Canceling $10k of student loan debt is stupid.

[Anonymous]

Do I get $10k toward a graduate degree? Because I didn’t go to grad school because I knew that debt was a bad idea. So now I also gave up all the higher earnings I could’ve had.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Up to $125,000 singles or $250,000/for couples is way, way too high.

What a joke.

Exactly, people who make six-figure salaries have *NO ISSUES* paying back a $10k loan.

What about the ones with way more than 10k in debt? The more you have, the harder it is to pay back because of the interest.

For those with way more than $10k in debt, this $10k is not going to help much. It does not solve their problem that they can't make enough money to pay back whatever it is that they owe - remember this is the crux of the matter.

I could get into my story. And I agree with you somewhat. Let some explain why I’m extremely appreciative of 10k and how it helps.

We have 2-ish years left. “We” but it’s my DH’s debt. But it’s our family finances, I benefit from his education and work. We have traded being breadwinners at diff times.

The quicker we get it done, the quicker it’s done.
The longer it takes, the longer it takes.

We have benefited incredibly from the stop on interest and minimums:
-On interest: the daily balance increase was a lot. Ballpark monthly: 600. We could pay $2k monthly, and only see a drop by $1400. This got better as the balance has gotten lower.
-on minimums. The minimums are lower than we pay, about $400 of the $2k we pay monthly. That’s not the issue. (In fact the minimums would keep the balance climbing! Again not the issue). The problem is *divided* minimums. We’ve had a 9 loans, representing diff semesters. 5 paid off. 4 remaining. Our extra $1500/we put on the highest interest rate. When there were minimums, that 400 practically disappeared into the ether. It’s related to ^ that interest rate above. All 4 loan loans balances climb. Minimum doesn’t lower it. We put the extra on one. It felt like those minimums disappeared, as I said.

Since national forebearance, what we have applied has not “disappeared.” The balance actually goes down at the same rate we put into it.

If we had no interest, we will definitely finish it off in 2 years (9 years post degree). But as the interest accrual returns, I feel worried it will take us 4-5 years.

A $10k drop from Biden will make it go so much quicker.

I understand why interest is charged. I think the greatest change he could push is a low low interest rate for people who have high balances who are paying $25-30k per year and still seeing little balance change. Or, just lower interest rates for all student loans. Congress sets those rates, time to change it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Canceling any debt is stupid. You borrowed, you pay.

I agree, we should eliminate bankruptcy and bring back debtors prisons. Maybe airline executives would do a better job with that incentive. Or are you only talking about 18 year old kids being forced to make life altering decisions?

Any means any

The problem is that the current system requires poor people to pay back all their debt while wealthy people and corporations (who carry WAY more debt) are often able to escape debt via lawyers and other legal mechanisms designed to help them discharge debt for less than they owe.

Student debt is unique in that it can't be discharged in bankruptcy. It's also unsecured debt -- it's not like you can sell the underlying education to pay off your loans the way you can with a house. We need a policy solution to the problem of ballooning student debt because it impacts the economy very negatively. It keeps people from buying homes (or even moving out of their parents homes into rentals), it is impacting the birth rate, it limits the ability of people to open businesses or invest. We need a longterm solution to student debt, and that probably includes some amount of debt forgiveness for people who are already buried in debt, followed by rule changes to prevent people from ever getting this deep in debt to begin with.

-- Signed, someone who paid off 80k in student loans myself and does not oppose debt forgiveness for others because it's a smart policy decision and is not actually about personal fairness to me

Good points - my main problem with the loan forgiveness is that it doesn’t address the root causes to begin with- why has college become so expensive? It used to be fairly easy to pay your way through a 4 year degree, now it’s really only possible if you attend community college and live close enough to a state university to live with your parents while completing a bachelors. Even then, everyone I know who tried to work full time while going to college took way longer than 4 years to finish.

And why are students and their parents being approved for these massive loans to begin with? As another PP pointed out, having so many young adults saddled with student debt os bad for the economy, and it gets worse and worse every year. I don’t know what the solution is but this just seems like kicking the can down the road.

And it’s not the professors salaries that are increasing…. So many schools are incredibly poorly run. This is not helping this moral hazard of bloated administrations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Up to $125,000 singles or $250,000/for couples is way, way too high.

What a joke.

Exactly, people who make six-figure salaries have *NO ISSUES* paying back a $10k loan.

What about the ones with way more than 10k in debt? The more you have, the harder it is to pay back because of the interest.

For those with way more than $10k in debt, this $10k is not going to help much. It does not solve their problem that they can't make enough money to pay back whatever it is that they owe - remember this is the crux of the matter.

I could get into my story. And I agree with you somewhat. Let some explain why I’m extremely appreciative of 10k and how it helps.

We have 2-ish years left. “We” but it’s my DH’s debt. But it’s our family finances, I benefit from his education and work. We have traded being breadwinners at diff times.

The quicker we get it done, the quicker it’s done.
The longer it takes, the longer it takes.

We have benefited incredibly from the stop on interest and minimums:
-On interest: the daily balance increase was a lot. Ballpark monthly: 600. We could pay $2k monthly, and only see a drop by $1400. This got better as the balance has gotten lower.
-on minimums. The minimums are lower than we pay, about $400 of the $2k we pay monthly. That’s not the issue. (In fact the minimums would keep the balance climbing! Again not the issue). The problem is *divided* minimums. We’ve had a 9 loans, representing diff semesters. 5 paid off. 4 remaining. Our extra $1500/we put on the highest interest rate. When there were minimums, that 400 practically disappeared into the ether. It’s related to ^ that interest rate above. All 4 loan loans balances climb. Minimum doesn’t lower it. We put the extra on one. It felt like those minimums disappeared, as I said.

Since national forebearance, what we have applied has not “disappeared.” The balance actually goes down at the same rate we put into it.

If we had no interest, we will definitely finish it off in 2 years (9 years post degree). But as the interest accrual returns, I feel worried it will take us 4-5 years.

A $10k drop from Biden will make it go so much quicker.

I understand why interest is charged. I think the greatest change he could push is a low low interest rate for people who have high balances who are paying $25-30k per year and still seeing little balance change. Or, just lower interest rates for all student loans. Congress sets those rates, time to change it.

I would love to talk to a reporter about our story.
We aren’t representative of those with real problems, however. I know we are fine. There are people who can’t make ends meet.

We borrowed, we always knew we would pay back. We put so much in, and have a lot to go. I’ll pull up the numbers later. They are interesting.

I’d hate to be profiled if it makes it look like we are whining about … aww man we have to sacrifice 1. Fixing our siding to prevent rodents 2. Going on vacation, traveling to see family or show the country and the world to our kids 3. Retirement saving so behind that dcum has laughed at how unprepared we are (shall I link to the thread?). 4. Hate getting hit with huge car repairs, dental diagnoses, and a shoddy deck that needs fixing. Because it delays us further.
We sacrifice, but we don’t struggle to survive. We’ll be fine eventually.

I can’t whine about real things.

But we can become incredibly discouraged when we see that our borrowed amount and paid amount are inching closer and closer, and the interest keeps the balance high. And be astounded about how much crazy progress we made without interest ….

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Up to $125,000 singles or $250,000/for couples is way, way too high.

What a joke.

Exactly, people who make six-figure salaries have *NO ISSUES* paying back a $10k loan.

What about the ones with way more than 10k in debt? The more you have, the harder it is to pay back because of the interest.

For those with way more than $10k in debt, this $10k is not going to help much. It does not solve their problem that they can't make enough money to pay back whatever it is that they owe - remember this is the crux of the matter.

I could get into my story. And I agree with you somewhat. Let some explain why I’m extremely appreciative of 10k and how it helps.

We have 2-ish years left. “We” but it’s my DH’s debt. But it’s our family finances, I benefit from his education and work. We have traded being breadwinners at diff times.

The quicker we get it done, the quicker it’s done.
The longer it takes, the longer it takes.

We have benefited incredibly from the stop on interest and minimums:
-On interest: the daily balance increase was a lot. Ballpark monthly: 600. We could pay $2k monthly, and only see a drop by $1400. This got better as the balance has gotten lower.
-on minimums. The minimums are lower than we pay, about $400 of the $2k we pay monthly. That’s not the issue. (In fact the minimums would keep the balance climbing! Again not the issue). The problem is *divided* minimums. We’ve had a 9 loans, representing diff semesters. 5 paid off. 4 remaining. Our extra $1500/we put on the highest interest rate. When there were minimums, that 400 practically disappeared into the ether. It’s related to ^ that interest rate above. All 4 loan loans balances climb. Minimum doesn’t lower it. We put the extra on one. It felt like those minimums disappeared, as I said.

Since national forebearance, what we have applied has not “disappeared.” The balance actually goes down at the same rate we put into it.

If we had no interest, we will definitely finish it off in 2 years (9 years post degree). But as the interest accrual returns, I feel worried it will take us 4-5 years.

A $10k drop from Biden will make it go so much quicker.

I understand why interest is charged. I think the greatest change he could push is a low low interest rate for people who have high balances who are paying $25-30k per year and still seeing little balance change. Or, just lower interest rates for all student loans. Congress sets those rates, time to change it.

I would love to talk to a reporter about our story.
We aren’t representative of those with real problems, however. I know we are fine. There are people who can’t make ends meet.

We borrowed, we always knew we would pay back. We put so much in, and have a lot to go. I’ll pull up the numbers later. They are interesting.

I’d hate to be profiled if it makes it look like we are whining about … aww man we have to sacrifice 1. Fixing our siding to prevent rodents 2. Going on vacation, traveling to see family or show the country and the world to our kids 3. Retirement saving so behind that dcum has laughed at how unprepared we are (shall I link to the thread?). 4. Hate getting hit with huge car repairs, dental diagnoses, and a shoddy deck that needs fixing. Because it delays us further.
We sacrifice, but we don’t struggle to survive. We’ll be fine eventually.

I can’t whine about real things.

But we can become incredibly discouraged when we see that our borrowed amount and paid amount are inching closer and closer, and the interest keeps the balance high. And be astounded about how much crazy progress we made without interest ….

This would be a completely different pill to swallow if they would just X the interest. Backdate to when you graduated or 6 months after you stopped attending. All payments go towards principal. Eliminate interest.

[Anonymous]

This is just SUCH a slap in the face to those of us who already paid off our loans.

Do they plan to do this annually? What about the kids who haven’t gone to college yet?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm really surprised he has the authority to do this via executive order. Not just the debt cancellation but also reducing IBR programs from 20 to 10 years and reducing the percentage of discretionary income paid towards loans from 10% to 5%.

I imagine this will be tied up in court for quite some time.

Who is going to sue over this and on what grounds?

PP here and the grounds would be that the action exceeds his authority under the statute. No idea who will sue, there's usually a special interest group that runs these lawsuits.

Standing is a thing, and it's hard to imagine who has standing here.

PP here and probably the loan servicers who will lose some amount of revenue.

Seems pretty thin standing for federal loans. This doesn't impact private loan servicers.

Sure it does, those loan servicers get a fee for servicing those loans. Loan forgiveness will impact their revenues.

[Anonymous]

Anonymous wrote:This is just SUCH a slap in the face to those of us who already paid off our loans.

Do they plan to do this annually? What about the kids who haven’t gone to college yet?

This. So if you budget and dutifully pay off your loans, you're screwed. I paid mine off a few years ago becuase I was super aggressive about it. If only I'd Paid just the minimum payment and left $10K on the table, I could've put that money in my pocket. What absolute BS.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Canceling any new or old measly $10k of student loan debt is the dumbest idea. What is the payment on that, a mere $100/month?

Instead, the struggling folks need help - the ones buried under 75k, 100k, 300k of debt for over 20 years who, because it's been 20 years, obviously they can't pay it! And I mean 20 years since school completion, not 20 years of qualifying payments, huge difference.

my 2 cents

For me, canceling $10k of my debt would have halved my monthly payment. I’m one of the teachers who got screwed over under the last administration. I was supposed to have my debt entirely forgiven.

Why is your student loan my responsibility to pay off?

Because the ballooning of federal student loans was a product of ill-guided federal policy (under both Dems and Republicans), student loan debt is hindering US economic growth, and college graduates are a benefit to an industrial/post-industrial society not just a private benefit. Also, student loans are the product of the divesting of support from state governments for public education that prior generations benefitted from. Think of it as a scholarship for completing college rather than a forgiveness of loan. I don't have student loans--but it was federal and state policies that created the student loan mess and I'm all for having them help clean it up. It will benefit everyone--student loan holders and not.

Bless your heart. If I thought about it as a scholarship for finishing college, I would be wealthy. I finished a PhD with zero debt by working my A$$ off and I am not getting a scholarship for graduating college and grad school. I understood the impact of taking out $100k worth of loans on my future, even at 18.
Explain how it benefits me or my children? I have been saving for their college since before they have been born, not hoping for loan forgiveness. I have worked jobs I don't particularly liked, lived in a house that is less than dcum standards, and driven by many a starbucks to save a dollar so that they can have a college education. Again, how is giving away 10k when there is no other clean up of the college cost mess included benefiting anyone but the people before them? I don't understand the logic.

You are not directly benefitted by many of the ways society gives out tax breaks, credits, benefits etc. but you want to participate in that society. You are getting some benefits somewhere--most PhD programs are subsidized by master's and undergraduate programs to pay for RAships, TAships and their associated benefits such as tuition remission, health insurance credits, stipends. This is because society values having experts and recognizes that PhD programs represent a long investment that may not make financial sense. Government agencies allow that sort of distribution of costs to reflect that--but it's not particularly "fair" on any individual level.

In your savings for your kids, did you benefit from the tax break of a 529 plan? Those tend to privilege those who have a HHI of 100k or higher a year, which is far above the median. Why should all the those making 60k pay for your tax break? (Because whether we call it a credit, a break, forgiveness, etc. it's all coming from the same pot).

I'm sure since you have finished a PhD (as have I) you have had the good fortune of more intelligence than average--I trust you can be aware that not everyone had the same intellectual resources to work with. You likely (though not necessarily) have some family background that helps you (even if your parents didn't go to college, and didn't contribute financially to your undergraduate education, they likely had higher than average intelligence if they have a kid who completed a PhD) I think it is problematic that we have drifted into being a society that encourages families to believe that every kid--regardless of their aptitude--will do better if they go to college, and I have no problem with correcting that. I am glad that the student loan forgiveness is being built on an earlier initiative for far greater investment in community college which makes sense for more students. I see the loan forgiveness as an effort to help clean up some of the mess that the government contributed to around college costs/encouragement of 4 year college for all, and I want it followed up with continued investment in community college, greater support for trade education and on-the-job training, and significant public investment in excellent 4 year colleges rather than treating it primarily as an individual good that people purchase.

Thank you. There are so many ways people are benefiting from government handouts. They are mad about $10k in forgiveness but paid for their kids education with a 529 that they got a tax break for. Ugh make it make sense!!!

Wealthy people somehow dont see tax breaks as handouts. They can bemoan 10k a kid while ignoring how much they aren't paying on not only their 529s, but their IRAs and 401ks not to mention their mortgage deductions.

You get tax breaks for paying student loans in the same way you get a tax break for paying a mortgage dum dum. What you call for would be like a home owner not only being able to write off mortgage interest, but also getting a portion of their mortgage principal reduced. That's not the same like you are trying to equate. Jeez you are really obtuse and willfully ignore the fact that millions of student loan borrowers already get tax breaks for borrowing.

I don't know how you can be this obtuse-- as adults you are also getting all sorts of "layered tax breaks." For having a kid--Maternity/paternity leave, child tax credit + dependent exemption+ 529 education benefit (for education at any level K-graduate)+ public school funding+ many other potential programs and credits that may come into play. The tax breaks for student loans are currently of miniscule value for most people--and a tiny portion of loans are subsidized. No one is getting more money back than they are paying in.

Conversely, the people getting social security/medicare right now get far more than they ever paid into the system--even inflation adjusted and with the time value of money.

This disparity is true on the state level. Connecticut, California, NY, MA, Wisconsin, Minnesota, Washington all pay vastly more in federal income taxes than they receive in federal funding.

Keep crying and moving the goal posts.

First you tried to claim that everyone who gets tax breaks for 401ks, IRAs, 529s etc. were getting 'handouts' and that that was a reason for student loan forgiveness. Then when it was pointed out that people paying student loans already DO get tax breaks for paying loans, you tried to move the goal posts to claim that upwards of $2500 per year in deduction is 'a miniscule drop in the bucket'.

Stop being a whiny entitled loser and pay your bills. Forgiveness is not the same as tax breaks in other areas. Student loan borrowers already get tax breaks, duh. Now you want to double dip because you are entitled and lazy.

I don't have any student loans! (I had one 8500 graduate student loan that I paid off years ago). Nor do my kids! I just think they make sense for society and think people who don't notice all the preferential treatments they also get in tax breaks just can't see the difference between a federal government deciding to forgive loans it gave out and other forms of debt.

Once again, student loan borrowers DO GET PREFERENTIAL TREATMENT. THEY GET TAX BREAKS OF UP TO $2500 PER YEAR. You want student loan borrowers to double dip in treatment now.

check the income requirements. Once you start making a reasonable income by DC standards, your benefit goes away.

Oh whoop dee doo. So sad borrowers making 6 figures are not eligible for tax deductions on student loans. There will be income caps on loan forgiveness too.

So we reward those that took at debt for worthless degrees that can't pay it back? Wtf

Yup, pretty much. Only the genders studies, philosophy majors, english majors, and all of the crappy degree holders get this free handout.

+1. Looking at the Twitter handles for the folks cheering this on and it’s shocking how many worthless degrees are out their. I mean, who the hell borrows six figures for an ethnic studies degree? Maybe at the community college level, but at the university level?

See that's my point. I mentioned the "hobby degrees" earlier...DD was an art major in HS and wanted to pursue ART in college. I convinced her to study Info Systems. Months after graduation, all in her cohorts have jobs anywhere from 75k to 95k, with her @90k. For a 24year old with zero bills, that's a ton of money. She still draws and paints regularly, but thanks every couple weeks when she sees her paycheck. She's loving adulting, and can't believe she getting paid so well for what she did in college.

[Anonymous]

Anonymous wrote:Do I get $10k toward a graduate degree? Because I didn’t go to grad school because I knew that debt was a bad idea. So now I also gave up all the higher earnings I could’ve had.

This comment is non-sensical. First of all, you aren't guaranteed higher earnings with a graduate degree. Second, if you DO get higher earnings, the debt you take on should pay off. And third, what graduate degree costs 10k? None of them.

If you want to go to grad school, go. No one is stopping you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is just SUCH a slap in the face to those of us who already paid off our loans.

Do they plan to do this annually? What about the kids who haven’t gone to college yet?

This. So if you budget and dutifully pay off your loans, you're screwed. I paid mine off a few years ago becuase I was super aggressive about it. If only I'd Paid just the minimum payment and left $10K on the table, I could've put that money in my pocket. What absolute BS.

Is this a joke?

I still have loans and don't even qualify for forgiveness (consolidated way back when so they are no longer held by the federal government). But I'd MUCH rather have had the money to pay them off faster than get the 10k now (again, I don't even get the 10k so I'm not even defending this program).

I can't imagine being debt free and then getting upset about other people also getting rid of their debt. I'm happy for you that your loans are paid off. I just made an extra principal payment on my loans to hopefully get them down further. I'm happy for the people getting the 10k forgiven. Student debt sucks. It weighs me down and makes life harder. Why on earth would you be bitter about this?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is just SUCH a slap in the face to those of us who already paid off our loans.

Do they plan to do this annually? What about the kids who haven’t gone to college yet?

This. So if you budget and dutifully pay off your loans, you're screwed. I paid mine off a few years ago becuase I was super aggressive about it. If only I'd Paid just the minimum payment and left $10K on the table, I could've put that money in my pocket. What absolute BS.

In what way are you "screwed"? You are debt free. Congrats. You'd really have rather paid more interest over the years in order to take advantage of this program? That's idiotic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is just SUCH a slap in the face to those of us who already paid off our loans.

Do they plan to do this annually? What about the kids who haven’t gone to college yet?

This. So if you budget and dutifully pay off your loans, you're screwed. I paid mine off a few years ago becuase I was super aggressive about it. If only I'd Paid just the minimum payment and left $10K on the table, I could've put that money in my pocket. What absolute BS.

In what way are you "screwed"? You are debt free. Congrats. You'd really have rather paid more interest over the years in order to take advantage of this program? That's idiotic.

NP. There would have been no interest paid these last couple years.

[Anonymous]

Anonymous wrote:Do I get $10k toward a graduate degree? Because I didn’t go to grad school because I knew that debt was a bad idea. So now I also gave up all the higher earnings I could’ve had.

Same. Guess I should have started that graduate degree after all. Kind of sucks for those people who tried to do the right thing while others will get free money they are perfectly capable of paying off ($125/250k income limits - really?!).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is just SUCH a slap in the face to those of us who already paid off our loans.

Do they plan to do this annually? What about the kids who haven’t gone to college yet?

This. So if you budget and dutifully pay off your loans, you're screwed. I paid mine off a few years ago becuase I was super aggressive about it. If only I'd Paid just the minimum payment and left $10K on the table, I could've put that money in my pocket. What absolute BS.

Is this a joke?

I still have loans and don't even qualify for forgiveness (consolidated way back when so they are no longer held by the federal government). But I'd MUCH rather have had the money to pay them off faster than get the 10k now (again, I don't even get the 10k so I'm not even defending this program).

I can't imagine being debt free and then getting upset about other people also getting rid of their debt. I'm happy for you that your loans are paid off. I just made an extra principal payment on my loans to hopefully get them down further. I'm happy for the people getting the 10k forgiven. Student debt sucks. It weighs me down and makes life harder. Why on earth would you be bitter about this?

You need to get your arms around this: the debt is not forgiven, instead some else has to pay for it. Say this three times. That’s why people are understandably pissed.

https://www.cnbc.com/2022/08/24/bidens-student-loan-forgiveness-may-cost-taxpayers-prompt-inflation.html