More students are seeking "forgiveness" of student loans

[sactoking]

I'm surprised it took 26 posts but, misleading title. The person in question is not getting their loans "forgiven". Loan forgiveness implies that the principal balance will not need to be repaid. From the OP:

he can hold off making payments

What the person is getting is either a forbearance or a deferral. In a deferral the borrower does not have to make principal and interest payments right now but the interest accrued is capitalized and increased P&I payments will need to be made in the future. In a forbearance the borrower does not have to make payments right now and the accrued interest is waived but P&I payments will need to be made in the future. In neither scenario is principal forgiven.

Currently student loan principal can only be forgiven if you take a public sector/teaching job, and even then you have to make payments for 10 years to have the remaining balance forgiven.

 

[Doppel]

I'm surprised it took 26 posts but, misleading title. The person in question is not getting their loans "forgiven". Loan forgiveness implies that the principal balance will not need to be repaid. From the OP:



What the person is getting is either a forbearance or a deferral. In a deferral the borrower does not have to make principal and interest payments right now but the interest accrued is capitalized and increased P&I payments will need to be made in the future. In a forbearance the borrower does not have to make payments right now and the accrued interest is waived but P&I payments will need to be made in the future. In neither scenario is principal forgiven.

Currently student loan principal can only be forgiven if you take a public sector/teaching job, and even then you have to make payments for 10 years to have the remaining balance forgiven.

Buzz off, we are bitching and you are a buzz kill

It's obvious to me that these loans shouldn't be getting made unless there is a good chance of them being paid off. They should probably also be just like private loans with the means to declare void in bankruptcy. This means there will be less money around, which will also pull student loan debt down (it's massive in huge part because a total idiot can get it and cruise through a C- average in his toilet paper degree racking up $20k debt/year).

 

[nageov3t]

my understanding was that when student loans could be dropped via bankruptcy, it was being masssively abused, especially by doctors/lawyers.

rack up a million dollars in debt, declare bankruptcy, and live with your parents while you ride out the credit hit.

 

[RTWcag]

I like it all the people who say we should lower taxes because it will increase government revenue, now claiming that the way to get the loans repaid is to have the government take all the workers money. What is the maximum percent of income that should go towards student loan payments?

 

[nehalem256]

I like it all the people who say we should lower taxes because it will increase government revenue, now claiming that the way to get the loans repaid is to have the government take all the workers money. What is the maximum percent of income that should go towards student loan payments?

You do realize that loans are a voluntary obligation right?

 

[DrPizza]

With the housing market, there was plenty of blame to go around - to the owners who couldn't afford their houses, and probably just as guilty - to the loan agents (you know, the guys who should be the experts on what people can afford) who convinced the buyers that they COULD afford the house. Many loans should never have been made.

Now, with student loans, they'll loan you any amount of money (it seems), no questions asked. At the same time, you have a culture that tells kids "if you go to college, you'll get a good job." I even heard that last night on the news "college is a good investment." Sure, overall it's a good investment. But, there is a whole spectrum of outcomes. Majored in fine arts, English literature, US history, psychology? How many employers are thinking, "gee, if only we had someone who memorized all the battles of the Civil War." People need to be given reasonable expectations of the value of their degree upon graduating.

I almost want to say "make internships mandatory." However, that's a quick way to weed out the hard working students in college from the slackers. 50 job applications for an entry level position? Let's see, 45 have zero experience (not that it matters, experience really isn't necessary; we put that requirement there to limit the pile of applicants.) Heyyyy, look at these 5 - they went to the trouble of finding an internship. I know a lot of kids - I keep track of a lot of my former students. Every one of them who did an internship or found a summer job in their field is hired before they even graduate, with the exception of one psychology major (not exactly sure what the internship was.)

 

[nextJin]

This is one of those things where I believe if the States had any say in the matter they could bring back high school specific courses in mechanics, carpentry, electrical, design, etc. So those that have zero desire to goto college or who can not afford it have another skill that could lead to some type of career.

The world needs ditch diggers, not everyone can goto college. Sending everyone and their moms to college only does two things both of which are negative. Esspecially with government loans pratically every college will raise tuition yearly and secondly the value of those degrees will become less when the market is flooded. This is happening in several degree fields so those that have a degree in underwater transgender mating habits get stuck with a huge debt and still work at McDonalds.

 

[Fenixgoon]

i saw someone post a "support this [loan forgiveness] initiative" on facebook. f that.

i picked engineering, a degree that pays. i pay my student loans back at ~2.5x the required rate. why should i subsidize everyone else who made a crap decision?

 

[Mursilis]

If you're too stupid to manage your money correctly, and not come out of school 100K in the hole, then you were probably too stupid for college.

 

[nehalem256]

i saw someone post a "support this [loan forgiveness] initiative" on facebook. f that.

i picked engineering, a degree that pays. i pay my student loans back at ~2.5x the required rate. why should i subsidize everyone else who made a crap decision?

Its called socialism. It doesnt exist to subsidize the people who make good decisions.

 

[WelshBloke]

140k seems like quite a lot to charge someone for a few years of education.

 

[nageov3t]

140k seems like quite a lot to charge someone for a few years of education.

a million dollars seems like quite a lot to charge someone for a new car, and you can be damned sure no bank is going to loan my middle class ass the money to buy a Maybach

 

[GoPackGo]

Here in MN the per year cost, including room and board at the University of Minnesota is $20,954. Lets say a person gets a nursing degree, that is still nearly $84000 of debt. So what happens if the nursing job market were to fall out. The person started a degree that was solid and good potential income,but now after graduation need to work at Wal-mart for $8.00 an hour.

A huge problem is the school charges the same no matter what 4-year degree you get.

 

[NoCreativity]

I almost want to say "make internships mandatory."...

That has been my advice to anyone who has kids in college. When I graduated the economy wasn't terrible, but wasn't great either. Friends who had done co-ops/internships either already had jobs or got them quickly after graduation. Those that didn't, struggled to find anything.

There should be ceilings for loans depending on degrees. Higher earning degrees get higher ceilings.

 

[GoPackGo]

That has been my advice to anyone who has kids in college. When I graduated the economy wasn't terrible, but wasn't great either. Friends who had done co-ops/internships either already had jobs or got them quickly after graduation. Those that didn't, struggled to find anything.

There should be ceilings for loans depending on degrees. Higher earning degrees get higher ceilings.

That would be nice, but school charge the same no matter what 4-year degree you get.

 

[nageov3t]

I know for a fact that it varies widely between fields, but for me, internships always felt like a case of the rich getting richer.

in the fields I was trying to get into (publishing, journalism, before both industries imploded), just about every single internship is unpaid. the kids who could afford to spend their summer breaks without an income racked up a new internship every summer, while the rest of us ground away in our McJobs (I did office temp work, but most of my friends spend their summers in retail).

not that it mattered in my case because I immediately changed career paths on graduation, but that was my own perspective on the internship racket.

 

[momeNt]

Quick! Someone call Krugman so we can blame this on the free market.

 

[NoCreativity]

That would be nice, but school charge the same no matter what 4-year degree you get.

So shouldn't that factor into the college/major decision making process? I agree with you, majors with less earning potential should not cost the same but I don't see that changing.

If a person really wants that degree with low earning potential, they need to find a way to make up for the lack of loans. It shouldn't be up to the taxpayer to foot their bill.

 

[GoPackGo]

So shouldn't that factor into the college/major decision making process? I agree with you, majors with less earning potential should not cost the same but I don't see that changing.

If a person really wants that degree with low earning potential, they need to find a way to make up for the lack of loans. It shouldn't be up to the taxpayer to foot their bill.

Look at education requirements for teachers and what they start out at for pay... I think we would need some balance for lower paying jobs that require strong levels of education but are vital to a working society.

 

[Thump553]

I agree that a restructuring of the program is necessary. One of the biggest areas of waste, and one that is essentially unreported, is the huge growth of so-called online colleges fueled by government loans. This is a growth industry on Wall Street (I recall reading that the Washington Post is being kept afloat by it's online college division) but the students overpay for loans that are not dischargeable in bankruptcy. Total student debt now exceeds total credit card debt-and I don't think it is because Americans have become more thrifty overnight.

I hate to sound like a Dave but this is one area where our government policies favor the corporate vendors over the students and the taxpayers, the ones that will foot the bill for this feasting at the government till.

 

[Imported]

i saw someone post a "support this [loan forgiveness] initiative" on facebook. f that.

i picked engineering, a degree that pays. i pay my student loans back at ~2.5x the required rate. why should i subsidize everyone else who made a crap decision?

Agreed. I'm paying off my loans at around a 3x rate and should be done in another 2 years.

 

[Paul98]

Your mom goes to college

 

[amdhunter]

Let them go broke.

 

[Darwin333]

http://news.yahoo.com/amid-student-loan-tussles-more-seek-forgiveness-204927348.html




140K debt for graphic design degree and 12K/year salary? Look like he needs some basic reality classes first.

So now we have idiots that would load up with huge debt for music appreciation, religious study, etc. and then they want the government, ie. the taxpayers, to forgive those loans after 10 years or so? More debts and deficits. China will take care of it, all of it. <sarcasm>.

Why should student loans not be discharable in bankruptcy like virtually every other kind of debt?

 

[Fern]

Why should student loans not be discharable in bankruptcy like virtually every other kind of debt?

As has been previously pointed out, upon graduation people could immediately declare bankruptcy and have the loans wiped out.

Most people don't have many assets upon graduation. There's little in the way of downside to otherwise prevent it.

Fern