Just because you start a thread does not mean you can disregard ToS. This is not a debating society, and the fact that you were engaged in debate with the same user that resulted in me having to ask you two yesterday to knock it off in a separate thread is problematic.
Most of the users on this thread have been around for a while. The rules are not new. Please abide by them everyone. Inclusive in the rules is the prohibition to go OT to challenge a moderator; if you have a question for her, PM her.
Many have said they are Okay with loan forgiveness programs if the student works for it through a post grad program. I’m doing an Americorps program now and one of the benefits is the Segal award, which is equal to a Pell grant amount (so about $6400 for a full year). It’s a volunteer program but there is a stipend to live on (taxable income) and then this Segal award.
The catch? The Segal award is taxable income in the year you take it. I can transfer my award to my daughter for her student loans, but it then becomes taxable income to HER. They gave many examples of students working 2 years in the program, withdrawing the funds to pay for a semester or two of college, and losing all FA from their school because their income is now too high because of the reward.
All loan forgiveness programs are not create equal.
I think vpa2019 has it right. Colleges in the US provide many more services than just education such as:
Dorms & meal plans
Healthcare
Career counseling
Sports and other EC opportunities
On-campus transportation
Each of these items create liability for the schools and there are a lot of regulations that schools have to comply with, so they end up having to hire a bunch of administrators for things unrelated to education.
I personally know a lot of kids who would have had substantially less student debt if they stayed at their in-state option, didn’t study abroad, didn’t go on spring break to Cancun, and paid attention to graduation requirements so they didn’t need a 5th year.
I also know some kids who’s parents cut them loose at age 18, so housing, food, healthcare was on them. I view their needs in a different bucket, like housing subsidies and food stamps, but instead they are borrowing the money in student loans.
I worked in financial aid at a public, urban university with a commitment to access. Many of the students I worked with were phenomenally poor - a level of poverty that is difficult to fathom. The students often need to live away from home, for reasons that include being able to get to classes. When there is no transportation, including public transit, or when there is no college within commuting distance, living away from home is not a luxury; it’s a necessity in order to attend college. One of the few ways that these kids can lift themselves from this poverty is a college degree. Without federal loans, it would not be possible for them to even hope to go to college. In other words, not everyone is borrowing willy-nilly when they have more practical options. Will some benefit from loan forgiveness who maybe doesn’t “need” it? Sure … and I saw families with high income & lots of business write-offs qualify for Pell grants that they didn’t “need” (not to mention benefiting from lower taxes due to the write-offs). Sometimes in an effort to help the many, folks we might not think should benefit, do.
Loan forgiveness is for federal Direct subsidized & unsubsidized loans only. I doubt Perkins would be included unless consolidated into a Direct loan (because they are actually loans made with federal funds, but through the college). Verification of income is already being done annually for income driven repayment plans and for the Public Service Loan Forgiveness program. Borrowers upload their tax information to the servicer directly from the IRS website.
True, so why don’t we do more to help those desperately poor students directly, rather than this plan which aids the upper middle class as well? This plan disproportionately favors the well off at the expense of the poor.
None. TBH, I would prefer a lower income threshold. Those are not incomes that make me think of people struggling financially. I would support it in the absence of anything better, but I do think if there is to be an income cap, it should be lower. Maybe a bit higher amount forgiven & a lower income cap. I think that would have more real impact.
Truthfully, although I am not opposed to forgiveness, I think that there are some other helpful things that could be done: lowering interest rates, fixing consolidation so that it doesn’t make the loan balloon to a gargantuan amount, getting rid of interest capitalization that occurs for numerous reasons (most of which borrowers aren’t aware of and/or don’t understand), forgiving the balance after a certain number of years once the underlying loan is repaid. There are groups that have studied various methods to assist borrowers, but I am not seeing anything other than blanket forgiveness being widely discussed.
But what we really need is to fix the system that contributed to our current mess. Loan origination fees need to go, interest rates should be lowered, loan servicers should give correct information, repayment plans should be streamlined, grants for low income families should be increased. In addition, methods of lowering costs to students should take on true urgency … not just colleges lowering tuition … states, community organizations, corporations, folks with financial means should do what they can to help figure out how to make college more affordable going forward. It does positively affect our society to do so.
Congress already passed a law eliminating COI income from student loan forgiveness. Was buried in one of the omnibus COVID relief bills. Knew it would be politically challenging to pass a stand alone bill so they do it a year in advance when no one notices.
I would like them to couple this with no interest loan’s so people can actually pay back the loan and not just pay on interest for years. We make life so hard for those trying to better themselves. We need to start to think differently!!
All the more reason that the costs be correctly calculated and presented so that voters can properly determine if the benefits are worth the costs. This should be considered a basic obligation of the government when entrusted with taxpayer dollars.
I’m all for correctly calculating costs and benefits. But your suggestion - applying GAAP - drastically distorts the calculation because it accounts for the costs (defaults) but not the benefits (a more skilled and educated populace, increased productivity and social mobility, etc.)
I don’t think he can legally erase/forgive student loan debt without a law passed by Congress (just as he can’t loan money without Congress). It may not stop him but I also think it will be challenged if issued.
But, on the other hand, if somebody can’t do something, it is extremely stupid if someone asks why they are not doing it. It is obvious, I hope to everyne, that the president can’t cancel credit card debt.