Does $10K student loan forgiveness help you? How old are you? (salaries, bachelor's)

[oceangaia]

When is the cutoff date? Is there still time for my kids to take out $10k loans and have them forgiven?

[TMSRetired]

Originally Posted by oceangaia

When is the cutoff date? Is there still time for my kids to take out $10k loans and have them forgiven?

Your kids would be better off going with the new plan....payments of only 5% of your salary, no interest and balance forgiveness after 10 years.

One example cited in the link below showed someone making near $40K a year (new college grad possibly) would only pay $31 a month. After 10 years the balance of the loan is forgiven.

So that would be a college education that would only cost you $3700 with the government subsidizing the rest of the balance of a 4 year education.


https://www.whitehouse.gov/briefing-...-need-it-most/

[TexasLawyer2000]

Originally Posted by ss20ts

There are no banks involved in federal student loans. The money comes from the federal government not a bank.

Fair enough... it puts money in the hands of people who can spend it in the economy.

[TMSRetired]

Originally Posted by TexasLawyer2000

Fair enough... it puts money in the hands of people who can spend it in the economy.

Nobody is giving out money. The government is writing off $500-600 billion...just "lost money".

[TexasLawyer2000]

Originally Posted by TMSRetired

Nobody is giving out money. The government is writing off $500-600 billion...just "lost money".

This is not lost money to borrowers. $100/month (or whatever) that is not paid out on a loan is $100/month the borrower has to spend in the economy.

[Futuremauian]

An important side note. If you received a Pell Grant (low-income), you can write off an additional $10,000.

https://messaging-custom-newsletters...8e02492bad66bf

QUOTE: For anybody under this income threshold, the plan will forgive up to $10,000 in debt. For somebody who received Pell Grants in college — a federal program focused on lower-income families — the plan may forgive an additional $10,000.

[Futuremauian]

Originally Posted by TMSRetired

Nobody is giving out money. The government is writing off $500-600 billion...just "lost money".

Not exactly. The government is passing the debt from individual borrowers over to the taxpayers.

[RamenAddict]

Originally Posted by Futuremauian

Not exactly. The government is passing the debt from individual borrowers over to the taxpayers.

Keep in mind that for many people, the $10K is exclusively interest- so no debt is really being passed onto anyone. The fed government is just losing out on some interest. It’s arguably had more to invest since a lot of people were denied PSLF for years while at the same time making payments on time.

[oceangaia]

Originally Posted by TexasLawyer2000

This is not lost money to borrowers. $100/month (or whatever) that is not paid out on a loan is $100/month the borrower has to spend in the economy.

Where does the money go when it's paid back on the loan?

[rabbit33]

Originally Posted by RamenAddict

Keep in mind that for many people, the $10K is exclusively interest- so no debt is really being passed onto anyone. The fed government is just losing out on some interest. It’s arguably had more to invest since a lot of people were denied PSLF for years while at the same time making payments on time.

Never heard of the time value of money, have you?