Student Loan Forgiveness

[BC.]

Sorry more questions in this very informative thread:

Does anybody know if this forgiveness could pertain to future grad school in the next couple years 23-24’? How long is the time period for the forgiveness? Is it going to be where you can only apply for it this fall? Can students apply for it next year? How long is the grace period?

Ex. Senior…..will have undergrad loans…is planning grad school. Can one apply for forgiveness for this fall/next fall?…this would definitely effect choice of where to attend grad school.

Ex. Junior….will have undergrad loans….possibly planning for grad school fall of 24’…..anybody know if forgiveness will be available that long?

As long as the total does not exceed $10,000…can students apply for forgiveness and put that towards undergrad loans and future graduate school loans?

[SumJongGuy]

More speculation from Chris Christie and others this morning on This Week with George that SCOTUS will walk all of this back.

[Hood26]

More speculation from Chris Christie and others this morning on This Week with George that SCOTUS will walk all of this back.

Yes, Chris Christie a brilliant political mind.

[SumJongGuy]

Yes, Chris Christie a brilliant political mind.

He's a buffoon but he does have solid career experience at the federal US attorney level. I'd actually put him on a higher intellectual and legal level than the SCOTUS trash (Amy Covid Barrett, Traiter Thomas, Drunk Kavanaugh, etc..) that very well could walk this back if they get the opportunity to..


EDIT to add.. It was Christe who said it, but the whole rest of the panel, mostly left leaning, nodded in affirmation that this is a possibility and nobody shut it down as not likely, NOBODY.

[Supermoon]

There would be no bigger political bungle than walking back something like this. No critic of the policy would give you any credit, and your piss off your base that you finally have gotten back on your side.

That’s some weird galaxy brain shit that nobody with two ounces of sense would think is a good idea. Which is why Christie said it.

[Supermoon]

Sorry more questions in this very informative thread:

Does anybody know if this forgiveness could pertain to future grad school in the next couple years 23-24’? How long is the time period for the forgiveness? Is it going to be where you can only apply for it this fall? Can students apply for it next year? How long is the grace period?

Ex. Senior…..will have undergrad loans…is planning grad school. Can one apply for forgiveness for this fall/next fall?…this would definitely effect choice of where to attend grad school.

Ex. Junior….will have undergrad loans….possibly planning for grad school fall of 24’…..anybody know if forgiveness will be available that long?

As long as the total does not exceed $10,000…can students apply for forgiveness and put that towards undergrad loans and future graduate school loans?

I think this only applies to loans pre-2022 school year, and the payment stuff is the future facing part.

[jfost]

There would be no bigger political bungle than walking back something like this. No critic of the policy would give you any credit, and your piss off your base that you finally have gotten back on your side.

That’s some weird galaxy brain shit that nobody with two ounces of sense would think is a good idea. Which is why Christie said it.

I think the “but it’s not fai(R)” crowd would loooooooooove it to be ruled unconstitutional… do you have it reversed?

[J. Barron DeJong]

There are three types of undergrad college loans: 1) subsidized, 2) unsubsidized, and 3) uncapped parent loans.

So consider a family with $500k/yr income and three kids attending expensive schools with $60k/yr annual tuition. The kids each take out $57.5k in total loans with parent loans covering the rest. Together all three kids along with their parents borrow $720k for tuition.

All these loans then get consolidated under the IDR plan loophole created by the changes. The three kids end up paying around $100K each or $300K total spread out over 20 years. After which point the rest is forgiven by the government, resulting in a $420k household/college government subsidy.

Has anything been said to make you think that parents loans are going to be forgiven? I haven’t seen anything about that specifically, so my assumption is it only applies to federal loans in the students name, and as dunfree said, there are limits to the size of those loans. No undergrad is getting $100+k of debt wiped out, far as I can tell.

[Danno]

There are three types of undergrad college loans: 1) subsidized, 2) unsubsidized, and 3) uncapped parent loans.

So consider a family with $500k/yr income and three kids attending expensive schools with $60k/yr annual tuition. The kids each take out $57.5k in total loans with parent loans covering the rest. Together all three kids along with their parents borrow $720k for tuition.

All these loans then get consolidated under the IDR plan loophole created by the changes. The three kids end up paying around $100K each or $300K total spread out over 20 years. After which point the rest is forgiven by the government, resulting in a $420k household/college government subsidy.

Can parent loans be consolidated with loans in the student's name, all becoming the student's responsibility?

[jfost]

Can parent loans be consolidated with loans in the student's name, all becoming the student's responsibility?

No, and the 500k/yr family wouldn’t have been able to take out federally subsidized loans in the first place. FAFSA denied.

[MultiVerse]

Has anything been said to make you think that parents loans are going to be forgiven? I haven’t seen anything about that specifically, so my assumption is it only applies to federal loans in the students name, and as dunfree said, there are limits to the size of those loans. No undergrad is getting $100+k of debt wiped out, far as I can tell.

Can parent loans be consolidated with loans in the student's name, all becoming the student's responsibility?

With the caveat the loophole described on the previous page could and should be closed, most Federal student loans are now eligible for income-driven repayment plans. Which opens the door for the loophole known as double consolidation "that gives parents more repayment options tied to their earnings." ... "When you consolidate twice, however, you essentially erase the fact that the original loans were parent loans, and in doing so, you gain access to the income-driven plans for student borrowers."

The changes made to the income-driven repayment plan described on the previous page making it more generous means unless the loophole is closed it's viable even for wealthy parents.

Under income-driven repayment plans graduates pay a percentage of their income for a fixed number of years and after that the remaining debt is forgiven. IDR student debt is different than conventional student debt with fixed monthly payments based on loan amount because IDR is capped based on a percentage of discretionary income regardless of loan amount. It creates a world where costs matter a lot less.

So even if the undergraduate loophole is closed, the door remains open for Law school, medical school, etc. Schools can raise their prices for those types of programs knowing most graduates will only face relatively modest student loan payments. Law schools are already doing this sort thing with the Public Service Loan Forgiveness (PSLF) program to line their own pockets.

[jfost]

^
Well if you’re going to fill our heads with actual information then I guess I’ll shut up and listen..,

[Danno]

FFS, we're going to start hand wringing and criticizing this announcement because a little known and little used loophole that existed before this announcement might let a few savvy wealthy parent borrowers escape some of their loans by putting them in their kids names?

[dunfree]

With the caveat the loophole described on the previous page could and should be closed, most Federal student loans are now eligible for income-driven repayment plans. Which opens the door for the loophole known as double consolidation "that gives parents more repayment options tied to their earnings." ... "When you consolidate twice, however, you essentially erase the fact that the original loans were parent loans, and in doing so, you gain access to the income-driven plans for student borrowers."

The changes made to the income-driven repayment plan described on the previous page making it more generous means unless the loophole is closed it's viable even for wealthy parents.

Under income-driven repayment plans graduates pay a percentage of their income for a fixed number of years and after that the remaining debt is forgiven. IDR student debt is different than conventional student debt with fixed monthly payments based on loan amount because IDR is capped based on a percentage of discretionary income regardless of loan amount. It creates a world where costs matter a lot less.

So even if the undergraduate loophole is closed, the door remains open for Law school, medical school, etc. Schools can raise their prices for those types of programs knowing most graduates will only face relatively modest student loan payments. Law schools are already doing this sort thing with the Public Service Loan Forgiveness (PSLF) program to line their own pockets.

i clicked through to the story and the planners blog and it looks like both story’s suggest the loans are still held in the parents name - not the students name. But the parents get benefits as students by eliminating the parental coding of the loan. So the scheme would be take out a ton of debt for the kids college, transfer all the assets to them post college, consolidate the loans into yours and pay fuck all until you die and depend on the kids too support you.

And why paper applications? other than to add gogolian absurdity.

[MultiVerse]

Heh, the crazy thing is parents can even borrow to cover non-tuition expenses. In that case a parent could max out a zero percent IDR loan and then invest it. A parent could for example buy a condo and then rent it to their kids using the loan to pay themselves absurdly high rent. It wouldn't matter as long as they call it a "living expense"

[Bunion 2020]

Random question;

If you qualify for relief does the gubamint send you a check to pay down your loan or do they intervene and pay down the loan directly?

Reason I ask is a past history of watching so many folk use their student loans to buy a new bike or skis or whatever and let the balance ride.

[Hood26]

Random question;

If you qualify for relief does the gubamint send you a check to pay down your loan or do they intervene and pay down the loan directly?

Reason I ask is a past history of watching so many folk use their student loans to buy a new bike or skis or whatever and let the balance ride.

Yeah, watched this a dozen times. This program will be abused.

[MagnificentUnicorn]

Isn’t this loan forgiveness? Are they going to hand out checks or is the government just going to credit the loans?

[TNKen]

As you know, one of my daughter's is a PA. She has student loans from PA school. If she works for a not-for-profit and makes the minimum payment on her loans, the balance is forgiven. The huge hospital system in our area that she works for is a not-for-profit. Ding-Ding!!

[Bunion 2020]

Nekkid pics or GTFO

[AdironRider]

Just spent a week in my wife's old stomping grounds in rural Maine. While she went off to college (where we met, so our paid off loans were well worth it IMO), the vast majority of the people she grew up with never left. They are preschool teachers, loggers, mechanics, and painters, amongst other blue collar jobs.

She has stayed in reasonable touch with a lot of them over the years, and most of them are not stoked about this handout. They all universally see it as a handout to the 'rich kids'. Lots of them are where they are because college was not in the cards financially for them, not due to academic performance or a lack of aptitude, and they all know the costs are just being transferred to them. This was a hot topic at the local bars, restaurants, and cookouts we attended, and needless to say, for the first time in my many years of going there, I didn't feel very welcome. It was too fresh, and they all know our backgrounds. I can't say I blame them. My wife and I knew what we were getting into, and I can't say I expect those people to bail me out and paid ours off, but we are the college kids getting a handout in their minds.

I think I said it earlier in this thread but I'd rather see the money spent on universal daycare (as in incorporating that into the traditional K-12 programming expected currently). That would have been a much better use of the money. I don't think you can ever escape some aspects of government spending benefiting one group over another but this one is too stark a divide between the have's and have nots. The politics of this handout and the division it is creating, or continuing in a lot of cases, is real.

Over 50% of loan debt is held by graduate degree holders, and wiping out a portion of their undergraduate debt to get them there, with a 125k income cap, on the backs of people making 50k or lower is above and beyond any concept of fairness. Wipe out the for-profit debt, set the cap at something reasonable like 50-60k, and maybe this isn't the total boondoggle it is turning into, but this is way to much. No one making 60-125k needs a handout for their student loans. Full stop.

[Mustonen]

Isn’t this loan forgiveness? Are they going to hand out checks or is the government just going to credit the loans?

I guess we don’t know exactly how this will work, but generally the government will issue payment directly to the servicer/lender on behalf of the borrower. Since this is federally held debt the gubmint is likely just moving stuff around on their balance sheet.

Just spent a week in my wife's old stomping grounds in rural Maine. While she went off to college (where we met, so our paid off loans were well worth it IMO), the vast majority of the people she grew up with never left. They are preschool teachers, loggers, mechanics, and painters, amongst other blue collar jobs.

She has stayed in reasonable touch with a lot of them over the years, and most of them are not stoked about this handout. They all universally see it as a handout to the 'rich kids'. Lots of them are where they are because college was not in the cards financially for them, not due to academic performance or a lack of aptitude, and they all know the costs are just being transferred to them. This was a hot topic at the local bars, restaurants, and cookouts we attended, and needless to say, for the first time in my many years of going there, I didn't feel very welcome. It was too fresh, and they all know our backgrounds. I can't say I blame them. My wife and I knew what we were getting into, and I can't say I expect those people to bail me out and paid ours off, but we are the college kids getting a handout in their minds.

I think I said it earlier in this thread but I'd rather see the money spent on universal daycare (as in incorporating that into the traditional K-12 programming expected currently). That would have been a much better use of the money. I don't think you can ever escape some aspects of government spending benefiting one group over another but this one is too stark a divide between the have's and have nots. The politics of this handout and the division it is creating, or continuing in a lot of cases, is real.

Over 50% of loan debt is held by graduate degree holders, and wiping out a portion of their undergraduate debt to get them there, with a 125k income cap, on the backs of people making 50k or lower is above and beyond any concept of fairness. Wipe out the for-profit debt, set the cap at something reasonable like 50-60k, and maybe this isn't the total boondoggle it is turning into, but this is way to much. No one making 60-125k needs a handout for their student loans. Full stop.

There was a comment upthread about this working out to something like $1k/person, which seems crazy. But that’s now how taxes are paid. These people in rural Maine making $50K and lower aren’t paying for this. That narrative is absurd. If you make $50K and you have a family you aren’t paying much in taxes, and the bulk of this money is being paid for by the wealthy and the corporations. Ask them if they’d be OK with corporations and the wealthy paying for some debt forgiveness for the dwindling middle-class, instead, and I bet their tune changes.

And I challenge you to expound upon how $60K is any less arbitrary a cap than $125K. You gotta pick a number. I imagine it wasn’t entirely out of a hat and was looking at some bell curve of student loan debt, but who knows? Would be interesting to have heard those conversations. But what we do know is that the beneficiaries of this were more or less who they were trying to target, and they probably capped it around where their targeting efforts intersected with the law of diminishing returns.

[shaggy433]

...... No one making 60-125k needs a handout for their student loans. Full stop.

This may be true for some but not for all... 60k doesn't stretch that far...

1300 rent
1300 daycare
900 student loan
300 car
50 insurance
200 electric
450 food
that's 4500 a month just there.. that's not counting gas for hot water, stove etc. gas to get to work, cell phone, school supplies for the kids, credit card payments... this all adds up to nearly 60k a year so an 80k job before taxes...

[::: :::]

Over 50% of loan debt is held by graduate degree holders, and wiping out a portion of their undergraduate debt to get them there, with a 125k income cap, on the backs of people making 50k or lower is above and beyond any concept of fairness. Wipe out the for-profit debt, set the cap at something reasonable like 50-60k, and maybe this isn't the total boondoggle it is turning into, but this is way to much. No one making 60-125k needs a handout for their student loans. Full stop.

Please stop with the “on the backs of people making 50k or lower” hyperbole. It’s just wrong.

As you state, it’s a perception. What you don’t state is that doesn’t make it correct.

Better to maybe inform the electorate of who is actually paying.


From Statista: https://www.statista.com/statistics/...-income-level/

[AdironRider]

I am specifically referencing individual income above and not household. If you want to talk about households, 250K household income does not need a handout anywhere. Frankly 125k household income doesn't either. I know this is TGR and most of you have zero idea about what life is life in the real world but 250k is still a lot of fucking money to all but the top 10% of households in this country.

Not one of you is presenting an argument about how people without college degrees subsidizing those with one is in any way fair. That isn't perception, that is the reality of this program and it is pissing off a lot of people. Only 43 million people have student loans and there are 160+ million people in the workforce any given month.