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Income based repayment plans under current laws actually are much better for many borrowers. What Obama's new scheme does in reward those with very large student loan debts (and the schools they took them out to attend). It makes no financial sense for someone with say $20K in student loan debt to drag things out for 20 years.
Make no mistake about it; one of the worst things to happen for the federal student loan program was for the government to take back the thing. Worse still because the liberal/left will now use it to promote yet another of their long cherished goals, free or at least heavily subsidized higher education. In other words just as with healthcare the creation of an outright or quasi socialist higher education system.
Exactly wrong. Student Loan forgiveness can be treated as income. A tax bill will be associated with that.
It makes no financial sense for someone with say $20K in student loan debt to drag things out for 20 years.
Except when they walk from the campus into real life with a piece of paper in their hands, and expectation of being a millionaire within six months... and they are unable to find a job other than flipping burgers. In that case, it may not make sense, but it's the reality. At least until they decide, over the grill one day, that what they need to make that million and have their lives handed to them on a silver platter is get a PhD. Then the rack up another $200K and the cycle repeats itself in 6 years. Luckily they will have had experience flipping burgers so they'll have a heads up on the food service competition. And then they can look foward to that loan forgiveness in twenty years.
So just how long do you think it will be until Obama, Warren et al fix that "problem" as well.
Forcing the IRS to not collect taxes on part of forgiven home mortgages was part of Obama's housing "rescue". Only it proved so popular Democrats/liberals never want it to end. Mortgage Debt Forgiveness: 10 Key Points
Thankfully wiser heads prevailed and a stake was driven though the heart of the thing.
Notice how Obama says nothing about actually forcing colleges to limit the amount of tuition they could charge. Make the availability of federal loans available only to colleges that spend 80% of their costs on direct education expenses and they'll lower tuitions quickly.
Here is the thing in a nutshell; Americans both persons and corporations are addicted to debt. This wouldn't be such a bad thing on its own, but when something goes wrong as it often does, the consequences of not being able to repay often then becomes a federal problem.
The further we get away from the generations that remember the Great Depression the more what was once seen as an evil (debt) to be avoided, now seems some sort of birth right.
It seems everything from housing to retail sales among a list of things is built upon the premise of some sort of direct or indirect subsidizing of debt. Now it seems Obama and his crew are prepared to add education to that list.
Notice how Obama says nothing about actually forcing colleges to limit the amount of tuition they could charge. Make the availability of federal loans available only to colleges that spend 80% of their costs on direct education expenses and they'll lower tuitions quickly.
Well have to give the guy credit as Obama has tried (limited) steps to hold at least for profit institution's feet to the fire. However the Education Department and *that man* have found many of their plans either derailed by Congress and or that body in a rare show of bipartisanship is up in arms.
Let's fact it education is a business in this country, both for and not for profit. When the former got wind of Obama's plans telephones in Washington started ringing. Senators and House members both started hearing from schools in their districts about how Obama's "reforms" would basically put them out of business. DeVry along with some of the top names in the for profit university sector have been leading this fight.President Obama’s plan for rating colleges is promising, because college presidents hate it.
Well have to give the guy credit as Obama has tried (limited) steps to hold at least for profit institution's feet to the fire. However the Education Department and *that man* have found many of their plans either derailed by Congress and or that body in a rare show of bipartisanship is up in arms.
Let's fact it education is a business in this country, both for and not for profit. When the former got wind of Obama's plans telephones in Washington started ringing. Senators and House members both started hearing from schools in their districts about how Obama's "reforms" would basically put them out of business. DeVry along with some of the top names in the for profit university sector have been leading this fight.President Obama’s plan for rating colleges is promising, because college presidents hate it.
Why didn't he do it by executive order? Isn't that what he did now with the PAYE system?
Your statements are incorrect. Under the IBR, Pay AsYou Earn, and ICR plans, loan borrowers must make 120 qualifying payments. After the 120 payments are made, the entire balance (including accrued interest) is forgiven. Those who do not meet the eligibility factors will be responsible for repaying the entire balance of their loan, including all accrued interest.
Exactly! We don't bat an eyelash at money that goes to corporations, immigration (both legal and undocumented) and other countries! The fact that American students are getting help trying to better their lives is a plus. I personally think university should be free for all Americans.
Balls. Taxpayers complain all the time about handouts to corporations (remember Solyndra), the money spent on criminal immigrants and even more for foreign aid. University will never be "free", someone will have to pay for it. Unless you can get those overpaid administrators and professors to work for free and those buildings to be built for nothing. YOu could be honest and say that you think the taxpayer should provide for your education.
Our entire education industry needs to be reworked. The cost of education doesn't match the value received. Too often a bunch of grad students with no teaching experience are the class instructors. Students making what, $15/hour? Is this what you feel you should get for your money? We should have professionals with actual teaching experience instructing classes. At the undergrad there is little if any reason for a full professor to be doing the instruction, but there should be better instruction than ESL grad students. Someone with a bachelor's degree and industry experience would be far more useful as an instructor.
There should be a tuition cap on any school that receives federal funding, either in the form of grants or GSLs. If you place a cap of say $10k per year on tuition for a university to be eligible to receive federal funding, it would be a start. Give the schools an incentive to get costs under control. There are no checks and balances on the system now. And the impact shows.
Which means that taxpayers are on the hook for about 90% of the amount of money these students borrowed. NO. Not just no, but hell no. Those responsible students that got degrees in useful fields will have jobs that allow them to pay their debts. While the taxpayer is on the hook for those that took "basketweaving" classes. Want a degree in art appreciation? Sociology? English lit? Women's Studies? Something that has low demands and leaves lots of time to party? Don't expect the hard-working taxpayer to pick up the tab when you end up flipping burgers.
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