Impulse Spending Fixes and PSLF Choices When You’re in Grad School

11:57But I was also thinking about the financial piece of this and I wanted to track my total personal spending in February to see if there's a connection between being on my phone during those hours and spending money. So I don't know if this is how you feel, like you log off work, right? It's late afternoon and even into the night, it's like I tend to make these impulse purchases because I'm just like scrolling mindlessly after work, after putting the kids to bed, these sort of like high stress moments. I'm just trying to turn my brain off. I'm trying to decompress. But I started to wonder if I could use the brick to cut off my ability to spend money so easily, so impulsively and fill that time with more fulfilling hobbies, like started journaling this year.

12:39I have some reading goals. Yeah. And my daughter's been kind of journaling with me at night or like kind of scrapbooking, whatever. So thinking about the idea of what the money is going to be for. If you've been following along on the no spend thing, one of the goals was the Disney trip.

12:57Sean Pyles:Oh yeah. And I actually reached out to a Disney travel agent and we have like hard numbers on a trip for my daughter's birthday. That would be maybe a surprise for her. Is it more or less than$20 ,000? Disney is so expensive. Oh, way less. Way less. Yeah. Anyway, that's a whole, we need to get Sally French on the phone. Yeah, another conversation. That, yes. Okay. But like having hard numbers really helps so i i want to like continue to fund that and actually we're going to be able to stay at like a nicer place than i thought we're like we're splurging we're splurging okay so that's like a priority um i want to add some cash to our emergency fund because hello i'm the wife of a federal worker it's wild out here government shutdowns we learned this in 2025 just i i don't know if there's an amount in my emergency fund that would make me feel safe so we're just going to keep stacking the cash you know i don't know and then i have some outdoor home maintenance this is very boring um but do you know how much mulch costs like i don't want to know let me give you a gardening hack amanda and this might be a complete aside there is a service called chip drop chip drop.com i believe it is an arborist in your area can come and drop a tree's worth of chips in front of your house it's free mulch oh and it's not dyed with chemicals like black or red or brown and it's better for your yard.

14:16Sean Pyles:So we can talk offline about this. Yes. You might've just made room. You might've just freed up some of that money for something else. I love that idea. I have 1 million gardening money hacks, so we can talk about that. Okay. I love this. I love this. Okay. But see, like, this is wonderful. So like, I do have some really clear places for where I want this money to go. Not to mulch. Not to mulch. Yeah. That would be ideal, right? Yeah. Well, let us know how much money you save by not doing that online shopping when you're at your most vulnerable after a day of working and parenting. Okay. And here's the thing though.

14:49I started to kind of do the math a little bit ahead of coming on the podcast. I'm going to have to pick a month from last year that isn't February because I was still, I was riding high on my no spend low buy, like things were really tight. I need to like compare it to June or something when things got a little bit looser.

15:07Sean Pyles:Kids are out of school. Right. I'll report back.

15:09Elizabeth Ayoola:I want to say, Amanda, I am so glad to find someone else who also has a brick. I have a brick. You have one. I have a brick and I've been using it for a while now. I think I bought it like almost two years ago now. And then I just threw it in my drawer. And then one day I was like, enough is enough. Similar to you. I was like, I'm on my phone too much. I'm trying to teach my son not to be on tech all the time, but I'm not modeling that. So I started using the brick And I also use it to block shopping sites. So I use it to block Zara. I would minusly scroll on Zara all the time and end up buying stuff.

15:40Elizabeth Ayoola:And honestly, I'm proud to say I barely go on Zara anymore. Now it's just I don't have it. I kick the habit. So I don't know the last time I bought anything on Zara. It does help me. And, you know, when we're on social media, there are always ads to buy things. Always. I'm less I'm less online now. And I shop less online, too. I was like the other day, I was like, who am I? I haven't had like the urge to just buy new clothes in a while. Right. So I definitely think it's been helpful. You're giving me some hope that this is going to like really help me too.

16:07Sean Pyles:You guys are kind of selling me on this brick thing. I'm tempted to get one. But we use scrolling and spending as a way to self-soothe a lot of the time. And this actually gets me to what I'm doing in February, which is creating more friction in my life, especially around spending. I read this article in The Cut that is titled, In 2026, We Are Friction Maxing. Did you guys see this?

16:28Elizabeth Ayoola:Yeah, actually, I did. Very good read.

16:30Sean Pyles:It was a great piece. So for those who didn't read it, the gist is that, you know, we as a society have really let ourselves become kind of overly coddled by technology, much to our detriment. We're offloading our thinking and our creativity to AI chatbots. And we're so desperate for entertainment at all times that we're scrolling social media while we're watching a Netflix show, while we have an iPad up and we're like playing with our kids at the same time. and you know the article does talk about parenting too i'm sure you guys could relate to this and how it can be tempting to just shove that ipad in front of your kid just to get them to kind of calm down and i realized that we are doing the same thing to ourselves like we are ipad kids without even realizing it we are what an analogy it's very true convicting yeah so the idea with friction maxing is that you are intentionally rebuilding some of the friction in day-to-day life to actually enjoy what it means to be a person learning and growing and sometimes struggling as we're alive, because that helps you grow over time.

17:28Sean Pyles:So I'm taking this principle and applying it to my money in February, and I'm doing it in a kind of chaotic way just so I don't get bored. So this week, the first week of the month, I'm not going to buy anything online, even books. I have this bad habit of if I see a book I want, I will just go to the Powell's website. Powell's is the local bookstore in Portland where I go to all the time. And I, instead of just going into the store, I will pre-order it and then just go in to pick it up. And I realized it probably takes me just as long to just like do that versus going into the store. So why not enjoy perusing the shelves, which is one of the joys of going to a bookstore anyway.

18:00Sean Pyles:And then the following week of February, I'm only going to use cash. And I have not done that maybe ever in my life, actually. So I'm going to see how that goes. The third week of February, I am not going to use my phone to buy anything, not even tapping Apple Pay at a register. I'll be pulling out my wallet and we'll see how that goes. And then the final week of the month, I'm just going to forego takeout on my phone, which is a bad habit of mine, especially on the weekends. I just want to order food and it gets really expensive because it's so easy to do. I just keep buying more than I maybe would otherwise.

18:34So those are how I'm going to be adding friction to my spending in February. Okay. I have to ask about week two, about the using cash thing. yes i'm just thinking about like filling up your car at the pump you're gonna have to walk into the gas station and pay somebody man i mean and how do you know how much you're gonna take out are you gonna like do you have a set number in your mind like are you are you looking at like average weekly expenses and like okay i'm gonna take out around that much or are you gonna force yourself to like go back to the atm over and over you're asking questions i have not asked myself

19:09Sean Pyles:So I will let you know when I have answers to them, but I imagine I'll take out maybe a couple hundred dollars and see how far that gets me. I'm fortunate that I don't drive a ton, so I actually might be able to get away without filling up my gas tank for a week. Because, yeah, I don't like going into a gas station to give them cash, because how do you know how much is going to fill up your tank, right? True. This will be part of the learning of this experience over the month, and I'll see how I like it. And I honestly don't even know what lessons I might learn from it. But I'm excited to not have spending money be as easy as, you know, opening my fridge for a LaCroix.

19:44It's going to be interesting. I think that you might encounter some friction out in the world because there are some shops, some restaurants that say, like, we do not accept cash.

19:53Sean Pyles:Yeah, I was at a cider house over the weekend that said we don't accept cash at all. And so I would have had to have my friend cover me and then I give them cash. My friends don't want cash, but they might have to accept it this month. You're going to be the weird magical unicorn out there with just cash. People are going to be rolling their eyes at me left and right. And we'll all have to learn to work through the friction here.

20:16Elizabeth Ayoola:I'm most excited about, as we're all talking about our no spend challenges, but yours in particular, Sean, about all the human interactions that you're going to get that we miss out on because of all the friction we're trying to avoid. I don't want to go to the store and pick it up. Maybe I don't want to talk to anyone today. And then you have this like cute little conversation with the person handing you your food or you have the conversation with the person that you're giving cash to your gas. All these little things are what make up the human experience. Right. And sometimes we miss out on them because we want the convenience of doing everything from our bed.

20:43Elizabeth Ayoola:Right. And not talking to anyone.

20:46Sean Pyles:Let's build some community and use our cash more. Yeah. Some things are meant to be hard. Like this whole you know, you talked about the article that you read and like part of the human experience is not just being able to glide so seamlessly through life. Right. Even if it's a little thing like, OK, I can't go to this store because they don't accept like a little bit of friction probably will do us all good. Make us a little bit stronger in the new year. It makes for a good story. Yeah. At the very least, it will. Yeah. Well, I'm excited to see how our months go. So, Amanda, we'll be checking in with you throughout the month.

21:17Sean Pyles:We might just ask for a voice memo or two. We'll see. And listeners, if you are doing a no spend or money mix up challenge, whatever you want to call it over this month, let us know to leave us a voicemail. text us, email us, and we'd love to hear your stories.

21:31Elizabeth Ayoola:Or leave us a comment on Spotify and tell us how it's going, or Apple or wherever you get your podcasts. All right. We're about to get into this episode's money question, where we talk through whether it's a better idea to focus on paying off student loans while you're in grad school, or if that money would be better used towards paying your mortgage down.

21:48Sean Pyles:But first, listener, take just a second and think about where you might need some nerdy help with your money. Do you have a question that you just can't seem to work through, or are you maybe struggling with what to prioritize in your finances?

21:59Elizabeth Ayoola:Whatever your money question is, we the nerds are here to help you. So send us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.

22:12Sean Pyles:Or email us at podcast at nerdwallet.com. All right, this episode's money question is coming up next. Stay with us.

22:22Elizabeth Ayoola:Today's episode is sponsored by Spectrum Business.

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24:15Sean Pyles:We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Sydney, who sent us an email. Hi, NerdWallet friends in my head. I am a 34-year-old full-time nurse, married with no children, currently managing a student loan balance of roughly$30 ,000 with a monthly payment of$500. Based on my calculations, I have about three years of payments left before qualifying for public service loan forgiveness. I'm also starting my master's degree. My husband and I currently own a home, but are planning to sell and purchase a new one closer to work.

24:48Sean Pyles:Earlier this year, I also had to purchase a new car due to commute demands, resulting in a monthly car payment of nearly$600. Both my husband and I have excellent credit. He carries roughly$50 ,000 in student loans, but no car payment. We maintain just under three months of savings in a high-yield savings account as we navigate these financial and life transitions.

25:08Elizabeth Ayoola:Now to help us answer Sydney's question on this episode of the podcast, we have lending nerd Kate Wood. Kate, welcome back to Smart Money. Oh, thank you for having me back.

25:18Sean Pyles:So a lot has happened in the world of student loans and repayment options over the past year or so. So Kate, to kick things off, can you outline how public service loan forgiveness works exactly just so we know what we're working with here? Sure. So public service loan forgiveness is a program that lets people who work in qualifying jobs. And that includes a lot of folks. It includes nurses like our listener, people who work for nonprofits, people who serve in the military, people who work for any level of government to get their student loan balances discharged, aka forgiven, after making 120 payments while they are working in those jobs.

25:54So after the equivalent of 10 years worth of payments, whatever you still owe is going to be forgiven. The really vital part here is the well working in those jobs aspect. So it's not about how long you've had the loans or how many payments you've made overall. It's about how many qualifying payments you've made. So it doesn't have to be 10 consecutive years of payments. Just over however many years you have the loan, you have to have made 120 payments while you are working for a qualified employer. So in the case of someone like Sydney, who's currently in graduate school and her loans are in deferment, she's not making payments.

26:30So that time that she's spending in that deferment is not counting toward PSLF forgiveness. Even if she were to make payments during this time, so long as she is technically in deferment and does not have a payment due, that payment would not count toward PSLF.

26:45Sean Pyles:It wouldn't be a qualified payment in this case. Something that Sydney could choose to do would be to decline the loan deferment. That way, if she's declined the deferment and she's making payments, those would count toward PSLF. However, that would only be the case if she is not only going to school, but also maintaining at least 30 hours per week of employment with a qualified employer. If she were to take out new loans for this new graduate program, that's a whole other thing. So those could also potentially qualify for PSLF if she does continue in the field of nursing or in another qualifying field.

27:22But those new loans would be on a separate timeline from her existing loans. So she's estimating that she has about three years of payments left on the loan she already has. But those new loans would have their own 10-year timeline.

27:35Elizabeth Ayoola:Sheesh, so many rules going on here. But Kate, repayment plans are changing later this year. More rules for us. Would that affect these new loans? That would extremely affect these new loans. So if she were to take out new loans for a new graduate program. So based on her question, it sounds like she's in this graduate program now. But let's say hypothetically, this is a new program that she is starting next year. Any new loans taken out for a new degree after July 1st, 2026 will only have two repayment options, the new version of the standard repayment plan or the repayment assistance plan, which is the new income driven plan.

28:13If this is a program that she's continuing, so she's already been enrolled in this program, already in graduate school, she can continue on with the old rules for up to three years or until you finish your degree, whichever is shorter. That means that the other income-driven repayment plans, income-based repayment, income-contingent repayment, and pay-as-you-earn, or PAYE, those would all still be available. But if she takes out any new loans, all of her loans would then move on to one of these new repayment options, both the existing loans and the new ones. So if you take out additional loans, you will no longer be eligible for any of the existing income-driven repayment plans.

28:55Sean Pyles:So Kate, just so I'm totally clear, these payment plans that you just outlined, they run sort of parallel to PSLF, right? Yes. So PSLF is separate entirely from your actual repayment plan. So most people who are on PSLF are kind of looking to pay as little as they can, right, before that balance is forgiven. So in many cases, folks are on one of the income-driven repayment plans because those generally have lower monthly payments. Unless you were particularly high income, then you might be seeing a payment that would be comparable to what you'd get on one of the standard plans. But for a lot of people, income-driven is going to give them a lower payment.

29:35So folks are picking a repayment plan. They're making 10 years worth, 120 qualifying payments, whatever repayment plan they're on. And then those 120 qualifying payments are what will eventually get them PSLF. So PSLF is separate from the forgiveness that you hear about with the other income driven repayment plans. In those cases, depending on which plan you're on and when you entered it and a lot of other things, the earliest that you would see forgiveness would be after 20 years worth of payments with the new plan that's cut. Yeah. With the new plan that's coming up, the repayment assistance plan, it's going to be 30 years worth of payments.

30:13Sean Pyles:That's a mortgage. Yes. It is a mortgage. Oh my gosh.

30:16Elizabeth Ayoola:I haven't thought about it that way before. That is a mortgage. Kate, is there anything else that makes PSLF different? So one other difference about PSLF, in addition to the you get forgiveness after 10 years, which is a huge plus. The other good news is that after you reach that 120 payment mark, your remaining loan balance is forgiven and you will not have to pay taxes on it. You might have heard a lot in the news lately about the idea of a student loan tax bomb. PSLF forgiveness is not going to be affected by that because PSLF is never taxed at the federal level. The whole student loan tax bomb topic is a topic for another time for sure.

30:54But bottom line here, that does not apply to PSLF borrowers.

30:56Sean Pyles:Yeah, it sounds quite scary and maybe dangerous for your finances. So we will definitely have you on to talk about that sometime soon.

31:02Elizabeth Ayoola:Well, now that we know how this whole program works, thanks to your explanation, Kate, let's get to what's new with the program and loans for graduate school, because things are looking pretty different from how they were a year ago, which I'm sure you know, Kate, because you're in the know-how. One change that might not apply to our listener, depending on whether she plans to take out additional loans for her graduate degree, is that late last year, the Trump administration put out a proposal to reclassify nurses as not professionals. There was a lot of social media uproar about that, by the way.

31:33Elizabeth Ayoola:And therefore, they would be eligible for lower amounts of federal loans for graduate school. How might this impact those going into the nursing field? So this is another aspect where it kind of depends, at least for our listeners, Sydney, where she is in her program. If this is a program that she's already begun, she's not going to be subject to these new rules either until she finishes the degree or for three years. But if this is a brand new program that she's starting and if she takes out new loans for it, she would be a subject to this. So in a nutshell, the One Big Beautiful Bill Act got rid of graduate plus loans.

32:09And if you're like, what is a graduate plus loan? Basically, if you're currently in grad school, or if you've had federal student loans to go to grad school, those were the loans you had. It's just, that's what the graduate student loans were called. So with grad plus loans, you could borrow up to your program's cost of attendance. So So whatever it costs to go, inclusive of like tuition, fees, the estimates for lab fees, other costs like that, you could borrow up to that. Now, because of the One Big Beautiful Bill Act, starting for new graduate loans next year, they are going to be subject to borrowing caps.

32:43So most graduate degrees, including controversially nursing, are subject to the lower cap, which is$20 ,500 per year or$100 ,000 lifetime. The ergos that have been designated as professional degrees have higher caps, 50 grand a year or 200 ,000 lifetime.

33:01Sean Pyles:I mean, depending on the profession that you're pursuing, I imagine that these caps wouldn't cover what you might need to take out. This has been controversial since day one. Tuition is really high. We know this. The median cost for four years of med school for students who graduated this past spring, for example, is nearly$300 ,000 for public universities and over$400 ,000 for private. That's data from the American Association of Medical Colleges. The median debt that folks are taking on,$200 ,000 for those who went to a public school,$250 ,000 for private. Additionally, with these lending caps, very few degrees qualify as professional degrees.

33:42So on one hand, nurses are excluded, and we have heard a lot about nursing being excluded. But there are only like 44 degrees total that actually qualify as professional. And the definition that they're drawing on comes from the 1965 Higher Education Act. So it's not particularly inclusive. And also, I would say even for fields that are considered professional under this bill, a lot of professional organizations, notably the AMA or the American Medical Association, have complained that these borrowing caps are just too low.

34:14Sean Pyles:A cynical person might posit that these borrowing caps are just potentially designed to push people into private loans, which could be more expensive and make people in the banking world a lot of money at the expense of borrowers. That's definitely something that one could posit. In theory, the sort of thinking behind this is that if we put in these borrowing caps, and this is the maximum amount that students can pay, then schools will be forced to lower their tuition. Not super how capitalism usually works, but in theory, that could put the squeeze on schools. The reality is, though, I mean, like you were saying, Sean, we might see a lot of students turning to private loans.

34:58And we might just simply see people turning away from these fields entirely. There are really serious concerns that existing shortages that we already have in medical fields, including nurses, are just going to be exacerbated if people feel like, well, how can I go into this? How am I going to pay for it? There are very valid concerns that these limits could dissuade people who are from groups that have historically been underrepresented in these fields. So that could be people from underrepresented minority groups, first-generation college students, students from rural areas. Those groups are already underrepresented in medical fields, and that this could dissuade people even further from going into them.

35:40So then you're ending up with, you know, medical practitioners who don't reflect the diversity of the actual population.

35:46Elizabeth Ayoola:I will say just as I'm hearing all these numbers thrown around these mortgage numbers for education, it just makes me think back to my undergraduate degree. I did mine in the UK and I at the time didn't pay more than$10 ,000 for three years of schooling. Sorry, 10 ,000 pounds. Correct me. 10 ,000 pounds, which is

36:04Sean Pyles:still way cheaper i am so jealous that was less than half of a year for me and my postgrad was

36:12Elizabeth Ayoola:like and i know the the type of degree that you choose you know influences the price as well but was around five or six thousand pounds so i'm like people are paying a hundred thousand two hundred three hundred thousand dollars for school yeah that's wow it's a lot yeah yikes well moving

36:30Sean Pyles:on. The one big, beautiful bill act didn't directly impact PSLF, but that said, the Trump administration has taken steps to tighten the program's eligibility. And many with the opportunity to take advantage of this program probably feel anxious about whether this loan forgiveness program is actually going to pan out for them. It seems like our listener is in that camp too. So I feel for you, Sydney. So Kate, can you outline these recent changes and maybe what's the best course of action for those who are hoping to have their loans forgiven, but are just really anxious that this program might cease to exist?

37:04As you mentioned, One Big Beautiful Bill Act didn't directly affect PSLF, but PSLF had already been tinkered with a little bit. So at this point, it sounds like a long time ago, but way back in March 2025, President Trump issued an executive order that said that employers who otherwise would qualify for PSLF, but who engaged in quote-unquote illegal activities would lose that PSLF eligibility. So in other words, if you're a student loan borrower, you're in repayment, you're working for these employers, you would no longer be eligible for forgiveness with PSLF. The language throughout is highly partisan, but the gist of it is that organizations that engage with issues like immigration, reproductive rights, really anything diversity, equity, and inclusion could be stripped of qualification.

37:51That was finalized back in late October 2025, so last fall, where they basically laid out a process for how these employer reviews would work, how they'd be notified, what that kind of timeline would be, how this would actually look, and who would decide what is or is not illegal still hasn't really been decided. Well, Kate, how are people responding to this? Like Sydney mentioned, there's a lot of fear. There's a lot of anxiety about, okay, what does this mean? Is this going to cease to exist? And as with so many things with student loans, it's a wait and see, right? It's a wait and see. And I'm sorry, that was a big sigh and a wait and see.

38:30That's not what you're hoping to hear. I will say on the optimistic side, this brought about a really swift reaction. So when we got that finalized ruling in October, two major lawsuits were brought right away against the education department. So one was brought by a group of state attorneys general. And the other one was brought by a group of municipalities, labor unions, nonprofits that all kind of teamed up. So that one in particular is interesting because cities, like entire cities are concerned that if they are a place that's been deemed a sanctuary city, then all of their employees, so teachers, police, folks like that, could theoretically lose PSLF eligibility, which would be really detrimental for a huge number of reasons.

39:13It is super stressful for borrowers, but it is important to remember that nothing is happening yet. These are strong lawsuits that are being brought, and at minimum, these could hold up implementations of these changes for months or potentially even years. If PSLF forgiveness is your goal and you're working toward it, keep working at your job or, again, at any job of a qualifying organization. You can switch jobs. You don't have to stay at one job for every single one of those 120 payments, So those payments will still count as long as you're with a qualifying employer. Since, again, we don't really know, you know, which kinds of employers might lose qualification or how it could look.

39:51It doesn't make sense to jump to conclusions based on this like it could happen.

39:57Elizabeth Ayoola:Yeah. Thanks for emphasizing that, Kate, because I know sometimes we can get scared and make like fear based decisions. Right. So could the Trump administration, including the Department of Education, just wake up one day and decide to cancel the PSLF program? or would it take congressional action? It would indeed take congressional action. So PSLF was created by Congress and it has historically had strong bipartisan support. After all, I mean, we're talking about supporting people who choose to go into helping professions, right? Like emergency medical personnel, you know, teachers, firefighters, stuff like that.

40:30It's kind of hard to argue against. And so PSLF dates to 2007. You know, it was introduced by Congress during George W. Bush's administration. The first Trump administration did actually try and fail to kill PSLF, which is why we're now probably seeing them take different tactics, in this case, potentially restricting access to PSLF. I will say also for what it's worth in terms of, you know, talking about these presidential administrations doing executive orders and executive actions and stuff like that to try to make changes, the Biden administration 100 % did that stuff as well. They were also using executive action to make changes to PSLF.

41:06In that case, though, they were expanding access. So hit a little bit different. We've gone like so far, though, into the stuff that I know about. Let's go into a bit more of like what you guys know about and the other part of Sydney's question, whether she should focus on paying off her student loans or put more toward other goals, notably a down payment on a home.

41:27Sean Pyles:Right. This is a classic financial priorities question, and we get these all the time in different facets, but I always find them so interesting because the question is really whether to keep paying off these loans to achieve PSLF as soon as possible. And I understand Sydney's urgency behind that because I would feel pretty anxious if I was in their position. Or do they want to take advantage of the opportunity to stop making payments while in grad school and direct that$500 a month elsewhere, which is not an insignificant amount of money, especially since Sydney's car payment is$600. That's a lot to put toward a car every single month.

42:00Sean Pyles:And, you know, ultimately this comes down to a question of priorities, which is really, really personal. What does Sydney value in how they're managing their finances? So they could consider whether they have any other pressing areas of their personal or financial life that they want to put money toward instead as well. Like, for example, we don't know what Sydney's retirement situation is like. They said that they're 34 years old. How much do they have saved for retirement so that they can actually fund life after their working years. Something else that comes to mind is that Sydney said that they have just under three months of emergency fund savings.

42:35Sean Pyles:I think that that is a little on the lower side, giving some of their uncertainty. They might want to consider putting more money into that account.

42:42Elizabeth Ayoola:I think I personally would pay off the P.S. LF loans. That would be my choice in this scenario. And simply because, like you said, Kate, nothing is written in stone yet. Would it be amazing for all my loans to be paid off after a period of time. And I could use all of that bulk cash to do exactly what Sean said, bulk up my emergency fund, of course, go on vacation. You can edit that out and just do other things that are really fun. So yeah, I would definitely stick with paying off the loans.

43:11Sean Pyles:And Kate, what would you do? I would also stick with paying off the loans. However, I really want to emphasize yet again that we don't have any actual reason to assume that PSLF is going away, the administration might make it a lot harder to get forgiveness, but forgiveness isn't going anywhere. So I would focus on the right now goal of buying a home. I just wouldn't forget about the longer term goal of, hey, we want to get rid of the student loan debt. So a couple of steps that I would take personally, one, I would go through my paperwork to figure out exactly what my payment count is. There's no longer a counter on studentaid.gov, the system that used to be there for IDR.

43:49So you could see, okay, this is how many payments I've made. That's not there anymore. Loan servicers we know can be inconsistent, can make mistakes. So I would look really closely at my payment history. And because it's PSLF, also my employment history, make sure I know exactly how long I really have left on those loans. Because I'm trying to focus on other goals, like bilking up my emergency savings or making a down payment, I'd also do whatever I can to minimize my monthly student loan payment. So even though repayment options are changing for new borrowers, for current borrowers who don't take out any additional loans, if we don't take out any new loans, you still have a number of options.

44:28Income-based repayment, income contingent repayment, pay as you earn are all still technically available to you. Two of those, ICR and PAYE, are going to go away after 2028. But you know what? But with PSLF, if she's looking at, you know, three years of payments, if you can get two years of a lower payment, take that two years, right? Because you're trying to get forgiveness. Get as much forgiven as possible. Pay as little toward that balance as you can, right? You really want to maximize the amount that is forgiven. Minimize the amount that you're actually paying. Again, though, because of all these changes, if she were to take out new loans for this grad program, assuming that she's starting the grad program in 2026.

45:07So that would count as not only new loans, but new graduate program. We are not under the old rules. That would change everything. And again, those loans will have their own tenure timeline. That's a whole other thing to consider. There is so much to think about. And I'm sorry for throwing out so many numbers.

45:24Sean Pyles:I mean, we appreciate you doing it because it's a complex topic. But you talking about how important it is for people who are in this program to track their qualified payments and their employment history. That makes me wonder about the actual forgiveness itself. Is it automatic or are people in this situation going to have to maybe like make the case of, hey, here are all of my payments. Here's where I was working when I was making these payments. They are qualified and kind of have to fight for themselves to get this forgiveness. So forgiveness is meant to be automatic. So basically, servicers are going through at the education department's direction, are going through records saying, OK, these are the people who've met this goal at this time.

46:05That said, things have been moving incredibly slowly, and we have seen a lot of issues with forgiveness being dispersed, not necessarily in terms of PSLF forgiveness specifically, but just overall. So we've been in a situation for several months now where we were in a situation previously where forgiveness was not being processed at all. So one of the ongoing lawsuits against the Education Department was brought by the American Federation of Teachers. They have been really strong advocates because in particular, PSLF is something that very much affects their membership, right? Teachers are heavy users of the PSLF program.

46:44And so they have really strongly advocated for making sure that we're holding the education department accountable and that things are moving forward, that borrowers are getting what they were promised when they took out these loans. So as part of that lawsuit, they were like, so we noticed that you guys are not processing forgiveness and you need to start doing this. That was the exact legalese that was used for that. So they were able to get income-based repayments. So IBR borrowers are starting to see forgiveness being processed. We started to see that right around the shutdown. So it was like October that we started to kind of see that happening.

47:24People who are on PAYE, pay-as-you-earn plan, people who are on ICR, income contingent repayment, we are still trying to get the wheels moving again so that forgiveness is processed for people on those plans. So there are currently a substantial population of people who have actually reached the forgiveness timeline, whether it's 10 years PSLF, 20 or 25 years. It's just the regular way on one of these other plans and who are waiting to have that forgiveness actually processed. On one hand, yeah, it's a good situation because this loan balance should be gone. On the other hand, because the loan balance is technically still active, you need to do something about it.

48:04So these folks are either stuck working with their servicer to get a deferment or forbearance so that they aren't having to make payments during this time. Or something else that the AFT lawsuit forced the education department to codify and guarantee was that if you made extra payments during this time, so if you just kept paying your loan because you kept having payments due, that you would get that paid back to you once your loan balances were given. It's a lot.

48:31Sean Pyles:I would like that to be a payback with interest for all the trouble. Yeah. Right. That's going to happen. Yeah, it should be. Yeah. Well, so it seems like this is yet another situation where people have to be their best, most informed advocate. Absolutely. Or be part of a union that can help advocate on your behalf.

48:50Elizabeth Ayoola:I have a third option. If I decide to change my career and become a nurse or a teacher, it sounds like GoFundMe is a lot more straightforward.

48:58Sean Pyles:I thought you were going to say we're going to burn it all down, Elizabeth. GoFundMe is a nice option too.

49:03Elizabeth Ayoola:Yeah, geez. All right, all right.

49:06Sean Pyles:Well, Kate, thank you so much for coming on and explaining what is quite a complex but really topical subject. Of course, thank you for having me back. And if folks wanna hear more about the best student loan products and other loan products, they can check out NerdWallet's best of awards. You can find that at nerdwallet.com slash awards. That's all we have for this episode. Remember that we're here to answer your money questions. So turn to the nerds and call it or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.

49:39Elizabeth Ayoola:And we want you to join the Smart Money Party next time to hear about how to handle taxes when you're self-employed. Yes, the party is this show. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

49:54Sean Pyles:Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

50:04Elizabeth Ayoola:This episode was produced by Tess Vigland, Hilary Georgie helped with editing, Nick Crismy mixed our audio, and a big thank you to NerdWallet's editors for their help.

50:13Sean Pyles:And with that said, until next time, turn to the nerds.

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