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I’ve been using this opportunity to pay principal. I’ve reduced my 170k to about 103 since COVId started. That would take a lifetime before because I was never getting to the principal.
I’m worried about going back to paying what I’m paying now while the number gets larger due to interest capitalization.
White House Chief of Staff Ron Klain said a decision on whether to forgive student debt through executive action will be made before the payments resume. The bills, which have been on pause since March 2020, are currently scheduled to start back up again in May.
“The president is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” Klain said on the podcast “Pod Save America,” which was posted Thursday night.
The payment pause has already been extended five times throughout the pandemic.
Student loans are 50% the fault of the universities and government and 50% the student imo.
I work with a lot of people making 100k/yr+, and a lot of them won't pay their student loans. I repaid my loans before age 30 on less than they make now but they keep thinking someone will forgive them. They're going to be in for a rude awakening when their social security is docked to pay student loan payments.
On the other hand, some people royally are being screwed and are unable to pay massive bills on small salaries. While some of this can be blamed on student choices, there's also issues with the government being able to loan so much money. For graduate students they basically get a blank check with graduate plus loans
Student loans are 50% the fault of the universities and government and 50% the student imo.
I work with a lot of people making 100k/yr+, and a lot of them won't pay their student loans. I repaid my loans before age 30 on less than they make now but they keep thinking someone will forgive them. They're going to be in for a rude awakening when their social security is docked to pay student loan payments.
On the other hand, some people royally are being screwed and are unable to pay massive bills on small salaries. While some of this can be blamed on student choices, there's also issues with the government being able to loan so much money. For graduate students they basically get a blank check with graduate plus loans
I agree with who's fault it is. I also think it should be the colleges lending the money. They have no skin in the game with these federal loans. They collect the money and run. They've been allowed to raise the price of college over the last 20 or so years.
I also think maybe they should start qualifying these kids for the loans, like we have to when borrowing from a bank.
Then there should be a way to add money to a college card for books. It has to tighten up so people can't just live off of the money and party like some have done.
Have you ever told them their social security will get docked? Probably their tax return at some point too. Could have sworn my daughter who doesn't have a student loan mentioned something about an application to apply for the government not withholding at least part of the tax return or child tax credit for student loan debt.
Quote:
Originally Posted by HudsonCoNJ
I haven’t made any payments to my wife’s student loans during COVID in the event it’s forgiven. Don’t wanna miss out on my freebie.
I'll be shocked if Biden gets rid of $10k per loan. He surely will not forgive the whole thing, and why should he? A lot of young people misspent those loans. They need to man up and pay them back. It's their debt.
If someone can't pay, they can still get them discharged on bankruptcy. It's hard but can be done.
Particularly if you are in a public interest field/job and can join the Public Service Loan Forgiveness program. For me, this forbearance has been wonderful. Even if this thing is not extended again past May 1, I would have been able to keep at least $10k in my pocket during the pause while adding having that time count as if I was making payments.
If I have to resume payments in May, I'll definitely get through it, but I won't exactly shed a tear if the pause continues
I'm curious about the bolded part. So if my loan is on an extended term, don't I pay until it is paid off or only for the number of years for the extended plan even if it's not paid off? Is that how that works?
**edit - nevermind. I see that is for public service only.
….but student loan bankruptcy being (mostly) barred is another reason the system is toxic and broken.
Student loan bankruptcy being (mostly) barred is a wonderful thing. I knew people long ago whose plan, at 18 years of age, was to borrow as much as possible in Federally Insured Student Loans throughout a lengthy college tenure with the intent of filing for bankruptcy protection upon graduation.
I know one in particular who, after graduation, took a wonderful vacation trip to Nepal, and wrote back to Sallie Mae via international snail mail that he had decided to become a Tibetan Buddhist Monk and live a life of poverty in Nepal with no income. With no income for the rest of his life, he wrote, he'd not be able to pay a penny of his student loans. But he did profuse thank them for the wonderful college experience.
It is that type of moral hazard we must guard against.
Oh - that Buddhist Monk? He recently retired from Goldman Sachs.
Last edited by RationalExpectations; 03-08-2022 at 07:57 AM..
But doesnt it look pretty bad when someone declares bankruptcy? Declaring bankruptcy isn't really a fresh start, it's a sign that you've basically f*cked up and will ruin your credit.
There was a time that was true, just as there was a time being on the public dole was considered shameful.
Nowadays, people wear it as a badge of brilliance.
You're right, people are going to college that should not be, now they're learning a huge lesson that the people don't want to eat their college debt. There's also the ones that lived off of the student loans that now are crying.
Sadly, the lesson the borrows have learned is if they vote for the right politician, and by right politician I mean the left politician, then they might nott have to pay back their loan.
Quote:
Originally Posted by Roselvr
The government needs to get out of the loan business unless they start qualifying people for those loans. Most wouldn't qualify for a small loan, I don't know how they qualify for $30k or more.
That's precisely why a previous administration got into the student loan business in the first place -- that administration knew that in the future (and that future is now) the right administration could promise to forgive all student loans, and by right administration, I mean the left administration.
The economic lesson is Econ 101:
People Respond to Financial Incentives.
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