00:02
Peter Dunn
Welcome to the Kristen Ahlenius Show. I'm your producer, Peter Dunn. Pete the planner, joined by co producer Damian Dunn. No relation. Hello, Damian.
00:13
Damian Dunn
Hello, co producer Pete.
00:14
Peter Dunn
This week on the show, we are here to support and produce the show of media darling Kristen Ahlenius. Kristen, take it.
00:28
Kristen Ahlenius
We both know I hate this.
00:31
Peter Dunn
Oh, you don't hate this, because you have been all over the media this week like you're on a book tour, on television, in the newspaper, on a kristen is a full fledged media star.
00:47
Damian Dunn
She's kind of a big deal.
00:50
Kristen Ahlenius
I don't know about that, but you're not wrong. Damian was on TV too, though. Don't forget that.
00:57
Damian Dunn
How much run did that get in our company? Slack zero. Wasn't mentioned once. All you do you want me to.
01:05
Kristen Ahlenius
Post it right now?
01:06
Damian Dunn
Not at all. Not once.
01:08
Kristen Ahlenius
Well, I will after the show.
01:09
Peter Dunn
So hello, everybody. Sorry for the inside baseball. Welcome back to the program. So the student loan forgiveness thing happened and here's why this is important, because Kristen was all over the media this week talking about it and it was Dame and I's dream come true. When we first met Kristen, we saw all of this glory and potential in her and she is shining bright for the world to see this week and it is wonderful. Dame, do you feel that? I I've had an amazing week living vicariously through people, acknowledging how great Kristen is.
01:45
Damian Dunn
Yeah, kristen, you can shake your head all you want, but the truth of the matter is, pete and I had conversations just like this shortly after you were brought onto the team, saying that this is very reasonably a place that you could go and here you are.
01:59
Peter Dunn
It's a great week.
02:01
Kristen Ahlenius
It's nice to hear when other people think that you have potential, so I appreciate it.
02:06
Damian Dunn
Well, the bad news is we think.
02:07
Peter Dunn
You'Ve reached it and you've peaked. All right, so here's what we're going to do this week, we are talking student loan forgiveness all week. It's a complicated topic, I know. For months, arguably for years, student loan forgiveness has been like, hey, is someone going to forgive student loans? And that feels like a very singular idea and event and process, it's a lot more complicated than that. So this entire show we're going to talk about, all right, what does the forgiveness mean? Kristen actually is the expert on that, so she's going to break it down and tell us what's going on there. Then we're going to talk about the ramifications of this, like, sort of the social ramifications of this. What does it mean for people who didn't go to college because they made a different choice? Or what does it mean for people who just paid off their student loans?
02:59
Peter Dunn
What does it mean for people who've yet to go to school? And Kristen, I saw this and maybe you'll cover it, but the last day that you could have taken out a student loan that would arguably be forgiven was June 30, is that right?
03:13
Kristen Ahlenius
Correct.
03:14
Peter Dunn
So can you imagine if you took out a student loan on July 1?
03:21
Kristen Ahlenius
You're salty.
03:22
Peter Dunn
Good morning to a lot of our live stream viewers. Big Rick swink. Bringing the big Rick energy, as always. And Andy. Hello, Rochelle, Danza, Neil. Okay, you guys want to start the show? I mean, this is going to be a huge episode. We have media darling Kristen Ahleinus here. Let's do it. I got to set up my timer, chris and I really am just going to tee you up and let you run wild like Hulkamania.
03:56
Damian Dunn
Is Neil the person that shows up as Facebook user in my stream? Is that who that is?
04:00
Peter Dunn
I believe it is. I believe it is.
04:05
Damian Dunn
Okay, well, it is now.
04:07
Peter Dunn
Okay, in three, two, one. This week on The Pete the Planner Show, we're not answering your money questions. We typically do when you email us Askpete@petetheplanner.com. In fact, we've got a lot of emails at Askpete@petetheplanner.com that we could go over this week. We are punting until next week. Why? Well, student loan forgiveness happened. It has been talked about for so long. We've talked about it for so long on this show, and it actually happened. Prom night got here. We had a good time. What does it all mean? Joining me to discuss are the co hosts of this program, a man with the same last name, yet we do not share blood. His name is Damian Dunn, and he's the vice president of advice at Your Money line. Hello, my not my brother.
04:58
Damian Dunn
Hello, no blood.
05:01
Peter Dunn
And the director of Education and media darling Kristen Ahlenius joins us now. Kristen, you've been all over the media this week discussing this topic because, let's just face it, you're one of the foremost experts in the world on this topic, and you just so happen to be a co host of this show, so it works out beautifully. Dame if there's ever donut legislation, your ship will come into harbor as well. Kristen all right, catch everyone up. What in the world just happened?
05:30
Kristen Ahlenius
In summary, what just happened is that if you make less than $125,000, if you're single, less than 250. So double that amount. If you're married, you could have $10,000 in student loan forgiveness. If you were a Pell grant recipient, as an undergrad student, you are subject to up to $20,000 in student loan forgiveness. All others, up to ten. And then with all of that, not the limited waiver, the administrative forbearance was extended through the end of the year. So that we have some time, I would assume, to figure out these logistics.
06:05
Peter Dunn
All right, so, Damian, what I'm hearing is that a person who has not been paying on their student loans because interest rates have been set at zero since March of 2020 will have another few more months to benefit from that legislation. So this is also to say, Dame, are people's balances just going to get wiped out? Do they have to apply for this? Do you understand how this works?
06:32
Damian Dunn
It's a little tricky as of yet because there are some, I think, nearly 8 million individuals that have their income records on file with the Department of Education, and the appropriate action will be taken based on those at that point. Now, there will also be an application that will be available online in the coming weeks to start this process manually or if your income has changed and you think you are now eligible, even though the information on record may say that you're not. And those will be reviewed and we'll figure out whether or not you get your 10,000 or $20,000 of relief. And this is all, of course, subject to any potential lawsuits that may be filed and slow the process down.
07:13
Peter Dunn
Kristen, is there a feeling of how many Americans are affected by this legislation? I saw something to the tune of 23 million people. Is that about right?
07:21
Kristen Ahlenius
I thought that the number was actually higher than that. Maybe at the next segment I keep the student loan portfolio on my computer. We could pull it up and maybe go over the numbers.
07:39
Peter Dunn
Was this amount surprising to anyone? Was the Pell Grant addition or doubling? Was that a surprise? Should anyone have been surprised by what just happened?
07:51
Kristen Ahlenius
I don't think anybody should have been surprised by the 10,000 because we started to hear whisperings of it a few weeks ago. I think the surprise was that it took up until like, ten days before were supposed to enter repayment again. Now, the Pell Grant portion, I didn't see that until I don't know, it was like two days before as were prepping some media to send out to your money line. And the pell grant part surprised me.
08:21
Peter Dunn
Yeah. Dame if I were to ask you what Pell Grants were, would you want to then pass that question back to Kristen?
08:28
Damian Dunn
No. Pell Grants are available for students who show exceptional financial need in college. So it's something you qualify for based on income that's reported on the FAFSA. Beyond that, they are, I believe, renewable annually. Kristen, you can correct me if I'm wrong there, but I think those are something that you need to qualify for each and every year.
08:50
Kristen Ahlenius
And the Pell Grant Award, again, is the $20,000 versus the $10,000. I want to make sure that we keep mentioning the number.
08:59
Peter Dunn
So if you have two people that qualify for Pell Grants and have student loan debt, and they are a household that makes less than $250,000 and each of the borrowers has $20,000 of student loans, you're saying that household theoretically would have $40,000 of student loans wiped out?
09:15
Kristen Ahlenius
As I understand it.
09:17
Peter Dunn
That's amazing. This entire show, we're going to really cover this from every angle. We're going to talk about unintended consequences. We're going to talk about unfortunate realities. We're going to talk about how this bill targeted certain populations and purposefully and accidentally ignored other populations. Kristen, one element of this decree what are we even calling this? It's not a bill because it didn't come through legislation. Is it an executive order?
09:46
Kristen Ahlenius
I think technically all right.
09:48
Peter Dunn
One of the things that came through this executive order is these ideas around income based repayment going forward. Help us understand that, because don't fall asleep at the wheel. That might be the most interesting part of all this.
10:02
Kristen Ahlenius
Yeah, and it's interesting, and it's also complicated because income driven repayment, as the Department of Education came up with all of this, is based on the concept of non discretionary income. And Doe defines non discretionary income very different than we. So, like Dame, would you mind defining, how would we say, what is your non discretionary income?
10:28
Damian Dunn
Non discretionary income in our purposes is going to be money that's already obligated for some other purpose, whether that's a mortgage, whether that's a car payment, whether that's student loan repayment, or whatever the case may be. It's money that you've already got allocated to some other source that requires those dollars in your wallet.
10:48
Kristen Ahlenius
And the Department of Education defines nondiscretionary income as the amount that you make for your household size over the federal poverty line multiplied by 150%. So you can make 150% of the federal poverty line, and then everything over that is considered your discretionary income. So it's like, very technical and doesn't I don't think personal finance minds us and many others would agree with that definition, so it's kind of convoluted. But they're increasing that number. So that 150%. Multiplier that, we see. The goal is to increase that. This is proposed the goal is to increase that to 225%, which I believe the method or the reasoning behind that is that would equate to a $15 minimum wage. So then everything that you make in excess of $15 an hour would be considered discretionary income.
11:44
Peter Dunn
So what I don't understand about this part of the legislation, and it's not legislation, so is this executive order, that part is happening, the income based repayment, or is that a proposal? That's what I don't understand.
12:00
Kristen Ahlenius
So the change from being required to pay 10% of your discretionary income, moving to 5%, being the requirement, was part of the original announcement. Now, the proposed change to increase that threshold, essentially, that's part of what we hope to see or what the administration hopes to see moving forward.
12:23
Peter Dunn
I guess there's a lot I don't understand, which is why we're dedicating the entire show to this. So Kristen and Damian can explain it to me. Wouldn't that mean, if you're only paying 5% of your income on your income based repayment plan, that your balance would grow based on the interest rate?
12:42
Kristen Ahlenius
It depends on how high your interest rate is and how high your balance is, because if your interest and that was actually, I think one of the other proposed changes was that if your monthly payment didn't pay off the interest, essentially the government is going to subsidize that. So I think effectively that makes in practice, it makes all student loans partially subsidized, I think is technically how that works.
13:09
Peter Dunn
Yeah. And we're going to explore this and more here coming up the rest of the show. And one of the things is this last part of the executive order, this income based repayment change, is this actually the most expensive part of this executive order as opposed to the billions that are forgiven in loans? We'll talk about all of that next right here on the Pete the Planner show. I'm Pete the planner. Right. I mean, not right. I'm Pete the planner. But right. Like, couldn't that theoretically be the most expensive part?
13:43
Damian Dunn
Yeah, it goes into perpetuity and if colleges continue to, off the record, say, well, you know what? I won't spoil it.
13:52
Peter Dunn
Hello, Jacob. Hello, Brian Pinkins. Good to see you. Wow, this is fascinating. You know, we are going to talk about this on the show and so I don't know why I'm going to say it here too. People can, of course, have their own opinions on it. I'm not going to try to disprove them. But what I think is interesting is when people want to have a very tidy, this is good, this is bad, because I just think it's a lot more complicated than that. I think a lot of government policy, people want to say this is good or this is bad and they're entitled to that. But I just think it's a lot more nuanced than this is good and this is bad. Even the debates we have about social issues, I find that they're just a lot more complicated than what we want to distill it down to.
14:46
Damian Dunn
People are fun.
14:48
Kristen Ahlenius
Yeah. I think something that's very interesting and maybe noodle on it to talk about is that I have found that persons tend that are upset about the legislation don't necessarily feel that way toward people that they know in person. It's easy to be upset about something that doesn't impact people that you know. But if you think about if this positively impacted Damien or you or me, then is someone as upset if they know us? Does that make.
15:26
Damian Dunn
You you never want to try and put somebody you know and care about in a worse position when you see this benefiting their personal lives, then yeah, of course you're going to feel a little bit warmer about the prospect of whatever the topic is at that point. But when you're dissociated from having any immediate impact with yourself or those you love, then it's much easier to have a harsh approach at something.
15:57
Peter Dunn
Good morning to Ian watching on the live stream famous Pike Red Devil. There's a lot of Red Devils on the stream. Thank God I didn't alienate everyone in high school because then we wouldn't have any viewers. Okay, let's come back after the break. I'm going to ask the question when we go to air so that we have a little bit of transparency in this and we've done this before. I'm going to ask you guys about your college experience and did you pay for it and did you have student loans? Because I think that if we're going to have opinions about other people's student loans, I think we need to disclose our own, right? Is that fair?
16:38
Kristen Ahlenius
Absolutely.
16:39
Peter Dunn
All right, coming back. Here we go. Sorry, I'm just getting my pipes ready. Three, two, one. Back on the Pete the Planner show talking the student loan forgiveness executive order. It's weird when you begin to talk about it, you say President Biden student loan forgiveness and then it's like, well, what's the noun? It's not a bill, it's not legislation. Is it a decree? That sounds aggressive. It's an executive order. Right. It's something. Before we get going too much on this, Kristen and Dame, we're about to try to give some perspective on other people's opinions around their college funding situation. I just find it appropriate for us to come to the table transparently with how if we all three of us went to college, but how it was funded and did we come out with any student loans, because I just think it's the honest thing to do.
17:34
Peter Dunn
So I went to college, believe it or not, and my parents paid for my college education and I did not have a dime of student loan debt. And I just Maya Culpa. I'm not apologizing for that. That's just my reality. So Dame, what's your reality?
17:52
Damian Dunn
Pete, did you have to work on paying off any of Mrs. Planner's loans after you were married?
17:59
Peter Dunn
No, she paid a little bit as she went. She was required to pay a little bit as she went from her parents, but her parents paid for hers. But we never had any student loan.
18:06
Damian Dunn
Debt in our household, so my situation was very similar to yours. I did not have any student loan debt. My education was paid for, but we did pay for a portion of my wife's undergrad and all of her master's degree.
18:19
Peter Dunn
Okay, excellent. So as working people, did you take on student loan debt or do you pay for it with whatever assets you had?
18:28
Damian Dunn
She had student loans for undergrad and then we paid for I believe we paid for her Master's degree out of pocket.
18:38
Peter Dunn
Okay. Wow. Kristen, what about you?
18:42
Kristen Ahlenius
I had part of my first year paid by my parents and then after that was a mixture of working and student loans so that I didn't have to take out private loans. And then I'm actually in a Master's program and I am cash flowing that Master's program, which means that I do actually have some undergraduate student loans. So I'm a beneficiary of this executive order.
19:06
Peter Dunn
Sure. We have another coworker, a well beloved coworker in our organization, and she's going to have a majority of her student loans wiped out. So it was a happy day for her. So it's with that we begin to take a look at this and sort of maybe let's call it the social or cultural ramifications of this dame. Let's begin with people who never went to college because they chose a different path. They didn't want to take on the burden of student loan debt. They considered that when they were making the choice, and so they went the other route. And so now you've got people who chose the other route that are seeking this forgiveness. How is a person supposed to get their head around this if they did not go to college because they didn't want to get involved?
19:57
Damian Dunn
It's a really tough ask for some of those individuals because like you said, maybe they went into the trades or maybe they went into the military to try and provide their service there and get a college benefit. And it's going to probably be pretty challenging for some of those individuals to come to terms with this executive order. And frankly, I don't have a problem with their position at this point because they made their choices what they felt was the most responsible financial decision at that point in their life. They knew maybe where their interest lied and they didn't want to get into debt for something they weren't sure they were really going to benefit much from. So if I'm in their shoes, I try and take a couple of really deep breaths. I'm not saying that they need to change their perspective or change their opinion on this.
20:52
Damian Dunn
They're certainly welcome to hold whatever opinion they want. But if I'm in their shoes, I try and look for very clear examples of where this legislation sorry, this executive order really benefited maybe even somebody they knew that was just absolutely struggling and it was going to be an uphill battle for a long time. And this gets them, if not over the hump, but maybe they can see that light at the end of the tunnel. Now look for very personally applicable examples to why this might benefit somebody they care about.
21:23
Peter Dunn
Yeah. Kristen, what would you add to that?
21:26
Kristen Ahlenius
I think that if you chose to not pursue higher ed and you wanted to and you chose not to because you didn't want the burden of student loan debt, I think it's okay if you're upset. I don't think that your feelings have to be or that your opinion on this has to happen in a silo. You can be happy for me or for anybody else, and you can be upset that you didn't get to benefit from this and that you may have made different decisions. And I don't think anybody can tell you that you can't be upset about that.
21:57
Peter Dunn
Yeah. Okay. So let's transition, and I'll stick with you. Kristen let's transition to a person who went to college and paid off their student loan debt, maybe taking on a second job, maybe just their first job, making some sacrifices or just playing the long game. How is a person in that scenario supposed to get their head around this executive order?
22:20
Kristen Ahlenius
I think very similar approach. I think it's that you can feel upset. And if we take two persons and all things equal, one person will be awarded student loan forgiveness and the other will not. Again, all things equal, the person who just received student loan forgiveness just saw their net worth move by ten grand overnight. And is that fair in those two situations? It's not. So as far as getting your mind wrapped around it, I think that sometimes there are things that happen that we get to benefit from, whether they're tax credits or other things, and sometimes we don't get to benefit. And again, is that fair? Maybe not, but I think it's just reality.
23:02
Damian Dunn
Tim same. We are faced with this new reality. There's only so many things that we can control, and if you want to be upset about it, that's okay. I would encourage you not to be there and dwell in it. That will do very bad things for you. However, what we need to try and do is figure out a long term solution for the issue that we're facing. And while this legislation will have immediate impacts for those that it benefits, it's still an uphill battle on trying to figure out how to make college more affordable for the masses, because right now it's set up to where we're just going to face this problem again in another 1015 years.
23:43
Peter Dunn
Yeah, I don't get personally and again, I come from a place of privilege, and I'm not necessarily apologetic about that. I just think I have no problem acknowledging it. Right. I don't have a problem when legislation or executive orders don't benefit me. Right. That doesn't necessarily bother me. Do I think taxpayer dollars get spent on things that I'd rather them not get spent on? Of course, I think everyone does. But this one feels so deeply personal and this almost feels like classism is a part of this argument. Kristen, to this point, how do you feel about all of the arguments being thrown around by various people and organizations and Twitter accounts that this is similar to PPP loans? Do you see a parallel between forgiveness and student loans and forgiveness of PPP loans? Is there any parallels to draw between the two other than the F word, which is forgiveness?
24:55
Kristen Ahlenius
You took the words right out of my mouth. I was going to say their names sound similar, but I don't think that if we actually lay out the facts that the forgiveness is the same.
25:09
Peter Dunn
I would agree. At the risk of putting down a controversial opinion, and this is just my opinion I don't think there's any parallels whatsoever between PPP loans and student loan forgiveness. The entire point of the PPP loan was for it to be forgiven and it was also, by the way, to keep people employed when the economy was shut off like a light. So, I don't know, while I don't necessarily have a problem with people that got their student loans forgiven, I also don't think the way you justify that is saying, well, PPP loans got don't. It's an apple and oranges thing to me.
25:51
Damian Dunn
Totally agree. The PPP loans could have been handled a little differently. They could have had checks sent directly to the individuals themselves and bypassed the employer at that point. And that could have potentially figured it all out.
26:05
Peter Dunn
So here's what we're going to do. We're going to talk about inflation and we're going to talk about the long term impact on college costs. That's next on the Pete the Planner show. I did not like how my voice went up there at the end. The Pete the Planner show. Kristen for the oh by Matt royalty makes it into the show. Matt was the gentleman who on LinkedIn made the joke of the week. Matt made the joke of the week on LinkedIn last night, suggesting that Kristen looked so good on TV because of the lighting, because she finally pulled the ring light out of the box and stopped having her laptop sitting on top of it. So, Matt, kudos to you. You're our listener of the Week. Kristen, for those joining us late, kristen has been all over the television this week. She is a media star.
26:53
Peter Dunn
Kristen listening. How did you watch your clips back?
26:57
Kristen Ahlenius
Absolutely not. Seriously, I did not.
27:01
Peter Dunn
I've watched them several times.
27:02
Kristen Ahlenius
Dame oh, no.
27:04
Damian Dunn
I've watched them all at least once.
27:07
Peter Dunn
My next question is irrelevant. Can here's my question. Can you watch them twice so you can answer this question. Do you have a verbal tick or a word that you go to while you're processing and thinking and answering? Because I know I used to all the time and I'm curious if you've detected that on your own. I'm not saying I found one for you. I'm just saying if you found your own.
27:35
Kristen Ahlenius
I use, like, way more than I should. I listen back to this show every week because I think watching game film makes you better. And I use the word like a lot. I don't know if I did on the news, but the reason I didn't watch the media broadcast back was because I expect it to look awkward because I did not know going into this that when you record from home, you don't get to see anyone else. So you just talk into your computer and normally you read off of people's facial expressions or you're looking for nonverbal cues. And there is none of that when you're on live TV from your home. So I had no desire to watch my awkwardness back.
28:16
Peter Dunn
I will just say we've talked about this before. The black abyss. You stare into a lens, you see nothing back. You don't know what your face is doing. Your face looked fine.
28:27
Kristen Ahlenius
Kristen, I appreciate that.
28:30
Peter Dunn
Okay, we've got a lot more to talk about with so many great comments on the live stream. So thank you all. We've got some actually pretty heavy hitters on the live stream right now. We got Craig P. Anderson who was deeply involved with the student loan industry for years. And we've got Phil Schumann, the director of Financial Wellness at Indiana University who's also been all over the media. This so, okay, coming back, hey, let's hit inflation. Let's hit college costs. What else do we want to hit?
29:06
Kristen Ahlenius
Were there any other questions in the Facebook Live? Oh, we didn't mention the deadline.
29:12
Peter Dunn
Okay, we can hit the deadline. Oh, June 30. Okay. And then we'll maybe end with so this is going to happen again, right?
29:22
Damian Dunn
Yeah. Did you see Craig's comment?
29:24
Peter Dunn
Yeah, I know, we'll get there. Yeah, I was going to say it's shocking, but is it really shocking? I'm not sure it's shocking.
29:32
Damian Dunn
I'm shocked that it happened quite that fast, but I'm not good with math.
29:37
Peter Dunn
You are definitely not good at math. All right, let's go in three what in the heck? Sorry. Three, two, one. Back on the Pete the Planner show student loan forgiveness. Executive order edition of the show, also known as the Kristen Alanius is a media darling edition of The Keep. Actually, CNBC is on the lobby TV of our offices here at HQ One and HQ two. And I was going in the lobby this morning, I was walking through and I saw on CNBC someone complaining about what a horrible inflationary move this is and how this is going to stoke inflation. As you know, I am not an economist. I just don't see that perspective at all. I know how many people have not been paying on their student loans for the last 30 months. I do not see at all how this impacts inflation, do you?
30:42
Damian Dunn
I don't. I think the money that people think is going to get flooded into the economy is already there. For the vast majority of people that we're talking about getting forgiveness. You and I projected for a long time that once student loans pick up, it's going to pull some of this money out of the market, out of the economy, and it's going to tamp down on inflation concerns. Now it's there and based on the inflationary reports that we've had in the last few months, it seems to be slowing down. So I'm not sure it's going to add fuel to the fire. It may prolong inflation for a little bit, but is it going to ramp things up? I don't see it.
31:21
Peter Dunn
Kristen, what do you think?
31:23
Kristen Ahlenius
I have almost the exact same perspective as Dame. I think the thing that maybe you could. Make as an argument is that by approximately a third give or take of borrowers not having to make a student loan payment anymore, that money will get to stay in the economy. But as far as, like, immediate impacts, like he said, what percentage of people are saving that or not using it for a purpose that is increasing inflation? I don't know that number is high enough to make that argument.
31:53
Peter Dunn
Yeah, I just think that's one of the weirder perspectives on this is that this is going to stoke inflation, because here's what I know. Come January 1, 2023, we're about to see inflation completely pull back because people are going to have to pay their student loan payments and money is coming out of the just I don't know. There's a lot of arguments. That's one I just don't understand.
32:19
Damian Dunn
Do you think some people think they're going to get checks in the mail for that?
32:25
Peter Dunn
Well, I mean, I would hope someone who's on CNBC would not think that people are getting a $10,000 check, but I would think others might think that. But I never consider that dame in social media.
32:38
Damian Dunn
I can see that be I shuddered to say reasonable assumption for people to be thinking on social media, but it wouldn't surprise me if there's a fair number of people on social media that think that's what's going to happen.
32:50
Peter Dunn
All right, so Craig P. Anderson, now that he's going to drop off the stream, he did leave one comment. Again, Craig was a big part of the student loan industry of helping people pay off student loan debt. And so he just left a comment stream that it's worth noting. He says, for what it's worth, the big problem with all of this is that it does not deal with any of the root cause problems, the biggest of which are tuition costs and no connection accountability for ROI of programs relative to student loan debt. I could not agree know there was a couple tweets from I believe it was a New York Times or a Wall Street Journal reporter that off the record. On background, a college president said they now no longer feel the pressure to keep tuition costs low, and that is the moral hazard that this executive order actually brings.
33:40
Peter Dunn
Craig also pointed out on the live stream, guys, there should be a Craig P. Anderson show. It's much better, but Kristen's not on it. So there's this idea that aggregate student loan balance will be back to where it is today, what, 1.7 trillion in three years? In three years, we will be right back where we are today. And so this isn't even a matter of treating a don't. That's the challenge with this, is it will make college more expensive because of this executive order for Dame's kids, for my kids, and for Kristen's dogs. I think that's what is afoot his comment.
34:23
Damian Dunn
I agree with a good chunk of it. I think a big issue is there's no connection or accountability for ROI, for the degrees and the loans that are taken out. The tuition cost, if we're talking public schools and that's where I'm going to leave it, I'm not going to even delve into the private school. Phil Schumann and I just had this conversation earlier this week. If tuition for a public school in your state is around $12,000 a year, that's not chump change. But it doesn't seem all that unreasonable. I think where college starts to get out of hand is all of the ancillary costs that go around with it. So if you decide to live on campus or in a college town, you're going to find all sorts of ways and needs for those dollars. But the tuition itself doesn't seem that unreasonable to me.
35:13
Damian Dunn
Maybe I'm off on an island on this one, but I would be curious to hear what the two of you think about that.
35:19
Peter Dunn
Well, Chris, let me tag on that for Kristen to answer because Kristen's here to answer everything. Kristen, I agree with Dame, but where does it come to out of state tuition? Because if you can go 12,000 in state and you're going to 40,000 in state, how do you get your head around that? I know Phil's on the stream and I know various universities get a lot of revenue from out of state students. That's not a great decision.
35:48
Kristen Ahlenius
I don't know how you have this conversation not be super political, but to Damien's point, using me as anecdotal experience my freshman year, my room and board was more than my tuition. So you're exactly right is that I received a degree from what I would call a prestigious university. I'm very biased and my room and board costs more than a quarter of my degree.
36:11
Peter Dunn
How's that political?
36:14
Kristen Ahlenius
No, the in state, out of state thing is political.
36:17
Peter Dunn
Got it. Oh, political within the higher ed group. Correct. Not political in terms of no. Yeah, okay. With a couple of minutes left. And really I feel like we've hit this topic from a lot of different angles. What is upsetting about this to me about this entire discourse around this and I love that people can feel how they feel because they're coming from their own perspective and of their loved ones. I think where I get frustrated is that I feel like we're continuing to pit people against each other. That's what I don't like. I don't like this idea that I'll say it. What's the matter? I don't like that the White House is coming out and saying, well, if you're against this but you took PPP loan money. Those are totally different things. And I don't like that Jim Jordan could come out and say you're telling me a factory worker is paying for some philosophy major in no.
37:13
Peter Dunn
No that makes any sense either. And so unfortunately, like everything else in our society right now, the polar opposites are using this to just advance their narrative, and they're doing it by pitting people against each other. And I think that sucks.
37:31
Damian Dunn
There was a phrase I saw used on Twitter this week that I had never heard before, but I think is incredibly appropriate. People are rage farming. They're out there just planting the seeds, trying to stoke and grow rage. And then as people participate in that, they're the ones being harvested. They are the ones that are being brought to exactly where everybody else is trying to push them to anger and divisiveness. And we need to take a step back and look at things in a much broader picture and maybe not focus on ourselves quite as much.
38:09
Peter Dunn
Yeah, I get this idea this week when this is all happening. I know our three minds were especially Kristen and Dame, our minds went to, okay, how do we get this out? So that what has happened can help as many people as possible. That's where went. And sure, we all have politically different opinions on this show, but that's not where this is right now because the executive order happened. And so we're trying to get as much positive utility out of it as possible for as many people. And I just really struggle with this of like, I'm excited about that, but I am the first to acknowledge per Craig P. Anderson, in three years, student loan debt's right back where it was. And I will end with this. I think this sets us up for future forgiveness. And that idea is a dangerous idea for people who may take on more debt than they should because they feel like their debts will be forgiven in.
39:10
Damian Dunn
The future or because they have to because prices have gone up.
39:15
Peter Dunn
All right, here's what we're going to do. We're going to take a break from student loan forgiveness. It actually happened. I can't believe it happened. It did happen. And instead we're going to do the biggest waste of money of the week. No, it's not student loan forgiveness. It's something different that and yeah, there are other current events, too. I'm Pete the planner. Damn. I feel like you and I should run for Congress.
39:41
Damian Dunn
Nobody would elect us.
39:44
Peter Dunn
Okay, Kristen, you're not vain enough for this. But Kristen, have you ever considered running for political office?
39:55
Kristen Ahlenius
I'm afraid that people are going to say mean things about me on the podcast reviews. Do you think that I could handle a public? No. No, not at all.
40:07
Damian Dunn
If you and I ran for a higher office where there was a first and second in charge, our ticket could be done. And.
40:16
Peter Dunn
Know, if Pete Buttigieg and I ran together, it'd be Pete and repeat.
40:21
Damian Dunn
Sure.
40:27
Peter Dunn
At one point in like just in my head, I was, would I want.
40:32
Damian Dunn
To make a difference?
40:33
Peter Dunn
I never voiced it. Right. This is years ago. Then. Damn. I had to have told you that I've been approached two different times by two different parties to run. Not one, they wanted to appoint me as something when someone left something and the other one they wanted me to run. And I was like that's when none of it made any sense. And I was like, that's the worst job on the planet. I would never do I it's flattering, but it's just like is it flattering or are they you're a cretan. You do it.
41:06
Damian Dunn
Yeah. I couldn't stand to be the punching bag, so I couldn't do when people.
41:11
Peter Dunn
Go to Washington or go to whatever their state legislatures and they do it with like, I'm going to make a difference. And then like a month in, they're just like, hey, we're having a know, we're going to auction off a, I don't know, puppy. Puppy. I don't know. I don't know where the puppy came into any of this.
41:30
Kristen Ahlenius
It's International Dog Day, I think.
41:32
Peter Dunn
Is it? Happy Dog Day? Kristen oh, thanks. There's some interesting comments. Casey asked this and we didn't hit it, but we should hit it right now. Kristen so this only applies to federal loans and not consolidated loans with private companies.
41:46
Kristen Ahlenius
Go ahead, buddy. It only applies to loans owned by the Department of Education, which it's worth pointing out for the podcast listeners that we in the profession. There is not a ton of clarity around. I have brought this up before the family federal or the federal family education loans, which haven't been dispersed for over a decade. But those loans by and large are not owned by Doe. They were co signed essentially by the Doe. But the way the legislation or the way the announcement from the White House reads, if the debt has to be owned by Doe, there will absolutely be people who think that they're part of this that will be left out, at least in the first wave. Do I think that they'll go back and fix that? Because people will be outraged because these loans, again, are over a decade old. I think they'll have to go back and remedy that.
42:41
Kristen Ahlenius
But the way it reads, I don't think that all loans are going to be included.
42:46
Peter Dunn
Can I ask a question that might lead to divisiveness, but I'm going to give you both an out. The question is on a scale of one to three being very much so and one being not at all. How much did this executive order come from the buying votes perspective? How much did this executive order come from the buying votes perspective? Because you've heard it voiced, people are entitled to their opinion about it. I will go first if it makes you feel better. And I am going to be a weenie. And I'm saying a two. And here's why. Actually, let's go one to four because that way I can't be a weenie. Okay. Actually, you still could be half anyway. No one cares. Listen, I think it's about it, too. And here's why. I think the Biden administration sincerely feels like they are solving a problem for some people, and I actually believe that.
43:49
Peter Dunn
I feel like this does solve a problem for some marginalized people. 100% believe that. I also think that a lot of that promise comes from campaign promises that were meant to influence votes, and then now they have to deliver on it or they're in trouble for the midterms and they're in trouble for the reelection campaign. That's how I feel. So I'm a two.
44:13
Damian Dunn
Kristen, what scale are we going on? One to three?
44:16
Peter Dunn
We're going to three. We're going one to three. So I'm a weenie. I'm going two.
44:23
Kristen Ahlenius
Three. Was that it was politically very political.
44:26
Peter Dunn
One, not so much two. You're a weenie. What are you choosing?
44:30
Kristen Ahlenius
Well, at the risk of flooding your email inbox, I pick five. But I think that what has happened actually has almost backfired, because the 10,000 was a campaign promise. And I think what I've seen anecdotally is that the people who really wanted this never thought 10,000 was enough to begin with. So you waited two years to deliver on a promise that you made, and then you only did what you said you were going to do in the first place. And it's like, oh, look at what happened. It's like, well, you kind of campaigned on this. So again, at the risk of flooding your email inbox, like, five, but I.
45:11
Peter Dunn
Don'T think that's a controversial opinion by the and not that you do, but I'm saying you could support President Biden and still say it's a five. Right. I think that's where we don't have to get so polar. Like, Dame, I assume you're at a seven. Where are you at?
45:27
Damian Dunn
Well, I was going to say five until she said five, so I've got to one up her since I'm the de facto most conservative person on this podcast. So your radio show so, yeah, I guess I'm six or seven now.
45:38
Peter Dunn
Yeah. They were backed in a corner based on campaign promises. I think that's where it is.
45:50
Damian Dunn
If they felt this strongly about it and it was for pure altruism, there's no reason it couldn't have happened earlier in the first term.
45:59
Peter Dunn
Okay, so I'm not pushing back on that. My question would be, wasn't there a lot of other fish to fry early in the term?
46:07
Damian Dunn
Aren't there still a lot of yeah, are there still? I'm not sure. He stood at a podium and made a 15 minutes announcement followed by a bunch of tweets that some intern did. So this could have been wrapped up much earlier.
46:20
Peter Dunn
Fair enough.
46:21
Kristen Ahlenius
Can we draw attention to Big Brick's question? Because I think that is something important that we didn't talk about, and I haven't seen a whole lot is that usually student loan forgiveness outside of an established program like public Service Loan Forgiveness is taxable. The public service loan forgiveness program that relief is not taxable. However, as part of the something relief act, I think, I don't remember, it was signed like two years ago. There was temporary relief for student loan forgiveness outside of those programs. So through 25, I believe student loan forgiveness is not taxable. And that was independent of yesterday's decision or Wednesday's decision. Those two things just happen to line up. So this forgiveness should not be taxable.
47:11
Damian Dunn
However, yes, it still could be at the state level.
47:15
Kristen Ahlenius
Yeah.
47:17
Peter Dunn
You guys remember when I said aqua Greg came in here before the show was started and were all just talking and he was videoing us. I just saw that he put that video up on LinkedIn.
47:27
Kristen Ahlenius
I told you.
47:29
Peter Dunn
What in the world is going on? Aqua Greg?
47:31
Damian Dunn
You have to watch the video to find out.
47:33
Peter Dunn
Oh, my gosh. Okay, let's move on to some frivolity. Hey, by the way, I'm biased, right? But I appreciate that conversation we just had because again, the three of us on various elements agree. We see it differently, we disagree, it's okay, it's fine. And I just don't think it's a binary thing. It's terrible, it's great. No, it's freaking complicated is what it is.
48:03
Damian Dunn
I think the most telling thing is the one thing that we all agree on is that it doesn't solve the problem, right?
48:10
Peter Dunn
Yeah. You know what, there's two problems to solve and I don't think it solves either. But there's people that are deeply in debt with student loans and $10,000 isn't enough to get them out. And then there's the cost of college going forward and it makes it worse. Whatever. Let's continue. Just show awkward Greg behind the scenes unauthorized documentary of the show. What in the world? Imagine if I had said something unsavory last time. I buy him a jimmy john's. What?
48:51
Kristen Ahlenius
Dame. What was that stat that I gave you the other day that indiana, of the borrowers over 60 that have student loans, the average balance was like $38,000.
49:04
Damian Dunn
So people who are on a fixed income for the rest of their life have 38 ish thousand dollars in loans. If they've got one, that's the average number in 60 and overage.
49:18
Peter Dunn
Do not care for that statistic.
49:20
Kristen Ahlenius
Sorry.
49:21
Damian Dunn
For multiple reasons.
49:22
Peter Dunn
In three, two, one. This week's biggest waste of money of the week right here on the Pete the Planner show is the auto CBD cocktail bitters. Boost your mood along with your drink's. Flavor with auto CBD cocktail bitters. The blend is a custom combination of herbaceous botanicals including by the way, Damian did a little entertainment dancing to put himself through college and his stage name was herbaceous botanicals. I didn't know if you knew that, Kristen.
49:55
Kristen Ahlenius
I didn't know that.
49:57
Peter Dunn
Including lemongrass licorice. I'm sorry. I don't know where that came from, but it's wonderful.
50:03
Damian Dunn
Videos were destroyed.
50:06
Peter Dunn
I got to start. It's a custom combination of herbaceous botanicals, including lemongrass licorice and cacao, each with its own holistic properties to support well being. It's then been enhanced with pure auto CBD sourced from organically grown hemp plants to elevate cocktails with a floral citrus profile while delivering the calming benefits of CBD. Skip the alcohol altogether, add it to mocktails juice and tonics and sip yourself into tranquility. All right, Dame, you are familiar with bitters because you are known to make a cocktail or two or six. Kristen, you're not familiar with bitters because that's not your jam. You're a ranch water gal.
50:56
Kristen Ahlenius
Yes.
50:57
Peter Dunn
So, Dame, I'm going to give you the first actually, I'll give Kristen the first crack at what does this cost? Bitters for cocktails. But it's CBD.
51:06
Kristen Ahlenius
CBD infused.
51:08
Peter Dunn
Yeah. Okay, dame? And I want to just say a couple of things. Number one, if you're having a cocktail, do we also have to have the effects of CBD? Brian pinkens guessed $420. That's funny. Do we also have to have the same, like, I'm not a CBD guy. I mean, I've made this quite clear, and it's not because I don't like it. I have enough vices. I don't need another one. That just seems like a lot of money. $80 for bitters.
51:50
Damian Dunn
Don't knock until you tried it, man.
51:52
Peter Dunn
Jeez. All right. And now we go to the dude for the news. What's in the news this week, dude?
52:00
Damian Dunn
Well, let me get to the right page.
52:03
Peter Dunn
Wow. That is the first time in the show in two years that I've tossed you from the news. But you were so tranquil that you weren't ready, and that's disappointing.
52:13
Damian Dunn
Yeah, well, you talked to me about it. My review the number of people with credit cards and personal loans already hit fresh highs in the second quarter of 2022. According to TransUnion's latest Credit industry insights report released earlier this month, Credit card balances also jumped 13% during the second quarter, the largest year over year increase in more than 20 years, according to a separate report from the Federal Reserve Bank of New York. At the same time, APRs are just under 18% on average, which is also an all time record. Since most credit cards have variable Apr, there's a direct connection to the Federal Reserve's benchmark. As the federal funds rate rise, so does the prime rate, and, well, credit cards follow suit. You know what situations like this call for, Kristen? Student loan forgiveness, debt forgiveness, close governmental influence. That's right. The Consumer Financial Protection Bureau is considering looking into how much banks charge an interest.
53:08
Damian Dunn
Though the CFPB doesn't have the authority to cap interest rates, banks could feel it's more prudent to lower rates versus publicly battling it out to justify their practices. Experts warn there could be unintended consequences, however. For example, banks may tighten requirements to get and use credit cards, leaving many customers without access to credit.
53:30
Peter Dunn
Now, I have not necessarily heard people talk about student loan forgiveness from a slippery slope perspective. However, you hear a story like this, it starts to feel slippery, sloppy, doesn't it?
53:44
Damian Dunn
Little bit.
53:46
Kristen Ahlenius
But that might be one of my least favorite news stories I've heard in a while.
53:51
Peter Dunn
Wow. You don't consume a lot of news, do you?
53:56
Kristen Ahlenius
Yeah, but consumer debt just makes me nauseous. I can't help it.
54:01
Peter Dunn
Well, it makes you nauseous because you know the position it puts people in.
54:06
Kristen Ahlenius
Right?
54:06
Peter Dunn
You're not nauseous because of the choices people find themselves making. It's the aftermath.
54:12
Kristen Ahlenius
Exactly.
54:14
Peter Dunn
I would note that the mechanism of an interest rate associated with risk, with consumer debt, that is how it works. That's part of the apparatus. The only reason that a person is lent money is based on their credit worthiness. So if that begins to suffer, there has to be an increase interest rates. Or again, we get back to Moral Hazard, which should just be the name of the show.
54:40
Damian Dunn
Yes, I absolutely should.
54:43
Peter Dunn
Does that scare you, Dame? Do you think this is a news story that's just like, hey, I need something to rat about this week, or do you think this is like, we're not heading there. There's no boy, those seem like famous last words. We're not going to get to a point where what is it, the Consumer Financial Protection Board?
55:05
Damian Dunn
CFPB?
55:06
Peter Dunn
Yeah. They're going to start legislating interest rates.
55:10
Damian Dunn
Nope, they can't legislate, but they could take to task banks for their practices of charging exorbitant interest rates. And instead of getting bad PR, banks could decide, you know what, we'll just back it off. But in order to do that, we're going to tighten up our requirements and a lot of people are going to lose access to credit.
55:26
Peter Dunn
But what is exorbitant, Kristen? It's not unusual. I remember seeing that at one point in time, which is high. But is that exorbitant or is it for a person that credit worthiness is in question?
55:44
Kristen Ahlenius
That's exorbitant.
55:46
Peter Dunn
Dave, do you think that's exorbitant? If you're missing payments, I see the.
55:50
Damian Dunn
Direction that you're going with this, and I see the distinction you're trying to make. If somebody's a horrible credit risk, maybe it's entirely reasonable, but maybe those people shouldn't have credit extended to them in the first place.
56:03
Peter Dunn
Well, yeah. What else is in the news? I tried to catch them off guard again. I got them.
56:12
Damian Dunn
You did well. Even as people struggle to stretch their incomes amid high inflation, it turns out there's money that they may already have, and they're probably overlooking unused gift cards. Pete to that point, 47% of people have at least one unused gift card voucher or store credit, according to a new survey from CreditCards.com. This is the guessing part of the show. Pete. The average unused amount is this person. The average unused amount is this person.
56:41
Peter Dunn
All I can think about is not wanting to disclose how much unused gift cards I have. So maybe that's the second guessing game.
56:50
Kristen Ahlenius
Is it total or, like, the average person has cards worth this amount, like, per card?
56:58
Damian Dunn
I don't know. So just assume whatever you want.
57:01
Peter Dunn
Oh, man. My guess is I'm going to go.
57:05
Damian Dunn
$300 100 and $5175 person, up from $116 last year. For the entire US. Adult population, that could add up to $21 billion in money just sitting on gift cards.
57:21
Peter Dunn
All right, I'm going to allow each of you to make one lobby, one guess as to the amount of unused gift cards that I believe are in my possession. And this is not a flex. Dane, will this classify as Pete bragging about his financial situation?
57:39
Damian Dunn
Only the reviews will tell.
57:40
Peter Dunn
Yes. Is there anything else in the news this week?
57:45
Damian Dunn
Yeah. California on Thursday approved regulations banning the sale of new gasoline powered cores and trucks by the year 2035, an action aimed at addressing climate change that could speed the nation's transition to electric vehicles. The regulations, which applied to sales of new cars, pickup trucks and SUVs, would establish annual thresholds for the share of zero emission vehicles automakers must sell in the state each year, starting at 35% in 2026 and ramping up to 68% in 2030 and 100% by 2035. While EV sales still account for only around 6% of new US. Vehicle sales, they surpassed 16% in the second quarter in California.
58:25
Peter Dunn
I can't get my head around that story. I can't get my head there. I had the chance when I was in Phoenix last week to have an electric car or a gas car. I've never driven electric car and I chose a gas car out of habit. And that's all there is time for this week on the Pete the Planner Show.
58:44
Kristen Ahlenius
Yeah. I'm from the middle of Nowhere, Indiana, so same.
58:47
Damian Dunn
There's a ton of infrastructure that's going to have to happen for any of this to occur. It's the fifth biggest economy in the world and I don't think they have a shot at it.
58:55
Peter Dunn
And that's all there is time for this week on the Pizza Planner Show. Hope you enjoyed the student loan forgiveness episode of the show. Sending good vibes. Good vibes. Are all this in the budget? I'm Pete the planner. This was the show.
59:11
Kristen Ahlenius
I feel like there was another question.
59:13
Damian Dunn
That we didn't that we need to address.
59:16
Kristen Ahlenius
Oh, no. It was Jason's comment. What's not fair? Only one of the people on this feed has to comb their hair.
59:21
Damian Dunn
Thanks for pointing that out.
59:22
Peter Dunn
Thank you.
59:23
Kristen Ahlenius
You're right. Jason.
59:23
Peter Dunn
Jason, wait. You know what? I hope male pattern baldness besieges his home. That's not very I we I think we would have talked about this. We had to have talked about this. If you and I went, like, a month of growing it out, who would look worse? I know this is a visual, but where's your actual deficiency?
59:49
Damian Dunn
Basically, I'm trying to do it in a reverse screen. Basically everywhere between here sorry. Down. No.
59:57
Peter Dunn
Yeah, I've got upside down horseshoe just in the front. Really? I don't have much of a bald spot in the back, but it's just.
01:00:05
Damian Dunn
That in the front yeah, I've got a lot of real estate on top of my head that would be very bare.
01:00:11
Peter Dunn
All right, guys, I got to shoot some videos.
01:00:14
Damian Dunn
Sorry. Jeremiah.
01:00:17
Peter Dunn
Kristen, awesome job. Dame and I loved celebrating you this week, and we will continue to do so. You're awesome. Good job.
01:00:25
Kristen Ahlenius
Thank you.
01:00:26
Peter Dunn
Dame, awesome job celebrating Kristen this week.
01:00:30
Damian Dunn
Thank you.
01:00:31
Peter Dunn
Hey, thanks, everybody, for being part of the show today. That's all we got. Stay getting money.
