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HMM 68:  [Part 1 of 2] The Real Low Down On Student Loans With Jay Fleischman

HMM 68: [Part 1 of 2] The Real Low Down On Student Loans With Jay Fleischman

Student loans can be a complete beast to understand which is why I have a student loan expert, Jay Fleischman to help break it down for us.

He gave such great information that this one interview became a 2-part series.

What You’ll Learn In Today’s Episode:

  • The key differences between federal and private loans
  •  4 steps to take before you take out any student loans
  • One interesting piece of research to keep in mind that affects those long-term decisions

Resources From This Episode:

Let’s Talk College Facebook Group

Listen to Jay’s Podcast!  Student Loan Show

What was your biggest takeaway from today’s episode?  Please be sure to share in the comments below.

Abrazos + Much Love,



Click on the arrow below to access the transcript:

Read Full Transcript



[00:00:08.0] ANNOUNCER: Welcome to the Her Money Matters Podcast, the podcast to help you take control of your finances. Join your host, motivational money coach, Jen Hemphill, as she shares with you practical, simple money insights into real life stories by women like you.

Let’s get to it.


[00:00:25.9] JH: Hello there. I’m so happy to have you here. This is Part I of a two part series because our topic today, student loans, is such a heavy topic. There is so much to know about student loans so that’s why I am breaking up the interview I did with our guest expert into two and what I’m going to do at the end of each episode is I am going to recap those important pieces.

So yes, you’ll be hearing a summary of what he talked about, just a very brief summary, and so that way you are learning from him and then I’m going to recap it for you and therefore you’re going to retain it a whole lot better. Now in today’s episode, you will learn about the key differences between federal and private loans. You’re also going to learn about the four steps to take before you take out any student loans and you’re going to learn about one interesting piece of research to keep in mind that affects those long term decisions.

Let me share with you a little bit about Jay Fleischman. Jay believes we’re set up to fail financially, we don’t teach children about money. It’s a taboo subject. It’s so strong and so taboo we can’t even discuss it with those who we’re closest to. Parents do talk with children about sex and drugs but not money. Schools don’t teach civics or home economics much anymore, so we’re left to learn the rules on our own. At the same time, we’re indoctrinated to believe more stuff means success even if can’t afford it.

The credit industry bombards us with messages saying, “Good things come to those who don’t wait,” and just like kids whose parents don’t teach them about the dangers of drugs, we make awful mistakes that can ruin our lives. But if you don’t know the rules, you should get a second chance to get it right. That’s where Jay comes in. Jay helps give people a financial do over.

He’s been a consumer protection lawyer for over 20 years and he helps people lower their student loan payments and get out of default, reorganize their finances by using the bankruptcy laws, correct errors on their credit reports defend law suits brought by creditors and student loan companies and sue debt collectors who harass people in violation of federal and state law. Jay also trains lawyers in the field of student loan resolution through the student loan law workshop and hosts The Student Loan Show, a weekly podcast about, well you guessed it, student loans.

Let’s go ahead and meet Jay.


[00:03:15.7] JH: Welcome Jay Fleischman to the Her Money Matters Podcast. I’m excited to have you here and to talk about the dreaded school loans.

[00:03:23.8] JF: Tan-tan-tan. Thanks for having me Jen. I’m happy to be here.

[00:03:27.5] JH: Well, I wanted to start off with, for those listening to get to know you. So I always ask and then we always want to know what your money story is, how you grew up around money. So if you could tell us a little bit about that.

[00:03:41.0] JF: Well I’m 46 years old, so when I was young talking about money wasn’t really accepted and I remember growing up vividly, I never knew what anything cost. I never knew what my parents brought into the house, I never knew what went out of the house, I never really had a concept of things but I knew full well that money was not easy to come by in my house.

We didn’t grow up wealthy, my dad worked a lot when I was a kid and I knew that hard work was necessary in order to bring money into a house and that you had to be careful. No matter how much money you had, you had to be careful about what you were spending because you never knew when something unexpected was going to come up that you are going to need additional money that you hadn’t counted on, that you couldn’t necessarily budget for.

So even though I didn’t have a formal education from my parents about how money operated, I knew what I still think are the most important about money. Money doesn’t grow on trees, and you’ve got to work hard for it, and when you do make it, you need to make sure that you don’t spend all of it because there are other things that you’re going to need it for later on down the line.

[00:05:05.0] JH: Perfect and so there weren’t really any money conversations but obviously you’ve made your observations and had some realizations from that. Now later on down the line did you have any financial advice that you would consider was probably the best financial advice you have ever gotten?

[00:05:23.2] JF: My best financial advice that I ever got was exactly what I just said, and I’ll give you the story behind it because there is a story behind it. When I was young, I was in two fairly significant accidents and as a result of those accidents, when I turned 18 I had what at the time was a fairly large amount of money at my disposal and rather than listening to the advice that was given to me, I did what an 18 year old with a lot of money would do.

I spent it unwisely, over a fairly significant period of time but unwisely and I came out of that realizing that it’s a great idea to make those mistakes when you’re real young but it’s an even better idea to listen to your parents when they tell you that spending all the money isn’t in your best long term interest. So yeah, the lessons came from observation and came back to haunt me at a fairly early age.

[00:06:32.0] JH: Right, right. I hear you. Well thanks for sharing that story, and I would like to know, we always want to know if you could take us just in a quick snippet, a quick tour of a typical month for you and how your household finances are managed, any tools that you may use, any apps, whether you sit down weekly? Tell us a little bit about how that goes in your household.

[00:06:55.6] JF: Sure, I look at my money every day. It’s almost an obsession with me in terms of how much is in the checking account, how much is on the savings account, just for regular cash flow. What bills are outstanding, in spite of the fact that all of my regular bills are automatically paid through auto debits and out of my checking account. All of my utility bills are automatically paid, my rent because we rent we don’t own, my rent is automatically paid.

Everything goes out and the reason why that’s the case is I’m self-employed, my wife is self-employed, we don’t have a lot of stability in terms of our schedule every day, every week and every month. So if left to our own devices, those are pretty good chance that something would fall through the cracks as far as our bills are concerned and we learned very early on that’s just not the way to live.

So all of our regular bills are paid automatically and we do that just through our checking account. We bank with Chase and we use the online banking and that’s how that gets taken care of. We do track all of our spending. We use Mint just because we’ve used it for so long and it’s just become a regular part of our life. I know that there are other tools out there such as You Need A Budget and a lot of my clients love that. But we like Mint just because it’s easy to track. We can track our spending on our phones and it’s kind of a set it and forget it way of looking at things.

Our savings, we have regular money that goes out of our account into some defined savings areas whether it’s our long term retirement or our slush fund. But we also use Digit, which is an app that I’m sure you’ve heard of and a lot of your listeners have heard of that will automatically save for you based upon your spending activity in your checking account. That’s been invaluable to the extent that using Digit, we were able to take this summer the longest and most comprehensive vacation that I have ever taken as an adult.

[00:09:08.6] JH: That’s wonderful.

[00:09:09.6] JF: Yeah, in the past 16 years I have never unplugged from my business for an entire month and this year I did.

[00:09:17.5] JH: Good for you.

[00:09:18.1] JF: Yeah, all auto saving. It was great, yeah.

[00:09:20.7] JH: That’s awesome and since you both are self-employed what tips or what advice do you have? Because being self-employed the income isn’t necessarily the same month to month, how do budget for that or I don’t know if that’s the correct question, but how do you plan for that?

[00:09:39.1] JF: Yeah, how do you count for the highs and lows of self-employment and there are a lot of highs and lows. So the way that we do it is we automatically assume that we are going to have our worst month every month and the worst month is always equal to the worst month of last calendar year and that’s how I’ve done it for, it will be 21 years that I’ve been self-employed come this December and that’s how I have always done it.

I plan my spending based upon last year’s worst month, this way if the bottom falls out, I am covered on the basics. Everything over that, that’s good and there are other things that we do with that but always plan for the worst and hope for the best.

[00:10:25.7] JH: Right, that’s perfect and before we get into student loans, tell me how you became a lawyer and why student loans? Why are you focusing? I want to know. I was trying to see if that came out in your story or why did you come to this area of student loans with your career?

[00:10:43.0] JF: Well, as I said, it will be 21 years come this December that I’ve been self-employed as a lawyer and I started out as a consumer bankruptcy attorney helping people get out of debt and then I started to look more closely at their overall credit position, their overall long term financial goals and thing of that nature that is outside the scope of most consumer bankruptcy attorneys but I think very important in order to be able to help my clients, never be my client again.

That’s really my goal, but there aren’t that many lawyers that don’t want a repeat business. I am one of them. So about four years ago, I’ve been noticing that my clients were coming to me more and more with student loan problems and there are some particularities and bankruptcy laws that really limit the relief that student loan borrowers can get through going through bankruptcy. So I was forced to either A, tell my clients that I couldn’t help them and that made me sad. Or I could try to figure out what I can do.

At that point I, just by happenstance, I was introduced to a guy names Joshua Cowen. He is a student loan lawyer in, at the time, Connecticut. He’s since relocated to Vermont and we became acquainted. He was beginning to teach a workshop where he taught lawyers how to handle student loan issues and he and I started working together. I actually took the workshop a little over four years ago now and after I went to the workshop, he and I started working together and now we’re partners in the workshop and we go around the country and we train lawyers.

[00:12:29.1] JH: That’s awesome.

[00:12:30.0] JF: Yeah, so it’s been really good. We’ve trained a little over 300 attorneys in student loan resolution over the past four years. This year looks like we’re on track to beat our annual numbers, which is great because I’ve got to tell you Jen, there are too many people out there for me to handle or for all 300 of us to handle. For every one of us, there are way too many people who need our help.

[00:12:58.7] JH: I believe it. Well thanks for sharing that because I was curious on how did your path lead to what you’re doing today. So I appreciate you sharing. So let’s get into the nitty gritty of student loans and what I wanted to do is I wanted to break it down into different scenarios, those who are needing to take loans, those who already have student loans, and then those that are thinking of their kids and saving for their kid’s college.

So let’s address those who are about to take loans and if you could break down the different types of loans that are out there and what you need to know before signing on the dotted line?

[00:13:38.1] JF: Sure. There are two major types of student loans. There are federal student loans and there are private student loans. Federal student loans are either guaranteed by the federal government or originated by the federal government, in other words the government itself is the lender and that’s the case for any federal student loan that was originated on or after July 1st, 2010. Prior to that, private banks were able to lend money and have that money guaranteed by the federal government under what was called the FFEL Program.

Those loans are, for the most part, not credit based, for the most part do not require a co-signer or guarantor and offer a significant number of repayment options to help keep you on track with your payments and lead you either to payment in full or forgiveness or cancellation or discharge of indebtedness. They come with a significant number of programs and protections behind them that are designed to assist you.

Private student loans are the absolute opposite. Private student loans are all credit based, private student loans are given based upon market rates. So interest rates are all over the board. It can either be fixed rate interest or variable interest. Over 96% of private student loans that are originated at this time in the United States require a guarantor or co-signer, which means that you’re going to need to have, if you are a student, you’re going to need to have somebody who’s got good credit, good income, good assets to stand behind you and sign and agree to be held legally liable if you can’t make the payments.

Private student loans also offer no federally mandated repayment programs. There is no forbearance or deferment. There’s no long term discharge or cancellation. It is in all respects just like any other bank loan that you may take for any other reason.

[00:15:45.5] JH: Right, right and so if a person, let’s say you encountered a person that was about to take a student loan out, what advice would you give them? I mean you could tell them about the types of student loans but before they signed those papers, what is your best piece of advice?

[00:16:04.5] JF: My best piece of advice is run the other way but that’s not realistic. So my best realistic piece of advice, there are a couple of steps that you need to take before you take out a student loan of any sort. The first thing you need to do is you need to decide what it is that you think you want to do with your college education. Where do you want to go? Where do you see yourself? What are your goals? What major are you looking at? What do you want to utilize that for and what is the best school that you can get into that is going to maximize your chances of getting to your end result?

So if you want to be a doctor, let’s say, well you need to have an undergraduate degree in some science. If you’re a bio degree or a chem degree, one of these standard pre-medical school undergraduate degrees. Well what is the best school that you can get into that’s going to lead you to medical school, that’s going to give you the best value for that degree? And that’s how you want to pick your school. So the first thing you need to do is what do you want to do?

Second thing is what school can you get into that’s going to help you get you where you need to go? If you get to those two questions and you don’t know the answer, then you don’t go to college. That’s the bottom line. We are trained at this point to think that you’ve got to go to college. You’ve got to go to college to get a better job, to have a better future, to have a better career, because in large measure, our parents told that to us.

[00:17:48.0] JH: Absolutely.

[00:17:48.8] JF: Because either they were the first ones into college or we were the first ones into college. I mean in my family, I was the first one into college. So I grew up, “You go to college.” “Why?” “Because you go to college, that’s what you do. It’s great.” It’s a circular argument but at the time, my risk wasn’t that high relative to what my probable income was even after a four year degree. You can’t say that anymore.

You’ve got kids who are spending a 120, 150, $200,000 on an undergraduate four year degree, having absolutely no idea what they want to do. Having no idea what their trajectory is going to be and they’re going to college because they have been told, “Well you’ve got to go to college.” The reality is that we need plumbers and mechanics and people who work with their hands and we need people who just have a latent intelligence that doesn’t require a four year degree.

Plenty of smart folks I know, my parents included, don’t have a four year degree. I think that’s okay. So after you get those two levels, what do you want to do, what’s the best school that you can get into that’s going to help you with your goal? Then you want to determine, what can I do to make it as inexpensive as possible for me to achieve my goal? What can I do to cut my cost? What can I do to lessen the burden financially of me not working for two years or four years, whether it’s a two year degree or a four year degree?

And you really want to start to learn good budgeting habits at that time. I know it’s difficult for an 18 year old to consider that but that really as a parent, that’s what you want to teach your kids and as a kid, that’s what you should be demanding to learn. Because the less money that’s going to cost you, the less debt you’re going to potentially have to get into. Maybe you can work part time, maybe you can take some time off and earn enough money to fund at least a year or so of college. That’s a great way of going about it too.

Once you’ve figured out how to minimize your cost, then you can start looking at financial aid sources. You can start looking at federal student loans and then you can start looking at private loans but even before that, you want to look at scholarships. Nobody ever told me about scholarships when I was a kid. It was all, “Well if you’re really smart you’ll get a scholarship.” So I worked my tail off into high school. I got really good grades, I didn’t get any scholarships but as far as I was concerned, that was my only avenue for getting money that I wasn’t going to have to pay back.

There are thousands and thousands of scholarships out there that people don’t know about and a lot of people don’t even claim the money. That’s a shame, you’re giving up free money? That’s awful. So look at your scholarships before you look at your federal and then ultimately your private student loans. So in a nutshell, that’s the steps that I tell people to take.

[00:20:49.2] JH: That makes sense and do you have a certain website that you recommend for scholarships? I know it’s all not housed on one website that would be nice though right? You can go to one website to find, unless something’s changed but.

[00:21:06.3] JF: Yeah, that would be great. I like Fast Web. Fast Web has been around for ever and ever, and ever, that’s at I like but I’ve been told that I have really actually gotten into and have actually spent some time on it myself because I’ve got friends who are going to college, is Big Future, which is by the college board and that’s at and there’s a pretty good scholarship search there.

[00:21:35.5] JH: Okay.

[00:21:35.9] JF: And I’ve used that and beyond that, there is a Facebook group that I am a member of and if you can tolerate my typing in the back, I want to actually give it out to your listeners because it’s really, really good. The woman who runs the group, I have no idea who she is. I have no idea what her background or her job is but all she does every single day is she posts scholarship information.

The group is called Let’s Talk College. It’s a closed group so you have to apply for entry and membership but I don’t know where she finds this stuff. She finds amazing resources that are just some of them are really off the wall. But they are amazing resources, I highly recommend it to everybody.

[00:22:20.9] JH: Well, I thank you for sharing that to us and I’ve got even more questions that are popping up, so this is probably going a longer interview than usual. But the other questions, a couple of questions that I want to ask your thoughts, and I don’t know the right terminology. What are your thoughts on before we started recording, I was telling you and mentioning how my husband when he signed for those student loans, they didn’t do a really good job of educating.

It’s just basically showing, “Hey, sign the paper, read the paperwork and sign it,” right? But now they have I think they’re called whether they’re student centers or something that my impression is that they that’s to help with that, educate them and I’m not sure what they’re called, student loan centers or something like that?

[00:23:10.9] JF: On the college campus?

[00:23:12.0] JH: Yes, yes.

[00:23:12.9] JF: A lot of campuses have financial aid centers and they do call them by a number of names, which they didn’t have when I was a kid either so.

[00:23:20.9] JH: Yeah, well I was just wondering. I thought they just expanded that and are doing more than what they were doing before or maybe I am incorrect?

[00:23:29.6] JF: You know, you would think so.

[00:23:33.0] JH: They just changed the name, the branding I guess.

[00:23:36.1] JF: Yeah, I mean look, the reality is that scientific studies show that the ability to engage in long term complex thinking doesn’t fully develop until you’re 25 years old and so when you’re 18 years old and coming into college or even when you’re 21 and finishing up college, your ability to plan long term, you just don’t necessarily have it. So I think that the ability to educate somebody just on the basis of walking into a center is limited by human development in many cases.

[00:24:16.7] JH: Right, that makes sense.

[00:24:17.6] JF: Yeah, I think that really makes it difficult. I don’t think that schools are doing enough. I know for a fact that the US Department of Education recognizes that not enough is being done and they are doing everything they can to bring out more initiatives to educate more students. For example, federal student loans, as I said, come with a lot of repayment options. Really there are 11 or 12 income dependent repayment options for federal student loans.

That’s a lot of choice there and people don’t really know about them but the entity that is in the best position to educate a borrower about that is their loan servicer, that would be Navient, the name used to be Sallie Mae, Great Lakes, MOHELA, Nelnet, etcetera, etcetera and names that they are the people who send you the bill for your federal student loan.

In spite of that fact, when a borrower calls their federal student loan servicer and says, “I’m having trouble making my payments.” The student loan servicer seldom provides the borrower with understandable and complete information on what their other options may be and the government recognizes that and they are doing some work on it.

[00:25:36.2] JH: Right, right.

[00:25:36.8] JF: There’s not nearly enough information and there’s not really as much as we would hope, both as borrowers as well as people who have borrowers in our lives.

[00:25:46.8] JH: Right, makes sense.


[00:25:54.1] JH: Wow, wow, wasn’t that just awesome and guess what? There’s still Part II. There is so much more to talk about in regards to student loans and Jay is just fantastic. So I can’t wait to share part two of this interview and as I promised, I am going to do a quick recap of the main take aways about today’s show on student loans but before we do that, I wanted to do a quick shout out to someone in our community.

Her name is Angela and she’s a fairly recent member of our community and along with her husband, Angela and her husband are wanting to get their finances in better shape for retirement. She’s been very active and encouraging to the group, asking questions and she’s been such an uplifting member in our community. So I really, really appreciate that Angela.

So let’s go ahead and do that quick recap so that way it sticks more in the brain longer. So in today’s episode, he talked about the key differences between federal and private loans. So there’s definitely some differences but whatever you take away from this, just remember the federal loans have that advantage. If at all possible, get those federal loans. They are guaranteed by the government and there are so many other benefits. So that is one of the key take aways.

The second take away are those four steps to take before you sign the dotted line, before you take out any student loans. So really just don’t jump the gun in taking student loans. Don’t think, “Well let me just go ahead and take out the student loans.” Be clear about what you want to do, do what you can to minimize the cost, don’t go and get a $100,000 in student loans and come out with a career that maybe you’re only making $40,000 a year. Think about in those terms.

Apply for those scholarships. I am making sure that I have all those links of those resources, those phenomenal resources in today’s show notes over at and the last key piece that I wanted to recap was just that piece of research that he mentioned about long term thinking, how we really don’t develop that until we’re about 25 years of age. And why do I bring this up? Because, for two reasons.

If you have a kid and they’re going to need student loans let’s say, make sure that you help them out, and helping them think and helping them understand the repercussions of student loans, right? And let’s say you’re on the other side, where you were the one that took out the student loans. Don’t beat yourself up over it too hard at this moment. There is nothing you can do. Besides, just pay them off right? So I just wanted to make sure, I thought that was an interesting piece of research that I think we just should keep in mind.

So that is the recap. I hope you got a lot of value. Next week will be Part II of this series so make sure that you come back for that and because we did speak about student loans, I want to mention one way to minimize the amount that you take out or if you’re paying them currently to pay them faster is to be clear on where all your money is going. I cannot stress that enough. This is the piece that a lot of people don’t do and a lot of people think is overwhelming.

But I’ve got your Jumpstart Your Money Mini-Guide that will help you do just that. I’ve gotten so much great feedback of how much it’s helped people. So remember, it is a free resource. It’s a free tool for you and you can get that over at So that is a wrap for today. I want to thank Jay for joining us even though he’ll be joining us again next week and sharing so much good stuff about student loans and even getting to know him today was just wonderful.

So make sure you check out all the show notes on where to find Jay, on finding all those resources that we talked about today over at and I will catch you again next Thursday.



P.S. THANK YOU for listening!

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  1. HMM 69: [Part 2 of 2]The Real Low Down On Student Loans With Jay Fleischman - Jen Hemphill - June 12, 2019

    […] If you did not listen to Episode 68, do that first by clicking here. […]

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