Interesting Article Re. SLs and the government

Re: Interesting Article Re. SLs and the government

• bmo88 member

  

  August 2015

  Interesting read. I have discussed this with friends who honestly took out way more than they should have for non-lucrative degrees. Quite a few are banking on the nonprofit program or income based repayment with the 20 year cancellation. I have always been leery about the ability for our country to simply forgive/cancel so that many loans. It just wouldn't be sustainable or economically viable. DH and I took out $40k combined for three degrees. I have chose to not finish my masters (part way done from when previous employer paid for it) because I don't want more loans. We are paying back every penny. We prioritized payments even when we made very little money. I just want them gone.

  

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• simplyelise member

  

  August 2015

  We've paid off 26,800 on student loans in the last 10 months making about 77k gross with 2 months of unemployment in there and still tithing 10%. So I do not have much sympathy in me on this topic.

  
  

  DH has a coworker who works at a state department and his wife works for a prosecutor and they end up bringing low six figures home. They are both JDs who are on IBR and don't pay extra. But they just bought a house and now they are about to join a country club. They are banking on either public service forgiveness or the 20 year cancellation. This pisses me off so much.

  
  

  I don't think public student loan forgiveness should be as broad as it is. For lawyers especially, it's not a situation where there is a shortage of lawyers and we need to incentivize government legal work. There is an abundance of lawyers and the ones who choose to work for PAs or for statewide offices are also frequently doing so to further their political careers. Why should I be subsidizing that?

  
  

  I am glad that IBR exists for a lot of people who would probably not have had access to education without assistance and also for degree fields that have low wages, etc. 

  
  

  All that said, I'd be in favor of implementing all three of the options they listed in the article: cap total amount you can borrow, offer less forgiveness options for graduate programs, and increase cancellation from 20 to 25 years. I also don't think Pay as You Earn should be available to people of all income levels. I do think refinancing should be available.

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• Xstatic3333 member

  

  August 2015

  Yeah, I can agree with the three options in the article as well, at least as a step in the right direction. I also think you make a good point that it might be wise to limit PSLF to fields where there is a legitimate need.
  
  I don't personally judge people for using the forgiveness programs if they fairly qualify without gaming the system. I do think, however, that the programs themselves might be a poor idea, particularly as they relate to grad degrees.
  
  My grad degree is in a field where typical starting salaries are around $40,000, and I did take some loans, but what I consider a reasonable amount. Some of my friends borrowed in the six figures, however, and I know they are banking on forgiveness. H is in the same field, but graduated into the recession in 2008 and was underemployed for a while. He was on IBR for a few years to get on his feet, but now is off, which I think is a good use of these sorts of programs.
  
  Limiting the income level for PAYE is a great idea. 10% of discretionary income means a lot more to someone making $30,000 than someone making $80,000.

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• als1982 member

  

  August 2015 edited August 2015

  simplyelise said:

  We've paid off 26,800 on student loans in the last 10 months making about 77k gross with 2 months of unemployment in there and still tithing 10%. So I do not have much sympathy in me on this topic.

  
  

  DH has a coworker who works at a state department and his wife works for a prosecutor and they end up bringing low six figures home. They are both JDs who are on IBR and don't pay extra. But they just bought a house and now they are about to join a country club. They are banking on either public service forgiveness or the 20 year cancellation. This pisses me off so much.

  
  

  I don't think public student loan forgiveness should be as broad as it is. For lawyers especially, it's not a situation where there is a shortage of lawyers and we need to incentivize government legal work. There is an abundance of lawyers and the ones who choose to work for PAs or for statewide offices are also frequently doing so to further their political careers. Why should I be subsidizing that?

  
  

  I am glad that IBR exists for a lot of people who would probably not have had access to education without assistance and also for degree fields that have low wages, etc. 

  
  

  All that said, I'd be in favor of implementing all three of the options they listed in the article: cap total amount you can borrow, offer less forgiveness options for graduate programs, and increase cancellation from 20 to 25 years. I also don't think Pay as You Earn should be available to people of all income levels. I do think refinancing should be available.

  Amen. In a majority of instances, amassing a large amount of student loan debt is a choice. There are typically always options to minimize or avoid borrowing huge amounts for education (doing your first two years at community college or getting college credits in high school, choosing a less expensive university and/or degree, working part time during the school year and full time in the summer, working full time and going to school part time, or finding an employer who offers tuition assistance, etc.) I'm personally not a fan of tax payers bailing out those whose financial difficulties are brought about by their own making.

  HeartlandHustle | Personal Finance and Betterment Blog  

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• vlagrl29 member

  

  August 2015 edited August 2015

  sorry but if we made a 6 figure income those loans would be paid off asap - I wouldn't want to keep paying on them for 20 years just to get forgiveness.  They must be paying a lot because the Income based is obviously based on your income and theres is large.

  
  

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• simplyelise member

  

  August 2015

  vlagrl29 said:

  sorry but if we made a 6 figure income those loans would be paid off asap - I wouldn't want to keep paying on them for 20 years just to get forgiveness.  They must be paying a lot because the Income based is obviously based on your income and theres is large.

  They both work in government, so I think they make about 110k or so. But their loans are probably at least 180k. So if they do "Pay as you earn", they are capped at 10% discretionary income. That means they're not even getting close to paying them down. But they are currently in positions eligible for public loan forgiveness, so maybe they will be able to get them cancelled in 10 years.

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• CuriousKiddosMama mod

  

  August 2015

  I also want to know what counts as discressionary income. This was an interesting article.
  Overall I think the pay as you earn system is really stupid. If you borrow the $ you should repay it. I wonder if loans not getting repaid is going to have an impact on the cost of college.

  

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• Xstatic3333 member

  

  August 2015

  CuriousKiddosMama said:

  I also want to know what counts as discressionary income. This was an interesting article.
  Overall I think the pay as you earn system is really stupid. If you borrow the $ you should repay it. I wonder if loans not getting repaid is going to have an impact on the cost of college.

  I think the availability to borrow huge amounts in and of itself is definitely having a huge impact on the price of college. I'm pretty annoyed with my alma mater. It's become one of the priciest schools in the country while pouring money into fancy new dorms and gyms, while failing to invest in professors or classroom buildings. You could easily hit six figures for a bachelors' there, and if it's largely forgiven it's basically taxpayers funding fancy dorms for an organization that pays no taxes.

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