How Student Loans Work...EXPLAINED! 

Another thing. If you dont pay off your student debt then when you retire they wont give you your social security money.

I know a guy who faked his death to escape student debt

I might have to watch this 7 more times

NEVER ever DEFER. Trust me on this. I added 5 years to my payoff date just by deferring for 6 months. Worst mistake ever

I don't want student loans, I just want to travel the world with a good education.

Not mentioned in this episode, filling out the FAFSA is also how you apply for PELL grants.

It's funny because Tyler Oakley went to MSU and ended up with a bunch of debt... And now I'm headed in the same direction. (laughs nervously to hide tears)

This made everything feel worse

UPDATED INFORMATION: Perkins Loans are no longer available!!

I teach a class on financial literacy. I am playing your videos in several sections of my class. You do an excellent job of laying this information out in a way people understand. Nice Job!

The more I learn about this kind of stuff, the more I'm convinced that the best decision I ever made was NOT to go to grad school. My most important education-the one that taught me how to be an independent, self-reliant, well-adjusted adult-began when I left the cloistered halls of academia.

so glad i found this channel!

I love that this is so simple and yet explains so much

I go to a brazilian public university, so I didn't have to deal with all of that, but it's nice to know how different things work there and I'm sure it helped a lot of other people. Great job, guys! :)

Student loans are always stressful, but you did an excellent job explaining this without any confusion .

m writing a college application essay dealing with a major issue with the education system,and i chose the cost of going to college, and this video helped me a lot.

Thank you for laying this all out! Also thank you for donating the revenue to The Trevor Project.

Haha, Billy Joel tickets and Chili's gift cards. You sure know how to appeal to Gen X! Seriously though, Rose and I could have benefited from this information being so accessible back when we were in school. Luckily, we are several years out of college and are paying off debts much faster than expected, however most of our friends are not so fortunate. If you are going to college soon, no matter how financially stable you may be, definitely look into the things Mike talks about here. Trust me, it could save you years of stress. -Nathan

I am French and thx you for your video. It helps me to understand the student debt. 👏👏 good job.

A few helpful notes: 1.The url fafsa.com was recently acquired by the U.S. Department of Education, so hopefully in future it will not link students to a scam but to the actual FAFSA, 2. The online FAFSA is best for most people, but the paper FAFSA is best if the student's parents are undocumented immigrants (So, it's good that it still exists!), 3. The PLUS loan isn't necessarily better than private loans because of the high interest rate (currently 7.21%), BUT if parents are declined based on their credit, it increases the amount of Stafford loan a student can get ($4,000 more in Unsubsidized Stafford loan for freshmen), 4. Parents or students should start making payments on loan interest during college since they can currently claim up to $2,500 as a deduction on their income taxes for the next year (Just wanted to add some more info. that you probably didn't have time for!)

After doing the counselling thing I have developed a fear of college lol. Not only will I be stressed to do well academically but I must stay on top of paying off my loans as I am learning

Watching this made me so happy I live and study in Australia as an Australian citizen.

This video was fantastic! I had both unsubsidized and subsidized loans available and had no idea what they were thanks for explaining now I know I don't need them right now.

Unless u have a scholarship go to cc first then in state

Student loans are depressing.

Wtf is this? Im confused af! Holy shit im panicking!!!!

Very timely for me unfortunately. ;P Also yay for the charity donation! That's pretty cool of you!

GREAT video on FAFSA, types of loans, and how to repay them! I'm glad you mentioned at the end how many people struggle to pay them back! According to TheGuardian.com--- a staggering 83% of graduates NEVER repay their loans in full!

I love the "speak in tongues" reference! Thanks for making this video. I am 33 years old and headed back for my undergrad and i am LOST with this all! Thanks again!

Don't get a student loan for a major like Liberal Arts or History. You can easily pay off student loans in the first year if you have a Bachelor's in a STEM major.

first year of college this year and was looking into loans thank you for the tips and pointers your amazing and super funny

I'd also add that some schools will give you more money if your parents apply for a PLUS loan and are denied. Granted, this will only be helpful to people whose parents will agree to do that (mine told me right before college that they would not apply for any parent loans or give me any money for school, so that kind of left me out of that benefit), but I know several people who got up to $10,000 more in aid per year from doing that, and that was all grants and scholarships, no loans.

The new date to start your Fafsa application is now October 1st. It was just change last year, so don't wait until January, you want to fill out your fafsa apps as soon as possible to get the best advantages

SO HELPFUL!!!

Mike you are a good host.

The first time I filled out the FASFA it took weeks and there were tears. Now there is a way to link your taxes to fill in all the information if you filed online, which saves a ton of time. Also, when you turn 24 or in certain circumstances you don't have to claim your parents anymore. More money coming in to pay for school, but more to pay back.

dude, this is great. Thank you!!

Woo! that was incredibly helpful I myself am not in the position of having a student loan but this will be very helpful for my brother who may have to get a loan soon. -Omar

Thank you for this. I start my freshman year of college this month and I had to to take out loans. I'm so grateful that my dad knows about this stuff but this is such an important video!

For returning students with previous debt: how much of a student loan can be used for living expenses?

ALSOOO!!! A LOT of private colleges require you to fill out a CSS profile! It's available on college board, so don't forget!

I think that January 1st beginning is being pushed back this year...for incoming high school seniors in the U.S, in August/September, FAFSA opens October 1st...

Hey Mike, thanks for the upload. It was very informative. I have a question... Have you ever heard of anyone devoting the majority of their income after graduation to JUST paying loans? Not taking on a house or a car note? Do loans no allow you to do that? Do you have to pay monthly or can you just throw your paychecks at them until they vanish? Thanks

THANK YOU!

Also not mentioned, but forbearance is an option for those who choose to serve a year with AmeriCorps or other service commitments

yes

If I have an outstanding payment at university I previously attended and I go to community college now, can I apply for a student loan?

You can always sign a contract for three years and get 100% of public education or $19,000 of Private education paid for per year, plus a monthly allowance.

Thank you so much I was so confused

Videos like this remind me how grateful I am to be Scottish. The government pays our tuition fees, there is only one company that gives student loans, you fill out one application to get your tuition fees paid and to apply for loans and any other grants. Loans are repaid through income tax but only after you earn over £17,000 per year. If you never earn that much you never pay it back. If you don't pay it back after 30 years, they write it off.

This was fun and useful :)

Awesome, this reminded me to change my payment plans, and pay off part of my loans. :) I have sort of a request/tip that I thought of a while ago, but for some reason did not comment on (I think...): could you keep in mind how universal the advice in the videos is while planning them? I really don't mind that some of them are US-centric, that's most of your audience, so it's completely understandable. But I remember a while ago there were a bunch in a row that were very US-centric, and it made me a little sad (I like getting advice from you guys! it's so awesome!). Again, this is something I noticed a while ago, I don't even remember when, so you may already be doing this, in which case: thanks! you are awesome. (you guys are awesome regardless ... did I say awesome enough? yes? awesome!)

What was Tyler Oakley's loan?

You Are Awesome

I just finished taking care of loans and such before this video -_- I should mention that for my govt loans I had to fill out 2 things on the fafsa website. This might be new. One is a form. The other is a little informative program where you fill out answers, it guarantees to the govt that you understand your loans and the payment plans available to you.

Here I'm worrying about how I'm going to pay for College/University at the age of 15. Is that a bad or good thing lol #LifeSucksBalls

Great video! Now, if you could please make a video on how to migrate to another country and begin higher education from there. Thanks in advance!

Youre actually supposed to fill out FAFSA on october 1st

What if your child/dependent choose not to attend college? Can you use the 529 plan to finance something else. What are the penalties?

holy shit i'm so happy i'm not american

You really should mention the fact that while you pay student loan interest the interest paid is a Tax Deduction. You will receive a 1098-E by mail or you'll be able to get the information online through the Loan Processor. So when you think about it, a longer repayment isn't a big deal when paying more over the term of the repayment for interest when you can take it off of your various 1040 forms at Tax Time. www.irs.gov/taxtopics/tc456.html

Is it bad that I'm 14 and I don't know my social security?! And should I register for the FAFSA application? It seems like a great advantage but am I too young?

5:40 Death or student loans? Where is the nearest cliff? xD

oh god i'm never going to collage my life is worthless *spirals into pit of sadness*

I DID THE FASFA I RECOMMEND

Thanks for this video! Even though I've been paying off my student loans for about a year now, this video really helped clear things up and reassure me that I am in fact on the right path (yesss tiny adulthood wins). One thing I would add in terms of loan forgiveness is to develop a plan early - research forgiveness options before you start repaying your loans so you can calculate approximate monthly payments and put a good plan in place ahead of time. Student loans can be really overwhelming and mostly make me cry a lil bit, but you did a really great job explaining all of the things in a way that's super duper informative and funny (I laughed at student loans, which is a thing I never thought would happen and it was glorious). Thanks for being awesome!! :)

I have a MASSIVE question for you guys at HTA. Would it be possible to create a Canadian version of this video as student loans are very different on this side of the border and it would be great to cover for the Canadian viewers like myself ;)

Now I'm really appreciating the free higher education here in Saudi Arabia!

okay so I will be going to community college for my first 2 years of college. Unfortunately due to my poor choice of procrastination I've missed all of the deadlines for scholarships at my school. A full for a full time student is a little over $1400. Would you recommend I just pay for it then apply for scholarships my following year or would getting a loan be okay in that situation?

Still confused. Will I ever adult?

Usually you get both Unsubsidized and Subsidized.

What happens if you take a partial loan and you know you can pay it back in a year or two even though you're still in school can you pay it off while still in school? Can you make pay it off entirely while in school still if you can?

Which is better in terms of paying off more quickly subsidized or unsubsidized

Can you use the loan for bills as well?

Can one fill out the FAFSA even if they are an international student but living in US? Because I recently shifted to US and want to go to college here but was unsure about all the things that are accessible to students like us?

This guy is soooo cool. I like him.

If I accepted my subsidized loan am I able to start repaying this loan during the school year or during the summer of that same year (rather than wait until I graduate to start paying this loan)?

You should avoid student loan debt as much as possible. You cannot get rid of it till you pay it off.

One more really important term to know: forbearance! Forbearance just means restraining yourself from exercising a legal right, but *in this context* it's when a loan holder will restrain themselves from collecting payments on a loan that's already entered repayment. Say you're a year out from college. You've got a pretty basic job, you're making your payments and then BOOM downsized. You don't have the income to pay the bill, and going into bankruptcy (as mentioned) won't absolve the debt. But you *can* call your loan holder and explain to them what your financial situation is like and request forbearance. It's entirely at their own discretion but they might pause the repayment schedule while you get some income established. Interest will still accrue, so it's not like this is free. However, since your payment schedule is paused, you won't have 6 months' worth of payments building up while you search for a new job. True story: say your loan issuer sent everything to your parents who decided *not* to forward any mail and now they're asking for several thousand dollars from all those bills you never saw. (1) Try to get them to place the loan in forbearance. (2) Consolidate your loans to restart the clock. The penalty you pay is interest accrued on the lump sum and an extended payment calendar, but it'll keep you from trashing your personal finances in the meantime.

Can you start paying off student loans, specifically a subsidized loan, while you are still in college?

Hey Mike! Thanks for this video. As an International student, I pay almost double the fees so... BUT my problem (you don't have to read it, really, it's too different..) is that my uncle is paying a large part of my undergraduate fees, and he's also keeping me in his house with his family...which I feel very burdened about. He says that I can pay him later after I complete my studies and get a decent job, and if I go with the student loans options he would think I'm insulting him and his money. I don't know, I just feel very burdened about it and I would highly prefer to get student loan instead of taking it from your relatives, cuz I feel like a burden on people I care about :(.

If i am stuck between two schools, one where I would walk out with no loans/debt or one that has more prestige, should I go with the school from which I would have no loans/debt?

For those wondering, a 529 College Savings account is AWESOME and works like a Roth IRA. Any money you put into it you've already paid taxes on, but you're given a few ways to invest your money and any interest you earn during that time period grows tax-free as long as you use it on qualified college expenses (this includes tuition, room & board, books, and even a computer/laptop, but NOT travel/transportation/a car). You can open a 529 account for yourself or a relative of yours, and if that person doesn't use all the funds, you can transfer the account to be in the name of someone else as long as they are related to the original person the account was opened for (so you could open an account for your child, and if they don't go to college you can transfer the account to their spouse, their child, their sibling, or even yourself, plus many other options!). If you open the account, you control it, so no need to fear your child will blow the money on non-college expenses. If you do withdraw the money for non-college expenses, you pay a 10% penalty on any INTEREST you've earned (not on any contributions you've made, yay!). Finally, depending on what state you open your 529 account with, you might get a tax deduction on any contributions you make into your 529 account up to a certain amount each year, so do your research! (Most states have a 529 plan, but you don't have to open your 529 account through your own state, so do some comparing!) Feel free to ask questions, as I worked as a 529 specialist at Fidelity Investments and I know a lot about these accounts and I'm shocked as to how little is known about this awesome resource!

In the UK it’s so much more reasonable and affordable, you don’t pay it back until you earn a certain amount (6% on 25k+ monthly repayments as an undergraduate) and the debt gets wiped off after 30 years! If you don’t earn you don’t pay, it’s like £20 per month for some people I’ve heard. The USA is crazy to live in for me who has lived in the UK all my life I couldn’t imagine the fear people have as getting into debt is so much easier there

What if you dont need cash?

6:52 he sounded like Dr. Janosz Poha from Ghostbusters 2

Learning.....

So you typically have 10-20 years to pay off debt?

are student loans applicable to international students??

My kid is in his senior year of high school. He wants to do a number of things that may require going to different kinds of schools at the same time. He wants to go to a community college over a 2 year spell and take the basic 10 classes to prepare for at least 1 associates degree in biology. He also wants to take some basic construction and business classes specializing in landscaping and design. He is a unique kid. He hangs with trustees of a local botanical gardens and works there in the summer months. These men and women are influencing him as he works for them too in business ideas. Most of them are older people that are loaded. They are taking him under their wing. One dude is worth around 20 million dollars. He is teaching my kid a bit about $$$. I think he will learn more about how to do business from these folks more than even the schools can do it.

I need help, what’s the point of a student loan if you have to pay the college back anyways after you graduate? Why would I want a loan that would just build up interest? Just don’t get the point of them

I took out my first private loan a few weeks ago for 26k, which is enough for one year. I just got a notice, though, that the school is only accepting 17k of my 26k loan. The 17k won't even cover my basic education and I have no way of getting the other 9k. What do I do?

How do you apply for private loans though? Can you be denied?

I need some serious advice here, guys. Five years ago my parents and I took out a few private loans with Sallie Mae for about 15,000+ total to be able to go to my school of choice. I honestly don't remember how much the original amount was for, but I graduated in May of last year and at the moment I owe about $20K in private loans. I've been fine with that; my tuition was about 40K per year so me only having to pay off a years worth of tuition out of 4 years isn't awful. Since graduating I've been making my monthly payments on time like I should. Five years ago my grandfather and my mother both cosigned my loans, my grandfather cosigning the largest of the 4. A week ago my grandfather passed away from cancer. And my mother is in the process of filing for bankruptcy as I type this. Anyone who has dealt with Sallie Mae might immediately understand my problem. As per my original Promissory Notice, cosigner death or bankruptcy could enable Sallie Mae to place my loans into automatic default regardless of the actual loan status, and demand I pay the sum of the loan right then and there. They came under some heat last year for this practice and, after handing their old loans to Navient, have claimed to change their practices. But no online source will tell me what they changed them to. The only thing I can find online are these horror stories from last year of people getting their lives ruined when Sallie Mae's debt collectors come around. I am honestly terrified that this will happen to me. I'm a year out of college; I haven't been paying my loans long enough to qualify for any cosigner release and I have no way to obtain $20k any time soon unless some sort of lottery miracle happens. Sallie Mae suddenly making the entire sum of the loans due is literally the last thing me or my family needs right now. Has anyone had any experience with this recently? Of course, Navient closes their customer service offices on the weekends so I can't call them until Monday, but I would really appreciate any insight anyone has before I freak myself out any more.

This is really help people. Thank you for the video.

Loan forgiveness (due to death) doesn't apply to all private lenders (they would go after cosigners, and then family maybe?). I assumed that the Parent PLUS loan also wouldn't be forgiven given that your parent took it out in their name, but the Student Aid website* makes it somewhat ambiguous. It says "the loan may be discharged if the child for whom you borrowed dies, or if you die or become totally and permanently disabled" - but this specific sentence wasn't included in their list of things that would allow for a discharge of the loan, for some reason it was included above it. Also that use of "*may* be discharged" makes it seem that sometimes it does, sometimes it doesn't. As a student that worries a lot about what would happen to the money I owed if I died (either by natural causes or myself), finding out that the Parent PLUS loan might fall onto my parents is a really scary thought. *Link: studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation#im-a-parent

my solution: screw student loans, never get them period

i love you new york

Question is this for Canada too?

So scholarship good student loans bad?