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Matter of Opinion - Student Loan Forgiveness under Biden

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    Matter of Opinion - Student Loan Forgiveness under Biden

    Hey all, I'm working through my debt journey, and I have my last student loan down to $11,101.28.

    The interest waiver and forbearance has been extended until September 30, 2021.

    I'm curious to know everyone's opinions on the likelihood of student loan debt being forgiven, really of any portion at all.

    And with that being said, is it morally right to allow myself to benefit from student loan forgiveness? I took out the debt and I got the degree and it is my responsibility to pay it back.

    With the number of $10,000 student loan debt being the magic number I keep hearing for student loan forgiveness, I keep finding myself thinking if I should pause my debt journey once I reach $10,000 on my student loan and start focusing on my car? What are your thoughts?

    Thank you! Looking forward to your answers!

    #2
    What’s the balance, term and rate on the car loan?

    are you maxing retirement contributions?

    Comment


      #3
      I think you should keep doing what you've been doing. If, at some point in the future while you are still working on it, they decide to forgive some student loan debt and you qualify, go for it. If you're currently paying extra on the student loan and are asking about switching to paying extra on the car instead, I would say that's entirely dependent on the interest rates. Pay the one with the highest rate first.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


        #4
        A few thoughts....

        First, I would take advantage of the interest waiver as long as available, until it's your last debt. So focus on your car loan, but if it's finished off before interest kicks back in come October, restart working on the student loans.

        FWIW, that's mostly my answer for your question about stopping at $10k as well. I will never recommend waiting for the bozo's in D.C. to fix your life & get yourself into a stronger financial situation. I believe too much in work & personal responsibility... Don't delay getting out of debt in hopes that Congress well forgive SL debt. When it's time to tackle your SLs, do it. If some forgiveness comes & finishes it off for you, great. Until then, get yourself out of debt.

        That said, I don't think it's a morality issue to accept the forgiveness in the event that it does happen. If it occurs, it's a policy choice made by our elected leaders, and will be applied in accordance with whatever law implements it. Just accept it as a gift, and move on toward financial security for yourself. Do I think it'll happen? I give it no better than 50% chance. There's alot of opposition to it, even within the Democratic party. Especially with a split Senate, I think the support to pass such a measure will be difficult to secure.

        Again, I strongly prefer supporting people by encouraging personal responsibility & growth, providing job training/placement, etc. I'd much prefer to see strong action on reducing the cost/fixing affordability of college going forward than granting loan forgiveness.
        "Praestantia per minutus" ... "Acta non verba"

        Comment


          #5
          Originally posted by cdorfish View Post
          Hey all, I'm working through my debt journey, and I have my last student loan down to $11,101.28.

          The interest waiver and forbearance has been extended until September 30, 2021.

          I'm curious to know everyone's opinions on the likelihood of student loan debt being forgiven, really of any portion at all.

          And with that being said, is it morally right to allow myself to benefit from student loan forgiveness? I took out the debt and I got the degree and it is my responsibility to pay it back.

          With the number of $10,000 student loan debt being the magic number I keep hearing for student loan forgiveness, I keep finding myself thinking if I should pause my debt journey once I reach $10,000 on my student loan and start focusing on my car? What are your thoughts?

          Thank you! Looking forward to your answers!
          Federal Student loan forgiveness is being proposed as an economic stimulus, not that different from just sending out checks. It just happens to be more targeted. I don't feel like there's a big question of personal morality here, personally. I work hard and have always paid my bills, but that wouldn't cause me to turn down such a gift. No, I'd use it to get farther ahead. And if I felt so inspired, I could certainly make a donation to my alma mater now or down the road to support educational programs, i.e. "pay it forward". If I was so opposed to the idea of loan forgiveness or stimulus and wanted to pay back every red cent, you could donate the outstanding balance back to the US treasury.

          I think the chances of student loan forgiveness happening are high. If done in the next two years, the senate can pass virtually anything via a bill through the normal process; it can also be done through executive action. It's more of a question of just how much will be forgiven, and when. I think the minimum to be forgiven would be $10k per borrower and at most, $50k.

          On the car, I'd imagine interest might be higher, and a $10k student loan balance isn't much in the grand scheme. I'd probably be focusing on the car anyhow, keeping in the back of my mind that student loan debt could disappear in the near future--just don't let interest accrue or let it go into default - sounds like you weren't planning to anyway.

          Comment


            #6
            I wouldn't count on loans being forgiven. It sounded good on the campaign trail, but I doubt it will happen in any broad scope.
            Just take advantage of the 0% interest and keep paying them down on your own.
            If they are forgiven one day, then good for you. You will be ahead of the curve.

            Brian

            Comment


              #7
              Originally posted by ua_guy View Post

              Federal Student loan forgiveness is being proposed as an economic stimulus, not that different from just sending out checks. It just happens to be more targeted.
              It's really not a great form of economic stimulus. Why? Because it targets the wrong people. The ones suffering most from the pandemic and resulting economic collapse aren't college graduates but rather lower income, less educated folks: essential workers like childcare providers, supermarket workers, restaurant staff, custodial crews, etc. I'm all for targeted stimulus but let's target the people who need it most.

              I'm a liberal Democrat who opposes student loan forgiveness. I'm sure I'm not the only one. Surely there are Democrats in the Senate who agree with me. Getting a majority might not be so easy in a 50-50 Senate.

              Keep paying your loans.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment


                #8
                You may well have this sorted already, but I would double check and make sure your loan is a federal, rather than a private. I can't imagine the latter being forgiven for any amount.

                Comment


                  #9
                  I will go on the record to say I'm against student loan forgiveness.

                  That being said my DD22 graduated in May 20 with 10k student loans. She's a nurse and started working in July '20. Saved up her 10k to pay her loan off in the 6 mos when the interest would start accruing, but then the extension happened, so her 10k is sitting in a savings account waiting to see what is going to happen. If she has to pay it back she will, if she gets it forgiven then she has 10k more to her name. I told her she'll probably end up paying more in taxes in her life so to not complain because she got this forgiveness on the front end.

                  Comment


                    #10
                    Originally posted by disneysteve View Post

                    It's really not a great form of economic stimulus. Why? Because it targets the wrong people. The ones suffering most from the pandemic and resulting economic collapse aren't college graduates but rather lower income, less educated folks: essential workers like childcare providers, supermarket workers, restaurant staff, custodial crews, etc. I'm all for targeted stimulus but let's target the people who need it most.

                    I'm a liberal Democrat who opposes student loan forgiveness. I'm sure I'm not the only one. Surely there are Democrats in the Senate who agree with me. Getting a majority might not be so easy in a 50-50 Senate.

                    Keep paying your loans.
                    I'm generally in the same political quadrant as you and I feel more ambivalence than opposition towards it. I see it through the lens of people I've known with student loans and I can see where SL debt has been stifling for their progress. You are correct; ultimately these folks are the least likely to need help over the course of time, although, IMO, not undeserving. It's an investment in Americans just the same. Honestly, I believe income-threshold stimulus programs are unfairly leaving people in the fray just like a targeted SL forgiveness program is. Stimulus is for purposes of stoking the economy - different groups will stimulate the economy in different ways.

                    And yes, important to note - the programs discussed are for federal loans only.

                    Comment


                      #11
                      Originally posted by ua_guy View Post

                      I'm generally in the same political quadrant as you and I feel more ambivalence than opposition towards it. I see it through the lens of people I've known with student loans and I can see where SL debt has been stifling for their progress. You are correct; ultimately these folks are the least likely to need help over the course of time, although, IMO, not undeserving. It's an investment in Americans just the same. Honestly, I believe income-threshold stimulus programs are unfairly leaving people in the fray just like a targeted SL forgiveness program is. Stimulus is for purposes of stoking the economy - different groups will stimulate the economy in different ways.

                      And yes, important to note - the programs discussed are for federal loans only.
                      I agree. "Oppose" was kind of a strong word. I'm not 100% against it for all the reasons you stated. And yes, giving stimulus money to people who "don't need it" can still help if it results in people going out and spending more, dining out, and circulating that money into the economy.
                      Steve

                      * Despite the high cost of living, it remains very popular.
                      * Why should I pay for my daughter's education when she already knows everything?
                      * There are no shortcuts to anywhere worth going.

                      Comment


                        #12
                        Please note, my response is not directed towards you, so much as it it towards the topic in general. With that said:

                        When you take out a loan, you are promising that you will pay it back.

                        When you suggest that the load should be forgiven, you are saying we should steal from someone else to keep your promise.

                        The net effect of the tax payer having to pay your student loans is colleges will charge more.

                        You are a thief if you reach into someones pocket and take their money when no one is looking. You are just as much a thief if you are given permission to steal from them.

                        Comment


                          #13
                          Originally posted by myrdale View Post
                          Please note, my response is not directed towards you, so much as it it towards the topic in general. With that said:

                          When you take out a loan, you are promising that you will pay it back.

                          When you suggest that the load should be forgiven, you are saying we should steal from someone else to keep your promise.

                          The net effect of the tax payer having to pay your student loans is colleges will charge more.

                          You are a thief if you reach into someones pocket and take their money when no one is looking. You are just as much a thief if you are given permission to steal from them.
                          myrdale in case people haven't noticed, the US is literally in a winter of discontent - resentment and inequality are high right now. Mass debt relief would seem to be a prudent move to avoid further social instability. So, I were Biden, I'd relieve all the debts I possibly could.
                          james.c.hendrickson@gmail.com
                          202.468.6043

                          Comment


                            #14
                            Originally posted by myrdale View Post
                            Please note, my response is not directed towards you, so much as it it towards the topic in general. With that said:

                            When you take out a loan, you are promising that you will pay it back.

                            When you suggest that the load should be forgiven, you are saying we should steal from someone else to keep your promise.

                            The net effect of the tax payer having to pay your student loans is colleges will charge more.

                            You are a thief if you reach into someones pocket and take their money when no one is looking. You are just as much a thief if you are given permission to steal from them.
                            It's being discussed as a one-time cancellation of debt for federal loans only. The schools have already been paid; the debt is with federal institutions. It's really no different than writing a stimulus check and mandating it be used towards student loan balances. I get what you are saying, but I also don't think that really applies to the program as it's being discussed. Or am I missing something? If it were differently worded as a federal investment in higher education, or a federal higher education rebate based on outstanding federal SL balances, would you feel differently?

                            Kind of like when a stimulus check is sent out, Conservatives are generally against it, as it furthers government spending, increases national debt, inflation.

                            But if the same thing is worded as a one-time tax break, a lot of conservatives are cheering in the streets because, yay lower taxes. See the difference?

                            If we were talking about cancellation of private loans, and if it meant those institutions or schools wouldn't get paid - that's a very different discussion, one that isn't happening. I agree - that wouldn't make sense.

                            Comment


                              #15
                              I am a moderate conservative and oppose student loan forgiveness. With that said, there’s nothing wrong with accepting the forgiveness if it becomes available.

                              If I were you, I’d plan to pay back the loans, keep making payments, and if student loans become forgiven then it’s a nice windfall.

                              If you have a strong opposition to it, you can donate the money. We received a small stimulus check the first go round because it was based on 2019 tax returns and my husband benefitted from a lot of his 2019 income being non-taxable. I felt very strongly that the stimulus money should be given to those that needed it and sent the money to a high risk friend who had lost her job due to the pandemic. There’s nothing stopping you from sharing the wealth if you want to pay it forward.

                              Comment

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