Anonymous wrote:Important to understand that one's student loan debt may not be discharged upon death of the borrower in various circumstances. Depending upon when the loans were taken out, the loan may be viewed as community property in the 12 community property states and be inherited by the surviving spouse.

Also, if one is behind on payments, the overdue amount may remain after the borrower's death.

Private student loans may or may not be forgiven / discharged upon the death of the borrower.

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?

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.

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.

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.

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.

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.

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?

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: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.

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?

Anonymous wrote:

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.

Anonymous wrote:

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