Just cancel student debt already

[idahome]

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/

My heart stopped at the origination fee, but then I thought - at least it’s clearly stated?

But seriously, 0% interest is where it needs to go.

Also, just extend the pause already. I found out I’m moving from Great Lakes to Nelnet and I’m still waiting on communication from Nelnet. I do t see this going well at all.

[wildrice]

I guess I can see the argument against 0% interest - it does take resources to administer loans, so they probably need to cover that overhead somehow. If student loans operate at a loss for the government, that might incentivize them to be less liberal about letting people borrow (and thus preventing people who don't have money to go to college from being able to access it). HOWEVER there must be some way to cover overhead without charging the current criminally high rates. Mortgage and other loan servicers somehow figure it out. The federal government should not be making a profit on student loans.

[gretchenindisguise]

Jul 19, 2022 10:23:19 GMT -5 wildrice said:

I guess I can see the argument against 0% interest - it does take resources to administer loans, so they probably need to cover that overhead somehow. If student loans operate at a loss for the government, that might incentivize them to be less liberal about letting people borrow (and thus preventing people who don't have money to go to college from being able to access it). HOWEVER there must be some way to cover overhead without charging the current criminally high rates. Mortgage and other loan servicers somehow figure it out. The federal government should not be making a profit on student loans.

I haven't dug into this myself, but someone I trust was telling me that part of the college prices going bananas was linked to parent plus loans coming online - since parents could borrow incredible amounts, they could charge incredible amounts. I'm sure the correlation is there and one could argue that holding back on the amounts you're able to lend would force colleges to decrease tuition to more reasonable rates. Of course that's a process and those in the middle of the shifting would be most impacted.

[bimbi284]

www.nbcnews.com/politics/politics-news/student-loan-servicers-told-not-contact-borrowers-payment-pause-deadli-rcna39964

“The Education Department has been telling loan servicers not to reach out to borrowers as recently as “the last couple weeks,” said Scott Buchanan, the executive director of the Student Loan Servicing Alliance, which represents all of the companies that service the federal loans subject to the administration’s moratorium.”

[NewOrleans]

for the love. Cancellllllllllll itttttt

[pumpkin]

Jul 26, 2022 19:22:54 GMT -5 bimbi284 said:

www.nbcnews.com/politics/politics-news/student-loan-servicers-told-not-contact-borrowers-payment-pause-deadli-rcna39964

“The Education Department has been telling loan servicers not to reach out to borrowers as recently as “the last couple weeks,” said Scott Buchanan, the executive director of the Student Loan Servicing Alliance, which represents all of the companies that service the federal loans subject to the administration’s moratorium.”

This is interesting because my loans are currently with FedLoans and I’ve gotten 3 letters about when payments will restart - you know, while I wait for someone to waive the magic forgiveness wand.

[bimbi284]

Jul 26, 2022 19:31:57 GMT -5 pumpkin said:

Jul 26, 2022 19:22:54 GMT -5 bimbi284 said:

www.nbcnews.com/politics/politics-news/student-loan-servicers-told-not-contact-borrowers-payment-pause-deadli-rcna39964

“The Education Department has been telling loan servicers not to reach out to borrowers as recently as “the last couple weeks,” said Scott Buchanan, the executive director of the Student Loan Servicing Alliance, which represents all of the companies that service the federal loans subject to the administration’s moratorium.”

This is interesting because my loans are currently with FedLoans and I’ve gotten 3 letters about when payments will restart - you know, while I wait for someone to waive the magic forgiveness wand.

Yeah I’ve gotten the letters also, but I am also being transferred to MOHELA for PSLF, so we’ll see how all that plays out.

[wanderingback]

Ok seriously, what is going on with student loans?!

I'm guessing some small type of forgiveness might be announced, so they're waiting to fine tune those details?
I know I likely won't qualify for any forgiveness so it better not be ok you either qualify for forgiveness or you have to start repaying in October or something like that. They better extend the pause until 2023!

It seems like a risky move politically too, since I highly doubt it's going to be total forgiveness for all, just extend the pause until after the midterms.

[gretchenindisguise]

I’d like it extended until Feb 1st.

After midterms is holiday season and those last until January. The application of the waiver and the transition from fedloan to mohela has been such a shitshow, they need time.

[wanderingback]

More and more rumors about the 10k cancellation coming out this week for borrowers who make up to $125,000. I never expected to get any forgiveness, but I’m wondering if this is a good political move? I know Biden has forgiven a lot with the pslf reform and the for profit cancellation, but still, forgiving loans like this has been a big platform and it seems like 10k is not going to go over well for a lot of people.

The pause also better be extended till next year.

[msmerymac]

Aug 23, 2022 11:32:07 GMT -5 wanderingback said:

More and more rumors about the 10k cancellation coming out this week for borrowers who make up to $125,000. I never expected to get any forgiveness, but I’m wondering if this is a good political move? I know Biden has forgiven a lot with the pslf reform and the for profit cancellation, but still, forgiving loans like this has been a big platform and it seems like 10k is not going to go over well for a lot of people.

The pause also better be extended till next year.

There have been rumors about spot forgiveness, essentially, for things like PELL grant recipients or those in certain industries as well. Plus Schumer and Warren continue to meet with Biden to hopefully push him in a better direction. And I can't imagine he won't extend the pause until 12/31. 


www.cnn.com/2022/08/22/politics/student-loan-white-house/index.html

[gretchenindisguise]

Aug 23, 2022 11:32:07 GMT -5 wanderingback said:

More and more rumors about the 10k cancellation coming out this week for borrowers who make up to $125,000. I never expected to get any forgiveness, but I’m wondering if this is a good political move? I know Biden has forgiven a lot with the pslf reform and the for profit cancellation, but still, forgiving loans like this has been a big platform and it seems like 10k is not going to go over well for a lot of people.

The pause also better be extended till next year.

I agree, but there are a lot more loan holders $10k and under than I realized. An older article stated that $10k forgiveness would wipe out loans for 1/3 of borrowers and would cut total debt by at least half for another 20 percent. 

It's still not my favorite proposal, but at this point they really just need to do something. He's been saying we would hear something "in the next couple of weeks" since April ffs.

[lo]

I make less than 125k (hello, teacher here), so I wonder if it will be based on my income or combined with H’s.

[bimbi284]

Apparently Biden will be announcing something tomorrow twitter.com/i/events/1562124610639785985?s=21&t=TrQR8KWT1iAUDWQPEgEZ_w

[Jalapeñomel]

Aug 23, 2022 13:09:16 GMT -5 lo said:

I make less than 125k (hello, teacher here), so I wonder if it will be based on my income or combined with H’s.

I hope it would be individual! Lots of teachers make bupkis but combined with their spouse’s income, they make enough to push them over $125k combined.

[BlondeSpiders]

Jul 26, 2022 19:31:57 GMT -5 pumpkin said:

Jul 26, 2022 19:22:54 GMT -5 bimbi284 said:

www.nbcnews.com/politics/politics-news/student-loan-servicers-told-not-contact-borrowers-payment-pause-deadli-rcna39964

“The Education Department has been telling loan servicers not to reach out to borrowers as recently as “the last couple weeks,” said Scott Buchanan, the executive director of the Student Loan Servicing Alliance, which represents all of the companies that service the federal loans subject to the administration’s moratorium.”

This is interesting because my loans are currently with FedLoans and I’ve gotten 3 letters about when payments will restart - you know, while I wait for someone to waive the magic forgiveness wand.

This is where I am. Because I took a summer course (3 credits short by graduation!) my loans were deferred another year. By the time I was scheduled to start paying, repayments were paused.

I graduated in June of 2019, and I have not made a single SL payment. I keep hoping part will be cancelled by the time repayments start. It's only about 30K, but every little bit helps.

[wanderingback]

Aug 23, 2022 12:33:24 GMT -5 gretchenindisguise said:

Aug 23, 2022 11:32:07 GMT -5 wanderingback said:

More and more rumors about the 10k cancellation coming out this week for borrowers who make up to $125,000. I never expected to get any forgiveness, but I’m wondering if this is a good political move? I know Biden has forgiven a lot with the pslf reform and the for profit cancellation, but still, forgiving loans like this has been a big platform and it seems like 10k is not going to go over well for a lot of people.

The pause also better be extended till next year.

I agree, but there are a lot more loan holders $10k and under than I realized. An older article stated that $10k forgiveness would wipe out loans for 1/3 of borrowers and would cut total debt by at least half for another 20 percent. 

It's still not my favorite proposal, but at this point they really just need to do something. He's been saying we would hear something "in the next couple of weeks" since April ffs.

That’s great. I know 10k forgiveness will be super helpful to many many people.

I wonder what the break down is on under graduate vs graduate/professional school loans? Hopefully there are no stipulations on that, as I’ve also heard mentions of forgiveness being only for undergraduate loans.

It’s nice to hear that 1/3 of all student loan borrowers have balances less than 10k since you hear all the time about the crazy expense that school is these days.

[gretchenindisguise]

Aug 23, 2022 13:09:16 GMT -5 lo said:

I make less than 125k (hello, teacher here), so I wonder if it will be based on my income or combined with H’s.

Earlier versions that have floated were $150/single and $300/married, so I would expect this proposal to be the same but obviously lower. So maybe $125/single and $250/married? We shall see.

[wanderingback]

I would also like to see that break down by race. I’m pretty sure the average debt for Black people is a lot higher than for white people due to structural racism.

[Susie]

I think we're going miss out yet again.  H and I both borrowed six figures for law school in the early 2000s.  H is well under a $125k threshold, and in a PSLF-eligible government role, but due to particulars largely related to my income, he wasn't a good candidate for PSLF.  We didn't foresee the rules changing, so we refinanced his loans to private to save on interest.

Now he might be a better candidate due to changes in eligibility, but he has no federal loans.  Plenty of private ones.

I work in private sector, so I've never been PSLF eligible.  But I do have federal loans!

I have mostly accepted that we'll be paying back every dime ourselves, and I'm usually ok with it, but I do get frustrated with all the changes.  I'm not so much envious as just frustrated at my own inability to foresee the changes to make good decisions for our financial circumstances.  At 15-16 years post-graduation we have around $70k left from the original $260k, and I look forward to it someday just being over.  It's hard to imagine.  It's been a defining feature of my entire adult life.

[jlt19]

Aug 23, 2022 12:33:24 GMT -5 gretchenindisguise said:

Aug 23, 2022 11:32:07 GMT -5 wanderingback said:

More and more rumors about the 10k cancellation coming out this week for borrowers who make up to $125,000. I never expected to get any forgiveness, but I’m wondering if this is a good political move? I know Biden has forgiven a lot with the pslf reform and the for profit cancellation, but still, forgiving loans like this has been a big platform and it seems like 10k is not going to go over well for a lot of people.

The pause also better be extended till next year.

I agree, but there are a lot more loan holders $10k and under than I realized. An older article stated that $10k forgiveness would wipe out loans for 1/3 of borrowers and would cut total debt by at least half for another 20 percent. 

It's still not my favorite proposal, but at this point they really just need to do something. He's been saying we would hear something "in the next couple of weeks" since April ffs.

Half of borrowers until next Spring + grace periods end. Trust me, this will knock out 1/3 of what I owe and I’ll be happy as hell about it. But there has GOT to be some sort of reform or we’re just kicking the can to end up in the same exact spot we are now.

I am honestly perplexed how interest rates haven’t been more of a focus the last 2 years.

[wildrice]

Aug 23, 2022 16:33:50 GMT -5 wanderingback said:

I would also like to see that break down by race. I’m pretty sure the average debt for Black people is a lot higher than for white people due to structural racism.

Bingo. Although the disparity doesn't appear to be as far apart as I would have expected www.bankrate.com/loans/student-loans/student-loan-debt-statistics-by-race/

Even so, if the average Black student is leaving college with 44k in debt, that is a major barrier to being able to get ahead, especially compounded with all the other effects of structural racism.

Eta: I didn't see the other article when I googled, but 25k is a big disparity for sure and honestly more in line with what I would have guessed.

[gretchenindisguise]

Aug 23, 2022 16:33:50 GMT -5 wanderingback said:

I would also like to see that break down by race. I’m pretty sure the average debt for Black people is a lot higher than for white people due to structural racism.

Oh it is a lot higher. educationdata.org/student-loan-debt-by-race

[wanderingback]

Aug 23, 2022 17:13:28 GMT -5 Susie said:

I think we're going miss out yet again.  H and I both borrowed six figures for law school in the early 2000s.  H is well under a $125k threshold, and in a PSLF-eligible government role, but due to particulars largely related to my income, he wasn't a good candidate for PSLF.  We didn't foresee the rules changing, so we refinanced his loans to private to save on interest.

Now he might be a better candidate due to changes in eligibility, but he has no federal loans.  Plenty of private ones.

I work in private sector, so I've never been PSLF eligible.  But I do have federal loans!

I have mostly accepted that we'll be paying back every dime ourselves, and I'm usually ok with it, but I do get frustrated with all the changes.  I'm not so much envious as just frustrated at my own inability to foresee the changes to make good decisions for our financial circumstances.  At 15-16 years post-graduation we have around $70k left from the original $260k, and I look forward to it someday just being over.  It's hard to imagine.  It's been a defining feature of my entire adult life.

I’m sure it’s not super helpful, but to me having 70k left is impressive and great progress! I thought federal loans were discharged/forgiven after 25 years? So at least you only have 10 more years to go. But yes sucks that things keep changing.

The interest accrual is so brutal for me. It seems like I haven’t made a dent in my $350,000+ and feels like I never will. I’ve just made peace that this will be a bill for the next 25 years (questionable if I’ll qualify for pslf since I do a lot of per diem work).

[wildrice]

Aug 23, 2022 17:21:07 GMT -5 jlt19 said:

Aug 23, 2022 12:33:24 GMT -5 gretchenindisguise said:

I agree, but there are a lot more loan holders $10k and under than I realized. An older article stated that $10k forgiveness would wipe out loans for 1/3 of borrowers and would cut total debt by at least half for another 20 percent. 

It's still not my favorite proposal, but at this point they really just need to do something. He's been saying we would hear something "in the next couple of weeks" since April ffs.

Half of borrowers until next Spring + grace periods end. Trust me, this will knock out 1/3 of what I owe and I’ll be happy as hell about it. But there has GOT to be some sort of reform or we’re just kicking the can to end up in the same exact spot we are now.

I am honestly perplexed how interest rates haven’t been more of a focus the last 2 years.

I agree. For higher balance borrowers especially, the interest rates are just criminal. My H's loans are going to be collecting almost 7k in interest per year. That makes paying them off seem impossible.

I am not happy with 10k but I guess it is better than nothing. If the pause goes until the end of the year my H's loans would be down 22k from where they were in January, which is about 20%. We will probably move them to a private lender after that.

[Susie]

Aug 23, 2022 17:25:01 GMT -5 wanderingback said:

Aug 23, 2022 17:13:28 GMT -5 Susie said:

I think we're going miss out yet again.  H and I both borrowed six figures for law school in the early 2000s.  H is well under a $125k threshold, and in a PSLF-eligible government role, but due to particulars largely related to my income, he wasn't a good candidate for PSLF.  We didn't foresee the rules changing, so we refinanced his loans to private to save on interest.

Now he might be a better candidate due to changes in eligibility, but he has no federal loans.  Plenty of private ones.

I work in private sector, so I've never been PSLF eligible.  But I do have federal loans!

I have mostly accepted that we'll be paying back every dime ourselves, and I'm usually ok with it, but I do get frustrated with all the changes.  I'm not so much envious as just frustrated at my own inability to foresee the changes to make good decisions for our financial circumstances.  At 15-16 years post-graduation we have around $70k left from the original $260k, and I look forward to it someday just being over.  It's hard to imagine.  It's been a defining feature of my entire adult life.

I’m sure it’s not super helpful, but to me having 70k left is impressive and great progress! I thought federal loans were discharged/forgiven after 25 years? So at least you only have 10 more years to go. But yes sucks that things keep changing.

The interest accrual is so brutal for me. It seems like I haven’t made a dent in my $350,000+ and feels like I never will. I’ve just made peace that this will be a bill for the next 25 years (questionable if I’ll qualify for pslf since I do a lot of per diem work).

You may very well be right.  I have 3 remaining federal loans, with 64, 64, and 66 payments remaining, respectively, which would mean payoff in Dec 2027 x2, and Feb 2028.  I graduated in May 2007, so Dec 2027 is exactly 20 years from when repayment would have begun.  No idea why only one of them has 2 extra payments, maybe I deferred just that one at one point.  It has all moved around between servicers and so much time has passed that I don't remember.

[ellipses84]

I’m very curious to see what the terms will be. I was lucky to benefit from PSLF forgiveness for the majority of my loans since they were in my mom’s name and she’s an educator. However, I have a few thousand left in my name and it dawned on me recently that they may need to be consolidated to qualify for any forgiveness. They are FFEL loans which didn’t qualify for the payment pause under the cares act and I’ve been paying on them the whole time. I really should have looked into this sooner so I could have benefited from that too, but the were such a drop in the bucket compared to the rest. Fingers crossed for everyone!

[hermione]

Aug 23, 2022 17:13:28 GMT -5 Susie said:

I think we're going miss out yet again.  H and I both borrowed six figures for law school in the early 2000s.  H is well under a $125k threshold, and in a PSLF-eligible government role, but due to particulars largely related to my income, he wasn't a good candidate for PSLF.  We didn't foresee the rules changing, so we refinanced his loans to private to save on interest.

Now he might be a better candidate due to changes in eligibility, but he has no federal loans.  Plenty of private ones.

I work in private sector, so I've never been PSLF eligible.  But I do have federal loans!

I have mostly accepted that we'll be paying back every dime ourselves, and I'm usually ok with it, but I do get frustrated with all the changes.  I'm not so much envious as just frustrated at my own inability to foresee the changes to make good decisions for our financial circumstances.  At 15-16 years post-graduation we have around $70k left from the original $260k, and I look forward to it someday just being over.  It's hard to imagine.  It's been a defining feature of my entire adult life.

You clearly know more about your situation than I do but shouldn't he be able to move his loans back to the feds? That's what I was told to do - and once that was complete they evaluated my payments that I made while loans were private.

[Susie]

Aug 24, 2022 8:35:56 GMT -5 hermione said:

Aug 23, 2022 17:13:28 GMT -5 Susie said:

I think we're going miss out yet again.  H and I both borrowed six figures for law school in the early 2000s.  H is well under a $125k threshold, and in a PSLF-eligible government role, but due to particulars largely related to my income, he wasn't a good candidate for PSLF.  We didn't foresee the rules changing, so we refinanced his loans to private to save on interest.

Now he might be a better candidate due to changes in eligibility, but he has no federal loans.  Plenty of private ones.

I work in private sector, so I've never been PSLF eligible.  But I do have federal loans!

I have mostly accepted that we'll be paying back every dime ourselves, and I'm usually ok with it, but I do get frustrated with all the changes.  I'm not so much envious as just frustrated at my own inability to foresee the changes to make good decisions for our financial circumstances.  At 15-16 years post-graduation we have around $70k left from the original $260k, and I look forward to it someday just being over.  It's hard to imagine.  It's been a defining feature of my entire adult life.

You clearly know more about your situation than I do but shouldn't he be able to move his loans back to the feds? That's what I was told to do - and once that was complete they evaluated my payments that I made while loans were private.

I haven't found a path, although it's possible one exists that I haven't found yet.  

H graduated law school in 2006.  As of August 2012, when I created a spreadsheet to track and really buckle down on SL repayment for both of us, he had:

Fed Direct Stafford loan serviced by Mohela, $2,492.22
Fed Direct Stafford loan serviced by Mohela, $2,455.08
Fed Direct Stafford loan serviced by Mohela, $1,198.02
Fed Direct Stafford loan serviced by Mohela, $2,492.22
Fed consolidation loan serviced by Nelnet, $53,149.70

Plus a large sum in various private loans.

The four Stafford loans were paid in full in 2015.  By June 2020, the $53k consolidation loan was paid down to $36,282.49.  With no hope of PSLF in sight at the time, we refinanced the $36k + a $3k private loan into a single private loan with Earnest to save on interest and cut down on loan servicers/accounts.  In retrospect it sounds dumb, but sincerely, we had no way to know then that mixing his fed and his private loans into one private loan would be a major problem later.
 
FF to 2022, and he has spent 14 years in PSLF eligible roles.  But now he has all private loans, and one of them contains a mix of the previously federal consolidation $36k + $3k private, and IDK if or how I can now disentangle it and get back to fed loans.  (I say "I," I guess I mean "he," but I handle all of our finances.)  The whole thing is so frustrating.

[hermione]

Aug 24, 2022 9:27:58 GMT -5 Susie said:

Aug 24, 2022 8:35:56 GMT -5 hermione said:

You clearly know more about your situation than I do but shouldn't he be able to move his loans back to the feds? That's what I was told to do - and once that was complete they evaluated my payments that I made while loans were private.

I haven't found a path, although it's possible one exists that I haven't found yet.  

H graduated law school in 2006.  As of August 2012, when I created a spreadsheet to track and really buckle down on SL repayment for both of us, he had:

Fed Direct Stafford loan serviced by Mohela, $2,492.22
Fed Direct Stafford loan serviced by Mohela, $2,455.08
Fed Direct Stafford loan serviced by Mohela, $1,198.02
Fed Direct Stafford loan serviced by Mohela, $2,492.22
Fed consolidation loan serviced by Nelnet, $53,149.70

Plus a large sum in various private loans.

The four Stafford loans were paid in full in 2015.  By June 2020, the $53k consolidation loan was paid down to $36,282.49.  With no hope of PSLF in sight at the time, we refinanced the $36k + a $3k private loan into a single private loan with Earnest to save on interest and cut down on loan servicers/accounts.  In retrospect it sounds dumb, but sincerely, we had no way to know then that mixing his fed and his private loans into one private loan would be a major problem later.
 
FF to 2022, and he has spent 14 years in PSLF eligible roles.  But now he has all private loans, and one of them contains a mix of the previously federal consolidation $36k + $3k private, and IDK if or how I can now disentangle it and get back to fed loans.  (I say "I," I guess I mean "he," but I handle all of our finances.)  The whole thing is so frustrating.

Everything student loan related is SO complicated. I hope today's news will somehow help all of us.