Public Student Loan Forgiveness?

[DrDawkinstein]

12 hours ago, PetermansRedemption said:

Just to confirm, you have to make 10 years of qualifying payments, correct? So, wouldn’t the loan be completely paid off in many cases anyways? Seems they should look to lower this to 5 years. 
 

As it stands, can you really qualify if you make a decent combined income? Or do you have to be on income based repayment to really take advantage of this? 

 

You would think so, but due to the predatory nature that Education Financing has taken on, a LOT of people still have major debts after working for 10, 20 years.

 

The system is way broken.

 

The debt is already off the federal books. Just wipe em out. I'll stop there to keep this off PPP.

 

Congrats @Johnny Hammersticks!!

[Jauronimo]

While I am happy for people who are free of the burden of crushing student loan debt, particularly those who were duped by predatory for profit institutions, this legislation does nothing to address the underlying issues.  Its time to have a discussion about the cost of education, non-recourse lending, and the amount of debt an 18 year old should have access to.

[LeviF]

2 minutes ago, Jauronimo said:

While I am happy for people who are free of the burden of crushing student loan debt, particularly those who were duped by predatory for profit institutions, this legislation does nothing to address the underlying issues.  Its time to have a discussion about the cost of education, non-recourse lending, and the amount of debt an 18 year old should have access to.

 

Yeah, it's a bandaid thrown into the woodchipper after the fact. 

 

Stanford, while certainly among the elite universities is obviously high cost and part of that is that they now have more employees than students. I don't think universities can or should be judged on money in/money out but there are questions there that need answers. Not even political answers, just practical ones.

[Johnny Hammersticks]

13 hours ago, PetermansRedemption said:

Just to confirm, you have to make 10 years of qualifying payments, correct? So, wouldn’t the loan be completely paid off in many cases anyways? Seems they should look to lower this to 5 years. 
 

As it stands, can you really qualify if you make a decent combined income? Or do you have to be on income based repayment to really take advantage of this? 

The PSLF program has nothing to do with income.  It is for people who make student loan payments while employed in qualified “public service” professions such as public education.  I had to submit documentation from each of my 3 employers with their EIN to verify that they were qualified employers.  

[Big Turk]

1 hour ago, Jukester said:

If you're referring to the one time IDR Account Adjustment, my loan just got credited for the full remaining balance earlier this month automatically!  What a crazy pleasant surprise.  If your loans qualify, they need to be consolidated into a Direct Consolidation Loan (if not already).  I'm in the process of doing that for my wife's loans.  Deadline is 5/1/23. See details at the link below.

 

https://studentaid.gov/announcements-events/idr-account-adjustment

 

Mine have already been consolidated quite some time ago....just recertified for IDR...this would be pretty amazing if it happens, owe about 40K on them.

[teef]

46 minutes ago, Jauronimo said:

While I am happy for people who are free of the burden of crushing student loan debt, particularly those who were duped by predatory for profit institutions, this legislation does nothing to address the underlying issues.  Its time to have a discussion about the cost of education, non-recourse lending, and the amount of debt an 18 year old should have access to.

i agree 100%.  the cost of education has gone up at a staggering, unfair rate.  even keep educational loan rates low.  i was in the lucky group the consolidated my loans at 2.5%.  my understanding is that they were at 8-9% at one point.  for an educational loan?  it just seems wildly unnecessary.

 

school loans don't have to be an evil idea.  i'll be paying mine off until i'm 58, (there's no reason to prepay right now at those rates) and it's 1000% worth it.  

[Big Turk]

5 minutes ago, teef said:

i agree 100%.  the cost of education has gone up at a staggering, unfair rate.  even keep educational loan rates low.  i was in the lucky group the consolidated my loans at 2.5%.  my understanding is that they were at 8-9% at one point.  for an educational loan?  it just seems wildly unnecessary.

 

school loans don't have to be an evil idea.  i'll be paying mine off until i'm 58, (there's no reason to prepay right now at those rates) and it's 1000% worth it.  

 

Mine consolidated at like 7.25% and you couldn't redo it, you were basically stuck with that rate forever once you did it...it really sucked...but hopefully will be free of those soon.

[Jukester]

32 minutes ago, Big Turk said:

 

Mine have already been consolidated quite some time ago....just recertified for IDR...this would be pretty amazing if it happens, owe about 40K on them.

Mine was 48k and I was just checking my online account as a matter of maintenance.  Literally couldn't believe my eyes when I saw it.  Thought I was reading it wrong.  FYI I was never on IDR, just making a fixed payment every month but it was definitely 20 plus years.  Never received any notice or anything.

[Augie]

53 minutes ago, Jauronimo said:

While I am happy for people who are free of the burden of crushing student loan debt, particularly those who were duped by predatory for profit institutions, this legislation does nothing to address the underlying issues.  Its time to have a discussion about the cost of education, non-recourse lending, and the amount of debt an 18 year old should have access to.

 

Oooh, where to start? We had dinner a while back with a very smart guy. He had been the President of Ford Europe and after “retiring” became the Dean of the business school at a major university. He compared education to manufacturing cars. You don’t shut the plants down all summer, or close for 3 weeks at the holidays. There is absolutely no reason it should take 4 years (or more, for many) to get a college degree. 

 

As for the cost, our son’s MBA from Emory University was about $85k. He’s got a very good job, but they just had their first child and the wife will be out of the workplace for a while. He’d be paying on that loan forever if we had not stepped in to help them out. Why was it so expensive? It was during Covid, so it was almost 100% virtual (fortunately, saving countless hours of travel). It was a wise investment of time and money, but there is no excuse for it costing so much.

 

John Grisham actually wrote a book about a law school that existed for the purpose of generating student loans. It wasn’t about education, it was about generating profits. There is something very wrong about that.  

[WhoTom]

14 minutes ago, teef said:

i agree 100%.  the cost of education has gone up at a staggering, unfair rate.  even keep educational loan rates low.  i was in the lucky group the consolidated my loans at 2.5%.  my understanding is that they were at 8-9% at one point.  for an educational loan?  it just seems wildly unnecessary.

 

It's not just the interest rate that's bad, it's the fact that interest starts to accrue the moment you take out the loan. When I got my student loan in the early 80s, the interest didn't start to accrue until six months after graduation. Now, the rates are high and the interest starts accumulating on day one. When a kid graduates with a bachelor's degree, they could already have four years of interest racked up on their loans. That's just wrong.

[teef]

15 minutes ago, Big Turk said:

 

Mine consolidated at like 7.25% and you couldn't redo it, you were basically stuck with that rate forever once you did it...it really sucked...but hopefully will be free of those soon.

7.25 is insane.  it just strikes me at robbing students.

2 minutes ago, WhoTom said:

 

It's not just the interest rate that's bad, it's the fact that interest starts to accrue the moment you take out the loan. When I got my student loan in the early 80s, the interest didn't start to accrue until six months after graduation. Now, the rates are high and the interest starts accumulating on day one. When a kid graduates with a bachelor's degree, they could already have four years of interest racked up on their loans. That's just wrong.

absolutely.  they made sure to let us know that the moment we left grad school the interest was accruing.  i think i had to pay the interest at least for the first year, then it had to be principal and interest.  god forbid you ever have a late payment or default on a school loan.  my goal is to get my kids through college debt free if they decide to go, then anything after that is on them.  hopefully the situation will be wildly different then.

[Jauronimo]

2 minutes ago, Augie said:

 

Oooh, where to start? We had dinner a while back with a very smart guy. He had been the President of Ford Europe and after “retiring” became the Dean of the business school at a major university. He compared education to manufacturing cars. You don’t shut the plants down all summer, or close for 3 weeks at the holidays. There is absolutely no reason it should take 4 years (or more, for many) to get a college degree. 

 

As for the cost, our son’s MBA from Emory University was about $85k. He’s got a very good job, but they just had their first child and the wife will be out of the workplace for a while. He’d be paying on that loan forever if we had not stepped in to help them out. Why was it so expensive? It was during Covid, so it was almost 100% virtual (fortunately, saving countless hours of travel). It was a wise investment of time and money, but there is no excuse for it costing so much.

 

John Grisham actually wrote a book about a law school that existed for the purpose of generating student loans. It wasn’t about education, it was about generating profits. There is something very wrong about that.  

Think about a product where you pretty much have to have it to succeed today. Or at the very least, a product where your teachers, parents, family, friends, guidance counselors, and pop culture spend 18 years telling you that you absolutely need this product.  The providers of this product can charge whatever they want for this product and do not see any change in demand/enrollment.  That is how you get an absurd cost of education, absurd student debt balances, and a general debt/default crisis.

 

There is no incentive for higher education institutions to control costs.  Due to non-recourse lending, school gets paid even if the student stops paying their loans.  Due to the programming I described above and access to insurmountable debt, demand for education is completely inelastic: there is no change in demand based on change in price.  If people will buy at any price, why wouldn't you see how far you could go?  Why not build a college town, give every freshman an iPad, and put a pool in the freshman dorm?

 

The logical solution to runaway costs of education is to control access to debt.  Less access to debt, means lower enrollment, which means incentive to control costs.  Maybe this wouldn't hit the ivys but the rest of the top 100 would feel it.  Unfortunately, this results in some real issues. Namely, restricting access to the best universities to anyone who isn't very wealthy or getting a full ride.   Common sense on giving 18 year olds access to insurmountable debt is also easily assailable as "anti-education" in the current political discourse.  Anecdotes about one impoverished child paying their way through Yale and becoming unfathomably rich are incoming.

 

The other solutions involve promoting skilled trades in K-12, a strong and affordable state university system, and educating children and parents on the realities of higher education.  Unless you have a burning desire to be working at a top hedge fund, top 5 corporate law firm, or be the best neurosurgeon in the country, you don't need an ivy league education.  You likely don't need a top 100 education.  If you don't know what you want to do, a state school degree is just fine and doesn't close any doors for you.  You can drive a truck in west texas or work an oil rig and make more money with a high school education than most white collar people will ever earn in their careers.  College isn't for everyone and it doesn't need to be.

[Jauronimo]

Then there is the issue of for profit education which comprised the largest portion of defaulted student loans, if I recall correctly.  If a school is running commercials starting at 2AM, it should probably be shut down and have no access to federal student loan programs.  I feel bad for the high number of adults who tried to turn their lives around and ultimately paid exorbitant tuitions only to find that the job market isn't that interested in someone in their 40s with the skills of a 22 year old who majored in "exciting new fields like criminal justice, business, and high tech!".  

 

Predatory trade skills are another real problem although I'm not sure how common it is.

 

https://www.npr.org/2022/03/01/1062679587/for-profit-colleges-student-loan-borrowers-fraud

Edited February 23, 2023 by Jauronimo

[Augie]

I was at a luncheon a while back and the speaker was from the economic development commission. He talked about trying to attract new businesses to the area, and the obstacles they faced. He said the companies they were trying to attract didn’t need more young people with college degrees, they needed welders and plumbers. You can make a fine living if you have mastered a trade. 

[LeviF]

1 hour ago, Augie said:

 

John Grisham actually wrote a book about a law school that existed for the purpose of generating student loans. It wasn’t about education, it was about generating profits. There is something very wrong about that.  

 

This is closer to the reality of law school than most people think lol

[Saxum]

On 2/22/2023 at 1:34 PM, Johnny Hammersticks said:

If you weren’t a blood sucking attorney maybe you could have had your loans forgiven too.  😉 😂 

 

He must not be a good one if he could not get a class action suit to pay for it.

 

I was party of three class action suits where all I got were discounts on future purchases at firms which wronged me while laywers got all the money.

2 hours ago, Augie said:

I was at a luncheon a while back and the speaker was from the economic development commission. He talked about trying to attract new businesses to the area, and the obstacles they faced. He said the companies they were trying to attract didn’t need more young people with college degrees, they needed welders and plumbers. You can make a fine living if you have mastered a trade. 

 

Our plumber has a Master of Science in Building Construction.  College degrees do help if not one of the basket weaving ones.

[Johnny Hammersticks]

17 hours ago, Augie said:

 

I’m VERY happy for you and your family. Oh, and you’re welcome.  😋

 

That is a LOT of Ca$h every month. Especially since it often comes around the time many people are starting to have kids. Somehow, we get by.  🤷‍♂️

 

EDIT: We have always said there are two things we would pay for, for ourselves and our kids. The first is education, and the second is housing. We let our son get a loan for his private school MBA, but then we paid it off when he finished. They just had their first child, the wife is out of the work force for a while, they are lucky. The best part is they know it. 

Your children are very fortunate.  While we have small savings accounts for each of our kids that should cover books and a small part of their tuition, my wife and I are not interested in paying for our kids’ college education.  
 

If they work hard enough in HS to earn scholarships and grants for academics/athletics then good for them.  Otherwise, they can choose an option (e.g., community college, trade school, etc…) that is commensurate with their effort and aptitude.  I’m not paying 70K per year so my kid can go to UVM just because it’s what they’re supposed to do after HS.

 

My son is very much an academic.  He works really hard in school, is in all honors/AP classes, and is near the top of his class.  My daughter is very bright, but is not so motivated by or interested in her academics.  They both will find a realistic life path.

 

Honestly, I made it alright, but I wish I had better guidance from my parents when I graduated HS.

[Beast]

If you guys weren’t all so nerdy you wouldn’t have to be forgiven of anything.

[Johnny Hammersticks]

16 minutes ago, Beast said:

If you guys weren’t all so nerdy you wouldn’t have to be forgiven of anything.

I was a VERY average HS student.  Before I started to take college seriously, I was just in it for girls, partying, and playing college lacrosse.  All the wrong reasons to borrow ~30K per year to go to college.  

 

Right before my HS graduation, my grandfather offered to buy me a truck, pay for all my tools, and pay my tuition to attend trade school/training program of my choosing.  I declined.  I often regret that decision.

[T&C]

Who absorbs all of this "money"? The school, the county, the state, or the entire country?