It will be more than messy.

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?

Anonymous wrote:For those of you who think they’ll never restart, why? Even if the Biden plan goes through, people still owe above the $10k/$20k forgiveness threshold. Why shouldn’t people start paying that back?

PP here. I’m not saying payments shouldn’t resume, I’m just predicting they won’t. Once you pause something for three years, people get used to the new normal, and it’s a political nightmare for whoever restarts them. Do you really think Biden is going to do that one year out from an election? It would be political suicide.

Anonymous wrote:

Anonymous wrote:For those of you who think they’ll never restart, why? Even if the Biden plan goes through, people still owe above the $10k/$20k forgiveness threshold. Why shouldn’t people start paying that back?

Because they’re not due.

Those should become due while the first $10/$20 piece gets figured out.

Anonymous wrote:For those of you who think they’ll never restart, why? Even if the Biden plan goes through, people still owe above the $10k/$20k forgiveness threshold. Why shouldn’t people start paying that back?

Because they’re not due.

Anonymous wrote:I think there will be a lot of babysitters available.

Seriously, did they really think this wouldn’t happen?

(Also hoping the Sup ct goes against the admin’s forgiveness program, unless I can get my car loan forgiven and the first $10k of my kids college bill written off.)

The people with these loans are teachers, building inspectors, business owners. They aren't college kids, they are middle aged people with jobs who have been paying for years. And they still can't pay off these loans.

Mine are already forgiven, thankfully, but navigating PSLF was a nightmare. What a mess.

I totally support the first $X of your kid's college being free, by the way. State schools should be low-cost to all and free to most. It's wrong to tell people they need college degrees to work (required even for many jobs that shouldn't really need them), then make those degrees unaffordable without predatory loans.

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.

For those of you who think they’ll never restart, why? Even if the Biden plan goes through, people still owe above the $10k/$20k forgiveness threshold. Why shouldn’t people start paying that back?

Anonymous wrote:They will never restart payments. The wait has been too long. Once people are used to something (in this case not paying) they will never be able to resume it. It’s a political nightmare. Look at all the Central Americans who have had their TPS renewed every two years for more than 25 years based on a hurricane that occurred in the last 90s. And these are actual citizens. Payment resumption will never happen.

From your mouth to Gods ears. If I have to restart the $700/m payment with the inflation that has occurred in the interim I will be flat broke. If I can eke out another 3 years I can make it to PSLF

Anonymous wrote:Already threads in the politics forum.

OP here. yes there are topics there but its just a bunch of huff and puff from right and left...this is a real question about what people think will happen financially.

They will never restart payments. The wait has been too long. Once people are used to something (in this case not paying) they will never be able to resume it. It’s a political nightmare. Look at all the Central Americans who have had their TPS renewed every two years for more than 25 years based on a hurricane that occurred in the last 90s. And these are actual citizens. Payment resumption will never happen.

I think there will be a lot of babysitters available.

Seriously, did they really think this wouldn’t happen?

(Also hoping the Sup ct goes against the admin’s forgiveness program, unless I can get my car loan forgiven and the first $10k of my kids college bill written off.)

Implementation of the PSLF waiver is a big problem. Many thousands of people are eligible to have loans forgiven and never reenter repayment but MOHELA has screwed up so much their applications wont be processed by the time repayment starts.

Also the admin announced a fix for problems with IDR that has yet to be implemented. I dont really understand hwo those things square with August repayment.

Already threads in the politics forum.

if there is no resolution by May, you guys think all these people that have not paid anything in the last 3 years and hence its not budgeted for (obviously inflation now) are suddenly all gonna fork up and pay? This can get messy, I can easily see a major crisis brewing. What do you guys think??