Original subtitles

My name's Amanda Kochey.

I'm 23- years- old.

I'm a bartender and office manager living

in Los Angeles, California.

I have a lovely girlfriend.

Her name is Kat.

We've been together for a year and a half now,

and she is the most amazing person.

I grew up in Sicklerville, New Jersey.

So I graduated from Emerson College

and moved across the country eight months ago,

and my degree was in theater performance.

This was only I had grown up my whole life doing.

I told myself as a kid, Amanda, you're an actor, heck

yeah you're going to do it.

I feel like I need to be accomplishing all the things

that I went to college for.

Only problem is I'm broke.

DAN ROSENSWEIG (VOICEOVER): Here are the facts:

the numbers are massive.

44 million people have borrowed over $1.5 trillion

in student loan debt, and it doesn't end there.

My name is Dan Rosenzweig and I'm

the CEO of the multi-billion dollar company Chegg.

This is my mission: with the help

of my financial expert, Denaetha Doe,

we're going to help young people--

The loans are closing in.

Yeah.

DAN ROSENSWEIG (VOICEOVER): --who

are drowning in extreme debt--

How many credit cards?

10, 11, 12--

12.

DAN ROSENSWEIG (VOICEOVER): --to build a life

of financial independence.

I just want to get out of debt and I want your help.

When the world is pushing down on you, it's very hard.

DAN ROSENSWEIG (VOICEOVER): This is an economic crisis

of epic proportions--

I don't use that much.

DAN ROSENSWEIG (VOICEOVER): --and we have to fix it.

No, come on!

Aah!

DAN ROSENSWEIG (VOICEOVER): They're going to hate it,

but when we're done they're going to be on the road

to financial freedom.

You feel good about what we've done so far?

I do, thank you.

DAN ROSENSWEIG (VOICEOVER): This is "Going From Broke."

DAN ROSENSWEIG: Well, it's another day,

another dollar somebody owes.

So who we seeing today?

We're off to see Amanda today.

She's a 23-year-old bartender, moved

across country after graduating from Emerson College--

Great school.

Great school.

She decided to pack up all her things.

Drive across country to LA without a plan.

All right.

And has $216,000 in student loan debt.

Wow.

Is this just another kid with her head

in the clouds and no plan?

She's actually working really, really hard.

She works over 70 hours a week.

How did she get the loans?

It's a Parent PLUS Loan--

Oh.

Exactly

Who co-signed?

DENAETHA DOE: Her mom.

And what'd they put up for collateral?

Her house.

Her mom's house.

Wow.

So this kid probably feels like if she doesn't

make the payments every month, that her mom

could lose her house.

This is a great kid who's putting

in the time and the energy, but isn't getting anywhere.

This one really upsets me.

She's out of money and pretty soon

she's going to run out of gas.

I think we can help her.

DENAETHA DOE: Let's do this.

AMANDA: Hi.

DAN ROSENSWEIG: Good morning.

How are you guys?

Good, thank you.

Great.

Thanks for having us at your workplace.

All right, let's get down to business.

Why are we here for you?

I want to--

I guess be less of a grown up and be

able to live my life instead of work and work

and never do anything but pay my loans

and then not have any money at the end of the month.

Right now I have three jobs.

I am a bartender five days a week,

I'm an office manager five days a week,

and then any time I have free time I walk dogs.

It's not an amazing gig, but it's

that extra money where I'm like oh, maybe I

can use this for groceries or something.

I am so much in debt and I work all of the time,

and it doesn't feel like I'm paying it off at all,

and I don't get to see my girlfriend

as often as I'd like at all, and it's kind of sucking.

You're a very interesting situation for us, which is--

you have a tremendous work ethic.

Yeah.

You seem to have taken responsibility for the fact

that you borrowed a lot to invest in your future.

Yeah.

Normally, the difficult part of the conversation

is getting people to acknowledge they owe money.

No, I'm broke.

[LAUGH]

Well, but you're actually making progress.

You're actually making progress

and you're actually taking the steps necessary to get

yourself out of it.

However, the path that you're on is unsustainable,

and right now you're not able to live your life.

You're going to burn yourself out.

I'm sure you're probably already feeling some of this.

Yeah.

DENAETHA DOE: Let's go over your numbers

so we can get a clear picture of your debt to income ratio.

All right.

DENAETHA DOE: So you're bringing in $4,000 per month.

Is that accurate?

Yeah.

By the way, congratulations.

DAN ROSENSWEIG: Yeah.

You're 23-years-old, and you're bringing in $50,000 a year

and you're busting your hump to do it.

That's very impressive.

Yeah.

DENAETHA DOE: Paying the minimum on her Parent PLUS Loan

and personal loan plus other monthly expenses,

Amanda spends about $3,500.

But with all of her hard work, she's bringing in $4,000

each month, so she's actually ahead $500 every month.

DAN ROSENSWEIG: By the way, have you ever done

an exercise like this before?

I've never done an exercise like this before.

And what did it reveal to you about your life?

I think that my priorities have been my loans.

DAN ROSENSWEIG: Yeah.

It's what I spend the most money on.

And you should be proud of that.

Yeah.

Growing up, there were a lot of moments where like, oh,

this bill didn't get paid this month?

Crap, we have to pay this one again.

And it kind of would always come up and sneak up on us,

a lot of times after something had been canceled.

DAN ROSENSWEIG: Why the loans in particular, though.

It's my mom.

DAN ROSENSWEIG: You love your mom?

I love my mom, yeah.

So somebody who had problems paying

her bills mortgaged her entire future on you,

and that's got to feel painful.

Yeah.

DENAETHA DOE: The majority of Amanda's student loans

is a Parent PLUS Loan, and how a Parent PLUS Loan works

is that it's usually offered to parents who

have poor credit that want to be able to help

their child with schooling.

And in order to get this loan they usually

put up something for collateral, and that collateral

is usually a home.

In my perspective, these are typically

very predatory because they are intentionally

going after people who have poor credit,

likely don't know a lot about how the student loan

system works, and therefore they charge an incredibly

high interest rate and put them in a situation

where they are paying this loan for the rest of their life.

AMANDA: I think I just feel really guilty about it.

I want to pay the loans back, because I

want to pay her back for everything

that she has done for me.

And I don't want to be this disappointment

child that she took this really big risk on

and it didn't pay back.

The only way that the banks or the credit card companies

or frankly the government thinks they're

going to make their money back is

by having high interest rates, which they claim

is a result of your bad credit, or the risk that we take,

and the fact that so many people are unable to pay them back.

Do you have any idea how much you're

actually paying them back?

I don't, yeah.

Yeah, this is what I think you need to understand.

Yeah.

The goal of the bank is for you never

to be able to pay off more than your interest

into your principal, because they make a lot more money.

And so Parent PLUS loans and other kinds of loans

are actually worse than you think they are.

The path you're on right now would mean that you wouldn't be

able to finish paying that off for another 20 years,

and the total amount of money that you'll end up paying on

that $200,000 loan is $372,000.

Wow, that's almost double.

DAN ROSENSWEIG: Yeah.

Exactly.

DAN ROSENSWEIG: So recognizing that we have this obligation,

we're going to sign some homework.

You need to consolidate your loans to a lower rate.

There may be a better loan, lower interest rates.

We're going to take a look at the kinds of jobs

that a student like you should be eligible for,

and then last is reduce expenses.

AMANDA: OK.

DAN ROSENSWEIG: Well, listen.

We're going to come back in a week, if you do the work we're

all in with you, and we're going to try to put you on a path

towards greater fulfillment.

This was really about an investment in you.

Yeah.

DAN ROSENSWEIG: That's what mom invested in.

We have great confidence in you.

AMANDA: So here we are.

I just finished my morning job for the day,

and I'm about to go in and clock in for my night job

bartending tonight, but I got some homework done today.

I called a couple of refinancing companies.

One of them said they couldn't help me out with my situation,

but then the other one said that they can refinance Parent

PLUS loans under my name.

So that's super exciting.

I should be able to get the weight off of my mom,

can't wait.

But they are going to need a co-signer for me

and my mom hasn't been able to co-sign for my loans

in the past so we'll have her fill it out, see how it goes,

but until then, fingers crossed!

So I've been working on refinancing my loans

and my mom did not get approved to be my co-signer

for my last loan that I submitted,

and a lot of the other loan refinance companies either

don't refinance Parent PLUS loans

or don't refinance loans of my size,

and a lot of the loan places have a problem

with how much I make per year.

So I'm kind of like a stuck, little place right now.

I'm hoping that I can find something soon

or someone to help me out.

AMANDA (VOICEOVER): I decided to move in with my girlfriend Kat

to save a little money, but the process

of moving in and working 70 hours a week

leaves me with no time to do anything.

Are you the guy from Handy?

I am.

Oh my god, thank god, come in.

It's supposed to be a table.

I'll take care of this.

Awesome, a thank you so much, dude!

I'll get started.

So I tried to put everything together myself

and ultimately ended up checking out this really cool service

called Handy, and I was able to make a booking

right from the website.

And they showed me exactly how much it would cost,

and it all was so easy to do.

Have a good one.

Yeah, you too, thank you so much.

AMANDA (VOICEOVER): I'm ecstatic with my new desk.

He put it together so quickly, and it looks really good.

Today I'm meeting Denaetha regarding my loans

and refinancing them, and I'm hoping she has some answers

and solutions for me.

DENAETHA DOE: So we gave you some homework.

Yeah!

DENAETHA DOE: How's that going?

So I'm cutting a bunch of money out.

OK!

I'm moving in with my girlfriend--

DENAETHA DOE: OK.

So I've cut out like $600 a month.

Oh great! AMANDA: Yeah.

DENAETHA DOE: And then the next item

we had-- consolidating or refinancing your loans.

Yeah.

I tried really, really hard, and everywhere I sort of

turned I hit either not qualifying or requiring

a co-signer and they're not having

my co-signer get approved.

They gave me the really small loan

and it didn't cover my entire loan balance.

Let's take a few minutes to talk about your loan situation.

OK, yeah.

DENAETHA DOE (VOICEOVER): For Amanda this

isn't about falling further into debt,

this is about finding work life balance.

She's working 80 hours, maybe more every week,

doing three different jobs, trying to stay afloat,

and she's going to burn herself out.

And honestly, she's too young to be putting in this much work.

So unfortunately Parent PLUS loans,

they're notoriously hard to consolidate or refinance.

For Amanda it's about finding a way

to work smarter, so that she can enjoy life while still also

being financially responsible.

Remind me of the total balance you have?

$148,000.

Going through those programs to try

to consolidate or refinance--

AMANDA: Yeah,

DENAETHA DOE: --they only will look at your personal loans.

What was the total on that?

I have two different personal loans.

One of them $36,000, roughly, and then I

have a government loan for $23,000.

So you went through the refinancing program.

This is what they were willing to offer you to refinance,

this $59,000.

They'll only look at the ones where

they feel will be a lower risk and likely

be able to be paid back.

What was the offer that they gave you?

They offered me five and a half years at 5.12%.

DENAETHA DOE: Your monthly payment

would have been $1,134 per month just on that loan--

AMANDA: Right.

--which doesn't include the $900.

Basically $1,000, yeah, that I'm paying.

DENAETHA DOE: They gave you an offer of slightly lowering

your interest rate and effectively doubling the amount

of money you would have to pay each month, which

is a terrible deal.

[LAUGHING] And everyone's got a different approach.

I mean, if you really want to be aggressive

and knock this out in five and a half years,

you know, by all means.

When I think about this, I feel like it's like a weight

on my back or something.

Like I can't do anything else until it's taken care of.

Believe me, I completely understand wanting to--

Just get out of it!

DENAETHA DOE: Get out of it, absolutely.

You doubling the amount of cash that's going out each

and every month just towards your loans

is going to put you in a really vulnerable situation.

That's cash that could either be accruing

interest in your savings, in a mutual fund, in a CD.

You can invest that into business classes

to increase your skills so that you can make more money.

Can you come up with that $1,100 per month?

I think I could.

My recommendation would be to stick with the current payment

plan that you have.

There's a balance that has to be struck,

where we can create a plan where you have a clear, defined path

to knocking out one of your loans as quickly as possible

while also making sure that you're protecting yourself

and not putting yourself in a vulnerable situation.

Let's have a balance where we split that $1,000

so that you're putting an additional $500

payment towards this loan.

So it's like $850 every month?

DENAETHA DOE: Mhm.

The other $500 is going towards your savings.

OK.

Having cash in the bank gives you a little bit of confidence.

AMANDA (VOICEOVER): After talking with Denaetha,

I am really excited because she set

up a really good plan for me.

It is something that is both reasonable

and helps me find my goal.

Thanks for coming in, Amanda, it was so good to see you.

Thank you so much.

All right!

A lot of parents take out Parent PLUS loans as a way

to help their kids through college.

This can be a really risky type of loan.

Interest rate can be pretty high.

Second, it's usually tied to collateral.

So if you miss a payment, your house can be at risk.

Make sure you're making those bills on time,

you're not missing out.

Because when you do, the interest rate escalates and you

could be in debt perpetually.

While you're paying your bills on time,

you're building your credit and this can now

qualify you to refinance that Parent PLUS Loan

something a lot more feasible.

Another one of my tasks was to cut spending.

So I put some stuff together in my finances spreadsheet

and I want to show them to you.

Now what I typically spend is $1,982 a month.

I'm moving in with my girlfriend,

so I'll go from paying $875 a month to $600 a month,

which is a nice chunk.

My girlfriend has offered to pay the internet for where we live,

since she's already paying it.

So that's going to go down to zero.

And my lovely girlfriend has also

agreed to pay the utilities.

It means that I'll go from paying $1982 to paying $1543.

This is like an extra almost $1,000

I'll get to play around with, which is really, really cool,

but will probably go to my loans.

AMANDA (VOICEOVER): The day job that I'm at right

now is really, really great.

They talked about moving me to full time.

It's a company I can see myself growing in and moving through

and I just really enjoy being part of.

If i did start working full time there,

it would clear up some hours in my life.

Avoid being in debt longer, but being happier

would be worth it.

I don't know.

Because can I be happier if debt is

still consuming my entire life?

So I've had my workshop with Denaetha.

I'm really excited for Dan to come over today,

he's going to see my new place, living with Kat,

and we're going to sort of get to talk about how

things are going from here.

Let me grab you some tea.

Beautiful, thanks.

Nice place.

AMANDA: Isn't it?

It's amazing.

DAN ROSENSWEIG: Yeah.

So catch me up.

So now that I've moved in with Kat,

I'm saving a little bit of money.

I'm going to be paying off one of them a little faster

and putting a little bit of money into savings.

Really?

So I have sort of a safety net.

Which is great.

Yeah!

DAN ROSENSWEIG: And so what I want to do is let mom hug you,

but let me kick you a little bit and say what's the new plan?

Because otherwise your life's not going to change.

Here's what's going to happen.

You're going to pay off your loan faster,

thanks to your conversation with Denaetha,

but you're still going to be unhappy

because you're still going to be working

three jobs with no changes.

That's the part that's left, which is, how do we

bring joy back into your life?

And maybe you wake up one day and you

don't have to be a bartender.

What would happen for you if you made more money,

had benefits, and had your nights to yourself?

At least right now as the dream fricking come true.

It's time for us to get serious about looking

for the potential for a full time job,

because what I don't want you to do

is be content that you've made steps because you

haven't finished them yet.

So right now I work at a really

great digital marketing agency.

I work there in the mornings.

I'm part time right now.

They have a really big client services department as well.

I've had a few discussions with my boss,

our Director of Operations, about putting me on full time.

Wow, and how did that go?

It is something we're going to talk about in my one year mark.

When's your one year mark?

AMANDA: My one year mark is still about six months away.

If you're six months in and there's

room for you to be full time, then it's

time for them to consider it.

But in that next six months you need

to be making sure that you have a backup

in case they don't do it.

It sounds great.

Then let's go do that.

AMANDA: Yeah!

Let's go meet with my team.

We will work with you on resume, on communication,

on setting up those meetings.

You want to do that?

I'd love to nail that down, get it done.

Check, check.

I'm incredibly proud of you.

You're continuing to do all the right things,

but now we want to do some right things for you.

DAN ROSENSWEIG: Come on in.

Meet John.

Hi, I'm John Fabello.

Let's sit down and see if we can't get you a job.

All right.

So John, take it away.

JOHN FABELLO: We've actually put together some jobs

that you'd be qualified for.

We'd like to take you through those

and see if you'd be interested in some of them.

Awesome. DAN ROSENSWEIG: Great.

JOHN FABELLO: The first role, you'd

start off at a salary of approximately

anywhere between $45,000 to $50,000 a year.

DAN ROSENSWEIG: To put that in perspective,

you're earning about that now.

Yeah.

DAN ROSENSWEIG: However, you have three different jobs.

It's taking up almost your entire day, including

a lot of nights, and they don't come with benefits

and they don't come with a future, necessarily.

Point here is you can earn as much as you're earning doing

one job, freeing up tremendous amount of time

for you to invest in the rest of your life.

Right.

JOHN FABELLO: Next role is a production associate role.

You're going to be setting up concert timings,

you're going to have the ability to create that crew schedule.

So again, you're going to be able to have an impact.

AMANDA: The idea of working both in interviews

and management of schedule, that's something

I have experience with.

It sounds pretty perfect for me.

It sounds really cool.

All right, let's apply.

You ready?

Yeah.

Let's do it.

AMANDA (VOICEOVER): This session was amazing.

They really showed me a lot of things

that I am really qualified for, and that I could be making

the same amount of money I'm making now, working a lot less

hard and investing in myself.

It puts me in a place to be making

more money in the next five, 10, or 15 years.

Congratulations.

Yeah, thank you so much.

My pleasure.

It's just a step, but it's an important step

and I couldn't be more proud.

All right.

Congratulations.

DAN ROSENSWEIG (VOICEOVER): You know, the thing about life

is it's not a straight line.

It's a lifelong commitment to dealing with the situation

as it's presented and being able to pivot and adjust.

AMANDA: Since talking with Dan and Danaetha,

I have a lot going for me.

I have a plan to not only pay off my loans

but save a little money so that I

know my mom won't be in any trouble no matter what happens.

I have a plan to get a better, more secure job that leaves me

with more time for me to either invest in myself

or spend with my girlfriend and just

really start living my life.

[THEME MUSIC]

To find more resources to empower

your own journey of financial freedom,

visit goingfrombroke.info.

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