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We’re making your financial health our mission every week with our personal finance podcast, MakingCents. Join us as we explore ways to help you stay in control of your wallet and make sense of your money.
[TONE FADING IN] [DING]
EMILY BIGHAM: Welcome back to MakingCents, the podcast brought to you by Navy Federal Credit Union. I'm Emily Bigham. Thank you again for tuning in, and remember that you can subscribe to this podcast wherever you get your podcasts.
This week, we're going to be talking about mortgages, specifically VA loans. Service members and veterans often hear about VA loans, but they can be pretty difficult to grasp. And so today, we're going to try to simplify those for you so you can understand and also take advantage of their true value.
So today, we have an expert on VA loans, Kevin Parker. Kevin is the VP of field mortgage here and Navy Federal, which means that he manages the team of loan officers. They're member-facing, they're actually on the ground talking to members and, I guess, get a lot of these hard questions. Welcome, Kevin. Thanks for being here.
KEVIN PARKER: Thanks, good to be here.
EMILY BIGHAM: So I have a little bit of a question to throw you off today, just to start the day. Now that we've been working from home for a little over seven months, how was your morning routine changed?
KEVIN PARKER: Much different. So, I do not have the hour and 50 minute commute that I used to have. So that time, I found that I was spending a lot more time laying in bed.
I also have two little girls, a 9 and 12-year-old. So they're in school. So I'm finding myself to be a breakfast chef, and--
EMILY BIGHAM: Nice.
KEVIN PARKER: --trying to get them ready for school as well too. So it's definite changed a bit, but, you know, we've all been able to basically manage through and still add value. Whether it's being a part time father or a professional or working in my pajamas at home.
EMILY BIGHAM: Nice. Well, next time I'll have to have you bring me breakfast.
KEVIN PARKER: Ah, sounds good.
EMILY BIGHAM: [LAUGHS]
KEVIN PARKER: Sounds good.
EMILY BIGHAM: So VA loans. I hear a lot about VA loans. In fact, my mother-- shout out to Patty Bigham-- she texted me the other day and she was asking me questions about VA loans. And I was like, first of all, mom, that's not my area of expertise. I'm going to kick you over to the experts in Kevin's department. But, you know, it led me to realize just how complicated they can be. Because my parents have had a few mortgages in their lifetime, and to still be asking questions about VA loans and their benefits just made me realize how confusing they are. So why do you think that there's this perception?
KEVIN PARKER: Yeah, it's a great question. And I think that's a great topic because we're always out there trying to dispel the myth of VA loans and them being confusing or harder and the perception. The reason the perception is out there is because the purpose of a VA loan is to help members get into a property that's viable, a property that's going to hold value. But also, a product that's going to be beneficial to their specific needs.
And by specific needs, I mean more times than not, a lot of our military members maybe can take advantage of not putting down as much money as what a typical non-service member. And by that, we mean, there are a lot more low down payment options when getting a VA loan. So that right there is an instant benefit, meaning more cash. That's cash that you can use towards buying furniture or fixing up the property, things of that sort.
But the overarching point of VA loan is, that loan is there to protect service members and make sure that they're getting into a financial product that can be beneficial to them, specifically.
EMILY BIGHAM: So when you talk about less of a down payment, you know, there are a lot of mortgages out there that don't require a down payment or a large payment. And so if you had to boil it down to the best benefit of a VA loan, what would that be?
KEVIN PARKER: The interest rate.
EMILY BIGHAM: The interest rate. OK.
KEVIN PARKER: Right.
EMILY BIGHAM: Even in a low rate environment like we're in today?
KEVIN PARKER: Even at the low rate. So I should say, lower interest rate.
EMILY BIGHAM: OK.
KEVIN PARKER: Lower than typically your conventional loan, which in layman's terms means, less money, meaning your monthly mortgage payment is going to be a little bit lower than it typically would for other products. So that's a huge benefit.
Two, right behind it, as I just mentioned, the low down payment, meaning that's a lot less cash that you have to put down. And let's kind of touch on that for a moment, just in terms of just the cash aspect of it. When we provide loans to consumers, the more equity you have in the home, the less risk it is for the institution.
EMILY BIGHAM: The more equity.
KEVIN PARKER: Right. And by that I mean, let's say the home was worth $100,000. And you do a loan for $80,000. So the difference of $80 to the $100, that's the equity in the home, meaning cash, liquid in the home. Worst case scenario, that extra $20,000 is there as a cushion in case the lender has to get their money back. So that's the whole thing about why is it such a big deal putting down cash versus not? And for a VA loan, the VA comes in and helps us, basically securitize our loans. Which means that, if anything goes wrong, the VA is going to be there to back up that loan. That's really the benefit of where the Veterans Administration comes into place.
EMILY BIGHAM: And so that's why the lender is able to give a lower interest rate?
KEVIN PARKER: Correct.
EMILY BIGHAM: Got it. OK.
KEVIN PARKER: Because the VA is backing half that loan for us.
EMILY BIGHAM: So is it more difficult to get a VA loan then because you're going through the lender and then also the VA?
KEVIN PARKER: So ironically, it's not. So you would think so. That's a great question. But that's where the benefit of the Veterans Administration comes into place-- that, not only will we secure half that loan for you, but they're also going to give you a better interest rate. So you're kind of get a double benefit of being able to not put down as much money, keep more cash, and have a lower interest rate, keep even more cash.
EMILY BIGHAM: Sounds good to me.
KEVIN PARKER: Yeah.
EMILY BIGHAM: So then, I guess my question goes back to, then why is there such a perception that they're so difficult to understand? Is that where the eligibility question comes in or what's that perception?
KEVIN PARKER: Yeah, eligibility. And then also, one of the main purpose for the VA loan, once again, is to make sure that we are lending a house that's viable. And by viable, I mean, it's structurally sound, it's not a lemon, you're going to keep that property for a long term.
And so by that specifically, the VA has very specific requirements when they do appraisals, when they do home inspections. And so that's why you're going to get maybe some of the more-- what seemingly can be restrictions around VA loan is because sometimes the VA might require some additional inspections. Or not inspections, but some additional improvements done to the home based off the home inspection. That's where the perception comes from that it may be a little bit harder. But the key--
EMILY BIGHAM: Just because the--
KEVIN PARKER: --thing is--
EMILY BIGHAM: I'm sorry to interrupt.
KEVIN PARKER: No, no. No, no. Not at all. I'll say, but the key thing is working with the lender that's very familiar with the type of appraisals, type of home inspections. Because for us, like Navy Federal, we're specialists when it comes to VA. So we're very used to working with our members and working with the appraisers if anything needs to be done on a property. But more times than not, it's a common appraisal like any other conventional product.
EMILY BIGHAM: So how many times can you take advantage of the VA loan?
KEVIN PARKER: Great question. So the VA allows some flexibility in terms of what you call VA eligibility and we also call subsequent use, meaning you can use it multiple times. But it's really based upon your specific situation.
For example, some will want to get a VA loan for the purpose of an investment property or for a second home. Some would want to get a VA loan-- most want to get it for the purpose of a primary property. And so it really depends upon that person's unique needs, which is why they make you go through the Veterans Administration to actually find out what your eligibility is. And we help our members with that process early, before they even apply.
EMILY BIGHAM: So even if you're eligible for a VA loan, is there ever a right or a wrong time?
KEVIN PARKER: No, I wouldn't say they're the wrong time, because the VA is such a good product. I mean, we really believe in it and think it's a very, very beneficial product. So I wouldn't say there's a wrong time. More times than not, more veterans are going to use it for primary purpose. So that's your overwhelming, I would say, the purpose of getting a VA loan, for primary resident.
EMILY BIGHAM: What are some of the other options that you guys recommend if they're not going to take advantage of the VA loan?
KEVIN PARKER: Yeah, so--
Now fortunately, we're lucky. From the standpoint of, we are a portfolio lender, which means that we keep some of the loans that we issue on our books, meaning we don't sell them to Fannie Mae. And what I mean sell them, Fannie Mae buys loans to help securitize loans. Well, for Navy Federal, we keep some of our loans on books, which means that we have a bit more flexibility, which means that we can create products very specific for unique needs.
For example, we have a program called Military Choice. It's almost very close to what a VA loan is. The only difference is you're not using your VA eligibility. So if we have a member who does not want to use their eligibility for whatever reason, well, we have a different option of our Military Choice program in which the rates-- almost just as good, it's not quite the same. But it's almost just as good as a VA loan.
EMILY BIGHAM: So to me, that kind of makes sense. You know, you want to have options, especially because military members are moving quite often. And sometimes they don't know if they're going to relocate or if they're going to go overseas. Does going overseas or being here in the United States, does that change anything about the VA loans or eligibility?
KEVIN PARKER: No, because it's based off what the property is. So we lend in all 50 states. So regardless of where the member is, the reasons for their mortgage could change. But as long as it's in the 50 states, it doesn't matter where they are.
EMILY BIGHAM: And can you refinance a VA loan?
KEVIN PARKER: Absolutely. So that's was a great question. So there's a pro product called Interest Rate Reduction Loan, and that's a special program. Because every time you do financing, it cost money. All right? There is an appraisal fee, you have to do title, you have to do title work. And all those are different fees of cost associate with the loan. Well, with the Interest Rate Reduction Loan, those costs are reduced because you're not going to have to do an appraisal, in essence, we're saving money on the expense to do your loan. And it's a much faster process. And so we actually have a dedicated channel just to handle our Interest Rate Reduction Loan for our members.
EMILY BIGHAM: So I'm going to switch gears a little bit and kind of talk about what's going on right now. We're in a recession, but the environment's very different from that 2008 housing bubble recession. Have you seen any change in consumer, I guess, member behavior when it comes to home buying?
KEVIN PARKER: Yeah. So ironically, not as much as you would think. So right around March when COVID really hit, we did see a touch of a decline in terms of homes listed for sale. If you think about it, people didn't necessarily want to sell their-- list their home because they didn't want people maybe walking through and doing inspections. And on the other side as well, people buy homes-- they're a bit hesitant of going out there and shopping for new homes, et cetera.
But after March, we started to see home purchases kind of trend back up to normal levels. If you look today, even the same purchase trend is about the same that historically has been. So we haven't seen a huge shift in behavior. Our production from a Navy Federal perspective, still gonna be on target pre-COVID that what we thought. So no, I mean, honestly you haven't seen a big change.
EMILY BIGHAM: So I assume probably with the low interest rates, you guys are getting a lot of refinancing applications.
KEVIN PARKER: Absolutely.
EMILY BIGHAM: Yeah.
Well, that's good.
KEVIN PARKER: A huge number.
EMILY BIGHAM: That's smart, right? That's what you want members and consumers to do.
KEVIN PARKER: Absolutely.
EMILY BIGHAM: Is take advantage, when they can, of what's happening. And so tell me about your first home.
KEVIN PARKER: Great question. So my first home was actually right out of college. So I went to Hampton University down in Virginia in the Tidewater areas. So as you can imagine, it's a lot of military members in that particular area. And at 23 years old, a buddy of mine, we wanted to buy an investment property.
And ironically, the person buying that property was a veteran. And they actually did a VA loan on their side. So I got to experience a VA loan as a seller, in which talking about the appraisal and talking about the inspection on the seller perspective. And so that was my very first opportunity of basically buying a home as an investor and then selling it to a VA member.
EMILY BIGHAM: So, you know, from a seller perspective, I assume that's a lot different from being a buyer. What are maybe some, like, old tips that you can-- or I guess things to know about being a seller on the VA side that members should be aware of.
KEVIN PARKER: Yeah. I think that's a great question. I think one of them is understanding, maybe, what some of the red flags might be for the property type or the type of property or just inspections in general, improvement just in general. More times than not, if the home is viable, once again, structurally sound you're gonna be able to sell it regardless of what type of loan that you do.
But there is some in regards to painting and plumbing that, I think, maybe if you're selling it to a VA buyer, it might be helpful to know. But in more times than not, that's going to be on the realtor. The realtors, that's what they there for. We work very closely with our realtors. A lot of voters are very experienced and they're familiar with VA loans.
But one thing we do recommend for our members, our buyers in general is, you want to work with professionals who are familiar with that specialty. And by that I mean, I use the analogy of, when I want a steak, I'm going to go to a steakhouse.
Same thing for if I want seafood, I'm going to go to the restaurant that specializes in seafood.
EMILY BIGHAM: [LAUGHS]
KEVIN PARKER: Certain lenders specialize in VA loans versus others. I think we take a lot of pride, Navy Federal, working very closely with our military members and their families that we are a VA specialists. More than half the loans that we originate are VA loan. So we're very experienced and we're very comfortable in helping our buyers, helping our members. But also, working with realtors, and working with title companies, working with appraisers and working with homes inspectors.
EMILY BIGHAM: There's a lot that goes into the mix.
KEVIN PARKER: Yeah. It's its own ecosystem. And so that's something that we're very comfortable and confident in working through that process for our members.
EMILY BIGHAM: And your loan officers are across the country, right? I mean, I assume everywhere there's Navy Federal branch, that you probably have loan officers. And does that get a little bit complicated, especially in this current environment, do you see the different markets kind of acting differently or do you feel like across the board things are shifting and trending in the same direction?
KEVIN PARKER: That's a great question. Yes, we do see things typically trend differently, different parts of the country. Whether it's the inclement weather, whether it's the market, whether it's the market prices in that area.
For example, in our San Diego market, we tend to see home values--
EMILY BIGHAM: Patty Bigham, are you listening?
KEVIN PARKER: [LAUGHS] There you go. We tend to see home value is a lot higher in that market versus other parts of the country, whether it's southern Texas or parts of the Carolina's in which the bang that you can get for your buck is actually phenomenal. And so, the trends are a lot different for us, because we also have to go by state laws and all of our loan officers have National Mortgage Listing Registration, meaning they have to be certified to be able to talk mortgages to members. And that's something that we do manage and we take very seriously in making sure that our loan officers are very skilled at really helping our members.
And the great thing about offering mortgages, every mortgage is not for every person. And for us, it's about teaching our members and educating our members. This is a personal finance product. And for us, that's about financial literacy. It's about making sure our members understand because we know at Navy Federal, this is a relationship. And we want them to come back in five years or 15 years and we want to be able to help them for whatever need that they have. And so we take a lot of pride in making sure our loan officers are very comfortable in understanding each member is very specific need.
EMILY BIGHAM: Yeah, and so, if a member moves from market to market, do they stay with the same loan officer or is it typically, you know, you want to talk to the expert in the area?
KEVIN PARKER: So they can. So we actually to give them a choice. We try to let our members interact with us. However they want. So if they want to do it digitally, we have what we call a Home Squad System in which they can apply online. If they want to call on the telephone, if they want to walk into a branch. We want to let them interact how they want interact. And if they want to stay with a loan officer from a different part of country, they can.
A lot of times they might want to work with a loan officer or see a loan officer in person in that market. And we can do it as well too.
EMILY BIGHAM: I'm sure that's shifted a lot too, just given current situation. [LAUGHS]
KEVIN PARKER: Very true. Very true.
EMILY BIGHAM: I don't even want to get into that because I don't even-- that's just a lot.
KEVIN PARKER: Well, the good thing about loan officers too, our loan officers, they'll FaceTime.
EMILY BIGHAM: Oh.
KEVIN PARKER: They'll text members. However members want to interact.
EMILY BIGHAM: Digital?
KEVIN PARKER: Digital, yeah. So we try to make it easy, because we realize we have our loan officers who are part-time teachers and part-time cooks, just as we are. So we try to make sure that we give them the flexibility, and they're able to work with our members, based on what their needs are.
EMILY BIGHAM: That's great. So I have a question back on eligibility. You know, military spouses, would they be in the mix for being eligible? Or how would that happen? Do they have to be on a mortgage with their spouse who is active duty or a veteran? Or can you get into a little bit about eligibility?
KEVIN PARKER: Yeah, so there's two ways to answer that. One, the eligibility is based off the military member, not the spouse, so the military member does need to be on the loan. And certain states require that the spouse is actually on the application. For example, California is a state that if you apply, even in your own name, that military spouse has to be on a loan.
And so it's really state-specific, so that's why it goes back to-- we like having loan officers in different parts of the country, who understand those state-specific requirements, and we can help our members walk through whatever their needs are in their specific state.
EMILY BIGHAM: All right, so we're about to wrap it up here. And I think we've given-- I mean, you've given me, at least, a lot of great information. Do you have any last tips or tricks you'd like to give the audience about VA loans?
KEVIN PARKER: Sure. One, your mom better call us.
Two, once again, go onto our website, whether it's our website, or you have other websites like the VA. You have the CFPB website. There's a lot of information out there to just help people consume and understand.
We realize that buying a home, refinancing a home, is a really, really big, probably one of the most, important transactions, and so for us, we try to be teachers. And there are a lot of calculators on our website, a lot of great tools that members can take advantage of to make sure that they learn as much as possible about the VA loan.
So when they do find their home, we're going to try to make it as frictionless as possible, so that they can enjoy the concept of, what school are their kids going to go to, and the new furniture.
EMILY BIGHAM: There's so many other things to worry about, too, when you're in the military and you're moving from state to state. I mean, I grew up as a Navy brat and even moving overseas, you have to send half of everything you own six months before you get there. The anxiety I felt as an 8-year-old. I can't imagine how would parents feel.
So I think you cleared up a lot of the perceptions, and, to me, I think action relieves anxiety, so I would say just call. Whatever lender you're working with, just call and talk to them about your options. And a VA loan sounds like a great benefit that everyone should be taking advantage of.
So thank you, Kevin, again, for being on today's podcast. And, for the listeners, please feel free to call if you have any questions, and, of course, subscribe to the podcast wherever you get your podcasts. And thanks again for tuning into Making Cents.
NAVY FEDERAL CREDIT UNION REPRESENTATIVE: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information, and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation.
References to, or participation with, the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender.
Navy Federal Credit Union. Our members are the mission.
Episode 3: Understanding the Value of VA Loans
VA loans are a great perk for servicemembers to take advantage of when buying or refinancing homes. In this episode, Navy Federal's Vice President of Field Mortgage, Kevin Parker, makes it clear what to expect when getting a VA loan, including understanding funding fees and navigating eligibility confirmation.
- a discussion of VA loans, funding fees and obtaining a Certificate of Eligibility
- tips on what you should be doing to make the most of a VA loan
GUEST: Kevin Parker is Navy Federal's Vice President of Field Mortgage. A long-time mortgage professional, he has helped Navy Federal members become homeowners for the last 7 years.
[MUSIC PLAYING] EMILY BIGHAM: Hi, and welcome to the podcast MakingCents, brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham. And each week, I'll be taking your questions to the experts, to help you make sense of your money-- pun intended.
Welcome back today on the podcast is Matt Vean, here to talk about best careers for military spouses. Matt is a colleague of mine here at Navy Federal. He leads the Commercial Banking Team in our Business Solutions Division, and is a military spouse himself. Welcome, Matt.
MATT VEAN: Awesome. Thank you for having me.
EMILY BIGHAM: So what is the Best Careers for Military Spouses list?
MATT VEAN: Yeah, definitely. So it is a wonderful list for military spouses like myself who are seeking employment, whether they have just PCS'd or moved, looking for career transition, or simply just doing something different.
EMILY BIGHAM: So why did you choose to come up with this list? What was the momentum or motivation behind preparing this-- publishing it?
MATT VEAN: Yeah, absolutely. So when you think of military spouse and when you think of unemployment right now, we all see that the unemployment rate's fairly low, nationally. We take a look at it. It's a 5%, 6%.
However, the unemployment rate for a military spouse like myself is still very staggering-- north of 30%. And the unemployed is still roughly around the same. And so when you see a military spouse and when you look at the unemployment rate with them compared to the national unemployment rate, it's much different. And so this is a great opportunity for a military spouse to segue, like I said, into a new career, start something different-- whether they lost their job due to move, et cetera.
EMILY BIGHAM: So what's on the list?
MATT VEAN: Definitely. So as a credit union, we've identified major industries, segments that work well for a military spouse. So when you think of it, government and public administration, business support and human resources, health care, social assistance, educational services, financial services-- retail customer service, manufacturing, and defense contracting.
We've notated that these types of industries fit very, very well for a military spouse. Granted, they're very large. However, coupled with your family orientation, moving, what's going on in today's world, these fit best for a military spouse.
EMILY BIGHAM: They are broad, as you said. And looking at the list, there seem to be certain roles within these industries that would be best for the military spouses. Can you talk a little bit about that, and why you decided to pick out these certain roles?
MATT VEAN: Absolutely. So look at the first one. So take a look at government and public administration. So military families, they relocate. And where are they working?
They're working out of Army bases, Naval bases, Air Force stations, et cetera. And what's tied to those bases? Federal buildings, state buildings.
And so that's when you kind of see government and public administration, that there are a lot of job opportunities tied to military location. So that's when you take a look at San Diego. You look at Washington, DC, areas in North Carolina. You also look at places in Texas, and so on.
If you look at the second one-- so take a look at financial services. Financial services is such a broad industry. However, those types of skills in that type of industry is very, very transferable. And so when you look at a military spouse moving and whatnot, it's so easy to parlay your skills and experience into a financial services job, whether it's banking. It could be mortgage, et cetera.
EMILY BIGHAM: Were there any surprises to you?
MATT VEAN: To be honest, not really. Because like what you said before, it's very, very broad. So it's starting from this top funnel approach and then really narrowing it down as to what that person or persons wants to be doing.
I mean, when you take a look at government and public administration, that's like a 30,000-foot overview. But then you want to get more concrete and be like, OK, what is it exactly what I want to do within federal government? Or it could be in state.
EMILY BIGHAM: So I notice that a lot of these roles are analyst or project manager, or they seem to be roles that you could take on the road. Or they have a lot of flexibility-- they're remote. And I also saw a point in here about how military spouses, even pre-pandemic, had actually a pretty high unemployment rate.
But what was confusing to me was the part about the pre-pandemic and then it getting more difficult during the pandemic, when we're hearing that a lot of companies are sending people home to work from home. There's a lot more of remote work available. Why is it more difficult during the pandemic? And do you see that changing?
MATT VEAN: So it's interesting. I mean, the best thing for a military spouse right now-- and I don't want this to sound negative-- is COVID-- that COVID has really opened up this notion of you don't need to be in the office. And so the whole misconception of a military spouse pre-pandemic is you go in for a job interview and you tell that person or the hiring manager, I'm a military spouse, they immediately think, oh, you're only going to be here for a year or two and then you have to move. And that's not the case.
And so what COVID did not only with Navy Federal Credit Union but any other organization has been, like, no, we can do the same amount of work from home, be more efficient, and be more effective. And so that's the best thing that's ever happened for military spouses, unfortunately, for these past two or three years.
EMILY BIGHAM: Right. No, but that is great. And that's a good point that you bring up. I also saw here that military spouses, 89% of them have a college education, 30% have a four-year degree, and 15% have an advanced degree.
So these spouses are people who have been in the workforce. They know what's up. They understand competitive salaries. I'm surprised that it's difficult for them, but I'm happy that it is probably getting better and that this list can help them.
MATT VEAN: It is. And you know, it's interesting. Depending on where we are in our generations, we're dual-income households today. You don't see a lot of single-income households today. We just can't do it with the way economy is growing and whatnot.
And so this whole idea of the military spouse stays home and the active-duty service member's at work is kind of like null anymore. It's gone. I mean, joking aside, it's so funny. My wife gets asked all the time what I do at home. Is your husband a stay-at-home husband, stay-at-home father, et cetera? So it's a lot different.
One thing that people do run into, that I've run into here in DC is licensing issues. And that's what you just kind of noted is four-year degrees, professional degrees, master's degrees, PhDs, medical doctors, et cetera, there's a lot of military spouses that have those degrees and above. And so one thing that they kind of do run into is this licensing thing, of transferring their licenses from one state to another. And so that is one hurdle that some of them are facing right now.
EMILY BIGHAM: I can see that would be difficult. And also it's very motivating to start a job and really be excited about it and then all of a sudden you have to pick up and move. And it's not up to you. And not only do you have to move yourself but your family, your kids, your homes. And it's a lot of work.
I come from a military family. My dad was in the Navy. My mom was the military spouse who stayed home. They always said that's the toughest job in the Navy, is the military spouse.
And I believe it. And the spouse deploys and the stay-at-home spouse is watching the kids. And she left a career for that path. And I mean, thankfully, we're fine here today.
But to your point, I don't see how families could do that now, not having a dual income. It just seems very, very difficult. So I'm glad that there are these resources.
MATT VEAN: Yeah. It's interesting. When you go back to the skills transferring from one state to another, think of a lot of folks who are licensed case social workers, or therapists, that you could be registered to practice in the state of Texas. But then you move to Virginia, you have to start that process all over again. You could be a medical doctor, and then you have to transfer that as well.
And so it can be tough and cumbersome for people to be having to do this every couple of years, every four years. However, there's been leaps and bounds over the past four, five, six years to help military spouses do this-- have the resources available to accelerate the process, even at a reduced cost.
EMILY BIGHAM: Great. That's wonderful. What would you say is the biggest obstacle?
MATT VEAN: The biggest obstacle is not having your experience and skills transferable.
EMILY BIGHAM: Why?
MATT VEAN: That's number one. Because you have to be able to adapt. That's the key thing. Obviously, military spouses, I pride myself and all military spouses to be adaptable, because you're moving from one state to another. You're resilient, and you're tenacious.
On the flip side, it's like having those skills and experience to be transferable from one state to another. Take Washington, DC. Washington, DC is a mecca for job opportunities. However, you move in through four years and you can go to Dayton, Ohio, or Colorado Springs, or LA, or San Diego. But then you want to ensure that your experience and skills and attributes that you've had in Washington, DC are then transferable to companies alike in those other surrounding states.
EMILY BIGHAM: So tell me a little bit more about your experience as a military spouse. Did you run into some of these challenges?
MATT VEAN: You know, it was interesting. My wife and I got married in 2014. We moved across country in 2014, bought a new house in 2014. So we experienced all of life's challenges really within this six, seven-week period. I was with a company in Denver at the time. And I had a huge challenge. I remember, I had approached my manager in letting her know that I'm moving to DC.
And it was really interesting to see her reaction. She took it as almost like an insult. And I let her know. I'm like, hey, I'm not moving because I want to. I'm moving because we have to. And so it was an interesting process to finally get that going with that company.
And I was able to finally get a transfer. However, it took a long time. It was not an easy process. There were job opportunities out here in DC that I could have applied for, and I did. It took about a three, four, five-month period where they finally offered me a new position out here in DC.
EMILY BIGHAM: With your previous company?
MATT VEAN: With my previous employer. However, what I wanted to do was I'm like, if this is going to be so hard, then I don't know if I want to work for a company like that. And so what I did is I went to LinkedIn, started networking, started meeting people. And that was the cool thing was, I knew DC is a very transferable city. And so people are willing to help people out.
And I was mind blown. I remember, I had emailed 10 people through LinkedIn. And I remember, I used to get eight or nine responses right away, saying, hey, I want to help. Because I have to remember, a lot of people who live here in DC reached out to somebody years ago to help them get a job. And so it's just like that spider effect.
EMILY BIGHAM: Right. Were you able to use any sort of network-- military spouse network? Does that exist? I'm assuming it exists.
MATT VEAN: It does. Back then, I didn't know. And so it's grown leaps and bounds over the past five to eight years of what that network is like. I will tell you the military spouse network today, it's a very tight community. And military spouses look out for military spouses.
EMILY BIGHAM: That's great. That's nice to know. I also read here that some of the things that they're looking for besides flexibility is a meaningful job. And that has to be important to them. I mean, they're connected to the military, which also has meaning. Did that play a part in this list, do you think?
MATT VEAN: Absolutely, absolutely. I mean, I'll just give you a personal example real quick, is my job with Navy Federal. I was not looking for a job. However, this opportunity came to me. And I never even thought about ever working for a credit union.
But we're a military family. And what better way to help than work for Navy Federal? And it's wonderful. And it's been able to help me make a significant impact and contribution, not only to the members that we serve but to my team and to myself and to my family.
EMILY BIGHAM: That's great. We hear that a lot at Navy Federal, just from employee surveys about the meaning of work. And I know it means a lot to me to be able to help the military, coming from a military family and household.
MATT VEAN: We're all connected somehow in the military. We think about-- like, I've never served. However, if we've been in this country for two-plus generations, we've had a family member who has served at one time. And so there is some sort of connection. But what I love is everybody has such a high appreciation and strong appreciation for the military.
So this is the first year we've done a list for military spouses. However, if we go to 2018, we developed the first iteration of "Best Cities After Service for Veterans." In 2019, we developed "Best Careers After Service." And then last year, in 2020, we published "Best Cities After Service 2.0," which helps identify top cities in the US for military members who recently completed active-duty service and families changing priorities due to the COVID-19 pandemic.
However, I do want to let everybody know that if you're interested in more resources, check out our blog. Our blog is awesome. It gives great articles, tips, and topics, for myself, like a military spouse, or for veterans or anybody else, at www.NavyFederal.org/blog.
EMILY BIGHAM: So in talking about tips for job seekers, we've talked about the different industries that are great for military spouses. But what are your tips? You talked about, you went on LinkedIn. You were networking. What are some other ways?
MATT VEAN: Yeah. So I'm going to go back to social media. And I know there's a lot of folks who are kind of wary about social media. One thing is, is through LinkedIn, that's how you get jobs today.
And this is what I tell everybody. And I don't ever say this like a bragging thing or whatnot, but I really have prided myself on my network. And every job that I've ever had has been through my network. I've never gone to a careers website to apply. And that's so important for people to be building that brand.
I've always said, when you go to that Career page on a website, it's almost applying to a black hole almost, because you and hundreds of other applications are being submitted. And you're just kind of keeping your fingers crossed and praying that, hey, a recruiter picks up your resume at that time or day.
And so there's so many other targeted ways. And so LinkedIn is definitely the professional network. I've always said, that's my professional resume. That's how you build your network. That's how you meet people.
And so it's so, so important for anybody-- a military spouse, or anybody else who's looking for that career transition. That's my number-one tip. There's some great courses out there on how to utilize it, how to be more effective on it. It's not necessarily spending hours a day on there. It's just a targeted approach, having a strategy in mind and executing that.
EMILY BIGHAM: I think that sounds wonderful for someone who has a career and has a resume built up. What if you are just entering the workforce, but you're also a military spouse who's PCS'ing.
MATT VEAN: Absolutely. So Navy Federal's partner with Hire Heroes USA, which is a great organization that you can benefit from-- so HireHeroesUSA.Org. They have great starting tips and tricks for somebody like you were just talking about to do that, where maybe LinkedIn could be step number three or four.
But yeah, there's a lot of people who face that challenge. And it can be intimidating. It can be hard. And trust me, it's not easy. Absolutely, it's not.
EMILY BIGHAM: I can understand too, if you're looking for the flex. I mean, there are so many things that you really need to make it work for military spouses. But there are jobs out there. And this list must be really helpful.
And I'm really excited that you guys did this, because I think that it's just another resource and a way for people to start and see, oh, my skills are transferable. Like, just because I didn't work in health care before doesn't mean that I can't transfer my skills over to health care, or a larger organization.
So I think this list is wonderful. And you mentioned-- I guess you and I were talking about it earlier, about how this is a primary focus for the first lady and her Joining Forces initiative, or task force.
MATT VEAN: Yeah, I remember when I first moved to DC, when President Biden back then was Vice-President Biden, Jill Biden's big initiative was military spouse employment. And this was in 2014, '15, and '16. And so it's great to see with her being the first lady now that it's still a number-- I'm not going to say number one, but it's definitely a top two or three initiative from her, is military spouse employment. She has a very strong connection with the US Chamber of Commerce, with Higher Our Heroes, Hiring Our Heroes, et cetera.
EMILY BIGHAM: So where are some of these resources that listeners can go to if they're in this position.
MATT VEAN: Absolutely. So I encourage everybody go to NavyFederal.org/militaryspouse, and they can seek that list there. Also, you can go to Hire Heroes USA, as well, as two wonderful starting points.
EMILY BIGHAM: Great. Well, is there anything else that we missed that you want to mention here about military spouses' best careers?
MATT VEAN: No. I think what I would tell anybody who's a mil spouse today is don't ever be intimidated for trying to do a job in a different industry, like you brought up. Navy Federal Credit Union or most banking in general-- I'll use banking as an example because that's my career-- we don't necessarily like to see that you have banking on your resume. It's about the experience in what you're doing.
Here at Navy Federal, or most banks, we can teach you banking. That's easy. But it's the life experiences, the tenacity, the resiliency that you bring is just tenfold and just priceless.
EMILY BIGHAM: Agreed. As a hiring manager myself, I've had to hire a lot of people inside and outside the company. And it really is about the experience. And are you connected to the mission? And you can teach anyone anything, just like you said.
So I really hope that people are not intimidated to go out there and try new industries, or try new careers as well.
MATT VEAN: No, It's so fun to see people's passion. And like you were saying earlier too is it's not always about the money, as well. Yeah, we want to make good money, and we want to have awesome benefits. That's important.
But the mission. And when you survey people, and when you ask them about that, you'll get a lot of responses of, no. They want to make sure that what they're doing is for the better and that they're helping people and it's rewarding. And money comes with it.
EMILY BIGHAM: Of course. And I think every industry on here probably has some of that in it. So I would encourage people to go check out the "Best Careers for Military Spouses" on Navy Federal's website. You mentioned Hire Heroes, US Chamber of Commerce, and other people getting involved. So lots of resources. And I'm glad that this is getting a lot of attention.
MATT VEAN: It is. It is. It's been a really, really good thing to help, so.
EMILY BIGHAM: Well, thanks again for coming on and taking the time to talk today. I hope you have a great rest of your day.
MATT VEAN: Awesome. Thank you for having me.
EMILY BIGHAM: Of course.
ANNOUNCER: Navy Federal Credit Union is federally insured by the National Credit Union Administration. This podcast is intended to provide general information, and shouldn't be considered legal, tax, or financial advice. It's always a good idea to consult a tax or financial professional for specific information on how certain laws may apply to your individual financial situation.
References to, and participation with, the military community does not constitute organizational endorsement. Navy Federal is an equal housing lender.
Navy Federal Credit Union. Our members are the mission.
Episode 12: Best Careers for Military Spouses
We partnered with Hire Heroes USA to survey 2,000+ military spouses on what matters most in a career for them. The results? A list of the top 10 industries and career paths that offer flexibility and mobility. In this episode, we’re joined by Matt Vean, Assistant Manager of Commercial Business Lending, to discuss his personal experience as a military spouse in search of a fulfilling career, hiring tips that served him well and his takeaways from this project. Tune in to take a closer look at the military spouse experience and Navy Federal’s resources for military spouses.
[MUSIC PLAYING] EMILY BIGHAM: Hi, and welcome to the podcast MakingCents brought to you by Navy Federal Credit Union. I'm your host, Emily Bigham. And each week I'll be taking your questions to the experts to help you make sense of your money, pun intended.
Hi, and welcome back to MakingCents, a podcast brought to you by Navy Federal Credit Union. Today we're talking to Brittany Mills, the Assistant Manager In Education Lending. Hey Brittany, how's it going?
BRITTANY MILLS: Hey, how are you?
EMILY BIGHAM: Good. Thanks for coming on today.
BRITTANY MILLS: Thank you for having me.
EMILY BIGHAM: A lot of things have changed, and earlier we were catching up about what's been changing in the student loan area. I find it fascinating because, to me, when I was thinking about going to school, going to college, growing up in the United States, it's everyone needs to go to college.
BRITTANY MILLS: Yup.
EMILY BIGHAM: It's so expensive, but also I think a lot of the benefits are actually being on the campus. And you get more than just an education out of college. So I was curious about what's changed over the past year and a half. I feel like that's kind of a loaded question that we can get into. But in general, just right off the bat, what do you think has changed in the past six months?
BRITTANY MILLS: Well, I think the fact of the campus experience has changed. Lots of people, at the start of the pandemic they had to stay home or go back home. Because they went to school, and now they're saying, oh, everything is shut down. Colleges are shutting down, lots of these schools didn't have online programs available, so it's almost like the schools had no other choice but to just say go home and we'll figure this out as we go. So I feel like a lot of things have changed when it comes to, I can't be on campus with my friends. I have to be online in an online virtual environment. And that was hard for a lot of people if they weren't already used to taking classes online.
EMILY BIGHAM: So what's today's headline in the student lending world?
BRITTANY MILLS: Student loan forgiveness. Are my loans going to be forgiven. That's a big question that students have. And rightly so. I do as well. Everyone does that has a student loan. And so Navy Federal, we're waiting to see what will happen in that landscape.
EMILY BIGHAM: What would that decision change for you? I mean, it seems like there's a lot of uncertainty around that. I feel like the hot word is uncertainty. It's like, oh my gosh, what's going to happen in every aspect of everyone's life? But what would that change for Navy Federal or for you in your role?
BRITTANY MILLS: So we've already changed our strategy when it comes to making sure that members are top of mind. So federal student loans, they come with benefits. And when you refinance those as a private student loan you lose those benefits. And so we made a decision to temporarily pause the refinance of federal student loans so that members could keep their benefits and we can make sure that they have what they need and make the best decision for them at that time.
EMILY BIGHAM: How are you supposed to even make a decision as a student or a parent? Do you start saving for college? You have a son. You have a couple of kids, but I know that your super star football son is looking to go to school in a few years. What's the conversation in your household about college and student loans?
BRITTANY MILLS: So as you just mentioned, I travel with him for football. And just this past weekend we went to Florida. And he actually wants to go to school in Florida. So there's a good chance that he might say, hey mom, I want to go to school in Florida. We're going to have to look at all of our options and see what's available. He may get a scholarship, he may not. I can't sit around and wait for that. So of course we're going to save our money. We're going to look at the options that are available to us, either from the schools that he picks, we're also going to fill out the FAFSA when it comes time, which is the free student loan application for federal loans. Just things that we will need to do to help him get ready.
EMILY BIGHAM: So you mentioned federal student loans. And I very luckily did not have to go through this process so I'm a little bit unfamiliar with it. So apologies upfront if I ask a ton of questions about this. But what is the difference between a federal student loan and a private student loan?
BRITTANY MILLS: Sure. So federal loans, they typically have fixed rates and they don't require credit. And then once the funds are granted through the federal loans, grants or scholarships, if they don't cover the full amount, then you'll go ahead and get a private loan which you can apply for through your bank or credit union. They will determine if you qualify for the amount based on your credit worthiness. Lots of times co-signers do increase the chance of loan approval and lower the interest rate on your loan.
EMILY BIGHAM: OK, so that was a lot of financial speak. So even things as small as fixed rates, and determining your credit, and that they determine for you, I feel like even submitting something as simple as a credit card application can be daunting, because it is putting something out there and then seeing if it gets accepted. It's a lot of emotional stress.
Can you walk me through the real bare bones steps of, OK, so I'm a student in high school, and I've already decided what college I want to go to that's best for me, but I can't afford it. So what is your first step? Should you even be thinking about federal versus private student loan? Can you walk me through first things, first steps?
BRITTANY MILLS: Yeah. First things first is to fill out the FAFSA. A lot of people think, my parents have too much money, I can't apply, or I wouldn't get any money. You definitely want to go to the FAFSA which is the Free Application For Student Federal Aid to determine what you would qualify for. We want you to exhaust all your federal options first.
EMILY BIGHAM: OK, so federal number one.
BRITTANY MILLS: Federal number one.
EMILY BIGHAM: And use the FAFSA. So where can you get that? Is that an application online?
BRITTANY MILLS: Yes.
EMILY BIGHAM: Do you go through Navy Federal's website?
BRITTANY MILLS: That is FAFSA online. I can't think of the website right now, but yes.
EMILY BIGHAM: Google it.
BRITTANY MILLS: Google FAFSA. F-A-F-S-A.
EMILY BIGHAM: Perfect. We'll put it in the show notes.
BRITTANY MILLS: It lets you put up, I think, a couple schools that you choose. And then you can compare those offers once they come back to see what makes sense for you.
EMILY BIGHAM: OK. So first things first, use the FAFSA application. And then once you get those back, you consider, OK, is that enough money to cover it or do I need more money. And how are you supposed to know if you need more money than what someone's told you you can have? Does the school provide that?
BRITTANY MILLS: The school will provide you, I guess a gap letter. Not 100% sure.
EMILY BIGHAM: OK, so--
BRITTANY MILLS: I'm pretty sure they will let you know what else is owed on your bill.
EMILY BIGHAM: What else is owed on your bill. OK. And then, so when you then decide, OK, I need to go and get more money in a private student loan, is that when members reach out to Navy Federal? Is that when you--
BRITTANY MILLS: Yes. That's when they shop, which we encourage. Shop for the rates and terms that work for you. Because not every lender is the same. You want to check out that lender's reputation, you want to make sure that-- some lenders require you to pay immediately, so just checking to see what works for you is what's in the best interest for you at that time in your budget.
EMILY BIGHAM: And for some reason in my head I thought that student loans covered tuition and the bulk of those big expenses. But I found talking to people that maybe it covers other things like dorms and books and whatever you need. So what do student loans cover? Or what can they cover? Is it up to the student or is it up to the loan product?
BRITTANY MILLS: It is up to your school. So tuition, dorm room costs, off campus housing, textbooks and supplies, laptops, food, transportation, anything education related expenses that are certified by your school.
EMILY BIGHAM: OK, so the school certifies it. That's interesting. So you have to keep your receipts? This is so interesting to me. How does that work?
BRITTANY MILLS: I think it's up to each individual school.
EMILY BIGHAM: OK. So it's something that you need to talk about with the university.
BRITTANY MILLS: Yep.
EMILY BIGHAM: There's so many things that are involved in student loans that it's really crazy. And is that something that at Navy Federal you guys help people with? Are you kind of the trusted advisor? I know that with mortgages that's something that we definitely, we consider ourselves a trusted advisor. Do you guys do that with covers?
BRITTANY MILLS: We do as much as we can to support the student. But obviously each school is going to be different in what they require. And we also advise them, hey, reach out to your school. Make sure you know what is required of you from them as well.
EMILY BIGHAM: So refinancing. Tell me a little bit about that.
BRITTANY MILLS: Right.
EMILY BIGHAM: Everyone loves a good refi.
BRITTANY MILLS: So refinancing is typically great for someone that have all these loans and they want to consolidate them into one payment, and they want to potentially reduce the interest rate, which in effect will reduce their monthly payment. But at the same time, refinancing, you should also make sure you have the income to support as well as the credit history.
EMILY BIGHAM: So is this after? When are you supposed to think about refinancing? Is it after you're done with school and you have a job? Because I know that your credit matters. In order to build credit and in order to get a lower rate, you typically have to have higher income, or income period. Is that something that you have to wait and do afterwards? Or can you do it when you're in the process, in school?
BRITTANY MILLS: Most lenders require you to graduate before you can refinance. So and at that point you can do it at any time. But again, checking the rates, checking the lenders, knowing what they're being offered is what's in the best interest of you at that time, and making sure that you are getting the rate that you want. Because you wouldn't want to have a lower rate and try to refinance and you would get a higher rate. So trying to make sense.
EMILY BIGHAM: Well, and we're in a very low rate environment right now.
BRITTANY MILLS: Right now, yep.
EMILY BIGHAM: So are people concerned about rates going up and are they looking to refinance?
BRITTANY MILLS: And see, that's where part of the uncertainty is, because of the federal loan component. I believe some lenders are still refinancing federal loans. We are not. I think some people have even stopped considering it for now just to see what happens around--
EMILY BIGHAM: Put it on pause because you just don't know. And I think that's the smart decision.
BRITTANY MILLS: Exactly.
EMILY BIGHAM: Because if loans start going up, or even inflation will probably impact that a little bit. Also there's a lot going on with the job market right now with employment. I think a record number of people have left their jobs. I don't know if that's because-- I mean, there's a couple ways of looking at that data. So it could be like, OK, for the past year and a half, people have been sitting tight in their jobs, not wanting to leave or try to find new ones, because obviously working from home, or trying to go to a new company and manage a new team, or figure out what's going on while working from home is difficult.
So, is it now that because everything is opening up and people are starting to get out there more, is that percentage higher because people are looking-- they've been putting it on hold and now there's a surge. I had to point to that and I can't remember where I was going with it.
BRITTANY MILLS: Hey, listen--
EMILY BIGHAM: Because you know how I am. Analyst brain.
BRITTANY MILLS: No, that's fine. But to piggyback off that point, a lot of people, being home, have considered other options for themselves. The great resignation, right? People are actually considering things that are good for them and trying to understand-- making sure that they have that extra income to support whatever they want to do, whether that's refinance or keep their loans the same.
EMILY BIGHAM: Yeah. And I think also the crazy thing about the interest rates, and how we don't know what's going to happen with that, and there's so much fluctuation, I think that there's a lot of hype about that. Because even if interest rates are changing, it's not going to be so quickly that no one's going to have time to think about, OK, what should I do with my finances. Do you guys have any resources online that people can look at to if they have questions about this? Where do you send members when they have questions?
BRITTANY MILLS: We have a couple articles on our website, MakingCents articles that speak along these lines. Just educating them on the different student loans, and refinancing, things like that. So we definitely have the education out there for our members to look at.
EMILY BIGHAM: When do you start to repay student loans? Is that after you graduate as well?
BRITTANY MILLS: Yes.
EMILY BIGHAM: OK. What are your like--
BRITTANY MILLS: Although, I guess for in school, if you're in school, we allow you to make the $25 payment so that you can help build your credit.
EMILY BIGHAM: Tell me more about that. Because building credit is--
BRITTANY MILLS: It's very important.
EMILY BIGHAM: Well, it's really important, but it's something that people don't really understand that they can be doing while-- there's just a lot of questions about credit. And I think that you know a lot about credit. You were formerly in credit cards. We miss you. But tell me a little bit more about that monthly payment of $25 while you're in school and what that does to help your credit. How does that work?
BRITTANY MILLS: So yeah, you can choose that option where you can pay $25, and that will help you pay towards your loan. And a lot of people don't realize, but those payments are being recorded and helping your score increase little and little over time. So it does help that student, that when they finally graduate, they can maybe refinance on their own without a co-signer. Because most likely if you're a student, you're going to need your co-signer to support you.
EMILY BIGHAM: So it gives you a lot of financial independence. And you need a good credit to move on in your life. To buy a house, to buy a car, you need to have credit.
BRITTANY MILLS: Exactly. All those next steps and all those big milestones that come after school. So I think it's a good thing that we put on our website. We promote that. It's a good step for credit builders.
EMILY BIGHAM: Is it unique to Navy Federal or do other lenders do this?
BRITTANY MILLS: I believe there are some other lenders that do it, in their own unique way, of course.
EMILY BIGHAM: Right. But I mean that $25 monthly payment, that's something that seems very affordable for people.
BRITTANY MILLS: Very.
EMILY BIGHAM: Is it kind of like a set it and forget it type of thing where you can just set it up and it automatically transfers?
BRITTANY MILLS: So automatic payments are an option for all of our borrowers. So yes, they can do that.
EMILY BIGHAM: And can you pause it at any time if you feel like you really need that $25?
BRITTANY MILLS: Absolutely.
EMILY BIGHAM: That's really cool. That's a great benefit. I like that one. Of the best things that my dad ever did for me was give me a credit card when I went to college. And I love saying that because I know he's probably going to listen to this and be like, oh my god, that was a disaster. But that taught me about building credit and the importance of making sure that-- that monthly payment really matters. And just showing on time payments can boost your credit history, or the opposite, which I think that's why it's important that you guys allow people to pause that. Because if you miss payments that's also takes a credit ding. So this is a good learning tool I think. That's pretty cool.
BRITTANY MILLS: Yeah, we offer options. If they ever run into anything they can apply for forbearance. We can help them. So they just reach out, they apply for it, we'd go over their individual circumstances at the time.
EMILY BIGHAM: So what did forbearance look like in the past year and a half? What happened during the pandemic? What kept you up at night?
BRITTANY MILLS: I didn't know what I was doing. My first real world experience.
EMILY BIGHAM: No one did.
BRITTANY MILLS: During the pandemic we absolutely kept our members top of mind. We helped over 1,800 members with payment relief for their loans. And as always, we're going to continue to monitor their needs, and we adjusted as we needed to to ensure that they were OK, that we got their back, that we're doing this for them. So pandemic was a fun time.
EMILY BIGHAM: Yeah, well I think it taught us a lot too, about the importance of making sure that if you put the members top of mind, it's always going to work out. And I think that's pretty cool. So it says here that you guys assisted over 1,800 members with payment relief. That's a pretty high number. How many members do you guys serve in the private student lending world, ballpark? Is this a big percentage? Did you reach out to them or did they reach out to you? How did that work? Did you just kind of know who needed help? Or did they have to request it.
BRITTANY MILLS: They requested it. And I think ballpark is like 30,000 or so that we have in our student and refi space. So they reached out, we gave them the help that they needed, either online or maybe some called by phone.
EMILY BIGHAM: OK. So I have some questions for you that came from my sister.
BRITTANY MILLS: Sister!
EMILY BIGHAM: Shout out to Caitlin Bigham. Because she and my older brother both went and got their MBAs a couple years ago. And I know for her it was a huge stressor because she had to take out student loans. This was the first time that she had to go through that process. And I just remember it was very stressful and emotional. Not to mention that she's also going to school and figuring out what her internship's going to be in the summer. And she moved from San Francisco to New York City to go to school. And that was a whole thing. I mean New York City, as we know, the prices are really high.
So some of the questions that she had, which I think we already answered, were, do I shop around for student loans and see what rates I can get? And you said, absolutely. So I think that that's a big thing to mention. She asked about refinancing loans after graduation, which you also said, yes. And then something that she mentioned I thought was interesting was, when you are paying off your loans, how do you manage paying off loans versus putting your money towards other investments like retirement accounts, property, stocks.
BRITTANY MILLS: So I believe there's some knowledge out there that I've read, that anything over 6%, your student loan rates, you're better off paying those. Because you would save more money just by paying those. If it's less than that, pay those and you can invest a little here and there in what you're interested in. So I think that's the general guidance that I've seen when I've looked into this.
EMILY BIGHAM: OK. And is that something that Navy Federal money managers can also help with? I'm sure that's something they could help with.
BRITTANY MILLS: I'm sure.
EMILY BIGHAM: At this point, when you look at student loans and how long it's going to take people to pay off your student loans, how daunting to think that you would never actually be able to invest any of the money that you make. I mean, you have to figure out, what are we doing here? How am I going to set up myself for financial success?
BRITTANY MILLS: Especially because right around the time you're graduating you're also thinking about, what does my retirement look like in the future? What does that look like? So I think, yes, finding a financial advisor if you need to, Navy Federal has them. That can help you figure out what the right balance is.
EMILY BIGHAM: What about students who go to trade schools or unaccredited universities? Is there anything different there about the process they need to go through?
BRITTANY MILLS: They can still apply for loans. The advice I would give is just determine what the value is. There may be other options out there for you to take advantage of. There's a lot of online learning, but at the same time people do want that certificate or that completion. So it's really up to each individual person whether they want to take the loan out or just save the couple thousand dollars to pay for what they want.
EMILY BIGHAM: So transitioning a little bit to military, since that is a big part of Navy Federal's audience and membership. The GI Bill. What do you know about the GI Bill?
BRITTANY MILLS: Hey, if you have access to the GI Bill you should definitely use that for your education. If then additional funds are needed, then you can apply for private loans. But at the same time, a borrower's or co-signer's income would be required at that point.
EMILY BIGHAM: OK, so if you can take advantage of the GI Bill, you should do it.
BRITTANY MILLS: Absolutely.
EMILY BIGHAM: Awesome. OK. And I assume that's something that they also just go to the website and kind of--
BRITTANY MILLS: Mm-hmm.
EMILY BIGHAM: I don't know if it's similar to VA loans in that sense. Is a GI Bill financed through an institution or is it just through the government? Question for Google?
BRITTANY MILLS: Yeah.
EMILY BIGHAM: OK. Well I mean it's a big thing. So I also see some facts here. 9 in 10 borrowers aren't ready to resume federal loan payments in October. That's a high number. That's 90%. What does that mean? Aren't ready to resume? Does that mean--
BRITTANY MILLS: Well, because of the CARES Act, zero payment, zero interest, nobody is paying. I think I saw something where maybe 1% of borrowers are actually paying their federal loans. We still are doing our $25 payments and people are still paying our loans because we're private lender, obviously, we're not federal. I guess that would be something that they would have to determine on how they would handle.
EMILY BIGHAM: Yeah, so I think that there's still a big emphasis on the importance of college and I think that's also what's so frustrating, is you don't want something like financing to keep you from reaching your potential and getting you to the point where you're so stressed out that you're like, I'm just not going to do it because I don't understand federal versus student versus the uncertainty of forgiveness. What is your advice for people who are on the fence about going to school because of financing concerns?
BRITTANY MILLS: I would say, again, apply for your federal funds. Because you don't know what you will get at that point. After that, then you can look into what other options you have out there, and what's available. You may find that there's a family member that's willing to help you co-sign just to help you further that education. So don't be afraid to go to school because of financing. Apply and then see what happens from there.
EMILY BIGHAM: Apply and see what happens. And also I love the $25 monthly payment to help boost your credit. So I feel like right there there's a positive that you get immediately from doing something like this. When in the process should they start looking into it? When do you have to apply? So if you go to school in the fall, say school starts in August or September, when do you start this process?
BRITTANY MILLS: So I believe the FAFSA opens October 1 of each year.
EMILY BIGHAM: So for the following year.
BRITTANY MILLS: Yeah. So as early as you can, you've got to check the federal timelines, you've got to check your school timelines, states sometimes have guidelines. So once you know, OK, this is what I'm doing, start researching the schools, your state timelines, and all of that, so that you can go ahead and--
How I want to do it when it's time for me and my son, go find out what school he wants to go to, find out what their timelines are-- keep saying deadlines, I'm sorry, but they're probably the same-- deadlines and timelines, and then from there, I can organize my steps based on what we're going to do. So I can tell him, look, this is what needs to be done, blah, blah, blah, blah, blah. Hopefully he'll take some initiative, we will see.
EMILY BIGHAM: Even if he does, I'm pretty sure you're going to be like, oh, no, no, no, no, thanks honey, but here's what we're actually going to do.
BRITTANY MILLS: Yep, exactly.
EMILY BIGHAM: Good luck to him.
BRITTANY MILLS: You know how it is.
EMILY BIGHAM: I wish him the best.
BRITTANY MILLS: We still like to see it though.
EMILY BIGHAM: A for effort.
BRITTANY MILLS: But that's pretty much the timeline I'm going to be on, is once I know for sure what schools he wants to go to, start getting those dates written down so that I can organize what we're going to do.
EMILY BIGHAM: So a lot of preplanning.
BRITTANY MILLS: Yep.
EMILY BIGHAM: And then, is it ever too late to apply?
BRITTANY MILLS: That, I guess, would be up to your school.
EMILY BIGHAM: Not everyone is Brittany Mills and--
BRITTANY MILLS: That would be beautiful.
EMILY BIGHAM: --was ready when your child was 8 years old.
BRITTANY MILLS: I'm sure they'll make some exceptions based on what happened in the past year.
EMILY BIGHAM: Well, also because there is some uncertainty. You just never know. So you never know what you're going to get back from your application, and then you never know what exceptions they'll make. But also, what if you're in school and then your situation changes and you need student financing, loans.
BRITTANY MILLS: You can apply.
EMILY BIGHAM: You can apply?
BRITTANY MILLS: Mm-hmm.
EMILY BIGHAM: At any time? So it's never too late any time?
BRITTANY MILLS: You can apply and see.
EMILY BIGHAM: OK. That's awesome. Well, is there anything that we haven't covered that you would like to talk about?
BRITTANY MILLS: I would just want to say that, this is to the students and to the parents as well, but we've all been through our own personal challenges this past year. And I would say, please take care of you. Take care of yourself. Whether it's through meditating, creating, connecting, caring for yourself, I think all of that is very important. And if you don't know how or what to do, your school might have resources. There might be resources in your area that you can use. But keeping your mind healthy is just important. And I feel very strongly about that.
EMILY BIGHAM: That's great. And I think the emotion, the stress that comes with debt and financing, reach out to your trusted lender and talk to someone about what you can do to help ease that. Because if we can at least relieve some of that stress, I think that's a big win too.
BRITTANY MILLS: Absolutely.
EMILY BIGHAM: All right. Well, I can't wait for you to circle back with me and tell me what's going on with student loan forgiveness.
BRITTANY MILLS: I know. Maybe I'll be back. Maybe I'll be back.
EMILY BIGHAM: Who knows? You never know. Thanks so much Brittany. It was great to talk to you and I hope you have a great weekend.
BRITTANY MILLS: You too. Thank you.
EMILY BIGHAM: And good luck to your son.
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Episode 11: Student Loans 101
No matter when you're navigating the student loan journey, we want to make sure it's as simple to understand as possible. In this episode, we're joined by Brittany Mills, Assistant Manager of Education Lending at Navy Federal. Listen as we dive into all things student loans—from choosing between loan options, to meeting loan requirements and to creating healthy financial habits as a student. Tune in to get a closer look at what the changes this past year have meant for student loans and what to expect going forward.