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Student Loan Forgiveness

OmarR
Established Contributor

Re: Student Loan Forgiveness


@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. 

    EQ=850        TU=837         EX=839      INQ=0/0/0     UTIL=$1        AZEO


Message 11 of 25
LivingMyLife
New Member

Re: Student Loan Forgiveness

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?   


 

EQ 8 02/2020 650
Cur 04/2020 729
Goal 900
TU 8 02/2020 666
Current 713
Goal 900
EX 8 02/2020 629
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Goal 900
Message 12 of 25

Re: Student Loan Forgiveness

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.

Message 13 of 25
calyx
Super Contributor

Re: Student Loan Forgiveness



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 Smiley Happy ).  If you move to another company that is not a Federal Servicer, they won't fall under forgiveness programs.



F8 EQ: 809 | EX: 802 | TU: 805 | Accounts: 2/6 4/12 7/24
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 14 of 25
Impress
Established Member

Re: Student Loan Forgiveness

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.

Message 15 of 25
calyx
Super Contributor

Re: Student Loan Forgiveness

@Impress - I replied on your thread Smiley Happy



F8 EQ: 809 | EX: 802 | TU: 805 | Accounts: 2/6 4/12 7/24
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 16 of 25
Cory88
Regular Contributor

Re: Student Loan Forgiveness

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?

Message 17 of 25
calyx
Super Contributor

Re: Student Loan Forgiveness


@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.



F8 EQ: 809 | EX: 802 | TU: 805 | Accounts: 2/6 4/12 7/24
Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 18 of 25
Rottweilerlvr
Valued Member

Re: Student Loan Forgiveness

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".

Message 19 of 25
Impress
Established Member

Re: Student Loan Forgiveness

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.

Message 20 of 25
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