- Anthony, thanks for being on.
- Rach! - You're back!
- Yes, I'm back, and we're not wearing the same color.
- I know. - Yes!
- We're not matching.
We matched last time, and it was actually pretty fantastic.
- [Anthony] It was pretty cool.
- Okay, so I'm so glad you're on
because this episode we're talking a lot about student loans
and getting out of student loans.
And this is like your bread and butter.
I mean you're so passionate on the preventative side
of helping students go to school debt-free.
So, I want to know what makes you passionate about it
and what's your story.
- Well the reason, the main reason why, Rachel,
is because I took out $10,000 in student loans
when I didn't even need it, okay?
So, I had my father's G.I. Bill,
and I had a full-ride scholarship for the NFL.
Not the football.
I'm too short. - I was going to say.
- I'm too short to be
playing in the league. - Anthony, I'm impressed.
- Nah, nah, nah.
But it stood for the National Forensics League.
So I was a good debater.
And so because of that, school was taken care of.
But I'd seen all my peers taking out the loans
to pay for cars, to buy nice things,
and I was like, well why not just take them out?
And I wasn't even thinking.
No one really taught me the importance of avoiding debt,
especially student loans.
Going to college was the very first big decision
I ever made on my own.
And the second one was taking out debt.
And that was a huge mistake that I made
because of the lack of education.
And so I am so passionate about helping all young people
make better decisions and start off their life correctly.
And you do that by avoiding student loans.
- Yes, totally.
Well the whole college conversation is just huge,
and I feel like that there is . . .
I mean we're all for education around here.
We'll probably say that a few times.
But the truth of the matter is,
you don't have to go straight into a four-year school.
So talk about that.
Because I feel like there's a lie out there
that most seniors in high school feel like,
"Okay well I have to, that has to be my next step.
No matter what. No matter where I am financially,
this is what I'm supposed to do."
- When people think of four-year universities,
they think that, "Oh I've made it. I was good in high school."
But when they think about community college,
when they think about trade school,
it's like, "Oh I didn't make it."
Well, no.
I say that one of the best decisions a young person can make
if you cannot pay cash via cash or scholarship
to go to a four-year university,
going to a trade school and or a community college
is one of the best decisions you can make.
We talk about this in my book "Debt Free Degree"
that the average community college
costs anywhere between three and four thousand dollars.
And there are several states, like the state of Tennessee,
that you can go to community college for free
the first two years. - Yes.
- So, no. Four-year universities are not the only route.
It's a great route if you can get there debt-free,
but you have community colleges.
You have trade schools.
You have four-year universities.
And here's the thing too— I say, you have no school.
Sometimes you don't have to go to school
depending on the route that you want to go.
- So in this subject overall just like with student loans,
what are you hearing from parents and students
around the subject?
Because you're traveling all over the country
talking specifically to students.
But what are you hearing?
- You know, I'm hearing a lot from teens.
You know, Rachel, that they're nervous.
They're scared. At the same time, they're excited.
You know, "I want to go off to college,
but I want to do it the right way.
Anthony, I've learned from you to avoid it.
I've learned from Rachel to avoid it.
I know I do not need to rack up debt,
but this is all that I know.
I just know that if I don't have the scholarships,
then get student loans.
And I don't want the student loans
because I don't want to come back home when I leave home.
I want to start my life off correctly with a good job."
And then here's something I hear all the time, Rachel,
as well is, "If I go to school,
I'm guaranteed to get a good job."
- Yes.
- That's false.
- Uh uh. Uh uh. No. - That's false.
- And that is, that's a huge lie out there!
I mean, does it help you get
into the doors of some places? Sure.
Do some career paths,
you have to have a four-year degree? Yes, absolutely.
But it is not a guarantee.
- There is no guarantee.
And I tell this to every young person
that's watching your show,
and when I'm out there around the country.
The only guarantee is your hard work ethic.
You know, can you outwork the next person next to you?
Is education important? Will it help you? Yes.
Every single day, you and I are learning something.
Education is important,
but I believe what guarantees you a career
is how hard are you willing to work.
- [Rachel] Yeah, that's so good.
- And if you have the education with that, that's great.
But what can you bring to the table here?
- Okay, so someone watching,
probably a parent watching the show, maybe even a teenager,
maybe some smart teens are watching The Rachel Cruze Show.
But they're thinking, okay so how do I
go to school debt-free?
What are some quick hits that you can . . .
just some quick advice you can give them?
I want you to, one, identify your dream school.
Now Rachel, what's a dream school?
A dream school is an affordable school.
(laughter)
An affordable school to me is--
- I was like, one on the beach.
(laughter)
- You know, so that's the very first one.
Dream school. Affordable school.
Community college.
And I also want you to step back and look at
what careers can you get into that are bringing in money.
Why sit here and spend $40,000 for education
when you may only make $30,000 for the next 10 years?
I want you to really identify that route.
The number three I always tell young people is
to spend at least one hour every single day
from freshman year to their senior year
looking up grants and scholarships.
For the next four years,
that's 1,460 hours over those four years.
That's about 60 days.
That's two months that your giving yourself
that's going to be focused on your future.
- Yeah, absolutely.
So look up grants and scholarships every single day.
- So good.
- Those are the main three that I really say.
- Yeah, I love it.
So, when you're talking to a parent,
say that they're paying off their debt,
but they also want to help their child go to school,
go to college.
And in a perfect world, obviously, they can help financially,
but they may not be able to.
So what encouragement would you give them?
- You've done enough.
I want you to focus on you right now.
And I also want you to focus on your future and their future,
but first your future.
Here's the key thing:
I don't want you to stop paying off your debt
to help them get into school, and then they're all good
and you're still sitting here hurting.
You may have got them through school,
but then now when they get older and you get older,
now you got to go to them for help.
That puts more burden onto them in the future.
And so as parents, what I tell parents all the time
is make sure that you have a solid foundation to stand on.
Make sure that you're out of debt,
make sure that you have an emergency fund,
and make sure that you're investing into your retirement.
Because we know for sure you're going to retire.
And Chris Hogan says this all the time,
but there's a possibility, like me,
your kid may not finish their school.
- Yeah, or may not even go to school.
- So, I really want you to focus on you.
And once you get there,
I have no problem with parents helping.
But here's the truth:
The main responsibility when it comes to colleges
and their future is your kid's responsibility.
It's your job to train and guide them.
- Yes, absolutely. Totally great.
And I love it because you wrote a whole book on this.
"Debt Free Degree."
Anthony, what a good-looking cover.
- That's a good-looking man.
- Can we just talk about that for a second?
- Yes, can we?
- Seriously, this is so fun because this book . . .
Tell me about it because it's geared, I love it,
to parents and young people.
- It's geared to parents and young people.
My story is in there.
We've interviewed so many people.
Our team and I did so much research.
And this really started from my heart
back when I was in my youth pastor days.
I really had a heart and desire to help young people
as early as middle school
to start thinking about college,
and then once you get into your high school years,
you have to really get focused on it.
So we literally talk about what a seventh grader
through 12th grader needs to be doing
every single semester, every single school year—
to what classes should they be taking?
What does their resume need to look like?
How do you prepare for the ACT and the SAT?
What's the difference between the two?
How do you get more funding
when it comes to grants and scholarships?
How do you negotiate with colleges?
We really talk about a lot of things,
and this is a guaranteed way
that you can get your child into college 100% debt-free.
- I love it, and there's just . . .
I feel like the whole college admission process
is kind of like, you just go into this black hole and be like,
I don't know. No one's here to help me.
Like, I remember even feeling that, right?
All of the applications and everything,
it's just, it's so confusing. It's so confusing.
And the FAFSA and all of that.
You talk about everything in here in the book.
Guys, make sure to check it out.
Go to anthonyoneal.com.
Check out "Debt-Free Degree"
because we want a whole generation debt-free.
- [Anthony] Yes, we do.
- But there's a whole generation that's not debt-free,
and they're working on their student loans as we speak.
And so we went into my Facebook group and said,
"Okay guys, what questions do you have around this topic?"
So, we'll go back and forth and answer these, Anthony.
Naomi asks, "How do you take ownership of something
that is so freaking enormous that your spouse brought in?
I.e., one person had student loans, one person didn't.
Now we're married and we both have this loan.
I'm talking $140,000— not something little."
All right, Naomi.
My advice always with couples is that you are one.
You are one in every aspect of your marriage,
including your money.
And so when you said, "I do," you took on the student loans.
And so you have to change those pronouns
from his loans or my loans to our loans together.
And there's kind of this emotional buy-in
I feel like couples have to take in.
And if you're not working together as a team,
it's going to be that much more difficult to pay it off.
But when you're working together, all of the forces,
all of the motivation,
everything is pointed at this together,
it's going to help you so much faster.
Do you see that a lot with married couples
as their facing this mistake when they say, okay,
one of them has student loans, one of them doesn't?
- I do, you know, and being a young, single man,
I say exactly what you say.
Hey, once you got married, you became one, so it's ours.
Then I just recommend to the single people,
just find you someone debt-free.
(laughter)
- Put that on your profile.
So Desiree asks, "When your student loans are high, $300,000,
should you completely stop contributing
or never contribute to Roth IRA or 401(k)
until you're completely finished with the student loan debt?"
- You know, Desiree, I want to encourage you.
That's low. We've met people who have
four, five hundred thousand dollars with student loans.
So I want to encourage you. This will happen,
and you can become debt-free.
But yes, I want you to stop investing.
I really want to stick to the Baby Steps that we teach.
I want you to get out of debt.
I know that's a large number,
but if you really focus on it
and put all of your income toward
that one big sum that you have,
that timeframe will be shortened.
And then once you get into investing, Rachel,
you can invest a lot more.
Because what we're learning,
the average person who is in debt,
they're investing about one to three percent.
Well, we'd invest about 15%.
That's what we want you to be investing.
And so I really want you to focus on that.
But, yes please. Stop investing into your future
and invest into your future by becoming debt-free today.
- Yeah, Chris Hogan always is our friend.
I love because he's like, pause.
- Just pause.
- You know, it's not stopping forever.
It may take you a little bit longer, but pause.
- But the key thing here is,
do not remove anything out of the 401(k)
or something that you invested into.
- Oh, that's right.
- Let that sit right there. - Exactly.
Katherine asks, "Is it okay to have two debt snowballs?
One for our credit card debt, one for student loans."
- No.
Simple answer.
- Simple answer, no.
I mean, we want you to use the debt snowball.
Line up all of your debt from smallest to largest.
If your student loans are the largest, it goes toward the end.
And you just aggressively attack it that way.
Now, once you get to the student loans,
and if that is the last thing,
and you have let's say five student loans,
I don't have a problem with you then
having the debt snowball and doing it that way.
But loans, credit cards, car notes—boom,
all in one big debt snowball.
- [Rachel] All right, last question is from Monique.
She said, "Even if we attack our student loans aggressively,
it will take us five years.
I've decided to pause and complete graduate school."
I think she decided to pause paying off debt
and complete graduate school.
"Which will significantly increase our income.
My question is, should I go part time
and continue working full time
which will take four to five years to complete,
or should I go full time into school,
and I'll have enough cash saved up for about half
and then try to get merit scholarships for the last half,
which will take me three years?"
Okay, here's what I would say, Monique.
If it'll take you three years to go full time,
and you may not have enough cash saved up,
or it'll take you four years to go part time
and you're working your way through,
four years all the way, girlfriend.
But I would pause all of it, and be paying off your debt.
Get completely debt-free,
and get an emergency fund before going back to school.
And this is the hard thing
because I feel like there are a lot of people
wanting to go back for degrees.
But the thing is, and tell me what you think about this,
but I'm like, you have to clean up your mess first
because it's going to be so stressful having to juggle trying
to pay off debt, and you're going back to school,
and you're trying to do this.
You're trying to do 18 things at once,
and you're not going to get a lot of traction.
When you pause, focus. It may take you a few years,
but that's okay. It's okay.
Clean up the mess, get that emergency fund,
and then go back to school and cash flow it.
- I like what you're saying there, Rachel,
because when you pause and focus on one thing,
you can put all your energy toward that.
And also too, before you go back to grad school,
make sure you do a lot of research.
Make sure that you know for sure
that if I pay this out of pocket,
that it's going to bring back a return.
I am going to land this specific career, that specific job
that is worth what I'm spending.
And if it's not worth it, forget about it.
- Well, and what's funny is, honestly,
while you're on the journey of paying off debt,
you may look up and be like,
oh, well I already got a raise at work.
I don't need to go back to grad school.
I mean, seriously. I feel like a lot of people
fall into this trap of, "Oh I just need to go to grad school."
And there's a lot of people that waste a lot of
money on grad school. - A lot of money.
Sometimes it's good, sometimes it's not so . . .
- And also too, once you pay off your debt,
you just actually got a pay raise right there.
- That's true too.
You may realize, huh, life's pretty good.
- Life is real good. I'm debt-free.
- I think we can solve the world's problems here.
- We really can.
This needs to become the Rachel and Anthony—
- (laughs) ONeal Show. Good one.
You can be my guest cohost.
Anthony, seriously, thanks for coming on.
I love your heart. I love your passion
because this is such a huge topic to tackle.
But it's like one family at a time, one teen at a time.
Again you guys, "Debt Free Degree."
Check it out at anthonyoneal.com.
Thanks, Anthony.
- Thank you, Rachel.
(outro music)