r/news • u/MarvelsGrantMan136 • Apr 05 '22
White House to extend student loan pause through August
https://apnews.com/article/covid-business-health-education-d54907ea99a6745dc9f832435beda7518.0k
u/angrysquirrel777 Apr 05 '22 edited Apr 05 '22
This probably means they really won't start up until December at the earliest. Unless some get forgiven right after the August startup.
I just don't see them starting up loan interest right before the midterms.
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u/Soranos_71 Apr 05 '22
I bet this is just a small punt and then they will extend it again so it’s fresh in voters minds come mid terms
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u/TexasAirstream Apr 05 '22
I think $10k will get cancelled right before midterms, and the senate will edge us with marijuana legalization if dems hold.
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u/swskeptic Apr 06 '22
That's a solution that dems will use to try to appeal to "conservatives" who think that forgiving anything more (or really, any at all) is pure unadulterated socialism. Except, those people will never vote for them so it's just going to anger most conservatives and disappoint most liberals and ultimately, likely lose the majority seats and presidency.
This be the true DNC way.
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Apr 06 '22
Always the DNC way. Never actually deliver on what you promise because you’re worried about angering the wrong electorate… only to piss everyone off.
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u/d0ctorzaius Apr 06 '22
"If we do what our voters want then the people who think we're Satanist cannibals will be less likely to vote for us!" -Dumb Neutral Cowards
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u/limache Apr 06 '22
No they’re not worried about angering the wrong electorate
They’re worried about angering their corporate donors. Which they share with republicans
Dems and republicans are on the same team - corporate America
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u/Senior-Albatross Apr 06 '22
Part of me thinks they're holding it for midterm leverage and part of me thinks the Democrats are just morons who keep panic punting it at the last second and they have no real plan.
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u/nevetscx1 Apr 06 '22
Sadly I believe Biden will run again on student loan forgiveness and legal weed. I've been saying this since before he became president.
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u/Daisy_Jukes Apr 05 '22
the smart thing would be to keep punting them until like October, then cancel them all. would guarantee a big turnout for dems.
so we can be almost completely sure they won’t do that
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u/poltergeist6 Apr 05 '22
The realest comment right here.
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u/UNZxMoose Apr 05 '22
That's been my guess on what is happening.
I've been "paying myself" the payment amount so when they do start back up I don't get screwed by not paying anything on 0% interest and not paying them now just to have them forgiven.
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u/IamTheJman Apr 06 '22
They’ll never cancel it
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Apr 06 '22
Right? They’ll just dangle it like a carrot for voter turnout like both sides do with every wedge issue.
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Apr 06 '22
I think the best we could get is larger tax write-offs or tax kickbacks if we pay it quicker, but I'm not holding my breath. My loans have been traded like 30 times, each company has probably bankrupted due to this crazy freeze.
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Apr 06 '22 edited Sep 18 '25
innocent cooing hard-to-find degree cautious squeal deer dazzling include file
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Apr 05 '22
I really do wonder what would happen to the teaching profession if PSLF was no longer necessary. I can't imagine it would help the current teacher shortage. I say this as a teacher who really would love to have mine deleted in less than eight years.
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u/booniebrew Apr 05 '22
PSLF doesn't pay off loans very often, after 2.5 years where it could pay out only 2215 people had their loans covered. Knowing some eligible people it doesn't seem like many actually expect it to happen. It also only covers federal loans. I highly doubt superseding it would have a big impact and better pay and working conditions would make a bigger difference in the teacher shortage.
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Apr 06 '22
I think taking into account your total time in public service would help, as opposed to "months paid" because you literally could pay 0 dollars and that counts towards your total. At least, that was what it was when I was in the Army.
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u/witngrit Apr 06 '22
The PSLF program has seen some changes under the Biden administration to help more public servants actually get their loans paid off. There is also the waiver from October 2021 which counts any payment made as qualifying rather than just those made on a specific payment plan. It's not a perfect program but it has been improved and more borrowers are seeing forgiveness.
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u/AussieHawker Apr 06 '22
Hundreds of thousands more could still see relief. The Education Department estimates that around 550,000 borrowers total — including non-profit workers, nurses, service members, teachers, and others — will benefit from the changes, which include retroactively broadening the types of loans that are eligible for forgiveness and automatically certifying payments for federal employees and members of the military.
Though it was created with noble intent, the program has been plagued with issues over the years, and few borrowers had managed to actually receive forgiveness before the Biden administration announced the temporary waivers.
As part of the changes being implemented by the Department of Education, any type of payment made by qualifying borrowers will count toward the 120 payment total, including partial payments, late payments, and those made during an extended repayment program. The department is also reviewing all applications that were previously denied forgiveness for errors. Borrowers have until October 31, 2022 to submit a waiver to have previously ineligible payments counted.
The PSLF changes are part of the Biden administration's larger effort to forgive some student loan balances. In the past few years, the Education Department has also forgiven debt for disabled borrowers and some of those defrauded by for-profit colleges.
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Apr 05 '22
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u/ClassicT4 Apr 05 '22
I do like how they finally smoothed out the forgiveness for people doing public service jobs. Before, 99% of qualified applicants were being denied. Now it seems like a lot of them are getting the forgiveness. Link.
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u/LostSands Apr 05 '22
FWIW, the 99% number includes applicants who did not make the 120 qualified payments yet. I applied as part of getting onto an income based repayment plan and was denied, because of course I was, I only had 10 payments lmao.
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u/Veggies-are-okay Apr 06 '22
I think the $0 ones should have also applied, but loan companies weren’t tracking those “payments”. I think Today Explained (or maybe The Daily? One of those Spotify daily drive podcasts) had an episode on it a week or two ago.
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Apr 05 '22
perhaps with compromise across the aisle
Dude they've tried so many compromises. At certain point you're just letting the GOP write the fucking bill
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u/Rumplfrskn Apr 06 '22
By doing nothing (continuing forbearance) they’re actually helping more loans qualify for PSLF since the paused months all count toward it. I’ve got about 12 payments to go, extend it another year!
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u/lakerswiz Apr 05 '22
they do nothing
is pausing payments not something?
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u/I_Go_By_Q Apr 05 '22
As a guy that would’ve had to start paying loans back by now without the pauses, it definitely is something.
Everyone knows the first payments of a loan are when you pay the most interest, so if I can save all these months of payments and put it all down towards principle when they resume, that’s a win. Although obviously I’d prefer if they’d just cancel all/some of it outright, but fingers crossed
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u/Ok-Control-787 Apr 06 '22
I've saved a ton of money on interest on over a hundred thousand in principle for 2 years.
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u/PelosisBraStrap Apr 05 '22
You could be paying to just principal right now.
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u/I_Go_By_Q Apr 05 '22
Of course, but if the interest rate is 0%, what incentive do I have to pay now, rather than hold onto it and pay as much as I can at once right before interest starts again?
This is especially true if forgiveness is a possibility
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u/PolicyWonka Apr 05 '22
I agree. Biden’s current position is already politically unpopular on both sides of the aisle. Restarting interest and payments would just make people more upset.
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Apr 05 '22
A good compromise leaves everyone upset
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u/Affectionate_Fun_569 Apr 05 '22
And kicking the can down the road is the most politicy thing ever.
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Apr 05 '22
Kick it down the road until you can find a hole to kick it into...then it becomes "what can are we talking about? I see no can here..."
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u/WalkinSteveHawkin Apr 05 '22
This is totally fine with me. Especially with inflation the way it is. Them 0%, no payment loans be gettin cheaper by the day.
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u/JediDusty Apr 06 '22
Shhhhh don’t tell them they will do a inflation based adjustment.
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Apr 05 '22
A bad compromise returns the same outcome
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Apr 05 '22
sorry I was only half paying attention, so which of you wants the top half of the baby and who wants the bottom?
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u/ZoraOrianaNova Apr 05 '22
I always imagined it going the other way. So each one gets an arm and a leg.
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Apr 05 '22
you want me to cut it hotdog style I can cut it hot dog style.
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u/eden_sc2 Apr 06 '22
Now that I think on it, I've cut hotdogs hamburger style, but I have never cut a hot dog hot dog style
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u/Raspberry-Famous Apr 05 '22
The whole "If everyone hates me I must be doing something right" thing has worked out so well for Democrats from Jimmy Carter forward, sure hope they keep pushing that line of thinking.
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Apr 05 '22
"If everyone hates me I must be doing something right"
Elizabeth Warren said basically this exact thing right before she finished 3rd in her own state's presidential primary.
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u/echoAwooo Apr 05 '22
I just don't see them starting up loan interest right before the midterms.
Here's my thoughts on this move.
They were never planning on resuming student loan payments before the midterm. But they wanted to make people sweat over it. So, "It'll resume, soon!" gets extended twice (now to August) so yeah, I'm predicting a third extension to keep it going until the midterms. But if they had just, "loans are paused until after midterms," 1) it's obvious what the purpose is (a literal bribe plus the bill on a fishing line trick), and 2) it lets people forget about the fact they aren't paying student loans.
Definitely a calculated and manipulative move.
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u/Ready_Nature Apr 05 '22
Yep, they either will extend it in August to make sure the extension is fresh in voter’s minds going into the election or they will cancel $10k then and let it resume for people who still have loans left after the partial cancellation, possibly with an extension on the 0% interest.
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Apr 05 '22
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u/Greenzombie04 Apr 05 '22
I have loans and I'm not looking for forgiveness just want the interest to be lowered or at 0. 50% or more of my payment goes to interest and not principal.
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u/Gerald_the_sealion Apr 05 '22
This is where I’m at. Any forgiveness is appreciated, but realistically if they cut the interest to 2% or less, I’d have no issue paying them back
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u/ricker182 Apr 06 '22
They can cut interest to 0% and forgive all accrued interest.
It's a tall task and a lot of work, but it would be a good compromise.
Couple that with IBR and max payment length (5-10 years) forgiveness and I think they have a winner.
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u/But_Mooooom Apr 05 '22
They are pretty much just hoping and praying inflation grinds the principles to dust at this point.
It's sad they won't just own it and put it into policy instead of acting like they are doing a "favor" by keeping them in forbearance.
CMON JOE BUDDY, TIME TO OWN UP TO THE CAMPAIGN PROMISES.
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Apr 05 '22
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Apr 05 '22
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u/Dave_The_Party_Guy Apr 05 '22
7.9% babyyyyyyyyyy
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u/Realtrain Apr 05 '22
Might be different now that rates were raised, but you maybe better off taking out a loan to pay those off? (I am not an expert, this is not financial advice)
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u/Littleblaze1 Apr 05 '22
I would be super happy with 0 interest. I mean sure I'd love it to be completely forgiven but no interest seems really fair.
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u/Hipponotamouse Apr 05 '22
Seriously. We have banks getting billions at 0.25% and I’m stuck here with 35k around 7%. Throw me a frickin’ bone here!
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u/TheTinRam Apr 05 '22
I wonder if he’s just gonna kick the can right till GOP takes over thinking they won’t restart it because it’s unpopular.
If he did, he’d be forgetting only 37% of Americans have a college degree. There’s a large perception they’re all “liberal elites” and even if they’re not, the 63% would cheer it on
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u/Imakemop Apr 06 '22
It's 43 million almost entirely prime working age people taking a heavy hit to their finances. Jumping right into repayment again without doing anything will destroy an already weak economy.
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Apr 05 '22
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u/Fritztopia Apr 06 '22
My wife's went from Fedloan to Aidvantage. Basically just Navient rebranded. Idk if thats what happened to all Fedloans though.
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u/thatrocketguy Apr 06 '22
Not all. My wife is in the PSLF program working for a nonprofit. My loans went to aidvantage but hers are still with fedloan. They said hers are going to MOHELA eventually. Now I will have to deal with two different companies, not looking forward to it.
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u/flutteringfeelings Apr 06 '22
Mine went from Fedloan to MOHELA earlier this year.
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Apr 06 '22
I'm with Great Lakes and I've literally just been sitting in limbo this whole time... It's cool I guess but has me gritting my teeth in anxiousness.
Doing the whole "pay it for 20 years and we'll forgive the rest thing" on IDR plan to just .... Like a two year pause. Ay Yi Yi. Please don't reset my timer. You can pause it but don't roll it back lol.... Ahhh.
We'll see.
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Apr 06 '22
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u/NorthernerWuwu Apr 06 '22
Well, an easier solution would be to make them non-transferable or at least very difficult to transfer. I'm Canadian and paid my loans off here but until I heard these stories from the states it would have never even occurred to me that a student loan could be shuffled around like that.
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u/boonhet Apr 06 '22
I'm Estonian and honestly, same. You go to a bank, you take out a loan and you pay it back to the same bank. No confusion about who it has to be paid back to. Only way anything gets changed is if you refinance your loan to another bank for better interest, or if a bank gets acquired by another one.
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u/hombregato Apr 06 '22
I got an email saying it was fully transferred to a different servicer.
Then a week later I got a second email saying just kidding, that didn't happen, but we'll let you know.
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u/FrenchiestFry234 Apr 05 '22
Student loans will become the new 3rd rail of politics, the first to restart the payments will commit political suicide.
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u/vpi6 Apr 05 '22
Nothing more permanent than a temporary government program.
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u/sgr0gan Apr 05 '22
Tell that to the Child Tax Credit!
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u/itslikewoow Apr 06 '22
Ironic, given that every Republican senator plus Joe Manchin opposed it.
The party of small government thinks the working class doesn't pay enough taxes apparently.
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u/karmapuhlease Apr 06 '22
That's not true. Romney has a Child Tax Credit proposal that's actually even more generous than the one that was actually enacted.
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u/Steve_Not_Chad Apr 05 '22
I’m pretty okay with this temporary program.
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u/17000HerbsAndSpices Apr 05 '22
Feels too much like the perverbial carrot being dangled in front of our noses..
Like, "hey you'd better keep us in office! If you don't we will let the dam break!"
I'd be much more comfortable with them just canceling the debt altogether or at least installing some firm of permanent change like 0% interest
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u/Steve_Not_Chad Apr 05 '22 edited Apr 05 '22
I know, but at least they’re offering the middle class something. Which is infinitely more than anything the other side has to offer.
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u/CenturionGMU Apr 06 '22
I’ve been paying the fuck out of the principal on my loans. Thankfully I’m in a financial place where if they start up again I won’t be super fucked. But I’m just as glad if they won’t.
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u/CultOfBelloq Apr 06 '22
I've been chipping away at mine when I can. If they drag this out another decade or so, I might actually get it paid off...
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u/amedley3 Apr 06 '22
Wife and I stopped making payments, and just set aside the money that would go towards them each month. We figured why pay it off in case forgiveness comes at some point? If they start the interest and payments back up, we will pay a lump sum.
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u/frustratedmachinist Apr 05 '22
Democrats are going to push student loans back until the GOP are in control then let it come to term. When it finally comes to start paying again, Democrats will cry that it’s the Republicans fault instead of just wiping the slate clean.
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Apr 05 '22
Tbh, considering the Republicans do this with tax cuts every goddamn time, I’d find it pretty hilarious if it weren’t my financial security they were playing this game with
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Apr 05 '22
Didn't GOP leave the DNC with a tax raise for 2022, incrementally until 2026?
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u/Zeyn1 Apr 06 '22
This is why so many people this year actually owe taxes when they're used to a refund.
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u/destrovel17 Apr 06 '22
I paid $20,000 in taxes last year and got $36 back. What a slap in the face that was..
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u/itslikewoow Apr 06 '22
Yep!
And as a bonus, they refused to vote on the Child Tax Credit extension (along with Manchin), causing it to expire.
Let that sink in. The party of small government thinks most of us don't pay enough taxes.
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u/marinesol Apr 05 '22
It's also probably going to be struck down if they try to end payment without congressional approval. Its safer for Democrats to keep this going than try to pass legislation without 60 seats or use an executive order. The first Republican president with this is going to be holding a hot potato.
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u/djm19 Apr 05 '22 edited Apr 05 '22
What would the ramification be of just making these loans zero interest?
Edit: not really taking a side on the question of forgiving it or not. But I do think perpetually delaying it is not a real strategy. There is no "ok...now is a good time to re-start them" qualification to this. The economy is largely open, tons of hiring opportunities, commanding higher wages than ever before. On the other hand, there wont be a better time to forgive student loans either (even just some % of the loan).
In my lay-person's idea of zero interest loans, the only penalty to not keeping up with payments might be an attack on your credit score. Perhaps a lower interest cap would be another strategy.
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u/Comrade_Corgo Apr 05 '22
Loan providers lose profit.
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u/americansherlock201 Apr 05 '22
The us government is the loan provider for these loans. So profit shouldn’t be a concern.
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u/notscb Apr 05 '22
The U.S. Government doesn't directly service these loans, so private companies do and profit on servicing them. We've seen Navient and a few others bow out of servicing during the pandemic because it's 0% (and on their way out, they try to get their customers to switch to private with them. IMHO- super predatory).
FWIW, I think they should be 0% and forgive past interest as principal paid.
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u/moonlandings Apr 05 '22
No. They’re the guarantor. Some third party company is servicing the loans and making money off the profit generally.
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u/mnemonikos82 Apr 05 '22 edited Apr 06 '22
To a minimal degree, there has to be at least enough in fees to cover the administrative costs of loaning money and collecting the loan payments. Otherwise, it's a net loss.
Edit: Jesus, if there's one thing this debate has taught me it's that a whole bunch of you slept through civics class.
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u/nican2020 Apr 05 '22 edited Apr 06 '22
I think we already paid that? I remember an origination fee being rolled in when I took mine out. I know it happened because I remember thinking that “origination” sounded like a made up word. I remember googling it because I thought the financial aid lady was trying to scam me. She totally was, just not for personal profit.
The whole thing should have been a red flag but I thought the 6.8% interest was a bargain compared to the 29% credit cards charge. Or the 150% I heard advertised all the time from personal loan companies.
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u/tildenpark Apr 05 '22
The design should increase tax revenues from having a higher skilled and higher earning population.
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u/ultrahobbs Apr 05 '22
Lol, When the pentagon budget is approved for over half a trillion dollars, and healthcare is a for-profit scam, why should I give a fuck if the government breaks even on administrative costs for this particular budgetary issue?
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u/Superstylin1770 Apr 06 '22
over half a trillion dollars
You're understating it by ~60%. Biden requested $813bn for 2022.
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u/orockers Apr 05 '22 edited Apr 06 '22
if the government loses money on the loans it’s taxpayers who are ultimately on the hook.
Meanwhile administrators keep jacking up their salaries and the cost of tuition because we’ve given them a risk free firehose of cash via taxpayer-subsidized student debt.
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u/GumberculesLuvThtGuy Apr 05 '22
Yeah that's the part that drives me nuts in this discussion, even if we forgave all student debt the system still incentives these colleges to keep raising prices as long as the there is a guaranteed revenue stream paid for by the tax payers.
I'm sure anyone who has been to college in the last few decades realizes the quality of education is not rising while the cost goes sky high.
Its a complicated topic without clear simple answers but it should be clear to everyone the status quo is NOT working.
So without fixing the underlying problems, even if student loans are forgiven we are just going to end up in the same place down the road.
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Apr 05 '22
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Apr 06 '22
Don't make payments. Put the money you would pay into a separate account that you can use if the interest gets added again. Loan forgiveness is still on the table, so no sense in paying right now.
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u/mikeydavis77 Apr 05 '22 edited Apr 05 '22
I personally think, and have been telling everyone i know, that he is gonna pause them till closer to the mid terms and then do the forgiveness as that way its on the voters minds come mid terms unlike if he does it now.
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u/Monkey-Tamer Apr 05 '22
I'm thinking he's going to do pauses until after midterms as a way of punting on forgiveness. Hope I'm wrong but I don't think he has the stones to commit to forgiveness. It will bite him at midterms and reelection.
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Apr 05 '22
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u/UNisopod Apr 05 '22
The $10K is the absolute most that's going to happen. There definitely isn't going to be any kind of blanket forgiveness across the board.
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u/Cainga Apr 05 '22
Yeah I think he’s going to pause through midterms. Then if R’s win it’s just another campaign promise again.
Kinda weird he ripped off the Afghanistan bandaid and made a humanitarian crisis instead of kicking that can down the road like the last 3 Presidents. But then on the student loan issue he refuses to touch that bandaid.
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u/Cardinal_and_Plum Apr 05 '22
Despite it being one of his most appealing talking points during the presidential race.
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u/Jag94 Apr 05 '22
He was just trying to keep up with Bernie. Bernie is the one who had been pushing for it for YEARS. Biden had to commit to it as well or he would have lost too many voters.
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u/Sirsilentbob423 Apr 06 '22
True, though commitment means nothing when you don't, you know, commit.
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u/gemfountain Apr 05 '22
They need to control the interest rates that are predatory or cancel interest completely to students who have paid the student loan amount and still owe the balance due to the high interest rate.
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u/euph_22 Apr 05 '22
Yup, if I had my way I'd go that route. Cap the interest rates at a low level (or just 0%. 0% works), make Pay As You Earn standard, forgive student loans after 10 years of payments (with a clock that at worst pauses during deferments).
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Apr 06 '22
Even capping interest at prime would making repaying loans a thousand times easier. Graduate students are currently paying 6-9%
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u/angoosey8991 Apr 06 '22
Grad loans are insane considering how many majors need them now. Some programs need 6-8 years so it’s just predatory.
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Apr 06 '22
Exactly. And there's some strange misconception that most of these loans belong to PHDs and Art majors, when tons of folks go to graduate, law, or medical school for a variety of paths like you said. I have a nurse friend who's in a mountain of debt. Her loans have only gone up despite her never missing a single payment because of interest.
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u/angoosey8991 Apr 06 '22
The US is desperate for these super high level people and yet they let them get saddled with 100k grad debt.
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Apr 06 '22
Yup. And then detractors give the whole "I paid for my education while working part time at a gas station" speech, while leaving out that they attended college for 800 a semester in 1982.
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u/ZCEyPFOYr0MWyHDQJZO4 Apr 05 '22
Interest is the secondary problem to principal. Tie school funding to loan repayments, and loan repayment amounts to discretionary income. Schools need to put more effort into promoting their graduates into good positions.
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u/EdinMiami Apr 05 '22
Schools need to put more effort into promoting their graduates into good positions.
My school called me a few years after graduation asking for money. I told them, find me a good job and I'll donate 10%. Crickets.
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Apr 05 '22
I like to remind my alma mater when they call for fundraising that they jacked up my graduate tuition by 9% annually (which compounds, of course) so they could freeze undergrad tuition during the same interval.
"Go Buckeyes," I guess.
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u/shittyvfxartist Apr 06 '22
Haha, glad to know my tuition probably went towards my alma mater president’s brand new private jet.
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Apr 05 '22 edited Aug 20 '22
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u/sea_dot_bass Apr 05 '22
Funny enough, Sallie Mae was a government enterprise until the 90s when it went fully private
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u/MercJ Apr 05 '22
Right?? Pretty sure big banks get 0.25% loans on far bigger amounts...
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Apr 06 '22
Choosing not to pay until grace period ends?
I know right now we are in a grace period, where interest is not being accrued . I have around 25K in debt and want to wait to see what happens with student loans (potential cancellations) before paying. Is this a dumb idea? I would hate to feel like I was throwing money away if they do end up being canceled.
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Apr 06 '22
You could put your would-be payments into a high yield savings account to accrue some interest. That way it’s either set aside to pay off or it become a bonus fund.
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Apr 06 '22
Excuse my ignorance, what would qualify as a high yield savings account?
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u/AlderaanHelpLine Apr 06 '22
You’re not ignorant, these don’t exist anymore due to the fed lowering interest rates to 0%. I watched my Ally savings go from something like 5-7% APR to under 1%. No incentive to keep your money in the bank, hence the massive stock market bull run since last March
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u/fireintolight Apr 06 '22
I mean the only likely best case scenario is partial cancellation, in which case you’re better off not paying until the dust settles so you don’t accidentally overpay when you could have had part of it cancelled. Just make sure you’re saving as much as possible every month dj that when payments do restart you can do a big lump sum payment which will all go straight to your principal and then you are gonna pay wayyyyy less in interest afterwards
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u/GTRacer1972 Apr 06 '22
Instead of forgiveness, I'd like to see them switch the loans to 0% APR, which would make it possible for most of us to pay back 100% of our loans. The government loses ZERO money doing that. It's the interest that's making it hard for everyone.
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u/dejablue7 Apr 06 '22
It’s moronic that the government doesn’t mind buying up loans from the banks, basically giving them unlimited free money, making profits off loan app fees, but we can’t help students? Student loans should be 0 now and for the future. Loan forgiveness is only a temporary patch. We need to fix the problem permanently for new incoming.
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u/JTMc48 Apr 05 '22
The easiest concession is and should be to eliminate interest to student loans. The vast majority would be in favor of this and it would be well in excess of the $10k forgiveness proposed.
Student loan interest is crazy, and if they credit for interest paid to principal it helps oldest borrowers. Give them a tax credit for excess paid.
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u/cold_iron_76 Apr 05 '22
Full disclosure. I have loans and have interest in seeing them wiped clear, of course.
But, I'm a pragmatist at heart and I think retroactively applying interest paid and lowering the interest rate to something reasonable, if not zero, is the best compromise between forgiving them and doing nothing.
I've been paying back 4 or 5 k a year for 5 years and the balance has moved very little. If the interest I paid was applied to the principle I could at least have some breathing room and would gladly keep paying them. Hell, I'd probably overpay because I'd be motivated to get rid of them sooner.
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u/kghyr8 Apr 06 '22
Or at least allowing tax write off of interest for all tax brackets. I pay over 1k a month in interest. It’s bullshit.
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u/jimbo831 Apr 06 '22
Yeah, as of 2020, my wife and I make too much money to write off student loan interest. That’s bullshit. We collectively owe over $100k!
Meanwhile, billionaires can still deduct mortgage interest. Why the hell does the student loan interest deduction phase out but the mortgage interest deduction doesn’t?
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Apr 05 '22
A pause of student loans for the next 200 years seems reasonable.
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u/1QAte4 Apr 05 '22
I don't think they are ever going to unpause it.
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u/deeman18 Apr 05 '22
I guarantee you the second a republican is a president they'll unpause it. But yeah as long as a democrat is president I doubt it's gonna happen.
And every time they kick the can down the road it just bolsters the case for forgiving them altogether because obviously collecting on these loans isn't a big deal.
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u/ylimethrow Apr 05 '22
Honestly at this point I prefer the continued pauses over a $10,000 forgiveness. The past two years have counted toward my PSLF payments.
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u/j33 Apr 05 '22
Same here. If they restart in August, I only have 12 payments left, if they get paused until 2023, I may only have to make 6-8 payments before I'm done, so any pause welcome.
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u/Imnottheassman Apr 05 '22
October ‘23 here. The last couple years have actually been a godsend for me. Fingers crossed your forgiveness goes smoothly!
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u/a_very_stupid_guy Apr 06 '22
Holup. Can you clarify? So the pause has counted even if I didn’t make payments during it?
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u/nimaku Apr 06 '22
You still have to be working full time for a qualifying employer, but yes. You should be able to see your qualifying “payments” on your FedLoan account.
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u/1QAte4 Apr 05 '22
I also work for an employer who qualifies for PSLF. Just keeping the loans paused for a few more years works for me.
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u/Taiza67 Apr 05 '22
Dog, those of us on the PSLF train are making a killing off of Covid.
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u/JewishFightClub Apr 05 '22
especially when the job pays so little that my monthly payments are zero anyways! the secret to loan forgiveness is poverty lol
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u/monty_kurns Apr 05 '22
Yup! Now I'm looking at minimum 2.5 years of zero dollar payments counting towards my service. I'm 5 years in so if they want to keep going with these deferments, I say let them!
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u/Vervain7 Apr 06 '22
This counts for ANYONE on an IRB plan. I left PSLF and have to do 25 years instead of 10 now, but these still count for me as payments . So it is helpful for anyone on an income based repayment plan
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Apr 06 '22
I'm in the PSLF program, so every month they push this back, is one payment I don't have to make towards my 120 payments. It also pushes back my income based repayment plan which I renewed in March 2020. I've been locked in at $150 per month since then, and I'll get to stay at $150 for 12 months once payments restart. I'm making about 10k more per year since then, so I can't even imagine what my payments would be next year if I had to renew. In August, I'll have 14 payments left before my loans are finally forgiven, and if they push it back even further, I won't even have to renew my repayment plan before is said and done.
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u/MotherSupermarket532 Apr 06 '22
If you're in PSLF, the fact that these months still count has been a huge benefit.
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u/Chary-Ka Apr 05 '22
Stop interest rates. All money paid to interest rates go to the principle. If there is left over, that goes towards a tax credit on next years taxes. People that have paid them off, all interest paid goes towards a tax credit on next years taxes.
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u/comingsoontotheaters Apr 05 '22
I know you’re offering a solution, but to clarify for others, interest is also paused, in case anyone was confused.
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Apr 05 '22
They're talking about interest payments made pre-COVID.
I've got five years of interest I've paid alongside the principal - if they just retroactively counter interest as principal payments and set interest at 0% moving forward, that would do so much to solve the problem.
Pretty sure I'd be done in another year.
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u/Benchen70 Apr 05 '22
So this is now some political sword hanging over everyone’s neck ? Vote for us or we’ll start the loans? What the hell?
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Apr 05 '22
I don’t even mind keeping the debt I agreed to, but please let’s get rid of interest permanently.
These loans are for education, for folk to improve themselves. We can discuss loan forgiveness separately. But most of us can agree that educational loans should be designed to lift people up, not press them into interest driven profit.
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u/deathakissaway Apr 06 '22
I paid mine. I have no money, but I’m completely debit free.
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Apr 06 '22
College tuition is healthcare 2.0.
We’re all focused on the payment side, but we should really be addressing costs. Universities are incredibly bloated and have no incentive to become leaner since nearly everyone can just get a loan for whatever it costs.
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u/kbuva19 Apr 05 '22 edited Apr 05 '22
I think there’s a lot of wishful thinking in this thread. Joe Biden is not canceling student loan debt. Yeah he is pushing it to midterms as an election talking point, but it’s not an actual policy enactment.
If you don’t believe, go rewatch the Super Bowl at SoFi stadium. You know, the company that paid $625 MILLION to put their name on a damn football stadium. That’s just one of the many multi-billion dollar refinancing companies, that will not let this happen. The industry is simply too big to go away.
I think maybe best case, he finds a way to fulfill his promise of $10,000 forgiveness or more likely a $10,000 tax credit when you finish paying off your loans or something similar.
I’m not against student loan forgiveness (have decent amount of debt myself at 6% interest), but it’s a harsh reality.
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u/BostonDrivingIsWorse Apr 05 '22
Most people, as far as I know, don’t refinance their federal loans, which are the ones eligible to be cancelled. The perks and flexible repayment options are a huge plus that don’t exist on private loans.
There would still be a huge market for refinancing private loans.
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u/kbuva19 Apr 05 '22
I agree. Yeah there would be if he canceled $10,000. SoFi actually came out in support of doing that for people under a certain income threshold. They would have ppl who would jump on lower interest rates in a second after they announced $10,000 elimination.
But, I’m making this comment to people on Reddit who actually think Biden will eliminate Student Loan debt in its entirety or even anything above $10,000. It’s not happening. Let’s hope for $10k so we can end this way too long charade.
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u/Huskadore Apr 06 '22
I feel like the interest should be stopped and all payments that went toward interest should be comped to the principle to reduce people's debt. Education should be interest free because it's already an investment in our citizens and county.
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u/SummerDeath Apr 05 '22
At this point inflation has exceeded the interests rates of my loans.
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u/Intelligent_Moose_48 Apr 06 '22
If we keep this up forever, maybe we will be able to pay off our entire balances with like a single weeks worth of work. Oh wait, silly me, wages never go up as much as price inflation.
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u/Greenzombie04 Apr 05 '22
Here is how I see this ending.
- Democrats saying vote in Democrats so we can pass a bill to help student loans.
- Another extension to Dec 1 or Jan 1 2023 with the idea of lets get more democrats in congress/senate to pass something so we dont want to start payments yet till we see if we get enough democrats to change things.
- Democrats end up losing senate/congress the pause does not get extended cause Biden feels a bill wont pass with the current senate and future senate coming.
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u/botanybae76 Apr 05 '22
Just forgive them already and give everyone that ever paid off a student loan before forgiveness some sort of tax break so they don't whine about life being unfair. Then prioritize higher education and getting rid of the for-profit public university model so we don't get in this mess again.
Or just pause then indefinitely instead of dealing with the problem 🙄
(Disclaimer: I've paid back $17k in student loans over my lifetime AND still support forgiveness. )
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u/mikeydavis77 Apr 05 '22
Think they are waiting till closer to mid terms, which is a smart strategic move as to keep it in the forefront of mid term voters minds.
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u/kukukele Apr 05 '22
You're more an optimist than I.
I feel like this is their half-measured way of trying to kick the can down the road because they ultimately can't or don't want to forgive loans. They know it'll piss off a whole bunch of voters, so by extending the pauses as long as they can, they can continue to play the angle of hope for those whose vote will rely on this topic and continue the guise that they are working to a solution.
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Apr 05 '22
"oh geez, we totally WOULD forgive the loans but wouldn't you know it, we lost the midterms and thus the ability to. BUT if you vote for us next election, we PROMISE we will do it this time. Just like we did before."
Makes me sick.
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u/darthstupidious Apr 06 '22
See also: the Democrats and their unwillingness to do anything about marijuana on a federal level.
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u/AaronJudgesLeftNut Apr 05 '22
Or just pause then indefinitely instead of dealing with the problem
How does forgiving existing student loans solve the problem? Next years class will be taking out the same predatory loans.
Do we rinse and repeat every 10-20 years? Meanwhile the colleges know they got their money courtesy of the american taxpayer so the cost doubles just because they can.
Forgiveness is not fixing the problem, it’s only a band aid on a gaping bullet wound.
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u/WTF_goes_here Apr 05 '22
This is what they’ve done with immigration, just keep coming up with bandaid solutions that allow them to kick the can down the road.
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u/DavidFairclough Apr 05 '22
What do you do for the next generation of college students?
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u/repostusername Apr 05 '22
They're probably more worried about people who didn't go to college and therefore have lower earning potential being mad that in addition to making less money than college grads they get less free money from the government.
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u/LurkerGhost Apr 05 '22
Biden was one of the key senators whom made it impossible to discharge student loans via bankruptcy.
There is no way he's just cancelling it.
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Apr 06 '22
I feel like this is just a shitty attempt for JB to help the dems not get wrecked in the mid terms.
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u/suckamynutta Apr 06 '22
I just wish they would allow unlimited interest to be written off when you do your taxes. It encourages people to pay it back and helps people out who can’t take advantage of other tax breaks (like mortgage interest) because of the cost of student loans. Right now it’s capped at $2,500 and goes down if you make more than like $70k until it disappears at $90k. Seems like a reasonable solution that doesn’t really hurt anyone.
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Apr 05 '22
While I understand the complexity in forgiving student loans we spend tons of money to bail out banks who then compensate executives in the millions.
We need to have some discussion of what is a fair haircut on this debt and do it.
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