Posted on 12/31/2021 9:27:34 AM PST by Oldeconomybuyer
Why don’t democrats go after the greedy universities? Aren’t they the ones forcing kids to take out loans for overpriced degrees? Shouldn’t there be price controls on tuition? Colleges are profiting off of education, which is a human right! Shouldn’t the predatory colleges victimizing helpless students by reined in?
Might be more palatable if they forced the institutions of
“higher” education to pay out of their reserves.
I still wouldn’t be happy because of what we paid already for my family, but I’d like it better.
“the idiots will vote (D) regardless of how many times they’re lied to and betrayed.”
They are just like us.
Thus sayeth Raycpa “I have parent plus loans left on my last kid out of 3 who went to college. I am holding off paying on these loans. I have a plan for using excess funds that otherwise are earmarked for student loans plus the current savings from not having to pay principal or interest.”
A good plan provided you avoid capitalization of your parents plus loan.
To give the example of myself, we took out a parents plus loan for our daughter in 2012 ($21K, dispersed in 2012-13) she left school with a degree in 2017, we started payments in feb 2018. The suggested payment was $358.00/month but we sent in $400
When all fed loans went into forbearance in March 2020 we continued payments of $400/month then in Aug 2020 upped it to $800/month. Then we made 10 or 11 big payments of $1000 or $2000 this resulted in a paid off loan in October 29, 2021.
Between the time the loan went into forbearance and the pay off day we sent in payments totaling $19,500 on a $21,000 loan that we had been making regular payments even above the minimum amount. We paid about $33,000 for a $21,000 federal student parents plus loan.
So some might be asking why so much considering we were current on our payments? Answer: capitalization. Capitalization is when the lender adds the interest to the principal. So in effect you pay interest on interest, sort of like compound interest paid on a passport savings account (in the old days).
I don’t think most student loan borrowers are aware of this. Here is a link which explains. https://studentdebtwarriors.com/students/interest-capitalization-increases-student-loan-debt/#:~:text=Student%20loan%20interest%20capitalizes%20at%20various%20times%20over,plan%20changes%3B%205%20When%20you%20consolidate%20your%20loans.
My personal opinion is at best the government will forgive less than $50K if Biden wants to shut up the progs at the taxpayers expense he might try to throw them a bone but the political implications of student loan forgiveness when mortgage foreclosures are ramping up would be a political headache with little gain for the Dems. Even so I doubt Biden will fight for middle class taxpayers forgiveness of parents plus loans.
Helping pay for your children’s education is not stupid if they have a decent work ethic. We told our son and daughter that we would help conditioned upon their performance. My wife and I were blunt with them: We would help but were not paying them to party. Both our son and daughter listened and did well. Our son went to Law School and is now a Major in the Army. Our daughter teaches Earth Science and Physics in a private school.
I imagine that AOC is in the bellyaching group?
Fortunately? My kid is pursuing a doctorate degree and then plans on medical school so loans have not capitalized . My backup plan is to switch loans to private with lower rates after its obvious government benefits are not likely.
The real problem is that nobody has a plan that wouldn't shatter the current system upon inception. The Dems figured that if they could snap their fingers and make a couple trillion dollars disappear, they could make them reappear just as easily. It's all magic in Liberal LaLa Land.
My daughters parents plus loan was not our first student loan by a long shot. Both Mrs fatboy and me had student loans from back in the day, my wife is a degree collector resulting in a few more student loans including a degree in accounting from Rutgers and a BA and MA in teacher education.
So having paid back a few of these puppies I was still personally unaware of capitalization which I think we have the bamster to thank for and something like 8% interest on top of that.
But even if the dems get some kind of loan forgiveness through it would have a 50k cap. Given that you are a well educated financial individual is good for you but most of us mere mortals when we think student loan we think low interest, make some kind of payment every month and live a good life but some of your kids classmates, including future brain surgeons will have student loans in the 200 to 400+ thousand dollar range.
A guy I work with has parent plus loans for both of his kinds combined payment is over $3000/month. These are just BA degrees at least both of them are employed.
I think, but do not know for sure, but I think the way to avoid capitalization is to start making payments as soon as the loan is dispersed. If true, please explain to me how someone can say with a straight face that it is smart to not make some kind of payments on a capitalized loan with an 8-9% interest during an almost 2 year period of no interest forbearance?
You, not your kid will be paying this back and I predict the day will come when you are pining for theses days of forbearance. Your kid having a nice college education like my daughter who is a scientist and makes decent bux is nice, still, it’s a bitch paying back 1.5 times the amount you borrowed, even if it is only $20k.
I know, I know, many today feel that they will always be in some sort of debt and that is just the way it is. I disagree. My co-worker that has $3000/moth PPL payments is an expert on finding the best price on a new car or appliance but pays 10 times the amount of savings he gets on interest. Having been both heavy in debt and totally debt free I can say with no hesitation it is better for your mental health being debt free and putting your money into a 401B/401K or Roth IRA than than sending it to FedLoan Servicing or Visa. But hey not my problem.
Not sure where I read it but the percentage of student loan borrowers (including parents plus loan borrowers) not making payments since march 2020 is something like 90% I think combined the country has 1.5 trillion student loan debt, does anyone really think the democrats will simply write off all that debt? If they did it would put the economy into a tailspin and start riots.
My borrowing is complex. Most of it was related to financing my business as it grew. Yesm even using student loans,Now that it has grown as much as I want I am repaying as fast as I can while also catching up on retirement savings.
Do I pay anything down debt is good during high inflation. Do I pay down debt used to finance real estate and increase an asset that is protected from medicaid but has deductible interst. Do I pay down student debt that may have more favorable terms and might be partially deductible while providing a death benefit if I die early? Or do I pay down 2% mortgage which is also protected from creditors?
Or do I park the cash in I honds and wait and see what happens with laws and inflation?
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