<p>“My aim is to keep you well supplied with topics to talk about while flying high”</p>
<p>Thanks for the consideration, longprime, anything to stay awake. People are starting to look at me funny when I attempt to bring up your malfunctioning washet bidet seat.</p>
<p>LongPrime, Aren’t you a taxpayer too? If you think taxpayers should be focusing on how people like JA, you and your son are able to have taxpayers paying for you to “maintain these loans” , aren’t you concerned as well? Or have you found a way to not pay taxes? I’m with Bay, your posts are just too cryptic and frankly, frustrating.</p>
<p>As for incentives to “play the system”, maybe JA was incentivized to buy a house because the government was giving first-time home buyers $8000 in tax credits. If he had a clunker, maybe he got several thousand dollars to buy a new car…</p>
<p>“Cash for clunkers” was in 2009, a few years after his testimony to the Senate where he mentioned buying an $18,000 used four year old sedan (and the “cash for clunkers” money could only be applied to a new car).</p>
<p>I was just pointing out government programs that incentivize people to take taxpayer money, as the current interest rate on many student loans is incentivizing people to pay them back as slowly as possible. My extended family contains one person that took the tax credit to buy a house that he was going to buy anyway, one that moved up the scheduled purchase of a new car by six months to take the clunker money, and one that took out a federal-no-interest-while-in-school loan, just to take advantage of the interest rate float. No one desperately needed the money, but who’s going to turn it down?</p>
<p>And maybe the subsidized lenders were incentivized to lend education loans 2002-2006, 2006-2008, 2008-2010.</p>
<p>wait, gotta eat/</p>
<p>Used to be that the Stafford & PLUS were called Subsidized Interest Student Loans.</p>
<p>So what was the subsidy? The 6.5% less loan rate for Stafford and PLUS, 8.5% less loan rate. </p>
<p>DS loan rate is 2.0%. The PLUS rate is 2.0%</p>
<p>Do you see why I say, look NOT what DS/parents’ or JA pays, but what YOU, Taxpayers, are paying for loans during the contract years 2002-2006, and modified for contract 2006-2008, and finally killed in 2010. </p>
<p>Now DS has 10 years remaining on his consolidated Stafford, $15,000. (original taken amt=$20,000)
The consolidated PLUS has 20 years remaining on $45,000. (original loans taken = $110,000)</p>
<p>So what is the subsidy to the lenders?
What is the subsidy you are paying for DS’s education loan?
And if JA has a Stafford loan, what is that subsidy?</p>
<p>You bet I’m a taxpayer. And I’m mad as heck, far madder than you. </p>
<p>I read JA’s testimony as a warning to Congress, that his situation is unsustainable in its then subsidized form. That the Federal loans (he did not specify if the loans were Direct (dept of education loans) or Stafford (interest subsidized loans from a private lender)) and private loans. are a program for disaster. </p>
<p>Taxpayer, you should be incentivize me to accelerate DS loans. :)</p>
<p><a href=“Higher Ed Index”>Higher Ed Index;
<a href=“https://www.aamc.org/download/48744/data/interestratehistory.pdf[/url]”>https://www.aamc.org/download/48744/data/interestratehistory.pdf</a>
<a href=“http://www.henrywaxman.house.gov/UploadedFiles/Stafford_Loan_Interest_Rate_Reduction__Background_and_Issues.pdf[/url]”>http://www.henrywaxman.house.gov/UploadedFiles/Stafford_Loan_Interest_Rate_Reduction__Background_and_Issues.pdf</a>
Have a nice week. :p</p>
<p>Former students should pay back their students loans when they are financially able because it is ethically the right thing to do. JMO</p>
<p>Ah … ethics. You know, that has to be TAUGHT as a college class these days. Sigh …</p>
<p>If it is taught, how many actually pass the class??</p>
<p>I suppose that depends on the ethics of the prof. ;)</p>
<p>Well, well well…there was an articl in our newspaper today about the impact college loans will have on some of these folks qualifying for mortgages in the future. The article basically said that these students with high college loan balances will have huge difficulty getting mortgages because of this college debt.</p>
<p>I would like to know how this fellow and wife…with $150,000 in college debt, and an inability to pay any more than $69 a month (which even sounds like a reduction on the INTEREST rate) managed to get a mortgage for a house. Gotta wonder if someone else is a co-owner of the house too…of floated them a VERY significant down payment. Just saying.</p>
<p>Actually, my kid and spouse are having the opposite experience.</p>
<p>My kid is an attorney. Parents paid for about half of law school. Kid took loan for the other half. Started to pay it back on the 10 year plan. Married someone else with loans. Rent a very modest apartment and continued to pay back. </p>
<p>Then starting thinking about a house. Went to look. From what they’ve heard, it’s all about (a) coming up with a down payment and (b) how much your monthly bills are. </p>
<p>If my kid continued on the 10 year plan, kid and spouse would (a) have no down payment and (b) have a high monthly bill for the loan. </p>
<p>Everyone they talked to told them to go to the “pay it off in 25 years” plan, with smaller monthly payments. Put the difference in a bank account to accumulate a down payment. With a smaller monthly bill and a down payment, they will have a better chance of getting a mortgage. The amount they actually owe is less important than the amount of the monthly “nut” they have to meet. </p>
<p>Just one couple’s experience.</p>
<p>[FinAid</a> | Calculators](<a href=“Your Guide for College Financial Aid - Finaid”>Calculators - Finaid)</p>
<p>LongPrimes DS’s Consolidated Stafford Loan:
15,000 2%, 10 years remaining.</p>
<p>[FinAid</a> | Calculators | Loan Payment Chart Generator (Balance vs Rates)](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)</p>
<p>Loan Payment Chart (Balance vs Rates)
Loan Payment Chart - ( 0% fees)
Amount
Borrowed Loan
Term Interest Rate
0% 2% 4% 6% 6.8% 7.9% 8.0% 8.5%
Total Interest Total Interest Total Interest Total Interest Total Interest </p>
<p>$10,000 10yrs $0 $1,042 $2,149 $3,322 $3,810 4,496 $4,559 $4,878
$15,000 10 $0 $1,562 $3,224 $4,984 $5,714 $6,744 $6,839 $7,317
$20,000 10 $0 $2,083 $4,299 $6,645 $7,619 $8,992 $9,119 $9,757</p>
<p>Comment: Stafford , consolidated 2006 on Stafford loans taken 2002-2006.
INterst Paid to lender 6.8% = DS obligation @2% + TAXPAYER SUBSIDY
$5,714 = $1562 + $4152</p>
<hr>
<p>Longprime’s Consolidated PLUS
50,000, 2%, 20 yrs remaining</p>
<p>[FinAid</a> | Calculators | Loan Payment Chart Generator (Balance vs Rates)](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid) </p>
<p>Loan Payment Chart (Balance vs Rates)
Loan Payment Chart - ( 0% fees)</p>
<p>Amount
Borrowed Loan
Term Interest Rate
yrs 0% 2% 4% 6% 6.8% 7.9% 8% 8.5%<br>
Total Interest Total Interest Total Interest Total Interest<br>
$10,000 20yrs $0 $2,141 $4,544 $7,194 $8,320 $9,925 $10,075 $10,828
$20,000 20 $0 $4,282 $9,087 $14,389 $16,640 $19,851 $20,149 $21,656
$30,000 20 $0 $6,424 $13,631 $21,583 $24,960 $29,776 $30,224 $32,483
$40,000 20 $0 $8,565 $18,174 $28,777 $33,281 $39,702 $40,298 $43,311
$50,000 20 $0 $10,706 $22,718 $35,972 $41,601 $49,627 $50,373 $54,139
$60,000 20 $0 $12,847 $27,261 $43,166 $49,921 $59,553 $60,447 $64,967</p>
<p>Comment: PLUS, consolidated 2006 on PLUS loans taken 2002-2006.
INterst Paid to lender 8.5% = DS obligation @2% + TAXPAYER SUBSIDY
$21,656 = $4,282 + $17,374</p>
<p>Should I be patriotic or fiscally responsible?</p>
<p>Gonna go plant my veggie garden now, get a cow, few chickens. Hunker down.
Maybe I’ll just get a loan to live on…pay it back over a 100 years or so…</p>
<p>LP, I think I get your point and feel your frustration. In the case of your son, it may help to think of it this way - if your son is earning enough to pay $4152 + $17,374 in income tax (or $21,526) then he’s the taxpayer subsidizing his own loan, which he couldn’t do at a minimum wage job. Or you could be the one paying for his loan with your taxes - in which case, he should be thanking you. </p>
<p>When my parents were talking about the government paying them Social Security, I felt like pulling out our pay stubs and saying “No, DH and I are paying your Social Security - this is how much we’re paying and this is how much you’re getting! How about some thanks for that last cruise?”</p>
<p>Since DH and I retired, we’ve been paying a lot less in income taxes. So whoever’s been paying one of my children’s salaries (the kiddo works for the government), thank you. Oh, and the “free” masters on top of that, it was very good of you. </p>
<p>For most of those working, there’s no free lunch. But high taxes and high entitlements make sure we can’t pay for our own families’ lunches, so we wind up paying for each others’, with a government chosen someone taking a cut as the middleman.</p>
<p>After thinking about it, I take back the comment about my child’s free masters - I’m sure the government took much more than the amount of tuition from my child’s paycheck in income tax each year, so it could be considered self-taxpayer-funded.</p>
<p>LP,
Once again I’m having trouble interpreting your message. Are you saying that you (PLUS) and DS (Stafford) ended up being unexpectedly subsidized by the federal government in the amount of $17K+? Wow, that is great for you! Too bad for us full-pays who paid in cash that we didn’t know about that deal!</p>
<p>I don’t blame you for taking advantage of that opportunity, but I share your cynicism (I think that is what you are trying to convey). Again, my conclusion from all of this is: Borrow away! Only suckers pay in cash. </p>
<p>It would nice if JA would arrange some public Senate testimony to set everyone straight on the real truth of his (non)predicament.</p>
<p>i tried a detail reply but lost it on the KFire.</p>
<p>briefly, Stafford and PLUS (FFELP :FEDERAL FAMILY EDUCATION LOAN PROGRAM) is a loan program by lenders with subsidized interest and profit.</p>
<p>I don’t. know or did JA say what his government loans were, but you do know now the various repayment plans — deferred, income base (IBR), graduated payments, have the accruing interest capitalized and subsidized to 6.5 and 8.5%. --“pickapayment”</p>