Federal student loan borrowers can expect “the most affordable student loan plan ever”, Biden said in a video address on Tuesday announcing significant changes to the debt from higher education held by over an eighth of the country.
To me, the biggest wins is that interest cannot overcome your payment. So many people have loans that are more than they started with. Holding steady isn’t great, but it’s still a massive step forward. The forgiveness rules do mean that effectively some people have to pay until death. There’s no upper limit for forgiveness. More loans means longer payments. I was hoping for a cap help cool the cost of college because lenders would think twice with the interest cap and a known end of life.
Luckily there’s no payments until death in this plan, except for people with short lifespans I suppose. If you make minimum payments for twenty years, and the loans aren’t paid off yet, any remaining balance is forgiven. That includes zero dollar payments if your minimum payment is 0 because of low income. If you apply for forgiveness under public service loan forgiveness it’s shortened to 10 years of minimum payments. Prior payments under other repayment plans should count toward forgiveness too, clock isn’t suddenly resetting to twenty years for everyone.
Unfortunately Biden is not able to change the interest rate. Even though the law clearly grants him the power to forgive or modify many loan terms, it does not grant him the power to change the interest rates, which are set by statute. And even though the law clearly granted him forgiveness powers we all know how that went with the supreme court. So I don’t see them changing interest rates unless democrats get back the house and find a way to overcome a filibuster in the senate.
Yes, if you were getting zero dollar minimum payments under an income based payment plan (not deferrment or delinquent), then that does count toward forgiveness, which is any balance remaining after twenty years of payments for undergrad and twenty five years for graduate loans under the new terms. Ten years of payments under income based for public service loan forgiveness. Also forbearance zero dollar payments during covid counts towards both too.
Anyone know how this affects a homemaker that still has student loans. Is the income based on the household income or the loan holder whose current income is 0?
Edit:
From a nerdwallet article I found this:
Benefits for some married borrowers. Spousal income for borrowers who are married and file taxes separately will be excluded from IDR payment calculations; spouses no longer required to co-sign your IDR application.
So it looks like maybe filing separate can be a possibility though have to research any other tax implications.
Let them. Let republicans sue and drive the youth vote away further, let loan servicers emphasize how fucking ghoulish they actually are. Let it fuel actual legislation to change this shit.
They aren’t trying to win the current youth vote really, they’re already enacting sweeping educational changes in Republican controlled states to just indoctrinate the next round of youth voter at the start.
Good luck with that. Does anyone really think passing gag rules about the LGBT is going to even wiggle the needle? Even in a pre-internet era no self-respecting teen is going to think religious grandpa bullshit is worth shit.
Not someone. It was CATO. it was CATO that sued twice. Their argument was that with less needy people they would have problems hiring. This is from their filing btw.
Just so anyone is unaware, under the old system if you worked for CATO you were working for a non-profit which meant after dla decade you would be eligible for a lot of student loan breaks.
We are paying people to work for a lobbyist and when there was talk of stopping that the lobbyist sued. Never ever ever forget that it was CATO that did this. Not just someone.
It would be simpler, but then we would be subsidizing the 1% student loans. We already have that problem with social security: giving out massive payments to rich people while the program slowly runs out of money.
Who cares? This is how they fuck us. We can’t help anyone because someone who doesn’t need help can get it? Life is unfair you don’t make it less fair by making us all suffer.
The vaccine is available for free to everyone, as a result people who wanted it got it. That means the homeless and billionaires.
No, he didn’t. He tried the motions. The President does not have to collect on a debt or collect a tax without Congress forcing it. Which Congress can’t practically do.
This always baffles me. I hear people say “I’m never voting for a Democrat again! They couldn’t get student loan forgiveness done!!”
You think Republicans will get student loan forgiveness done? You think not voting will get student loan forgiveness done? Think again.
Biden and Democrats are doing everything they possible can in a hostile environment where Republicans sue as soon as any forgiveness is on the horizon. And Trump’s SCOTUS is there to help Republicans in that effort.
“Most affordable ever” does not mean “most affordable possible.” He tried that. SCOTUS stopped him. He’s doing what he can to make the situation better.
Honestly I think this is better on the whole. Not if you were going to get your loans forgiven - I get that - but for today and tomorrow’s borrowers, this policy will be a positive thing and will still help current debt holders, too.
It can actually end up having the effect of causing tuition to go up.
When student loans became loans that couldn’t get forgiven, and federal student loans became widely accessible for poor students, tuition prices got jacked up because the universities knew that they could get away with it. I imagine a similar thing will happen here.
The only true solution is to have free public higher education like the rest of developed nations do.
The true solution was to not mess with the system we had. Where the state schools were nearly free and debt was easy to discharge. The problem was they made it impossible to discharge.
This program will actually save my family more money than the program shut down by SCOTUS. Our loans were never (and are never) going to be completely forgiven, and that’s fine. We owe collectively ~$90k. This plan is a manageable path to payoff for us, at least.
Fed loans should be scrapped, the reason college is so expensive is colleges see that the gov will give loans to anyone and back them up. The second that this became the norm, these colleges just saw a blank check.
Not sure how effective that would be. It would have to be paired with regulation on the cost of college tuition for it to actually do anything.
And even then, a “more affordable” college education still is unobtainable to many students. Most people have zero savings or even a negative net worth.
So you’re solution is to allow people who have no savings and negative net worth to borrow hundreds of thousands of dollars that they cannot get rid of even via bankruptcy? If college tuition was 3k a semester or per year…way more people could afford it.
… putting a cap on tuitions based on poverty line? Subsidizing tuitions for people relative to poverty line? There are many ways to accomplish this it’s not impossible to make tuitions reasonable for people who can afford them and attainable for people who can’t. We all benefit from people being more highly educated
So the person who is $1 above the poverty line gets shafted? Most students could just not be claimed by their parents and instantly be below the poverty line.
Also you have to actually be independent to claim yourself as independent… have you actually gone through that process? You have to literally provide proof that your parents either A) could not help fund your education or B) are estranged or dead, and also have to sign an affidavit. Source: I had to do this myself in college
What? You do know that the poverty line is used as a base reference often right? Usually government assistance programs will qualify based on anyone below X% of the poverty line like 200% or something. You don’t have to be at or below the poverty line to qualify.
I really don’t know if you’re being serious, but the points you’re bringing up seem like nonsense. Obviously there are ways to manage these things, it just depends on how you want to go about it.
The point is, you’re still allowing colleges to charge whatever the fuck they want and they know the feds will pay it. Without the loans they’ve got to actually get serious about the bullshit spending they do and properly price the cost of attendance.
The program, named Save (Saving on A Valuable Education), will replace the Revised Pay As You Earn (Repaye) plan, lowering the minimum amount due on student loans for borrowers who enroll in an income-driven repayment (IDR) plan.
Under the old rules, borrowers enrolled in this plan were required to pay at least 10% of their discretionary income, or the difference between their adjusted gross income (AGI) and 150% of the federally designated poverty line. Now, borrowers only have to pay the difference between their income and 225% of the poverty line.
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