Reply to student loans...what will happen when payments start

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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.[/quote]

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.[/quote]

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. [/quote]

[b]Are student loans dischargeable upon death ?[/b] 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.[/quote]

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

I have private. They are not.[/quote]

Which company?[/quote]

I paid my private loan off in the last year. It was with Firstmark. Payments were not paused at any point due to the pandemic. [/quote]

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