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Student Loan Forgiveness Act of 2012

Discussion in 'Pharmacy' started by B Wong, 03.13.12.

  1. B Wong

    B Wong

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  2. xiphoid2010

    xiphoid2010

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  3. B Wong

    B Wong

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    I'm against it. Dropping PSLF to 5 years for medical professionals? That's not going to go over to well.
  4. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    Not going to pass...but holy sh*t, 5 years for PSLF?

    That means at 2 years of residency & 3 years of working in a hospital = $200k loan wiped out after paying $49,500 (assuming incomes of $50k, $85k, then $120k x 3 years).

    Again, not going to pass. Actually, I'm concerned that if you let EVERYONE on the 10-10 plan (currently limited to PSLF peeps), it'd be more likely to be cut (ie it won't fly under the radar anymore) in the future.

    Hmmmm
  5. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    They should limit this to primary care physicians, that'll dent the shortage a little bit.
  6. Sparda29

    Sparda29 En Taro Adun Gold Donor

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    I ****ing love it. $350K of debt wiped out. I'll take it.
  7. awval999

    awval999 New Member

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    It will die in committee. Never gonna fly. Never.
  8. awval999

    awval999 New Member

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    I'll also take a free pony.
  9. npage148

    npage148 Senior Member

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    I'm all for it. The Gov't has no issue handing billions/trillions to corporations who are the ones that actually create the problems we need to deal with. How about tossing a little to the people who actually need it
  10. browneyes021

    browneyes021

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    I'd be for it to help stimulate the economy. Just think about the millions of debted people who would spend money if they were free of student loan debt. I know if I didn't owe as much money, I would buy a house and obviously appliances and furniture for that house, but with all my debt I just save and spend money on groceries and loans. I rarely go shopping unless there's a really good sale going on. I look forward to the day when I have over 6k a month to just play with (obviously less after paying bills) because I wouldn't know what to do with it.
  11. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    It'll die because no one will lobby for it.

    Tax breaks for oil, solar, etc... survive because you have millions of dollars spent on effective lobbying.

    The only "threat" is that we're still a one person/one vote country but that power is rarely (never) exercised.

    The only way this thing would pass is if it's a democratic house, senate, and president and it's an election year wherein a republican filibuster could be seen as being anti-middle class, and ONLY if there's an effective PR campaign that highlights it.

    Oh, and only if that bill got something about keeping puppies alive attached to it somehow.

    Yep.
  12. JamesL1585

    JamesL1585 Member

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    Unfortunately, this particular bill won't pass... BUTT, and I say BUTT with two TT's because this issue is huger than JLO's ass (she has the largest in hollywood I believe), this sheds light on an issue that needs attention and FAST. The NEWEST crisis our country has self-administered and the symptoms are just really starting to show is the Student Loan Crisis and the unsettling prices of education in America. Like health care, like military, like everything else, it's f*#(#* out of control but will directly affect more people than any of these other issues because without education in this country it's extremely difficult to have afford a good quality of life.

    So I pray that from this bill, a fair and just bill will be presented that will pass. No reason I should be paying $1500 a month for the next 15-25 years of my life because I decided to go to school for 9 years. The education was punishment enough (Pharm school wiped my ass enough), no need to have to relive that through my wallet for another 2 decades. I digress.
  13. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    Granted, we're all fairly intelligent people who knew the terms of this agreement up front. I don't know anyone finishing med/pharm school going "WOW I had ZERO IDEA I'd be in this much debt."

    (Hopefully) we all did the risk/benefit analysis and acted accordingly.

    That's not to say the situation sucks or is difficult, but we were by and large informed buyers entering this contract.
  14. JamesL1585

    JamesL1585 Member

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    I know you're not being critical, and frankly just being honest, but exceptions to every contract. First off, the tuition is too damn expensive in the first place, but what alternatives do you have? Secondly, in my specific case, I had to borrow way more than expected because my financial dependence was placed on my mother, who passed away during school. This accounted for me borrowing an extra 30-40k because I had no alternative. So, things happen right? Nothing is in the contract for that, and my unfortunate situation is no one's but my own.
  15. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    Oh I know, I was sortof replying to you but more to everyone in general. I'm sorry for your situation, but everyone's situation will be different. It's just that we were informed buyers of an expensive product that's not performing as we expected, but like buying a house or stocks, there's an understanding that its value can go down.

    We start gliding down this slippery slope of expected vs. actual risk encountered and government intervention. Sure, government has an obligation and prerogative to make laws that "better" society and provide incentives to do things. On the other hand, I personally don't think risk should be subsidized/externalized to government, which is what this bill is effectively doing.

    I do see the other side, if the law is targeted enough, it can spur downstream changes and provide an economic boost by letting productive members of society get rid of the debt monkey sooner.
  16. Kansas Pharmer

    Kansas Pharmer

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    While I agree with most everything already said here, what about people like me? I spent time in the military to help pay for school. I also worked for a few years to pay down bills and have a sizable savings before starting school.

    So, if I leave with my PharmD and have no debt or minimal loans, then I am just screwed? This smacks of more class warfare and rewarding the people that do not or will not plan ahead (just like the mortgage "crisis"). I knew that it was going to cost me 200k to go to school so I started "paying" for school long before I enrolled.

    I have 4 mortgages (2 of which are now underwater) and I have accounted for at least half my school money already without any loans. The government is not going to "forgive" any of this debt for me. Why am I being punished for being "responsible" while other people take no risk and get the same rewards that I get?
  17. cycloketocaine

    cycloketocaine

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    Because life isn't fair.
  18. Kansas Pharmer

    Kansas Pharmer

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    LOL :laugh: True dat.

    The problem I have is I was always told to "work hard, spend wisely and enjoy the fruits of your labor". Thats why I went in the military in the first place. My parents could/would not pay for school and I didnt want a ton if debt so the Army was the best plan of action.

    Now, people are sometimes allowed to do whatever they want financially with no consequences. This will not end well...
  19. KUMoose

    KUMoose Grumpy old man

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    I agree that this is really bad, it allows people to get stupid degrees and then not be a significant productive part of society.

    The larger issue is that secondary (state) education should be free or vastly reduced in this country, for those going into high-tech/teaching/medical/engineering/intellectually demanding fields and are able to maintain a solid GPA (3.0). This is an area where we continue to lose ground against the rest of the world and is the biggest benefit for bringing people out of economic hardships.

    Sorry folks, want to go into basketweaving or sports management, you have to pay your own way. Luckily those people tend to play a sport and can get a scholarship.

    @KRPh, might want to tone down the mortgage crisis, you're lumping a lot of differing circumstances into a single group. Go read any of the independent work on the subject, you'll see a lot of corporate malfeasance regarding the situation.
  20. Shnurek

    Shnurek

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    Hmmm...yes! Another loophole in the system. Now along with potentially taking welfare and being on foodstamps and on medicaid, I can also get my loans disbursed! I love socialism! Yes, pay for meeee tax payers while I get a basically free education that will make ~100k! Oh wait...that didn't last so well for the Soviet Uni......
  21. Rx MPLS

    Rx MPLS

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    I may be a diehard liberal, but I just can't back this. It removes all personal responsibility from the equation and provides no incentive for students to try to keep their loan numbers low and for schools to try to keep their tuition costs low.
  22. Kansas Pharmer

    Kansas Pharmer

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    Oh, I agree. I suppose I should qualify my rant a little: I am just upset at the people that willingly signed mortgage documents and then walked away from their obligations when it "got too hard" to meet them (most of these are people that tried to speculate and lost). This is the overall prevailing attitude that I find wrong: no personal responsibility.
  23. npage148

    npage148 Senior Member

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    The problem is that student loans are extremely hard to disburse which creates no incentive for schools to keep tuition down or for lending agencies to do proper review of the applicant before handing out 100k.

    Sure you can try to pin it on the students but when no employer will look at a resume w/o a 4 year degree and loan companies are hyper-eager to dole out unlimited money which schools are more than happy to take you run into the crisis we are going to experience

    This is exactly the same as a communist dictatorship, that's for making the connection for all of us
  24. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    Ah this is where I'll disagree with you. I disassociate "walking away" with "personal responsibility" because the former is a simple exercising of the "no-pay" clause in your mortgage contract, and the latter is a moral imperative that is subject to each individual's circumstances.

    Every mortgage allows you to not pay and walk away. Every single one of them, it's right there in black and white. The bank agreed with you in advance that, if you do so, and depending on the state you're in, they'll take your house, ding your credit, attempt to sue you if possible, and call it square.

    Example: If you have a family of 4, are barely making payments on an underwater mortgage, you have a moral responsibility to provide the best situation for your children as a father (or mother) and a contractual "obligation" to the bank. Moral > contractual, I would walk away in a heartbeat.

    At the end of the day, you've provided for the fruit of your loins AND maintained compliance with the contract. Businesses do this all the time, why hold individuals to a different standard? The SCOTUS just ruled that corporations are just like people, therefore people are just like corporations.

    On a side note: mortgaging a house to pay for school sounds like a good idea, only because you can discharge mortgage debt/etc... through bankruptcy but not student loans. Damn, if I had a time machine...
  25. Rx MPLS

    Rx MPLS

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    It's not just students I wonder about; sometimes I wonder about their parents, too. When upper middle class parents with no health issues refuse to save for college (which they expect) for their one or two children and also don't save for their own retirement, I can't help but wonder what went wrong in our country. I completely understand when saving isn't feasible for people due to circumstances outside their control, but when you have the money and time, why wouldn't you provide your kids this firm footing and also save so you can one day retire comfortably yourself?

    Sorry for the mini rant, I saw these issues during my undergraduate years and it completely boggled my mind.

    Student loans are pretty easy to get, and as long as they are easy to get, schools will keep pushing prices up. When students start telling schools they are unaffordable, there will finally be some incentive for the schools to keep prices lower.

    As an example of misspent money from my school: they are building a beautiful new fitness center now. It's amazing looking, but every student at the U has paid an additional $75 per semester since 2008 for this gym, which won't open for a few more years yet. It's not a huge cost, but this stuff adds up. The current fitness center is completely fine, but it's not fancy enough to woo students to come to the school if the gym is their main concern. Still, our school is located in between two large cities with more than enough fitness opportunities if students desire them. Tacking $150 onto the bill of every student every year is just unnecessary (and I love going to the gym, but why make my non gym-going classmates support my habit?). Of course, student loan offers increase by the same amount to offset the expansion of new fees every year...and collectively, us students just roll over on our backs and let them continue to hike our tuition and fees.
  26. xiphoid2010

    xiphoid2010

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    One thing they could do is make student loans more like any kind of private loans - mortgage, car, credit card, etc.

    Bank won't loan you a mortgage where the monthly payment is >28% of gross income (36% max combined with other debt). So they can cap student loan at $100K for a degree that pays $50K/yr average (10 year monthly payment ~28% income). Students who want to borrow more must have a co-signer.

    If you can afford to spend that kind of money buying a house, then you can afford to pay back your student loan debt.
  27. confettiflyer

    confettiflyer Unicorn w/ dirty wings

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    I read this article in one of the big papers recently (<1yr) that discussed this very item. My school built these amazingly lavish dorms, fitness centers, and student centers with the idea of using them to recruit upper class students. A quick drive around my undergrad shows it was working: every other car was a BMW, Benz, Audi, etc... I had a nice shiny new Honda my parents bought for me for college but felt poor hunting for parking spots before class.

    Oh here we go, found it:
    http://articles.latimes.com/2011/sep/04/business/la-fi-luxury-student-housing-20110904
  28. maverick145

    maverick145

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    In 1979 at Michigan state university, four years cost $9176 in 2012 dollars. The cost is now almost 50 thousand. In California, public colleges were practically free, now tuition at the UC schools is over 10000 a year. These increases are because of federal and state cuts to higher education funding. So the cost of an education has just been shifted from tax payers (which group of tax payers has gotten the majority of tax cuts since the 70's?) to the students. So the idea that the federal government woudl be forgiving student loans is similar to how higher education has been funded in the past, the goverment subsidizes the cost. Why do they subsidize the cost? It benefits the entire economy as a whole. When MSU trains an engineer and that person goes to work at Ford, Ford is using that persons education for free. If Ford has access to highly qualified people educated at public universities, this is going to allow them to thrive in the world economy and will improve our economy. Every person in this coutnry benefits from a strong economy.

    There also is the point that one of the biggest causes of the recession we are in (recession is technically over) is the fact that the middle class has sooooooo much debt and because of it they spend less. Relieving debt of the middle class is going to help the economy, I think we can all agree on that.

    I mean when you drive on the roads that my tax dollars paid to build (and there are a million other examples of services we all use that our tax dollars paid for, ones that we dont even realize are there) I wont call you a socialist. There are just certain services that the goverment should provide that are going to benefit the coutnry as a whole. One of them is higher education. I dont want the goverment to take over caterpillar and start building bull dozers, I just want the goverment to provide the services that a healthy society requires.

    Here is the definition of socialism "any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods." Does having the federal goverment relieve student loan debt sound like that?

    Lets not forget, the cost of the Iraq and Afghanistan wars will likely reach 4.4 TRILLION. We can find the money for that no problem but we cant afford to educate our own citizens? Its just ridiculous
    Last edited: 03.14.12
  29. kvl1027

    kvl1027 Member

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    This bill won't fly, but I am definitly not against some relief for students of higher education. 6.8% on student loan debt when my mortgage is 3.8%? The Fed will get plenty from us in taxes, whats wrong with a little give back on student loan debt? I know I would be stimulating the economy a lot more if my loan payment wasn't so damn high.
    The middle class needs a break, I have no problem with a little relief and I wont feel bad if I get some.
  30. maverick145

    maverick145

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    Ya and before Obama took office, that 6.8% interest was going to a private bank. A private bank that has no risk and was not even lending the money (the money is from the goverment), all they did was service the loan and collect the interest. This earned them billions for doing practically nothing. So your interest money was not even going back to the goverment, some bank was taking it all. Hmmmm.... maybe that's why the rate is so high. Pretty nice system we all inherited, not only has the cost skyrocketed but then we have to pay interest to some bank so that they can send us letters telling us how much we owe them.

    At least now the interest is going back into the system.
  31. kvl1027

    kvl1027 Member

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    I have no issues with the interest going back tot he fed, actually makes more sense really. I just have a problem with the rate....it sucks!
  32. maverick145

    maverick145

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    Oh ya the interest rate is way too high. Ask anyone who went to college in the 70's what the rate was, it was like 2% or something. We are all getting ripped off.
  33. awval999

    awval999 New Member

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    While debating this is fun I just want to be crystal clear for the starry-eyed pre-pharms and explain our system of government so they don't think all of their impending student loans will be forgiven.

    For basics please watch "I'm just a bill on Capitol Hill"

    http://www.youtube.com/watch?v=tyeJ55o3El0

    This bill was introduced by a Democrat in the House. The House is run by Republicans. First the bill must get out of committee. All committees are chaired and majority Republican. It will die here. But if it didn't, it would then die on the floor by majority vote. Even if it passed (it never could) it would be fillibustered in the Senate because there isn't 60 votes for cloture for an unfunded mandate such as this, especially for a population that doesn't vote (ie: 18-29 yo).

    Just realize this pups. I will make it crystal clear.

    COME HELL OR HIGH WATER, FORGIVENESS THIS AND THAT, PROMISES THAT WILL NEVER HAPPEN, LOAN FORGIVENESS THAT WILL DIE IN COMMITTEE OR BE CANCELLED. YOU WILL PAY THESE STUDENT LOANS. EVERY CENT OF EVERY DOLLAR. EVERY LAST PENNY. EVERY DOLLAR IN TUITION. THEY WILL GARNISH YOUR WAGES, TAKE YOUR TAX RETURN AND GARNISH ANY SOCIAL SECURITY. THERE WILL NEVER BE ANY ESCAPE UNTIL YOU PAY EVERY LAST PENNY AND YOU HAVE THE SATISFACTION OF LOAN STATEMENT IN YOUR HAND.

    Done.
  34. awval999

    awval999 New Member

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    Where do you think this money comes from honestly? The answer: China.

    2012 Federal Unified Budget
    Deficit:
    $1.327 trillion (enacted)

    Some times I have to remind myself that the average age here is ~21.
  35. maverick145

    maverick145

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    Ya not now, but what about when Democrats take back control of congress. Why can it not happen then. The percentage of the population with student loans is growing every year so this kind of idea is going to gain more and more support.
  36. Digsbe

    Digsbe

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    I'm torn on the issue. Although I'll really enjoy not having to pay back roughly $150k after graduating in four years, I think that we are far enough in debt already and cannot afford it. If anything maybe the government could allow for tax breaks to companies/healthcare facilities that offer work contracts to more professional students in health care that aid in paying off their tuition (Like those contracts we used to have where a chain pharmacy/healthcare facility would pay for your schooling if you contractually agree to work for them X number of years).
  37. awval999

    awval999 New Member

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    Honestly, good question. The answer:
    http://en.wikipedia.org/wiki/Filibuster_in_the_United_States_Senate

    2012 is a defense year for the D's in the Senate. They had a lot of pickups in 2006. They will probably lose a seat or two. I honestly think Obama wins re-election. Furthermore, mid-term elections aren't good for sitting presidents so 2014 will be another "Republican Wave." They will have House/Senate for sure by then. I would say 2016 will be your next good chance for these free pony types of laws.

    I would also like to point out, that our government is not proactive, it is very reactionary. Honestly the default rate on student loans is only ~10%. Not much different then credit cards.
    Source:
    The U.S. Department of Education today released the official FY 2009 national student loan cohort default rate, which has risen to 8.8 percent, up from 7.0 percent in FY 2008. The cohort default rates increased for all sectors: from 6.0 percent to 7.2 percent for public institutions, from 4.0 percent to 4.6 percent for private institutions, and from 11.6 percent to 15 percent at for-profit schools.

    Most of the default is due to private, for-profit schools anyway. It would take massive defaults approaching ~50% for the government to do anything.

    In addition, the economy does suck right now, truthfully when it improves, the default rate will go down further. The only hope for these free ponies is truthfully another Great Recession that forces a socialistic type European state. So it will pretty much take the failure of market capitalism for the United States to do these types of things.

    Believe me when I say, you will pay EVERY CENT OF OF EVERY DOLLAR.

    PS: It's not like I don't want a free pony, or like $102,000.00 of them. I am just realistic of our form of government. Also, at least we will get cheaper houses for the next decade. Look at the brightside :)
  38. maverick145

    maverick145

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    Ya and what caused that deficit. The big three, Bush tax cuts, Iraq and Afghanistan wars, and the loss of tax revenue caused by the 2008 recession. End the tax cuts, end the wars, and fix the economy. Our budget problems are not unfixable, Clinton ended his presidency with the budget in surplus (in 2000, the predicted budget for 2010 was positive by a trillion!!!). Relieving student loan debt would also help the economy so doing that and fixing our budget can be done at the same time. And the idea that we borrow most of this money from China is wrong. We mostly owe the money to ourselves.
  39. awval999

    awval999 New Member

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    Take a deep breath.

    First, you are pre-dent, so as long as you don't go to USC and shell out $400K in student loans you will be fine. We are jealous of that your profession has rejected the "insurance model" for as long as they have. Also dental has a nice cosmetic side business.

    Second, yes, you are correct that much of the debt is intra-governmental holdings, but regardless, the general fund will need to cut spending/raise taxes in order to repay the SS Trust Fund and Medicare Trust Fund. The majority of the debt is owed to these two trust funds, and the beneficiaries are the American public.

    Mark my words, if the choice is to cut SS/Medicare $1T or forgive student loans, you damn well better believe its the elderly that will win that debate. And, in the end, that will be the choice.

    Constant government meddling in the higher education business caused all these issues. If parents/students had to pay cash for college and/or take out private loans (NOT BACKED BY THE GOVERNMENT) costs would fall dramatically.
  40. awval999

    awval999 New Member

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    I also love that confetti and myself find each other in these threads. I heart you confetti. Love the debates.

    The fact is, when confetti knows this bill is stupid, and can't pass, we should just lock the thread.
  41. xiphoid2010

    xiphoid2010

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    6.8% is high for now, but it's a fixed rate.

    I can see that pegging it to the yield on 10-year treasury note might make some sense. But how many people want their monthly student loan bill to go up and down all the time? Imagine the unpleasant surprise should the rate goes to 10% down the road.
  42. maverick145

    maverick145

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    Our legislature also reacts to pressure put on it from its constituents doesn't it? Those default rates are only for students who started repayment in fiscal year 2009 and defaulted by september 2010. The default rate on government loans is actually 20 percent! Thats way higher then I thought it was. Those 20 percent cannot discharge those loans in bankruptcy either, so their lives are basically ruined. I think you are underestimating how big of a problem this is, and it is only getting worse as state governments slash their support to public institutions and they have to raise tuition every single year. I think its going to get to the point where it is just a disaster and the government has to do something.
  43. pezdispenser

    pezdispenser

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    Here's something to ponder. If you were the US government/Treasury and people would readily lend you money at an interest rate of 1% for 5 yrs, 2.1% for 10 yrs or 3.25% for 30 yrs, would you take the money?
  44. maverick145

    maverick145

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    Am I a republican in this hypothetical situation? If I am then yes, I would take it and then give a tax cut to warren buffet. then complain about how high the debt is.
  45. awval999

    awval999 New Member

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    Let's follow your logic to its conclusion.

    Let's just borrow $10T then. Pay off everyone's mortgage, student loans and credit cards. 1% interest and all. That will help the economy.
  46. awval999

    awval999 New Member

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    I'm all for equalzing earned/unearned income tax rates. It won't solve our deficit problem though.
  47. scarshapedstar

    scarshapedstar MD c/o 2016

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  48. bacillus1

    bacillus1

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    I believe for future loans, there's a cap at about 50k.
  49. awval999

    awval999 New Member

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    If I may ask for a source for the 20% time I would appreciate it.

    Look, the old-fogies don't want to forgive our student loans. That's all there is to it. There are more of them than of us. Sure maybe 30 years from now. But not now. The whole 15% disposable income IBR thing forgiven after 25 years is the best that's gonna happen. And no, our legislature reacts to pressure from the media about things like transvaginal ultrasound before abortions and gay marriage. I would put student loans very far down the list.
  50. awval999

    awval999 New Member

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