Our entire premise for paying the loan off instead of spending all that time and energy to game the system was that student loan debt follows you everywhere, even through very legitimate bankruptcy.
Perhaps I’m reacting to old news but I thought student loan debt could not be forgiven. Was this premise false? For how long? Because the fact that anyone has the prospect of their loans being forgiven is news to me.
I guess any time the government starts making unilateral desicions that affect your long term strategy it irks me. Also, aren’t we (the US) incredibly in debt already? This is a huge amount, more than tons of other entire departments budgets. It’s over $100 billion! What’s going on here?
Guap, I think it’s important to remember that extraordinary relief is a result of extraordinary problems.
I don’t know when you went to college, but tuition costs have risen very quickly. Even faster than the health care costs that has everyone so worried. Meanwhile, graduates are finding it harder than ever to get a job, and salaries are stagnant. These problems are much more serious for today’s students than for those of us who went to school a decade or two ago. Is that justice?
Or look at it this way. Our student loans were federally guaranteed. Those of our parents and grandparents were not. We got something for free that they did not. Do we deserve their resentment for it?
I graduated in time to hit a very large recession and some of the worst unemployment scenarios our country had seen in years. Almost everyone I knew kept the same jobs they had in college in college, still serving Dunkin Donuts or Coffee only now they had student loan debt and had to move back in with their parents.
I am currently in a long term committed relationship with a woman that is taking part in an income based repayment plan for her student loans. She takes full responsibility for her choices and knows full well that, unless her income changes drastically (close to doubles) in the next several years (possible, but…) she is likely to be repaying those loans for up to 20+ years. For the record that will be until she is almost 50 years old. This is for a 4 year degree that was completed on time. And yes, she did work a job at or close to full time the entire time she was in school. These plans are not a walk in the park. Be glad you had the windfall that you and your wife did. Very few are that fortunate. You can also take comfort in the fact that you and your wife paid your loans back in full and don’t have the shame of not only being in debt for the entire prime of your life, but also of having the ability to take the moral high ground for having paid your dues, so to speak, in full.
My significant other fully realizes just how screwed she is now, but the same probably cannot be said for her when she was just signing up for school at 18 years old and the financial aid personnel at the fancy private school she went to told her “sure you can afford it”. Were you that wise at 18? If so consider yourself truly fortunate. Oh yeah, she also had about half of her 4 year degree paid for by scholarships. There are many others that went to the same school or many others that potentially owe much more.
And if you’re still feeling too jealous/rage-filled to even click that link to do some research about this “utter crock of shit” then here’s a quick rundown:
The income based repayment program went into effect in 2009
The income cap is defined as the point at which your payment on a 10 year repayment plan is greater than 15% (10% for those first borrowing after July 2014) of what the government defines as your “discretionary income”. Discretionary income is defined as income above 150% of the poverty level which you can find here. Spoiler alert, it is not much - $11,880 for a single individual x 1.5 = $17,820.
Loans are forgiven after 25 years (20 years for those first borrowing after July 2014)
Only federal loans are eligible
You must reapply for the program every year
Any amount forgiven after the 20/25 years is considered taxable income by the IRS. Better start saving now.
I’m not an expert in this, but those are the basic highlights that I can discern using my google-fu.
Furthermore, the income used to calculate the cap is based on the incomes of both the borrower and their spouse (if they are married) even if they file taxes individually. This means that if both of you combined earn more than the cap then you no longer meet the requirements. While my significant other and I may be able to handle this (mostly due to myself being debt free), it is a non-trivial part of the discussion we have regarding if/when to get married. For couples with even lower means than us this could be a deal breaker.
I have edited this post several times before clicking the Reply button to try to sound less angry. If I come across as a little bit pissed off, know that it’s not personal. The whole student loan situation in the US hits pretty close to home if you couldn’t tell.
Consider it this way:
Does it really benefit you at all, to have some other person in debt?
On some level, forgiving that debt could potentially improve their interactions with the economy, resulting in economic stimulus, which could actually benefit you. Certainly not a guarantee, but also not beyond the realm of possibility.
You were already responsible… That ship has sailed. But just wanting other folks to suffer like you did, out of some sense of fairness (or perhaps bitterness) may not actually benefit you in any tangible way.
I have edited this post several times before clicking the Reply button to try to sound less angry. If I come across as a little bit pissed off, know that it’s not personal. The whole student loan situation in the US hits pretty close to home if you couldn’t tell.
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Well said.
I don’t mean to denigrate anyone’s sacrifice in paying back their loans.
But when $80k in loans, some of them private that charge 8%+, gets you a (good, otherwise) job that pays $50k for 60-ish hours of work per week…having a spouse who makes decent money without that debt fucking anchor, and we’re well the fuck past any line drawn for any kind of debt relief…yeah.
I get why people are angry enough to vote for someone who’s going to go in and “drain the swamp.” Doesn’t excuse the complete lack of…I dunno, education? Curiosity? Basic fucking critical thinking?..that leads to President Merkin, but I get the anger.
The American middle class has been sold down the fucking river, and all we have to show for it are these t-shirts that say “hey, at least the working class is more fucked than we are!”
It’s way, way more complex than that, but yea. There’s are reasons we have to print something like 0.25 to 0.40 cents of every federal dollar spent, and at the same time why states are perennially bankrupt, and why infrastructure is falling apart, and why public schools are falling apart, and why everything related to public goods and services is declining, and health care costs are skyrocketing, but there are many and the understanding is complex.
I’m in the same boat as OP, though for various reasons I never got much of the benefits of my education financially.
I’ll just say this: I do not wish to screw people just because I had to pay back loans, that’s dumb and hypocritical. However, if we the taxpayer are investing in college more than we are now, there should be more efforts to make sure it’s good investment.
I don’t want to be paying off liberal arts degrees for marginal upper-class students from private unis.
Is there some sort of study out there that says more than fifty percent of this expected loan forgiveness comes from this group? Would you be okay paying for a non-liberal arts degrees from marginal upper-class students from private universities?
I’m just saying that I think things should be prioritized for highly qualified, lower income students going to public unis for more scientific degrees.
Lower costs, less risk, higher rewards and benefits to society.
I’m with Alstein on this point. If it’s public money subsidizing education in the form of low interest rate loans, then some sort of risk analysis should be performed to ensure we don’t get into this type of situation. In my state we have a program which provides some in-state tuition assistance. It started out as a merit-based program (high GPA, high ACT/SAT score) but quickly turned into something more akin to an entitlement (passed high school with a C average, minimum ACT/SAT score). I hear story after story of failed academic careers for, frankly, those who should not have been given the grant in the first place. I’d rather they provide a tiered system for university studies, community college, and trade schools. Help people, but make it a ‘success program’.
I wonder why they don’t do more to get the interest rates under control. I mean it was mentioned above a private loan’s rate was 8% that is crazy. A 100k loan @ 8% is gonna tack on 8k interest a year, that is B.S. And imagine if you can only pay 10k a year, your principle will take forever to hit zero.
Jesus Christ I am so lucky I went to UMass in the late 90s when it was still affordable. I graduated in 2001 with 30k in loan debt and had it paid off by the time I was 25. I did like $600 a month which was way more than my minimum payment, and at the time it felt like a lot.
If I want to send my kids to UMass when they’re 18 I need to be saving $1000 a month per kid, based on the projected costs.
Instead of making a contribution, I’ll just continue to be the guy who links and quotes giant sections of a Scott Alexander post: Against Tulip Subsidies
[quote]In America, aspiring doctors do four years of undergrad in whatever area they want (I did Philosophy), then four more years of medical school, for a total of eight years post-high school education. In Ireland, aspiring doctors go straight from high school to medical school and finish after five years.
…
There’s no evidence whatsoever that American doctors gain anything from those three extra years of undergrad. And why would they? Why is having a philosophy degree under my belt supposed to make me any better at medicine?
…
Americans take eight years to become doctors. Irishmen can do it in four, and achieve the same result. Each year of higher education at a good school – let’s say an Ivy, doctors don’t study at Podunk Community College – costs about $50,000. So American medical students are paying an extra $200,000 for…what?
…
I want to be able to say people have noticed the Irish/American discrepancy and are thinking hard about it. I can say that. Just not in the way I would like. Many of the elder doctors I talked to in Ireland wanted to switch to the American system. Not because they thought it would give them better doctors. Just because they said it was more fun working with medical students like myself who were older and a little wiser. The Irish medical students were just out of high school and hard to relate to – us foreigners were four years older than that and had one or another undergraduate subject under our belts. One of my attendings said that it was nice having me around because I’d studied Philosophy in college and that gave our team a touch of class. A touch of class!
This is why, despite my reservations about libertarianism, it’s not-libertarianism that really scares me. Whenever some people without skin in the game are allowed to make decisions for other people, you end up with a bunch of elderly doctors getting together, think “Yeah, things do seem a little classier around here if we make people who are not us pay $200,000, make it so,” and then there goes the money that should have housed all the homeless people in the country.
But more important, it also destroyed my last shred of hope that the current mania for requiring college degrees for everything had a good reason behind it.
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Higher education is in a bubble much like the old tulip bubble. In the past forty years, the price of college has dectupled (quadrupled when adjusting for inflation). It used to be easy to pay for college with a summer job; now it is impossible. At the same time, the unemployment rate of people without college degrees is twice that of people who have them. Things are clearly very bad and Senator Sanders is right to be concerned.
But, well, when we require doctors to get a college degree before they can go to medical school, we’re throwing out a mere $5 billion, barely enough to house all the homeless people in the country. But Senator Sanders admits that his plan would cost $70 billion per year. That’s about the size of the entire economy of Hawaii. It’s enough to give $2000 every year to every American in poverty.
At what point do we say “Actually, no, let’s not do that, and just let people hold basic jobs even if they don’t cough up a a hundred thousand dollars from somewhere to get a degree in Medieval History”?[/quote]
[quote]
If I were Sanders, I’d propose a different strategy. Make “college degree” a protected characteristic, like race and religion and sexuality. If you’re not allowed to ask a job candidate whether they’re gay, you’re not allowed to ask them whether they’re a college graduate or not. You can give them all sorts of examinations, you can ask them their high school grades and SAT scores, you can ask their work history, but if you ask them if they have a degree then that’s illegal class-based discrimination and you’re going to jail. I realize this is a blatant violation of my usual semi-libertarian principles, but at this point I don’t care.[/quote]
Is that actually true? I mean, I totally agree having non-medical undergrad as a requirement is insane, but I find it hard to believe that a significant chunk of medical school enrollment isn’t from in-state colleges - maybe not community college, but not Ivy fees either. We’re talking 80k-90k students a year.
Yeah, I would hope the median would-be doctor is paying less, it doesn’t seem like a fair figure. Of course, he’s not counting the opportunity cost of spending four more years in school (says the guy who spent 12 years in post-secondary…).
I came across this site, not sure how accurate the numbers are. But 30k in loans doesn’t seem that bad. The data seems entirely focused on state schools.
Seven in 10 seniors (68%) who graduated from public and nonprofit colleges in 2015 had student loan debt, with an average of $30,100 per borrower. This represents a 4% increase from the average debt of 2014 graduates.
So I would assume the people who have loans in excess of 30k the ones having the most difficulty in repaying? It would be interesting to see a breakdown of people unable to pay based on their chosen degree.
