Student loan Forgiveness

Welcome to the forum @Mayo377.  

Thanks for the question.  It sure is an interesting topic that our nation has needed to address. 

I do not have any idea on numbers regarding student loan debit but sense there will be focus on this subject this year.  

Perhaps @jeanne-mayell or some of our members might have some thoughts and will weigh in.  I believe there were some who picked up on student loan debt during our recent read the future night but don't know if those prediction are out yet nor their specificity on the subject.    

Just from reading news reports and political analysis, Biden is opposed to student debt forgiveness in general.  He was not supportive of its inclusion in the relief plan, but did signal that he might support a lower number, like perhaps $10K at some point.  However, unless Congress pushes it pretty hard (unlikely in the next 6-8 months), it probably won't happen in any amount for the foreseeable future.

It's a tough subject.  On the one hand, people shouldn't be in debt for their education the rest of their working lives, but on the other, those who sacrificed and worked their butts off to pay shouldn't end up feeling like they were "suckers" to pay their debts when others got a break.   

Student loans used to be very low (or no) interest .  I had a small loan in grad school which garnered NO interest because I paid it off prior to a year after graduating.  The interest would have been quite low even if I had not made the deadline.  We need to return to this model.  

Biden said that, in his view, a president cannot forgive more than 10k of the student loan debt. He said it is unconstitutional and if it is going to happen, it has to come from Congress. I believe that. The president cannot enter the realm of the House, which is the entity that deals with the appropriation of moneys.

But I've written three letters to Elizabeth Warren since 2017. The last one was in January 2021. She has answered to me twice, saying she's working on that. I just told her that now that we have the House and the Senate, it was time to do something about the student loan debt. I pay $550.00 a month for mine, and it is a progressive payment. This means, it will go up every year. Out of those $550.00 a month, the government only accredits me for $89.00, a month. This means that the government and the company assigned to manage the debt (in my case is Mohela) get $461.00 in interests a month. It is a racket!

Since I am not a spring chicken anymore, they want me to pay the whole thing before I die, so by the time of my retirement (and beyond), I will be paying $1280.00 a month (which I'll never be able to pay entirely). I asked Elizabeth Warren to work on the 50k forgiveness plan she had (and it is really so popular). I also asked her to work so the government can let us pay the rest of the debt interest free for everyone. It is the only way I can pay it off before retiring (or dying, whichever comes first). So, I'll probably die "with my boots on", still working to pay it off until God knows when.

My experience is similar to yours, @lizzie.  I took out several loans in the early 90s, when I started university, and then a few more when I went back in the late 90s to finish my degree. at the time, general interest rates were very high (10%+), and I was able to get a fixed rate of 8%.  The total of my actual loan principle was relatively low (~$27K) compared to what students are getting themselves on the hook for now.  However, I was never able to find work that paid enough to both live and pay on my loans, so for years, they languished in forbearance, during which the accrued interest was added to the principle.  After close to 12 years of paying a bit on them off and on, I had finally exhausted all of the forbearance time I was allowed, so I was forced to start paying on them regardless of my financial situation.  I was able to get an income-based repayment plan so it didn't totally bankrupt me, but after about eight years of that, I noticed that my balance was still increasing because the amount of the payments was less than half of the interest accruing every month.

By the time I moved in with my mom 12 years ago, interest rates were literally near zero, but I was still paying 8%.  I determined that I was going to pay them off somehow, but I had to clear off some other things first, so I kept the repayment plan for a few more years.  Then in 2016, I was instructed by spirit that I needed to get them paid if possible before 2021, or it would cause me serious problems.  By that time, the total of the accrued unpaid interest was over $20K in addition to the principle for a total of nearly $48K.  I still qualified for the repayment plan, but I started paying every cent I could afford toward them, usually about $1500/mo, but sometimes as much as $1800.  For my birthday last year, my mom paid off the smallest one for me (about $4500 remaining on it), and I focused on the larger one (still almost $15K).

I finally got a personal loan this month (at a much lower interest!) to pay off the last $7K, fully 30 years after the first loans were taken out.  It will still take several months to pay off that last bit, but at least the payments are more reasonable.

Let me say that I had no student loans, I served three years in the Army in the early 1970s so state schools in my home state of Illinois were free.

Very different situation for my kids. I was fortunate enough to have a job that allowed me to pay their tuition out of pocket for the most part. My son worked at the same company that I did (I'm now retired but he still works there) and I happened to run the tuition reimbursement program while he was getting his undergrad.

We were also fortunate to invest in our state's prepaid tuition program from inception so we were able to cover virtually all of our youngest's expenses that way. But here is the kicker (for those of you still reading). At first I declined to fill out the "Free Application for Federal Student Aid" or FAFSA as I felt that it didn't apply to me. The school in question informed me that even if I was paying out of pocket I still had to fill out the FAFSA application. They had also claimed that they didn't get any kind of cut or kickback from student loans. I don't believe them. As soon as I filled out the FAFSA we were inundated with loan offers directed at us from the school in question. All I had to do to commit our daughter to a $20,000 loan was to sign on the dotted line. They pushed and pushed those %$@# loans. I can easily see how someone could be drawn into them even if they had the best intentions. As long as there is this unholy alliance between the lenders and the schools, people will fall into debt for life.

The whole goal of this is to turn people into annuities for the wealthy institutions that write our laws and exert far too much influence over our country. The idea is, just like car loans and credit cards, that you NEVER get out of debt and they get a piece of you month in, month out for perpetuity.

Sorry this went on so long.

@tgraf66

@lizzie

Wow! Your stories are really difficult to read.  It is like being an indentured servant but without ever being able to be free or seeing any light at the end of the tunnel. 

I hope reform can happen very quickly.  Thank you for sharing your stories with us, I am certain there are other people who frequent this site who share similar experiences to yours.

@Paul-W  thank you for also sharing your experience.  It is helpful to put things in perspective.

@lovendures I am doing a graduate degree at a public college and only borrow a couple of grand. It's better to borrow as little as possible so you can pay it off as soon as possible or be able to pay in full once you get a job, ideally in civil service.

I feel that student debt will eventually be forgivable as long as you make some payments or work in civil service after some time.

Biden said he cannot forgive $50,000 of debt because of Constitutional reasons.

I like Biden a lot, but I do not buy it.

It's because of political reasons.  

The Banking Industry, like the gun lobby and pharmaceutical industries, has too much clout in this country. They have rigged the system and Biden knows he'd lose politically if he took it on. In the U.S. higher education is a profitable business for banks, and for college presidents, whose salaries have soared in recent years. 

I have seen some horrific student burdens that have crippled people for life. And  I bet these burdens disproportionately affect lower middle class people and people of color who didn't know how to navigate the system when they were applying for college.  I know one man who is paying off $150,000. He is a person of color who was the first in his large family to go to college.  So he did not know how to navigate the scholarship system and when he didn't qualify for money, he just borrowed it because he was determined to climb out of the oppressive wage system his whole family has endured.   

He has a good professional job but he can never own a home with a debt like that. He can't have a creative career either in spite of his talent, because the debt ties him to the same oppressive job system.

And the banks have rigged the system so that while the likes of Donald Trump can file for bankruptcy after bankruptcy while he continues to live a lavish lifestyle, people with student loans can never ever get out of their debt.  

They are indentured servants for life.

When the day comes that Liz Warren and AOC run this country, they will do what Bernie Sanders has wanted to do his whole life -- create a free higher education system that is not feeding off young people the way the current U.S. system feeds off people. They will set up a forgiveness program paid for by the banks themselves. But that is years away. It's similar to health care in that other countries have a free system, but not the U.S.

The U.S. has become a feeding frenzy for vulture capitalists in a number of industries. 

The Universities also collude in this game. College presidents' salaries have soared over the years with no accountability other than that they can.

There are many articles about this topic:  https://revealnews.org/article/who-got-rich-off-the-student-debt-crisis/

Here are some articles about college presidents's salaries:   https://slate.com/business/2014/05/college-president-pay-is-it-too-high.html. https://www.forbes.com/sites/richardvedder/2019/01/03/are-university-presidents-paid-too-little-or-too-much-how-would-one-know/?sh=59b6116c6fb8

@jeanne-mayell -  Yes, the university system is a "racket", a concept I have believed for many years. Even my own alma mater, Oregon State University is an example. The newest president after only a few months has resigned to avoid inspection into his own scandal from previous post. Even with all the evidence the university will pay him a severance package over half a million. Makes me not respect these people. https://www.seattletimes.com/nation-world/nation/oregon-state-president-out-for-handling-of-cases-at-lsu/

@jeanne-mayell I got my Bachelor's degree without debt as I attended a local public college. Owing to no more than $5,000 in federal loans is safer than $10,000, including private loans. Doing civil service can help with the repayment process. The yearly income of $40,000-$60,000 helps a person save extra money to make additional payments towards the outstanding principal.

I really hope we get total student loan forgiveness. I came from a poor working class family, my mom died when I was 8 from alcoholism, my father was never in the picture. My family is a bunch of addicts. The only way I could get myself out of that was to go to school, which meant total reliance on loans. I have ADHD so I couldn't work while going to school. I ended up going to grad school to get my MA in art therapy and counseling and had to live at home and the only school here that had that degree was a private school, so tuition was astronomical. I have close to $200,000 in loans and as a therapist, I make so little. It's ridiculous. I don't qualify for the 10 year loan forgiveness because I am in private practice. $10,000 will do nothing for my loans, hell $50,000 won't do anything for it either. 

@jeanne-mayell pretty much what happened to me, except I applied for Scholarships but never received them. Yet I watched privileged girls I went to school with who have both their parents and an easy life get scholarships. The whole system is unfair.