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It's really not the debt itself that's the issue, it's the high interest rates and daily compounding interest. There is zero risk to the lenders so why do we have 6%+ interest rates on these loans?
Rather than forgiveness we should make the interest rates 0.9% or maybe a little higher to keep up with typical inflation numbers. Either way, it's the interest that these graduates can't get out from under, give them a chance for the debt to actually be paid off.
It's really not the debt itself that's the issue, it's the high interest rates and daily compounding interest. There is zero risk to the lenders so why do we have 6%+ interest rates on these loans?
Rather than forgiveness we should make the interest rates 0.9% or maybe a little higher to keep up with typical inflation numbers. Either way, it's the interest that these graduates can't get out from under, give them a chance for the debt to actually be paid off.
Student loan debt is sold to investors and funds with one priority, they want a certain amount of return or investors aren’t buying…
2008 was an example of what happens when investors stop buying debt and there is no liquidity to create more money to loan.
Does anyone think it would be a better idea to cancel Medical Debt rather than Student Loan Debt?
If Equality and diversity were the goal, wouldn't Medical Debt cancellation fit the bill better?
Neither.
How many amnesty programs is this government prepared to implement?
Many people would be more than a little angry because they don't have student debt at this point. Their retirement savings would be considerably larger if they had not paid off student debt. Why subsidize and reward people who make poor economic decisions? Why penalize people who are financially prudent?
Why not pay my rent if I'm a little short this month?
Kids who over spent on going away to college or picked poor choices in degrees shouldn’t be bailed out .
We have all these mom and pop video store owners who were put out of business by blockbuster and ran up debt. .
We have the taxi drivers here in nyc who over paid Hundreds of thousands for a business who want a bail out .
Maybe those who bought photomats want a bail out since the digital age crushed them
Where does it stop .
When do those who made good responsible choices get their reward
I'm with Mathjak.
WHY should a relatively small minority of college graduates have their student loans forgiven? WHY should those of us that either didn't take out loans or have paid our loans as promised pay for the irresponsible actions others? This is like billing the RESPONISBLE TWICE! If students believe they were "conned" they should be able to do class-action suits against the colleges that sold them these expensive worthless degrees.
Education should be viewed more like any other consumer product. Try and get a $200,000 mortgage for a house worth only $50,000. Try and get a $100,000 loan on a $25,000 car. This is exactly what colleges and student loan companies are doing to 18 and year olds.
A bail-out today allows a corrupt and immoral broken higher education system live on and more generations are sold very expensive worthless degrees. Future calls for loan forgiveness is guaranteed.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,072 posts, read 7,508,849 times
Reputation: 9798
We are talking about guaranteed federal student loans, ie subsidized and possible unsubsidized.
The loans are guaranteed by the DOEd. The loans may have been sold to investors long ago. The investors probably have written off the principle and collecting accruing interest (DOEd paying) until DOEd writes off the loan.
I have little confidence with third party intermediaries. I know we were cheated out of 0.25% rate reduction for ontime payments after 3 years. We did get that reduction after 12 years. Unfortunately I threw away the contract papers in a downsizing and move.
I accept the blame.
The DoEd needs to write off the loans, IF they already have paid the purchaser of these bonds.
The students credit is already trashed. Not much to be gained by further keeping obligation over the heads of student.
WHY should a relatively small minority of college graduates have their student loans forgiven? WHY should those of us that either didn't take out loans or have paid our loans as promised pay for the irresponsible actions others? This is like billing the RESPONISBLE TWICE! If students believe they were "conned" they should be able to do class-action suits against the colleges that sold them these expensive worthless degrees.
Education should be viewed more like any other consumer product. Try and get a $200,000 mortgage for a house worth only $50,000. Try and get a $100,000 loan on a $25,000 car. This is exactly what colleges and student loan companies are doing to 18 and year olds.
A bail-out today allows a corrupt and immoral broken higher education system live on and more generations are sold very expensive worthless degrees. Future calls for loan forgiveness is guaranteed.
Agree, my brother and I both did 2 years of community college then transferred to a 4 year school. I went a bit more entrepreneurial, my brother more traditional interning/working for a large firm. Both of us ended up with very little student loans able to pay them off with little issue. Both of us were making $100k a year in our late 20s and both of us were able to become homeowners by 30. Everyone we know who went to those 4 year party schools that cost $150k are still stuck under a mountain of debt and some even in their 30s are still forced to live at home.
They could have done what we did, why should my taxes cover their mistakes?
We are talking about guaranteed federal student loans, ie subsidized and possible unsubsidized.
The loans are guaranteed by the DOEd. The loans may have been sold to investors long ago. The investors probably have written off the principle and collecting accruing interest (DOEd paying) until DOEd writes off the loan.
I have little confidence with third party intermediaries. I know we were cheated out of 0.25% rate reduction for ontime payments after 3 years. We did get that reduction after 12 years. Unfortunately I threw away the contract papers in a downsizing and move.
I accept the blame.
The DoEd needs to write off the loans, IF they already have paid the purchaser of these bonds.
The students credit is already trashed. Not much to be gained by further keeping obligation over the heads of student.
YMMV
I dont think so. We’re actually talking about federal direct loans, not loans sold to investors. All of the new rules only pertains to loans that the feds made, and are still the lenders. That’s why Parent Plus loans, and FFELP loans dont apply. They have to be consolidated back to federal direct loans first.
Agree, my brother and I both did 2 years of community college then transferred to a 4 year school. I went a bit more entrepreneurial, my brother more traditional interning/working for a large firm. Both of us ended up with very little student loans able to pay them off with little issue. Both of us were making $100k a year in our late 20s and both of us were able to become homeowners by 30. Everyone we know who went to those 4 year party schools that cost $150k are still stuck under a mountain of debt and some even in their 30s are still forced to live at home.
They could have done what we did, why should my taxes cover their mistakes?
All our kids went to local colleges and lived at home ..zero student debt
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,072 posts, read 7,508,849 times
Reputation: 9798
Quote:
Originally Posted by stone26
I dont think so. We’re actually talking about federal direct loans, not loans sold to investors. All of the new rules only pertains to loans that the feds made, and are still the lenders. That’s why Parent Plus loans, and FFELP loans dont apply. They have to be consolidated back to federal direct loans first.
What are FFELP Loans?
The FFELP was introduced as part of the Higher Education Act of 1965. Through the FFELP, private lenders issued federal loans that were guaranteed and subsidized by the federal government.
There are two main kinds of FFELP loans: commercially-owned and Education Department-owned.
FFELP loans were issued to undergraduate students, graduate students and parents in the following forms:
Stafford: Stafford loans were for undergraduate and graduate students enrolled at least half-time. Students with financial need could receive subsidized loans.
Unsubsidized Stafford: Unsubsidized Stafford loans did not offer the interest subsidy for undergraduate and graduate borrowers.
PLUS: PLUS loans were for parent borrowers taking out loans for their children’s undergraduate education. In 2006, the FFELP PLUS loan option was expanded to include graduate students.
Consolidation: FFELP consolidation loans allowed borrowers to combine multiple federal student loans into one.
The loan program ended in 2010 when the Health Care and Education Reconciliation Act was passed. The last loans were issued prior to July 1, 2010. The FFELP was replaced by the federal Direct Loan Program.
How Do I Know if I Have a FFELP Student Loan?
If you applied for federal financial aid prior to 2010, your loans are probably FFELP loans. Many who borrowed before 2010 still have outstanding loans because they deferred payments or took advantage of extended repayment plans.
To find out for sure what loans you have, you can use the National Student Loan Data System to look up your loan information. Once you log in with your Federal Student Aid ID, you can view all of the outstanding federal loans in your name.
If you don’t have your Federal Student Aid ID, you can also contact your student loan servicer to ask about your loans.
What Should I Do If I Have FFELP Loans?
While FFELP loans are no longer issued and the program ended in 2010, you may still have outstanding FFELP debt. The loans don’t go away just because the program ended; you still have to repay your loans according to your promissory note’s terms.
FFELP and the CARES Act
In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed. As part of its relief measures, the CARES Act suspended federal student loan payments and reduced interest rates on all loans to 0%. The CARES Act’s student loan provisions are set to last through September 30, 2021.
For FFELP borrowers, things are a bit confusing. Borrowers with FFELP loans owned by the Department of Education are eligible for the payment suspension and interest waiver. However, borrowers with commercially-owned FFELP loans are not. That means if you have commercially-owned FFELP loans, you are still required to make payments, and your loans are continuing to accrue interest.
In March 2021, the government expanded the CARES Act to include FFELP borrowers that are already in default. If you have FFELP loans but aren’t in default, you can’t take advantage of the payment suspension or interest waiver.
Some FFELP loan servicers are offering support or alternative payment plans for borrowers affected by the pandemic. If you can’t afford your payments, contact your loan servicer to discuss your options.
We need to clean up the books.
The people in default are a lost cause. We may hold them forever liable for the student debt, but that won't get our taxpayer dollars back.
We still have consolidated PLUS, 2002-2006 vintage. According to cited above article, its a consolidated FFELP. Our current administrator is and soon to be a was, NAVIENT. And the owner of the loan is DeuscheBank. IIRC, still about 8 years remaining and ~$30k.
YLMV
Last edited by leastprime; 04-20-2022 at 01:43 PM..
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