Yeah, that’s more like a settlement. It sets a bad precedent and has various issues (like people who already paid theirs off, or people coming later, or people who paid cash instead of loans, etc), but it’s not breaking a contract.
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While I agree with moral hazard, this is going to happen just like the housing crisis. In that case I bought my home in cash (kept paying my student loans) so I got stuck with my home equity dropping 50% and as a tax payer bail out. My question now is how to best position my loans to take advantage
Just like FWF helped to lock in the low-interest rate (at the time) but now with forgiveness on the horizon UHEAA is a liability. I wish I could still link that thread, probably archived somewhere?
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Did they forgive or paid off? Direct Loan?
Wow! That must have been an expensive education. Ivy league?
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Yes and professional school.
I believe this proposal will Direct Loans only (just like the current plans) hence my OP. I’m hoping it includes all fed loans. Private loans are a different beast which I why I didn’t refi inspite of great teaser rates.
I had several subsidized and unsubsidized direct loans that I consolidated into one Federal Family Education Loan Program (FFELP) loan at 2.88% and got a discount on the rate for doing auto-debit payments. My loan was not forgiven. I paid it off at the end of the 15 year term because FFEL loans aren’t eligible for forgiveness. I didn’t know at the start of the PSLF program that I wouldn’t be eligible. I don’t know what my rate would have been had I re-consolidated them back into direct loans at the start of the PSLF program to make them eligible. At that time, I wasn’t sure I was going to stay in public service for 10 years, so unless I could have gotten a rate under 4%, I wouldn’t have reconsolidated anyway.
"Welfare for the wealthy is precisely what is in question here: The majority of student debt is held by relatively high-income people, poor people mostly are not college graduates, and those who attended college but did not graduate hold relatively little college-loan debt, etc. As the New York Times puts it, “Debt relief overall would disproportionately benefit middle- to upper-class college graduates.” Which ones? “Especially those who attended elite and expensive institutions, and people with lucrative professional credentials like law and medical degrees.”
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Yeah no. The interchange fee is 1.5%-2.65%, most of it is paid to the issuing bank, the network only takes ~0.05%-0.13% [1, 2]. So let’s just say the bank collects 1.4% of every transaction.
Let’s say the bank fronts the money on average for 35 days (15 days to average the billing cycle, plus 25 days grace period, but let’s assume on average people pay their bill a little closer to the due date). Under these assumptions the issuing bank generates about 14.6% APR (1.4%*365/35) on the money they let you borrow.
According to this, AmEx collects more in interchange fees than they do in interest. So no, those who pay interest do not subsidize those who do not.
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I did the same into FFELP as well. At the time I thought UHEAA was a govt. agency but they seem to treat FFELP as private loans. I hope Biden’s DOE will treat FFELP loans differently. If not Is there a way to convert/ move to Direct loans (wasn’t an option in 2005)
Bingo!!! Just like granting amnesty to illegal immigrants w/o solving the problem of illegal immigration.
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You could have and still can reconsolidate into a loan that qualifies for the forgiveness programs, but none of the payments that you made while it was a FFELP loan count towards forgiveness, so you would be starting the clock over from scratch. So essentially, you are like me and SOL. I’ll bet you the remainder of your loan balance that the DOE does not change anything to make your loan and payments eligible. Don’t bother hoping for that. It’s a waste.
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I would agree with your bet under Trump/Devos but this time seems different
I’m “writing off” the past payments since I haven’t been in IBR or PSLF (I did do a few years of public service but not many. Bummed out since I didn’t know one had to be in a specific IBR program for the 20 yr payments forgiveness.
I didn’t reconsolidate /refi to Direct b/c I didn’t want to lose the 2.75% rate, but now the $10K Biden proposal is making me look. Q is the FFELP qualify or just the DOE Direct.
Good link I just found https://blog.ed.gov/2016/02/learn-the-secret-to-expanding-your-student-loan-repayment-benefits/
More details for the Making Bankruptcy Great Again Act.
- no credit counseling required
- no need to show up in person, video meetings on your schedule
- no consequences for spending most of your money on luxury items while making only the “minimum” plan payments to your creditors
- put your lawyers fees on a payment plan too
- renegotiate your home mortgage rate and get an extra 5-15 years to pay it
- private and federal student loans now dischargeable
The race to $7.5M worth of unhappy creditors per person starts as soon as this passes.
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In reality, we’re looking at about 1.7%-2.2%. The interchange all goes to the issuing bank, V/MC charges are separate (assessment fees).
But take a 2% rewards card, and even at the high range of the swiped transactions rate, that’s 0.2% to the issuer.
Nope
I’m guessing that you’re making an argument that almost anyone could pursue college if they had the right help, support etc and that almost all people are capable of doing it if given the right chance and circumstances, etc? I mean is that your argument that people could theoretically almost all handle collge? If so I don’t disagree with that sentiment generally. But I’m sure the people who literally can’t handle college is substantially higher than ‘null set’. I mean the technically intellectually disabled of the population are a good 2-3% alone which is not a ‘null set’.
But …We’re talking about the reality. Reality is everyone goes to college and yet people drop out in droves.
2/3 of people don’t graduate college in 4 years. 40% can’t get trough in 6 years
THats pretty clear lots of people can’t handle it one way or another. Maybe most of them have the inate ‘ability’ but they don’t apparently have the educational prerequisite, work ethic,
Then of the people who do graduate we’ve got 6% of them getting a BA in psychology adding to the millions of those degrees the nation doesn’t really need.
If you can barely get through high school then you should not go to college (on our dime). Maybe it wasn’t their fault they sucked at school but still.
If you don’t know what you wanna be when you grow up and major in stupid stuff then you should not go to college (on our dime)
I’m not opposed to people enriching themselves and being well rounded, etc. We’ve got libraries for that.
FYI, I’m also not opposed to the idea of student loan forgiveness.
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Fair, agreed.
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Some of the highest achievers from my high school went to top tier universities undeclared, because they didn’t know what they wanted to be. And while high achievers can usually get scholarships (i.e., not on our dime), I would argue that their potential for success is high enough to warrant at least some public investment, because it’ll have a high ROI.
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Yeah good point. I was being unkind there.
Honestly it seems most 18 year olds don’t have a good grasp of what they wanna be when they grow up. I’m almost 50 and I don’t know what I wanna be when I grow up
I do think we have far too many people getting psychology, communications and English degrees though. These are all valuable things in their ways but we serve noody well by having 10x as many degrees in the fields as needed.
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Much of discourse here is whether we should forgive or not. Just a matter of time It WILL happen now ( whether by Biden fiat or by Congress depending on GA) My question is how to best position my loans like I did to UHEAA in 2005 (Thx FWF)
Welcome to pendulum politics, denying 95% of forgiveness under DeVos etc
Q is “broadly cancel up to $50,000 in Federal student loan debt.”= FFEL or just Direct Loans
It is true that DeVos was in office while the forgiveness was denied, buth her hands were tied. The rules were literally set out by law in 2007. It took 10 years for anyone to be eligible, so the denials fell on her desk, but there was nothing she could do. It was the the Dept of Ed under the presidents before Trump that didn’t do a good job getting people into the loan payment programs that would eventually lead to forgiveness. I would bet none of those Administratios’ Department of Education sent a single letter to a single public service employer telling them to let their employees know they need to be paying on Direct loans in order to qualify for forgiveness.
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