FFEL was private lending. There were a lot of issues with it that negatively impacted students. If higher education lending were to be completely separated from the federal government, a lot of students would probably not qualify for loans. I realize that there are many people who think this is fine. I am not one of them. As long as being able to afford school requires some borrowing, I believe students need some level of protection from predatory lending. I have seen students/families who took on massive private debt to pay for undergrad. In retrospect, these students tell me that they had no idea what they were doing. I would like to see the program of limited guaranteed lending continue so that students can at least have a chance to afford a school without turning to private loans.
That said, I am not saying that I think the current system is ideal. There are many things wrong with higher education costs, and I am not seeing any of this being addressed in an actionable manner at the national level. I would just hate to see a major programmatic change to the current lending system take place unless and until costs to students are somehow reigned in.
Anyone is free to started a heated debate thread about this topic in the newly created Politics subforum, but Iām going to keep this thread civilized.
Remember the Forum Rules please. Take debate to the Politics Forum. Thanks for your cooperation.
The form to apply is supposed to be ready in September. I would bet that Federal Student Aid has already been working on the system needs to handle this, in anticipation of the possibility. There are a lot of system issues to work out with the servicers, which will take some time. I feel like the recent Public Service Loan Forgiveness push to process mass forgiveness, which involved much more difficult decision-making processes than blanket forgiveness, has helped pave the way, though. As a financial aid administrator commented on the NASFAA website, though, Iād hate to be the one responsible for processing 35 million requests for loan forgiveness. Itās going to be a bit slow & bumpy. But there will be a push to get it done quickly, since loan repayment begins again in January and some borrowers will not technically owe if their balance is low enough ā¦ maybe the initial focus will be on forgiving those first.
I was thrilled to hear this was signed yesterday and hope it survives the inevitable court challenges. I know many, many students it will help. Those who chose lesser cost schools around us should have approx half to all of their loans forgiven. Those who chose higher cost colleges still have to pay most of their student loans since many of those were private, so will still have a bit of a reminder that they made their decision.
If I could have changed anything, Iād have included trade school loans (if they arenāt - havenāt looked), and Iād have decreased the income from 125K to either 75K or 100K, but nothing is perfect, so Iāll support what is there.
I think the difference between my views and many others on here (not necessarily all) is the number of students we know who will benefit from this - and their situations. These are students whose parents donāt get to take advantage of many tax breaks out there for wealthier people, so if their ātax breakā is getting some loans forgiven, great.
Then, like others, I hope the high cost of an education gets tackled. PA (my state) is finally working on it. Other states are ahead of us. The way to fix things going forward is to fix this aspect.
Cost-wise, Iāve seen kids go from free lunches plus parents on all sorts of subsidies to being tax payers with an appropriate higher education. Paying a lifetime of taxes vs getting tax dollars for a lifetime ought to cover a bit of the cost for both the forgiveness and future assistance with costs.
Back in āourā day college wasnāt so costly so yes, those of us with loans usually paid it back. For these getting the forgiveness, they werenāt so fortunate.
We just dropped our daughter off for her first day of college. I could not help but wonder how the new batch of students will handle their loan obligations? Loan forgiveness part deux anyone?
Also, if the purpose of this is to discuss consequences/policy implications, perhaps it would be better to move the entire thread to the Politics forum. Then a thread could be opened in the NON-politics forums (this forum) with the intention to discuss how this new act/bill/whatever affects people with student loans in various situations. I think more members would find such a thread more helpful than one that debates the political fallout of the act.
Or better yet, take the political grievance bickering to the Politics forum, and allow this thread to be about how the new policy will affect students with loans affected by the policy. Tips, information on how different situations might benefit from the policy. Advice on how to apply for it. Useful things.
The politics forum was created for users to have a friendly discussion on political issues with Jon providing low-key moderation.
For a variety of reasons, users may opt not to join that forum. And thatās fine. But discussion outside the political forum is subject to ToS and Forum Rules, with moderator intervention as necessary.
So posts that violate ToS are subject to deletion. Threads that consistently violate ToS are subject to slow mode or closure. But the mods are not going to cherry pick posts to move between forums.
I will take the opportunity to invite anyone with ideas on how to make more work for the unpaid mods to raise their hand once Jon shortly asks for volunteers to join the moderating team.
The good news is that for one-third of those with student loans, this will end all their student debt. I wish we could have cut the interest rate to zero for all instead, but at least those 1/3 will be very happy.
Had this voicemail on my cell phone yesterday āThis is Annie with the Processing Center Iām calling today because Iām looking at your most recent reported income for your federal student loan and I think you might actually qualify for a forgiveness program which can possibly forgive all or a portion of your loans but we need to submit an application as soon as possible. Itās urgent you return my call today to finalize your enrollmentā and she gave an 800 number. So the scams have begun! She ended it with āif you do not have a federal student loan please disregard this message and I look forward to hearing from you soon.ā SO, she was looking at my recent reported income for my [non-existent] federal loan but she didnāt actually know if I had one. I live in a University town so I wonder if the numbers around here were being targeted first.
Perhaps a better place would be to create a new thread in the politics section for all political discussions about the debt forgiveness and leave this thread for talk about what it actually is, who is eligible, avoiding scammers, etcā¦
As I understand it, the 5% limit for IDR plans is only for undergrad loans. Grad loan IDR will still be based on 10% of discretionary income. I wonder what they will do with people who consolidated undergrad and grad loans.
My future son-in-law has six figures in federal student loan debt after college and law school. He is eligible as a Pell Grant recipient and he is under the income limit. Most but not all of his debt is from law school and he consolidated his loans. Heās working as a public defender and doing IDR and counting on PSLF. But unless the 5% applies to part of his debt, this wonāt make a significant difference for him. Heāll still need to complete his 120 qualifying payments and the payments are based on his income, not his loan balance. This will just mean less is forgiven at the end of the 120 payments. Good news for him is that the zero payments during Covid forbearance have been counting toward his 120.
This will be a big help for his sister, though, who has a much smaller amount of debt from getting a masters degree to teach English as a second language (TESL). Both of them did all their undergrad and grad school at their in state public universities, by the way.
Somehow both of my nephew and niece will not be able to get anything. They have huge debt from Medical school, about $400k each, but making over the income limit. They are the ones in helping profession so I think should get some help, who is in the right mind want to a doctor nowadays.
