Hi, my name is Bob Brooks, you know, we have an alarming financial crisis kind of boiling under the surface today, and it's student loan debt. Think about some of these statistics for a second $1.3 trillion, as of the shooting of this teaching lesson, teaching video $1.3 trillion in student loan debt. And that number continues to rise. I remember, it was just a short time ago that we were just getting over $1 trillion. Now it's over 1.3 trillion. The average student loan debt is $30,000 per borrower.

Number of borrowers is approximately 39.5 million people. You know, the government decided to take over the student loan programs and really ramp it up back during the financial crisis in 2008. And it's been a disaster ever since. Once they've gotten a hold of it because they approached it from the standpoint of every student is entitled to a college education, and we're going to make sure that we have enough money to loan to you to do so. And it creates a lot of interesting dynamics. And I always talk about the old school of thinking when it comes to college and the new school of thinking when it comes to college, and then our tendencies when it comes to debt, because it's one of those things that if the government says I can borrow this money, the government says that, that I can be responsible, I can and that I can take on this, this this liability, then that must be okay.

That's kind of our tendency, because we want to justify what we want to do. It's just like with credit card debt, if they if the credit card company says I can have a $15,000 limit, and I really want to buy these things, then I must be able to, I must be able to do it. And so we have that tendency to justify debt. And I think it's a toxic combination of the ability, the really the irresponsible ability that's given by the government to to borrow 100% of your college education and even more in some cases, and even putting it out there just so that people can go to sleep. school. And so it's the the old way of thinking versus the new way of thinking.

And we're going to talk a lot about that because what I'd like to do is see a paradigm shift. And I'm going to bring a lot of resources on to the network here to teach you about all facets of educational funding. I know that me being a dad, my son is in eighth grade. And some of the experts say that you start in ninth grade preparing for that college education. And so we'll talk about that I want to make sure that you are up the curve and understand. So let's talk a little bit about tips to effectively investing in college.

Now I say investing in college because it's so very expensive. It's the costs have continued to increase. And this is also a byproduct of making funds available. Since it's a supply and demand since there's such a supply of borrowed money to pay for the demand of school, then they continue to raise those tuition prices. And of course, at some point, there is a tipping point. But yet, you know, we're not there yet.

And these prices still continue. To go up at a ridiculous alarming rate, let's talk about some of these tips. So this is just a general overview to kind of set the table for future teaching videos. First of all, just because I can borrow is not a good reason to borrow. But so many people justify this now, this old way of thinking, and I still think that people kind of gravitate towards that is that you go to high school, and you're supposed to go to college, so you do whatever you can to send the child to college. You know, back when, when college education was not as expensive, maybe that that was appropriate.

But today, you're talking about an enormous amount of money. And you're talking about borrowed money in a lot of cases. And so you want to make sure that, that this is that this makes sense. So just because you can borrow the money, you know, reminds me of the the housing bubble in leading up to the real estate crisis, where you had people would go into mortgage offices, and the the lender would say, Well, hey, you qualify for half a million dollar house? Well, maybe they did. Or maybe they didn't.

They certainly couldn't afford a half a million dollar house. But so they look at it and they say, Wow, the bank thinks I can afford it. And so I will take out that half a million dollar loan. Well, they didn't really think through the fact that it was an adjustable rate mortgage where the mortgage was really small for five years, and then it ballooned up and got to the point to where they couldn't qualify for a new loan, and then they end up going into foreclosure. That was the basis of the subprime loans and what happened in the financial crisis. But they went ahead with it because what must be okay, because they say I can do it.

So be really careful about that. set boundaries. This is important as well, there's, you know, back the old the old school thinking, I'll use my college experience as an example. You know, I always looked at it, it was kind of 50% academic 50% and I would always called the Laboratory of life, where you're moved out away from your parents, you have the independence you never had yet the freedom To live life, the social aspect of fraternities, all the parties, all that that goes along with college. And it was that was a that was the college experience. And you know, 5050 mine was probably 7525, you can probably guess with a 75 was it wasn't on the academic side.

And so I really struggled in school. And fortunately just barely made it out. In fact, a funny story, my dad, I'll never forget this, we walk, we're walking up to the Coliseum for graduation, and that my dad just darted to the Usher grabs a program starts flipping through it, just to make sure that my name is in the program to make sure that I was actually graduating. Today, I think we have to set boundaries with our students and say, listen, here's the deal. Yeah, great. I want you to have a good time.

But that's not while you're going to school. So here's, here's what we're talking about. You're going to make these grades. This is what is acceptable. This is what's not acceptable. one semester, if you've if you fail to make these grades, you're coming back home, you're going to junior college.

Now this is not a slap In the face for junior colleges, and I'm gonna talk about that in a second. I think junior colleges are a wonderful idea for many reasons, which we'll talk about. But you've got to set those boundaries because what ends up happening is, is you know, your son or your daughter, they go to school, they make a 2.0, the first semester, and they come back, and then they rationalize why they made a two point and the next Miss will be better. They make a 1.5. And so really, what should happen is that they should lay the hammer down there and stop the bleeding because you're wasting all that money going into that, that expensive education when you could be doing it a different way. So set the boundaries.

Yeah, I was talking to a friend of mine one time and he said he was talking about his daughter going to school. She had a rough experience with school and he said, You know, I had to do the hardest thing as a dad I've ever had to do. I had to pull her out. And but you know what, it ended up being the best thing for her. And so make sure that you establish that boundary of first. The next one is be intentional.

Start early. What I mean by that You have to be you can't just kind of lazily go through the the process of looking for a school and preparing for the funding and all that. You got to be very intentional about it. You have to start early. Rana Goble is someone that I've had on my program many times. And I consider to be an expert when it comes to college funding, I can't find anybody a better resource.

We're going to talk a little bit about that in a minute too. And she always says that us there's things that you start doing in ninth grade to prepare for college, ninth grade. Now I have an eighth grader that's petrifies me to think that I have to start thinking about that ninth grade. But the other thing too is that it's important as a parent, that you really get up the curve and understand how all this works because it is a complicated system. And but your success rate of doing the right thing and make it in preserving that investment are going to be a much higher so be intentional. Be creative with your funding sources.

You know a lot of times parents You think, well, I got to have all this money saved up and invested in us towards college education, when really it can come from a lot of different places. And it should come from a lot of different places. Because a lot of us don't have that luxury just to save enough, the enormous amount of money that it takes to get to fund a college education. So obviously savings and investments, but think of it from the standpoint of cash flow funding. You know, maybe you had a child and in private school, and that money that you spent for private school now can go to help fund college education. Or maybe there were some expenses that you were spending money you were spending on different aspects of, of high school that you don't have to spend anymore, and that part of your cash flow can go towards funding as well.

Put your student to work. I you know, parents are hesitant to do this, and I really don't know why because it's I think that the student is has to have some skin in the game. They have to have to take some responsibility and pay for some of these expenses. I know that when I went to school, I worked all the way through school because I was I was had to pay for my living expenses. And so that put even though that probably didn't really motivate me and motivate me, obviously to do better in school, but I do think it's important to get some appreciation for what it does cost and be involved. The fourth thing grants and scholarships, there are a tons of ways to get get grants and scholarships and it's a learning process that you have to go through.

This is one of the things I hopefully can get one of these experts to come on the the network and really talk about in depth, how to access these and get some of this free money. Then student loans, I'm not vilifying student loans. I mean, student loans can be a part of the funding process, but you have to have a game plan, not just borrow at will and then justify down the road. I'm gonna have a job I can pay for it. You have to know, you know, say you're going to borrow a portion of it. And but this is the game plan of how to pay it back.

This is how it's going to happen. This is how long it's going to take and you've gone over that with your student in May sure that they understand this is your responsibility down the road. So it's a combination, I think they get you there, it's a lot more effective. Now consider the junior college route. I think Junior College is a great option to get the basics out of the way. It's inexpensive.

And most importantly, I think a lot of times that parents send students to to college, when they're not emotionally mature enough to handle it. Think about, you know, you're giving them all this freedom to be disciplined, and do that and really take serious school. And sometimes, you know, your high school students just not ready for that. You can keep them close to home Junior College is being a lot less expensive, is a great way to maybe boost up that maturity level of study skills, and see if they're really ready for college and do it a little bit taking a little bit less risk. So always consider that that's a possibility. When you think about it, two years in a in a junior college, then plus two years in a private school.

You get the same effect. You really do get the same effect. And it's not really, it's not what the combination is. It's what the student does with the combination that makes so much sense. Now retirement versus saving for college, what do I do? I get this question a lot, because I find that parents are a little bit conflicted.

They want to be saving and investing money over here for retirement, but yet they desperately want to make they want to see their kid, go to college, they want to see their their child have the college education, and have the advantage of going into the workforce with that degree. So they struggle, and then they have experts that say, Well, yeah, you never want to do that. You never want to stop saving for retirement, save for college. That makes no sense. Well, that's a textbook answer. My answer is this.

Get connected with what you value. If you truly value saving money for your your student to go to your child to go to college versus saving money for retirement, then save the money for college. Just understand the difference. fact that it's going to have on your retirement. So readjust your game plan, readjust your financial plan. And maybe it's that you do that for five or six years, and it delays your retirement for four or five years.

And you look at it go, I'm fine with that. But just know ahead of time and adjust. Remember, it's always about your values. Where we spend money is where we value where that money goes, is where we value and values are extremely important. So is the 529 plan the way to go for college funding. This is the primary savings and investment tool that you see parents use all over the country.

Let me tell you what a 529 plan savings plan is because there's actually two different types of 529 plans. And most people don't know this. The savings plan is an investment plan and you put money into it, you invest it into a buy and hold type strategy, which is one of the things I don't like about it, you know, kind of comment on that a second. You grow money over time, and then you don't pay taxes along the way. And then when you take the money Any out, you take it out tax free. So there's a huge tax benefit that goes along with the 529 plan.

Now, having said that, what I'm not a big fan of the fact that they force you to buy and hold, you can only make changes in the button the 529 plan one time a year, I just don't think it's enough flexibility. I don't think it's enough time opportunity to make the changes that you need to make. I'm not a big fan of the 529 plan. I'm a huge fan of the prepaid tuition plan, which is a 529 plan to the way that this works is that you make a payment over time each month and then when your student gets ready for college, it's paid for no risk, all guaranteed. Love the idea and the concept was great because of the fact that you can arrange your your college education funding however you want to now this is all done in the state that you live in.

So live in Texas, it would be a Texas University. So you can say I want my child to go to four years of private school in Texas or I want my child to go to four years of Have a public school, or I want my child to go to two years of junior college and two years of public school, whatever the combination is, and then they'll still tell you, the state of Texas will tell you Okay, well, if you put back X amount of dollars when it from the day they're born or from the day, they're five and on up to college, or you could even extend it through college, then that college education will be paid for I think it's a great, great way to define, like I said, that most people don't know about. Now, resources. This is something that you know, always through these teaching videos always want to bring to you because I just put so much value on education.

It's one of the main problems in America is that we don't have enough knowledge and education on how money works. Graduation debt, org. Raina. She didn't even know what I'm doing this. So I hope she doesn't mind. But I've had Ryan on the program many times and I consider one of the foremost authorities on college education funding.

And in she talks about in her books, how to get grants, how to get scholarships, how and all these creative ways to create money for college. So you can go to her website, graduation debt.org and one of the things I love about Reina is that she's very committed to education. It's all about the.org. And, and really educating and getting, excuse me getting parents up the curve on what they need to know, you know, today with college education with student loan debt, just growing at alarming rates. It takes a new pair of a paradigm shift to a new way of thinking about college funding. It takes the youth to take the opportunity to really learn and understand how the system works.

Because at the end of the day, you're spending and investing a lot of money in your child's education.