Just cancel student debt already

[sakoro]

Bumping up this thread to post an article from LATimes.com. It’s an interview with Elizabeth Warren arguing that student loan forgiveness is the best strategy for Dems in the midterms.

What do you think about some of these statements/ arguments?

Two-thirds of student debt is held by women; Black women are the most burdened. When running for Georgia governor in 2018, Stacey Abrams wrote an op-ed about the heavy student loans she had racked up. Not long after, Warren released a plan for canceling up to $50,000 in student loan debt per borrower.

“There is no single action the president can take all by himself that would have such a profound effect on racial justice in this country,” Warren told me.

Trump understood that restarting student loan payments would cost him the election. Also I didn’t realize that many kids going into the trades had student loans? I always thought employers would cover that training.

A new poll from Data for Progress and Rise found debt cancellation would spur higher turnout in the battleground states of Arizona, Georgia, Pennsylvania and Wisconsin.

The debt isn’t exclusive to white-collar professionals. It weighs down electricians, plumbers, truck drivers. Cancellation “could have a positive impact on some Trump voters,” Kyra Taylor, a National Consumer Law Center staff attorney, told me. Former President Trump, who initiated the loan payment pause and extended it to 2021, knew it would be “catastrophic electorally” to retract it before the election, says Melissa Byrne, a political organizer and activist on debt cancellation.

During COVID did Americans really learn that a functioning govt is important? I think the different messages from different levels of govt and constant changes (some necessary due to increased scientific knowledge, some due to bureaucracies responding to political pressure) made people more confused and divided.

Americans are realizing that sometimes, as Warren put it, life happens. We need a hand. “During the pandemic, people across this country started to see up close and personal why we need a functioning government,” she said. “We understood that we needed each other.”

[msmerymac]

sakoro, I feel pretty positive that it's why this extension is only through September.

Also, at that point it will be 2.5 years since anyone was required to pay their federal loans. I think the 538 podcast had someone on who talked about how the longer they delay repayments, the harder it will be to get people to start repaying.

[redheadbaker]

Apr 22, 2022 8:42:39 GMT -5 sakoro said:

Also I didn’t realize that many kids going into the trades had student loans? I always thought employers would cover that training.

A new poll from Data for Progress and Rise found debt cancellation would spur higher turnout in the battleground states of Arizona, Georgia, Pennsylvania and Wisconsin.

The debt isn’t exclusive to white-collar professionals. It weighs down electricians, plumbers, truck drivers. Cancellation “could have a positive impact on some Trump voters,” Kyra Taylor, a National Consumer Law Center staff attorney, told me. Former President Trump, who initiated the loan payment pause and extended it to 2021, knew it would be “catastrophic electorally” to retract it before the election, says Melissa Byrne, a political organizer and activist on debt cancellation.

Yeah. Many trade schools are for-profit schools who prey on kids who are the first in their families to go to college, veterans (even those with traumatic brain injuries), etc. 

ETA: And for some trades, the monthly payments for these loans are way more than students can expect to make doing that trade (thinking particularly of culinary school). 

[Poeticxpassion]

Apr 22, 2022 12:03:40 GMT -5 redheadbaker said:

Apr 22, 2022 8:42:39 GMT -5 sakoro said:

Also I didn’t realize that many kids going into the trades had student loans? I always thought employers would cover that training.

Yeah. Many trade schools are for-profit schools who prey on kids who are the first in their families to go to college, veterans (even those with traumatic brain injuries), etc. 

ETA: And for some trades, the monthly payments for these loans are way more than students can expect to make doing that trade (thinking particularly of culinary school). 

Yes! DH went to Motorcycle Mechanics Institute in Orlando. He racked up over $25,000 in student loans. He went through all that to work at a Harley Davidson dealership starting at $10.00 per hour and having to bring all your own tools! Tools cost thousands of dollars! The dealership ended up closing. He tried to go to another one- that one closed as well.

What does he do now? Take care of me. The lady who has $150,000 in students loans from her master's degree but can't work due to multiple sclerosis.

Student loans will follow us to the grave.

[Poeticxpassion]

jennyparnassus, I received notice that my student loans were being transferred to another company. They are going from Fed Loan Servicing to MOHELA.

[sakoro]

Apr 22, 2022 12:52:55 GMT -5 Poeticxpassion said:

Apr 22, 2022 12:03:40 GMT -5 redheadbaker said:

Yeah. Many trade schools are for-profit schools who prey on kids who are the first in their families to go to college, veterans (even those with traumatic brain injuries), etc. 

ETA: And for some trades, the monthly payments for these loans are way more than students can expect to make doing that trade (thinking particularly of culinary school). 

Yes! DH went to Motorcycle Mechanics Institute in Orlando. He racked up over $25,000 in student loans. He went through all that to work at a Harley Davidson dealership starting at $10.00 per hour and having to bring all your own tools! Tools cost thousands of dollars! The dealership ended up closing. He tried to go to another one- that one closed as well.

What does he do now? Take care of me. The lady who has $150,000 in students loans from her master's degree but can't work due to multiple sclerosis.

Student loans will follow us to the grave.

So sorry to hear that. And they wonder why more kids aren’t going into trades. Is this true for plumbers and electricians too?

[BlondeSpiders]

I graduated in 2019, but because I took a summer class, my repayment schedule didn't begin until Dec 2020. Which was right about the time payments were frozen.

So I have not made a single student loan payment despite graduating 2.5 years ago. I could get ahead of it and pay now, but I keep hoping it will get cancelled altogether. I only have 24K to repay. Well, 24K now. Probably 40K by the time it's paid off.

The kicker is the job I have doesn't even require a degree.  ¯\_(ツ)_/¯

[ellipses84]

[mention]poeticxpassion [/mention] Do you have federal student loans you could qualify for a permanent disability discharge? It can be certified by a Dr instead of Social Security or the VA.

My DH went to a 2 year specialty college where the income they said he would make has not been anywhere near a reality 10+ years later.

[sakoro]

Apr 22, 2022 22:46:22 GMT -5 ellipses84 said:

[mention]sakoro [/mention] Do you have federal student loans you could qualify for a permanent disability discharge? It can be certified by a Dr instead of Social Security or the VA.

My DH went to a 2 year specialty college where the income they said he would make has not been anywhere near a reality 10+ years later.

I paid off my loans long ago — graduated from in-state university in late 90s when it was still affordable. Did you mean to tag Poeticxpassion?

[ellipses84]

Apr 22, 2022 23:11:33 GMT -5 sakoro said:

Apr 22, 2022 22:46:22 GMT -5 ellipses84 said:

[mention]sakoro [/mention] Do you have federal student loans you could qualify for a permanent disability discharge? It can be certified by a Dr instead of Social Security or the VA.

My DH went to a 2 year specialty college where the income they said he would make has not been anywhere near a reality 10+ years later.

I paid off my loans long ago — graduated from in-state university in late 90s when it was still affordable. Did you mean to tag Poeticxpassion?

Oops, yes, edited!

[Poeticxpassion]

Apr 22, 2022 22:46:22 GMT -5 ellipses84 said:

[mention]poeticxpassion [/mention] Do you have federal student loans you could qualify for a permanent disability discharge? It can be certified by a Dr instead of Social Security or the VA.

My DH went to a 2 year specialty college where the income they said he would make has not been anywhere near a reality 10+ years later.

Yes, all but one loan is federal so I do qualify. My doctor just wants me to wait until my next MRI to be able to write that my MS is progressing. I'm worried about the private loans. There is a process for me to discharge nearly $135,000, but those last $15k is private. I wish there was a program for private loans as well.

[5kcandlesinthewind]

Apr 23, 2022 13:16:46 GMT -5 Poeticxpassion said:

Apr 22, 2022 22:46:22 GMT -5 ellipses84 said:

[mention]poeticxpassion [/mention] Do you have federal student loans you could qualify for a permanent disability discharge? It can be certified by a Dr instead of Social Security or the VA.

My DH went to a 2 year specialty college where the income they said he would make has not been anywhere near a reality 10+ years later.

Yes, all but one loan is federal so I do qualify. My doctor just wants me to wait until my next MRI to be able to write that my MS is progressing. I'm worried about the private loans. There is a process for me to discharge nearly $135,000, but those last $15k is private. I wish there was a program for private loans as well.

My husband recently got his discharged due to a permanent disability (he’s been legally blind since he was a teen.) He should have had them discharged in 2016 with the initial pass, but they told him he didn’t qualify because whatever letter he got from SS didn’t have the exact right wording. (I think it was supposed to indicate a 7 year term, but his noted it was permanent. Because, you know. Blind.) Anyway, when the Biden admin came in they realized people in this category had been screwed, and they’ve been discharging them quarterly. Not only did he get his remaining loans discharged (almost $25k left twenty years after graduation), he got back 5ish years of payments. Which is a really long way to say that you should look into whether or not they can backdate it to an earlier diagnosis date, Poeticxpassion.I don’t know if you’d be successful, but it would be worth exploring.

[Poeticxpassion]

Apr 23, 2022 18:44:20 GMT -5 5kcandlesinthewind said:

Apr 23, 2022 13:16:46 GMT -5 Poeticxpassion said:

Yes, all but one loan is federal so I do qualify. My doctor just wants me to wait until my next MRI to be able to write that my MS is progressing. I'm worried about the private loans. There is a process for me to discharge nearly $135,000, but those last $15k is private. I wish there was a program for private loans as well.

My husband recently got his discharged due to a permanent disability (he’s been legally blind since he was a teen.) He should have had them discharged in 2016 with the initial pass, but they told him he didn’t qualify because whatever letter he got from SS didn’t have the exact right wording. (I think it was supposed to indicate a 7 year term, but his noted it was permanent. Because, you know. Blind.) Anyway, when the Biden admin came in they realized people in this category had been screwed, and they’ve been discharging them quarterly. Not only did he get his remaining loans discharged (almost $25k left twenty years after graduation), he got back 5ish years of payments. Which is a really long way to say that you should look into whether or not they can backdate it to an earlier diagnosis date, Poeticxpassion.I don’t know if you’d be successful, but it would be worth exploring.

Thank you so much! I had no idea.

[jlt19]

Apr 22, 2022 16:54:16 GMT -5 sakoro said:

Apr 22, 2022 12:52:55 GMT -5 Poeticxpassion said:

Yes! DH went to Motorcycle Mechanics Institute in Orlando. He racked up over $25,000 in student loans. He went through all that to work at a Harley Davidson dealership starting at $10.00 per hour and having to bring all your own tools! Tools cost thousands of dollars! The dealership ended up closing. He tried to go to another one- that one closed as well.

What does he do now? Take care of me. The lady who has $150,000 in students loans from her master's degree but can't work due to multiple sclerosis.

Student loans will follow us to the grave.

So sorry to hear that. And they wonder why more kids aren’t going into trades. Is this true for plumbers and electricians too?

Usually, if a Union isn’t involved. In my city, the trades are still heavily Unionized and all have their own schools, which is free if you’re a member, working for a signatory contractor. But there are still plenty of schools that will take your money here. I can only imagine their presence in non-Union areas.

[BlondeSpiders]

Well, this is promising:

President Biden gave his strongest indication yet in a private meeting with House Democrats that he is poised to take significant action to relieve student loans, a move that could include canceling tens of thousands of dollars in debt for some people.

www.washingtonpost.com/politics/2022/04/26/biden-cancel-student-loans/ 

[idahome]

This is where I need to say that my financial literacy when I went to college and law school was zero. I firmly believed the only way I could get ahead was to do school but the only way to pay for it, beyond my undergraduate scholarship that covered some portion of my four years in undergrad was by taking student loans. The loan counseling at graduation was laughable and it wasn’t until the last 5-7 years (which is 10+ years after I graduated from law school) that I could afford to make any kind of payments on my loans.

I don’t know what I’m looking for here but I firmly believe the student loan space is a horrible racket and I don’t think that I’m the only one who didn’t really/fully get what I was doing each year I signed the loan paperwork.

I’ll pay my loans off when I’m around 65 and I can only hope that my income keeps increasing between now and then or else I’m not sure how I’ll make those payments.

So I hope the President does something here. Because I’m real darn tired.

[wanderingback]

So it sounds like maybe the $10,000 forgiveness might happen at some point?

The below quote is from a Wall Street journal article:
"Some of Mr. Biden’s advisers have privately expressed concern that across-the-board student-debt forgiveness could benefit middle-to-upper-class professionals with advanced degrees, who tend to have large amounts of student debt. Those advisers have argued for a more tailored approach that would limit debt forgiveness to lower-income borrowers, according to people with knowledge of the administration’s deliberations."

That is why I doubt I’ll ever see much benefit from loan forgiveness. I don’t think anyone has sympathy for doctors who have $300,000 - $600,000 in debt, even those of us working in lower paid specialties!

[gretchenindisguise]

Apr 26, 2022 20:43:45 GMT -5 wanderingback said:

So it sounds like maybe the $10,000 forgiveness might happen at some point?

The below quote is from a Wall Street journal article:
"Some of Mr. Biden’s advisers have privately expressed concern that across-the-board student-debt forgiveness could benefit middle-to-upper-class professionals with advanced degrees, who tend to have large amounts of student debt. Those advisers have argued for a more tailored approach that would limit debt forgiveness to lower-income borrowers, according to people with knowledge of the administration’s deliberations."

That is why I doubt I’ll ever see much benefit from loan forgiveness. I don’t think anyone has sympathy for doctors who have $300,000 - $600,000 in debt, even those of us working in lower paid specialties!

I've definitely seen loans of those balances forgiven on the pslf fb group. But pslf is limited to gov't, state, non-profit employers.

[bimbi284]

Some reporting on this and Biden’s meeting with the Hispanic Caucus: www.cbsnews.com/amp/news/biden-options-forgiving-student-loan-debt/#app

[wanderingback]

Apr 26, 2022 21:32:48 GMT -5 gretchenindisguise said:

Apr 26, 2022 20:43:45 GMT -5 wanderingback said:

So it sounds like maybe the $10,000 forgiveness might happen at some point?

The below quote is from a Wall Street journal article:
"Some of Mr. Biden’s advisers have privately expressed concern that across-the-board student-debt forgiveness could benefit middle-to-upper-class professionals with advanced degrees, who tend to have large amounts of student debt. Those advisers have argued for a more tailored approach that would limit debt forgiveness to lower-income borrowers, according to people with knowledge of the administration’s deliberations."

That is why I doubt I’ll ever see much benefit from loan forgiveness. I don’t think anyone has sympathy for doctors who have $300,000 - $600,000 in debt, even those of us working in lower paid specialties!

I've definitely seen loans of those balances forgiven on the pslf fb group. But pslf is limited to gov't, state, non-profit employers.

Oh yes, I know pslf. I just meant if Biden does actually say everyone can have 50k forgiven or whatever, as the quote says above I bet there will be some kind of income limits or specification on employer or profession because it’s going to look bad if middle to upper middle class people are the ones who benefit a lot from loan forgiveness.

[Bad Dingo]

Apr 22, 2022 16:54:16 GMT -5 sakoro said:

Apr 22, 2022 12:52:55 GMT -5 Poeticxpassion said:

Yes! DH went to Motorcycle Mechanics Institute in Orlando. He racked up over $25,000 in student loans. He went through all that to work at a Harley Davidson dealership starting at $10.00 per hour and having to bring all your own tools! Tools cost thousands of dollars! The dealership ended up closing. He tried to go to another one- that one closed as well.

What does he do now? Take care of me. The lady who has $150,000 in students loans from her master's degree but can't work due to multiple sclerosis.

Student loans will follow us to the grave.

So sorry to hear that. And they wonder why more kids aren’t going into trades. Is this true for plumbers and electricians too?

Not if they are union apprenticeship programs. But many Republican states do their best to block unions.

[ellipses84]

Apr 27, 2022 5:46:31 GMT -5 wanderingback said:

Apr 26, 2022 21:32:48 GMT -5 gretchenindisguise said:

I've definitely seen loans of those balances forgiven on the pslf fb group. But pslf is limited to gov't, state, non-profit employers.

Oh yes, I know pslf. I just meant if Biden does actually say everyone can have 50k forgiven or whatever, as the quote says above I bet there will be some kind of income limits or specification on employer or profession because it’s going to look bad if middle to upper middle class people are the ones who benefit a lot from loan forgiveness.

There has been discussion in the PSLF realm about expanding the definition to job types not just Gov’t / non-profits since it doesn’t seem fair two people could work the exact same job for very similar pay which provides a public service and not get loans forgiven based on who issues their paycheck. There’s a lot of situations in the medical profession and schools where people are doing the exact same job as a direct hire in a non-profit facility but being paid by an outside for profit company.

I have sympathy for anyone who has student loans, especially if they are greater than their annual income after graduating from school. The high interest rates are a huge part of the problem. People shouldn’t be owing more than they borrowed 10 or 20 years later!

[wanderingback]

So is the pause going to be extended again?
Inflation is through the roof and Biden doesn’t seem to be doing great politically. Can’t see it being a good political move to end the pause next month right before elections in Nov and it seems half the stuff they do is for politics so for once can’t it benefit us!

I have little faith that people are going to get forgiveness. If it is it’s going to be $10,000 for a small amount of people. (I never thought I’d get any kind forgiveness due to my salary). I don’t think it’d be wise to announce a bot great forgiveness plan before the midterms either.

[Velar Fricative]

Jul 17, 2022 7:35:07 GMT -5 wanderingback said:

So is the pause going to be extended again?
Inflation is through the roof and Biden doesn’t seem to be doing great politically. Can’t see it being a good political move to end the pause next month right before elections in Nov and it seems half the stuff they do is for politics so for once can’t it benefit us!

I have little faith that people are going to get forgiveness. If it is it’s going to be $10,000 for a small amount of people. (I never thought I’d get any kind forgiveness due to my salary). I don’t think it’d be wise to announce a bot great forgiveness plan before the midterms either.

I’ve been thinking (hoping?) that the election timing would be advantageous enough for them to forgive for a lot of people with a wider range jobs and salaries, possibly more than $10k too. That’s a nice way to boost turnout among younger voters.

[gretchenindisguise]

Jul 17, 2022 7:35:07 GMT -5 wanderingback said:

So is the pause going to be extended again?
Inflation is through the roof and Biden doesn’t seem to be doing great politically. Can’t see it being a good political move to end the pause next month right before elections in Nov and it seems half the stuff they do is for politics so for once can’t it benefit us!

I have little faith that people are going to get forgiveness. If it is it’s going to be $10,000 for a small amount of people. (I never thought I’d get any kind forgiveness due to my salary). I don’t think it’d be wise to announce a bot great forgiveness plan before the midterms either.

I think the pause and the pslf waiver will be extended.

Not sure about forgiveness. I was hopeful for awhile but I am not any longer. There seems to be so much nonsene out there about who owns loans and not wanting to help higher earners, even though this higher earners are exactly who we need right now (doctors, nurses, mental health, teachers, etc). $10k seems like so little in the grand scheme of things, and for those pursuing pslf it'll do not a single iota since they are required to be on income driven plans so the loan balance doesn't weigh in.

[wildrice]

I have no idea, but I'm getting sick of the waiting. I am hoping there will be additional pause, especially with inflation being insane right now - I don't think a lot of people will be able to start repayment. But will they ever? I don't know if things will be drastically different for anyone 6 months from now or a year from now. If anything, they might be worse if we end up in a recession and people are getting laid off of jobs.

I am getting frustrated that this delay is meaning that interest rates are rising on refinancing with a private lender. But it also makes no sense to refinance to an interest bearing lender while loans are at 0% with the federal government. Can we just keep them at 0% or a low rate forever? Ultimately that would do far more for a lot of people than forgiving a negligible 10k. Though of course for really low earners who have low loan balances, 10k would be a godsend. So... I'm glad I don't have to make the final decision, but I wish someone would so we could move on.

ETA: Or best, it doesn't have to be an either/or - forgive 10k and help people who have low balances/income (and lop a bit off the top of the pile for those who have high balances/incomes), and lower interest rates for everyone who has a remaining balance. Make them like 1% if you have to, but enough already with the 7% rates.

[sent]

Jul 17, 2022 17:44:31 GMT -5 wildrice said:

Make them like 1% if you have to, but enough already with the 7% rates.

This right here makes me feel so old that I finished my education before the interest rates blew up. I want my younger peers to have this. 

I also think $10K for everyone would just be easier and be less administrative costs overall. My peers have $500K in student loans. $10K won't make any realistic dent for them and they will more than repay it through their taxes over the next 40 years. 

[jlt19]

There are now two proposals in Congress for 0% loan interest.
1. 0% interest with a 20% origination fee for Undergrad and 35% origination fee for Grad. AND your payment will be 10% of your AGI over 150% of the poverty line.
2. 0% interest for any SL refinancing, even privately refinanced into fed loans.

I’ll let you all decide which party brought up which proposal.

www.google.com/amp/s/www.forbes.com/sites/zackfriedman/2022/07/18/student-loan-cancellation-congress-proposes-0-interest-rates-for-student-loans/amp/

[wildrice]

Jul 18, 2022 22:01:48 GMT -5 jlt19 said:

There are now two proposals in Congress for 0% loan interest.
1. 0% interest with a 20% origination fee for Undergrad and 35% origination fee for Grad. AND your payment will be 10% of your AGI over 150% of the poverty line.
2. 0% interest for any SL refinancing, even privately refinanced into fed loans.

I’ll let you all decide which party brought up which proposal.

www.google.com/amp/s/www.forbes.com/sites/zackfriedman/2022/07/18/student-loan-cancellation-congress-proposes-0-interest-rates-for-student-loans/amp/

A 35% origination fee? Omg. At least that is transparent, I guess... My H's loans gained about 55% in interest while he was still in grad school, plus whatever origination fee he paid. Still I think we can do better than that, Rubio...

[gretchenindisguise]

Jul 18, 2022 22:01:48 GMT -5 jlt19 said:

There are now two proposals in Congress for 0% loan interest.
1. 0% interest with a 20% origination fee for Undergrad and 35% origination fee for Grad. AND your payment will be 10% of your AGI over 150% of the poverty line.
2. 0% interest for any SL refinancing, even privately refinanced into fed loans.

I’ll let you all decide which party brought up which proposal.

www.google.com/amp/s/www.forbes.com/sites/zackfriedman/2022/07/18/student-loan-cancellation-congress-proposes-0-interest-rates-for-student-loans/amp/

When a 20 or 35% origination fee is better than the current interest - that is infuriating.