Student loan 'Forgiveness",Too little to help anyone, just enough to make everyone angry

[MCgrease08]

View attachment 221816
Daughters were all excited that $10k of their collage debt was going to be forgiven. Then they read the fine print. No debt forgiveness until 10 years of payments have been made.

FACT SHEET: President Biden Announces Student Loan Relief for Borrowers Who Need It Most | The White House

A three-part plan delivers on President Biden’s promise to cancel $10,000 of student debt for low- to middle-income borrowers President Biden believes that a post-high school education should be a ticket to a middle-class life, but for too many, the cost of borrowing for college is a lifelong...

www.whitehouse.gov

These are two different programs. The public service loan forgiveness program has been around for about a decade and a half already and it's been an absolute disaster. The percentage of public service loans that have actually been forgiven is around 2-3%.

New Data Shows Most Who Apply To This Student Loan Forgiveness Program Are Denied

The data shows that 98% of applications for Public Service Loan Forgiveness (PSLF) were rejected. Will the Biden administration take steps to fix the broken program?

www.forbes.com

I don't know why anyone would want to wallow around in debt for ten years waiting for a government program with a 2-3% success rate.

And then there is the idea of lowering payments based on income. How is that helpful for a low income earners? All it does is draw out the term of the loan indefinitely, while never actually touching the principal. It essentially ensures people will be paying student loans their entire lives.

"The rich rule over the poor, and the borrower is slave to the lender." - Proverbs 22:7

 

[MCgrease08]

I think this is something different. The public service loan forgiveness program has been around since Obama. I actually think it's a good program. As it relates to teachers, police, etc. Get a degree in a useful field, work in that field in an area that is in need of those people for 10 years (while making payments), remainder of loan forgiven (not transferred to the tax base).

I guess one might say it's good in theory, but like most government programs, it's terrible in practice.

Personally, I'm not going to sit on debt for ten years waiting for the slim hope the government will improve my life. I think we all can guess how that will work out.

New Data Shows Most Who Apply To This Student Loan Forgiveness Program Are Denied

The data shows that 98% of applications for Public Service Loan Forgiveness (PSLF) were rejected. Will the Biden administration take steps to fix the broken program?

www.forbes.com

 

[edwea]

It was a better program because it got people into useful degree fields and they had to work in those fields for 10 years I think. I kind of put it in the same category as military service members using the GI bill for college. I definitely agree that the implementation of the program was horrible and seemingly purposefully so. Of the many people I know that attempted to take advantage of it, only 2 or 3 were successful. I guess it may be more accurate to say that it was a good program (or had good potential) ruined by terrible government mismanagement.

 

[AndreusMaximus]

It was a better program because it got people into useful degree fields and they had to work in those fields for 10 years I think. I kind of put it in the same category as military service members using the GI bill for college. I definitely agree that the implementation of the program was horrible and seemingly purposefully so. Of the many people I know that attempted to take advantage of it, only 2 or 3 were successful. I guess it may be more accurate to say that it was a good program (or had good potential) ruined by terrible government mismanagement.

I dunno... a government program that may have actually accomplished its goal of "baiting" people into getting degrees and working in actual useful fields, and then it doesn't end up actually handing out all that much free money. Kind of sounds like a win-win to me.

 

[DoggyDaddy]

Just saw this on WTHR regarding taxes on the "forgiveness".

For Indiana, State Tax will be $323 for 10,000 forgiveness or $646 on 20,000 forgiveness. In addition to that, Marion County residents will pay $202 on 10K and $404 on 20K.

 

[indykid]

Yep, Indiana and it's counties have to get their share of the money that no-one will sell. An erased account counted as income so that the state and county gets their share of money that the recipient will not see, but must fork over several hundred dollars for the privilege.

So glad I was responsible and worked hard to put my child through college who graduated in 4 years with no debt! Thanks Uncle Joe... not really.

 

[Onebad06vtx]

We will all be taxed for this BS,well atleast those of us that work!

 

[KLB]

We will all be taxed for this BS,well atleast those of us that work!

Nah. Just more debt that will never be paid. Your tax dollars are spent well before they get to this.

 

[Axxe55]

A lot of high schools are pushing the narrative that kids need a college education and degree to be considered successful in life, which IMO is utter BS! There will always be career fields where a college degree is required and necessary, but too many kids are getting degrees in fields where they will never earn back the money they borrowed to get the degree and now they are wanting debt forgiveness for their poor choices in life.

 

[Ingomike]

Nah. Just more debt that will never be paid. Your tax dollars are spent well before they get to this.

Is this an excuse to just keep adding to the debt?

 

[KLB]

Is this an excuse to just keep adding to the debt?

Nope. Just pointing out that people aren't going to be paying taxes to pay for this. There are lots of things to complain about here, but that isn't one of them. Doesn't make it any better. It's more just semantics.

There pretty much isn't anyone in Washington that gives a single about adding to the Federal debt.

 

[Leadeye]

Most people I've known over the years with unpaid student loans simply weren't paying on them at all. I have to wonder if the state and counties will go after these people as now they will be late on a "tax" as opposed to a "loan".

 

[bobzilla]

I said it before, if we're going to just throw away money, give everyone who filed a tax return $10k, **** our economy once and be done. ~169M returns, so 1.7Trillion. We've spent more for less. Might as well go down swinging.

 

[KLB]

Most people I've known over the years with unpaid student loans simply weren't paying on them at all. I have to wonder if the state and counties will go after these people as now they will be late on a "tax" as opposed to a "loan".

They simply take any tax returns those people have coming.

 

[Ark]

Just saw this on WTHR regarding taxes on the "forgiveness".

For Indiana, State Tax will be $323 for 10,000 forgiveness or $646 on 20,000 forgiveness. In addition to that, Marion County residents will pay $202 on 10K and $404 on 20K.

Hmmm. So what happens when Marion hits you for $1,000+ out of pocket, then six months later this plan dies in SCOTUS and the debt comes back?

Also won't this go straight into the Indiana surplus and then right back out as rebates?

 

[HoughMade]

They simply take any tax returns those people have coming.

Dude....c'mon.

 

[KittySlayer]

Just saw this on WTHR regarding taxes on the "forgiveness".

For Indiana, State Tax will be $323 for 10,000 forgiveness or $646 on 20,000 forgiveness. In addition to that, Marion County residents will pay $202 on 10K and $404 on 20K.

That is because Indiana (and other states) follow the US Tax Code (law). Since Biden decided to do this with a pen crayon using an Executive Order instead of going through Congress the US Tax Code did not change so forgiven debts would still be taxable according to the current laws in place. Perhaps Biden should have done this the proper way through Congress.

 

[DoggyDaddy]

Perhaps Biden should have done this the proper way through Congress.

Perhaps Biden should follow @BigRed 's advice...

 

[BigRed]

Perhaps Biden should follow @BigRed 's advice...

GTH obiden

 

[Magyars]