Posted on 08/11/2015 7:53:27 AM PDT by SeekAndFind
Student-loan debt is a big problem.
The latest Federal Reserve data shows there is nearly $1.3 trillion in outstanding student-loan debt in the US.
In late 2009 and early 2010, student-loan debt passed auto loans, credit cards, and home-equity lines of credit as the biggest debt burden Americans face.
According to Debt.org, "The latest studies say that 70% of college graduates leave school with student-loan debt that in 2014 averaged $33,000."
Realizing graduates were struggling to repay their heavy debt burdens, the government announced a few plans that would allow student debt to be forgiven over time.
The loan-forgiveness repayment plans are helpful, but it's not that simple.
Two of the more popular ones are Public Service Loan Forgiveness and Income-Based Repayment.
Public Service Loan Forgiveness allows those working in the public sector to apply to have their loans forgiven after 10 years of service, which equates to 120 payments.
For those who don't work in the public sector, the government created a few income-driven plans. These allow borrowers to pay 10% to 20% of their discretionary income toward their student loans, which will then be forgiven in 20 to 25 years.
But there is one big problem. The loan balance at the time of forgiveness for income-driven plans is treated as income and taxed as such. Depending on the interest rate of the loan (some Federal loans have interest of more than 7%), the income-based payments might not cover the interest that is accumulating on the debt, which would cause the payoff amount of the loan to balloon over those 25 years.
Also, if someone is making income-based payments, chances are they are doing so because they cannot afford to make their regular loan payments.
(Excerpt) Read more at businessinsider.com ...
“The problem is, we scrimped and sacrificed to pay our kids’ tuition and I’ll be if we’re going to be on the hook for everyone else’s kid’s tutition, too”
Me too.
Yeah its not fair, but these kids, in significant numbers, won’t be paying back what they owe plus fees, penalties, and interest anyway. You pay for that too.
The right answer is to allow discharge of these debts in bankruptcy court. They’ll either restructure or eliminate the debt that way.
It will fundamentally change higher education funding, and hence all higher education. It’s long overdue.
As for getting screwed financially for doing the right thing...it isn’t the first time and won’t be the last time.
Some loans accrue interest during reprieves. Depends on if they are subsidized, in deferment, or forebearance. Since it comes from taxpayers (government backed ones). In my opinion everybody pays or no one pays. No breaks for anyone. Unless you are deemed unable to work due to a real disability, especially since I am paying mine back.
Well I won’t be hiring their welching ass for any job.
“Well I won’t be hiring their welching ass for any job.”
Chances are, they aren’t qualified for any job anyone here may have, so that most likely won’t be a problem, unless, of course, you run a Starbucks.
And I hope employers have the means to find out which of their employees got their loans forgiven, so they can fire them.
Making anyone who wants these student loans instantly eligible, regardless of ability to pay back, ever, was a tragic mistake. It’s what’s allowed the Universities to increase tuition. All that ‘free money.’
Has anyone noticed that nearly every post-high school academic institution is now a “University?” Every former 2 year college is now a “University!”) And they all seem, magically, to be worth @ $50K/year.
I can’t even imagine Hillary! or Fauxcohontas or Bernie for one minute going along with lowering tuition. That would require their lefty friends in the faculty lounge to take a pay cut. Income equality doesn’t matter there!
BTW, Foreign students aren’t eligible for student loans. They have to pay upfront. Usually that’s covered by their country’s government.
If we reduce the number of foreign students it would help to retain Americas strength. It would also put more pressure on Universities to lower their fees.
As it is they aren’t Institutions of higher learning. They are money machines pushing as many kids through as possible whatever the cost to those kids lives.
I’ll have to respectfully disagree that having foreign students affects American students’ loan burden, or the cost of “higher education” in the US. Yes, there’s something bassackwards about our educating foreign students whose knowledge gained here stands to lift another country possibly at the expense of our own.
BUT, those students (or their govt) pay the full fare. Most US students get some sort of discount, called a ‘grant,” from the University just for being admitted. I think only foreigners and very wealthy students pay the full fare.
Too many American students are taking full advantage of a system that allows them to borrow more than the costs (chalked up as ‘living expenses’). They are 18-21 years old with absolutely no sense of $$$, how to make it, or the obligation when borrowed, to pay it back. And today’s students are not facing a fantastic job market to provide the income necessary to repay the loans.
The diploma mills are a disgrace. There should be no allowance of federally subsidized or guaranteed loans to students enrolled at these schools. If a school fails to have more than X% of its graduates employed using their degree within a year, they should be denied accreditation and loans to their students. That would at least be a step in the right direction.
It pains me to see a generation now facing this kind of overwhelming debt, for whatever reason, but they DID sign their names on the line.
“The diploma mills are a disgrace”
You mean like Harvard or Yale?
To paraphrase: I can’t lay a finger...
Course, that would encompass 99.9% of the current Fedzilla.
Though, I suspect never to hear such a question posed to ANY candidate; nor expect a straight answer based on Constitutional authority (and if ANYONE would bring up General Welfare, counter with 5th/9th/10th/13th....)
One can dream that a single baby STEP to restoring our Republic *sigh*
Well, on the other end of the age spectrum you’ve got people (even here) whom believe they are ‘owed’ SS/etc. and that they *snicker* ‘pay for’.
Hard to give up what’s ‘free’; even if it is fitting of the shackles they themselves made
Education is “free” through high school. Why not make it free for those who qualify after high school? I think it would benefit the economy. My daughter worked through college/grad school and is paying her student loans but it isn’t easy. We waste so much money on stupid crap (e.g. why are lesbians fat?) that I would have no problem with redirecting some tax money to educate people. It also might bring down the absurd cost of higher education.
At any rate, promising student loan relief is a winning position to get the millennial vote.
STEM should be free, all other majors pay up. Making someone pay to study engineering/science/math is ridiculous.
Certainly, there are departments at Harvard and Yale, and every other University, that seem to exist for the sole purpose of brainwashing the kids who don’t arrive that way. But they DO a pretty good job of educating beyond that. Some depts are not so affected, and even within those ever PC depts there’s usually one or two profs who are not lefty oriented. I imagine the founders of our Ivies - old time Protestant ministers mostly - would be horrified at their current condition.
Nonetheless, they are marvels compared to those institutions that offer nothing except high tuition and a piece of worthless paper.
I remember one article which reported over 90% of students had an A average at Harvard.
Wouldn’t surprise me, but then again, given the level of competition to get into Harvard (Princeton/Yale, etc.), why not? They reserve X admissions for affirmative action, Y for extraordinary non-academic achievers, and Z for legacies. (but we won’t call them quotas) The rest are all valedictorians with perfect or near perfect SAT’s, enough AP credits to complete at least a full year of undergrad, and just generally over achieves who get As. Seriously, every year they turn down more valedictorians and high/perfect SAT scorers than they can possibly admit.
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