Forgive Student Loans? (Political)

[Katyusha]

There's a movement afoot to forgive everyone's student loans as a way to stimulate the economy. Approximately 108,000 people are part of this, although it's not an official movement in Congress or any government here that I'm aware of. Take a look.

 

[Salvor-Hardon]

If there's a petition for that, I'll sign. I'm still paying my students loans and I've been out for 15 years.

 

[Guest]

Speaking from enlightened self-interest, if they want to write off the last eight grand or so of my wife's student loans from her nursing program, I'm all for it.

Mine were paid off quite a few years ago.

 

[impressive]

This is treating something that's not even a symptom of the problem.

 

[S-Des]

I've been a proponent of something being built into unemployment that allows for freezing of your interest charges for the duration of your unemployment. When I lost my job, Sallie Mae was fine with giving me a year emergency deferment. Of course they were, because they are charging me interest that they'll forcibly take from me if I can't afford payments in the future. It's beyond a rip-off that I'm paying 9% on this loan, which is now higher than when I got it in the first place (and accumulating at a rate of $400/month while I'm so broke I can't afford to pay for fast food).

It wouldn't do that much to stimulate the economy, but anything that would stick it to the student loan people is fine with me.

 

[sr71plt]

I can see forgiving student loans over an extended period of service in such positions as the medical field and teaching, but if they want to forgive loans willy nilly, I'd like to have them pay me too for the twelve years of college and graduate school that my family or I covered on our own.

They were given as loans, not grants.

 

[Belegon]

I have to say that I am not in favor of forgiving any kind of loans. Refinance? Sure. Freeze interest? Okay, I can see that. At least the rate. Certainly I think that deferments at a reduced rate are possible.

I'm not necessarily in favor of forgiving mortgages either. I think they should be refinanced to allow people in trouble to survive... and you can do that without a loss of principle. Make a 30 yr mortgage a 40. Yes, in some cases a re-valuation, even if it causes a loss, is probably necessary. I'm thinking about situations like in Riverside County, CA... where people bought a home for 800K that is now worth 525K.

Foreclosure is expensive for the bank too. You'd be surprised how many of the companies holding those deals would be willing to take a loss on the principal to save the income stream.

 

[JAMESBJOHNSON]

I worked two full-time jobs and went to school full-time. I didnt get any loans at all. Whats in it for me?

 

[S-Des]

Whats in it for me?

The thanks of a grateful nation.

 

[TE999]

There's a movement afoot to forgive everyone's student loans as a way to stimulate the economy. Approximately 108,000 people are part of this, although it's not an official movement in Congress or any government here that I'm aware of. Take a look.

That 'idea' is ridiculous in it's face. A loan is an agreement to pay back what you owe whether it's for college, a house, a car, a tv...whatever. When I was in college (on the GI Bill) they were handing out student loans like Halloween candy. Learn now, pay later. So now people are going to be relieved of their obligations? That's teaching a lesson in responsibility, alrighty.

From a fiscal standpoint, how blowing off 108,000+ college loans is going to stimulate the economy is beyond me.

 

[sr71plt]

I also feel about this issue the same as I do about those knowingly chomping off more than they could afford for mortgages (because "everyone" was doing it, because house values were going to go up "forever," and because if it doesn't go down that way, "someone" will bail us all out anyway).

I paid off two mortgages the old fashioned way and see no reason why I should pay off everyone else's mortgage now.

This was the attitude my daughter-in-law worked on in mounting up $60,000 for a second and third post-graduate degrees after she married my son. And she was right. At a certain point, I got tired of hearing how poor they were, and I paid off the loan. Still waiting for her to say "thank you." (Not holding my breath--many of her generation were raised to believe they'd always be bailed out. Which brings us back to proposals to forgive student loans).

 

[Misty_Morning]

I can see forgiving student loans over an extended period of service in such positions as the medical field and teaching, but if they want to forgive loans willy nilly, I'd like to have them pay me too for the twelve years of college and graduate school that my family or I covered on our own.

They were given as loans, not grants.

My ex had over 100K in student loans (not grants). After Med school and residency he took a position in a severely under served location. He had to work there 3 years and all his student loans were paid off.

I still had to pay mine off. And it took me 7 years....while we were married...while he was making 6 figures...while I had taken nearly 50% salary reduction so "we" aka HE could pursue his dream.....no I am not bitter...




Note: he's still there in redneckville. One of the reasons he's my ex.

I think repaying student loans for services provided to communities is great.

Needs to happen more often.

 

[sr71plt]

My ex had over 100K in student loans (not grants). After Med school and residency he took a position in a severely under served location. He had to work there 3 years and all his student loans were paid off.

Discounting the loans down while serving in jobs the community needs seems legitimate to me. This is usually specified in the deal up front, though.

 

[Misty_Morning]

That 'idea' is ridiculous in it's face. A loan is an agreement to pay back what you owe whether it's for college, a house, a car, a tv...whatever. When I was in college (on the GI Bill) they were handing out student loans like Halloween candy. Learn now, pay later. So now people are going to be relieved of their obligations? That's teaching a lesson in responsibility, alrighty.

From a fiscal standpoint, how blowing off 108,000+ college loans is going to stimulate the economy is beyond me.

If the person signs a contract to provide a service for a certain number of years...it's good.


If we can give back to society AND have our debt forgiven or partially forgiven for that service...I see nothing wrong with that.

And if it weren't for the VA bill...I would have never gone to college. My dad was 100% DAV. He gave his health for his country. I was able to get a college education because of that.

What the VA and Student loans and Pell Grants didn't pay was still considerable. If I had had the chance to "work off" my student loans...I would have done it in a heart beat.

 

[JAMESBJOHNSON]

The thanks of a grateful nation.

Plus a shot car and shoes with holes in the soles.

A loan is not a grant or a scholarship. Its a loan. The whole notion of forgiving student loans is elitist hubris.

Pay your loans! Fucking deadbeats.

 

[S-Des]

If I had had the chance to "work off" my student loans...I would have done it in a heart beat.

Exactly. Giving people the option to work off some of the interest would even be a great idea. I don't mind paying what I owe (plus interest), but I've worked with some pretty shady people at Sallie Mae, who would try to talk you into taking deferments. While it would be nice if we all made intelligent decisions about our money matters, the fact is a lot of people don't (especially when they're already in financial trouble). I even contacted them about working out a payoff or some sort of cash now versus reducing some of the accrued interest (which at this point makes me paying off my loan in full unlikely), and was told they didn't care. They know the government is going to help them collect, so they have no interest in working with people who owe them money.

In contrast, you can work out arrangements with many banks or credit card companies, as long as you can find a way to make the deal look worthwhile to them.

 

[Misty_Morning]

Exactly. Giving people the option to work off some of the interest would even be a great idea. I don't mind paying what I owe (plus interest), but I've worked with some pretty shady people at Sallie Mae, who would try to talk you into taking deferments. While it would be nice if we all made intelligent decisions about our money matters, the fact is a lot of people don't (especially when they're already in financial trouble). I even contacted them about working out a payoff or some sort of cash now versus reducing some of the accrued interest (which at this point makes me paying off my loan in full unlikely), and was told they didn't care. They know the government is going to help them collect, so they have no interest in working with people who owe them money.

In contrast, you can work out arrangements with many banks or credit card companies, as long as you can find a way to make the deal look worthwhile to them.

Not sure about now...but when I was paying off my student loans...the interest was almost nill.

And if you had any trouble with getting a job, a deferment was simple...and was always granted.

Then there was a variety of hardship deferments.

All ya got to do is ask..and fill out the right forms.

And when you got a deferment...no interest was accrued.

One could carry a student loan for YEARS without interest, so long as you keep up with the paper work.

 

[S-Des]

Not sure about now...but when I was paying off my student loans...the interest was almost nill.

And if you had any trouble with getting a job, a deferment was simple...and was always granted.

Then there was a variety of hardship deferments.

All ya got to do is ask..and fill out the right forms.

And when you got a deferment...no interest was accrued.

One could carry a student loan for YEARS without interest, so long as you keep up with the paper work.

Oh no....they charge interest while you're on deferment. That's how my loan went from $25,000 to $50,000 (despite me making a number of payments). At the moment, I'm on economic hardship deferment while I'm unemployed, and they're charging me over $400/month in interest.

My interest rate is 9%, which is less than my credit cards, but not exactly nothing.

 

[Misty_Morning]

Oh no....they charge interest while you're on deferment. That's how my loan went from $25,000 to $50,000 (despite me making a number of payments). At the moment, I'm on economic hardship deferment while I'm unemployed, and they're charging me over $400/month in interest.

My interest rate is 9%, which is less than my credit cards, but not exactly nothing.

Shit....things were different 20 to 25 years ago.

Are these federally insured student loans?

 

[S-Des]

Shit....things were different 20 to 25 years ago.

Are these federally insured student loans?

Yeah. That's why they don't make any effort to work with you. They know the government will do their dirty work. They had a case in the news last year where the government garnished someone's Social Security retirement to force them to pay back the school loan.

 

[Belegon]

I paid my loans off....but it took some belt-cinching.

I think Student Loans should be a "maintenance profit deal." The lender clears just enough of a profit that they want to make the loan.

9% is far above that. Even now.

 

[S-Des]

I paid my loans off....but it took some belt-cinching.

I think Student Loans should be a "maintenance profit deal." The lender clears just enough of a profit that they want to make the loan.

9% is far above that. Even now.

I'll get mine paid off. I have a plan to pay off other bills while I'm looking for a decent job so that next year I'll be able to pay extra to work it down. It just pisses me off that my company going out of business is going to cost me $9000 (plus the interest that compounds on that). They should at least give you a break on interest during emergency deferments (or call it something else.....like, "Take our deal and quit your whining").

 

[JamesSD]

Forgiving student loans definitely is not the answer.

If they want to expand the interest-free loan program, that's one thing. Offering temporary deferments during the recession is another possibility. However, people tend to act recklessly when just given money. Think of someone whose parents pay off their credit card debt. Guess what happens to their balance a year later?

 

[slyc_willie]

I'd rather see an expansion in the rewarding of grants, with those awards based on blind-eye assessments of work or original thinking. Sure, the SO has loans that will probably take us a decade to pay off (baring any fortunate windfalls), but that just reinforces her conviction to continue in the field she chose.

Granted, I never had any college loans, since the government paid for my continued education (well, most of it). But I like to think I more than earned it.

 

[amicus]

This thread was a far more interesting read that I thought it would be; some very cogent comments.

It pretty much should go without saying that when one obligates ones' self to repay a loan, that the moral answer is yes, pay it back.

However...(there is always a, 'however' with me it seems...)

The emergence of 'student loans', was and remains a political motive for at least two reasons: one, to support University professors in the lifestyle to which they have become accustomed and second, to permit minority students more access to higher education.

There is even a third reason that is beyond my ability to fully understand, but it has to do with the banks and lending institutions. It would not surprise me in the least that much of the, 'bank bailouts', went to excise toxic student loans.

We're making news!!! People all over the country are now talking about this movement. It all started with Jon Chattman, a writer for the Huffington Post, who wrote an article about this group back in early February:

You will find that near the end of the quite long article linked in the OP.

College tuition rates have increased every year that I can remember, and show no signs of slowing. Why is that?

I also object to something many seemed to find acceptable and that is serving in economically distressed areas, neighborhoods, to repay loans. This again, is a political act with a political motive. I cannot imagine anyone taking a home loan or a car loan with such attached means of payment.

It is part and parcel, in my opinion, of the political moves to force universal public service on graduates in return for loans and is the same genre of thinking as is universal medical care for all.

If the fat professors and 4 million dollar a year coaches would move away from the trough, higher education would become affordable for those who chose to partake.

It is my, 'feeling', that the new administration will forgive student loans, but it will not be for free, there will be strings attached, as there are with the TARP and Stimulus packages.

I really regret what some of you have expressed in attempting to pay back those loans; it should not be that way.

In this time of moral and ethical decisions being made at the highest levels, I suggest one could be morally correct in accepting forgiveness of those loans.

They were immoral and unethical to begin with.

Amicus