Student Loan Debt: Income Driven Repayment vs Poor Defaulters (wages, programs, job)
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Exactly, take a weekend job, get a paper route, move to a less expensive area, cut back on your spending...you know, the financially responsible thing to do. I get so sick of this bailout cost. I just ran numbers, my student loans were 25% of my GROSS income when I first got out of college, basically ended up being almost 1/2 of my take-home pay after paying for health insurance, taxes, etc. We had roommates, drove crappy cars, didn't get to take nice trips, had to save money so we could go out to the bars once/month, maybe. I just don't understand the attitude that you shouldn't have to pay off loans you took out.
I signed a contract in which I agreed to make "reasonable and affordable" payments. I defaulted before income-driven repayment existed, so I was not afforded an opportunity to make payments reasonable for my income. (More precisely, we disagreed on what was affordable to me, but arbitration was not available to me and a top-down decision was imposed.)
I've recently consolidated my student loans under income-driven repayment, which got them out of default, which puts more money in my pocket. If it were up to them, they'd keep extracting money from my paycheck forever.
If a payment is not affordable to a borrower below 150% of poverty level, being in default does not magically make it affordable, and therefore it follows that extracting money from the low income borrower's paycheck is punitive.
Or it can be looked at from the other direction: If money can be extracted from borrowers at poverty level, why should borrowers at 150% of poverty level get a bailout?
Defaulting is going to keep piling on fees and interest above and beyond what would occur with even minimum payments on time.
I basically agree with you - if you can't pay, you can't pay, and piling more on the top of the pile is impractical.
Exactly, take a weekend job, get a paper route, move to a less expensive area, cut back on your spending...you know, the financially responsible thing to do. I get so sick of this bailout cost. I just ran numbers, my student loans were 25% of my GROSS income when I first got out of college, basically ended up being almost 1/2 of my take-home pay after paying for health insurance, taxes, etc. We had roommates, drove crappy cars, didn't get to take nice trips, had to save money so we could go out to the bars once/month, maybe. I just don't understand the attitude that you shouldn't have to pay off loans you took out.
As far as I know, he makes at/around minimum wage and lives in a room in rooming house holding seven people in Michigan. He seems pretty intelligent - don't know why he's been in this mess well into middle age.
As far as I know, he makes at/around minimum wage and lives in a room in rooming house holding seven people in Michigan. He seems pretty intelligent - don't know why he's been in this mess well into middle age.
I don't think he lives in Michigan, I think he lives in California. Michigan isn't a high cost of living area and he keeps talking about how expensive renting a room in a house is.
I don't think he lives in Michigan, I think he lives in California. Michigan isn't a high cost of living area and he keeps talking about how expensive renting a room in a house is.
He lives in Portland Oregon. He also pays in excess of 25% of his very limited annual income to store "stuff" he intends to sell on eBay but can't sell at this time for all sorts of reasons. He's gotten much good advice over the years on how to improve his situation. He'd rather continue to complain on CD on a variety of topics than be proactive and take any of it. I'd put him in the same category as my brother: smart but clueless.
He lives in Portland Oregon. He also pays in excess of 25% of his very limited annual income to store "stuff" he intends to sell on eBay but can't sell at this time for all sorts of reasons. He's gotten much good advice over the years on how to improve his situation. He'd rather continue to complain on CD on a variety of topics than be proactive and take any of it. I'd put him in the same category as my brother: smart but clueless.
I have one of those brothers, too. High IQ, but no student loans because he dropped out of high school in his senior year. Worked for a tree service until a coworker died one day from exposure to fertilizer they were using. Then he was an assistant store manager for a number of years but he has a spine issue and he couldn't stand all day. Now he is 46, no job, bad back, girlfriend left him, and he lives with our 87-year-old mother. Complains about having to drive her to dialysis ten minutes away because sitting in a car hurts his back. But he will tell you how much smarter he is than everybody else.
I have one of those brothers, too. High IQ, but no student loans because he dropped out of high school in his senior year. Worked for a tree service until a coworker died one day from exposure to fertilizer they were using. Then he was an assistant store manager for a number of years but he has a spine issue and he couldn't stand all day. Now he is 46, no job, bad back, girlfriend left him, and he lives with our 87-year-old mother. Complains about having to drive her to dialysis ten minutes away because sitting in a car hurts his back. But he will tell you how much smarter he is than everybody else.
I feel for you dealing with a sibling like this. My brother is VERY book smart. As in 1600 on the SAT. He attended 5.5 years of college at a very prestigious private institution (on my parent's dime no less), but didn't graduate because he couldn't be bothered to take the general ED requirements which he said were boring and below his intelligence level. Bounced back home where he laid around and watched TV for a number of years since there were no jobs up to his standards.
At 57 he works at some menial job for minor ducats and complains about the unfairness of it all non-stop to whoever will listen. Wah, wah, wah... the college graduates get the all jobs I want. No S**t Bro. He also relies on my 86 year old mother for financial help. Why she goes along with his crap I will never know. He had every advantage and yet refuses to accept his responsibility for his current situation. And he still thinks he's the smartest person in any room....
Exactly, take a weekend job, get a paper route, move to a less expensive area, cut back on your spending...you know, the financially responsible thing to do. I get so sick of this bailout cost. I just ran numbers, my student loans were 25% of my GROSS income when I first got out of college, basically ended up being almost 1/2 of my take-home pay after paying for health insurance, taxes, etc. We had roommates, drove crappy cars, didn't get to take nice trips, had to save money so we could go out to the bars once/month, maybe. I just don't understand the attitude that you shouldn't have to pay off loans you took out.
Um, paper routes these days require a car, which requires a license to drive one. Heck, when i had a paper route in 1980 a car was required. (Apparently this requirement became common sometime in the 1970s)
Defaulting is going to keep piling on fees and interest above and beyond what would occur with even minimum payments on time.
I basically agree with you - if you can't pay, you can't pay, and piling more on the top of the pile is impractical.
So now that I have cumulatively paid more in piled-on fees than the principal I borrowed and now that my loans are out of default, and now that my low income qualifies me for ZERO monthly payment, should I pay anything on my student loan until I pay off my other debt?
Um, paper routes these days require a car, which requires a license to drive one. Heck, when i had a paper route in 1980 a car was required. (Apparently this requirement became common sometime in the 1970s)
I think that was just an example. There are ways to make a decent living without a college degree, or as a second job. Waiting tables, while stressful, is worthwhile for the amount of money you can make for the time there.
Two nights a week at a decent restaurant (aka not an Applebee's or Chili's) can net you around $300 a week. Thats nearly an extra $15,000 a year for around 12-15 hours a week. Even after I graduate from my Masters program I intend to continue to work at a restaurant a few nights a week for that exact reason. Two years of that and my student loans will be taken care of completely, and I won't even have to touch my actual salary.
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and now that my loans are out of default, and now that my low income qualifies me for ZERO monthly payment, should I pay anything on my student loan until I pay off my other debt?
