Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

The Rolling Student Loan Bailout: A consumer guide to all the ways you can avoid repaying Uncle Sam.
Wall Street Journal ^ | August 10, 2013

Posted on 08/10/2013 9:30:26 AM PDT by reaganaut1

The Consumer Financial Protection Bureau performed a genuine public service this week by alerting taxpayers to the tidal wave of student loan defaults coming their way. Too bad the intention was also to alert student borrowers to ways they can avoid repaying those loans.

A new analysis by the bureau shows federal-backed student loan debt surpassing $1 trillion, which is nearly double what it was at the start of the Obama Presidency. As college costs have continued to balloon in tandem with federal loan and grant subsidies, students have assumed more debt. Many jobless Americans have also sought asylum from the Obama economy by returning to school.

A lot of these student borrowers upon entering the real world find themselves unable to make payments on their gargantuan loans, notwithstanding low interest rates. The bureau reports that nearly seven million borrowers or 13% of outstanding loans are in default, defined as not making a required payment for 270 days (nine months).

That headline default rate doesn't include the 8.9 million borrowers who have postponed or temporarily reduced their payments. The Department of Education allows borrowers to defer payments for up to three years if they're experiencing economic hardship or can't find full-time work.

All told, about 40% of out-of-school borrowers have defaulted or delayed their payments, which is a de facto default. The government's reported default rate will likely climb when borrowers whose temporary amnesty expires have to resume payments on their loans, which in the meantime are accruing interest.

But deadbeats need not fear. According to the bureau, "there are ways to avoid default on a federal student loan even when you think you can't afford your payment."

(Excerpt) Read more at online.wsj.com ...


TOPICS: Editorial; Government
KEYWORDS: cfpb; ibr; incomebasedrepayment; studentloans
Navigation: use the links below to view more comments.
first previous 1-2021-33 last
To: reaganaut1
The Republicans should ask why people who work for the government get to welsh on their loans.

It can't be because they aren't paid enough, or the benefits aren't good enough.

21 posted on 08/10/2013 10:16:09 AM PDT by Pearls Before Swine
[ Post Reply | Private Reply | To 1 | View Replies]

To: USS Johnston; jodster36

But I would still like to know the details.


22 posted on 08/10/2013 10:16:14 AM PDT by Red_Devil 232 (VietVet - USMC All Ready On The Right? All Ready On The Left? All Ready On The Firing Line!)
[ Post Reply | Private Reply | To 19 | View Replies]

To: All


Help FR Continue the Conservative Fight!
Your Monthly and Quarterly Donations
Help Keep FR In the Battle!

Sponsoring FReepers are contributing
$10 Each time a New Monthly Donor signs up!
Get more bang for your FR buck!
Click Here To Sign Up Now!


23 posted on 08/10/2013 10:17:34 AM PDT by musicman (Until I see the REAL Long Form Vault BC, he's just "PRES__ENT" Obama = Without "ID")
[ Post Reply | Private Reply | To 20 | View Replies]

To: Red_Devil 232
But I would still like to know the details.

I understand -- and my son is in the same predicament -- but you can bet the devil knows something about those details ;-)

24 posted on 08/10/2013 10:20:29 AM PDT by USS Johnston (All that is necessary for the triumph of evil is that good men do nothing. ~ Edmund Burke)
[ Post Reply | Private Reply | To 22 | View Replies]

To: USS Johnston; Red_Devil 232

No pun intended :-)


25 posted on 08/10/2013 10:21:28 AM PDT by USS Johnston (All that is necessary for the triumph of evil is that good men do nothing. ~ Edmund Burke)
[ Post Reply | Private Reply | To 24 | View Replies]

To: AtlasStalled
Who wants to be a millionaire?! All financed by hardworking middle America (and our Chinese friends).

And their children...and grandchildren...

26 posted on 08/10/2013 10:31:29 AM PDT by VRW Conspirator (Producing Talk Show Prep since 1998.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: wildbill

Even if a very mentally disabled (unemployable) person attempts to discharge a student loan under the current bankruptcy code, Sallie Mae will spend multiple times the value of the loan in attorneys’ fees to fight it.

Maybe the optimal solution to this developing crisis would be to means-test the ability of borrowers to repay their loans. Those loans that cannot be fully repaid then become fraud claims against the schools, which would be compelled to disgorge the tuition and fees they accepted after pushing worthless degrees on naive students. A lot of state-funded schools would then have to be privatized or closed, because the fraud claims would accrue to the state taxpayers.


27 posted on 08/10/2013 11:01:15 AM PDT by Unknowing (Now is the time for all smart little girls to come to the aid of their country.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: Unknowing

They have a means testing provision by which the student can ‘reduce’ the amount of the repayment for a period, but it is difficult to prove up and the outstanding balance keeps growing.

The whole system was gamed by the schools who basically counseled students to take out loans without regard to the probability of repayment based on the utility of the degree.

After all, how many PHD degree majors in English Romantic Poets are going to pay off with jobs that will sustain these loans? They think they are going to find successful well-paying jobs in academia so they can stay in the cocoon.

However the schools are now narrowing the track toward full-time professorships by exploiting the hordes of English and Literature majors with BA, Ma, and PHD degrees as part-time adjunct professors at $10 per hour. I know the system because I was one.


28 posted on 08/10/2013 2:44:02 PM PDT by wildbill
[ Post Reply | Private Reply | To 27 | View Replies]

To: Red_Devil 232

The east way is to get as many credit cards as you can, take out as much money in cash advances as you can, purchase high ticket electronics and resell for half price at swapmeet,craigslist,... then pay your student loans off with the money. Turn around and file Bankruptcy on all the credit card debt. That’s the american way.


29 posted on 08/10/2013 7:06:01 PM PDT by eyeamok
[ Post Reply | Private Reply | To 18 | View Replies]

To: Red_Devil 232

loanconsolidation dot ed dot gov
(Federal consolidation)

There are different repayment plans. But I did it b/c our income dropped a lot.
You can fill out some basic info and there is a calculator on there that will tell you estimated payments under each plan, the years to pay off, interest, etc. That way you can see that you’re not getting extra things tacked on there!

Good luck!


30 posted on 08/10/2013 10:19:15 PM PDT by jodster36
[ Post Reply | Private Reply | To 18 | View Replies]

To: jodster36

Thanks for the info!


31 posted on 08/11/2013 5:21:28 AM PDT by Red_Devil 232 (VietVet - USMC All Ready On The Right? All Ready On The Left? All Ready On The Firing Line!)
[ Post Reply | Private Reply | To 30 | View Replies]

To: Unknowing

“Maybe the optimal solution to this developing crisis would be to means-test the ability of borrowers to repay their loans. Those loans that cannot be fully repaid then become fraud claims against the schools, which would be compelled to disgorge the tuition and fees they accepted after pushing worthless degrees on naive students.”
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////
I think that is worth considering! I have become convinced that much if not most of the modern “education” system is little more than a scam. I have spoken to recent university graduates who AND I AM DEAD SERIOUS, could not pass the test to get INTO high school from my era. Forget about passing high school finals, most would flunk miserably. We have young university graduates in this area taking jobs that would have required AT MOST a public high school diploma fifty years ago, in many cases they are taking jobs that would have been done in the past by high school dropouts. I have seen ads for jobs requiring a degree and offering a starting pay that would, after adjusting for inflation, amount to less than the 1963 minimum wage. It is outrageous that young people spend four or more years and a ton of borrowed money and end up with less real education than their grandparents got for free in the public school system.


32 posted on 08/11/2013 4:28:16 PM PDT by RipSawyer
[ Post Reply | Private Reply | To 27 | View Replies]

To: eyeamok

The way you say it it sounds terribly dishonest but in reality is no more so than the way our government is operating.


33 posted on 08/11/2013 4:30:32 PM PDT by RipSawyer
[ Post Reply | Private Reply | To 29 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-33 last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson