student loans...what will happen when payments start

[Anonymous]

PSLF is completely different and separate from the Biden loan forgiveness. If they screw with PSLF yeah a bunch of people will sue bc they made decisions based on it that involved foregoing higher salaries in the private sector.

[Anonymous]

Anonymous wrote:So no one has been paying student loans back at all for several years? I had no idea. Jesus, no wonder inflation has been crazy.

You think the student loan pause is the cause for inflation?.....oh my.

[Anonymous]

Anonymous wrote:So no one has been paying student loans back at all for several years? I had no idea. Jesus, no wonder inflation has been crazy.

No, I've been paying. I've paid a lot down and never inflated my life really. So, if it starts up again I'm not worried. I also was paying like $900 over my original payment. But my income also more than doubled since March 2020. I could have bought a house like everyone else, but I figured this was more important. I'll finish paying next year or if I have a good bonus this year then maybe even earlier!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those who don’t understand why student loans are different: 1) they loaned to risky candidates who had low chances of being able to repay 2) they charged extremely high interest rates 3) the interest compounds (unlike a mortgage) 4) they are not dischargeable by bankruptcy or even at death.

So quit comparing to a mortgage.

+1

Absolutely correct.

On top of soaring costs for college, the federal government further fueled higher education costs by handing out money to any college student without qualification at continuously compounding interest rates which were unjustified for the minor level of risk. What the federal student loan program did to graduate and professional students was far worse due to the amounts involved.

The US government federal student loan program placed many into debt for life.

There’s lots of misinformation on this thread. Federal student loans are absolutely dischargeable upon not only death but also permanent disability. The interest rates have been variable for a few years and are similar to what you’d find for a private student loan, often better unless you are super well qualified. You can pay your loan back based on your income—something that you could never do with your mortgage. So if you make no money, you pay $0 and those payments count towards 20-25 year forgiveness. The Biden admin is implementing a new Income driven plan this summer which is extremely generous, ensuring median income families pay extremely small or no monthly payments and and the debt won’t amortize if your payment doesn’t cover interest. Debt pause is tied to HEROES act authority which is expiring but Biden could do some last ditch vague extension but that’ll be it. Pausing the loans each month is super expensive and is causing us to approach the debt ceiling faster which is angering Republicans and some Democrats.

As for what will happen, unfortunately it will be messy. There will be a grace period once loans restart and borrowers who may struggle to repay will hopefully sign up for income driven repayment or secure economic hardship deferments or other forbearances. It’s tough.

Are student loans dischargeable upon death ? If one owes $150,000 on student loan debt at the time of death, but has an estate worth $300,000, is the loan forgiven or must the estate be without adequate funds to repay the student loan in order to be "discharged" ?

If you see permanent disability as an out for student loan debt, I would like to know who or which entity determines what qualifies as "permanent disability".

Suggesting that borrowers can seek relief through forgiveness has been shown to be unrealistic up to this point in time.

Yes. All federal (including parent plus) ones are, and most if not all private ones are.

Silly question, but I thought all debts were discharged at death? No one else can be compelled to pay your debts - right?

[Anonymous]

We invested/saved the extra cash. It was about $80k in cash in uncommitted money (both of us have law school loans) and is now $100k due to investment gains. So we will have to pay cap gains tax when we do resume paying, but still ahead.

People who have been paying are schmucks but so are people who let lifestyle inflation happen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those who don’t understand why student loans are different: 1) they loaned to risky candidates who had low chances of being able to repay 2) they charged extremely high interest rates 3) the interest compounds (unlike a mortgage) 4) they are not dischargeable by bankruptcy or even at death.

So quit comparing to a mortgage.

+1

Absolutely correct.

On top of soaring costs for college, the federal government further fueled higher education costs by handing out money to any college student without qualification at continuously compounding interest rates which were unjustified for the minor level of risk. What the federal student loan program did to graduate and professional students was far worse due to the amounts involved.

The US government federal student loan program placed many into debt for life.

There’s lots of misinformation on this thread. Federal student loans are absolutely dischargeable upon not only death but also permanent disability. The interest rates have been variable for a few years and are similar to what you’d find for a private student loan, often better unless you are super well qualified. You can pay your loan back based on your income—something that you could never do with your mortgage. So if you make no money, you pay $0 and those payments count towards 20-25 year forgiveness. The Biden admin is implementing a new Income driven plan this summer which is extremely generous, ensuring median income families pay extremely small or no monthly payments and and the debt won’t amortize if your payment doesn’t cover interest. Debt pause is tied to HEROES act authority which is expiring but Biden could do some last ditch vague extension but that’ll be it. Pausing the loans each month is super expensive and is causing us to approach the debt ceiling faster which is angering Republicans and some Democrats.

As for what will happen, unfortunately it will be messy. There will be a grace period once loans restart and borrowers who may struggle to repay will hopefully sign up for income driven repayment or secure economic hardship deferments or other forbearances. It’s tough.

Are student loans dischargeable upon death ? If one owes $150,000 on student loan debt at the time of death, but has an estate worth $300,000, is the loan forgiven or must the estate be without adequate funds to repay the student loan in order to be "discharged" ?

If you see permanent disability as an out for student loan debt, I would like to know who or which entity determines what qualifies as "permanent disability".

Suggesting that borrowers can seek relief through forgiveness has been shown to be unrealistic up to this point in time.

Yes. All federal (including parent plus) ones are, and most if not all private ones are.

Silly question, but I thought all debts were discharged at death? No one else can be compelled to pay your debts - right?

The “someone” is your estate. If your husband dies and has debt in his name only you don’t just get to keep his car, home equity, etc. while his credit card company holds the bag.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those who don’t understand why student loans are different: 1) they loaned to risky candidates who had low chances of being able to repay 2) they charged extremely high interest rates 3) the interest compounds (unlike a mortgage) 4) they are not dischargeable by bankruptcy or even at death.

So quit comparing to a mortgage.

+1

Absolutely correct.

On top of soaring costs for college, the federal government further fueled higher education costs by handing out money to any college student without qualification at continuously compounding interest rates which were unjustified for the minor level of risk. What the federal student loan program did to graduate and professional students was far worse due to the amounts involved.

The US government federal student loan program placed many into debt for life.

There’s lots of misinformation on this thread. Federal student loans are absolutely dischargeable upon not only death but also permanent disability. The interest rates have been variable for a few years and are similar to what you’d find for a private student loan, often better unless you are super well qualified. You can pay your loan back based on your income—something that you could never do with your mortgage. So if you make no money, you pay $0 and those payments count towards 20-25 year forgiveness. The Biden admin is implementing a new Income driven plan this summer which is extremely generous, ensuring median income families pay extremely small or no monthly payments and and the debt won’t amortize if your payment doesn’t cover interest. Debt pause is tied to HEROES act authority which is expiring but Biden could do some last ditch vague extension but that’ll be it. Pausing the loans each month is super expensive and is causing us to approach the debt ceiling faster which is angering Republicans and some Democrats.

As for what will happen, unfortunately it will be messy. There will be a grace period once loans restart and borrowers who may struggle to repay will hopefully sign up for income driven repayment or secure economic hardship deferments or other forbearances. It’s tough.

Are student loans dischargeable upon death ? If one owes $150,000 on student loan debt at the time of death, but has an estate worth $300,000, is the loan forgiven or must the estate be without adequate funds to repay the student loan in order to be "discharged" ?

If you see permanent disability as an out for student loan debt, I would like to know who or which entity determines what qualifies as "permanent disability".

Suggesting that borrowers can seek relief through forgiveness has been shown to be unrealistic up to this point in time.

Yes. All federal (including parent plus) ones are, and most if not all private ones are.

Silly question, but I thought all debts were discharged at death? No one else can be compelled to pay your debts - right?

NP. It depends on cosigners.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So no one has been paying student loans back at all for several years? I had no idea. Jesus, no wonder inflation has been crazy.

No, I've been paying. I've paid a lot down and never inflated my life really. So, if it starts up again I'm not worried. I also was paying like $900 over my original payment. But my income also more than doubled since March 2020. I could have bought a house like everyone else, but I figured this was more important. I'll finish paying next year or if I have a good bonus this year then maybe even earlier!

Wow you made a huge mistake.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not a political discussion. We are discussing the ramifications of a restart on the economy if a whole bunch of people decide to not pay and go into default. Does anyone know the magnitude of student loans vs that of the housing crisis from 2008? Is it even close or not? We keep hearing the consumer is strong blah blah and I just don’t see it, who is sitting around on all this stimulus money? Is the consumer strong because they are paying their student loans? Will all this change when the pause ends? Will the economy go to shit since the consumer is not “strong” anymore?

There won’t be any ramifications bc the money is owed to the govt who made a massive profit from it. It’s just a paper debt. There’s no fallout to the private economy.

It's no different than writing $10k or $20k checks to some arbitrarily defined group of citizens.

What type of debt is *not* "just a paper debt?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those who don’t understand why student loans are different: 1) they loaned to risky candidates who had low chances of being able to repay 2) they charged extremely high interest rates 3) the interest compounds (unlike a mortgage) 4) they are not dischargeable by bankruptcy or even at death.

So quit comparing to a mortgage.

+1

Absolutely correct.

On top of soaring costs for college, the federal government further fueled higher education costs by handing out money to any college student without qualification at continuously compounding interest rates which were unjustified for the minor level of risk. What the federal student loan program did to graduate and professional students was far worse due to the amounts involved.

The US government federal student loan program placed many into debt for life.

There’s lots of misinformation on this thread. Federal student loans are absolutely dischargeable upon not only death but also permanent disability. The interest rates have been variable for a few years and are similar to what you’d find for a private student loan, often better unless you are super well qualified. You can pay your loan back based on your income—something that you could never do with your mortgage. So if you make no money, you pay $0 and those payments count towards 20-25 year forgiveness. The Biden admin is implementing a new Income driven plan this summer which is extremely generous, ensuring median income families pay extremely small or no monthly payments and and the debt won’t amortize if your payment doesn’t cover interest. Debt pause is tied to HEROES act authority which is expiring but Biden could do some last ditch vague extension but that’ll be it. Pausing the loans each month is super expensive and is causing us to approach the debt ceiling faster which is angering Republicans and some Democrats.

As for what will happen, unfortunately it will be messy. There will be a grace period once loans restart and borrowers who may struggle to repay will hopefully sign up for income driven repayment or secure economic hardship deferments or other forbearances. It’s tough.

Are student loans dischargeable upon death ? If one owes $150,000 on student loan debt at the time of death, but has an estate worth $300,000, is the loan forgiven or must the estate be without adequate funds to repay the student loan in order to be "discharged" ?

If you see permanent disability as an out for student loan debt, I would like to know who or which entity determines what qualifies as "permanent disability".

Suggesting that borrowers can seek relief through forgiveness has been shown to be unrealistic up to this point in time.

Yes. All federal (including parent plus) ones are, and most if not all private ones are.

Silly question, but I thought all debts were discharged at death? No one else can be compelled to pay your debts - right?

The “someone” is your estate. If your husband dies and has debt in his name only you don’t just get to keep his car, home equity, etc. while his credit card company holds the bag.

If the debt is in his name and the car and home are joint property you do. At death, joint holding pass to the joint account holder

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a political discussion. We are discussing the ramifications of a restart on the economy if a whole bunch of people decide to not pay and go into default. Does anyone know the magnitude of student loans vs that of the housing crisis from 2008? Is it even close or not? We keep hearing the consumer is strong blah blah and I just don’t see it, who is sitting around on all this stimulus money? Is the consumer strong because they are paying their student loans? Will all this change when the pause ends? Will the economy go to shit since the consumer is not “strong” anymore?

I would have also thought that there is no way the consumer is strong, but I can go to a casual restaurant last night, and it is absolutely packed on a Tuesday. I can order a new car and hope that it gets here in three months and I get the opportunity to pay full price.

So please, please bring back student loan repayments, because the Fed’s hikes don’t seem to be doing anything.

These are not the same people with the loans. They are the folks who got PPP loans forgiven, and who have under 3% mortgages, which loan holders don’t have, because they have been paying their loans.

Why would the loan payers have been paying their loans for the last three years?

[Anonymous]

Anonymous wrote:

Anonymous wrote:So no one has been paying student loans back at all for several years? I had no idea. Jesus, no wonder inflation has been crazy.

You think the student loan pause is the cause for inflation?.....oh my.

np. It's definitely a contributor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those who don’t understand why student loans are different: 1) they loaned to risky candidates who had low chances of being able to repay 2) they charged extremely high interest rates 3) the interest compounds (unlike a mortgage) 4) they are not dischargeable by bankruptcy or even at death.

So quit comparing to a mortgage.

+1

Absolutely correct.

On top of soaring costs for college, the federal government further fueled higher education costs by handing out money to any college student without qualification at continuously compounding interest rates which were unjustified for the minor level of risk. What the federal student loan program did to graduate and professional students was far worse due to the amounts involved.

The US government federal student loan program placed many into debt for life.

There’s lots of misinformation on this thread. Federal student loans are absolutely dischargeable upon not only death but also permanent disability. The interest rates have been variable for a few years and are similar to what you’d find for a private student loan, often better unless you are super well qualified. You can pay your loan back based on your income—something that you could never do with your mortgage. So if you make no money, you pay $0 and those payments count towards 20-25 year forgiveness. The Biden admin is implementing a new Income driven plan this summer which is extremely generous, ensuring median income families pay extremely small or no monthly payments and and the debt won’t amortize if your payment doesn’t cover interest. Debt pause is tied to HEROES act authority which is expiring but Biden could do some last ditch vague extension but that’ll be it. Pausing the loans each month is super expensive and is causing us to approach the debt ceiling faster which is angering Republicans and some Democrats.

As for what will happen, unfortunately it will be messy. There will be a grace period once loans restart and borrowers who may struggle to repay will hopefully sign up for income driven repayment or secure economic hardship deferments or other forbearances. It’s tough.

Are student loans dischargeable upon death ? If one owes $150,000 on student loan debt at the time of death, but has an estate worth $300,000, is the loan forgiven or must the estate be without adequate funds to repay the student loan in order to be "discharged" ?

If you see permanent disability as an out for student loan debt, I would like to know who or which entity determines what qualifies as "permanent disability".

Suggesting that borrowers can seek relief through forgiveness has been shown to be unrealistic up to this point in time.

Yes. All federal (including parent plus) ones are, and most if not all private ones are.

Silly question, but I thought all debts were discharged at death? No one else can be compelled to pay your debts - right?

Honda Financial Services can make a claim on your estate for the $20k you owe on your Accord.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a political discussion. We are discussing the ramifications of a restart on the economy if a whole bunch of people decide to not pay and go into default. Does anyone know the magnitude of student loans vs that of the housing crisis from 2008? Is it even close or not? We keep hearing the consumer is strong blah blah and I just don’t see it, who is sitting around on all this stimulus money? Is the consumer strong because they are paying their student loans? Will all this change when the pause ends? Will the economy go to shit since the consumer is not “strong” anymore?

I would have also thought that there is no way the consumer is strong, but I can go to a casual restaurant last night, and it is absolutely packed on a Tuesday. I can order a new car and hope that it gets here in three months and I get the opportunity to pay full price.

So please, please bring back student loan repayments, because the Fed’s hikes don’t seem to be doing anything.

These are not the same people with the loans. They are the folks who got PPP loans forgiven, and who have under 3% mortgages, which loan holders don’t have, because they have been paying their loans.

I have a federally backed student loan I've been paying since 2001/2ish (well, except for the past 3 years) and a mortgage under 3%. It is possible to have both.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a political discussion. We are discussing the ramifications of a restart on the economy if a whole bunch of people decide to not pay and go into default. Does anyone know the magnitude of student loans vs that of the housing crisis from 2008? Is it even close or not? We keep hearing the consumer is strong blah blah and I just don’t see it, who is sitting around on all this stimulus money? Is the consumer strong because they are paying their student loans? Will all this change when the pause ends? Will the economy go to shit since the consumer is not “strong” anymore?

I would have also thought that there is no way the consumer is strong, but I can go to a casual restaurant last night, and it is absolutely packed on a Tuesday. I can order a new car and hope that it gets here in three months and I get the opportunity to pay full price.

So please, please bring back student loan repayments, because the Fed’s hikes don’t seem to be doing anything.

These are not the same people with the loans. They are the folks who got PPP loans forgiven, and who have under 3% mortgages, which loan holders don’t have, because they have been paying their loans.

Why would the loan payers have been paying their loans for the last three years?

Lady it’s not the folks who still owe tons in student loans or who are crippled by a $20K debt who have been eating out and buying up houses the last few years.