Some good news from the Federal Government

[Dave Gray]

In October, they temporarily modified loan forgiveness laws where they were too rigid.  The plan was supposed to help half a million people get 2+ years closer to paying off their loans, but for a few thousand, would complete them within the year.

My family was one of the few thousand.  We have no more student loans.

We are normal, working-class people.  My wife is a teacher and has been paying toward those loans since her career started with essentially no movement.  There were some unrealistic, rigid, and senseless technicalities that were used against her that were corrected from this order.

So, this is a big success story for us.  It doesn't really "give" us money, but it unsaddles us from this mountain that we were never going to climb.

[EDGECRUSHER]

Very nice, good to hear. Those loans can paralyze you financially.

[ArtieChokePhin]

Very nice, good to hear. Those loans can paralyze you financially.

I agree.   From what I've seen and read, student loan debt is some of the most toxic debt you can get yourself into.   It can't be discharged in a bankruptcy and will follow you to your grave if left unpaid.   

Thankfully, I had no student loans because I went to trade school for half the time when I was in 11th and 12th grade and went to work in said trade a few months after I graduated.  My wife graduated with minimal student debt thanks to a scholarship and paid it off quickly by going without certain things and making it a top priority. 

[EDGECRUSHER]

I agree.   From what I've seen and read, student loan debt is some of the most toxic debt you can get yourself into.   It can't be discharged in a bankruptcy and will follow you to your grave if left unpaid.   

Thankfully, I had no student loans because I went to trade school for half the time when I was in 11th and 12th grade and went to work in said trade a few months after I graduated.  My wife graduated with minimal student debt thanks to a scholarship and paid it off quickly by going without certain things and making it a top priority. 

It can't be discharged through bankruptcy anymore because the government started to back the loans I believe in the 2000s. That's why tuition has skyrocketed and the loans are even more crippling. They pray on 18 year olds. No bank would give a teenager a house loan and they can just take back the house if they default, but they have no problems giving them $150k for any degree, useful or worthless because they know there is no risk, they will get paid.

[CF DolFan]

I hadn't heard this but it sounds like it's heading in the right direction. I have several issues with student loans but I don't think they should be charged to people who didn't take them out. I also have issue with giving a kid 100,000 for a degree that they may or may not use while a kid who wants to start a business or do an apprenticehsip cannot get loan for 10k.

[pondwater]

No offense to anyone here. But I disagree entirely. If you agree to borrow money, you should pay that money back.

[ArtieChokePhin]

It can't be discharged through bankruptcy anymore because the government started to back the loans I believe in the 2000s. That's why tuition has skyrocketed and the loans are even more crippling. They pray on 18 year olds. No bank would give a teenager a house loan and they can just take back the house if they default, but they have no problems giving them $150k for any degree, useful or worthless because they know there is no risk, they will get paid.

Actually, they've been undischargable since the 1970s.   And the reason is a simple one which you partially stated.   You lend someone money for a house or a car, you can repossess it.  You can't repossess knowledge.   Once they find a way to repossess knowledge, they will allow student loans to be included in a bankruptcy filing.   That light device in Men In Black comes to mind.

[CF DolFan]

No offense to anyone here. But I disagree entirely. If you agree to borrow money, you should pay that money back.

I didn't take it as not paying it back. The way Dave put it I thought they just gave them better terms.

[Spider-Dan]

You cannot discharge student loan debt in bankruptcy because if you could, there would be no reason not to.  Bankruptcy (and a temporarily wrecked credit score) would simply be an expected component of higher education, just like student loans are now.

As we found out during the foreclosure crisis, you can, in fact, put a dollar value on your credit rating (for the next 7 years)... and that value is less than the hundreds of thousands of dollars that people would have owed on underwater houses, and still do owe on student loans.

[pondwater]

I didn't take it as not paying it back. The way Dave put it I thought they just gave them better terms.

I was under the impression that it was the same thing I read about a few months ago. Using government money toward paying down or paying off people's student loans. I also have a goofy pothead friend who keeps rambling about it after a few drinks. I have to remind him that he spent the money on a useless degree and now it's his responsibility to pay it back.

[Spider-Dan]

I was under the impression that it was the same thing I read about a few months ago. Using government money toward paying down or paying off people's student loans. I also have a goofy pothead friend who keeps rambling about it after a few drinks. I have to remind him that he spent the money on a useless degree and now it's his responsibility to pay it back.

How would you feel about such a program if, instead of the government paying off student loans, the feds simply gave student debtors a tax break that was precisely equivalent to [the amount of their yearly student loan payments, over the length of time they will be required to pay them]?

You don't strike me as the kind of person who opposes tax breaks, especially for corporations or business owners.

[pondwater]

How would you feel about such a program if, instead of the government paying off student loans, the feds simply gave student debtors a tax break that was precisely equivalent to [the amount of their yearly student loan payments, over the length of time they will be required to pay them]?

You don't strike me as the kind of person who opposes tax breaks, especially for corporations or business owners.

Sure, that's fine. As long as you give everyone else a tax credit that averages what you're giving people who voluntarily took out loans. That means every individual that files a tax return.

And while we're at it, why don't we just pay off everyone's credit cards also? I mean the terms aren't very good, they're marketed to young adults, and they take many many years to pay off making the minimum payment.

At the end of the day, if you agreed to pay something back, just pay it back. No one put a gun to your head and made you sign a legally binding loan agreement. Or maybe just pay for college out of your own pocket instead.

[Spider-Dan]

Sure, that's fine. As long as you give everyone else a tax credit that averages what you're giving people who voluntarily took out loans. That means every individual that files a tax return.

Right now, I don't get the same handout tax credits that farmers, corporations, and other business interests get.  So why should a tax credit for student debtors also apply to people who didn't take out student loans?  Why can't they get the same sweetheart tax subsidies available to big business?  Just like every student debtor willingly signed their name to the loan, every business in this country is well aware that tax law can change at any time and no one owes you a subsidy.

So it seems to me that if we can have an entrenched system of tax credit welfare for businesses (without giving the same credits to every individual that files a tax return), we can do the same for student debtors.

[pondwater]

Right now, I don't get the same handout tax credits that farmers, corporations, and other business interests get.  So why should a tax credit for student debtors also apply to people who didn't take out student loans?  Why can't they get the same sweetheart tax subsidies available to big business?  Just like every student debtor willingly signed their name to the loan, every business in this country is well aware that tax law can change at any time and no one owes you a subsidy.

So it seems to me that if we can have an entrenched system of tax credit welfare for businesses (without giving the same credits to every individual that files a tax return), we can do the same for student debtors.

Can I safely assume that you don't agree with tax credits to farmers, corporations, and business interests?

[Dave Gray]

To clarify, we didn't get better terms.  In our case, the remainder of the debt was wiped.

As an incentive to become a teacher, where your pay isn't good, as compared to the education level required for the position, there are programs to expunge debt if you teach for x amount of years or in certain subject areas or whatever.  It's also to prevent teachers from leaving for the private sector where the pay is better.

But that program had weird clauses....like, you had to pay for 10 years -- but it had to be 10 consecutive years with unrealistically strict terms.  My wife got promoted to the district level (still working for the school) but since she was out of the classroom, that stopped the consecutive payments streak within the classroom....not really the spirit of the rule.  Another thing has to do with teaching certificates.  Sometimes (I don't know the exact details), but your teaching certificate will expire and you have to be rehired -- and sometimes you'll get hired on a temporary certificate...something like that.  But that isn't considered part of the 10 years.

Anyway, we kinda got screwed on those things, because...frankly, they were bullshit technicalities, which the federal government recognized and corrected.  So, they retroactively credited all of the payments to the 10 year program thing and resolved the debt.