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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]
It's the problem they never recognize... that people with lots of student loans almost always have valuable degrees that support very high incomes. Yet the media highlights the sob stories about the small percentage who couldn't graduate with a worthless degree from New Hampshire Backwoods Pine Tree College because their Great Aunt Wilma got sick and had to live under the poor student's front porch. Thus... forgive the loans.

Everyone I know who has had loans forgiven is either well-off or rich.[/quote]

What I find most annoying about this whole debate is that the original terms of the loan stated forgiveness with 250 on time monthly payments. This was in the loan agreement I signed. The loan servicing companies did not keep track of this information. Many people met the required terms of the loan. I paid 250 payments on time. My income is irrelevant to the discussion because it was taken into consideration in my monthly payments.[/quote]

I don't understand. When you get a mortgage, you know what your payments will be for 30 years, if you have a 30-year loan. You also know you can pay it off early under the terms of most loan contracts.

How did your student loan differ? If you made the prescribed payments of original amount and interest, you should have paid off the loan in the 250 payments, or what am I missing?

The loan servicing company had to abide by the terms of the contract, just as you had to.

So explain to me like I'm 5 years old why your loan was not paid off in 250 payments per the terms of the contract?

The bipartisan laws that established the federal student loan system allow forgiveness of any remaining principal + interest after 20 years of payments for undergrad loans and 25 of payments for graduate school loans.

If you’re in a “public service” job - teachers, cop, military, federal/state/local government employee, working for a nonprofit - you can get forgiveness after 10 years of on-time payments.

Prior to Joe Biden, the federal government & its contacted loan servicers were doing a horrible job of applying the forgiveness to borrowers allowed under the law. Servicers would loss payment records. The Department of Education wasn’t processing forgiveness & their loan files were a mess. Joe Biden’s administration fixed those issues.

So really, Joe Biden is just making the government abide by its laws and responsibilities. I thought you wanted “law and order”? Well, this is it. [/quote]

I get it. The loan gets forgiven after 250 payments.

But my question remains. Why is the loan not paid off at the end of the 250 payment period? If you paid off the principal loan amount, plus interest, following an amortization table, there should be no need for loan forgiveness because there should be no unpaid amounts remaining. So why is the loan not paid off at the end of the 250 payment period? I need that part explained like I'm 5 years old.

[/quote]

Because federal law also allows for income-based repayment programs. It’s not a straight line amortization, like a 30Y mortgage. Your minimum payment amount will go up and down, depending on your employment status and earnings. Further, if you get laid off from a job, you can put your loan into forebearance. But your interest will accumulate while you’re not making payments and then get capitalized into the principal balance when you come back out of forebearance and start making payments. So then the interest is now compounding on new, higher amount of principal moving forward.

This is how people ending up paying monthly amounts for 10-15 years but barely touch the principal balance. In short, they are not making enough money to fully cover a principal + interest payment every month. Further, the previous loan servicers were HORRIBLE. They would “accidentally” put people into forbearance without authorization, the interest would get capitalized, and the borrowers had no recourse for a long time despite making payments (that only applied to interest!).

Here’s my personal example: I took out an undergrad loan in 2004. By the time I paid it off in 2010, I had gone through 3 servicers who all had partial documentation of my payments. If you’ve been paying for 20+ years, I guarantee you’ve probably had 4 servicers none of whom had complete information of your payment history. This would never happen with commercial or residential loan servicing with banks because there’s actually lawyers involved and servicers get sued. For student loan borrowers with an incompetent servicer, you actually need to sue the federal government….who can afford that? [/quote]

"By the time I paid it off in 2010, I had gone through 3 servicers who all had partial documentation of my payments. If you’ve been paying for 20+ years, I guarantee you’ve probably had 4 servicers none of whom had complete information of your payment history. "

These two sentences are a lie. I guarantee they are.  This would violate so many state and federal statutes, it's not funny. Nope. Not buying that for a second.[/quote]

lol you know absolutely nothing. Servicers have been the primary problem with student loans.

https://www.forbes.com/sites/adamminsky/2023/11/03/27-million-student-loan-borrowers-to-be-compensated-for-servicer-problems/?sh=77b1f7f87576[/quote]

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