Student loans (What are the facts?)

[alkemyst]

fact: never, ever, ever get a private student loan.

nor consolidate your student loans into other types of credit.

While you can't declare them in bankruptcy, I have found student loan lenders for the most part are very reasonable with working things out.

 

[alkemyst]

in some narrow circumstances they can be discharged in bankruptcy.

Indeed, very rare:
http://studentaid.ed.gov/repay-loans/forgiveness-cancellation#discharge-in

They are willing to negotiate over the course of 10 years with even a non-full principle payment; it's extremely unlikely most would qualify when the rest of their debt is dissolved.

It may become more common with rates being much higher lately though.

I borrowed at less than 4%

 

[Wreckem]

i heard if you land a federal job, they clear some or all of your student debt. can someone confirm?

i took out a home equity and paid off my student debt. i can walk away from the mortgage and be clear of that headache.

Some agencies will pay up to $20k(some might be higher or lower) of your student loans over a set period of time.

There is also the PSLF as someone else mentioned, but that applies to anyone working in the loosely defined area of "public service".

My wife and I are both on IBR and are doing PSLF. Our forgiveness date is around 2023.

 

[Ophir]

I refuse to believe that someone with your lack of writing skill ever graduated from college. Can you at least try to put the small bit of effort into proper sentence structure? It also isn't too much to ask for coherent thoughts.

 

[alkemyst]

I refuse to believe that someone with your lack of writing skill ever graduated from college. Can you at least try to put the small bit of effort into proper sentence structure? It also isn't too much to ask for coherent thoughts.

 

[Corporate Thug]

Huh?

The facts are that you can't discharge your student loans in bankruptcy. So unless you die, sooner or later you will pay them off.

That's not necessarily true. You can discharge them but it's difficult.

 

[Corporate Thug]

fact: never, ever, ever get a private student loan.

my small private loan is nearly half the interest rate of my gov loans...

 

[Ophir]

That's Mr. Badass to you, manlet.

 

[Vdubchaos]

I don't think people realize just how much of an impact this is going to have on our economy in the near future. When I mean near future I'm talking about 5 years from now. We need people to spend. We need people to put back into the economy and they can't do it if they large monthly bills. We have millions of young people who will never purchase a home or a car. This is bad news.

It's actually good news.

Consumerism is NOT a good thing and is not sustainable (especially if the world follows).

 

[Whisper]

Someone had mentioned a 30-year forgiveness period for Income-Based Repayment (IBR); it's actually 25 years' worth of on-time payments. Not a huge difference, but a difference nonetheless. However, a key point is that the discharged loan amount(s), to the best of my knowledge, are then taxed as income. Thus, if you've been making IBR payments that haven't even covered accrued interest and end up having something like $200k discharged, it's going to be a very rough tax year for you if you haven't been saving up in anticipation of that.

Public Sector Loan Forgiveness, as mentioned, discharges the remaining debt after 10 years and the discharged amount isn't taxed. No one's actually made it to the 10-year point yet, but the first crop of folks should be getting there within the next couple years. I imagine a pretty large clusterf*ck when that happens. The biggest issue will be all the changeovers that occurred when loans went from federal to private managers, and relatedly the inconsistent documentation criteria by various loan managers. I foresee a whole bunch of folks who're thinking they've hit the 10-year mark being told that they don't qualify for X or Y reason, and that they still need to make Z number of payments (or that they were never actually enrolled in the program in the first place).

There are various other loan repayment assistance programs as well. The VA offers loan repayment as an incentive for certain new hires (i.e., they basically give you a set amount of "extra" money per year, in addition to your salary, that goes straight to loan repayment; I think usually around $10-20k). Similarly, the National Health Service Corp offers $30-50k in repayment funds for each 2-year block of full-time service in approved underserved areas. I don't know if you can work for more than 2 years, though. Also, NIH offers loan repayments of up to $35k/year for MD and/or PhD researchers working in approved topic areas (e.g., clinical, health disparities, pediatric). And then there's always military service.

 

[Wreckem]

Someone had mentioned a 30-year forgiveness period for Income-Based Repayment (IBR); it's actually 25 years' worth of on-time payments. Not a huge difference, but a difference nonetheless. However, a key point is that the discharged loan amount(s), to the best of my knowledge, are then taxed as income. Thus, if you've been making IBR payments that haven't even covered accrued interest and end up having something like $200k discharged, it's going to be a very rough tax year for you if you haven't been saving up in anticipation of that.

Public Sector Loan Forgiveness, as mentioned, discharges the remaining debt after 10 years and the discharged amount isn't taxed. No one's actually made it to the 10-year point yet, but the first crop of folks should be getting there within the next couple years. I imagine a pretty large clusterf*ck when that happens. The biggest issue will be all the changeovers that occurred when loans went from federal to private managers, and relatedly the inconsistent documentation criteria by various loan managers. I foresee a whole bunch of folks who're thinking they've hit the 10-year mark being told that they don't qualify for X or Y reason, and that they still need to make Z number of payments (or that they were never actually enrolled in the program in the first place).

There are various other loan repayment assistance programs as well. The VA offers loan repayment as an incentive for certain new hires (i.e., they basically give you a set amount of "extra" money per year, in addition to your salary, that goes straight to loan repayment; I think usually around $10-20k). Similarly, the National Health Service Corp offers $30-50k in repayment funds for each 2-year block of full-time service in approved underserved areas. I don't know if you can work for more than 2 years, though. Also, NIH offers loan repayments of up to $35k/year for MD and/or PhD researchers working in approved topic areas (e.g., clinical, health disparities, pediatric). And then there's always military service.

It went from 3rd party servicing companies to government affiliated servicing companies in 2006 or 2007. PSLF ONLY FORGIVES LOANS THAT ARE 1. Loans prior to 2007 that were consolidated into a Direct Consolidated loan or 2. Direct Loans that originated after the switch to Direct loans. So what you are saying won't happen as a persons loans would be all with one servicing company and there shouldn't be any changeovers. Also there is no "enrollment" into the program. You submit your employment history and it is verified. The best practice is to submit your employment history as you are working and not waiting until the end of the 120 payments. If you regularly submit your employment verification forms you can track how many payments you have made and how many more you have according to your servicing company. Once you have a 120 verified payments you then submit the application for forgiveness.

The earliest someone can get their loans forgiven under PSLF is Oct 1, 2007 as any payment made before that date does not count.

And 25 year loan forgiveness is a terrible idea. A person will end up paying back more than they borrowed and also get hit with a sizable tax bill.

 

[Mai72]

It went from 3rd party servicing companies to government affiliated servicing companies in 2006 or 2007. PSLF ONLY FORGIVES LOANS THAT ARE 1. Loans prior to 2007 that were consolidated into a Direct Consolidated loan or 2. Direct Loans that originated after the switch to Direct loans. So what you are saying won't happen as a persons loans would be all with one servicing company and there shouldn't be any changeovers. Also there is no "enrollment" into the program. You submit your employment history and it is verified. The best practice is to submit your employment history as you are working and not waiting until the end of the 120 payments. If you regularly submit your employment verification forms you can track how many payments you have made and how many more you have according to your servicing company. Once you have a 120 verified payments you then submit the application for forgiveness.

The earliest someone can get their loans forgiven under PSLF is Oct 1, 2007 as any payment made before that date does not count.

And 25 year loan forgiveness is a terrible idea. A person will end up paying back more than they borrowed and also get hit with a sizable tax bill.

In regard to the loan forgiveness program (IBR) what choices do these people have? There are people who owe $1,000 a month in student loans. How are they going to pay for this? The people that are enrolled in IBR aren't worried about 25 years from now. They are worried about today. If they can get their payments dropped to a manageable level then I think it's a good thing. Anyway, 25 years is a long time and we will probably see something dramatically happen to the student program. It's going to be revamped and the government will offer payouts to people who owe large students loans. This is going to be a hot topic in the near future.

 

[xeemzor]

In regard to the loan forgiveness program (IBR) what choices do these people have? There are people who owe $1,000 a month in student loans. How are they going to pay for this? The people that are enrolled in IBR aren't worried about 25 years from now. They are worried about today. If they can get their payments dropped to a manageable level then I think it's a good thing. Anyway, 25 years is a long time and we will probably see something dramatically happen to the student program. It's going to be revamped and the government will offer payouts to people who owe large students loans. This is going to be a hot topic in the near future.

The government should continue the trend of making changes to the student loan system only effect new loans. No one forced anyone to go to an expensive school or major in sociology. The people who took out large amounts of student for worthless degrees should be held accountable.

Of course, that probably won't happen and they will get a bailout because politicians are sensational idiots but I can dream.

 

[child of wonder]

It was stupid of me to pay off my wife's $23k student loan today. I should have waited for the eventual crash and gotten bailed out!

Responsibility FTL.

 

[QuantumPion]

The only ways to get out of paying student loan is to have minimal or no income for 20 years (in order to qualify for the minimum payment reduction plan) and then get the remaining balance forgiven. OR, work for the federal government and get the loan forgiven after 10 years.

Student loans are a horrible deal these days.When I was in college I did get some student loans, but I was getting a technical degree, the tuition wasn't as much, the student loan interest rate was only 1.7%, and the interest was deferred until graduation. Now, tuition is much higher, the loan interest is crazy high (7-10%!), and they charge you deferred interest. You'd have to be nuts to get any substantial amount of student loan on those terms.

 

[jaedaliu]

The only ways to get out of paying student loan is to have minimal or no income for 20 years (in order to qualify for the minimum payment reduction plan) and then get the remaining balance forgiven. OR, work for the federal government and get the loan forgiven after 10 years.

OR work for a different government entity (example: teacher in inner city school)

OR be a primary care physician in an underserved area for a given amount of time

Both of which examples are already given in this thread. I'm sure there are more ways.

 

[s0me0nesmind1]

Someone had mentioned a 30-year forgiveness period for Income-Based Repayment (IBR); it's actually 25 years' worth of on-time payments. Not a huge difference, but a difference nonetheless. However, a key point is that the discharged loan amount(s), to the best of my knowledge, are then taxed as income. Thus, if you've been making IBR payments that haven't even covered accrued interest and end up having something like $200k discharged, it's going to be a very rough tax year for you if you haven't been saving up in anticipation of that.

Public Sector Loan Forgiveness, as mentioned, discharges the remaining debt after 10 years and the discharged amount isn't taxed. No one's actually made it to the 10-year point yet, but the first crop of folks should be getting there within the next couple years. I imagine a pretty large clusterf*ck when that happens. The biggest issue will be all the changeovers that occurred when loans went from federal to private managers, and relatedly the inconsistent documentation criteria by various loan managers. I foresee a whole bunch of folks who're thinking they've hit the 10-year mark being told that they don't qualify for X or Y reason, and that they still need to make Z number of payments (or that they were never actually enrolled in the program in the first place).

There are various other loan repayment assistance programs as well. The VA offers loan repayment as an incentive for certain new hires (i.e., they basically give you a set amount of "extra" money per year, in addition to your salary, that goes straight to loan repayment; I think usually around $10-20k). Similarly, the National Health Service Corp offers $30-50k in repayment funds for each 2-year block of full-time service in approved underserved areas. I don't know if you can work for more than 2 years, though. Also, NIH offers loan repayments of up to $35k/year for MD and/or PhD researchers working in approved topic areas (e.g., clinical, health disparities, pediatric). And then there's always military service.

Why anyone would go for discharge is beyond me. 20-30 years and you're nearly already on your way out of the workforce. 20-30 years and you have paid so much interest (from obvious minimum payments) that you probably could have paid off the loan 5x with the amount of interest accrued.

Absolutely asinine to go for a discharge on any loans other than legitimate bankruptcy. The only case I would ever use it is if my house flipped from $200k to $100k value. That's the only time I would call it quits. File for bankruptcy, hurts my credit for a little while - but guess what? Thats why you have a wife for the next loan 😉

 

[s0me0nesmind1]

In regard to the loan forgiveness program (IBR) what choices do these people have? There are people who owe $1,000 a month in student loans. How are they going to pay for this? The people that are enrolled in IBR aren't worried about 25 years from now. They are worried about today. If they can get their payments dropped to a manageable level then I think it's a good thing. Anyway, 25 years is a long time and we will probably see something dramatically happen to the student program. It's going to be revamped and the government will offer payouts to people who owe large students loans. This is going to be a hot topic in the near future.

Are you high or just incredibly stupid?

 

[sdifox]

Worthless Degrees and lack of "professional" jobs.....and also lack of getting WHATEVER job.



School is no different than buying a house or a car. If you can't afford it, you shouldn't get it. Unfortunately it's still perceived as an investment (and it is of course)....



If you owe someone money, you SHOULD pay it off.

What's the problem?

Bankruptcy shouldn't be an "easy" way out. Sorry

So corporations can default on their obligations scat free but not people?

 

[s0me0nesmind1]

So corporations can default on their obligations scat free but not people?

Corporations have this thing called "credit".

With this said "credit" there is this thing-y called trust that they are given. However, in such cases, there are "accidents" that happen. There are also unlucky "situations". Just like your credit cards, they offer you a % of interest that is directly based on how much they trust you. HOWEVER, they fully know that a certain % of ANY trust level will not pay or screw-up at some point or another. The difference is that they know approximately how many of those people in that trust level will have a situation.

In a student loan situation... no trust is involved. No credit is monitored. No trust is earned. Complete dumbass? SURE! Take out $200k! No problem! You fuck up? Don't worry, it's on the tax payers! Suckers!

 

[Phoenix86]

In regard to the loan forgiveness program (IBR) what choices do these people have? There are people who owe $1,000 a month in student loans. How are they going to pay for this? The people that are enrolled in IBR aren't worried about 25 years from now. They are worried about today. If they can get their payments dropped to a manageable level then I think it's a good thing. Anyway, 25 years is a long time and we will probably see something dramatically happen to the student program. It's going to be revamped and the government will offer payouts to people who owe large students loans. This is going to be a hot topic in the near future.

Why are college educated people taking out loans they can't afford?

 

[Mai72]

Are you high or just incredibly stupid?

You don't think that this will happen? Have you seen what we owe as a country in student loans? One trillion dollars and counting. If you don't think this is going to impact the economy you must be very naive. A lot can and will happen in 25 years.

 

[s0me0nesmind1]

You don't think that this will happen? Have you seen what we owe as a country in student loans? One trillion dollars and counting. If you don't think this is going to impact the economy you must be very naive. A lot can and will happen in 25 years.

I'm not saying something isn't going to happen... But it's certainly not going to be the government paying them off you imbecile. Where do you think "government payouts" come from you dolt?

 

[Vdubchaos]

So corporations can default on their obligations scat free but not people?

Call your government, not me.

I never said ANYTHING Corporation was right......but I also didn't write laws.

 

[AznAnarchy99]

There was something about if you don't pay it off in 25 years they'll forgive you but you have to write it off as income on your taxes.

I can't even imagine having that hang over your head for that long.