Found the internet!White House to extend student loan pause through August
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I think the gov needs to start repayments sooner rather than later, and I'm saying that as someone with an obscene amount of debt due to law school (but a high salary thankfully).
However, the federal government, at least on the grad school side, is massively responsible for inflating the cost of education via unlimited graduate loans. There should be some recognition for them just completely fucking the market, and reducing or zeroing out interest rates, followed by massive reform to student lending generally.
Because forgiving them right away removes the incentive to continually harvest votes to "delay payments" for all election cycles ahead?
So, going from "during an election year" to "right before the elections"?
Yeah, this is going to get extended again.
I’ve been making payments the whole time I’m starting to reconsider lol
As PSLF applicant, every month they delay is another free month for me. On a selfish level I'm loving this. Never spent a dime, and yet I'm at least a year and a half through my 10 years (not sure if anything before 2021 os counted).
They're gonna cancel it at this rate. My friend's strategy of maxing out on loans on the off chance they're forgiven is really going to pay off at this rate.
As soon as I got this notification I thought "oh boy, r/neoliberal isn't going to like this" and headed over. Can't wait to see the anger.
Personally, I'm cool with the pause because I'm just taking advantage of the 0% interest and investing the payments I would be making.
Having payments start up after August 31 more closely aligns with the end of temporary PSLF (October 31).
I can't tell if that's either to try and give the Department of Education/FedLoan a head start on dealing with payments restarting before the flood of last-minute TEPSLF applications, or if it's going to be set up as a way to extend both to give an appearance of "student loan forgiveness, sort of" right before the election, though.
Personally, I'm cool with the pause
Well no shit, it's good for the specific people it targets. The issue is it's bad in general
Nice! I am finishing my private loan payments and then I think I will start a rainy day savings account. Also I am able to contribute 9% to my 401k
My only serious complaint is inflation and this is probably a drop in the bucket.
Politically, holding interest payments hostage is a good strategy. Dems should just keep it at 0% and leave it to the GOP to resume them when they're back in power. Gives people in debt a good reason to vote Dem, and doesn't cause the same level of resentment or budget problems a full scale forgiveness policy would.
Old article (2021 but):
https://www.cnbc.com/2021/07/16/graduate-students-owe-around-50percent-of-all-student-debt.html
About half of student loan debt is held by graduate students with advanced degrees. The highest loan amounts go to lawyers and doctors who get paid really well.
I get people don't like paying their loans, but student loan relief should be way down the list of priorities for anyone in the U.S. Most of the people with loans can pay them!
Most lawyers do not get paid nearly well enough to service their loans. If you're not in biglaw, you're relying on IBR. Even with a modest scholarship, a typical law school will set you back 200k. This creates an incredible incentive among elite law students to not work in the public sector and to congregate in the Vault 50 and either stay there or exit into tech/finance.
Any doctor who goes into primary care is probably also relying on IBR. Med school is an easy 300-400k and unlike law school scholarships are essentially non-existent. You've also got a few years of shit pay residency post school where any payments you make aren't making a dent in even your interest. Again, creating incentives for people to do something other than what we need more of.
Doctors who specialize and lawyers in biglaw can afford the current system. Everyone else can't unless subsidized by IBR, and that bill comes due for the government eventually.
*This all ignores people who didn't pay for their grad school, which is a decent chunk of them, but then that's another issue- do we want to perpetuate only the upper middle class/wealthy having access to these professions and entrench their advantage? There's also obviously more nuance to this than I wrote (for example, law school LRAP programs or the couple med schools that have gone tuition free) but it conveys the point I think reasonably well.
Half of the money is owed by graduate student with advanced degrees since they tend to borrow much larger amounts. But they're not half of the students with debt
You might say it's not worth it to delay loans for 10k of debt for 10 people if you also have to do it for 100k for 1 lawyer. But in a world where no legislation passes there are few options, and this does help a lot of people who need help. Plus some who don't
Yeah, just let people declare bankruptcy on them. Most people won’t have to and those with 200k and a crap degree can take that option
At most cancel 10k of debt for everyone. If someone owes 30k, they would still owe 20k. But people who owe less than 10k, would be free of the debt.
Making Republicans restart payments is a smart political move.
So you think we should have student loans paused, at minimum, through 2024?
White house to extend student loan pause through heat death of the universe
So bad lmao this is such a giveway to high-salaried advanced degree holders with six figure debt (me) but fuck it it works for me. Let me keep paying down my principal babyyy
So bad lmao this is such a giveway to high-salaried advanced degree holders
Well, and the 40% of people with student loan debt who never actually graduated from college and don't have literally any benefit from the money they spent.
Why would you pay down principal? Seriously I mean, look were this train is going. I paid off my student loans, and apparently I'm a sucker for it. At this rate they'll never resume payments. It's defacto cancellation.
Also literally why would you? Wouldn't you be better putting your money in a savings account, earning like 1%, and then if they ever resume payments, you now have more money to pay back with?
Genuine question can someone explain why we don’t like that? As someone with student loans I’ll take it but wanna know the opinions here
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It's because our system of financing higher education is super broken. We socially encourage students to take out large amounts of debt to attend. Schools are then, because many students are making socially pressured decisions during a period of vulnerability, taking advantage of an inflated and not socially beneficial high level of demand to raise prices. They're also competing now on the basis of services that are not socially valuable and would not be paid for but as part of the now inflated tuition. (see the accommodations spending at UChicago or many new student unions).
Engaging in perpetual payment delay, which is effectively relief without eliminating the paperwork or all of the stress to borrowers, incentivizes increased levels of borrowing by future students who anticipate the money is now a grant. It also incentivizes schools to increase costs and services provided to students, as a result of the further inflated demand curve.
Let's imagine you have 1 million dollars to give away to Americans in need. Who would you give it to?
Everyone
Specifically poor people, and not rich people
Specifically a group that makes more money on average and specifically NOT most poor people
Student loan forgiveness when not targeted is choice 3.
The average person with a degree is going to be making way more money than the average person without one. In fact, the more debt you have, the more likely it is you have a high paying job. A lawyer or doctor has way more student debt than a McDonald's fry cook.
Student debt relief disproportionately helps people who are well off and doesn't help the majority of struggling families
Of course, if you're included in the group that gets a benefit, you can't help but like it. But as a societal policy it's bad.
Yo will hear lots of answers, most talking about how regressive it is. My argument is just, you took out a loan, you have some obligation to pay it back. Why are the rest of us suddenly on the hook for someone else's loans in exchange for nothing?
Should we forgive mortgage debt too. Or car loans? Why student loans specifically?
The problem with immediate blanket student loan forgiveness is that it largely benefits the upper middle class. The best argument I hear in favor of it is mainly to serve as a buy in for the upper middle class for increased taxes to fund free/lowered tuition. Meaning that free college and debt forgiveness can still produce a net progressive effect if tax brackets are restructured. Problem is we aren't anywhere close to that.
Some people don’t like that it benefits the upper middle class, which I find to be unconvincing. Helping the upper middle class can be a good thing and it also helps plenty of lower and middle income Americans. What many people in this sub don’t seem to get is maximizing measures of tax progressivity is a means to an end not an end in and of itself.
Personally I don’t believe any cancelation of student loan debt is a good idea (assuming we are thinking about practicality and effectiveness in practice rather than just making people vote for you). Canceling all student loan debt (which is also an extreme I don’t think Biden would lean towards however this is just for the sake of example) wouldn’t really solve anything besides giving the current class of loan debtees some relief while still leaving plenty of space for the future class of loan debtees who will still have to take out loans for their classes. Forgetting that aspect, there is also the fact that the US gov would have to be the one taking on this debt I imagine, a debt which is currently about $1.6 trillion (and its interest of course). This would put a massive strain on the economy and would probably lead to massive inflation (due to the government opting to pay all those loans and interest now rather than later). This would not bode well for anyone.
A much better solution would involve screwing with the interest rates themselves, either making them low interest loans (maybe 1%) or bypassing the interest rates altogether and making them interest free loans. Then there is the obvious solution of just making college free for all (public of course) and thus no one would need to take out large, unpayable loans in order to get an education. The free college approach is very obviously not a realistic solution at the moment but the interest route does not seem like a bad option in my opinion. To be fair, I’m not even sure if Biden is able to unilaterally change the interest rates of these loans so maybe I’m just talking out of my ass. These are just solutions I would imagine would work better than just flat out canceling student loan debt and basically kicking the problem down the road.
Thank you for coming to my ted talk lmao 😤
bypassing the interest rates altogether and making them interest free loans.
I mean, you have to convince banks to lend thousands of dollars to teenagers with no collateral or credit history somehow.
A much better solution would involve screwing with the interest rates themselves, either making them low interest loans (maybe 1%) or bypassing the interest rates altogether and making them interest free loans.
How is this better? This is a regressive policy that massively favors wealthy students getting enormous loans for high-paying and well-connected careers.
The vast majority of student loan holders have between 10k-30k in debt. Forgiving a flat rate of 20k-30k completely wipes out the debt owed by the people most likely to be in need of relief, while keeping the students with the highest potential net worth on the hook for what they borrowed.
They should have just restarted payments earlier which would have helped reduced the inflationary effects we are feeling now. Kicking the can down the road doesn't help the situation.
They should have just restarted payments earlier which would have helped reduced the inflationary effects we are feeling now.
By how much?
Knew this would happen...my wife and I have a combined networth of around $650k, around $350k liquid...she went back to get a masters, and despite our cash holdings, we decided to take out federal loans last fall...0% interest for a year for no reason, and a decent likelihood he knocks off $10k this fall in order to get millennials to polls.
Anyways, after years of complaining what a stupid policy this is (both the prolonged freeze, and the promise of forgiveness), I' decided to give up, respond the incentives, and just profit from it. Thanks for the bailout everyone :)
Same. Capitalism typically resolves issues in favor of those with capital. So this obviously benefits me. It feels good to keep winning.
As someone who’s already getting my loans paid off by the federal government because I work for them, I don’t particularly care about this, but I understand that letting loans restart during an election year is a tough political message to send. Particularly when Republicans started this.
Does anyone believe Biden won't kick the can down the road again in August? This is student debt cancellation in all but name.
I dont know why y’all vote. But I vote Democrat for the “give me that”. So yes give me that student loan pause babyyyyyyy. Blue no matter who
Maybe I should start voting Republican in that case? I would be much, much, much better off.
I vote Democrat for the “give me that”.
At least you stopped pretending to be anything but self-obsessed. The cosplay of being actually liberal/progressive was pretty obvious anyhow. At least those in need can now safely assume you're in it only to leave them farther behind.
Taking from Peter and giving it to Paul is unsurprisingly popular with Paul
Anyone who needs to be bribed into voting is the last person who should be voting.
You should vote blue no matter who because it is the only moral decision you can make come election time, not because the dems did something for you.
Out of everything going on in the world this is what exhausts you? I don’t think you’re focusing on the right problems.
This is personally very good for me (0% interest part) so I approve!
Seriously if the final fix is you have to pay but interest is VERY low (1-2% vs the 7 I currently have) I think that would be fair.
If we offer ultra low loan rates in the midst of high inflation we're offering a huge subsidy to higher education that will continue to drive up costs and push people toward expensive debt.
It's not so much fairness, but doing what you describe would actively worsen the long term problem.
It's bad for the rest of us because it costs the government money to do that, and contributes to inflation.
Meh, I'm just going to start paying anyways. COVID hasn't had an effect on my work.
Make me pay intrest at least. Not everyone else, just the girl with an engineering degree that can afford it
This is fucking dumb. Smh this administration. I feel lost politically.
Shit I have a locked in refi rate. I dunno if I should take it or wait and have a higher rate—but maybe not pay for another while and invest it
Student loans are a giant scam, these pauses have affected no one but the borrower, just drop the damn debt
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