Student loan forgiveness?

[bjl584]

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]

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]

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.

[Snodog]

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.

I really hate it when someone comes along and pours cold hard facts on a good rant. Why must accuracy always spoil our sense of outrage? Where's the fun in that? This is AMERICA!!

[Frugal]

I haven't seen anything in the news about this topic since reading the original thread, but I don't think there is any chance of this making it through Congress, if it even is indeed there already sitting somewhere in committee. I put the chance at 0%. Have mixed feelings about the issue...still.

[YULACU]

Frugal,

The provisions mentioned by neguy and I are already law. Student loans can be forgiven in 10 years tax free if you work in the public sector or for a non-profit. You can have your loans forgiven in 25 years if you participate in the income based repayment program and you can have your loans forgiven in 20 years if you start school in 2014. As a recent grad, I was required to take entrance and exit counseling regarding my student loans so most new grads should know about the different payment programs and loan forgiveness programs available to them. The provisions have been around for a while. Before I entered law school, I was well aware that if I worked for the Feds or legaIdaid my loans would be forgiven in 10 years. I'm not allowed to post links because I haven't been here long enough, but if you google "student loan health care white house" it will take you to the White House web page addressing the recent changes.