Obama's plan for student loan relief...

[1ive2die]

Advertisement - Members don't see this ad

I appreciate Obama's help regarding this, even though the interwebs seems to think that student loan interest rates should be like 3%.

What I would really like is:
income max increased or eliminated for writing off student loan interest on taxes

Even better, being able to write off some/all of student loan principal...but there are probably huge unintended consequences with **** e.g. more liberal arts majors who will work at Starbucks for life. And the Republicans would probably reject it anyways as "govt interference in education" or some dumb ****.

Some days I love being Canadian. Who am I kidding, that's everyday. For government student loans, interest is paid by the government for the duration of studies. Interest accrued after your studies is tax deductible. If you need a student line of credit, banks lend at 3% with no co-signer.

 

[xiphoid2010]

I think any pharmacist taking advantage of IBR and actually having anything forgiven is abusing the system. We make enough money to cover what any REASONABLE person would spend on a pharm.D. I think we as a society have come to associate these government programs with free money which is entirely not the case. We as a country will at some point have to pay for the things we are doing now. I work for a non profit rural hospital so I qualify for income based repayment forgiveness after 10 years which, if i did, would save me about $30,000. I refuse to do this as a matter of principle mainly (and the strong belief that this program will not be around in 10 years and I'll be stuck with an extra $25-30 grand in interest instead). I pay the debt I've accrued just like everyone else should. Its your own fault if you spent $200,000 on a degree that only can earn you $115,000 a year.

Right on! 👍

People need to take responsibilities, and government need to stop making it so easy to be irresponsible, especially when the country cant afford it.

Why is nobody asking how are we going to pay for all of these bailouts? Even when you get your student loan forgiven after 10 years, you are not done paying. You will be paying for the everybody else' loan forgiveness through higher taxes.

 

[PharmEcon]

I think any pharmacist taking advantage of IBR and actually having anything forgiven is abusing the system. We make enough money to cover what any REASONABLE person would spend on a pharm.D. I think we as a society have come to associate these government programs with free money which is entirely not the case. We as a country will at some point have to pay for the things we are doing now. I work for a non profit rural hospital so I qualify for income based repayment forgiveness after 10 years which, if i did, would save me about $30,000. I refuse to do this as a matter of principle mainly (and the strong belief that this program will not be around in 10 years and I'll be stuck with an extra $25-30 grand in interest instead). I pay the debt I've accrued just like everyone else should. Its your own fault if you spent $200,000 on a degree that only can earn you $115,000 a year.

Most people are not like you. The world doesn't revolve on ideology and that is why programs like these do not work. While I don't support programs such as IBR that are nothing more than moral hazard, if I am forced to subsidize them with my tax money, I will not hesitate to use them if I think it will help me (in terms of IBR I don't plan on it partly because I don't even expect it to be around by the time I am qualified for it and partly because I think there are better options for me). Are you also going to return the money you get from social security and medicare, etc. because you can afford it? When the politicians have no problem screwing over everyone for their self-interest, I don't see why we shouldn't all be willing to do what is best for ourselves and our families even if it means hurting their corrupt system.

 

[a runner]

When the politicians have no problem screwing over everyone for their self-interest, I don't see why we shouldn't all be willing to do what is best for ourselves and our families even if it means hurting their corrupt system.

That's the way I see it too. Since the system is so corrupt, an argument could be made that accelerating its collapse by using all these programs is actually a good thing. Why should my family suffer (because taxes would make it harder to pay my loans back) just because they want to keep the party going?

 

[PharmDstudent]

Is that you in the avatar?

No, but it's close enough.

 

[vash1012]

Most people are not like you. The world doesn't revolve on ideology and that is why programs like these do not work. While I don't support programs such as IBR that are nothing more than moral hazard, if I am forced to subsidize them with my tax money, I will not hesitate to use them if I think it will help me (in terms of IBR I don't plan on it partly because I don't even expect it to be around by the time I am qualified for it and partly because I think there are better options for me). Are you also going to return the money you get from social security and medicare, etc. because you can afford it? When the politicians have no problem screwing over everyone for their self-interest, I don't see why we shouldn't all be willing to do what is best for ourselves and our families even if it means hurting their corrupt system.

Naturally, I don't think anyone else in the world is going to bat an eye at my ideological stance against IBR loan forgiveness. I can certainly understand yours and everyone else's point. Its just my personal philosophy is to advocate for personal responsibility first. I am already forced to be involved in our ridiculous system enough as is. I imagine many politicians themselves have a similar sentiment as you, in that they are forced to work through this convoluted system to get the things that are most important to them done. So why wouldn't they make some promises to special interest groups along the way in exchange for some campaign funds? Those of us who strongly advocate for personal responsibility have no right to ask for change in our political system if we don't even follow our own ideology.

 

[PharmGR]

I'm just curious reading this thread. I graduated in 2010, I have about 130k in goverment student loans. I currently make 109K at a non-profit hospital (love my job!) and have been considering pslf for some time but havent done it yet. I am a single mother so family size is 2. But I have read about the new plan and to me it seems the reduction is only for new graduates that graduate in 2012 or after, is this true or will i be able to take advantage?
Thanks for any feedback!

 

[BuffaloPills]

I'm just curious reading this thread. I graduated in 2010, I have about 130k in goverment student loans. I currently make 109K at a non-profit hospital (love my job!) and have been considering pslf for some time but havent done it yet. I am a single mother so family size is 2. But I have read about the new plan and to me it seems the reduction is only for new graduates that graduate in 2012 or after, is this true or will i be able to take advantage?
Thanks for any feedback!

You can absolutely take advantage....your payment right now, if your maximizing your 401k should be $880 and after 120 payments the remaining amount will be wiped out. All payments made after Oct 2007 can count as part of the 120 payments, it's retroactive.

The changes in 2012 reflect the change in how the IBR payment is calculated, it drops from 15% to 10% for post 2012 graduates if their first loan originated after 2008. You will not qualify for that unless your first federal loan was borrowed in or after 2008. If you do qualify your loan payment will drop to $587 per month.

As the law states now, you qualify and should definitely take advantage if you work for an NPO.

 

[PharmEcon]

So why wouldn't they make some promises to special interest groups along the way in exchange for some campaign funds? Those of us who strongly advocate for personal responsibility have no right to ask for change in our political system if we don't even follow our own ideology.

Absolutely not because they are the root of the problem- they sell out first and pass foolish laws that we then have to deal with. It is only natural for us to do what is best for ourselves, even if we disagree with current policy.

I respect your position, I truly do. There are few people who would sacrifice such a big personal gain (potentially) for what they believe in (or maybe the benefit of feeling morally accomplished is just worth more to you- either way it doesn't matter, it is laudable in my opinion). Perhaps foolish, but laudable (with no disrespect intended whatsoever).

 

[confettiflyer]

Absolutely not because they are the root of the problem- they sell out first and pass foolish laws that we then have to deal with. It is only natural for us to do what is best for ourselves, even if we disagree with current policy.

I respect your position, I truly do. There are few people who would sacrifice such a big personal gain (potentially) for what they believe in (or maybe the benefit of feeling morally accomplished is just worth more to you- either way it doesn't matter, it is laudable in my opinion). Perhaps foolish, but laudable (with no disrespect intended whatsoever).

Agreed. I'm under the personal belief that YOU are your own fiduciary, no one else is going to look out for you. The person you're responding to is violating this maxim in some misguided sense of social justice/martyrism.

Doing your best to improve your bottom line is one of the foundations of our society.

 

[CuriousPharmD]

i make about 8900 a month gross working for the VA...currently im paying 792/mo on the extended graduated plan on about 160k which is basically just paying the interest every month...which makes me puke!!!

how do i know if i qualify??? also...will i be eligible for forgiveness since i work for the VA after 10 years? if not...is it still worth it to switch over if its forgiven after 20 years?

can someone help me out and clarify my situation for me?? thanks in advance...

 

[confettiflyer]

i make about 8900 a month gross working for the VA...currently im paying 792/mo on the extended graduated plan on about 160k which is basically just paying the interest every month...which makes me puke!!!

how do i know if i qualify??? also...will i be eligible for forgiveness since i work for the VA after 10 years? if not...is it still worth it to switch over if its forgiven after 20 years?

can someone help me out and clarify my situation for me?? thanks in advance...

You qualify since the VA is a government agency (PSLF covers non-profits and gov't entities).

Would you pay LESS with IBR vs. the extended graduated plan? if so, switch over and file the paperwork when you hit 10 years. Just curious, when did you graduate/start working for the VA?

 

[CuriousPharmD]

You qualify since the VA is a government agency (PSLF covers non-profits and gov't entities).

Would you pay LESS with IBR vs. the extended graduated plan? if so, switch over and file the paperwork when you hit 10 years. Just curious, when did you graduate/start working for the VA?

i dont know if i would pay less...how would i find out?? by calling direct loans? also, has been wondering why they changed their website? i liked it better the old way and i cant see my pay history on the new website...its like i just started paying on my loans last month...

i guess under IBR i would max out at about 890/mo while my current plan under the extended graduated plan will eventually go higher than that...does anyone have any experience with IBR???

and for your last question...i graduated sept 08 and started working for the VA july 11...thanks in advance!

 

[xiphoid2010]

Agreed. I'm under the personal belief that YOU are your own fiduciary, no one else is going to look out for you. The person you're responding to is violating this maxim in some misguided sense of social justice/martyrism.

Doing your best to improve your bottom line is one of the foundations of our society.

While I agree that a part of the natural instinct is to do what's best for yourself. But ensuring the survival of the group is serving your own interest as well. This is used to explain altruistic behaviors observed in nature.

If the government goes bankrupt and hyperinflation takes off, any gains you may have made by through loan forgiveness would be dwarfed.

The logical thing to do is vote to repeal the law. Baring that, another option would be off-shoring your assets before US credit rating takes a dump.

 

[confettiflyer]

While I agree that a part of the natural instinct is to do what's best for yourself. But ensuring the survival of the group is serving your own interest as well. This is used to explain altruistic behaviors observed in nature.

If the government goes bankrupt and hyperinflation takes off, any gains you may have made by through loan forgiveness would be dwarfed.

The logical thing to do is vote to repeal the law. Baring that, another option would be off-shoring your assets before US credit rating takes a dump.

I hate that phrase "government goes bankrupt" because it doesn't make any logical sense. Aside from that, I think we're headed into a deflationary period (ie Japan in the 90's) which sucks because I will likely be a debtor for the next 25-30 years thus increasing my burden (I'll take inflation thank-you-very-much).

And US credit won't take a dump...I'd normally agree with you that the dollar isn't what it used to be, but if you look across the pond, we're looking pretty stable by comparison.

As for altruism and group survival, that only works if the others abide by the same set of principles you do. We live in the US, screw the other person before they screw you = key survival tactic.

 

[xiphoid2010]

I hate that phrase "government goes bankrupt" because it doesn't make any logical sense. Aside from that, I think we're headed into a deflationary period (ie Japan in the 90's) which sucks because I will likely be a debtor for the next 25-30 years thus increasing my burden (I'll take inflation thank-you-very-much).

And US credit won't take a dump...I'd normally agree with you that the dollar isn't what it used to be, but if you look across the pond, we're looking pretty stable by comparison.

As for altruism and group survival, that only works if the others abide by the same set of principles you do. We live in the US, screw the other person before they screw you = key survival tactic.

Historically deflation is much rarer than inflation. But it could happen I suppose. Either way blows. Also I agree that EU credit isn't doing better, but comparing which government's fiscal policy is even less responsible isn't going to prevent our own financial crisis.

If this country's survival is built on every man screwing others first then we are all doomed to see everything fall apart.

 

[PharmEcon]

While I agree that a part of the natural instinct is to do what's best for yourself. But ensuring the survival of the group is serving your own interest as well. This is used to explain altruistic behaviors observed in nature.

While some reduction in [the intent of] optimizing your own situation could lead to a better situation for the group and for the individual, at what point that happens is arguable in this case. I don't think there is enough of a movement to take the cuts here for a couple people to really make much of a difference. Interesting Nash equilibrium situation though.

If the government goes bankrupt and hyperinflation takes off, any gains you may have made by through loan forgiveness would be dwarfed.

The chances for hyperinflation are still low. Also, government defaulting on payments doesn't necessary mean hyperinflation will ensue. Either way, your last statement only holds true if all of your holdings are in or denominated strictly in said currency. Don't keep all your eggs in one basket!

I hate that phrase "government goes bankrupt" because it doesn't make any logical sense. Aside from that, I think we're headed into a deflationary period (ie Japan in the 90's) which sucks because I will likely be a debtor for the next 25-30 years thus increasing my burden (I'll take inflation thank-you-very-much).

Disagree on the deflation and as someone who will also be a debtor for a while, I still much rather prefer reduced inflation and reduced deflation (stable currency) to either extreme for the long run's sake.

As for altruism and group survival, that only works if the others abide by the same set of principles you do. We live in the US, screw the other person before they screw you = key survival tactic.

Not an inherent attribute of the US. Of humanity, arguably, but it isn't that simple- compassion is a real thing and there are non-monetary benefits including feeling morally accomplished (and feeling bad about oneself for doing or not doing certain things).

Historically deflation is much rarer than inflation. But it could happen I suppose. Either way blows. Also I agree that EU credit isn't doing better, but comparing which government's fiscal policy is even less responsible isn't going to prevent our own financial crisis.

History isn't too relevant since correlation doesn't much here.

As for comparing the two, it does still matter and ironically CAN prevent a financial crisis. It's all relative and so long as the markets have more faith in the US than those other governments and than other places to put their money, they will put money in. Not an argument for fiscal irresponsibility or the ludicrous spending the government currently does though.

 

[PharmGR]

So basically I can take advantage of the existing plan but not the new plan, correct? that stinks that the new 10% rule is only for the new loans, doesn't make much sense

 

[a runner]

So basically I can take advantage of the existing plan but not the new plan, correct? that stinks that the new 10% rule is only for the new loans, doesn't make much sense

Yeah I just realized that the 10% is only for people who's first loan originiated in 2008 or later. Seems if you're trying to help people and prevent defaults, it would make more sense to help people in repayment, or soon to be instead of people who haven't even started school yet. Those are the ones who moral hazard will apply to even more because they haven't even selected a school, profession, or started taking loans out yet!

 

[xtsukiyox]

Yeah I just realized that the 10% is only for people who's first loan originiated in 2008 or later. Seems if you're trying to help people and prevent defaults, it would make more sense to help people in repayment, or soon to be instead of people who haven't even started school yet. Those are the ones who moral hazard will apply to even more because they haven't even selected a school, profession, or started taking loans out yet!

2008 is the beginning of when people might have jumped from the tanking job market into the refuge of college to retrain for a few years. So if it's as you've presented, it would be helping people who started school during the recession, decreasing pressure for the dwindling available jobs.

I guess it really depends on what the purpose of providing the change in terms is. Are they trying to "bail people out" who are having trouble making payments because they couldn't find jobs during the (ongoing) recession? Or are they trying to incentivise retraining during / after the recession? I'm not sure this is really a bail out - either way seems to introduce "moral hazard," though.

 

[a runner]

2008 is the beginning of when people might have jumped from the tanking job market into the refuge of college to retrain for a few years. So if it's as you've presented, it would be helping people who started school during the recession, decreasing pressure for the dwindling available jobs.

I guess it really depends on what the purpose of providing the change in terms is. Are they trying to "bail people out" who are having trouble making payments because they couldn't find jobs during the (ongoing) recession? Or are they trying to incentivise retraining during / after the recession? I'm not sure this is really a bail out - either way seems to introduce "moral hazard," though.

It may be a bailout for those who've already started school or are in repayment. While some of the people using it will be as you described (those who started school after losing their jobs in the tanking job market), after that, all of the people looking at using the program will be going forward.

This program is indefinite (from the government's standpoint) and so is planned to mostly help people who are not yet in college. What I'm saying is that's kind of stupid because those are the people who will know "hey I can do whatever I want, go to whatever expensive school I want (including diploma mill pharmacy schools that charge $35k/year) for as many years as I want (including failing years, taking 7 years full time to complete a BA, etc.), and it doesn't affect my repayment amounts." I'm just saying, you'd think they'd bail the people out who are already in trouble (people with loans from like 2002 and in repayment) versus people who will be in trouble in the future (2018 graduates, for example) who already know they'll be bailed out right now and can plan on it.

 

[BuffaloPills]

It may be a bailout for those who've already started school or are in repayment. While some of the people using it will be as you described (those who started school after losing their jobs in the tanking job market), after that, all of the people looking at using the program will be going forward.

This program is indefinite (from the government's standpoint) and so is planned to mostly help people who are not yet in college. What I'm saying is that's kind of stupid because those are the people who will know "hey I can do whatever I want, go to whatever expensive school I want (including diploma mill pharmacy schools that charge $35k/year) for as many years as I want (including failing years, taking 7 years full time to complete a BA, etc.), and it doesn't affect my repayment amounts." I'm just saying, you'd think they'd bail the people out who are already in trouble (people with loans from like 2002 and in repayment) versus people who will be in trouble in the future (2018 graduates, for example) who already know they'll be bailed out right now and can plan on it.

^^^ completely agree

 

[xtsukiyox]

It may be a bailout for those who've already started school or are in repayment. While some of the people using it will be as you described (those who started school after losing their jobs in the tanking job market), after that, all of the people looking at using the program will be going forward.

This program is indefinite (from the government's standpoint) and so is planned to mostly help people who are not yet in college. What I'm saying is that's kind of stupid because those are the people who will know "hey I can do whatever I want, go to whatever expensive school I want (including diploma mill pharmacy schools that charge $35k/year) for as many years as I want (including failing years, taking 7 years full time to complete a BA, etc.), and it doesn't affect my repayment amounts." I'm just saying, you'd think they'd bail the people out who are already in trouble (people with loans from like 2002 and in repayment) versus people who will be in trouble in the future (2018 graduates, for example) who already know they'll be bailed out right now and can plan on it.

My point was that I think you've made a faulty assumption that the politicians are trying to help people avoid defaults. It is politically popular to help people who had to take actions specifically because of the recession (go back to school & live on aid, go to the unemployment line, default on mortgage). And it's politically popular to help "the future of America." However, I haven't heard anyone frame helping students who already have debt in a way that plays well to the general public.

The purpose of this legislation seems to be getting lost. Are they trying to help recession students retrain? In which case, put an end date. Are they trying to help future students? In which case, why make it backdated? It doesn't look like the purpose is to help "all" students. I suspect the real reason has something to do with helping retrain the populace for a new economy, or some other buzz catch-phrase some intern took too seriously.

That isn't saying I don't agree with the points you made.

 

[PharmDstudent]

My point was that I think you've made a faulty assumption that the politicians are trying to help people avoid defaults. It is politically popular to help people who had to take actions specifically because of the recession (go back to school & live on aid, go to the unemployment line, default on mortgage). And it's politically popular to help "the future of America." However, I haven't heard anyone frame helping students who already have debt in a way that plays well to the general public.

The purpose of this legislation seems to be getting lost. Are they trying to help recession students retrain? In which case, put an end date. Are they trying to help future students? In which case, why make it backdated? It doesn't look like the purpose is to help "all" students. I suspect the real reason has something to do with helping retrain the populace for a new economy, or some other buzz catch-phrase some intern took too seriously.

That isn't saying I don't agree with the points you made.

Bernanke seems to be worried about "cyclical unemployment that could lead to structural unemployment".

 

[xtsukiyox]

Bernanke seems to be worried about "cyclical unemployment that could lead to structural unemployment".

Ignorant nub here - does Bernanke have a hand in setting student loan policy? I mean, I'm sure he's politically powerful, so who knows what politics can do behind the scenes - but I mean an active role.

 

[PharmDstudent]

Ignorant nub here - does Bernanke have a hand in setting student loan policy? I mean, I'm sure he's politically powerful, so who knows what politics can do behind the scenes - but I mean an active role.

No. He's part of the Fed. The Fed sets short-term interest rates. These interest rates cascade down onto consumer and business loans.
[YOUTUBE]http://www.youtube.com/watch?v=h9rjqjr0An4[/YOUTUBE]
Per the video, he's taking into account "the growth rate, unemployment rate, and the inflation rate", but "not the protests into account, specifically".

In other words... No. He would not be taking an active role, more of a passive role. An active role, I would imagine, would come from legislation.

 

[xtsukiyox]

In other words... No. He would not be taking an active role, more of a passive role. An active role, I would imagine, would come from legislation.

Thanks. I know much more about the world of business & consumer loans than I do student loans, especially after the government took them over.

It is interesting that Bernake is making statements about structural unemployment at the same time Congress is considering student loan changes that would make it easier for people to go back to school.

 

[PharmDstudent]

Thanks. I know much more about the world of business & consumer loans than I do student loans, especially after the government took them over.

It is interesting that Bernake is making statements about structural unemployment at the same time Congress is considering student loan changes that would make it easier for people to go back to school.

Well... going back to school --> more training --> better chance at qualifying for a job. Right? 😕

The sad part about unemployment is that workers can not force companies to create more jobs.

 

[harmonidrum]

If you did not enact the socialist boondoggle and ideologically oppose such nonsense, participating in government handouts is not only ideologically consistent, it should be viewed as recouping your stolen money from the State.

 

[harmonidrum]

P.S. Vote Ron Paul 2012 😀😀

 

[sakigt]

If you did not enact the socialist boondoggle and ideologically oppose such nonsense, participating in government handouts is not only ideologically consistent, it should be viewed as recouping your stolen money from the State.

Taking subsidized loans and going to a publicly subsidized school is already a great start. Bring on the cognitive dissonance!

 

[a runner]

Taking subsidized loans and going to a publicly subsidized school is already a great start. Bring on the cognitive dissonance!

It's not cognitive dissonance if you know why you're doing it...

If you disagree with something why would you want to "make it last as long as possible." If they wanna subsidize and socialize everything, then we'll show them how unsustainable it is and bring down the system! Or at least get your future stolen money back in the process 😉

 

[spacecowgirl]

So it's only a bailout or an entitlement when someone else gets it but it's recouping "stolen money" when it's you?

Interesting.

 

[a runner]

So it's only a bailout or an entitlement when someone else gets it but it's recouping "stolen money" when it's you?

Interesting.

Um, when you're going to be paying tens of thousands of dollars every year your entire career, then yes it's recouping stolen money. If you'll never pay income taxes in your life, then yes, it's an entitlement.

Actually, either way, I've called IBR/PSLF a bailout for me from the beginning. And I'd still use it even if I wasn't going to be paying lots of taxes in the future. Like I said, gotta bring down the system.

 

[StevePerry]

Um, when you're going to be paying tens of thousands of dollars every year your entire career, then yes it's recouping stolen money. If you'll never pay income taxes in your life, then yes, it's an entitlement.

Actually, either way, I've called IBR/PSLF a bailout for me from the beginning. And I'd still use it even if I wasn't going to be paying lots of taxes in the future. Like I said, gotta bring down the system.

It just completely amazes me when people are so downright idiotic (especially that have made it through pharmacy school), that they can't get it through their skulls that just because you oppose all these bull---- programs, it doesn't mean you don't want to recoup the money that is rightfully yours. Like you want to just hand money away for s--- you don't agree with, passed by politicians you didn't vote for, and not try to get it back? I mean, really??? Kudos to guys like Ron Paul for taking a stand and not even accepting Medicare / Medicaid personally from patients, but even in being the most altruistic about it, Dr. Paul still tries to take it back for his constituents.

If there were no federal programs handing out loans, there would be a more prominent private sector solution for education such as pharmacy school. Like you said you'll pay FAR more into the US Ponzi Scheme than the miniscule amount that you've taken out with student loans.

 

[spacecowgirl]

Um, when you're going to be paying tens of thousands of dollars every year your entire career, then yes it's recouping stolen money. If you'll never pay income taxes in your life, then yes, it's an entitlement.

Interesting and simplistic POV.