Does $10K student loan forgiveness help you? How old are you? (masters, exam)

[MKTwet]

This $10k forgiveness is nothing more than another covid related perk. It's not gonna do much for those who have the debt. If you have $10k left, congrats it's paid for sooner. If you still have more than $50k in debt, you're still have to work on paying it off.

But this does nothing to fix the price of education cost and inflation.

[RobertFisher]

Helps me realize it's better to be a deadbeat.

[prospectheightsresident]

I'm in my early 30s. This doesn't benefit me at all as I have graduate loans and am enrolled in the PSLF program.

[redguard57]

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.

What I suspect will eventually happen, is like health care, where the Feds dragged their feet on a needed reform for years and years and years then finally copied what a state did (Massachusetts Romneycare which they basically copied to become Obamacare).

I suspect that New York state's Excelsior Scholarship will be the model for an eventual federal college funding program. They're already telegraphing with all the focus being on <125k earners, which is coincidentally the cutoff for NY's program.

[Mr. Clutch]

Yeah it benefits me some. I make just under the income cutoff with around $50K in federal loans left to pay off. I just finished paying off the last of my $60K of private loans (its expensive to learn to fly) two weeks ago, so its good timing. So that $50K will go to $40K and i'll pay it off a bit faster. I'm in my mid-30s.

I'm not a huge fan of this action in isolation without a larger plan to make college more affordable and lower/eliminate interest rates for education loans, but it definitely helps me.

[TMSRetired]

Originally Posted by Mr. Clutch

Yeah it benefits me some. I make just under the income cutoff with around $50K in federal loans left to pay off. I just finished paying off the last of my $60K of private loans (its expensive to learn to fly) two weeks ago, so its good timing. So that $50K will go to $40K and i'll pay it off a bit faster. I'm in my mid-30s.

I'm not a huge fan of this action in isolation without a larger plan to make college more affordable and lower/eliminate interest rates for education loans, but it definitely helps me.

Part of Biden's EO does address making college more affordable.

The loans will be interest free
You only pay back 5% of your salary for 10 years and the balance is forgiven. Repayment is going to be income based.

The Fed cannot address tuition costs so they are subsidizing your college costs.

One example given in the Fact sheet:
College grad making $40K pays $31/month for 10 years and then is done..balance forgiven by the Fed.
Total college cost for borrower: $31x12x10 = $3720.00


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

[Mr. Clutch]

Originally Posted by TMSRetired

Part of Biden's EO does address making college more affordable.

The loans will be interest free
You only pay back 5% of your salary for 10 years and the balance is forgiven. Repayment is going to be income based.

The Fed cannot address tuition costs so they are subsidizing your college costs.

One example given in the Fact sheet:
College grad making $40K pays $31/month for 10 years and then is done..balance forgiven by the Fed.
Total college cost for borrower: $31x12x10 = $3720.00


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

Well that's good from the perspective of the student, but bad for the taxpayer as they're subsidizing the remainder and there's no accountability from the schools to keep costs down. That plan means college rates can continue to skyrocket because students will know that no matter how much they take out in loans, they will only have to pay a fixed amount. This sounds like something that will turn the student loan business from a gov moneymaker to a liability year after year.

Its a start, but I think a better (and cheaper) solution would be that the government offers interest-free or extremely low-interest (less than 1%) loans for education up to a ceiling that's determined by each school based on its evaluation of the student when he or she applies, what their intended program of study is going to be, etc. If that student finishes his or her education as planned, they should pay the loan back (with a significant savings from essentially only having to pay principal).

If the student drops out (or otherwise doesn't finish), the student should repay a portion of that loan (say 1/3) while the school should be responsible for covering the other 2/3. This way, schools will be more cognizant of the risk before they accept a student, because the school will be responsible for 2/3 of however much federal aid they authorize if the student isn't successful. This should lead schools to run more as a business, and not give a guaranteed $100K plus loan to an 18-year old freshman who hasn't even decided his major. The student benefits by not having a massive loan hanging over their head at a time when his or her income is likely not as high as it otherwise would have been. The authorized amount could be re-evaluated each year and adjusted based on changing conditions if needed.

On some level, the government is going to have to subsidize higher ed, but I'd rather see more funding go to offering scholarships for students going to low-supply/high-demand fields than just paying off a portion of everyone's loan after a decade. Still, it's a start and better than what the situation was like up until this week.

[Roselvr]

Originally Posted by ss20ts

Hopefully this is the beginning of revamping the student loan system. The interest really needs to be changed. It's ridiculous! It's designed so that it can't be paid off by most people. The rates are far too high. I have some triple my mortgage and double my auto loan rates.

I won't be holding my breath about them revamping the interest.

My son's loan was paid off pretty quick from memory. I paid the parent plus, he paid his, we banged them out. It wasn't cheap either, over $500 a month, he's 37 now, so this was 20 years ago.

We paid the PPL during his college, he started paying when he got out. He had about $20k for 3 quarters of college. I'm thankful he got out when he did. Quitting the Art Institute in Philly was the smartest decision he made.

He loved to draw, was very good at it but the world was moving away from drawing, into the digital world and animation which was not his calling. To think that some with Art Institute loans have been forgiven is a hard pill to swallow. Thy misled everyone saying they'd help them get wonderful, high paying jobs. His two roommates stuck it out, last we heard, they weren't making much with their degree. Wish I could recall specifics.

He started doing DirecTV when my stepson had found them willing to train and hiring back in early 2006. He was with them about 7 years, now with Comcast about the same. He loves doing it. If anyone has issues, he your diagnosing guy. He's very good at problem situations. Doesn't like installing which I can't blame him.

Originally Posted by ss20ts

Much of what people have been paying is just the interest. I've paid more than my loans were and my balance continues to grow because the interest keeps compounding. The payments are applied to interest first. Not a dime has been applied to my principle. I paid for over 10 years! The interest I now owe is double the amount of the loan. I've made more than double the minimum payments and still gotten nowhere. My family pays far more in federal income tax every single year than the $10K I'm getting my loans reduced by. Were you upset over forgiving the PPL loans? Bailing out the auto, bank, or airline industries? Defense spending? Funds we send overseas? Corporations not paying their fair share of taxes?

The interest is my6 biggest gripe. They should not be making so much on each loan/person.

I'm glad you'll at least get $10k taken off of your loan.

Originally Posted by prospectheightsresident

I'm in my early 30s. This doesn't benefit me at all as I have graduate loans and am enrolled in the PSLF program.

Aren't yours almost written off? I thought you were really close to being done.

Originally Posted by Mr. Clutch

Well that's good from the perspective of the student, but bad for the taxpayer as they're subsidizing the remainder and there's no accountability from the schools to keep costs down. That plan means college rates can continue to skyrocket because students will know that no matter how much they take out in loans, they will only have to pay a fixed amount. This sounds like something that will turn the student loan business from a gov moneymaker to a liability year after year.

Its a start, but I think a better (and cheaper) solution would be that the government offers interest-free or extremely low-interest (less than 1%) loans for education up to a ceiling that's determined by each school based on its evaluation of the student when he or she applies, what their intended program of study is going to be, etc. If that student finishes his or her education as planned, they should pay the loan back (with a significant savings from essentially only having to pay principal).

If the student drops out (or otherwise doesn't finish), the student should repay a portion of that loan (say 1/3) while the school should be responsible for covering the other 2/3. This way, schools will be more cognizant of the risk before they accept a student, because the school will be responsible for 2/3 of however much federal aid they authorize if the student isn't successful. This should lead schools to run more as a business, and not give a guaranteed $100K plus loan to an 18-year old freshman who hasn't even decided his major. The student benefits by not having a massive loan hanging over their head at a time when his or her income is likely not as high as it otherwise would have been. The authorized amount could be re-evaluated each year and adjusted based on changing conditions if needed.

On some level, the government is going to have to subsidize higher ed, but I'd rather see more funding go to offering scholarships for students going to low-supply/high-demand fields than just paying off a portion of everyone's loan after a decade. Still, it's a start and better than what the situation was like up until this week.

I agree, interest needs to be a number that will actually get loans paid, not so much that it costs three times as much. They plug higher education because they make a killing on it.

I also agree colleges need more responsibility in the students they graduate or don't graduate. They have nothing to lose. They raise rates because they can.

I'd also like to see it so that loans can't be used to party or fund vacations maybe by having a credit card that is only taken at certain places such as for books, to colleges for tuition and housing. If housing off campus there should be some other type of funding specific to where it pays the landlord direct or something.

I had a neighbor who lived off of the wifes student loans because he was out of work. I tried to warn they they could never claim bankruptcy but they didn't want to hear it. She did an accounting degree, We lost touch, he's now disabled, I don't know if she ever got a job doing it. I'd assume they would qualify.

[TexasLawyer2000]

Originally Posted by MKTwet

This $10k forgiveness is nothing more than another covid related perk. It's not gonna do much for those who have the debt. If you have $10k left, congrats it's paid for sooner. If you still have more than $50k in debt, you're still have to work on paying it off.

But this does nothing to fix the price of education cost and inflation.

With a median student loan debt of around ~25k, $10 is significant. The vast majority of people don't have $50k of student loan debt.

Also, working to pay off debt is not a bad thing like you make it out to be.

[gg]

It hurts me as I am a hard working upper middle and hanging on to that status until the direction of our country defeats me as upper middle gets crushed by such things. I paid my kid's loan off as hard working parents try to do. So now I will be paying on the $500 billion our current leaders want to impose upon me. Does this benefit me? Um, nope, it will send me to the middle and then lower middle is next stop. I work 6-7 days a week as it is!

My retirement is going to be a mess due to the massive spending of this current leadership! Oh well, you can't beat them. They have all media sowed up.