Canceling student loans

[leh-nerd skin-erd]

10 minutes ago, The Frankish Reich said:

Typically loan forgiveness = imputed income = tax liability. Not sure how this latest plan is going to treat that. $10,000 of extra "income" for someone earning $125,000 in 2022 means about $2200 extra coming back to Uncle Sam. And if you live in NY or CA ....

... so watch this one carefully, and see if they add an IRS special rule treating this forgiveness as a nontaxable event.

(Yes, I hate this plan)

I was focused on the theory that the IRS would be focusing on tax cheats, assuming Alf was referencing the wealthy and uber-wealthy Trumps, Bidens, Gates, Cubans etc who walk among us.  There are likely millions (tens of?) of individuals who have student loan debt, will meet the criteria for forgiveness, and have side hustles like tutoring students, driveway sealing, house painting, cutting hair and so on where cash is king.  Individually it may not always amount to much money, but collectively, the government is missing out on some major coin.  If viewed from the perspective of the greater good, it actually makes sense to pursue that revenue in addition to the much bigger fish beating the system.  

[Big Blitz]

Why not credit card debt?

[PetermansRedemption]

7 minutes ago, Big Blitz said:

Why not credit card debt?

Because the government has no authority to cancel debt it doesn’t own. 

[ArdmoreRyno]

If people really want to help with the student loan issue.... 

 

Drop the interest rates. That's what kills people. 

[Chef Jim]

There is already a program in place for public student loan forgiveness.  I suggest they stick with that and cut with the vote pandering. 

[PetermansRedemption]

30 minutes ago, ArdmoreRyno said:

If people really want to help with the student loan issue.... 

 

Drop the interest rates. That's what kills people. 

Precisely what my recommendation has been for years. Such a simple solution I have no idea why it was never brought up. Just keep interest rates at zero while resuming payments. The government still gets the money it loaned out, payments stay affordable without exorbitant interest rates, and balances don’t balloon to unsustainable rates if you lose your job and require a forbearance. 

[BillStime]

44 minutes ago, ArdmoreRyno said:

If people really want to help with the student loan issue.... 

 

Drop the interest rates. That's what kills people. 

Elizabeth Warren appreciates your support  

[BillStime]

🎯🎯🎯🎯🎯 

 

 

and I paid off my loans three years ago 

[ALF]

If $20K for those with pell grants or $10K for those who did not qualify ALF approves.  Liz Warren and other D politicians wanted $50K ,  Bernie and progressives wanted 100% forgiveness. That makes Biden a ultra conservative 🙂 

[B-Man]

5 minutes ago, BillStime said:

🎯

 

and I paid off my loans three years ago 

 

 

Tax cuts let people keep more of that which they have earned.

 

Student loan forgiveness is completely different.

 

 

AND, of course, student loan forgiveness will heavily favor the rich also.

 

But Billsy does what he is told to do.

 

.

[aristocrat]

 

[Big Blitz]

1 hour ago, PetermansRedemption said:

Because the government has no authority to cancel debt it doesn’t own. 

 

 

Not my point. 

 

What issue is being addressed here?

 

Help us understand the bribery.  

[GaryPinC]

22 minutes ago, PetermansRedemption said:

Precisely what my recommendation has been for years. Such a simple solution I have no idea why it was never brought up. Just keep interest rates at zero while resuming payments. The government still gets the money it loaned out, payments stay affordable without exorbitant interest rates, and balances don’t balloon to unsustainable rates if you lose your job and require a forbearance. 

 

Certainly interest should be targeted, you can keep it very low or zero for the first year and raise it over time to encourage early principle payoffs.  Penalize with higher rates for delinquent payers.

 

A big part of this should be some required educational seminars that map out the costs should you go into default, and yearly discussion of your loan obligations relative to your future projected salary (based on expected degree).  Default is so hard to get out of because they accelerate the interest that must be paid plus can tack on collection fees. 

 

Someone I know defaulted and had a $3500 collection fee added on to their loan costs, and the fee had to be paid off first before payments were applied to the original loan with interest building up the entire time.  So you get back to making your loan payment, only to watch the loan amount increase each month.

 

But yearly online update to make sure kids and family understand future monthly loan payment vs average salary for your major.

 

The final item is that once you pay off your original loan plus interest amount and any fees, your loan should be forgiven. 

[Backintheday544]

3 hours ago, The Frankish Reich said:

Typically loan forgiveness = imputed income = tax liability. Not sure how this latest plan is going to treat that. $10,000 of extra "income" for someone earning $125,000 in 2022 means about $2200 extra coming back to Uncle Sam. And if you live in NY or CA ....

... so watch this one carefully, and see if they add an IRS special rule treating this forgiveness as a nontaxable event.

(Yes, I hate this plan)

Democrats included a provision that student loan forgiveness is tax free through 2025 in the last stimulus reconciliation bill.

[ArdmoreRyno]

55 minutes ago, BillStime said:

Elizabeth Warren appreciates your support  

 

There has been proposals before, bipartisan bills. 

[Big Blitz]

25 minutes ago, Bandito said:

The democrats attempting to buy votes once again. College borrower making six figures gets a 10K git. Guy in the trades who borrowed money to buy a truck for his business gets a higher gas bill due to Biden's energy policies. Progressive "equity" means they buy votes, you pay.

 

 

Exactly 

 

All while completely ignoring (deliberately) why the cost of college has sky rocketed in the last 20 years.  

 

Party of the people.  

[ALF]

11 minutes ago, Big Blitz said:

 

 

Exactly 

 

All while completely ignoring (deliberately) why the cost of college has sky rocketed in the last 20 years.  

 

Party of the people.  

 

What have republicans done to address this problem in the past 20 years ?

[sherpa]

1 minute ago, ALF said:

 

What have republicans done to address this problem in the past 20 years ?

 

Sometimes, letting the free market system lever these issues is much better than a gov or party interfering.

Actually, I would state "always."

 

What the Republicans have not done is propose eliminating debt for people who have agreed to it and signed promissory notes to pay it back.

 

The net of this taxpayer funded forgiveness is to, once again, fail to let the free market impact idiotic college costs, and remove the US University system from having to be accountable for unjustified, and way beyond cpi, wage growth, or any other economic measure, increases.

 

[LeviF]

1 hour ago, aristocrat said:

 

 

5 hours ago, LeviF said:

Again, Republicans not only miss the point but miss an opportunity.

 

Democrats understand that politics simply comes down to what Old Hickory practiced: reward friends, punish enemies.

 

 

[mead107]

50 % of kids that go to college should never have gone. Will never use there degree.