unmarried couples who jointly own assets.
• Keep lines of communication open with experts—financial plans may need to pivot as policies change.

---

If you have a similar financial dilemma or want guidance, go to jillonmoney.com, click the 'Contact Us' button, and you could be the next caller featured!

---

Transcript

[Podcast Advertiser]

I want to tell you about another podcast I Can't Get Enough of. Giving Done Right is all about how to make an impact with your charitable giving and tackles the question every donor is asking, how can I make the biggest difference right now? With shifts in federal policy and funding in flux, nonprofits and civic institutions are struggling and your giving matters more than ever. You'll hear from philanthropic experts and major donors who who reveal how to maximize impact on issues from protecting democracy to supporting immigrants in crisis. Whether you give hundreds or millions, this show delivers knowledge that turns good intentions into real results. You can listen to Giving Done Right wherever you get.

[Robert Half Recruiter]

Podcasts need contract help for those workload peaks and backlog projects. You're not alone. Robert half found that 67% of companies surveyed 70 said they will increase their use of contract talent. That's why their recruiters leverage their experience and use award winning AI to quickly find the skilled candidates you want. Learn about their specialized talent in finance, accounting, technology, marketing, legal and administrative support at Robert Half. They know talent. Visit roberthalf.com talent today.

[Jill]

Welcome to the Jill on Money show. It's Monday, September 22nd and we are here trying to help you make better financial decisions. Sometimes not even better. We're just trying to help you wade through all these decisions that are kind of thrust upon you and sometimes that feels unfair, like, oh man, this is so confusing. It's complex. Well, I get that. Mark gets that. We don't want you to do it all on your own. We are here to help you out. Mark and I are both certified financial planners and we love talking to you about whatever it is that is going on and help you figure out the way forward. And sometimes there are a lot of different ways forward. So get in touch with us. Go to jillonmoney.com, click the contact us button, write us a note, and when you are at the end of that form, there's a little box that says would you like to come on the air live with us? If you check the box, Mark will attempt to bring you on and hopefully it works with our schedules. So that's great. While you're on the website, don't forget you can sign up for the free weekly newsletter which comes out every Friday. Okay, let's kick it off. We have got Logan who joins us from Missouri. Hello Logan. Welcome to the program. Hello.

[Logan]

How are you doing today?

[Jill]

Doing great. What can we do for you, sir?

[Logan]

Well, I have a bunch of questions mainly focused on student loans and my retirement savings plan of which I started very, very Late in life.

[Jill]

You know what? It's okay. Sometimes the people I know who started late really come around and just supercharge things. So this is not a problem. We are here to help. So, Logan, how old are you?

[Logan]

I'm 47.

[Jill]

Are you married? Partnered? Single? Where do you stand in that world?

[Logan]

Partnered.

[Jill]

Okay. And do you and your partner combine your finances?

[Logan]

We do. Only in our budgeting. We keep them separate, though. So I can spend my money, she can spend hers.

[Jill]

Okay, I got it. In other words, when we talk about when you have retirement and student loans, it's not like you're all one big happy family. You're contributing to household expenses, but not the bigger picture. You're not like, oh, she's got $800,000 in a bank account. She wants to pay off all my student loans. We're not there yet, right?

[Logan]

Not yet.

[Jill]

Darn it. I wish she had that. Okay, so, okay. Do you live together?

[Logan]

We do.

[Jill]

Okay, got it. All right. Do you own a home together?

[Logan]

Yes, we do have a mortgage.

[Jill]

Okay, what's the house worth?

[Logan]

350.

[Jill]

Okay. And what is the outstanding mortgage amount?

[Logan]

Over half of that has been paid off.

[Jill]

All right. And do you know what the interest rate is?

[Logan]

I don't.

[Jill]

Do you remember when you bought it?

[Logan]

She actually bought it before we got together. We did do a little refinancing. I think she has got that old wonderful 3% interest rate.

[Jill]

I love that. Perfect. Okay, now let's get to you. So, Logan, are you working full time?

[Logan]

I am.

[Jill]

How much do you earn?

[Logan]

$104,000 a year.

[Jill]

Okay. And do you make retirement contributions on that $104,000?

[Logan]

Yes, I am contributing at 15%.

[Jill]

Ooh, that's a lot. Good for you.

[Logan]

Yeah, I'm trying to catch up. And I have converted my 401 over into a Roth plan.

[Jill]

Great. How much is in that Roth 401?

[Logan]

$60,000.

[Jill]

And is there any other money that you have invested for retirement? An old ira, an old retirement plan? Anything else out there?

[Logan]

No.

[Jill]

Okay. No. Don't worry. I hear your voice going down. I get it. It's. All right. Now, the student loan situation, I bet there's a story here. So why don't you give me a little bit about where you stand in the student loans?

[Logan]

Okay, So I have $98,000 in graduate school debt. I do have 15 years of on time payments. But the student loan repayment plan that I was on from the Biden administration has essentially disappeared.

[Jill]

Right.

[Logan]

And there are a lot of changes that are going on with the new administration that I think are going to reduce the student repayment options down to just two or three very, very basic plans.

[Jill]

Right, right. That's what I understand as well. One is just going to be a plain old like here's what you owe and you know, here's your monthly payment and the other is some sort of amount that would be based on your income. What's the payment that you have right now for the student loans?

[Logan]

Well, right now, because of some of the COVID era plans under the Biden administration, my student loan payment is set to zero until August of next year. And I've spoken, I've called in and talked to the administration, the student loan administrators, and they can't tell me what my eventual repayment is going to be yet. So there's not really a way to budget for it. However, I also get an additional 24,000 a year from a VA disability. And if I take the entirety of that monthly payment, I will be able to pay off the entirety of my student loans before I hit that 20 year forgiveness.

[Jill]

Oh my God. But you don't know.

[Logan]

So yeah, that's my big question. Should I just bite the bullet and pay it all or should I continue to make my on time payments and when I hit 20 years of on time payments, file for having the rest of it wiped out? Man.

[Jill]

Okay, so we have five years to go. Could be a whole new administration. You never know. Could be a whole new program. I'm inclined not to pay it all off. That's so unlike me because I like certitude. But I mean, look, you can take that 24 grand a year of disability and sock it away and create kind of a sinking fund so that if you had to you. Because right now, what happens to that 24 grand a year? Where does that go?

[Logan]

Right now I'm trying to save as much of it as possible.

[Jill]

So how much do you have in savings right now?

[Logan]

Right now I've got about 8,000 in savings and that's just in a regular credit union savings account that is only earning 0.01 interest. So I also wondered, should I take all of that savings out and put that in a Roth IRA and something that's high yield.

[Jill]

No, no, not high. No, I don't want it in the Roth. I need availability, don't I? I've got five years, right? Is this the only savings you have?

[Logan]

On top of just my regular checking account that's got about 6,000 in it.

[Jill]

Does the credit union have CDs? Maybe we could just throw some of the money in CDs just right.

[Logan]

Yeah, they do.

[Jill]

Okay, so maybe I would do that. Just you need access to your money. I mean, you do need an emergency reserve fund. Does your partner make a ton of money? And like I don' really have to worry about an emergency. I don't want to be stupid about this.

[Logan]

Oh, we're pretty equal. She does have an emergency fund. We both made a plan of having half a year's spend saved up in case of something happening.

[Jill]

What's your half year spend equate to?

[Logan]

I would want about 30,000.

[Jill]

All right, so, well, I mean, we still have to put this. So we have to get that disability into the savings and check savings specifically. And if you can go to a High Yield Savings, if they offer that, you can go online, you can go to depositaccounts.com and you can open up an online High Yield Savings account. But you need to have access to your money. You really do. So I think that until you get to this $30,000 savings level, I wouldn't put the money in a Roth. I just would like you to have access just in case. Right. That's what Emergency reserve is. Now, in terms of the five more years next year, we don't know what your payment's going to be, right? For all intents and purposes. That's another reason just to keep the savings as bulked up as you can. I think it's fine to put 15% into the Roth. I think you should be using every available dollar and put it into savings. But do make it high yield or throw some money in a CDC ask. Sometimes credit unions will give you a deal if you ask and find out what they have available. And if not, you can always go to an online High Yield Savings or money market account. It's so weird because you have this five year period. We don't know. Ostensibly you would have said, well, if I make five years of payments, so if next year I'm off, you know, off the hook for another year, I can beef up my savings, then I start paying. Let's just pretend it's, I don't even know, $1,000 a month, okay, you pay that for another four years and at the end of that four years you either would have two different things happen. One is like, hey, you owe us all this money or maybe you don't. And I would like to preserve the optionality for don't. It's just that we need to have the money available so that you can make these payments and you can pay for the loan if you need to, and that's what you're going to do with your disability. If all of a sudden in a year from now, you're like, hey, Jill, I got my $30,000. Now what? Then you can open up a brokerage account and just start to put some money in there. But I think the most important thing today is to beef up that savings till it's 30 grand. I don't know, Mark. Do you feel different? I know you probably would feel, like, much more comfortable if he just paid this off. But we're close, though, right? We're close to the possible time here. He's done 75% of the work. There's no way I'm paying it off right now. I'm going to wait another five years. Yeah, there's no reason not to. And if you, you know, if you have the wherewithal to just be able to carry this emotionally, I think you're going to be fine. And even if not, we will be able to figure out, like, a plan before then. So here's what I want you to do. Logan from Missouri, I want you to be very focused on building up your savings while you're contributing to your Roth 401K. But in a year from now, when the clock starts ticking again, I want you to get back in touch with us. I want to know what that payment looks like in a year.

[Logan]

Okay.

[Jill]

That's going to be your next decision point. Okay. And we'll go and, like, if it's $2,000 a month, because all of a sudden they're like, well, we got to figure out how this dude's going to pay us back in the next four years. Then you will use your disability payment to just pay the. Make those payments. But let's see what it comes back with. You know, we don't know. It's so crazy. This is insane to switch policies like this midstream on people. It really is. So I'm sorry you have to go through that. Can I ask you a nosy extra question?

[Logan]

Absolutely.

[Jill]

You're partnered. Do we have some estate documents? Are you at that point? Like, what happens if your partner who owned the home, if she were to pass away, would you be the inheritor of that house?

[Logan]

Yes, she has set that up in her will that I would be okay.

[Jill]

And do you have a will that sets her up as well? You know, she. Actually, you need a will, but you don't. Your most. Your largest asset is the $60,000 Roth 401K. So she's the beneficiary of that.

[Logan]

Yes, she is.

[Jill]

All right, do you have your documents otherwise? Like, who gets to pull the plug?

[Logan]

Oh, no. And I haven't set up a will. It's definitely something I should do.

[Jill]

You should do that. You know what? You're a grown up now. Now you have to do it, I'm sorry to say. Logan, go get yourself. If you have that as a corporate benefit, that's a nice thing to use. Estate planning. So have done a will, a power of attorney, and a health care proxy. That's it? That's all you need? And very. It's. It's. I. I encourage you to do that.

[Nancy Cartwright]

Also.

[Jill]

It's very strange. I don't know what the law is in Missouri, but, you know, when you're not married, the funny thing is, is that the law is kind of thorny with estate issues, so it is better to get something down on paper. Okay.

[Logan]

Okay.

[Jill]

All right. I'm just gonna go Zen with you, man. Five more years.

[Logan]

I know. It's so close.

[Jill]

It's so close. And so much can change, as we've just seen over the past five years, when it comes to student loans. So stay in touch, keep us posted, and let us know if there's any further information we can help you with, all right?

[Logan]

Oh, I will happily do so. Thank you.

[Jill]

All right. Thanks for getting in touch with us, Logan. Hey, are you in this purgatory of student loan madness? Get in touch with us. Let's get a game plan to together for you. Just go to jillonmoney.com, click the contact us button, write us a note, and if you'd like to join us live, check the box. Mark does everything else. All of our content lives on that website, jillonmoney.com so might as well bookmark it. And you can subscribe to us on the Odyssey app or wherever you find your favorite podcast. Try to put your hands metaphorically on someone's back. Or maybe just give someone a hug. Get permission first. I'm a hugger. Still got to ask permission. Change your work, Change your wealth. Change your life. Thanks for listening. We'll talk to you tomorrow.

[Podcast Advertiser]

Hey, gang, here's the thing about wine. Some of the best bottles are not sitting on a store shelf. They're being crafted at small, independent wineries. But those wines can be so hard to find sometimes. I wish I had a personal sommelier to guide me to find the best wines I normally wouldn't be able to access. Where's that handcrafted pinot that I've been craving. Well, Psalmsation's expert team seeks out incredible wines from top independent producers. These are bottles that you will not find in stores and on shelves. They aren't mass produced wines. They're handcrafted with care, using pure ingredients and meticulous winemaking. Whether you want a single bottle, a guided tasting experience, or an entire wine club membership, Psalmsation makes it easy to elevate your wine experience. Shop their [e-mail] jillonmoney that's psalmsation.com jillonmoney.

[Nancy Cartwright]

Hi, I'm Nancy Cartwright. You may know me better. As the voice of Bart Simpson on Simpsons Declassified. We're diving into the mysteries that keep the Simpsons forever young. Have you ever wondered how the Simpsons regularly predicts future events? Who better to ask than the show's creators, performers and writers, the celebrity guests? Be sure to follow and listen to Simpsons Declassified wherever you get your podcasts.