Student loan forgiveness?

[c3troop]

Anyone know if this is actually going to make its way through congress?

I personally will be irrate if it does. I just paid off a 4k loan and only have 8k left.

No one takes responsibility anymore for their debt and it makes me sick.

What do you guys think?

[Joan.of.the.Arch]

As far as I know, no one has even drawn up a bill to consider it in committee. Has someone? I think the idea to forgive loans which have been faithfully paid for 20 years is going nowhere. The president spoke of this in his last state of the union address, and that's the last I heard of it. The federal government would have to pay out the remainder of the obligations, yet Congress is in no mood to appropriate the money.

[JoshuaHeckathorn]

It's already possible if you've been making payments for 10 years and work for the government, a nonprofit, or you're a teacher.

[Nightfly]

Haven't heard anything about this, and I tend to follow the news concerning the national budget somewhat. I don't see it as a realistic agenda item considering that Congress is now finally starting to talk about cutting budget costs (which never would have happened even five years ago).

[Snodog]

Didn't hear anything about this either.

I always thought it was kinda unfair that a couple can go crazy with thier credit cards, buy expensive cars, house, and then claim bankruptcy while someone out of college and unable to find a job can't claim it on their student loan debt.

[Scanner]

The reform that needs to happen is on the front end, not on the back end.

Money has to be more thoughtfully appropriated, if we are even going to have a student loan program at all.

I have mixed feelings on this. I did take advantage of gov't student loans which did advance me to where I am at today. It was a great program. So, in a way, I have some "user guilt" as if I used any entitlement - Medicaid, Medicare, SSI. But it's getting to the point of collapse.

And honestly, as a taxpayor, why should I subsidize for your kids to go to college when I haven't yet paid for mine to go?

The problem is colleges, esp. for-profits, but also state-run, have become "cash cow businesses." As soon as they allocate more money for education, colleges figure out a way to spend it.

I am not a free market maven by any means in all situations but I think we need to start cutting back public funds for education. It would be one thing if grads were purchasing degrees and actually using them, but that doesn't appear to be the case.

[dfeucht]

Originally Posted by Scanner

And honestly, as a taxpayor, why should I subsidize for your kids to go to college when I haven't yet paid for mine to go?

This mindset disturbs me. I think it is clearly in ALL of our best interests whether we have children or not that our children have access to a good affordable education which is why we have public schools and offer subsidies/tax breaks for higher education. Not all children are in situations where us as parents or even the students themselves can cover a full education without some help.

There is clearly plenty of room to question the value the education our children are currently receiving (and the price of higher education) and we must somehow fix the system so that we improve our kids' science/math scores so that we can continue to compete in the global economy.

But I think we are so quick to think that our money is not well spent so we should stop spending it instead of trying to better utilize the funds we do spend on education to improve our youth's education.

I don't know the answer, but I think we have to look outside of I have to pay for my own kids so why am I subsidizing you.

[dczech09]

I have one question: since when did it become my responsiblity to pay for the education of some kid in the Bronx whom I have never even met? Since when did it become society's responsibility to make sure kids can have access to "affordable" education?

This whole student loan forgiveness is a load of crap. You get your student loans forgiven by the government; but who has to pay into the government so that they have money to use to allow the forgiveness in the first place? How about you give me $5,000 and I will go to Sallie Mae and pay off your $2,500 loan for you? And while I am at it, I will pay off some "under-priviliged" person's $2,500 loan.

Do you see how this works? Essentially the government has turned into a middle-man; they are not creating value, they are just using existing value to finance things as they see fit. There is another word for this: MOB.

Why don't we try my idea: I pay for my education, you pay for yours, and Bobby in Seattle pays for his. We do not need to bring a middle-man into the equation. And do not give me this crap about under-priviliged people. It is not my responsibility to take care of someone I do not know; it is my responsibility to take care of myself and those whom I chose to take care of.

[Frugal]

I agree with Snodog.

[photo]

Originally Posted by dczech09

I have one question: since when did it become my responsiblity to pay for the education of some kid in the Bronx whom I have never even met? Since when did it become society's responsibility to make sure kids can have access to "affordable" education?

Every child deserves a basic education up to high school. Beyond that, however, I agree with you.

[photo]

Here's an excellent article that explains how families for college who save are penalized:

How Colleges Punish Families Who Choose to Save - Daniel Indiviglio - Business - The Atlantic

I have 4 kids: 1 is in grad school (and is on stipend), 2 are in college, and one is in high school. FAFSA essentially said that we had saved so much that our children received nothing based on income, even though our income is not that high. Yet, I know people whose income is higher than ours and have received aid for their kids because they spend everything they earn and have saved nothing. And we wonder why our economy is in such poor shape.

[c3troop]

Thank God there are sane people on this forum who have my mindset. I'm just so irked by what is going on in this country now. Everyone wants something but wants it handed to them.

[cypher1]

While I never finished college (although I did pay off loans years ago), this possibility now inspires me to get more debt for my Masters in Advanced Basket Weaving with a minor in Humanities. When I can't get the job which I feel entitled to, I'll just wait for the Govt to wipe out my loans for free. Done and done.

[Joan.of.the.Arch]

Well cypher, the deal was going to be that you would have to have paid faithfully for 20 years first. I see no reason why you could not have made enough artisanal baskets to pay off your whole loan in 20 years.

Update: You know what? I thought I had read about this in the president's 2011 state of the union address, but in skimming over the text online, I could not find any reference to it. C3troop (OP), do you recall where you heard of it?

[jpg7n16]

Originally Posted by Snodog

I always thought it was kinda unfair that a couple can go crazy with thier credit cards, buy expensive cars, house, and then claim bankruptcy while someone out of college and unable to find a job can't claim it on their student loan debt.

You can seize the car and sell it, you can foreclose on the house and sell it - you can't sell someone's education to pay down their loans... well you kinda can - it's called a "job."

It wouldn't do the country much good if people could just go to school for 5 years at $25k a year... then just file bankruptcy as soon as they get a job. It's like getting your $125,000 degree for free!

Bankruptcy falls off your credit after what, 7 years? That's like $18k/year of free money.

I think the school system would collapse if people could bankrupt their school loans.

[bjl584]

Originally Posted by jpg7n16

You can seize the car and sell it, you can foreclose on the house and sell it - you can't sell someone's education to pay down their loans... well you kinda can - it's called a "job."

It wouldn't do the country much good if people could just go to school for 5 years at $25k a year... then just file bankruptcy as soon as they get a job. It's like getting your $125,000 degree for free!

Bankruptcy falls off your credit after what, 7 years? That's like $18k/year of free money.

I think the school system would collapse if people could bankrupt their school loans.

You could always pay off your student loans with a HELOC and then just walk away from your house. Just sayin'

[neguy11]

What is with all this "outrage" these days? I'm getting so tired of people ranting and raving about things without educating themselves about the issue and the actual details! Anyway I assume this thread is referring to the Income Based Repayment plan for federal student loans.

Read about it here: Student Aid on the Web

The plan determines your monthly payment based on your family size and your AGI compared to the poverty level. After 25 years of payments on this plan any remaining balance is forgiven, though the amount of forgiveness IS taxable income.

Every year they will look at your tax return and determine your monthly payment based on your AGI. If your AGI is less than 150% of the poverty level for your family size, your monthly payment is $0. If you AGI is greater than 150% of the poverty leve for your family size, your monthly payment is calculated as follows:

1. Look up the poverty level guidelines for your family from the Department of Health and Human Services website.
2. Multiply the appropriate poverty guideline by 150%.
3. Subtract your adjusted gross income from the number you calculated in the previous step.
4. Multiply your answer by 15%.
5. Divide this answer by 12.
6. This is your new monthly payment, unless it is greater than your original payment under the 10-year standard repayment plan. If this is the case, your payment remains the same.

[YULACU]

I believe student loan forgiveness has been in effect since 2007. Changes to IBR, however, were incorporated into the Health Care bill. Instead of paying 15% for 25 years, grads will pay 10% for 20 years and then the remainder of their student loans will be forgiven. Unfortunately, it will only effect student loans taken out 2014 and beyond. On another note, if you work in the public sector or for a non-profit, your loans are forgiven after 10 years tax free! I wouldn't suggest IBR on its own, but when it is coupled with the public service forgiveness option it becomes a pretty good deal.

[photo]

Originally Posted by YULACU

Changes to IBR, however, were incorporated into the Health Care bill.

There are a lot of things in Obamacare that are unknown to the public. So far, most new things we learn are quite the opposite of what we've been told.

[Snodog]

Originally Posted by photo

There are a lot of things in Obamacare that are unknown to the public. So far, most new things we learn are quite the opposite of what we've been told.

I agree.

For example, people will be so pleasantly surprised to learn that there are no death panels.