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There are no banks involved in federal student loans. The money comes from the federal government not a bank. Trickle down economics has been shown time and time again to not work.
That's the way it used to be and some people of a certain age (cough) may only be familiar with student loans from during that period. Now students borrow directly from the gov't, which is why the loans are now called Federal Direct Student Loans. Anybody who paid off their loans before the change, and didn't have to become familiar with the new system for their children, may not know about the change and they wouldn't have any need to know about it. I don't miss those "bad old days" at all.
I served 11 years in the Marines got out when the GI bill had been cut way down. I didn't bother with it.
My wife took a promotion with longer hours and I worked part time to finish college. I was recruited and commissioned in the Army and I served for 15 more years. Prior to my commission the GI Bill came back new and improved. I was allowed to transfer it to my daughter and it payed for her college plus extra living expenses.
I'm retired now and debt free.
To those who just received 10-20k of education debt relief Congratulations!! I am happy for you!
I served 11 years in the Marines got out when the GI bill had been cut way down. I didn't bother with it.
My wife took a promotion with longer hours and I worked part time to finish college. I was recruited and commissioned in the Army and I served for 15 more years. Prior to my commission the GI Bill came back new and improved. I was allowed to transfer it to my daughter and it payed for her college plus extra living expenses.
I'm retired now and debt free.
To those who just received 10-20k of education debt relief Congratulations!! I am happy for you!
I served 11 years in the Marines got out when the GI bill had been cut way down. I didn't bother with it.
My wife took a promotion with longer hours and I worked part time to finish college. I was recruited and commissioned in the Army and I served for 15 more years. Prior to my commission the GI Bill came back new and improved. I was allowed to transfer it to my daughter and it payed for her college plus extra living expenses.
I'm retired now and debt free.
To those who just received 10-20k of education debt relief Congratulations!! I am happy for you!
One of my son's female friends is/was a Marine, she's going to law school via her GI Bill. Plus she's a phamracy tech at CVS. She works very hard for sure. Very smart "girl" (mid 30's)...
She posted how expensive her used or rented books were, it was a small mortgage payment!
Quote:
Originally Posted by WoodburyWoody
No help for me. But I attended at a time in a state whose legislators funded state colleges and universities at a much higher rate than they - and most states - do now. So for both my undergraduate (help from parents, worked part-time) and graduate (got a GA that covered tuition and paid a stipend for work), I was lucky.
Or should I say that the leaders at that time were smart. It is a win-win-win ... the individuals, the communities and the employers benefit greatly. A better educated public leads to them getting better jobs, which leads to better salaries, which leads more tax revenue, which leads to better schools, infrastructure, parks, safety nets and better pools of employees for employers.
This addresses a symptom of the problem, but not the problem. But it is also sooooo much more than simply loan forgiveness. And the people who are targeted to benefit are the people who will still spend that money ... for homes, for cars, for their children's clothing and activities. It is not like they will stash it in an off-shore account. It will enter the economy and recirculate to local businesses for goods and services.
Hopefully, just a first step. Because the much of the economic policy practiced for much of the past 50 years has only benefited those at the very top, while the working and middles classes have accumulated debt for that.
If they're so broke they can't pay their loans, they won't have extra money to throw into the economy, not for food, houses and certainly not for activities, or even putting their child in a sport which is another topic, how expensive that is.
Quote:
Originally Posted by TMSRetired
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.
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.
PSLF - public service loan forgiveness is a totally different forgiveness.
They have been forgiving a lot of public service loans since enacting the new terms, the article below says $9 billion in debt has been wiped away finally that was wrongfully not approved for some reason or another.
According to this article, 164,000 people have been forgiven with others being given an extra year of payment credit.
Quote:
“As you know, the limited PSLF waiver announced last year has already improved the lives of more than 164,000 public servants who have had their student loans forgiven and 1 million who have received an average of one additional year of PSLF credit,†the lawmakers wrote. “Yet, we write today, as we believe that additional action is needed to ensure public servants—who have been on the frontlines of the COVID-19 pandemic and recovery—can access the PSLF waiver.â€
The lawmakers noted that only an estimated 15% of the 9 million public servants with student debt have filed paperwork to track payments under the program, and one of the Education Department’s efforts to correct wrongful denials—a review of applications involving extended forbearances and deferrals—has yet to begin, despite the pending October deadline.
According to the Education Department, as of June 2022, more than $9 billion in student loan debt has been forgiven through the Public Service Loan Forgiveness Program. Eighty-nine percent of the 164,000 borrowers who have had loans forgiveness under the program were did so due to the temporary waivers
The problem with all these forgiveness plans is that none were retroactive. If you did your 10 years prior to 2007 and retired or went into private work, too bad. Your time doesn't count. Probably couldn't get the paperwork you need anymore either. That is why now ignoring those people was especially egregious this time aroun. The $10k was real money borrowed that does impact the Federal budget, but if they simply retroactively waived accumulated interest and debt collection fees _ that is not money that actually existed so waiving it would mean it wouldn't be missed and would have helped older debtors with older loans but they went the wrong way.
This does not help my wife because she earns too much. A better solution would be:
1. Student loan interest is 100% deductible regardless of income. No more $2500 cap.
2. Remove accrued interest accumulated during loan deferment period.
3. Slash loan interest to .01% as long as payments are made on time starting Jan 1 2023.
This does not help my wife because she earns too much. A better solution would be:
1. Student loan interest is 100% deductible regardless of income. No more $2500 cap.
2. Remove accrued interest accumulated during loan deferment period. 3. Slash loan interest to .01% as long as payments are made on time starting Jan 1 2023.
#3 is all that's needed and what I've been harping about on this forum forever. Go ahead and check out all my posts concerning student loans.
Banks and their lobbyists OWN the politicians on both sides of the aisle. When Obama arranged to have all the student loans backed by the government AT THAT TIME interest rates should have been slashed to next to nothing. Retroactively and in the future. The banks would not have worries about any defaults and our government NOW wouldn't be giving a shot in the arm for higher inflation and government debt to the tune of $ 300 billion+. Not to mention the horrible inequities that this has created for all those who have sacrificed dearly to pay back their student debt and all those who never had student debt having never been to college, for whatever their reasons.
"Skills" learned in college are mostly dubious and very intangible. And no, I'm not just talking about the English Lit majors. A lot of people did their best to try to put those to use, but it didn't pay off. And truth be told, a lot of those people probably didn't belong in college to begin with. But what options do they have? You can't make a living bagging groceries when you're also strapped with $30k of unforgivable debt. And if you're not smart enough to put the education to use, you're probably stuck somewhere in the middle drowning.
It takes a quite bright individual to make a college degree pay off.
Either the person is bright enough at the front end to succeed in a difficult--but lucrative--career program.
Or the person is bright enough at the back end to parlay a less difficult program into a lucrative career.
People who aren't bright enough are going to waste a lot of money. Political conservatives will say, "They didn't work hard enough." Political liberals will say, "They were discriminated against."
But the problem is: They simply weren't bright enough to make a college degree pay off.
And frankly, that is most people. Making a college degree pay off requires something like >120 IQ. By definition, most people don't have an IQ that high.
Most people don't need to be trying to get a bachelor's degree. In fact, most people never do. Yet, we've created an education system that, from K to PhD, assumes most people can and will.
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