Student Loan Consolidation and Proposals

[No1]

I'm just going to throw this out there..a little anarchist thinking, but how about everyone organize and not pay the loans back. I know that we will all take huge hits in credit scores and probably be thrown in jail, but if it was a massive enough movement the government might jump in and give US a bailout. Maybe I'm just wishing or thinking crazy but these fukking loans are crazy. Like we are out here doing Life sentences trying to pay this shyt back. Really?

You would never be able to organize that many people. BTW, I saw your random Jay and Beyonce hate in that other thread, you really mad because they keep their personal lives to themselves and don't do a bunch off the cuff interviews for you fam lol

 

[Czerka]

I'm just going to throw this out there..a little anarchist thinking, but how about everyone organize and not pay the loans back. I know that we will all take huge hits in credit scores and probably be thrown in jail, but if it was a massive enough movement the government might jump in and give US a bailout. Maybe I'm just wishing or thinking crazy but these fukking loans are crazy. Like we are out here doing Life sentences trying to pay this shyt back. Really?

theyve already given you a bailout. its called ibr. thats why this shyt will never happen. its basically the alternative to making student loans dischargeable (youre discharging them at the end of the program anyway). other countries are doing the same thing.

 

[ltheghost]

You would never be able to organize that many people. BTW, I saw your random Jay and Beyonce hate in that other thread, you really mad because they keep their personal lives to themselves and don't do a bunch off the cuff interviews for you fam lol

Dang had to track me down after the hate huh? LOL I was just stating the obvious. They aren't political people. I was just pointing out they are entertainers and nothing more. Other people have built them up to be the spokesmen of the race and culture but it really isn't that serious, well not that serious when it comes to them.

And we could organize that many people if we started doing it together and started getting media attention. We need to be on some "Hell no! We won't pay" type of shyt! A million student march against the Student Loan Program!!! Burn this bytch to the ground!! LOL but honestly...that first of the month payment is a painful reminder of what you have to do to be "educated" in this country.

 

[ltheghost]

theyve already given you a bailout. its called ibr. thats why this shyt will never happen. its basically the alternative to making student loans dischargeable (youre discharging them at the end of the program anyway). other countries are doing the same thing.

Yeah I know...but its just not enough...lol I want out of this student loan slavery. I know I took the money but damn....I want one of those big bank bailouts or loan forgiveness!! LOL

 

[gho3st]

IM BOUT to apply for forbearance too.

 

[ltheghost]

IM BOUT to apply for forbearance too.

Its such a shytty process. Its like they rub it in your face. "Explain why you cannot come up with the money sir"....That student loan slavery is no joke.

 

[gho3st]

Yeah I know...but its just not enough...lol I want out of this student loan slavery. I know I took the money but damn....I want one of those big bank bailouts or loan forgiveness!! LOL

whats the worst that can happen if you default....Can i go to jail?

 

[Czerka]

Ok, so here are some ways to take advantage of the governments revisions to IBR (enacted last December 2012). this is a great deal but it depends on what you want to be making. obviously i support the student loan forgiveness act but i cant see the government being more generous than this (with the caveat that not everyone qualifies for the new IBR and those people still need relief)

also called "pay as you earn". basically, your payments are not contingent on your loan balance - they are calculated off your income. 10% of your AGI over 20 years. after 20 years, your debt is forgiven (10 years if you work for gov or non-profit)

Lets start with the average dude, graduating with $30k in debt, starts out working at starbucks

all of these calculations assume 3% raises (which may or may not be accurate)

Starbucks
Starting Salary: $30,000
Starting loan balance: $30,000
Starting IBR Monthly Payment: $85
Total payments over 20 years: $29,707
Total forgiven: $38,547

The government is giving you a $30k interest free loan for 20 years

Next scenario: Accountant, $50k debt (on the high end), starts out at a Big 4 accounting firm

Accounting
Starting Salary: $50,000
Starting loan balance: $50,000
Starting IBR Monthly Payment: $235
Total payments over 20 years: $78,074
Total forgiven: $36,141

This person would have been slightly better off paying it over a 10-year plan, where his total payments would have been $69,279 (depending on his time preference).

the more you make, the less you benefit

the real boon here is for grad students.

Now lets look at an MBA grad, making $90k after graduating, borrowing the average MBA debt of 120k. Let's say he also has $30k debt left over from undergrad he never paid off i was more aggressive and assumed 5% raises, so his final salary at year 20 is $227,425.

MBA
Starting Salary: $90,000
Starting loan balance: $150,000
Starting IBR Monthly Payment: $498 (runs up to $1577 by year 20)
Total payments over 20 years: $234,000
Total forgiven: $165,832

although this person ends up paying $75k of interest, its not much over a 20 year period especially for someone making six figures.

also, under a ten year "standard" plan he would have paid $218,390. Why would he do the ten year plan if he could pay almost the same in 20?

Now for the real comedy

A med student who spends 5 years in residency making 50k. He then works at a hospital for 5 years (a nonprofit) making $250k+ (3% raises). Since he works for a nonprofit, he qualifies for 10-year forgiveness.

he borrowed $300k in loans for shyts and giggles lets say he had 50k left over from undergrad

Med Student
Starting Salary: $50,000 as resident, 250,000 as attending doctor
Starting loan balance: $350,000
Starting IBR Monthly Payment: $235 as a resident, ~$2000 as a doctor
Total payments 10 years: $136,449
Total forgiven: $773,551

Here's the catch, the forgiven amount under the 20-year plan is taxed. so you could end up with a tax bill at the end (if they dont change it, which they probably will).

but that doesnt apply to the doctor since you are exempt from forgiven loans being taxable if you work at a nonprofit

the bottom line is that the incentive here is to max out your loans and hold onto your savings. they really need to fix this shyt

my brehs

 

[nomoreneveragain]

Got Forberance until the beginning of next year.

Just gonna take each check and knock off each loan one by one.

Goal is to be Debt Free by 5/1/14.

28K left

 

[CrimsonTider]

Ok, so here are some ways to take advantage of the governments revisions to IBR (enacted last December 2012). this is a great deal but it depends on what you want to be making. obviously i support the student loan forgiveness act but i cant see the government being more generous than this (with the caveat that not everyone qualifies for the new IBR and those people still need relief)

also called "pay as you earn". basically, your payments are not contingent on your loan balance - they are calculated off your income. 10% of your AGI over 20 years. after 20 years, your debt is forgiven (10 years if you work for gov or non-profit)

Lets start with the average dude, graduating with $30k in debt, starts out working at starbucks

all of these calculations assume 3% raises (which may or may not be accurate)



The government is giving you a $30k interest free loan for 20 years

Next scenario: Accountant, $50k debt (on the high end), starts out at a Big 4 accounting firm



This person would have been slightly better off paying it over a 10-year plan, where his total payments would have been $69,279 (depending on his time preference).

the more you make, the less you benefit

the real boon here is for grad students.

Now lets look at an MBA grad, making $90k after graduating, borrowing the average MBA debt of 120k. Let's say he also has $30k debt left over from undergrad he never paid off i was more aggressive and assumed 5% raises, so his final salary at year 20 is $227,425.



although this person ends up paying $75k of interest, its not much over a 20 year period especially for someone making six figures.

also, under a ten year "standard" plan he would have paid $218,390. Why would he do the ten year plan if he could pay almost the same in 20?

Now for the real comedy

A med student who spends 5 years in residency making 50k. He then works at a hospital for 5 years (a nonprofit) making $250k+ (3% raises). Since he works for a nonprofit, he qualifies for 10-year forgiveness.

he borrowed $300k in loans for shyts and giggles lets say he had 50k left over from undergrad



Here's the catch, the forgiven amount under the 20-year plan is taxed. so you could end up with a tax bill at the end (if they dont change it, which they probably will).

but that doesnt apply to the doctor since you are exempt from forgiven loans being taxable if you work at a nonprofit

the bottom line is that the incentive here is to max out your loans and hold onto your savings. they really need to fix this shyt

my brehs

I doubt they change that.

Any debt forgiven is looked at as income received for tax purposes

 

[Czerka]

I doubt they change that.

Any debt forgiven is looked at as income received for tax purposes

Budget Would Eliminate Taxes on Forgiven Student Debt - NYTimes.com

There's been other bills in Congress to change it. I don't follow politics anymore so I don't know how likely it is... but unless they change it, the tax element could significantly reduce the benefits of entering IBR, which is why its so unpopular right now and the white house had to expand the program last year.

also, they DID change it for public service jobs, so its not unprecedented

 

[No1]

House Passes Student Loan Bill, Setting Up Showdown

By JONATHAN WEISMAN

WASHINGTON — The House on Thursday passed legislation to head off a doubling of student loan interest rates on July 1, instead tying rates to prevailing market trends and ending federal subsidies.

The bill, approved largely along party lines, 221-to-198, kicks off what is sure to be the next showdown between House Republicans, Senate Democrats and President Obama, with a hard deadline looming in little more than a month. Republicans said they had come up with a long-term plan that would get the government out of the business of setting interest rates.

“What the House is doing today is a responsible way to deal honestly with the issue of student loans,” Speaker John A. Boehner of Ohio said. “Can somebody politicize this on the other side of the aisle? Certainly they can.”

Democrats jumped on the issue to say House leaders are intent on raising the cost of already-onerous student debt. They quickly signaled that the brewing fight would become a major political rallying cry.

“It’s really stunning,” said Representative Nancy Pelosi of California, the House Democratic leader.

At stake is a subsidized loan rate of 3.4 percent for more than 7.4 million students with federal Stafford loans, which would jump to 6.8 percent if Congress fails to act. Democrats fixed the 3.4-percent rate before Republicans took control of the House in 2011. Last June, Republicans buckled under political pressure and extended the subsidized rate for one year, just two days before its expiration.

This time, Republican leaders insist they will hold firm, but they face Democrats in the Senate dead set against their approach and a threatened White House veto.

“Who’s going to set interest rates, politicians here or the markets?” asked Representative John Kline, Republican of Minnesota, chairman of the House Committee on Education and the Workforce.

The House bill would allow student lending rates to reset each year, based on the interest rate of a 10-year Treasury note, plus 2.5 percentage points for Stafford loans. The Congressional Budget Office projected that rates on Stafford loans would rise to 5 percent in 2014 and 7.7 percent in 2023. Under the legislation, Stafford loans would be capped at 8.5 percent, while loans for parents and graduate students would have a 10.5 percent cap.

The legislation would cut the deficit by $3.7 billion over 10 years, a small but politically significant number, since White House officials say the deficit should not be reduced on the backs of indebted college graduates.

Senate Democrats want to extend the current subsidized rate for at least two years. The cost to the federal government, $8.3 billion, would be paid for by closing tax loopholes. Senator Kirsten E. Gillibrand, Democrat of New York, would go further, setting a 4 percent rate for all student loans and allowing graduates with higher interest-rate loans to refinance at that level.

But President Obama has a different proposal that would fall somewhere between the House and Senate bills. He, too, would set student lending rates each year based on Treasury’s borrowing costs, but those rates would be fixed for the life of the loan, not reset each year. He would also cap student-borrowing costs at 10 percent of a student’s income.

The White House proposal has divided Democrats and given Republicans some hope that a negotiated solution can be reached in June. House Republicans said Thursday that they had been negotiating with the White House for weeks, but that those talks broke off under pressure from Congressional Democrats.

Ms. Gillibrand said the White House income cap should be set at 5 percent, and she still opposes setting rates by market forces, even if those rates are not allowed to fluctuate, as the president has proposed.

“The reason why the federal government has made the decision to subsidize education is because getting a college education is the gateway to the middle class,” Ms. Gillibrand said. “If you want to create a growing economy and to create long-term investment in our future, that means investing in our kids.”

http://www.nytimes.com/2013/05/24/u...own.html?partner=rss&emc=rss&pagewanted=print


I can't vouch for that on this one O-Dawg, what happens if we end up with a Republican president who sets that shyt high as hell in a couple of years based on some arbitrary "market calculation." I'm with Gillebrand on the 5% vs. 10%.

 

[Richard Wright]

They need to make it easier for good students to pay for school and more difficult for under performers. Incentivize this shyt.

 

[AAKing23]

The house bill is the better version as opposed to Obama's version IMO

 

[tru_m.a.c]

I can't vouch for that on this one O-Dawg, what happens if we end up with a Republican president who sets that shyt high as hell in a couple of years based on some arbitrary "market calculation." I'm with Gillebrand on the 5% vs. 10%.

Isn't that why you don't create an "arbitrary" market calculation?