Student Loans Debt
 

This is in the political section, because there is a petition out that is talking about eliminating student loans, forgiving them... the like. If you're on facebook, here's the group:
http://www.facebook.com/group.php?gid=58440324477

The hope is to help stimulate the economy by helping relieve student loan debt, giving newly graduated students the ability to spend their paychecks in all other sorts of places (stimulating the economy).

Here is the petition:
http://www.thepetitionsite.com/1/Rea...-Student-Loans

Here are some of my personal thoughts:

1) Forgiving student loans completely
2) Forgiving all of your interest, but not your loan it's self.
3) Changing the 8% interest rate cap it currently is- to a 1% interest rate

1- pros, are that hey, you're debt free
1- cons - the banks just LOANED you that money, they are now out that money, and hurting more

2- pros, The government use to have the ability to pay your interest rate, (subsidized vs. un subsidized loans if you filled out your FAFSA)
Also, you would still be paying back the money you owe, banks wouldn't lose any money.
2- cons, the government, would be paying your interest, and that is quite a bit of money to shell out.
Also, banks would make no profit, and they are a business

3- Pros - Banks can still be in business making profits, and you have less money to pay back, you pay only slightly more than you borrowed and dramatically less that if you borrowed at a 8%
3- Cons - you still have to pay more than you borrowed.

Feel free to discuss if you are for/against, how you would change the petition.

I'll never turn down free money from the government.

From my standpoint, the student loans programs are the only government programs out there where the government realizes a ROI via increased income taxes paid by individuals who earn more because of the degrees student loans helped them get.

Are you serious?

*not you Kevin*

There may be a petition, but I don't see the government doing it.

Although it would take a heavy load off my budget if any of those things happened.

There are programs you can work for that will forgive student loan debt.

M -- I look at it this way. The government is going to be taking from me for a long, long time as I'm going to in all likelihood have a more than decent income.

I have no problem with taking whatever hep the government throws my way.

No, I totally agree. That's why I had no problem taking out student loans. The student loan interest deduction was nice while it lasted, too.

I thought the first post was kind of insane.

Well yeah.. call me a cynic and all, but in the eyes of legislators, a fundamental reality which can always be counted on can be summed up like this:

Students and their finances < the bottom lines of banks

I'll concede that banks should get to make a decent profit on these loans, but I also think the profit shouldn't be more than a point or two above prime. Why is this? Subsidized loans are not bankruptable. In other words, these loans, particularly to doctors, lawyers and other money-making degree-holders have damn near zero risk and are generally, over the long haul, free money to the bank which can absolutely be counted on.

I think the interest rates are out of hand.

At any rate, while I'd love to see student loans forgiven, this isn't the sort of policy the Democrats will be interested in implementing. Graduates with student debts are not generally going to be in that mostly non-working group of folks dubbed the "working class," rather, we're more likely to be middle to upper-middle class -- kind of in the "to hell with you" category, right below the "we're actively trying to undermine your financial security" category.

At any rate, while I'd also like a choo-choo and a red race car and a spiderman for Christmas, I don't think I'll be getting my student loans forgiven either.

I'm finding that the OP is making a lot of *interesting* posts all over GC.

You could, quite a few of my friends got debt forgiveness (well a percentage of it) for their Law School Debt, provided they stay at Legal Aid for x number of years.

I'm not really worried about that. I am pretty much (unlike many of my colleagues) assured of a very good income after graduation. While I'll take free money, slaving away at the PD's office isn't in the cards for me.

I do respect the job those folks do. One of our divorce clients was recently represented by the federal Public Defender who did a hell of a good job --our guy is a minority and got a hung jury on a drug charge -- I know, I didn't know that ever happened in Oklahoma either.

As lovely as it would be for the government to swoop in and say that they forgive my all my college debts, I wouldn't accept it.....

Maybe a lower interest rate, but the fact is, I took out that money and I owe it back!

If we start paying back everyone's debt, the government will be in debt forever.

Wait...you mean that's not what we want?

I wouldn't mind a lower interest rate to offset the tremendous amount that I owe, it would help.

I don't know I just wish they gave teachers more of a break. The only way teachers get a "break" is if they are 1) sped teachers or 2) teaching in the other "hard to fill" areas.

I just think the whole thing sucks. I know I didn't go into teaching for the money, but come on, I'm like working poor. I probably owe 80K in school loans and I will be lucky if I make 45K next school year.

Since I live in AZ and my state is full of dumbasses who don't know how to not waste money, the teachers are suffering (along with districts) and we won't be getting a raise. Heck salaries will probably drop or freeze.

I'm not saying eliminate all of teachers school loan debt, but maybe have a program where teachers, after a certain amount of service in education, can apply to have up to 50% of thier loans forgiven, but a minimum of like 10% will be forgiven and depending on the application and what the "group" decides will be how much you get forgiven.

And not just teachers deserve a loan forgiveness program, another one I can think of right off the bat is nurses. Both jobs require a minimum of a bachlors degree and continuing education.

School should be free all the way through college. Anything after, there should be a cost. I'm not sure if it's still the same, but a guy I used to work with, he was originally from the Ivory Coast. He lived in Paris for about 10 years and he said school is free there. I don't see why school can't be free here in the states.

You read my mind! I felt like we were watching an episode of Coffee Talk with our host Linda Richman.

I'm feeling verklempt over Barbara Streisand, I'll give you a topic to discuss amongst yourselves, discuss:

The mean girls of GC are neither mean nor girls, DISCUSS.

Now that a person had eight babies using student aid money (allegedly) I doubt there will be anything but tighter restrictions on loans. It wouldn't surprise me if they did audits and you had to bring in receipts to prove what you spent money on.

Screw that. I just paid off 70K of student loan debt in two years. Is the gov't going to reimburse me for that?

Seriously, me too. People, you took on the debt, pay it back. Everyone thinks they are entitled to a bailout of their own. You decided to take on that debt, you signed on the dotted line. Be responsible for your own actions and pay for it.

Not that a facebook petition/online petition is going to be too influential.

Bullcrap. I'll bet Obama checks it regularly on his Blackberry.

There's currently a federal program that if you work for 10 years in public service (which includes working in a federal, state, local or tribal government position, working for a public interest law organization, or a 501(c)(3) organization), and if you make your payments on time for 10 consecutive years, you qualify for debt forgiveness. You have to consolidate your debt under one of the federal repayment programs (i.e. not consolidate under a private lender). I know there are even better programs in some states (and that some schools, including Yale, I believe, have their own programs), and there are law students lobbying for better programs in most of the other states (including CT), for those who want to go into public interest law without having to take a second job at Starbucks.

I can see the wisdom of those types of loan forgiveness programs, especially in public interest law where they're having a hard time finding good young lawyers, or they're losing good attorneys after a couple of years because of financial issues.

Something like this wouldn't affect me a whole lot personally, as I've worked full-time throughout undergrad and law school to minimize loans. But, as noted above, I think it's pretty drastic and would have no chance of being enacted.

This goes into something else that kind of annoys me about this new batch of kids...they think that since the Obamas had student loans, that they're more "sympathetic" to those who have loans. Maybe he is, but I'm not, and I had loans too.

It could be, if everybody wanted to pay a whole lot more in taxes. Everything could be free if we turned over all of our money to the government and they doled out stuff. But, we're not a socialist society. Many of the places where such education is free, people are also told what they will study. We tend to like our freedom to major in whatever we want.

I never said I agreed with the petition.... I'm personally for a plan where interest rates are capped at 1-2 percent. But this is something that is out there, and it exists, and this is the news and politics section, so I wanted to see what peoples ideas where.

I'm not saying, give me a free ride, and I'm not saying I want the gov't to pay for my loans. I'm willing to pay back my loans, that's why I work and go to school full time. I'm just asking for people's opinion.

The halo will fade. Give it time.

This is a horrible idea. Not only are you wasting billions of dollars that should either be spent on some sort of sustainable public works project or not spent at all, but you're also setting a precedent for people to carelessly borrow money.

This might be the first time I agree with you. There are already too many people who run up insane amounts of credit card debt without thinking about the ramifications. Why cancel what is considered good debt?

If you file bankruptcy, you still have to pay your student loans. The government is not going to forgive all student loan debt.

You'll probably laugh, but the halo has faded for me.

I was thinking the exact same thing!

I choose to become a teacher. I does suck that I need a BA degree to teach and I earn less than some people who don't even have degrees, but that just shows that we have a messed up system.

As someone else said earlier, in most states there is a teacher forgiveness loan program, but you have to meet their strict criteria of what is a critical need area, it changes every year, and they want you to usually teach an urban school.

I gave him a chance, but after this stimulus debacle, and the Keynesian boondoggles to come, come election time, only the true believers will still be supporting him. The only way he gets a second term is if Sarah Palin wins the Republican nomination.

(I think I threw up in my mouth just a bit)

LOL I was thinking the same thing. I'm a year or two away from having all of my loans paid off, and I'd be PISSED if the gov't now stepped in to erase the debt of the millenials, who haven't even begun to understand what it means to be a responsible, bill-paying adult.

Since the length of time to find a "real" job after graduation is getting longer and longer (last I heard it was around 9 months and that was before the more recent downturns), I could see them deferring them longer, or not charging interest while one is laid off, or making some measures like that. But completely forgiving them seems counter productive. College grads are still in a much better position than non college grads. As we're moving away from manufacturing, it's the non-college grads who need job training, etc.

I'm getting kind of tired of hearing people who have two working adults (spouses, whatever) in the home saying "Where's my bailout?" because, in reality, they do not need one! If they do, it's because of their own irresponsibility. I don't need a bailout at this point in time. I believe my job is pretty secure. I spend carefully and save carefully. I'm paying a boatload more in taxes for 2008 than usual because of inheriting IRAs from my mom. I don't expect a handout for no reason just so that I can spend frivolously.

Having programs for people to re-finance out of insane mortgages is one thing. Forgiving loans for those people who are in the best position right now is just silly. That said, I do think teachers who are paid less than $60K or so should get reduced student loans, even on sliding scales for working in various difficult geographic areas. Nurses too, and probably some other "critical need" type jobs. With the shortage of general practice physicians, they should probably qualify too.

I think that's a decent idea.

6 months after graduation is the average amount of time to find a job, and start paying off loans. If you lengthen that to a year, or 18 months, you risk students taking that time off as a large vacation, possibly putting them into a worse situation. Though, it does give time for those harder jobs to find that you may need more time to pay back your loans.




I just feel that, if banks know that at this point in time student loans are almost mandatory for anyone wanting to get their degree, and even MORE likely for grad students, they could help everyone by lowering the interest rates. The government wouldn't need to step in the way people feel they do now, and banks are still making a load of money off of the interest just because people are BORROWING so much money.

Building credit is one of the best things a student can do for themselves, so they need ways to do that. Some credit card companies have stepped in a had great rates and insensitive for current college students. Students also need to learn financial responsibility so they wont be relying on unemployment/welfare for the rest of their lives. (Which ultimately hurts the rest of the country because we're paying taxes for their lazy @$$es)

When I first heard about this petition, i was surprised at the amount of support I saw. But then I thought about how many of my friends (college students) are on unemployment, and It kind of made me think about how lazy this country is. The government get's nothing out of you going to college. So why should the government bail you out of your student loans. The government would get something out of lowering student loans Interest rates because less people would be having difficulty in paying back.

I'm the youngest of 5, all went to college, I'm still in it. My parents told us, they would pay for half of the first 4 years we were in school. After that, we're on our own. So i have loans out, and my parents have loans for me, and when I enter my 5th year (because my program can't really be done in 4) I'll be on my own. Would I love for that year to be free? Duh, who wouldn't. But that's what scholarships are for. And that's why I keep applying for scholarships. I wont be in the worst of shape after i graduate. But my parents have 5 kids worth of loans, 20 years worth of college loans, in 12 years. They consolidate, and they do what they can. But the amount of interest alone is putting them in a serious financial situation.

I think lowering the interest rates can help longer than forgiving student loans. Forgiving student loans just makes people even more lazy, and possibly feel even more entitled to things that they're not entitled. Also, as many people have said, that money could go toward much better things... as long as they are things IN this country. But bailing out student debt will only help one generation of college students, what about the next set of college students? The government can't help everyone get through college, they do what they can, FAFSA, and other ways to get government aid. There are private loans, and as always... just a damn good highschool GPA can do wonders for you!

I think things are going that way, at least to a certain degree. From the emails that go out over my law school's listserve, it appears that the new federal loan consolidation programs have an option where you can base your repayment on your income. Now, I don't know whether that significantly drops the starting payments, and I'm guessing you get hit hard on the back end, but it's an option. Plus, there are the loan forgiveness options for teachers and lawyers; I'm not sure which other professions have that sort of program.

I'm not sure how far to stretch the programs though. How do you decide which professions should qualify? Of course, I'm speaking as someone who is going into a profession that has some loan forgiveness, and as someone who was able to us a minimal amount of student loans (through merit and need based scholarships/grants and full-time work proceeds) through undergrad and law school, so take my opinion for what it's worth.

I can't speak much to student loans either. I never had them. For undergrad, I had a full tuition scholarship, help from parents for room & board and worked for my book/spending money/sorority dues. For grad school, I did it while working full time for employers that had decent tuition reimbursement programs.

If only there were more of those out there :-\ They exist, but are oddly hard to find.

The military will pay off everything and you'll go in as an officer.

Student loan interest rates are lower than they've ever been; I honestly don't think they can get any better. Mine were at just under 3%; my savings account has a higher interest rate! I figured it made more sense for me to pay that off and put the money I was paying for loans in savings.

Oh yeah...not everyone who does well in school will get scholarships. A lot of colleges do not provide merit aid; some private scholarship organizations look at need before they look at merit to prevent one or two students at the top from taking the most scholarship money. I was in the top 1% of my HS class with a ton of extracurrics, and I got exactly $1,500 in scholarship money. That money was actually connected to an activity I was involved in. Great considering 4 years of tuition was just about $150,000. :)

But most student loans have variable interest rates that change every 6 months... they could go back up to 8. And that sucks :-( I pay 15,000 a semester for 5 years... plus summer classes

Most people get their loans consolidated after school; usually, after a few years of on-time payments, your interest rate will be lowered. Also, if you agree to do automatic debit, your rate could be lowered as well. My loans--federal and private--were NEVER as high as 8 percent; they hovered somewhere around 2.5-5% before I locked them in.

I think one thing that's being left out of this debate is the cost of attending some schools versus others.

If you elect to attend a pricey private school you probably owe somewhere between four and ten times as much money as a public college grad, with no corresponding increase in your salary. (Sure there could be an increase in your salary, but it's probably much more field of study related rather than cost of school related.)

Why should this decision be subsidized by the government at all?

ETA: am I wrong in thinking of it this way? It's not that I want some system that keeps students who can't afford to write a 100,000-200,000 dollar check for their education out of elite schools, and yet, maybe the schools themselves should help the kids finance it? What was Havard's endowment?