Obama Expands His "PAYE" Student Loan Scheme To Cover Almost All (employment, lobby)

[RedZin]

Originally Posted by freemkt

??? Did you overborrow for the purpose of fundiing persnal desires? I borrowed only what I needed in order to pay my inflated tuition, so I never got a student loan "refund".

Let us suppose you had gotten a refund and it was to help you pay for expenses that, if unpaid, could impede your progress through school. I'm not talking about trips to the beach or luxury cars... I am talking about gas to and from school, food, school supplies, etc.

If a student can only work limited hours because they are in school, then they may need to supplement their pay with loans. Is it better to have them stressed out over bills while trying to earn an education?

Put another way, I was a single mother and a full-time college student who worked part-time (no evenings, those were for my son and I to spend time together and who could afford nighttime childcare, anyway?)

I could not live on campus because my school didn't have campus housing for families. So, I had to pay rent, lights, phone (this was before there was widespread cell phone use... I didn't have one), gas, groceries, childcare, etc.

I did this with a combination of work and student loans for living expenses. My apartment was modest. I had roommates sometimes, because it helped pay the bills.

It took me a bit longer to finish school because I could not go full-time every semester due to child/work requirements.

My student loan debt was larger than it would have been if I was a single person who could live on campus and had parents footing some/part of the bill.

But, going to college was important to me and without it I would not have the earning potential I have today (I went back later to get a master's degree and I have some loan debt from that, but my employer did reimburse a good part of my degree). This enabled me to get an even better job.

Bottom line is that not all students who take out loans for living expenses are partying hard. Most of them are probably not doing anything like that. They just want to get a degree and hopefully better themselves and increase their earnings' potential.

The economic crash has had an impact on people's finances. No doubt the housing crash (I kept my house and never made a late mortgage payment, but I was still in grad school and my loans were deferred) did little to help people's financial pictures.

There isn't anything wrong with bailing out students. These "bailouts" really are designed to help them pay a reasonable amount each month for a given time period, because the amounts they owe are too high and would have a detrimental effect on their ability to provide for themselves and their families, if they have any.

Of course a young, single person who can move back in with mom and dad can pay off loans. My ex husband moved into a house that his parents let him live in rent free and paid off every dime of his loans. I did not have such a luxury and I was taking care of all 3 of our kids (I still do).

Nearly everyone who likes to think they are entirely self-made and that they never got help from anyone to get through school or get a job is delusional.

Not addressed to you, freemkt, just addressing this issue in general.

People really lose it over student loan bailouts, but I have never once heard anyone say "I do agree that the current situation cannot continue. Let's help the students who have loans now, and modify these programs so this sort of thing never happens again."

I usually just hear "They should pay! They borrowed!"

The hilarious part is that I hear it from people who were bailed out during the housing crash and even from people who have filed bankruptcy.

Students cannot file bankruptcy and discharge all their loans. For students with heavy debt, they probably would do this, but I think most of us want to pay the loans back to the best of our ability and preserve our credit ratings.

If our government bailed out big banks, there's not reason they cannot help out millions of students who would use the money that they didn't have to send in for student loans to boost the economy. It's not like the Feds are going to start taxing everyone extra because students need help. Sheesh.

[RedZin]

Originally Posted by ambient

There's a good intent behind it, as student loans have become a very serious problem in this country and Congress has failed to lead.

The only problem is that this will do nothing to address the root of the problem and encourage future school price increases to slow down. If anything, it may have the opposite effect.

I am of the opinion that a chief (and somewhat paradoxical) reason for the massive college cost hikes is the prevalence government lending. Administrators know that education is seen as critical to many people and that the government has nearly unlimited capacity to hand out loans of virtually any size to students. In other words, there is a large demand, fixed supply, and significant price inelasticity. So they naturally raise prices accordingly and use the cash to pay themselves a lot and build their kingdom. What happens to the students down the road when they leave the schools crippled with debt is none of their concern.

In other words, school administrators have found, thanks to the government, an efficient way to funnel increasing amounts of taxpayer funds into their pockets.

I agree. I think that any plan to provide assistance to students who are already in excessive debt needs to be paired with a plan to reduce rampant, out of control costs of attendance.

Since, as you pointed out, Administrators know that the government has deep pockets, why can't we, as taxpayers, not realize that those same deep pockets can help the students that the government enabled schools to overcharge in the first place?

It's a circular problem and all parts of it need fixing.

[TRlaura]

Redzin, I don't expect for one second that you will understand this. But bailing them out will then make them a moocher. And those of us that choose not to mooch pay their bill. Simple math.

[RedZin]

Originally Posted by AeroGuyDC

None? For all those who made terrible decisions we should bail them out just because?

We did it for bankers who made terrible decisions. We did it for homeowners who borrowed more than they could afford... it happens all the time for people who file bankruptcy and nobody is leading the rallying cry to bring back debtor's prison for people who cannot pay their bills.

Students would be better served by paying every dime of their tuition on credit cards, then filing bankruptcy.

In fact, some time ago, there were some clever lawyers and doctors who paid off their student loans with credit cards, then waited awhile and filed BK.

The government eventually got wise to that one, so it's no longer a loophole.

My point is that these people who made "terrible decisions" were usually teens and twentysomethings.

The people who borrowed for more house than they could afford were people of ALL ages. Nobody grabbed a pitchfork over that. They blamed predatory lending.

Why not blame predatory lending for the student loan crisis?

[RedZin]

Originally Posted by TRlaura

Redzin, I don't expect for one second that you will understand this. But bailing them out will then make them a moocher. And those of us that choose not to mooch pay their bill. Simple math.

Why would I not understand this? As I see it, these students still have to pay a percentage of their loans for at least 20 years (10 for public service, which are very low paying jobs) and they have to pay taxes on any amount that is forgiven.

How is that mooching?

You are talking to me like I don't pay a ton of taxes. The AMT loves my household. I still do not mind helping students because I know what it's like to have to support yourself AND another human being (or three) to get an education.

ETA: Telling a person with whom you do not agree that you don't expect them to understand what you're saying is terribly rude. I'm not stupid. I just think you're using anecdotal evidence to paint all students as partying freeloaders. I, on the other hand, recognize that there are a variety of people who attend college, and assuming they're all one way just because you saw a few people blow student loan money is doing all borrowers a disservice. I am able to see that there's more than one side to this equation. It's called being open minded and having empathy for others.

[TRlaura]

Originally Posted by RedZin

How is that mooching?

Any amount of money that was loaned and not repaid makes you a moocher. I couldn't care less if it is from a house or a car manufacturer or a bank or whomever. You still stick it to the rest of us. Sheesh...

And shame on me for working during my high school and college summers and then washing dishes in the dorm in between my studies. And even dumber than that, I worked during my spring break because I could not fund a trip to a Florida beach. (And yeah Kat, I just dreamed that I saw that happen.....)

[uggabugga]

Originally Posted by BugsyPal

He's at it again. Waving his magic pen Obama will now expand his student loan forgiveness scheme to potentially cover anyone with federal student loans. Repayment would be capped at 10% of monthly income with the entire balance forgiven after 20 years, ten if the borrower works in the non-profit sector.

Who is going to pay for all this forgiveness? I'll give you three guesses...

Schumer: Obama’s Student Loan Order A Good Move « CBS New York

President Obama to order help for student loan debtors - Nirvi Shah - POLITICO.com

Obama expected to promise student loan relief - Jun. 8, 2014

Obama Throws Bone To Americans Crushed With Student Loans | The Daily Caller

something similar has existed for govt. employees since 2012:

What is the Public Service Loan Forgiveness Program?

The PSLF Program is intended to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by certain public service employers.
https://studentaid.ed.gov/repay-loan...public-service

[AeroGuyDC]

Originally Posted by Opin_Yunated

College is not a terrible decision. This country needs educated American citizens to remain competitive in the future. If we have no problem bailing out banks and large corporations, bailing out the next generation's leaders should be no problem at all.

Once again... irrational ideology on display. Ideology is imprudent.

No, i'm not referrring to the act of seeking a college degree. I'm referring to the many thousands (if not millions) who have taken out loans and did not complete their degree. Should they have their loans forgiven? Or what about those who majored in an unemployable major? That's a terrible decision too. What limit do you put on this forgivenness thing? Certainly you don't seek to forgive the unforgivable, right?

[AeroGuyDC]

Originally Posted by freemkt

??? Did you overborrow for the purpose of fundiing persnal desires? I borrowed only what I needed in order to pay my inflated tuition, so I never got a student loan "refund".

No, that's what came to me after signing on the dotted line. It was not sought after intentionally. And it was not rejected by me either. Not many broke college kids turn away refunds, myself included. The good news is I paid for it, and I paid it off. No harm, no foul right? But for those who seek forgiveness....they should not have that portion of their college "expenses" forgiven. Afterall, they didn't spend it on education. Unfortunately, such expenditures are not policeable.

[blackandproud]

Originally Posted by HappyTexan

Kat, there's a lot of "loopholes" in the student loan program and if one plays their cards right the student can get more money than what actual school expenses cost.
And then there is SNAP for college students..again if you know the loopholes.

I've seen a few myself recently so it can be done.

A student with family in The Woodlands should not be qualifying for these types of need based loans and programs but there are loopholes in the rules that allow it.

The Woodlands: very wealthy master planned community north of Houston. Median income is $98K.

Can you outline some of these loopholes? As a parent that just had her second child to graduate from college and a third just in her sophmore year, it is not easy obtaining government subsidized student loans. I've had to take out not only parent loans but also co-sign on their studen loans.