student loans...what will happen when payments start

[Anonymous]

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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.

Why do you assume that all of these borrowers are "crippled" by their debts?

Bc it makes nonsense to let high interest compound on a 10K debt if you possess the money to pay it off.

If you have a federal student loan (not private) your interest shouldn't be very high. I can't remember what my interest rate is (since I haven't paid a payment since early 2020) but it is low enough that even our financial planner told us just to pay the minimum.

Then yours are old. Like before 2010. More recent ones have rates compounding at 6+ %.

[Anonymous]

The interest rate on unsubsidized student loans was 6.8% from 2006-2014. Compounding.

[Anonymous]

Anonymous wrote:The interest rate on unsubsidized student loans was 6.8% from 2006-2014. Compounding.

My kid has subsidized loans from 2019-2023 and the rates range from 2.75-4.99%.

[Anonymous]

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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.

Why do you say that?

You should have prioritized buying a house over loans from the beginning.

But why? I already save $2000 a month for a house.

Because if you bought a house, you would be up 25-30% right now on that investment but none of use knew so I give you that

[Anonymous]

Anonymous wrote:

Anonymous wrote:The interest rate on unsubsidized student loans was 6.8% from 2006-2014. Compounding.

My kid has subsidized loans from 2019-2023 and the rates range from 2.75-4.99%.

Most graduate programs end up in unsubsidized. The subsidized loans are small and whatever in this context

[Anonymous]

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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.

Why do you say that?

You should have prioritized buying a house over loans from the beginning.

But why? I already save $2000 a month for a house.

Because if you bought a house, you would be up 25-30% right now on that investment but none of use knew so I give you that

True. But I'm single and there's plenty of time to buy a house. And the investment is only realized if you sell. Most of my friends that did buy barely save for retirement, have small savings, and have endless repairs, and still have their looming student loans. I think buying is important but I'm not willing to compromise on general savings, maxing retirement, backdoor, hsa and brokerage just to say I have a house. I'd like to continue all of those things and have a home. Which is why I prioritized paying down my loans because at some point they will start up again and I will be in a good position to put a hefty down payment on a home and never have to worry about owing student loans. It will also be easier to take on a somewhat higher mortgage for the right home. I also can do this b/c I am in a higher paying field.

[Anonymous]

Can anyone tell me - will the current supreme court case affect PSLF loan nonpayments being treated as payments counting towards the 120 eligible payments?

I will qualify for PSLF loan forgiveness starting this summer. I have not paid my loan since the moratorium, which amounts to $10k in payments that could be forgiven IF every month of nonpayment counts....

[Anonymous]

Anonymous wrote:Can anyone tell me - will the current supreme court case affect PSLF loan nonpayments being treated as payments counting towards the 120 eligible payments?

I will qualify for PSLF loan forgiveness starting this summer. I have not paid my loan since the moratorium, which amounts to $10k in payments that could be forgiven IF every month of nonpayment counts....

No. The SC case is about Biden’s pen stroke forgiveness using the HEROES Act authority. It’s not about PSLF.

I had $160K in loan forgiven in August 22 due to PSLF and those awesome $0 payments during the pandemic. Those $0 payments saved me $20K in payments. What a time to be alive.

Keep trudging along with PSLF, it’s worth it.

[Anonymous]

Anonymous wrote:I worked at McDonald’s doing the summer and it helped pay at least 50% of my bill, why don’t kids work at McDonald’s doing the summer to help pay for college? McDonald’s is a great place to work when you’re young, it’s also fun.

Man, Boomers have no idea what things cost. I worked at a law firm over the summers making very good money and still had 6 figures of debt. And I am not young, this was many years ago.

But sure, go on about how you bootstrapped your way through [heavily subsidized] college by working a minimum wage job part of the year.

[Anonymous]

Anonymous wrote:Can anyone tell me - will the current supreme court case affect PSLF loan nonpayments being treated as payments counting towards the 120 eligible payments?

I will qualify for PSLF loan forgiveness starting this summer. I have not paid my loan since the moratorium, which amounts to $10k in payments that could be forgiven IF every month of nonpayment counts....

No it has nothing to do with the PSLF or PSLF waiver.

[Anonymous]

People need to start paying. It's a loan[! Debts need to be paid

[Anonymous]

Anonymous wrote:People need to start paying. It's a loan[! Debts need to be paid

How do you feel about the PPP loans that were forgiven under the same act? Or about strategic bankruptcies of businesses?

I agree that loans generally should be paid, but in this case government policies allowed student loans to balloon while the value of the education lessened over time. And they gave these loans to 18 year olds with little understanding of the long term implications. I think the government is squarely in its right to forgive them and to make the adjustments they are doing to repayment policies.

[Anonymous]

I think we’ll need to start paying in August regardless of the outcome of the lawsuit. We’ve all been given an amazing truly once in a lifetime reprieve where we’ve been acne to save or pay down our loans with zero interest. It’s very positive for borrowers.

[Anonymous]

Anonymous wrote:I think we’ll need to start paying in August regardless of the outcome of the lawsuit. We’ve all been given an amazing truly once in a lifetime reprieve where we’ve been acne to save or pay down our loans with zero interest. It’s very positive for borrowers.

Able not acne. Typing on my phone!

[Anonymous]

Anonymous wrote:I think we’ll need to start paying in August regardless of the outcome of the lawsuit. We’ve all been given an amazing truly once in a lifetime reprieve where we’ve been acne to save or pay down our loans with zero interest. It’s very positive for borrowers.

I totally agree. But I'm sure most people didn't save and didn't pay it down. Which is why I don't feel bad. It's been 3 years!!!