Is it possible to pay back $600k+ in loans?

[viralhiker]

Will it be possible to pay back $600K in loans post-medical school?

I feel sick to my stomach. Since I turned 18 I have had no financial support from my family. Despite writing this on every application essay and conveying this to every financial aid office, nobody has offered a solution except “I’m very sorry to hear that, at least these loans are low-interest and don’t require a co-signer.”

My undergraduate, master’s, and now likely medical school degree will have to be entirely funded by loans. My EFC from the school isn’t even high. It’s four digits. But all they offered me are loans. This is after i spoke to the director of financial aid and wrote him an essay describing my family and financial position.

I’m at a loss. I do want to pursue a competitive specialty that will likely allow for a higher salary. But even then.. is it possible? Or am I making the worst financial decision imaginable by taking out another $320k+ in medical school loans?

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[alm414]

I'm really not well versed in financial aid, so I'm sure someone else will provide a more comprehensive answer, but the short answer is: yeah, it's definitely doable.

Just based on some online loan and income tax calculators I plucked from google, if you make $300k/year as a physician (sounds pretty doable especially if you are pursuing a competitive specialty), and take out $600k in loans with a 7.00% interest rate, your monthly payments on a 10 year loan term would be about $7k/month, or ~$84k/year. Your take home pay would be ~$200k. So after loan payments you're still ~$120k/year. I know you'll probably also have more expenses at that point in your life than you do now (family, mortgage, retirement, etc.), but I'm still gonna take a guess that even ~$120k/year is substantially more income than you've ever had before.

 

[wysdoc]

Will it be possible to pay back $600K in loans post-medical school?

I feel sick to my stomach. Since I turned 18 I have had no financial support from my family. Despite writing this on every application essay and conveying this to every financial aid office, nobody has offered a solution except “I’m very sorry to hear that, at least these loans are low-interest and don’t require a co-signer.”

My undergraduate, master’s, and now likely medical school degree will have to be entirely funded by loans. My EFC from the school isn’t even high. It’s four digits. But all they offered me are loans. This is after i spoke to the director of financial aid and wrote him an essay describing my family and financial position.

I’m at a loss. I do want to pursue a competitive specialty that will likely allow for a higher salary. But even then.. is it possible? Or am I making the worst financial decision imaginable by taking out another $320k+ in medical school loans?

Look at it this way:
Most MS1 students take out the maximum loan amount they are offered the first year. You are also going to have some extra expenses that first year like moving to a new city, buying furniture for your apartment, etc.
Live economically by doing your own cooking, eating fresh fruits & vegs instead of going to restaurants a lot (easy in quarantine times).
By the end of the first year, you will be able to estimate if you really need to borrow as much in year 2. Maybe you don't.

Once you are a resident you will be getting a paycheck, in the neighborhood of $50,000 a year. You won't be taking out new loans, but beginning to make payments on the ones you have. The big number on the loans is scary but learn as much as you can about how to keep track of them and pay them off methodically and you can make it.

 

[viralhiker]

Look at it this way:
Most MS1 students take out the maximum loan amount they are offered the first year. You are also going to have some extra expenses that first year like moving to a new city, buying furniture for your apartment, etc.
Live economically by doing your own cooking, eating fresh fruits & vegs instead of going to restaurants a lot (easy in quarantine times).
By the end of the first year, you will be able to estimate if you really need to borrow as much in year 2. Maybe you don't.

Once you are a resident you will be getting a paycheck, in the neighborhood of $50,000 a year. You won't be taking out new loans, but beginning to make payments on the ones you have. The big number on the loans is scary but learn as much as you can about how to keep track of them and pay them off methodically and you can make it.

Thank you for writing all of that. The numbers are so large it feels like the sky is falling, but thinking about them rationally as you put it makes it all seem more surmountable.

 

[Angus Avagadro]

There are military and Public Health Service scholarships that pay for all of med school for several years of payback service. Something to consider with huge debt like that.

 

[viralhiker]

There are military and Public Health Service scholarships that pay for all of med school for several years of payback service. Something to consider with huge debt like that.

I definitely do not want to join the military. However, I’m not aware of Public Health Service scholarships. I’ll have to look into what that entails.

 

[xffan624]

I definitely do not want to join the military. However, I’m not aware of Public Health Service scholarships. I’ll have to look into what that entails.

Also consider the VA HPSP which doesn't require military service and doesn't limit specialties (beside no Pediatrics obviously)

 

[EdgeTrimmer]

You don’t have any instate As? 600K is a lot and will take 10+ years unless you get into high paying specialty or as Dave Ramsey says follow rice and beans lifestyle.

 

[Angus Avagadro]

I definitely do not want to join the military. However, I’m not aware of Public Health Service scholarships. I’ll have to look into what that entails.

Don't discount the military. Talk is cheap, and never hurts to explore every option before you make a lifelong decision. I have several friends, classmates of my wife, who have gone that route, one got out of the air force as soon as his comittment was up. 2 others remain to this day. One chief of surgery at a flagship military hospital. Another was a former white house physician. They have had assignments in the UK, Italy, and Spain, San Diego, etc.. I don't think any regretted their service. One, a retired oral surgeon, enlisted and loves it! Something to consider. There are downsides to every option, even owing your soul to the bank. Good luck and best wishes.

 

[viralhiker]

You don’t have any instate As? 600K is a lot and will take 10+ years unless you get into high paying specialty or as Dave Ramsey says follow rice and beans lifestyle.

One of my instates offered only COA loans. We’ll see what the other does. Their average indebtedness is pretty close, however, so I don’t have high hopes.

 

[viralhiker]

Don't discount the military. Talk is cheap, and never hurts to explore every option before you make a lifelong decision. I have several friends, classmates of my wife, who have gone that route, one got out of the air force as soon as his comittment was up. 2 others remain to this day. One chief of surgery at a flagship military hospital. Another was a former white house physician. They have had assignments in the UK, Italy, and Spain, San Diego, etc.. I don't think any regretted their service. One, a retired oral surgeon, enlisted and loves it! Something to consider. There are downsides to every option, even owing your soul to the bank. Good luck and best wiahes.

Appreciate that. Thank you

 

[Deltasidearm]

If you already have $280k in loans then the military may not be the best option anyway. It is well understood that the military will pay for your schooling but is almost always a worse decision financially in the long-term. As an attending, you will make much more as a civilian than for the DOD and coming in with $280k in loans is a hefty burden to bear as an O-3.

If I were in your shoes, I would try not to worry too much and just do the best you can in school. I would rather make >$250K/year with $600k to payback as a physician than make ~$80k/year with $300k to payback with a M.S.

Your road may be long and daunting to look at since you're just at the start, but the journey will be worth it and you will slowly but surely climb this mountain.

 

[viralhiker]

Your road may be long and daunting to look at since you're just at the start, but the journey will be worth it and you will slowly but surely climb this mountain.

I appreciate that, thank you.

 

[OfMiceAndWomen]

I definitely do not want to join the military. However, I’m not aware of Public Health Service scholarships. I’ll have to look into what that entails.

Public Service Loan Forgiveness

[highlight] Alert! If your PSLF application is denied because some or all of your payments were not made under a qualifying repayment plan for PSLF, you might still be eligible for forgiveness through Temporary Expanded Public Service Loan Forgiveness. Learn more. [/highlight]

studentaid.gov

Federal student loan forgiveness after 10 years of payments while working with a qualifying employer. If I'm not mistaken, I think most hospitals / medical centers qualify as not-for-profit organizations?

 

[wysdoc]

A good roundup of financial aid advice here: HomeSkool's Guide to Financing Your Medical Education

And no, I don't think most hospitals/medical centers qualify as PSLF employers. There is a long application process for this and it requires persistence and excellent record keeping and adherence to the rules.

 

[Goro]

Will it be possible to pay back $600K in loans post-medical school?

I feel sick to my stomach. Since I turned 18 I have had no financial support from my family. Despite writing this on every application essay and conveying this to every financial aid office, nobody has offered a solution except “I’m very sorry to hear that, at least these loans are low-interest and don’t require a co-signer.”

My undergraduate, master’s, and now likely medical school degree will have to be entirely funded by loans. My EFC from the school isn’t even high. It’s four digits. But all they offered me are loans. This is after i spoke to the director of financial aid and wrote him an essay describing my family and financial position.

I’m at a loss. I do want to pursue a competitive specialty that will likely allow for a higher salary. But even then.. is it possible? Or am I making the worst financial decision imaginable by taking out another $320k+ in medical school loans?

if I could do that with my mortgage, you can too especially when you'll be making at least twice what I'm making.
I think there's a website called white coat investor which has information on all of this

 

[viralhiker]

if I could do that with my mortgage, you can too especially when you'll be making at least twice what I'm making.
I think there's a website called white coat investor which has information on all of this

Thank you for the encouragement

 

[IlDestriero]

It’s certainly doable. Perhaps you would benefit from the HPSP program more than many if you have any interest in serving in the military.

 

[CorgiLoaf]

Here is some more math to put things into perspective. Assumptions: 300k income, live in NY, 600k debt @ average 6% interest, compounding monthly.

Post-tax in NY, that will be ~190k. Say you make 50k in residency and want to give yourself a 50k "raise" when you become a full physician, so you live on 100k/yr.

If you put 90k/yr (or $7,500/mo) towards your 600k debt, you will be able to pay it off in 103 months.
If you live on 50k/yr still and put $140k/yr towards your debt, you will pay it off in 60 months.

300k is a bit on the lower side if you are pursuing a specialty and NY is a high-tax state.
Google "Debt Repayment Calculator" and play with the numbers a bit. 600k debt is a scary number but not insurmountable.

**I didn't account for the capitalized interest on your loans while you are in medical school. It might take ~10% more time to pay everything off

 

[YCAGA]

Here is some more math to put things into perspective. Assumptions: 300k income, live in NY, 600k debt @ average 6% interest, compounding monthly.

Post-tax in NY, that will be ~190k. Say you make 50k in residency and want to give yourself a 50k "raise" when you become a full physician, so you live on 100k/yr.

If you put 90k/yr (or $7,500/mo) towards your 600k debt, you will be able to pay it off in 103 months.
If you live on 50k/yr still and put $140k/yr towards your debt, you will pay it off in 60 months.

300k is a bit on the lower side if you are pursuing a specialty and NY is a high-tax state.
Google "Debt Repayment Calculator" and play with the numbers a bit. 600k debt is a scary number but not insurmountable.

**I didn't account for the capitalized interest on your loans while you are in medical school. It might take ~10% more time to pay everything off

This is a good breakdown. And it is also basically worst case for someone trying to pay off $600k…or in other words, it includes some bad decisions for someone $600k in debt. OP can refinance to 3-3.5% as an attending and will pay 3-3.5% during residency with REPAYE…that will save them a few years. NY state has brutal state and local taxes like you mentioned, so I would target a state with 0 state income tax, they normally pay more anyways. And like you also said, $300k is low for a specialist. Even if you get forced into family medicine because of poor medical school performance, the median salary for an FM hospitalist is about $320k. You should be pushing for more than that if you are $600k in debt even if it means a less desirable location for a few years. And less desirable location can mean 6 figure loan repayment by your employer for a certain contract length. As an FM hospitalist, you can go crazy for 2-3 years working nights and picking up extra shifts and realistically clear $500k/yr gross. It won’t be fun and you will get burnt out eventually, but if you do it in a state without income tax and you are married, 2-3 years of residency hours can make a huge dent in your debt. It could possibly pay it off completely if you “live like a resident” plus a lil fun money

so tl;dr: yes, you can do it. Just make good decisions here on out. The best decision you can make is to fall in love with a high paying speciality and match into it. Then refinancing and location will help you pay it off quicker. Last thing which sinks most people do lifestyle creep, which is why @CorgiLoaf has the great idea of giving yourself a “raise” as an attending.

 

[EdgeTrimmer]

Last thing which sinks most people do lifestyle creep, which is why @CorgiLoaf has the great idea of giving yourself a “raise” as an attending.

only caveat is your SO has to go with it

 

[viralhiker]

This is a good breakdown. And it is also basically worst case for someone trying to pay off $600k…or in other words, it includes some bad decisions for someone $600k in debt. OP can refinance to 3-3.5% as an attending and will pay 3-3.5% during residency with REPAYE…that will save them a few years. NY state has brutal state and local taxes like you mentioned, so I would target a state with 0 state income tax, they normally pay more anyways. And like you also said, $300k is low for a specialist. Even if you get forced into family medicine because of poor medical school performance, the median salary for an FM hospitalist is about $320k. You should be pushing for more than that if you are $600k in debt even if it means a less desirable location for a few years. And less desirable location can mean 6 figure loan repayment by your employer for a certain contract length. As an FM hospitalist, you can go crazy for 2-3 years working nights and picking up extra shifts and realistically clear $500k/yr gross. It won’t be fun and you will get burnt out eventually, but if you do it in a state without income tax and you are married, 2-3 years of residency hours can make a huge dent in your debt. It could possibly pay it off completely if you “live like a resident” plus a lil fun money

so tl;dr: yes, you can do it. Just make good decisions here on out. The best decision you can make is to fall in love with a high paying speciality and match into it. Then refinancing and location will help you pay it off quicker. Last thing which sinks most people do lifestyle creep, which is why @CorgiLoaf has the great idea of giving yourself a “raise” as an attending.

Thank you! The positive vibes on my situation go a long way. I woke up extremely depressed and anxious about my debt, but I'm trying to think more rationally and keep a better outlook on it. Some people on other forums (cough cough) are saying things like "move to Hungary and go to med school there" or "switch to a computer science career to make more money."

It was nice to receive level-headed and realistic advice from you and everyone else.

 

[YCAGA]

Thank you! The positive vibes on my situation go a long way. I woke up extremely depressed and anxious about my debt, but I'm trying to think more rationally and keep a better outlook on it. Some people on other forums (cough cough) are saying things like "move to Hungary and go to med school there" or "switch to a computer science career to make more money."

It was nice to receive level-headed and realistic advice from you and everyone else.

It’s a lot of debt but you will also make a lot of money so it’ll be fine. Just don’t marry someone with expensive taste and no self control lol

 

[CorgiLoaf]

only caveat is your SO has to go with it

If my SO isn't okay with me bringing home 100k post-tax, that'll be her loss and my gain

Thank you! The positive vibes on my situation go a long way. I woke up extremely depressed and anxious about my debt, but I'm trying to think more rationally and keep a better outlook on it. Some people on other forums (cough cough) are saying things like "move to Hungary and go to med school there" or "switch to a computer science career to make more money."

It was nice to receive level-headed and realistic advice from you and everyone else.

Yep, there are really only 2 ways you can screw yourself completely: (1) don't match; (2) develop insane lifestyle creep and finance a $5M house by the beach. Worst case scenario, you make $240k/yr in primary care and it takes you 11-12 years to pay off your debt. Still sucky, but you'll still have a very comfortable life/retirement.

 

[EdgeTrimmer]

If my SO isn't okay with me bringing home 100k post-tax, that'll be her loss and my gain

It's tough market out there competing with CS guys

 

[YCAGA]

It's tough market out there competing with CS guys

At least we aren’t nerds.

…wait…****

 

[CorgiLoaf]

It's tough market out there competing with CS guys

So true. A couple of my friends got hired at Facebook/Google/Apple making ~130k right out of college.
2 guys got a ~30k sign-on bonus, which was almost the entire salary of my gap-year job

 

[YCAGA]

So true. A couple of my friends got hired at Facebook/Google/Apple making ~130k right out of college.
2 guys got a ~30k sign-on bonus, which was almost the entire salary of my gap-year job

But do they get to say they are a PHYSICIAN™ when they introduce themselves?!

*goes back to my 500 Anki reviews and cries*

 

[EdgeTrimmer]

So true. A couple of my friends got hired at Facebook/Google/Apple making ~130k right out of college.
2 guys got a ~30k sign-on bonus, which was almost the entire salary of my gap-year job

Yes, 130K + signing bonus is going rate from top schools and someone I know who at 29 is already worth couple of millions. But even all that my son chose medicine, so cheering for you'll.

 

[Banco]

I mean at this point, you have 300k. You kind of need a high paying job to pay that off. Medicine can give you that. Without medical school, what are your income prospects like from your Master's?

It is a hefty sum, but it can be done - it'll just take you a while. You can also look into PSLF based programs.


But I will take this opportunity to once again say higher education cost in the USA is absolutely ludicrous.

 

[EdgeTrimmer]

But I will take this opportunity to once again say higher education cost in the USA is absolutely ludicrous.

Not the only the cost but the number of years to become a doctor.

 

[CK1212]

I'm going to be about 300-400k in debt by the end and my plan is to rent for the first few years after residency, continue living like a resident and aggressively pay down those loans in a 3-4 year span. Check out the White Coat Investor (both the book and the blog). There is a chapter in the book that talks about finances coming fresh out of residency.

 

[GreenDuck12]

It’s certainly payable but you have to recognize the trade offs and make smart plans. Right now you plan on going into a competitive specialty but what if that doesn’t work out (either due to changing interests or the reality of how competitive things are). For planning purposes I always recommend projecting the low end of physician salaries (150-200–k). At that level of debt looking into loan forgiveness options would be extremely prudent whether it be PSLF or a state/federal program to practice in a high needs area. Short of that, looking for favorable terms and rates to refinance would be a good option as well. My wife has a couple hundred thousand in loans and must pay a minimum of 20k before starting to pay back the principal. this is much higher than her minimum payment. If we were in a position to only make minimum payments her debt level would dramatically increase.

Id recommend using the financial aid website calculators to give yourself a better idea of what you are looking at.

 

[RheumDoc112]

This is a big debt burden, but I can tell you it is certainly possible.
I was about 550k in debt and have 118 payments made towards PSLF. Also certified my position every three months (very much overkill but the thought of hearing after the fact that your job site didn't qualify terrified me).
You'll find a ton of discussion regarding PSLF, and the truth is absolutely no one on here knows the future of the program. Regardless, there will always be creative pathways to climb out of debt if you choose that route.
Best of luck!

 

[YCAGA]

This is a big debt burden, but I can tell you it is certainly possible.
I was about 550k in debt and have 118 payments made towards PSLF. Also certified my position every three months (very much overkill but the thought of hearing after the fact that your job site didn't qualify terrified me).
You'll find a ton of discussion regarding PSLF, and the truth is absolutely no one on here knows the future of the program. Regardless, there will always be creative pathways to climb out of debt if you choose that route.
Best of luck!

That’s awesome and great advice. Update us in two months?!

 

[Idahomie]

The best advice I've gotten is to not restrict yourself geographically. There are a lot of places in the US with high paying jobs and low cost of living. Surprisingly, many of those places are quite enjoyable to live in. Follow the money after residency. You can pay off loans aggressively in a low cost of living area and still have a pretty great quality of life. If you hate it, you can always try somewhere else or stick it out until the debt load is more manageable and move somewhere more desirable.

600k is above average, but certainly manageable. Look at orthodontists. They have to pay some obscene amount of money for their post graduate education (like 100k a year or something). At least medical residents get paid something. The average debt for orthodontists is like 500k, and I think a large percentage end up with over 600k. While there are some cushy high paying private practice opportunities in orthodontics, I believe the majority make a similar salary to the lower paying medical specialties. In general, they are still able to pay off their loans and have a well above average quality of life.

Your situation, although unfortunate, is not unique. There are people who have made it back from worse and are on track to have a reasonable and stable retirement. I would not let that thought dissuade you from medicine. Who knows, it may be a good motivator to help you stick it through the tough times in med school and residency.

 

[Planes2Doc]

If you work for a 501c3 non-profit after graduation, you can do what's called PSLF (Public Student Loan Forgiveness). You qualify after making 120 payments using an income-based repayment plan. That's what I'm doing with close to $400k. Some people refinance and pay them off aggressively. It's all possible with a physician salary while working full-time. Good luck!

 

[BritainKittenMittens]

OP can refinance to 3-3.5% as an attending and will pay 3-3.5% during residency with REPAYE…

Not familiar with this, but doesn't this assume that we are in a low interest environment like we are now? Interest rates are set to only go up, right?

 

[GreenDuck12]

Not familiar with this, but doesn't this assume that we are in a low interest environment like we are now? Interest rates are set to only go up, right?

Correct however interest rates for refinancing medical school debt will likely still draw favorable interest rates due to the desire of some financial entities to build longer term relationships (investments, mortgage, etc).

 

[CorgiLoaf]

600k is above average, but certainly manageable. Look at orthodontists. They have to pay some obscene amount of money for their post graduate education (like 100k a year or something). At least medical residents get paid something. The average debt for orthodontists is like 500k, and I think a large percentage end up with over 600k. While there are some cushy high paying private practice opportunities in orthodontics, I believe the majority make a similar salary to the lower paying medical specialties. In general, they are still able to pay off their loans and have a well above average quality of life.

Wow I had no idea, and many orthodontist residencies charge you tuition?

 

[deleted314957]

Why am I seeing so many articles about folks walking away from their debt with impunity
while a number of our legislators think that is a fine idea?

 

[Mad Jack]

I'm really not well versed in financial aid, so I'm sure someone else will provide a more comprehensive answer, but the short answer is: yeah, it's definitely doable.

Just based on some online loan and income tax calculators I plucked from google, if you make $300k/year as a physician (sounds pretty doable especially if you are pursuing a competitive specialty), and take out $600k in loans with a 7.00% interest rate, your monthly payments on a 10 year loan term would be about $7k/month, or ~$84k/year. Your take home pay would be ~$200k. So after loan payments you're still ~$120k/year. I know you'll probably also have more expenses at that point in your life than you do now (family, mortgage, retirement, etc.), but I'm still gonna take a guess that even ~$120k/year is substantially more income than you've ever had before.

Realistically everyone is better off taking REPAYE these days. 25 year term, and it cuts any interest that is not covered by your monthly payments in half. Payments are a maximum of 10% of your disposable income, which means that you're paying just over $2,100/month. You have two potential strategies from here, either paying the paltry payments while interest accrues and banking on forgiveness after 25 years, or making larger payments that take advantage of the halved interest rate to pay your loan off in a shorter period of time. While under REPAYE, interest does not compound, so just throw an extra 5k at principal a month (fedloans lets you target payments over your minimum payment to interest or principal, so obviously do the latter) and it will melt away in no time, further lowering your future interest accrued

 

[GreenDuck12]

Why am I seeing so many articles about folks walking away from their debt with impunity
while a number of our legislators think that is a fine idea?

Links? Are you sure you are seeing articles about people walking away from debt as opposed to taking advantage of the pause in payments and interest accrual per policies of the Trump and Biden administrations?

 

[KnightDoc]

Links? Are you sure you are seeing articles about people walking away from debt as opposed to taking advantage of the pause in payments and interest accrual per policies of the Trump and Biden administrations?

No, there are a ton of articles on the topic. It's not a med student thing (doctors make plenty and cannot simply walk away with impunity), but it's a national crisis because there is a huge overhang of student loan debt that will never be repaid, is not eligible for forgiveness, and is not currently dischargeable in bankruptcy.

Something has to be done, but politicians cannot agree on just what that is. No matter what, blood does not flow from stones, so hundreds of billions of dollars will not be repaid by millions of people buried under tens of thousands of dollars in debt who are barely (or not at all) able to make ends meet. As interesting as this is, this really has nothing to do with us as future doctors, other than the impact it will have on us as future taxpayers.

It all goes to the wisdom of allowing people to borrow tons of money with a federal guarantee (or, nowadays, directly from the federal government), which mostly goes to support relatively high tuition rates, with no credit test, collateral, or standard governing ability to repay. This, of course, must be balanced against the desire to open access to people without the ability to simply write tuition checks.

 

[GreenDuck12]

huge overhang of student loan debt that will never be repaid, is not eligible for forgiveness, and is not currently dischargeable in bankruptcy

This is my point - there is no walking away from student loans because they cannot be discharged through bankruptcy.

That being said, there are proposals to forgive student loan debt either legislatively or through executive action, as you mention, but that is different. Perhaps I misunderstood the post that I quoted due to the use of “walk away from their debt with impunity.”

 

[KnightDoc]

This is my point - there is no walking away from student loans because they cannot be discharged through bankruptcy.

That being said, there are proposals to forgive student loan debt either legislatively or through executive action, as you mention, but that is different. Perhaps I misunderstood the post that I quoted due to the use of “walk away from their debt with impunity.”

Yeah, I don't know specifically what articles are being referenced, and just assumed it meant people who cannot pay are not paying, nothing is happening to them, and political pressure is building to legitimize it. Even, to a certain degree, for people who can pay (e.g., proposals to forgive $10K-50K in debt for everyone).

 

[deleted314957]

Links? Are you sure you are seeing articles about people walking away from debt as opposed to taking advantage of the pause in payments and interest accrual per policies of the Trump and Biden administrations?

Right now, in all the national press there is extensive discussion of loan relief$50k) or out right forgiveness.

 

[GreenDuck12]

Right now, in all the national press there is extensive discussion of loan relief$50k) or out right forgiveness.

That’s different than walking away from loans with impunity. Walking away from loans is to literally cease all payments and to be clear that is not the current conversation. There is a discussion about forgiving some amount of student loans through executive action but if, how, who, and when are all big questions. Personally, I’m less in favor of outright forgiveness and more interested in seeing student loan interest rates drop - there is no arguable reason why student loans should have a higher federal interest rate than a mortgage.

 

[NITRAS]

Right now, in all the national press there is extensive discussion of loan relief$50k) or out right forgiveness.

The press is also in large part extremely left leaning. The press doesn’t have to get 10 republican to agree with them To print hair brained stories. Just like President Biden can say things that having a green focused government policy doesn’t hurt vast sections of the economy and promice multi-trillion “infrastructure” programs.

The truth is that the President’s political capital is going elsewhere. And the more crazy stuff they propose, the more likely they will lose their majority in the House or senate.

The sad thing is that there likely could be a bipartisan support to really fix the federal student loans program, as 10ish thousand dollars in forgiveness in conjunction with divulging the Feds from student loans would fix many of the problems caused by the current program. The vast majority of people with hundreds of thousands of dollars in student loans are people with professional degrees, who have professional incomes. But that isn’t going to happen.

 

[KnightDoc]

That’s different than walking away from loans with impunity. Walking away from loans is to literally cease all payments and to be clear that is not the current conversation. There is a discussion about forgiving some amount of student loans through executive action but if, how, who, and when are all big questions. Personally, I’m less in favor of outright forgiveness and more interested in seeing student loan interest rates drop - there is no arguable reason why student loans should have a higher federal interest rate than a mortgage.

Actually, there is one huge reason. Mortgages have physical collateral and are underwritten based on the credit worthiness of the borrower. Student loans are guaranteed available to all, with no collateral and no credit check. There is not only a higher risk of default, there is also potentially nothing to go after if the borrower is unemployable or does not earn enough to ever repay.

This is the arguable reason the market has not offered student loans at lower rates than mortgages, even though private loans for medical students are available at lower interest rates than for philosophy students.