topic Re: Student Loan Forgiveness in Student Loans

Student Loan Forgiveness

hsfun2019 — Thu, 04 Feb 2021 21:58:29 GMT

With all this discussion by the Whitehouse and Congress looking at Loan Forgiveness have they said who will be eligible? I know it has to be a federal loan, but have they said if they are putting income caps on it etc?

Re: Student Loan Forgiveness

barca — Thu, 04 Feb 2021 22:12:56 GMT

it is not yet determined.

I think Biden wants only undergraduate loans and limited income.
It seems Chuck and others wants 50K for every student loan borrower.
While the extremes wants all student loan forgiven.

I owe student loans myself and most of them are post graduate.

Moreover, I might not qualify because of high income.

I am hoping Chuck Schummer idea works. (50K for all borrower )

Re: Student Loan Forgiveness

hsfun2019 — Fri, 05 Feb 2021 13:55:56 GMT

That was my fear that they would slap an income piece to it. What's sad is most of mine is from a federal consolidation loan that I am responsible for with my ex-wife. I may be having some extra funds that would allow me to pay it off but i'm going to hold off until they determine who will get what paid for. Love to get that albatross off my balance sheet.

Re: Student Loan Forgiveness

calyx — Fri, 05 Feb 2021 16:04:11 GMT

Yeah, I'm hoping they don't apply any kind of means test.

100k in the Bay Area isn't the same as 100k in Houston.
I would welcome any amount. 10k would mean I could pay it all off this year.
50k would wipe it out and I would cry with happiness and actually be able to start funding retirement.

Re: Student Loan Forgiveness

Impress — Sat, 06 Feb 2021 04:59:58 GMT

While 50K would not wipe out all of my debt, it would clear a HUGE chunk of it, so I'm hoping the Dems can convice Biden to go bold.

Re: Student Loan Forgiveness

onstar — Sat, 06 Feb 2021 08:50:03 GMT

$50K would make a pretty good dent. I'll still have over $100K left, but it would help SO MUCH.

Re: Student Loan Forgiveness

barca — Fri, 19 Feb 2021 19:17:01 GMT

I am praying (50k per borrower) plan work

no income limit or masters/PhD restriction.

like most of you, while it will not cancel all my student loan , it will take a big chunk from it. i have been paying it down aggressively for years.

the problem we have are those who are opposed to it .

'some said they work so hard to pay for their student loan while in college , would they get refund.
'some who did not have college degree said -- why should college holders making much more money than them get a break.
some claim they took all their savings or sold their second home for their son college

these angry opposition is what is holding it back .

While some experts advice you should continue to pay the student loan if you can afford it, to lower the principal aggreivesly since no interest is charged.

IMHO- you should use that money and pay down other debt and wait to see what will happen.

what I suspect at a minimum will happen is :

govt will remove 10K from every borrower and reduce the rate to like 2%.

btw - I am not affiliated with any political party neither have I voted before.

Re: Student Loan Forgiveness

Anonymous — Sun, 07 Feb 2021 13:39:51 GMT

I too hope there are no restrictions placed on the forgiveness.
50k would take care of all of my loans.

Re: Student Loan Forgiveness

calyx — Sun, 07 Feb 2021 17:34:55 GMT

@barca wrote:

While some experts advice you should continue to pay the student loan if you can afford it, to lower the principal aggreivesly since no interest is charged.

IMHO- you should use that money and pay down other debt and wait to see what will happen.

I snipped a bunch, but the above is SO true.
I see a lot of "what should I do while the loans are paused if I still have the money to pay" articles, and almost none of them mention paying down other debt.

If you don't have other debt - put it in savings and then do a big payment if/when they return if you want, but I don't understand the "pay it down faster" when waiting to see what happens since the loans are at 0% harms/costs nothing. After I pay off my medical/dental debt, I'll be paying towards my auto loan while I still keeping ~4months of SL payments in that line item in my budget.

Re: Student Loan Forgiveness

OmarR — Mon, 08 Feb 2021 19:55:15 GMT

@barca wrote:
the problem we have are those who are opposed to it .
'some said they work so hard to pay for their student loan while in college , would they get refund.
'some who did not have college degree said -- why should college holders making much more money than them get a break.
some claim they took all their savings or sold their second home for their son college
blah blah blah
these angry opposition is what is holding it back .

There are people that have struggled & sacrificed to pay back the student loans that they owed. If the govt chooses not to credit them ($10k or whatever amount) the same as the people that still owe, than they are 100% correct. There is a difference between that group NOT wanting your loans forgiven versus wanting to be treated equal.

Re: Student Loan Forgiveness

OmarR — Mon, 08 Feb 2021 19:54:25 GMT

@calyx wrote:
@barca wrote:

While some experts advice you should continue to pay the student loan if you can afford it, to lower the principal aggreivesly since no interest is charged.

IMHO- you should use that money and pay down other debt and wait to see what will happen.

I snipped a bunch, but the above is SO true.
I see a lot of "what should I do while the loans are paused if I still have the money to pay" articles, and almost none of them mention paying down other debt.

If you don't have other debt - put it in savings and then do a big payment if/when they return if you want, but I don't understand the "pay it down faster" when waiting to see what happens since the loans are at 0% harms/costs nothing. After I pay off my medical/dental debt, I'll be paying towards my auto loan while I still keeping ~4months of SL payments in that line item in my budget.

We are a zero debt household (other than mortgage), but I have an interesting side story. When my wife was getting her BSN, she chose one of those "for profit" colleges, Harrison College. (As if none of the other ones are for profit). She cashed flowed the first semester, but than took out student loans for the rest of her time there. Founded in 1902, the leadership in 2018 became shady and shut down, taking all of the students' monies. If a student took out 100% federal loans, than those loans were forgiven, credits erased, and the student had to start over somewhere else. So it was just time lost. As for my wife, she is now part of a lawsuit to try and get her first semester's money back, roughly about $4k.

My wife finished at a different college and we cash flowed everything. I hate debt and hate borrowing money for anything. So I never thought that I would recommend someone taking out REASONABLE federal loan amounts until that degree is in their hands. Otherwise, if someone cash flows everything and the school closes, fraud, student passes away, etc., than that cash is gone. With a federal loan, it's like credit on a credit card. If that school commits fraud or fails, than it's not your money. It's the govt's credit. In retrospect, my wife should have done 100% federal loans, gotten her degree, and than PIF after she obtained her degree.

Re: Student Loan Forgiveness

Anonymous — Mon, 15 Feb 2021 18:26:03 GMT

I really hope I qualify for something. The bulk is post grade. Once those are gone that will lift a major weight off my shoulders.

@hsfun2019 wrote:
With all this discussion by the Whitehouse and Congress looking at Loan Forgiveness have they said who will be eligible? I know it has to be a federal loan, but have they said if they are putting income caps on it etc?

Re: Student Loan Forgiveness

ambitiouscat79 — Tue, 16 Feb 2021 00:43:09 GMT

Does anyone know if the student loan forgiveness program would apply only to ones still with dept of education -- i'm trying to decide whether to refinance or consolidate my student loans with a company like sofi? Is it more appropriate to wait until after they reinstate the interest on it in a few months?

I am somewhat green to this and my graduate degree program was not in finance (lol) but is almost $150K - I am actually still 2 classes away from the masters degree and have always been "out of sight, out of mind" or "ignorance is bliss" but when I hit 40, I realized I need to start looking at how to repay and tackle this.

Re: Student Loan Forgiveness

calyx — Tue, 16 Feb 2021 16:33:00 GMT

Federal student loan forgiveness programs only apply to Direct Loans. So even if you have FFELs, you won't qualify unless you consolidate with the Dept of Ed (I realize that since you're still in school, you probably don't have loans that old, but I assume nothing ). If you move to another company that is not a Federal Servicer, they won't fall under forgiveness programs.

Re: Student Loan Forgiveness

Impress — Tue, 16 Feb 2021 20:35:58 GMT

According to studentaid.gov some of my loans are not direct. I'm not really sure how to tell which ones as it doesn't say. Any idea on how to tell? And can I consolidate only the ones that aren't direct? I'm trying to make sure any/all my loans qualify for some type of forgivness.

Re: Student Loan Forgiveness

calyx — Wed, 17 Feb 2021 15:52:52 GMT

@Impress - I replied on your thread

Re: Student Loan Forgiveness

Cory88 — Fri, 19 Feb 2021 02:43:37 GMT

One thing that I like to know is that will I have to pay taxes on the debit that is cancelled? If yes, what is the rate I would pay?

Re: Student Loan Forgiveness

calyx — Fri, 19 Feb 2021 13:09:38 GMT

@Cory88 wrote:
One thing that I like to know is that will I have to pay taxes on the debit that is cancelled? If yes, what is the rate I would pay?

Honestly, unless they actually did it, we wouldn't know.
I would expect that we'd have to pay standard income taxes on it, at the least (which I would still happily take).
But if they do that, I'd hope there's enough warning that those that can would adjust their withholding and the rest of us could start to save (and hopefully somehow avoid any kind of penalty for underpayment due to the 'windfall').

^ All of that is VERY imo.

Re: Student Loan Forgiveness

Rottweilerlvr — Sun, 07 Mar 2021 22:25:35 GMT

I don't want to be Negative Nancy here... BUT, I wonder what could be done for me?? My student loan went into default (circumstances due to a divorce and loss of significant income) and last summer I worked 12 hour shifts, 6 days a week to pay the loan off while my daughter was with her father. My credit is still crap. I still have at least another 2 years before they fall off and that's if I can convince them that the first negative was in 2015 and not 2018 that is being reported. The loan has been on my credit report since 2014. If they are going to give $10,000 to folks, why can't they remove my student loan from my report so I too, can effectively start over??? No one is talking about this and this would be "free".

Re: Student Loan Forgiveness

Impress — Mon, 08 Mar 2021 03:17:14 GMT

If your loans are paid off, have you looked into goodwill removal? It might not work if they are federal (and definetly won't work if they are federal and you still owe on them), but it's worth a shot.