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waitingforamiracle
Posts: 9
Registered: ‎03-30-2010
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Re: Student Loan Forgiveness Act of 2012

The student loan forgiveness act also includes being placed on an income based repayment plan. Basically, your payments are calculated according to your income and you have to reapply every year because your income may or may not change. Sounds good, right? Well I have recently applied for a FHA mortage loan, I have a decent credit score and very little debt but because I'm on the income based repayment plan under the student loan forgiveness act, my loan application was denied. Why? Because a bank will not lend money to folks who are on a payment plan that changes every year. I was told by my lender that their bank needed verification I would be on this plan, paying the same amount for more than 1 year and of course Direct Loans can't provide that information. If my lender uses the full monthly payment amount instead of the lower income based monthly payment amount, my debt to income ratio is too high to qualify for a mortage but they refuse to use the lower payment. I'm a school teacher so my income will never increase substantially....I'm pretty much stuck renting forever.
Valued Member
afraymoore
Posts: 97
Registered: ‎09-17-2012
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Re: Student Loan Forgiveness Act of 2012

Thank you for sharing this info.

Regular Contributor
loviedovie
Posts: 206
Registered: ‎12-20-2012
0

Re: Student Loan Forgiveness Act of 2012

[ Edited ]

Bornhuge wrote:

webhopper wrote:

bornhuge wrote:

I owe a ton in student loans, but I'm not for legislation wiping out my student loand debt or anybody else's.  We borrowed it, we should pay it.



In ten years, most people have paid so much in interest that they have actually paid back more than what they originally borrowed.  (I know I have)

 

 


Yeah, interest tends to cause people to pay back more than they borrowed.  Interest is part of the game.  It's not like anybody here signed up for a loan without having access to information about the interest rate.  A lot of people have made very poor choices about borrowing money to finance educations that did not support salaries that would allow for repayment of thier loans.  Would I rather see Washington bail out individuals struggling with student loan debt than banks?  Yes.  But, I'm not clamoring for a bailout of student loan borrowers because the government frankly can't afford it and it's more of a burden for everybody else that either didn't borrow or did, but paid back their loans as they agreed to.

 

Bornhuge-

 

I just found this old post and I will offer myself as evidence to the contrary of your claim. I took out about 250k in loans`for my doctorate from a private company in 2008. Upon completion of my program I would be able to consolidate the loans at a rate of 1.7% or so. While I would not have the income to pay the loan down aggressively, I could stay ahead of the 6k or so interest a year and pay it down until inheriting a chunk roughly equal to the size of my loan 10 years later. So I went for it.  

 

A few years into the program, I received a letter in the mail letting me know that my loans had been purchased by the government, put into a higher interest rate of 6.8 to 8.4 and even 11% for PLUS loans. Because the loans are held by the government they do not qualify for consolidation down to the 1.7 percent rate I had planned on. 

 

In other words- I got a letter in the mail informing me that my interest rate had roughly quadrupled and that I was bound to new terms. Instead of 6k interest a year to stay ahead of, it would now be closer to 30k before even touching the principal amount. Yet I am "lucky" enough to qualify for these new forgiveness programs.

 


Had anyone asked me if I could keep ahead of 30k a year and pay down this loan on a 60kish salary I would have said they were out of their minds and walked away. 

I was not given that opportunity. 

I will take this and any other loan forgiveness deal that is offered to me and feel 100% guilt free.

It should be criminal to sell loans and bind people to terms they never agreed to. 

 

That is my 2 cents. 


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Moderator Emeritus
webhopper
Posts: 7,225
Registered: ‎09-16-2011
0

Re: Student Loan Forgiveness Act of 2012

[ Edited ]

bornhuge wrote:

webhopper wrote:

bornhuge wrote:

I owe a ton in student loans, but I'm not for legislation wiping out my student loand debt or anybody else's.  We borrowed it, we should pay it.



In ten years, most people have paid so much in interest that they have actually paid back more than what they originally borrowed.  (I know I have)

 

 


Yeah, interest tends to cause people to pay back more than they borrowed.  Interest is part of the game.  It's not like anybody here signed up for a loan without having access to information about the interest rate.  A lot of people have made very poor choices about borrowing money to finance educations that did not support salaries that would allow for repayment of thier loans.  Would I rather see Washington bail out individuals struggling with student loan debt than banks?  Yes.  But, I'm not clamoring for a bailout of student loan borrowers because the government frankly can't afford it and it's more of a burden for everybody else that either didn't borrow or did, but paid back their loans as they agreed to.


 

I was 17 when I signed up for loans. The Fafsa indicated that my family should contribute enough based on their income.that I didn't qualify for grants. Little did they know that my family contributed $0. I could have gone to an ivy league school such as Harvard or Yale with my test scores and GPA. I felt like I did the smart thing by going to a state school and getting a degree in the growing.field of environmental science. I'm not sure that your statements accurately reflect the number of people such as myself who had no other option than to either take out a loan or not go to school and just work minimum wage and waste away my potential to contribute. My point is that I contribute 30k annually to the govt bottom line. Seems.as though it would be nice to benefit a little from what ive paid in.


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