Student Loan Forgiveness

[skimomma]

I am about as liberal as they come and I completely understand that a lot of student loans are the result of predatory lending practices and/or shady for-profit schools that don't deliver what they promise.  I get how difficult it is too crawl out from under mountains of debt taken on before one even has a decent income.  I have a college student so I am in the soup.  

But something bugs me about this and I just can't shake it.  I completely see the point for people who were truly taken advantage of.  But it seems super unfair to me that everyone would get their debt erased, essentially punishing the people that *did* pay off their loans.

As you can guess I am one of those people.  Dh and I graduated with the maximum amount of unsubsidized student debt.  At that time, it seemed like a staggering amount.  It made me sick to even think about the number.  (this is going to sound very bootstrappy, do forgive me)  We decided the best course of action was to continue to live like college students and devote all of our extra income to paying off the loans.  We continued to drive our ancient cars, did not vacation, lived in a cheap apartment furnished with hand-me-down furniture, delayed starting a family, etc..... and paid them all off within two years.  Then started to live like proper working adults.  I know many MANY people who make far more than we do that are still paying on their student loans (25+ years later) but have plenty of discretionary cash to spend on non-essentials.  It bugs me that they might get to walk away from their debt.

And it also bugs me that dd limited her college choices based on what she/we could afford to minimize student debt while watching some of her friends go to their dream schools, taking on unfathomable amounts of debt, that might just be erased.

I would love to understand this better and feel less resentful about it.  

[catz]

I totally get this.  We WAY reigned in my own son's college choices based on affordability.  We live conservatively for our income level.  My own college choices were reigned in by cost.  My husband lived in his parent's home and worked his way through an undergrad and did a professional grad degree program.  

I am not necessarily opposed to some cancellations.  Some meaningful cancellations have already been carried out.  BUT what does it mean for people taking out loans right now?  I feel like it is such a poor precedent to set while people are making college decisions based on the current system.  It feels like putting a bandaid on a broken leg.  I know families who are taking huge financial risks at close to retirement age so their student can attend a college based on some arbitrary ranking system that seems most tightly coupled with the wealth enrolled.  

I'd much rather see systemic reform and prioritize much more affordable options laid out for families, stop prioritizing funding for wealthy privates that are primiarly serving the wealth, and funding for professionals we need in society - teachers, doctors, nurses, public defenders, social workers, etc etc etc.  But given that those in decision making roles are most benefitted by the current system, I doubt anything will happen.

Edited March 30, 2022 by catz

[fairfarmhand]

1 minute ago, catz said:

I totally get this.  We WAY reigned in my own son's college choices based on affordability.  We live conservatively for our income level.  My own college choices were reigned in by debt.  My husband lived in his parent's home and worked his way through an undergrad and did a professional grad degree program.  

I am not necessarily opposed to some cancellations.  Some meaningful cancellations have already been carried out.  BUT what does it mean for people taking out loans right now?  I feel like it is such a poor precedent to set while people are making college decisions based on the current system.  It feels like putting a bandaid on a broken leg.  I know families who are taking huge financial risks at close to retirement age so their student can attend a college based on some arbitrary ranking system that seems most tightly coupled with the wealth enrolled.  

I'd much rather see systemic reform and prioritize much more affordable options laid out for families, stop prioritizing funding for wealthy privates that are primiarly serving the wealth, and funding for professionals we need in society - teachers, doctors, nurses, public defenders, social workers, etc etc etc.  But given that those in decision making roles are most benefitted by the current system, I doubt anything will happen.

This.

It seems that loan cancellations would simply be a treating a symptom of  the greater problems in education

Edited March 30, 2022 by fairfarmhand

[gardenmom5]

7 minutes ago, skimomma said:

I am about as liberal as they come and I completely understand that a lot of student loans are the result of predatory lending practices and/or shady for-profit schools that don't deliver what they promise.  I get how difficult it is too crawl out from under mountains of debt taken on before one even has a decent income.  I have a college student so I am in the soup.  

But something bugs me about this and I just can't shake it.  I completely see the point for people who were truly taken advantage of.  But it seems super unfair to me that everyone would get their debt erased, essentially punishing the people that *did* pay off their loans.

 

I'm married to a finance guy, have a dsil who is a finance guy, and a son who is an accountant.  Things have rubbed off.

SOMEONE is going to be paying those debts - the debt doesn't just disappear. Those pushing for student loan forgiveness won't address that.  

 It also ticks me off as three of my kids have paid off all of their student debt.  (incl. 2dd's doctoral program.) We were not in a position to be much help - so they had to do things on their own.   Two have grad degrees - 2dd had less in loans than many of her peers.  She also lived a much more austere life as a student.  1ds . . Just graduated, starts a job next week - and at least his starting salary is higher than he owes in student loans. He's the only one who owes money because he *just* finished.  (He didn't go to his preferred school - to which he was admitted - because it would have been $40K + per year for a BS.)

[teachermom2834]

Do we really think there is any chance of this happening? And what I do see is numbers like $10,000. That amount is not going to be the game changer in someone milking the system and living large and having it forgiven.

I don't think it is fair to forgive student loans. I think what is fair is reform. Lower interest rates, bankruptcy protections, etc. I think schools should have some skin in the game. I think the amount of free and easy student loan money is what fed the monster and made college costs get so out of control. All that free money flowing in disrupted a normal market.  I think there is alot of room for reform in the system. There is too much money lent with no qualification on ability to pay and the schools just stand to benefit with no consequences for not delivering a quality product. 

But straight up loan forgiveness doesn't make sense to me even as a progressive policy. My two oldest kids chose out of state colleges and took federal student loans (both came in under the limit but they each took some every year), These loans allowed them to choose schools they couldn't otherwise afford that led to better opportunities for them and more enjoyable college experiences. They lived away from home. At times they took jobs or internships that didn't pay as well as other possible jobs but were career builders. They graduated and got jobs in their desired fields. They can afford the monthly payments on these loans. It will hurt one more than the other but it is doable. Most kids in our community do not attend college or attend the not great community college and never get a four year degree. The idea that these other kids should have any part as tax payers in repaying the loans of my two young adults is anything but progressive. 

Reform? Absolutely. People in bad student loan situations are not always (sure there are some shady people) lazy stupid freeloaders. Crimes commited at 18 can be crawled out from under easier than a loan signed for. But blanket forgiveness doesn't make sense either. 

Edited March 30, 2022 by teachermom2834

[Arcadia]

As I understand it currently, the loan forgiveness was a carrot for the elections. There is a recent loan forgiveness for people who were preyed on either by the colleges (e.g. https://studentaid.gov/announcements-events/corinthian, https://studentaid.gov/announcements-events/borrower-defense-update) or by the loan company. 
I know people who are staunch supporters of the current party who would purposely vote an “anger” vote if all student loans are forgiven.  Regardless how liberal my friends may be, they already feel taxed to death with little to show for, from the potholes in the roads/freeway to access to state universities. 

[frogger]

I think it creates terrible incentives. 

Reforming the system to be more manageable makes more sense. 

[Pawz4me]

I agree, @skimomma. We're among the very fortunate who were able to cover our kids' college costs. But OMG, wouldn't I like having all that money in our retirement funds instead? Of course.

I think I could totally get behind cancelling student loan interest.  But not the principal.

[Katy]

I’m actually fine with forgiving a fairly large amount but I think it’s pointless unless more is done to reign in rising costs. 

[elegantlion]

5 minutes ago, Pawz4me said:

I agree, @skimomma. We're among the very fortunate who were able to cover our kids' college costs. But OMG, wouldn't I like having all that money in our retirement funds instead? Of course.

I think I could totally get behind cancelling student loan interest.  But not the principal.

I of a mixed mind on this issue, but agree on the bolded as one option. This interest pause has been really nice even though I'm still in school. 

I think real reform needs to have an incentive for people who did not attend college. For instance, forgive 10k of federal student loans for those that have them and offer 10k of educational credit to those who did not attend. They could only use it for themselves, not stack multiple for one family member. Obviously it probably wouldn't pay for a Bachelor's but it might pay for an associates or certificate. If people have already paid off their student loans then they could use the credit for further higher ed. I have no idea how it all might work. 

I think we need a more educated populace (stares at my community). If people had money to take a class here or there, even if they didn't want a degree, it could be a positive. 

 

[Bambam]

23 minutes ago, gardenmom5 said:

SOMEONE is going to be paying those debts - the debt doesn't just disappear. Those pushing for student loan forgiveness won't address that.  

 

This. This isn't imaginary money. It must come from somewhere. 

I'm a very practical person, always have been. If you are going after a degree that doesn't earn much money, borrowing to get that is NOT a good investment. Just don't. Find another way - cheaper school, different degree, live at home vs school, take longer, whatever.  Loans for a college degree are an investment in the future.  If that future won't at least fund a basic standard of living + repayment, you don't do it. You wouldn't buy a house you couldn't afford, but you would find one you could afford. 

[1234]

I’m kind of for them paying off student debt for those who have been paying 20-25 or more years. I know many who are still paying and it’s not because they’ve been burning through their money. My cousin is still paying 20+ years later but five years after graduating she had a baby and they almost lost him. Lots of NICU time and the hospital bills were outrageous. My sister is still paying 20+ years later but she’s never been married, no kids, very little traveling (and that’s just to see family), and never owned a home. Both of them are elementary school teachers and I think they just get paid so little it’s been difficult. 

I say that as someone who paid off my loans, dh’s loans, and just recently paid off ds’ as a graduation gift. I don’t really have a problem with the government helping others with it even if we were able to do it ourselves. 

[Katy]

In the 1970’s and early 1980’s it was totally possible for a kid working 20 hours a week on minimum wage to pay for room, board, books, and in-state tuition at most public universities. These days that amount will rarely pay for community college, and it’s a direct result of pumping nearly unlimited amounts of money at colleges. That needs to be fixed. 

[Faith-manor]

Here is my issue. High school diplomas aren't worth the paper they are printed on according to employers. So business has made college or trade school the threshold for employment that pays living wages plus some hope of health care benefits. This forces the issue of entire generations being required to take on debt that can't be discharged in bankruptcy, and being enslaved to those payments for up to twenty years. Colleges, universities, and trade schools have been allowed to engage in predatory practices, out and out lies, etc. upping tuition and fees by 400-500% over increases in wages. This has essentially created a generation of people who will never own homes, never take vacations, buy new cars, buy furniture, save money, and will forever ration healthcare because they cane pay student loans and deductibles and the insane cost of living relative to wages in many areas, and is causing huge swaths of them to decide they cannot afford to marry or have children. This has massive negative effects on the economy, and for those drawing social security and Medicare be very very scared because they will draw out way more than they ever paid in and are dependent on a robust size generation of young folks to pay into that system and continue to bolster the economy for the benefit of retirees. But they can't, and without help, will not be participating at the level needed. I paid my student loans. I get it. It is annoying as hell. However, I also went to college at a time when a year of tuition was only 10% of my family's annual income, and their EFC was way less than that. With three in college at once, our EFC was 1/3 of our take him income, and the total costs to attend exceeded our annual income when taking into account dorms, mandatory meal plans, and books/supplies. We paid, and paid dearly from savings, emergency savings, and 401K withdrawals. Most families can't do that, and it would have been impossible to save all of that money just for college because wages did not keep pace with education inflation. What saved us were our kids scholarships which significantly reduced their bills and allowed them to only take out federal student loans. But schools have cut way back on merit aid causing many high achieving students to not even be able to get decent scholarships.

None of us have to like it, and it would be stupid to only address the symptom and not the root cause like for starters paying years and years of taxes in my state for "public universities" only for the legislature to lower the tax dollars those same institutions receive to less than 12% of their minimum needed operational budget. They take our money for the purpose of education, and then spend it on something else. That is one cause. Then we have to force the State Board of Education and the Federal Department of Education to do some SERIOUS regulating of public university finances. We all know that isn't going to happen, and we would have to fund more financial aid that is not loans or merit based, and I don't see that happening either. So Millenials and Gen Z, got screwed, and no one wants to do anything about it.

I think going forward the law needs to be that private student loan debt is like any debt and can be discharged in bankruptcy. This will end the predatory loan practices because banks won't be able to draw blood from a turnip if they loan to someone who may not be able to pay it back. If it was more like car loans and house loans, that would go a long way towards fixing the issue in the future because colleges will.have to do other things to make school affordable or they will won't come close to filling their classes and dorms because there will not be an avenue for raising rates all the time, and foisting that financial burden off to debt. I would imagine financial aid would get more robust, and merit scholarships would grow a whole lot bigger. Maybe some of the smugness of college financial aid offices announcing that the $550 grant on a $15,000 tuition bill is NOT a generous amount. Some of things that come out of the mouths of individuals working in college business offices just amazes me some tike, and not in a good way either!

[maize]

I like the idea of pairing debt forgiveness (reasonable amount) with an equivalent education credit for those without student debt that can be used at any school.

[frogger]

3 minutes ago, Faith-manor said:

 

I think going forward the law needs to be that private student loan debt is like any debt and can be discharged in bankruptcy. This will end the predatory loan practices because banks won't be able to draw blood from a turnip if they loan to someone who may not be able to pay it back. 

This would be a good start.

I also think personal finance classes in high school would also be helpful. I actually think they should be required. For someone pursuing a super rigorous HS curriculum, you could test out.  

[mommyoffive]

I agree OP.  And dh and I paid off our student loans and that is why I feel like that.  For the really gross and horrible loans, something like not wiping the debt, but the refi and give them a interest rate that isn't horrible. 

But yes things need to change in this 

[Faith-manor]

15 minutes ago, frogger said:

This would be a good start.

I also think personal finance classes in high school would also be helpful. I actually think they should be required. For someone pursuing a super rigorous HS curriculum, you could test out.  

I agree. And it shouldn't be personal finance taught by bankers who will slant it towards "being in debt to us is good for you" but true finance consultants who do not have a financial incentive to skew their advice. Instead, just solid teaching by experts without proselytizing for investors among the students, no teaching license required. Stick them in the classroom with the seniors. If necessary, a licensed individual can quietly observe in the back of the room. I think we need kids to hear from sources who help people financially for a living, and regular people not just the 2%, but with zero surfing for clientele.

[Bootsie]

8 minutes ago, Faith-manor said:

 

I think going forward the law needs to be that private student loan debt is like any debt and can be discharged in bankruptcy. This will end the predatory loan practices because banks won't be able to draw blood from a turnip if they loan to someone who may not be able to pay it back. If it was more like car loans and house loans, that would go a long way towards fixing the issue in the future because colleges will.have to do other things to make school affordable or they will won't come close to filling their classes and dorms because there will not be an avenue for raising rates all the time, and foisting that financial burden off to debt. I would imagine financial aid would get more robust, and merit scholarships would grow a whole lot bigger. Maybe some of the smugness of college financial aid offices announcing that the $550 grant on a $15,000 tuition bill is NOT a generous amount. Some of things that come out of the mouths of individuals working in college business offices just amazes me some tike, and not in a good way either!

From a lending/banking perspective, there is a basic problem with treating student loans like car loans and house loans.  If you do not pay back your car loan, the bank has the car as collateral.  If you do not pay your mortgage, the bank has the home as collateral.  The bank cannot hold the education as collateral.  If you look at other uncollateralized loans (like credit cards) you see a much higher interest rate in order to compensate for the lack of collateral.  The fact that student loan debt is not discharged in bankruptcy provides the lender with some form of assurance, short of collateral, for the lending.

As far as colleges charging less, if you really look at the numbers, how is that going to happen?  Suppose it costs the university on average $150,000 to employee a professor.  (The professor would be making far less than $100,000 salary because the university has employment taxes, benefits, etc. that have to be included in the costs the university covers.)  Suppose a professor teaches 200 students a semester (which is a heavy average load).  That works out to $150,000/400 students, or $375 per student.  And, if the student has 10 professors per year, that works out to $3750 per student.  That would be a university covering ONLY faculty costs, with a heavy teaching load, and paying PhDs less than $50 per hour.  It would not account for any professors who are working with masters, PhD students, or any other situations where a 400 student load per year is not practical.  Then you add in the computer staff, the facilities, the electric bill, the janitorial staff, the library staff, the databases, the research equipment, the compliance staff that must be hired.... And when I put pencil to paper the numbers just don't work to have highly qualified professors teaching in an environment to give time and attention to students, pay the janitorial staff, pay the electric bill, etc. while keeping tuition at a rate that many view as reasonable.  

[skimomma]

15 minutes ago, Faith-manor said:

Here is my issue. High school diplomas aren't worth the paper they are printed on according to employers. So business has made college or trade school the threshold for employment that pays living wages plus some hope of health care benefits.

 

I do see this.  Since I am in the soup, I am very aware of how much *more* college costs now than it did when I went.  Reform is something I support 100%, as well as limited debt forgiveness in cases where people were truly taken advantage of and changes to the bankruptcy laws.

But there is still a great deal of personal choice in play here.  I think some people are making unwise decisions about where/how they attend and *I* don't want to pay for that, especially after paying my own loans and limiting my own dd's choices in order to do the "responsible thing."  While college costs are grossly out of control there is still a wide spectrum of options that vary in cost by magnitudes.

I know that it is unlikely to happen anyway but it keeps getting carted out as some great thing our current administration can do.  It just rankles me every time and I am really surprised I don't hear more widespread grumbling about it.  I mean people freak out if someone uses food stamps to buy junk food.  I would expect more outrage.

Either way, it appears I am not the only one here who is bothered so maybe it is not as popular as it seemed.

 

 

[Bootsie]

10 minutes ago, Faith-manor said:

I agree. And it shouldn't be personal finance taught by bankers who will slant it towards "being in debt to us is good for you" but true finance consultants who do not have a financial incentive to skew their advice. Instead, just solid teaching by experts without proselytizing for investors among the students, no teaching license required. Stick them in the classroom with the seniors. If necessary, a licensed individual can quietly observe in the back of the room. I think we need kids to hear from sources who help people financially for a living, and regular people not just the 2%, but with zero surfing for clientele.

What specifically would you like to be taught in these classes?  I teach a financial planning course to non-business majors at the university level, and I am curious and always wanting to learn more about what people know/don't know, where the holes are, etc.  Are there particular skills or misperceptions that need to be addressed?

[teachermom2834]

As far as personal finance classes go, I had to counteract what my kids were taught in their homeschool (Dave Ramsey) personal finance classes. I, for one, do not think all debt is bad. I don't think all student loan debt is bad. There is a difference between $20,000 in student loans and $200,000 in student loans. I get so tired of people running down anyone who takes or allows their child to take a student loan. I'm not sure who I want teaching personal finance to my kids. 

My 23 yo has $20,000 in federal student loans. He is making more money than dh did ten years ago. He can pay off those student loans like they are nothing and he would not have his career if he had not taken those loans. So I am tired of people attempting to pound into my kids' heads that all student loans are bad. I wish people could use some common sense and nuance. But everything in our world seems so all or nothing. It's exhausting. 

 

 

 

[Arcadia]

6 minutes ago, skimomma said:

 

I know that it is unlikely to happen anyway but it keeps getting carted out as some great thing our current administration can do.  It just rankles me every time and I am really surprised I don't hear more widespread grumbling about it.  I mean people freak out if someone uses food stamps to buy junk food.  I would expect more outrage.

 

You likely won’t hear grumbling about it because people don’t want to be accused of being selfish and/or hard hearted. Also people are aware it is a vote buying tactic. 

I think people did not really freak out when food stamps are used for junk food. Even low income people need comfort food and who is to begrudge them buying things like instant noodles. The outcry here was for people using EBT to pay for gambling at casinos. 

[Carrie12345]

It took us a long time to pay off dh’s low (compared to costs these days) student loans. I don’t think people should have to choose between living hand to mouth or delaying families until their mid-30s just because *we lived though it.  By that argument, I should have drank through pregnancy and spanked my kids.

Student loans today are hindering lives and impacting the economy. (I know it’s hard to tease out specifics with how insane everything is right now due to everything else, but still.)

I 100% feel that gov’t funded institutions need to be reigned the you-know-what in, and I do think it’s a very good idea to provide some level of relief to those who have already been taken advantage of in a must-have-degree world.
I don’t believe that anyone is pushing to wipe out the full cost of a Harvard law degree, but no one should be juggling 6-figures for the “right” to get an elementary school teaching degree from a state school.

And I don’t want to argue about room and board. Some of us don’t live near state schools with lengthy lists of majors.

[Arcadia]

6 minutes ago, Carrie12345 said:

.
I don’t believe that anyone is pushing to wipe out the full cost of a Harvard law degree, but no one should be juggling 6-figures for the “right” to get an elementary school teaching degree from a state school.

Teachers have loan forgiveness programs at the Federal and State level. 

e.g. 4 Loan Forgiveness Programs for Teachers https://studentaid.gov/articles/teacher-loan-forgiveness-options/

”Public Service Loan Forgiveness (PSLF) Program 

Forgives the remaining balance on your Federal Direct Loans after 120 qualifying payments (estimated over 10 years).

• Unlike other programs, PSLF does not require you teach at a low-income public school but only requires that you work for qualifying employer. This includes government organizations at any level (U.S. federal, state, local, or tribal), not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or other not-for-profit organizations that provide certain types of qualifying public services.”

[ktgrok]

The thing is, many people HAVE paid of the original debt, but due to interest owe more than when they started! We pay and pay and it continues to grow. At some point, it is crazy to have people who took on six figures, and have paid that much off despite graduating in a recession, continue to pay and pay the rest of their lives. 

 

[catz]

18 minutes ago, teachermom2834 said:

As far as personal finance classes go, I had to counteract what my kids were taught in their homeschool (Dave Ramsey) personal finance classes. I, for one, do not think all debt is bad. I don't think all student loan debt is bad. There is a difference between $20,000 in student loans and $200,000 in student loans. I get so tired of people running down anyone who takes or allows their child to take a student loan. I'm not sure who I want teaching personal finance to my kids. 

My 23 yo has $20,000 in federal student loans. He is making more money than dh did ten years ago. He can pay off those student loans like they are nothing and he would not have his career if he had not taken those loans. So I am tired of people attempting to pound into my kids' heads that all student loans are bad. I wish people could use some common sense and nuance. But everything in our world seems so all or nothing. It's exhausting. 

Do people actually say this though (any loans are bad loans) regularly?   I've done a little college related advising and I always say think of student loans in terms of a car loan and not a home loan.  And less is generally better.   I do think parent plus loans are predatorial and dangerous.  And I also think cosigning in most cases is a bad idea.  I just haven't had this experience at all or heard this anywhere.  I think federal loan limits can be a good guideline.   I think parents taking out loans to finance college can be fine if they qualify and can comfortably afford the loan.  But if you can comfortably qualify, you can get a loan with good terms/interest rate.  

And I just want to reiterate, I am not opposed to some forgiveness.  But I'd rather see us funding public institutions and fixing FA calculators. No one's EFC should be over 10 or maybe 15% of take home IMO.  I also agree on bankruptcy, that would eliminate a lot of predatorial lending right there.  

Edited March 30, 2022 by catz

[teachermom2834]

2 minutes ago, Arcadia said:

Teachers have loan forgiveness programs at the Federal and State level. 

e.g. 4 Loan Forgiveness Programs for Teachers https://studentaid.gov/articles/teacher-loan-forgiveness-options/

”Public Service Loan Forgiveness (PSLF) Program 

Forgives the remaining balance on your Federal Direct Loans after 120 qualifying payments (estimated over 10 years).

• Unlike other programs, PSLF does not require you teach at a low-income public school but only requires that you work for qualifying employer. This includes government organizations at any level (U.S. federal, state, local, or tribal), not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or other not-for-profit organizations that provide certain types of qualifying public services.”

But this only applies to federal loans and many people have private loans. That's how you end up with teachers with these big loans that aren't forgiven. At least that was my understanding.

What is unfair is that there are plenty of public service jobs that qualify that aren't exactly low paying. 

[skimomma]

11 minutes ago, Carrie12345 said:

It took us a long time to pay off dh’s low (compared to costs these days) student loans. I don’t think people should have to choose between living hand to mouth or delaying families until their mid-30s just because *we lived though it.  By that argument, I should have drank through pregnancy and spanked my kids.

 

That's not really where I am going with this.  It is not a "walked barefoot in 10 feet of snow" thing.  It's more like taking two people that took out the same amount of loans and make the same salary (regardless of the amount of those loans) but one made (reasonable) choices in order to pay off their debt while the other didn't.  If that loan is forgiven, it is basically "punishing" the person that "did the right thing."  I know it is not always that simple.  And I 100% agree that it hurts everyone when entire generations are delaying everything from home ownership to starting families in order to service unreasonable debt.  Something needs to be done.  Probably lots of things, actually.  But it does really bother me to think of how very unfair blanket loan forgiveness could be to some people....and I happen to be one of them.

[Arcadia]

1 minute ago, teachermom2834 said:

But this only applies to federal loans and many people have private loans. That's how you end up with teachers with these big loans that aren't forgiven. At least that was my understanding.

What is unfair is that there are plenty of public service jobs that qualify that aren't exactly low paying. 

Where I am from, teacher education is free but all teachers are bonded to the government. So if they didn’t fulfill their bond, they pay back their “scholarship”.

[teachermom2834]

3 minutes ago, catz said:

Do people actually say this though (any loans are bad loans) regularly?   I've done a little college related advising and I always say think of student loans in terms of a car loan and not a home loan.  And less is generally better.   I do think parent plus loans are predatorial and dangerous.  And I also think cosigning in most cases is a bad idea.  I just haven't had this experience at all or heard this anywhere.  I think federal loan limits can be a good guideline.   I think parents taking out loans to finance college can be fine if they qualify and can comfortably afford the loan.  But if you can comfortably qualify, you can get a loan with good terms/interest rate.  

And I just want to reiterate, I am not opposed to some forgiveness.  But I'd rather see us funding public institutions and fixing FA calculators. No one's EFC should be over 10 or maybe 15% of take home IMO.  I also agree on bankruptcy, that would eliminate a lot of predatorial lending right there.  

Oh yes. All loans are bad bad bad in the circle I run in. 

I think the federal undergrad limits are pretty reasonable. They can hurt if you have a low-medium paying job but they aren't going to destroy you and there are built in protections. However, you can get in trouble with federal grad school loans that don't have the same limits and Parent Plus loans. But the undergrad federal loans are reasonable. Of course it is better if you can do without but they can really be a step up if used well.

 

[ktgrok]

1 hour ago, Katy said:

I’m actually fine with forgiving a fairly large amount but I think it’s pointless unless more is done to reign in rising costs. 

It isn't pointless to the people struggling to pay them. 

1 hour ago, Bambam said:

This. This isn't imaginary money. It must come from somewhere. 

I'm a very practical person, always have been. If you are going after a degree that doesn't earn much money, borrowing to get that is NOT a good investment. Just don't. 

Well, again, in many cases the money was paid back, but with the interest and the predatory practices that pushed unsound deferrments, etc the amount grew so much that they still owe just as much as when they started. Besides, an educated populace is an investment that benefits our society. 

And many,many,many students were lied to regarding the ability to pay off their loans. (but I get that that is more about the predatory schools/banks...that's what we are dealing with now. One that lied, pressured young students, pressured aging/senile relatives to cosign, continues to find new reasons they needed more money well beyond what the student signed up for, with no way to transfer the credits so it was sunk cost, plus then predatory management practices)

[livetoread]

I don't know how bankruptcy would work. How would lenders judge who is likely to not pay it back and who is? Seems to me that anyone who is not from wealthy parents would be judged more of a risk and charged higher interest or just denied. The fact that the lenders know they will get their money is why so many can take out loans now. And if it's gov't loans we're talking about, there is a real incentive to take a bunch of money out, discharge it in bankruptcy, and be okay again in seven years, right about the time many college graduates might be looking for a home.

[skimomma]

22 minutes ago, Arcadia said:

I think people did not really freak out when food stamps are used for junk food. Even low income people need comfort food and who is to begrudge them buying things like instant noodles. The outcry here was for people using EBT to pay for gambling at casinos. 

I *have* heard plenty of grumbling, even while standing in line at the store within earshot of the recipient, about using "my taxpayer money" to buy Twinkies.  Twinkies are still food and it really is no one's business.  As simple as that is to grasp, it just surprises me that there is not more outrage about student debt forgiveness when the nuances are so much more complicated than Twinkie = food.

[Amethyst]

I agree with much that has been said here…real reform is needed, predatory practices, etc. I would just like to caution some of you that say “well, I paid off my loans, so…” This kind of thinking is not helpful. I get it, from an emotional point of view. Totally. Been there.
 

But because we had to suffer, doesn’t mean we have to allow the next generation to suffer. “Back in my day, residents had to work 48 hours straight in the hospital, and let me tell you, it separated the men from the boys!” That’s an awful way to think! We can do better for the next generation. And if that means talk of loan forgiveness (which I don’t think will happen) to get the conversation started, then great! Let’s not begrudge our own children some help from the government. I’d much rather the government give loan forgiveness to students than free money to corporations like GE and General Motors. 

[Mrs Tiggywinkle]

16 minutes ago, ktgrok said:

The thing is, many people HAVE paid of the original debt, but due to interest owe more than when they started! We pay and pay and it continues to grow. At some point, it is crazy to have people who took on six figures, and have paid that much off despite graduating in a recession, continue to pay and pay the rest of their lives. 

 

This is me. I have some from my graduate school since I did take out most of my master’s degree in loans and some from my undergraduate and a graduate year that was highly recommended at the time but now ill advised.  The interest even on my federal loans has caused me to pay everything from 2006 and before and yet I still owe.

What I don’t really get is that for federal loans, there is an abundance of income based repayment programs with forgiveness after 20 years, 10 if you work for the government or a non profit.  I know public schools teachers who pay $0 a month because their incomes are so low and the rest will be forgiven after 10 years of payments. I know that program had a lot of problems but it sounds like the government has made strides to fix that.  I think the current income based program is reasonable.  
I don’t think the government can forgive private loans, and that’s where most of the people I know got into trouble. I still owe $30,000 in private loans and I graduated in 2004.  I was in a situation where on paper my parents had a lot of assets so I got no financial aid after my first year, but they didn’t have free money to help me with college.  I am heavily in debt. The private loans I will pay off; the federal loans are on a REPAYE plan and will probably be forgiven after a while.   
 

I think the current programs are reasonable.  I’d be more in favor of making them easier and more accessible combined with reducing or eliminating interest.

[skimomma]

7 minutes ago, Amethyst said:

I agree with much that has been said here…real reform is needed, predatory practices, etc. I would just like to caution some of you that say “well, I paid off my loans, so…” This kind of thinking is not helpful. I get it, from an emotional point of view. Totally. Been there.

I fear that was my bad in describing some of my own feelings.  And while I *do* have feelings like that, because I am human, I also have feelings about the students here and now, like my dd, that are either not going to school at all or who are making college choices they would not normally choose because they don't want to service insane amount of debt.  It seems very unfair that those people are being compromised by attempting to be "fiscally responsible" while others could be rewarded for not.

[ktgrok]

6 minutes ago, skimomma said:

I fear that was my bad in describing some of my own feelings.  And while I *do* have feelings like that, because I am human, I also have feelings about the students here and now, like my dd, that are either not going to school at all or who are making college choices they would not normally choose because they don't want to service insane amount of debt.  It seems very unfair that those people are being compromised by attempting to be "fiscally responsible" while others could be rewarded for not.

The same people in favor of student loan forgiveness are the ones in favor of tuition free or debt free college. 

And trust me, if DH can get loan forgiveness (working on that now, as his are through the program that was in the news and his college was shut down for predatory practices - he should qualify), it won't feel like a reward to have already paid out over 6 figures. 

[Arcadia]

16 minutes ago, Amethyst said:

I agree with much that has been said here…real reform is needed, predatory practices, etc. I would just like to caution some of you that say “well, I paid off my loans, so…” This kind of thinking is not helpful. I get it, from an emotional point of view. Totally. Been there.

I think it is blanket loan forgiveness that people aren’t in favor of. My uncle in Asia is an undischarged bankrupt. He has no incentive to be financially responsible. Also blanket loan forgiveness just feeds the problem by swaying people who may be debt wary being willing to go into debt.

[skimomma]

6 minutes ago, ktgrok said:

The same people in favor of student loan forgiveness are the ones in favor of tuition free or debt free college. 

And trust me, if DH can get loan forgiveness (working on that now, as his are through the program that was in the news and his college was shut down for predatory practices - he should qualify), it won't feel like a reward to have already paid out over 6 figures. 

I am very much in favor of tuition/debt free college!

I would not consider anything about your dh's loans to be fair.  Especially since he paid six figures and someone who did not bother to make a single payment could also get forgiven.  It's not equitable across the table and that is what bothers me about blanket loan forgiveness.  There is no distinction between irresponsible choices and people who have genuinely been screwed over.

[ktgrok]

8 minutes ago, Arcadia said:

I think it is blanket loan forgiveness that people aren’t in favor of. My uncle in Asia is an undischarged bankrupt. He has no incentive to be financially responsible. Also blanket loan forgiveness just feeds the problem by swaying people who may be debt wary being willing to go into debt.

Again, the people who want loan forgiveness are also usually in favor of debt free college in general - so not encouraging people to take on more debt. Making it possible to get a degree without debt. 

[ktgrok]

1 minute ago, skimomma said:

I am very much in favor of tuition/debt free college!

I would not consider anything about your dh's loans to be fair.  Especially since he paid six figures and someone who did not bother to make a single payment could also get forgiven.  It's not equitable across the table and that is what bothers me about blanket loan forgiveness.  There is no distinction between irresponsible choices and people who have genuinely been screwed over.

Well, I can tell you I'd be more than happy for those folks to get their loans forgiven if it means he gets his forgiven. It isn't like out of spite we'd rather he not be able to get out from under this, just so others don't take advantage. It's like anything else, if you want to help those that need it, you will end up helping some that don't. But that's better than being so dead set on not helping the "unworthy" that you screw over those who do need it. 

[Faith-manor]

2 minutes ago, Arcadia said:

You likely won’t hear grumbling about it because people don’t want to be accused of being selfish and/or hard hearted. Also people are aware it is a vote buying tactic. 

I think people did not really freak out when food stamps are used for junk food. Even low income people need comfort food and who is to begrudge them buying things like instant noodles. The outcry here was for people using EBT to pay for gambling at casinos. 

Agreed. And truly, nothing is going to be done. They will kick the can down the road until many aspects of the economy come to a grinding halt because two generations are living into their forties in two bedroom apartments with three roommates eating ramen noodles, and then everyone gets really angry when social security and Medicare have to be cut - well, technically if corporations didn't have loopholes the size of planets to drive through in order to avoid paying taxes this would not need to occur. The system is a mess.

What baffles me is the "other people make bad choices, I shouldn't have to pay for them" mindset unless these same folks are also advocating for ending: publicly funded stop smoking, stop drugging, stop gambling, stop drinking programs, or medicaid/medicare coverage for lung cancer in smokers, liver disease in alcoholics, prenatal and obstetrics care for anyone viewed as not making good choices usually religiously biased perceptions though certainly when it comes to sex, basic common sense does not always come into play, healthcare for those who are incarcerated, all manner of public good works that eventually benefit people those who "didn't make good choices".

Part of living in a civilized nation is that we try to spread the pain of bad choices around for the public good because in the end, we pay for them in some way. We could just go feudal, make a laundry list of bad choices, and toss people to the curb financially, look the other way. That was the norm for many societies for thousands of years. We could do this. But the same set of voters who never want to pay for anything, was the same set who voted pro-corporation, pro " everything that benefits me in the here and now, yet screws over future generations" including NOT wanting to pay for robust K-12 public education which is how we started down this path to begin with, and demand that their social security and Medicare NOT get touched when in reality they are the biggest welfare generation ever, and many of them, including my parents, did not make good financial decisions at all.

Now that said, I don't see a huge amount of good coming from treating the symptom but not purging the causes. There might be short term gain from the standpoint that a few million people might begin participating in the economy in the traditional way that the last 60 years of economic growth and stability was based upon, but it will likely be short lived.

So ya. I get it. I paid mine. My husband paid his, my sons will pay theres or we will pay it form them by remaining in the workforce to supplement 401K income by working part time or having a side business. I totally understand the emotions of it.

I sit here with two aging mothers who are "welfare queens" because they will draw ungodly amounts of money out of social security and medicare, community centers for the aging public dollars, you name it, and the wonder if people who claim "They made bad choices so I shouldn't have to pay" are also going to advocate for elders ONLY getting out what they paid in plus reasonable interest, or being denied healthcare treatment for bad choices, or EMS doesn't respond to the bar brawl and leaves people bleeding out because bad choices, let the drug addict die, don't respond to that 911 call.

But don't worry. Nothing significant is going to happen UNTIL the system is bust. There will be lots of bobble head talks about it while pandering for votes. However, nothing substantiative will change. In about 20 years there will be a financial coming to Jesus moment over this, and it will be a train wreck of epic proportions. Gen Z will by in large not own homes, not buy stuff besides the cell phone and clothes required for work, will not have kids, will not get ahead in any appreciable way, will not have the resources to take care of elders and social security will be BEYOND bust, and they will have degrees that might be quite valuable to other countries with low birthrates who need workers. That brain drain has already begun. And many didn't make bad choices but were taken advantage of by a very corrupt system while hearing endless messages from parents, grandparents, businessmen, bankers, you name it that they have to go to a good school in order to get a good job, and that it is a character failure to not attend the very best ranked school the student can gain admission to while never acknowledging that the whole reason they are being set up for failure is the train wreck of public k-12 and the endless ridiculous reasons employers give for not paying living wages.

As for professors who make $150,000 a year? Nope.  Maybe at Ivy leagues of which there aren't that many, maybe at the top 100 colleges out of the 3000ish colleges we have in this country. The average salary for a full time faculty member was $104,000, Associate professors $81,000, Lecturers $56,000, and less than that for adjuncts (figures from 2018), and 46-55% of public university faculty were part time lecturers and adjuncts with no benefits earning less than $60,000 a year. The issue is not faculty salaries, it is ridiculous administrative salaries, perks, and overhead. The sheer number of administrators with a bevy of administrative assistants is staggering, and then there is the whole sports thing which is, well, epic. When my brother in law was a vice president of a small, college he made five times what the highest paid faculty member received. Brother in law had a master's degree. Faculty had PhD's. His administrative assistant made twice the average of full time faculty. She had an associate degree from community college.

Lots and lots of reform and regulation is required to fix the problems, and none of it is going to happen until a massive, unbelievable crisis ensues. Just like climate change. So long as the 1-2% are making money off the train barreling towards the cliff, and politicians retain power by maintaining the status quo, nothing is going to change. All we can do is the best we can do for our own kids and hope they make it.

[Amethyst]

29 minutes ago, skimomma said:

I fear that was my bad in describing some of my own feelings.  And while I *do* have feelings like that, because I am human, I also have feelings about the students here and now, like my dd, that are either not going to school at all or who are making college choices they would not normally choose because they don't want to service insane amount of debt.  

It sounds to me that your dd has learned an important lesson about being financially responsible. But I do understand the emotion. 

[Amethyst]

34 minutes ago, Mrs Tiggywinkle said:

 

What I don’t really get is that for federal loans, there is an abundance of income based repayment programs with forgiveness after 20 years, 10 if you work for the government or a non profit.  I know public schools teachers who pay $0 a month because their incomes are so low and the rest will be forgiven after 10 years of payments. I know that program had a lot of problems but it sounds like the government has made strides to fix that.  

In my house, we call this programs being “an indentured servant”. 

[Meriwether]

I don't have time to read the other responses right now, but I have concerns. If we forgive college debts, those degree holders still have a marketable degree. When that cost is absorbed by society, it will be partially paid in one way or another by people who did not go to college.

We are firmly in the donut hole for college expenses. We are hoping to get the kids through with little or no debt. They can only go to certain schools. They have to work. They have to get what scholarships they can. My second will not likely qualify for any merit aid. He works 20+ hours most weeks and saves most of that money (minus tithe, one tank of gas per month, and about $10 weekly for his hobby). He will also likely do 2 years of cc before going to a state university. We will still have to help him, but he is doing what he can to get through without debt.

And that is where I get stuck. At some point, people have to take responsibility for choices they have made. I am trying to front load the responsibility for my kids as much as possible, because it feels different to save up for something that to pay for something you've already gotten.

[Amethyst]

19 minutes ago, Faith-manor said:

Agreed. And truly, nothing is going to be done. They will kick the can down the road until many aspects of the economy come to a grinding halt because two generations are living into their forties in two bedroom apartments with three roommates eating ramen noodles, and then everyone gets really angry when social security and Medicare have to be cut - well, technically if corporations didn't have loopholes the size of planets to drive through in order to avoid paying taxes this would not need to occur. The system is a mess.

What baffles me is the "other people make bad choices, I shouldn't have to pay for them" mindset unless these same folks are also advocating for ending: publicly funded stop smoking, stop drugging, stop gambling, stop drinking programs, or medicaid/medicare coverage for lung cancer in smokers, liver disease in alcoholics, prenatal and obstetrics care for anyone viewed as not making good choices usually religiously biased perceptions though certainly when it comes to sex, basic common sense does not always come into play, healthcare for those who are incarcerated, all manner of public good works that eventually benefit people those who "didn't make good choices".

Part of living in a civilized nation is that we try to spread the pain of bad choices around for the public good because in the end, we pay for them in some way. We could just go feudal, make a laundry list of bad choices, and toss people to the curb financially, look the other way. That was the norm for many societies for thousands of years. We could do this. But the same set of voters who never want to pay for anything, was the same set who voted pro-corporation, pro " everything that benefits me in the here and now, yet screws over future generations" including NOT wanting to pay for robust K-12 public education which is how we started down this path to begin with, and demand that their social security and Medicare NOT get touched when in reality they are the biggest welfare generation ever, and many of them, including my parents, did not make good financial decisions at all.

Now that said, I don't see a huge amount of good coming from treating the symptom but not purging the causes. There might be short term gain from the standpoint that a few million people might begin participating in the economy in the traditional way that the last 60 years of economic growth and stability was based upon, but it will likely be short lived.

So ya. I get it. I paid mine. My husband paid his, my sons will pay theres or we will pay it form them by remaining in the workforce to supplement 401K income by working part time or having a side business. I totally understand the emotions of it.

I sit here with two aging mothers who are "welfare queens" because they will draw ungodly amounts of money out of social security and medicare, community centers for the aging public dollars, you name it, and the wonder if people who claim "They made bad choices so I shouldn't have to pay" are also going to advocate for elders ONLY getting out what they paid in plus reasonable interest, or being denied healthcare treatment for bad choices, or EMS doesn't respond to the bar brawl and leaves people bleeding out because bad choices, let the drug addict die, don't respond to that 911 call.

But don't worry. Nothing significant is going to happen UNTIL the system is bust. There will be lots of bobble head talks about it while pandering for votes. However, nothing substantiative will change. In about 20 years there will be a financial coming to Jesus moment over this, and it will be a train wreck of epic proportions. Gen Z will by in large not own homes, not buy stuff besides the cell phone and clothes required for work, will not have kids, will not get ahead in any appreciable way, will not have the resources to take care of elders and social security will be BEYOND bust, and they will have degrees that might be quite valuable to other countries with low birthrates who need workers. That brain drain has already begun. And many didn't make bad choices but were taken advantage of by a very corrupt system while hearing endless messages from parents, grandparents, businessmen, bankers, you name it that they have to go to a good school in order to get a good job, and that it is a character failure to not attend the very best ranked school the student can gain admission to while never acknowledging that the whole reason they are being set up for failure is the train wreck of public k-12 and the endless ridiculous reasons employers give for not paying living wages.

As for professors who make $150,000 a year? Nope.  Maybe at Ivy leagues of which there aren't that many, maybe at the top 100 colleges out of the 3000ish colleges we have in this country. The average salary for a full time faculty member was $104,000, Associate professors $81,000, Lecturers $56,000, and less than that for adjuncts (figures from 2018), and 46-55% of public university faculty were part time lecturers and adjuncts with no benefits earning less than $60,000 a year. The issue is not faculty salaries, it is ridiculous administrative salaries, perks, and overhead. The sheer number of administrators with a bevy of administrative assistants is staggering, and then there is the whole sports thing which is, well, epic. When my brother in law was a vice president of a small, college he made five times what the highest paid faculty member received. Brother in law had a master's degree. Faculty had PhD's. His administrative assistant made twice the average of full time faculty. She had an associate degree from community college.

Lots and lots of reform and regulation is required to fix the problems, and none of it is going to happen until a massive, unbelievable crisis ensues. Just like climate change. So long as the 1-2% are making money off the train barreling towards the cliff, and politicians retain power by maintaining the status quo, nothing is going to change. All we can do is the best we can do for our own kids and hope they make it.

👏👏👏👏

[ktgrok]

10 minutes ago, Meriwether said:

I don't have time to read the other responses right now, but I have concerns. If we forgive college debts, those degree holders still have a marketable degree. When that cost is absorbed by society, it will be partially paid in one way or another by people who did not go to college.

We are firmly in the donut hole for college expenses. We are hoping to get the kids through with little or no debt. They can only go to certain schools. They have to work. They have to get what scholarships they can. My second will not likely qualify for any merit aid. He works 20+ hours most weeks and saves most of that money (minus tithe, one tank of gas per month, and about $10 weekly for his hobby). He will also likely do 2 years of cc before going to a state university. We will still have to help him, but he is doing what he can to get through without debt.

And that is where I get stuck. At some point, people have to take responsibility for choices they have made. I am trying to front load the responsibility for my kids as much as possible, because it feels different to save up for something that to pay for something you've already gotten.

Again, many have already paid for their degree, what they are paying on now is interest. 

And society, those college educated and those not, benefits from an educated society. 

And those who want debt forgiveness also want your kids to have tuition free or debt free college as well. 

[Sneezyone]

2 hours ago, frogger said:

This would be a good start.

I also think personal finance classes in high school would also be helpful. I actually think they should be required. For someone pursuing a super rigorous HS curriculum, you could test out.  

This is required in VA. DD and I had many robust discussions during her class.

[Bambam]

1 hour ago, ktgrok said:

It isn't pointless to the people struggling to pay them. 

Well, again, in many cases the money was paid back, but with the interest and the predatory practices that pushed unsound deferrments, etc the amount grew so much that they still owe just as much as when they started. Besides, an educated populace is an investment that benefits our society. 

And many,many,many students were lied to regarding the ability to pay off their loans. (but I get that that is more about the predatory schools/banks...that's what we are dealing with now. One that lied, pressured young students, pressured aging/senile relatives to cosign, continues to find new reasons they needed more money well beyond what the student signed up for, with no way to transfer the credits so it was sunk cost, plus then predatory management practices)

All the more reason we should educate our children to think through the consequences and to be financially responsible and to think critically. These people signed paperwork on these loans. There are online repayment calculators now.  When we took out student loans, there was no such thing, but we built our own using spreadsheets. Now I get that life can change, but you make sure you have a valid plan before you *voluntarily* sign any loan paperwork.  Things happen, and some might not be able to pay it back, but that should not be the majority. If someone is borrowing $200,000 to get a BA in education, that really isn't a good financial plan. If they are borrowing $10,000, that might be a reasonable plan.  Again, it is easy to research to figure out an estimated salary range, demand for that degree, etc.