Am I the only one nervously/anxiously watching the student loan forgiveness topic?

[anitag1]

Just wondering if I'm the only one here watching this ever so closely, and what everyone's thoughts are on the subject, since I would imagine most of us here are debtors.

I can't stop constantly checking for news. I owe around $10,000. I went to college in the 90's/early 00's with my last distribution being in 2003. I went to community college to transfer, but they had put me in all the non-transfer classes so I had to pretty much do everything over (and pay for it, of course). While I was nearing the end, I went ahead and started taking some classes at a 4 year university. Problem was, I wasn't smart enough to pass a couple of the classes. I took one of them over and over, and even got a tutor. After the 5th time (and all that $$) I had to just accept that there was no was I was going to graduate, so I made that my last semester. So here I am with the remaining debt.

Most of the time I have been on forbearance because I couldn't make the payments (I was on whatever the general payback plan was). I would call the servicer and they would just kick it down the road. Every time I asked about options, that was all they would give. If I paid anything like the small amount I had, it would mess up the forbearance. I only in recent years found out (on the internet, not from my servicer or any ombudsman) about the whole Income-Based Repayment and switched over to that, so I am a loooong way from the maximum number of years. I also never knew student loans were available for anything more than books/tuition. Glad I didn't know that or I'd probably be further in debt!

When I finish my Ch 13 payments in July, the student loan will be waiting there again for me. I need so much medical stuff done that I'm going to be choosing between student loan and that all over again. I feel like I made the right decision to stop throwing more money at going to college when it was unlikely I would be able to pass a couple of classes (and then the harder ones after those two - they were math and science classes, both for a "normal" stable occupation). But I've been berated over and over for "making poor decisions". True - college was a choice that I made. I tried, and straight up could not succeed. Not everyone is built for college and I wish I had know that before I got so far. They sit you down, give you this plan - how much you'll make and how easy it will be to pay off the loan. When you're 18, it all sounds so reasonable. I'm certainly not sporting a degree, making a ton of money while buying a bunch of luxury items like the masses seem to thing everyone who supports some sort of forgiveness is doing.

I don't know what the answer is to the student loan issue. Just wiping away everything doesn't help future folks, so that needs to somehow be addressed - and I'm glad I'm not a policymaker to decide what and how. Anyway, thanks for listening to my rant. I'm on the edge of my seat as to what is going to happen. My luck they'll make it dischargeable in BK but I won't qualify, lol.

[flashoflight]

Yep, I'm watching the student loan situation as well. My SO will be trying the permanent disability route since we have never trusted Biden to actually follow through with promises. I've heard of some silly talk like people who went to Harvard and other elite universities shouldn't get forgiveness. Like what does the eliteness of the school have to do with student loan debt??? Even at the first $50k forgiven for everybody, it would leave a balance of $13k. Although $13k is manageable for us, we would rather not pay it at all.

[justbroke]

Unless and until there's an actual vote in Congress, I see this as nothing more than political fodder. I like to see my leaders actually do something, and not just talk about doing something. So, on that note, we shall see. It's just that I'm not waiting for it and I still have over $50K left in student loans. I too don't think it should be need-based or based on where one attended college.

It could be either a blanket forgiveness or a targeted program, such as they have today. I like the IDR/IBR and other incentives for those that choose careers in public service. Maybe extend those programs a bit more so that if you're on IDR for 10-years, it's then forgiven. Maybe even make it so that if the loan was always paid on time, but was otherwise in forbearance or "in-school" status, and 20 years elapses, the amount is also summarily forgiven. I guess It'd call that "effort based reduction" (EBR) in the loan amount.

On a lighter note, so glad I didn't go to ITT Technical Institute. At least they are dealing with those individuals. I always saw the commercials and thought about attending that school.

[shipo]

LOL, then there are those of us who did some community college and then bailed on the entire process. What little I spent on college back in the 1970s was paid for from my job as a janitor in a grocery store making a whopping $3.9125 per hour (don't ask me why I remember that hourly rate so precisely, until a moment ago I hadn't thought of that number since 1977 or so).

[bcohen]

I do not believe that student loan forgiveness by executive order is a good idea, and it is likely unconstitutional for the President to even attempt such a thing. I also do not believe that blanket forgiveness of X amount of dollars per borrower--supposedly in the name of "racial equity"--is a good idea. What is a good idea would be to allow student loans to be discharged in bankruptcy, subject to some reasonable waiting period after graduation or withdrawal from the educational institution.

In other words, for the first n number of years after graduation or withdrawal, student loans should be extremely difficult to discharge, because otherwise people could graduate, file for bankruptcy, discharge their student loan debt, and then accept a high-paying job. However, after n number of years, student loan debt should be treated as any other unsecured debt, because anyone who is poor enough to need bankruptcy by this point is unlikely to ever be able to repay their student loan debt.

It is an interesting question what the value of n should be. I think 7 years is a reasonable waiting period to balance the need to prevent abusive filings against the need to give relief to those who are truly drowning in insurmountable student loan debt.

[justbroke]

bcohen that's similar to my idea that the student should at least attempt to make a payment during 10 years following the loan(s). Even if they're in an IBR or some other forbearance (non-payment) status, I think the 10 year "try" is a good bar. After the 10 years, the debt would be subject to discharge or simple outright forgiveness through a government program. The former would simplify bankruptcies, and the latter would allow the student to simply ask the Department of Education for forgiveness after a reasonable period of attempted payback.

[Carmella]

I have mixed feelings on the student loan forgiveness and think it's probably not good economics for the country. But whatever happens will happen it's not up to any of us. I have read recently that a large forgiveness would probably not go through because of the legal end of how the loans were set up (I don't understand all that/can't explain details) However they think that there might be a chance of $10,000 going through by president executive order that could possibly skirt the legal issues. It if it does happen it will help every day people for sure. My daughter hasn't paid on her loan in a year now. She has just under $8,000 left. She paid off a lot of it in a short time (she only had about $21,000 prior to interest), but quit paying after the pandemic started and it was not required. I would hate to rush and get it paid off and then find out i could have had $10,000 paid forgiven.

I do agree there should be some type of forgiveness at some point.

My bigger beef is the student loan system and the cost of college and the cost of college recruiting causing young people to take on more debt than they understand completely. I feel like it's like the old advertisements of toys to kids on Saturday morning cartoons---that was shot down because it was manipulating children. I feel that the college process and picking a school that "feels good" and being recruited through gimmicks and advertising should go by the wayside. There has to be so much wasted money that could be used for the university or for their upkeep/salaries, etc instead of recruitment efforts.

I will tell anyone unless your major demands a certain university--go to community college and get the basic classes/research to make sure they will transfer to a university and save money/prevent too much future debt!

[justbroke]

I will tell anyone unless your major demands a certain university--go to community college and get the basic classes/research to make sure they will transfer to a university and save money/prevent too much future debt!

Let me just highlight that for those in the back.

[shipo]

The community college thing pays huge dividends for many, and did so for both of our kids.

For our son, he participated in one of the JUCOs with a great football program, and had he stayed in it, would probably have ended up playing football for a reasonably major university. Instead he decided he wanted to "do something" with his life sooner than later; near the end of his freshman year I took him down to the Navy recruiting office, had him take the ASVAB and then enlist in the Navy via their deferred entry program. That single year of college was kinda-sorta taken into account when he asked for a rating of "AD" (Aviation Machinist's Mate) and was able to get what I'll call a provisional acceptance into that program. In the end his experience in college, including the time on the football team, gave him an easy confidence which allowed him to rise to the rate of AD2 (Petty Officer Second Class, basically the same rank as a Sargent in the other services) in just three years; practically unheard of.

For our daughter, she did two fully years in community college (in Boston), got an Associates Degree, moved on to UMass Boston, and will graduate with her Bachelors Degree in a few weeks. The cool thing about the Massachusetts system is, if you graduate from one of their JUCOs, then you get to attend any of the UMass schools for just a small premium over the JUCO rate. Better still for our daughter, she's been accepted into a Masters program at UMass Boston, and they're going to cover all of her tuition in exchange for her working as a TA and teaching classes.

I think my wife and I are out only about $30,000 of tuition combined for all five years of college our kids have attended, so neither has (or will have) any debt from their college years.

[Carmella]

That's great shipo !

Our local community college now has a program to take courses with the intent to transfer to the university so you can make sure the credits will transfer. It's a shame there was such a negative stereotype of community colleges when my daughter was in high school

[justbroke]

The cool thing about the Massachusetts system is, if you graduate from one of their JUCOs, then you get to attend any of the UMass schools for just a small premium over the JUCO rate.

This works the same way between the Florida College System (FCS) and Florida University System (FUS). A student is guaranteed admittance into one of the FCS/FUS schools, if the student graduates from an FCS college. There are also "pathway" programs that guarantee admission between certain junior colleges (2-year schools) and a specific FUS school. For example, Valencia College in Orlando has a pathways program with University of Central Florida (UCF).

Florida tells students to consider a 2+2 program and spend 2 years at an FCS college and then attend the FUS university of their choice. This is especially true if you take an AA, rather than an AS, in the junior college. By taking the AA you take all of Florida's so-called "Gorden Rules" courses up front (history, composition, sciences, economics, mathematics, etc) while in the junior college. Then you take your actual major's requirements at the university in your junior and senior years. It's the most inexpensive way to go.

If living at home you could do 4 years for about $14K! That's $3,918 a year in the FCS (college). It's about $6,000 a year in the FUS (university). This is for in-state tuition for residents only.

I know of a student that went to a Florida state junior college, received an AS, and then went to USF. He graduated from USF (University of South Florida). He paid $0 total to attend school over 6 years. He did it on the Pell Grant and $0 spent out of pocket by living at home.

There are also full-ride scholarships under the Bright Scholars program for high school students which puts more $$$ in the student's pocket.

[joshuagraham]

It's like making a guess on how long it will take for enough Warren-esque folks get elected to Congress to get the debt jubilee done. I certainly would pay off the student debt as slowly as possible so as to increase the chance of getting the jubilee.

That said, as someone who had the ability to go to Boutique U but instead went to State U, and ended up with NO student debt, I would be outraged at folks getting a general jubilee. I would not have a problem with having another BK Chapter implemented that covered student debt, just so long as it would be robust enough so that someone who had hustled to pay back his debt wouldn't feel like he got cheated by doing so. At the very minimum, it should be a combination of Chapter 7's zeroing out and Chapter 13's long "give us all the disposable income you have" process, probably for a 10, not a 5 year period. Anyone in student debt distress would welcome the relief for debt that is given without any credit-risk analysis and has always been considered non-dischargeable.