So first, read this news story about a new report from the GAO:
So now why I’m mad. When my wife and I got married, she had just inherited $X amount from her Dad, who had just died, tragically young at 60. He was was able to give her this as a truck driver because he scrimped and saved and sacrificed. I was actually incredibly impressed he was frugal enough to save up this much. It was his legacy to her, and her sister used it for down payment on a house.
What did we use it for? We paid off $X amount in student loans that were federally backed and charging from 4-8% interest. We sacrificed any spending on anything, even new clothes, something fun, anything. We spent none of this money, none. And now it’s gone, and she is debt free.
And what did we get by taking personal responsibility and being fiscally responsible? Now they are talking about forgiving loans.
We changed the entire direction of our lives and spent her inheritance to pay back those loans and do the right thing. Where is the Justice? Where is my money?
I am furious, and I hope I’m not alone. If I ever meet someone whose giant loan was forgiven I feel like punching them in the face. Why is their loan forgiven and my wife’s inheritance destroyed? What the hell is this? What about all of us who repaid our loans?
You’re goddamn kidding me, right? Right? Fuck that shit. I came from nothing and work and worked and worked to get what I have. I got zero money from my parents. I also had loans I repaid. Explain to me the fairness here. Please.
I hear you, Guap. My wife and I have been doing the same. Extremely tight budget for the past 10 years - we each had $100k in student loan debt. $2500 monthly payments for the past 120 months. December will be our final payment. I’m so financially traumatized by it that I get severe guilt and regret if I spend $40 on myself. I want to get a PS4 but know that it will just be a guilt box. Yes, we made the decision to go to grad school and incur that debt, but damn if it wasn’t unclear at the time what the repercussions of that would be. Worst decision I’ve ever made. We’ve been flat broke several times over the past 10 years and even had to move in with my parents twice because we couldn’t afford our expenses. In a sense, I’ve gotten over it and just want it to freaking go away (yay December) but the experience has drastically changed both of us as people. What a messed up education system we have.
Yes, totally agree Clay. The extremely high cost and terrible ROI for education is another, very important subject. My wife also regrets her degrees (especially her post-grad degree) and talks all time how the education system ripped her off and it was the worst decision of her life. This comes out anytime money is discussed. In suspect millions of graduates are like this.
Buuuuut? She did take the classes and agree to the fees. Perhaps kids now will be much more wary and schools will be forced to drop prices due to demand. Or perhaps not.
The real problem is: We already paid back out loans. Is our money coming? If not, instantly lose respect for anyone who’s debt is forgiven. It’s criminal.
Yeah it pisses me off also. I worked 50 hour weeks (3 separate jobs) while going to college for 4 years and still kept a 3.2 GPA, just to keep my loans when I graduated below 50k (in 2003). I worked my ass off. Then I worked non-stop for 3 more years (I was lucky to find a good job) after college putting every spare penny I earned into paying that 50k off.
So over the course of 7 years I paid just about 85k out of my pocket. Parent chipped in about 10k over the 4 years, mostly for food and clothes. There was no loan forgiveness then and there never should be, you are an adult when you turn 18, these people signed legal papers, they should have understood the responsibility they were taking on.
Don’t be angry at them. Jealous? Sure. If you want to be angry, look back to Reagan and the decisions he made to slash Federal education grants in lieu of loans. There are tons of articles about this. Here’s one.
We have two kids. For me, the repercussions are that I simply don’t think that a run of the mill undergraduate degree and/or advanced degree is important in a lot of fields. If you are smart, can actually build/produce things (even digital things like websites, games, etc), creative, and organized, you’ll be fine without the degree. I’ll make damn sure, however, that my kids have some work experience before hopping from high school to college so that they (hopefully) have a better perspective on why it’s important to pick your major carefully and to study hard. As a parent, there’s no freaking way I’m going to shell out for two kids to go through undergrad if they just screw around and skip class the whole time. I won’t let them pick up loans to do that, either.
My Dad was very clear about helping me with college. If I picked a marketable major like finance, business, engineering, or computers, he’d help me. I chose Geology against his wishes so he didn’t. My senior year I wised up and frantically changed majors and took double course load to complete an MIS degree in time. I kind of agree with that view, more now than ever.
It limits what you can study in college, for sure. But I think wasting time on degrees is in the past. Kids have to be pragmatic now.
If you got screwed by the universities, the banks, and the government, that doesn’t mean you should want other people also to be screwed. How can you possibly lose respect for people whose loans are forgiven? Are you saying you’d have rejected loan forgiveness if it had been offered to you?
Income based repayment is based in a 20 year repayment schedule, and even though the loan is forgiven at the end 20 years, its actually taxable at the end. It is based upon your income though, and can vary based upon your marriage and children.
If you work for a non profit or the government, you are in luck though, because then you only need to keep paying for 10 years.
Here is a fun fact, with income based repayment, everytime you get a raise or a better job, your payments go up, so you kind of screwed. You can forgot about the PS4, since that is unaffordable for many graduates, even at the best of times.
Oh, and keep in mind, the medium income for millennials right now is about 21k a year. Those are the kids with the student debts you seem so jealous of.
Part of the issue is how society has basically made a degree a requirement, where now it’s effectively a tax you pay just to be able to potentially get a decent job, but there is no guarantee. Having recently gone through the job search it was noticeably different from ten years ago. Despite having over 20 years of experience at well known companies I still ran into situations where not having a degree was enough to not get past HR. Many companies ask about your degree as part of online application form and seemingly blackhole your resume if you don’t have a degree. It doesn’t matter so much as what it’s in, as long as you have one.
It would certainly be nice if they could give a big honking tax credit or something to people that paid theirs off. But if you had been in a position to benefit from this when you’d just finished school would you have been jumping for joy or yelling, “Hell no, that’s not fair to the people that paid theirs off”?
This is the same issue, in reverse, as pension “reform”; ie, giving the old people who contributed to the system less than they were promised. What good is a pension if the state can’t afford to pay it? To the reverse, what good is a loan if the loanee cannot repay it?
This isn’t straight loan forgiveness, people are still paying a percentage of income each month in the IBR (15% of discretionary income) and PAYE (10%) plans into their forties. Killing these plans now either puts a lot of people in the situation of choosing between loans and rent or giving up, trashing their credit and paying $0, which is a lot less than 10%.
