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Why Obama's Favorite Student Debt "Relief" Program Will Cost Taxpayers $100 Billion
A few months back, we called the government’s Income Based Repayment plans, or IBR, "the student loan bubble’s dirty little secret." As the name implies, the idea with IBR is that monthly student debt service payments are based on the borrower’s disposable income. The less money one makes, the less one has to pay. Each monthly installment under the program counts as a "qualifying payment", and after 300 of these, the balance of the loan (assuming it’s not paid off after 25 years), is forgiven. Perhaps the most interesting thing about this scheme is that it allows for "payments" of zero. Here’s what we said back in April:
After 300 "qualifying monthly payments" — so after 25 years of payments — any remaining balance is forgiven and legally discharged. The interesting thing about this is that if the calculated payment is zero, it still counts as a "qualifying monthly payment." That is, if, based on the borrower’s financial situation, he/she is not required to make an actual cash payment for a period, that period still counts towards the 300 "payments" needed to have the balance of the debt discharged, meaning that in the end, borrowers could end up paying substantially less than principal (taxpayers eat the balance) and are effectively allowed to remain in a perpetual state of default while avoiding actual payment default along the way.
Needless to say, when borrowers elect to enter an IBR plan, the payment streams from their loans become far more unpredictable, which is why suddenly, Moody’s and Fitch can’t figure out how to rate student loan-backed paper. The best (and most hilariously absurd) idea yet comes from Citi, who suggested last month that Moody’s should consider scrapping the whole idea of loan maturity, because after all, one can't really default on a loan with an indeterminate maturity date so if you just amend the bond indentures and extend the legal maturity date to infinity, you don’t have to downgrade the ABS.
The proliferation of IBR causes other headaches, not the least of which is that it makes it even more difficult than it already was to calculate delinquency rates. To wit:
We, along with the St. Louis Fed, have argued that stripping out loans in forbearance or deferment from the delinquency calculations paints a clearer picture of where things actually stand because while you can argue about how those loans should be classified, what you cannot do is count those loans in the denominator but not in the numerator when calculating delinquency rates because if you do, you're effectively ensuring that you will understate the true percentage of borrowers who are behind. As we’ve seen, the delinquency rate for borrowers in repayment is somewhere around 30%.
That said, if those who are enrolled in an IBR or PAYE program but whose financial circumstances are such that their calculated payments are zero are counted as both "in repayment" and as "current" (which seems likely), then even the 30% figure is likely a woeful misrepresentation of the actual delinquency rate, because those borrowers are being counted towards the total number of loans in repayment (the denominator) but not towards the total number of delinquencies (the numerator). Put differently: it seems rather strange to count someone as "current" just because their income-adjusted payment happens to be zero.
So as you can see, IBR presents quite a few problems for taxpayers, for ABS investors, and for anyone trying to get a read on just how perilous America's $1.2 trillion student loan bubble is becoming. Realizing this, the media is beginning to take notice and Bloomberg now says taxpayers will likely be on the hook for around $39 billion. Here’s more:
Laura Strong, a 29-year-old in suburban Chicago, owes $245,000 on student loans for the psychology Ph.D. she finished in 2013. This year, she says she hopes to earn $35,000 working part-time jobs as a therapist and yoga teacher—not enough to manage a loan payment of about $2,000 a month. But Strong isn’t paying anything close to that. She’s one of at least 3.8 million Americans who’ve qualified for federal programs that tie payments to income and eventually forgive debt for some struggling borrowers, leaving taxpayers to pick up the tab.
President Obama has praised the programs for offering a lifeline to borrowers who’d otherwise default, scarring their credit. Strong pays about $100 a month on her federal loans, which she used to finance her graduate studies at Argosy University, a for-profit institution. "I wouldn’t know how I would pay it back otherwise," she says.
Income-based repayment was introduced under President Clinton, but the programs weren’t heavily promoted until late 2013, when the Obama administration began sending e-mails to borrowers, including Strong, telling them, "Your initial payment could be as low as $0 a month." The number of people using these plans has quadrupled since 2012.
Here’s what the letter Bloomberg references looks like:
And here's a common sense look at why these plans put taxpayers on the hook:
The bottom line:
Borrowers hold $1.2 trillion in federal student loans, the second-biggest category of consumer debt, after mortgages. Of that, more than $200 billion is in plans with an income-based repayment option, according to the Department of Education and Moody’s Investors Service. For taxpayers the loans are "a slow-ticking time bomb," says Stephen Stanley, a former Federal Reserve economist who’s now chief economist at Amherst Pierpont Securities in Stamford, Conn.
The Congressional Budget Office estimates that, for loans originated in 2015 or after, the programs will cost the government an additional $39 billion over the next decade.
So that's a $39 billion taxpayer loss just on loans originated this year or later, and that could very well rise as schools begin to figure out that they can effectively charge whatever they want for tuition now that the government is set to pick up the tab for any balances borrowers can't pay (which incidentally is precisely what we said in March).
Consider that, then consider how much of the existing $200 billion pile of IBR debt will have to be written off and add in another $10 billion or so to account for for-profit closures and it's not at all unreasonable to suspect that taxpayers will ultimately get stuck with a bill on the order of $100 billion by the time it's all said and done and that's if they're lucky - if the "cancel all student debt" crowd gets its way, the bill will run into the trillions.
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Thanks for the free BMW you shit-boomers.
When PAYE came into existance, everyone at school maxed out their loans.
The problem with student loans (and nearly every problem) is that our federal government got involved. We all know that student loand debt has increased. We all know that college tuition prices have skyrocketed. They have because the federal got in the business of making college available and 'affordable' for everyone.
They made student loans so easy to get that more and people could go. So colleges started raising tuition. And the students didnt care, because they weren't spending their money. And in large doses of brainwashing from the time kids are in grade school about the NEED to go to school and they are left with 'no choice' but to pay the higher tuition costs with taking larger federal loans.
The government's role isnt educating our kids or making eduation available. Get the government out of lives!!
what a deal....hey, time to starting cranking up those tuition and book costs again, bitchez.
Annual increases of 15% outta do it. Those scumbag Marxist "professors" need big raises for their indoctrination efforts in these transformational times.
It is insane how easy it is to get 'free money'. It hasn't been that long since I started up again to finish my degree and I was automatically qualified for like 10 grand without even asking for it. The fucked up thing is, that was to pay for room and board, when I am doing most of the work online and have already said to the school during the application process that I work full time and have a house I already live in and pay for. What possible reason was there to even offer that to me when the loans far exceed the cost of tuition for a couple classes.
I'm 30 and know better, so I just laughed and shook my head, and declined them. How many 18 year olds, even ones whose parents are picking up the tab, are gonna turn that down? I will fuckin choke my kids if they accept that shit when they are older.
Debt slavery. Gotta catch em all!
Come on, ZH, were you born yesterday? I think not.
Until one understands fractional reserve banking, these 'loans' make zero sense. Fuck em. How about for once LENDERS eat it? What was their skin in the game, any way, like 3 cents on the dollar?
Keep working peons
Obama just doesn't have enough balls to come out and tell all the students that if they vote Democratic they have all their debts cancelled.
The lenders know that enough people will get sidetracked by behavior of the borrowers and lose track of the ball. While everybody bickers about "basket-weaving", "when I was young", "they should have known better", etc., well connected "lenders" not only walk away with all the loot, but charge hefty interest on it too. Then they say they're victims.
This generation of graduates is getting completely screwed.
1. Indoctrinate young people with the mantra that a college education is essential to a decent standard of living. Higher education becomes insanely overpriced due to the easy availability of huge govt backed student loans. Even allow students to 'earn' degrees that are totally unmarketable in the real world...
2. Because of their massive student loan debt, the new grads need to make a decent wage in order to make ends meet.
3. Corporations (who are nearly all solely bottom-line focused), pay the politicians to flood the country with cheaper labor via open borders, more work visas, and more green cards.
4. Johnny or Jane, with their shiny new degrees from an American school, cannot find a job that pays a sufficient amount to service school loan debt and basic expenses.
At least 75% of those attending University or even Graduate School probably shouldn't bother. It'll prove to be a very poor investment. Hopefully, more and more people will begin to figure this out.
Niiice system! U S A !! U S A !!
This is another perfect example of financial innovation. How, once again, do you steal money from people that don't have any?
Just give it to them.
They're encouraged to borrow moar, then earn less because defaulted loans are worth moar. You have to know damn well wall street bets have been placed on defaults. All these lenders will get paid back courtesy of "money" created out of thin air via either bailout or QE, while students (dupes) will be blamed for being "reckless".
the problem is that the middle class will end up paying for it. it is not one group's fault - it is the fault of many and the system is corrupt:
1. colleges/universities charge WAY too much (see no. 2)
2. creditors (gov't funded) have way too much money to lend out
3. students are either too immature or stupid to realize what they're getting themselves into and the ones that do are working the system and realize they will get a bunch of dough for free
I can only argue with one part of that. The middle class is hopelessly "responsible" for a gigantic tab run up by the union of gov/financial predators already. It's impossible to pay back what's already there, so it won't be.
Why I think it's a scam is this; one side of the deal is going to come out way ahead and that is the lenders and what they lent is fraud. They're stealing imaginary "money" from the future and enjoying the benefits now.
Don't forget stupid parents.
Most kids would be better off going to trade schools. No crippling debt going that avenue. There are so many kids with four year degrees (not always in anything remotely applicable in the real world) that its meaning has diminished. A bachelors from most universities is about on par with an associates degree of 3-4 decades ago.
Some trade schools are even crazy expensive now. Why? I think it's because of another govt program skewing the marketplace - the G.I. Bill.
18.8 trillion 18.9 trillion big deal
20 trillion who cares, 25 trillion whats the diff, 50 trillion now we are getting somewhere.....
A trillion here, a trillion there...
Before you know it, you're talking about some real money!
You keep track of those trillions, and those quadrillions will take care of themselves.
Yup. I'm living that life. Biggest mistake of my life was going to college and taking loans to get a degree. I used to work for a corpoartion (ULA). I couldn't stand that the rockets we were launching were used to spy on us and for war around the world (plus I was seeing huge wastes of taxpayers money). So I quit and cashed out my 401k and threw it at my student loan debt. I make less money, but at least my 401k wasn't stolen before I got to 'use' it. I'm over half way to get those loans paid off. I'm hoping to pay them off in 3 years.
Until then, I'll be a slave to the bankers!
Colleges and universities are scamming the system like every other industry, except that they use witless teenagers as pawns and turn them into debt slaves. If the schools were all that great their various departments could compare better employment rates. Instead they use the lives of young Americans to fund their own cushy jobs and pointless courses.
These schools should be required to produce a record of gainful employment for at least half of the graduates in each department, or refund the tuition. Also a requirement to advise the student of the dismal job market in a given area. That should weed out the administrative hangers-on of stupid courses that sound interesting at parties but have no chance of a job in the real world.
The system as it stands now is parasitic and is warping our social demographics. Graduates cannot find work in their chosen fields of study, take lower paying and completely unrelateed jobs doing anything, can't get a decent start in life, postpone marriage, and on top of it all they remain debt slaves for decades.
Meantime the schools are raking in the money faster than they can count it, riding the next generation like pack mules.
Princeton University put out a study three years ago that indicates that over half of Community Colleges & Universities in the USA will be bankrupt within the decade, and that tertiary education would fall into control of the Ivy League schools rendering lesser known schools as defunct in the process. Just like the TBTF banks, so it goes with tertiary education. M&A in the education sector is happening as we write here.
Structurally, they have foisted neo-feudalism off onto society, but they are calling it 'democracy' so we don't complain out loud in a public place.
Having watched this charade for some years now, I came to the same conclusion within the last few months. The largest schools will be just like the TBTF banks.
Thousands of lower-tier schools will go out of business.
I remember a day where if you borrowed money you had to show good collateral and ability to pay off.
I also remember taking 5 years to get thru school as I had to work and I took minumum class loads.
Work is a 4 letter word--we have enabled people to sit at home--some want to sit at home, some actually want to work but are so mentally beat up.
When I was a kid I can remember my parents dressing up to go beg the banker for a loan.
You basically had to prove you didn't need the loan to qualify for it in the 80's.
Chump change... or is it change for chumps?
You too could qualify for a repayment plan that makes your monthly payment as low as $0.00/ month with a balloon payment of $0.00 and an average interest rate of -4%.
Congratulations on your overall failure in life.
Taxpayer, Thanks for helping out the kids.
Hmmm. I wonder if any of these graduates can re-handle a maul...Winter is coming..
I doubt they could figure out which end of the log to hit it with.
people in general have no idea what a maul is
https://en.wikipedia.org/wiki/Splitting_maul
Sure I do. I'm going shopping at the maul.
It won't cost us anything, our tax dollars were spent long ago. Our grand kids on the other hand are another story. But hey, who cares? We'll be dead by then. It's their problem.
Hey I have an idea!! How about we charge every corporation using foreign labor or foreign workers on visas? We can send Apple the bill for 200,000 students in lieu of the 200,000 Pacific Rim workers that they use to build I-phones.
For years and years, American corporations demanded degrees and yet- they don't want to pay one thin dime for anyone's education. They just want the finished product for free. It's one of the greatest scams. They wanted free trade too- so that they could exploit foreign labor pools- and their lobbyists and politicians got er done.
Now the great socialist Obama wants to forgive the debt and screw me with it? Fuck oh dear this country is screwed up.
Hey, at least we get to look forward to thre prosperity that will come along thanks to the TPP.
Teeming with excitement here. Really crossing my fingers that my H1B TPP replacement has a wicked good curry recipe to share with me as I train him/her to do my job for half the pay. I am just not that great with curry but love the stuff.
My brother in law is a Boeing engineer and he sees the writing on the wall. Boeing has been hiring Chinese workers with their shit engineering degrees on visas. They pay them 1/3 to 1/2 of what he is currently making.
Margin expansion- that is all bean counters and corpoations care about.
I like the spirit of your idea but it's incongrous. Apple should pay for the college education of 200,000 American kids when they're utilizing uneducated Chinese factory workers/children instead? Seems like a huge mismatch there. If their factories were in the US would they require an electronics degree to work the assembly line? Doesn't seem like it, but I don't really know either.
How can a society that DOES NOT PRODUCE (manufacture) anything (besides weapons), CONSUME?
Hmmm... I wonder what is coming down the pike. Are the Chinese going to outsource their factories to America one day. I think they will. But it will be a very different America to the one we see around us, today!
Debt pays? Who would have thought......
College is a right, or so I'm told by some bearded kid in Williamsburg.
You guys have to make up your minds. In some threads, it's all, "yeah, fuck the bankers, don't pay, have a jubilee!" Then when that happens, it's all "lazy millenials, fuck Obama, people need to pay their debts!"
It would be nice if you picked a point of view and stuck with it.
Oh, wait, most of you have: it's the point of view of "I hate everything and I also hate everyone who is not exactly like me." Enjoy the rest of your life living like that!
I look forward to hearing again about how free college under the GI Bill for the so-called "Greatest Generation" wasn't an entitlement and it was the Free Market and the American Way, and about how kids these days are just pussies and don't know how to do anything and don't want to work.
Look, anyone with half a brain knows the government fucked us over. We know anything they touch turns to shit therefore, I do not engage in that hate each other game created by our government.
It's all one giant crime scene with the governments fingerprints everywhere. When we limit government, if ever, we would all be a little happier. Until that day happens, we are simply on an elevator which can only go one way.
The university con needs to be reworked. The debts need to be forgiven, but not repaid by taxpayers since it is onerous debt issued by government. Starve the universities until they start laying people off and stop construction plans for their guilded walk ways to the English Dept. Academic gravy train, now copied by the ACA.
exactly - the debt needs to be forgiven and the univerities need to eat it...
And the predatory lenders. FFS
And stay the hell off my lawn, you damn kids.
How did you get here from the huffingtonpost?
The jubilee isn't happening. What Obama is doing is shifting responsibility from the borrowers to the producers and thereby getting new loyal voters. I don't see how this basic fact has escaped you. Furthermore, the more the national debt rises, the worse the purchasing power of the dollar gets. At this point, the game is over. Yes, the dollar is the cleanest dirty shirt, for now, but the counterparty risk is overwhelming since the govt has tied the banks to its umbilical cord. Finally, does the word moral hazard mean anything to you? How would you feel if you worked your ass off to get ahead and then someone just leveled the playing field with people who haven't taken any personal responsibility for their families or economic decisions?
"point of view and stuck with it."
Fuck you. I do what I like. Tomorrow maybe I don't. I got frredums!
My girlfriends piss broke sister with 2.5 babies (2 were out of wedlock) pays $1 a month towards her $18,000 student loan balance because she is unemployed and on WIC/Food Stamps. Never going to have a job for the next 1.5 years with the current baby.
It's your choice that she's your future sister in law. You might have better luck writing to Dear Abby about that than complaining about it here.
Dude you might try more fiber in the morning, that may help with your crankiness?
She's a breeder, I'm thinking he's going to be baby daddy #4.
Were you near that bomb that went off in your avatar? Your mind seems to be irradiated.
Fedgov pays her to crank out 'illegitimate' kids. That is her job...
And a crippled one is like hitting the friggin lotto. Got a neighbor who has been squatting for years who is riding said situation like a mofo. Turned her house into some sort of non-regulated half-way/flop house as well. What I do give her credit for is knowing how to use the system against itself. She's a pro at that. White trash though. Through and through. Just a matter of time before she gets some sicko coming through her house. I've already warned her of that (plus a briefing on castle doctrine, stand your ground, and a few other gems).
Sooo... cigarettes, booze, meth, coke, while pregnant will result in a really screwed up child which will then result in mo' money from the gubbermint!
That behaviour unconsciously is repulsive enough, but don't think for a minute that many of the trashbags out there haven't figured that angle out...
The Fed handed out $16 trillion in secret bailouts. Why should US students not get $100 billion of that free money?
Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts
http://www.sott.net/article/250592-Audit-of-the-Federal-Reserve-Reveals-...
Free money? ... Dude, start paying attention. Idjit
It's not really free, they have to pay someone to type all the 1's and 0's into the computer
No so loud.
Don't you know it's all the unions fault, well,, combined with the fault of govt workers benefits.
Next we will get another article about how a college education is not needed. You can get a jump up by avoiding college and starting to compete for work with the illegals right out of high school.
And those secret bailouts are in addition to the theft of wealth that has been occuring by the jew bankers (headed by the Federal Reserve private corporation) since 1913. They want it all.
Exactly. What is everyone worried about. We are #1 exceptional reserve currency of the finest joo confetti ever printed with some bad ass .mil killers dying to protect it.
Debt has no meaning for Americans.
@justobserving: Well said. It's a drop in the bucket compared to how much this nation wasted. Trillions....smh
Laura Strong, a 29-year-old in suburban Chicago, owes $245,000 on student loans for the psychology Ph.D. she finished in 2013. This year, she says she hopes to earn $35,000 working part-time jobs as a therapist and yoga teacher.
Where in the hell did this woman 'finish' her "Ph.D?" At some Corinthian or other bullshit online school? Unbelievable...
I think I'm gonna major in bigfoot and chupacabra studies. Maybe mix in a little bit of homeopathic medicine and tie it all together with astrology. Wonder if I can find a part time job making 35k doing any of those things. Or maybe I have to find bigfoot first, and cure his bunions before I can get the big moneyz.
No kidding. This lady can earn a Ph.D, but then can't manage to earn more than $35K/yr in a big, expensive city like Chicago?
I'm sure she could, if she'd consider a different form of yoga...
Shhhhh, cash only.
Realising that college was not for me very early on and giving it a pass, I have no experience in this area. Would someone please enlighten me ... is passing a basic math course a prerequisite for a psychology Ph.D.?
I know youre being sarc. Anyways, a Ph.D in Psychology requires many statistics classes, so that way the student learns how to manipulate and fudge data to show the desired result. Sound familiar??? The new scientific method is having a conclusion first, than manipulating data to show evidence to prove the foregone conclusion.
As for economic literacy, it's not taught.
Yes - sarc. Thank you for your insightful comment. For whatever reason your up/down arrows are inactive .. so +1 from here.
it was a for profit school. says so buried in the article. shows what a dolt she is. usually you get PAID to be in a PHD program.
The article references "Argosy University" a for-profit school; which means the school has an army of education "consultants" who are paid commissions for every sucker, er, student, to sign up for a degree with conveniently offered financing.
29 is in the peak sexuality window for women. If she switches to porn, not counting female viagra she's got 9 years come out ahead as an entrepreneur sex therapist.
Yoga...
It will all be covered if the Libs get more in power...its socialism at its finest....pay me for 8 years of partying and hooking up....and cover my birth controll too...
Debt isn't slavery. Debt is money. Debt is Freedom !!!
The next step will be loan payment forbearance so long as student debtors put in the requisite hours in community service on behalf of the politically acceptable nonprofits, and sign over their absentee voter form to their "loan manager' at the appropriate times.
And refrain from potentially "harmful" speech.
And hand over any guns in their possession.
And hand over their passport and don't try to leave the country.
Wife has about $300k in debt for medical school. Just went through 5 years of residency and fellowship. Starts her nice $250k a year job next month but up until now we've been on the IBR repayment plan. We file separately so my 6-figure salary doesn't bump the payment up... been making payments of about $400 a month now for a few years. Going to pay it off in about 3 years though once she starts bringing home the bacon.
Have go work for a few years at an Obamacare clinic. The loan repayments are up around $40k/yr, which is not life-changing, but the work is very undemanding and the hours are easy. Great bennies, too. Good way to unwind after the med/residency sleep deprivation years.
So this money that was spent by students went to who exactly?
And ultimately the money benefitted who exactly?
So was the money/debt for the chilluns or the chosens?
When you provide incentive for people to do things, they tend to do it. What a shock.
In general I am in agreement with this. Impoverishing young people is not working very well for the economy, and having old people retire with student loan debt is obviously not helping anyone. The issues are: who should suffer when a student's future income doesn't justify his educational expense? How much should society invest in student education? Who can best allocate educational resources (investment)? Right now we have the worst possible system (as usual) in which the government guarantees the loans, but the private market makes the loans. What incentive is there for a private lender to evaluate the student's ability or willingness to pay back in the future if any default is covered by the government. Maybe if the first x% of losses are borne by the lender it would persuade them to exercise some due diligence. I also like Obama's plans to make schools more responsible for graduation rates and future student earnings.
"I also like Obama's plans to make schools more responsible for graduation rates and future student earnings."
Yeah, because unlike our public school system colleges would never ever graduate people just for the sake of graduating them.
The newly-graduated PhD in Psychology did not take out that $250,000 loan. You and I, as taxpayers, did, and no one asked us jack squat beforehand.
Well boys looks like I'm gonna educate the shit out of myself. School cost too much, so instead I went to work, I busted my back, then my ass to become a 80k year worker... I put money away, I have shit benefits, I work 60-80+ hours a week... But if I would have gone to school I would have starved and likely never found a job this good. If, in a few years things go south in my industry I could be let go... No education, but significant experience is all I will have to work with.
I hope the HR director understands a seasoned worker is better than 3 BA's fresh out of college with a major in transgender underwater basket weaving.
Actually there is a degree in underwater archaeology. They study ancient shipwrecks, how they were made, and what their cargos were. It is fascinating but something you might go back to school to study after you have retired from a productive career.
Put it all on Uncle Sam's card. Blank checks for everyone.
Just wait: 60 year olds will retire by going back to college. It's better than going to a nursing home. And you can live on debt. Go to maybe 1 art history class a semester. Enjoy life. When you "graduate", you owe nothing.
T
LOL. The logical progression will be elderly people with dementia/Alzheimer's taking full course loads, while their unemployed younger family members somehow drive $500/mo leased vehicles and always have the latest iphone.
OBlahblah is such a loser....could have put TyroneBiggums in there and we'd have been far better off.
I have never seen a politician give away more of other people's money than Obama.
Obama just needs to cut the military budget in half and every US citizen can study until s/he becomes a pensioner ...
So you "earn" a PhD from a "for profit" institution (they all are), enjoy the social status of being a PhD, then "follow your heart" to a yoga studio where the work you do has absolutely nothing to do with your major but the fringe benefits are nice... Which also lowers the amount you have to pay for your PhD.
Looks like I'm the dodo for changing my lifestyle to accommodate going to a 2 year school while working before transferring to a private 4 year with a ~3.9 getting scholarships and focusing on academics but still needing to take a minimum of loans that I'm currently paying off at double speed because I selected a major and minor with care. Glad I'll also get to subsidize the dreamers, that makes sense if you're a divisive jackass.
When I retire I'm going to become a fulltime student. 3 PhD's is my goal. (one in economics so heads up professor you got a disruptive student headed your way)
It's my retirement plan, suckers.
You beat me to the punch, Zeus. Except, what's with the PhD? That sounds like a little bit of work and bullshit. I'm thinking Interdisciplinary Studies, something I don't actually have to show up for or get grades.
In ObamAmerica, responsibility is for suckers!
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived,
Solution: Stop naming sources!
Need an Answer,
So if one needs only pay 10% of their discretionary then can they buy a nice car, home, expensive food etc. so that their overhead is so high there is very little discretionary left?????????????????
Are there limits to how much they can spend on overhead to purposely lower discretionary? Anyone know?
the repayment plan based on income uses the borrowers adjusted gross income from their tax return to determine their monthly payment. one has to be making almost nothing for this 300 month no pay plan.
there is a calculator the borrowers can use at studentloans.gov that calcs the amounts. need to have an account to use it. my son has $12K of debt and as long as he makes aig of $10Kor more he is paying something and amortized over 10 years, not the 30 yr nonsense if you are making $0.
Guess there is no such thing as default with these loans, as 10% of discretionary is nothing.
The pentagon has 1.2 trillion dollars missing. Donald Rumsfeld, the day before 911. hmmmm.....
No one brings that up anymore.
this is nonsense. all of this money that is leant is printed out of thin air. the government is the bank. the interest rates they are charging are a rip off . the amounts of interest that the preforming loans will deliver will far outweigh any loses.
and please, just how many kids that have gone to college and have debt do you think want to earn nothing for 25 years so they can have a $0/ mth payment on their student loan?
in the grand scheme of $200 trillion of debt obligations for this country, this like the $1T of auto loans and $1T credit card debt, is noise.
So one gets an 80,000 a year job which equates to roughly $4,000 a month take home. Then has a 2000 a month mortgage, 500 car payment, 800 month food and utilities and a child to care for. So maybe there is 400 left as discretionary. Could that person pay $40 a month for 25 years @10% of discretionary?????????
no. its based on your loan amount and adjusted gross income. nothing to do with discretionary income. in this case where there is good income the payback plan is based on 120 months and the loan balance. this person would pay back the entire loan + a ridiculous amount of interest the gov is charging for these loans
Student-loan backed paper has the same real world value as fiat settled gold futures... LOL
It s another way of financing the invasion of America with the revenues of Americans.
Hey kid, if I have to pay for your college through taxes, then you can work for me for minimum wage for the next 30 years. Makes sense to me.
Our radical, activist anti-president is at it again. All part of his sinister plan to Fundamentally change and destroy America using the well-proven "divide, conquer and destroy" strategy. We might survive it if we can get through the remaining 17 months left of this presidential non-sense. Otherwise the next president (will not be Clinton) will be helpless to turn this ship around.
is ti just me or does higher education seem to be becoming a backdoor/stealth means of progressive taxation? think about it - they publish their "list" prices that are absurd on the surface (like hospital "charge masters") then dynamically scale the "real" # to the parent's wealth and/or income! now, in addition we have a generation whose lifetime earnings are likely to occur under this and I (for one) can't help conclude that while it may not be their intent (though fwiw I think it is) the net effect of the math is indistinguishable...
Why is this guy still president? Are we letting him stay on for comic relief?
Say, this could get me a few years closer to retirement. Take out a shitload of student loans and . . .retire.
Yeeeeeahh !!
Obey and become slave for free !!
My payment is zero! I can't get wcreal job or I will have to pay student loan and I'll lose EBT benefits.
I am in this underground economy.
Whats the difference between 18 trillion an 18.1 trillion anyways? Obama has gone way beyond free phones.
I've posted twenty times on this. If you make over a certain amount per year you are not eligible for anything. My daughter pays $2000 per month because she makes $100k. She is not even allowed to deduct the interest. This is nothing more than vote buying and making the less successful dependent on government... all nothing more than wealth distribution. Let borrowers deduct the full interest and the government will save billions by keeping people in the system... paying the money back.
You have to be a super idiot to keep submitting to earnings confiscation all your life just to feed the socialist collectivist redistribution and vote-buying fanaticism of the current era world-wide.
You cannot escape it when you start your work life,
BUT
escaping this parasitism should be every intelligent person's obsession until freedom is attained.
The gov't figures that you can't buy a house with your current school loans.
So they have the bright idea of replacing that smaller amount of debt with an even larger loan like a mortgage.
Try to kill 2 birds with one stone to save the economy...
"student debt relief" is just another way of saying"
"lets stuff more "free' taxpayer money into banker pockets"
Please flip these charts upside down. Its going the other way...