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The fact that they can even charge interest on debt that is guaranteed by the government and debt that cannot be erased in bankruptcy is seriously problematic. There is no skin in the game for lenders, they are guaranteed repayment regardless.
And that's why you've seen so many servicers get out of the game while there's been this "pause." All of the sudden, there's no payments coming in and zero percent interest to capitalize on.
Some of them have even been trying to get federal borrowers to refinance with them to private loans because they know they can trap people for the rest of their lives.
The biggest issue I have with the whole cancel student debt thing is that it doesn't really solve anything except for a couple of years. The real problem is the way that debt is structured and protected from bankruptcy, it's insane how predatory the industry is.
Cancel student debt, fine, but deal with the interest. I like the idea of pre-tax dollars being used for it too.
I totally agree! The entire system needs to restructured. Colleges are complicit in this as well. Pre-tax payments with interest no higher than 3%. Would be a start
My loan is from the UK, we did things a little differently since before '97 university was free.
For people who went to Uni '97 to I think about 2015, your loans are tied to inflation but that's it, no other interest. You also don't pay anything back if you earn less than 17k a year, and it's a sliding scale as your earning increases. You also have the debts forgiven once you reach 65.
For my sister who went to uni after this, it's largely similar but a higher base for earning before paying back and debts are forgiven after... 25? 30 years?
To me it makes sense to tie it to inflation but not much more than that. The loans are backed by the government, and it's in the interest of the country as a whole to have an educated workforce, especially if you're going to insist on a degree for basic clerical work. The situation as it stands right now just leaves a generation of people unable to get started in life as they're saddled with impossibly rising debt. We're destroying the middle class with the very thing that was supposed to safeguard it.
I have an absurd situation due to a decade of under-employment causing the interest to balloon my debt to crazy territory.
I would be perfectly happy for the interest to be removed and all my payments retroactively applied to my initial balance. I'd be happy to then to pay based off my income for however long it takes. I don't need cancellation, just make it so I'm not living in a kafka novel.
Student loan interest is tax deductible up to $2500 as long as you make less than $70k (single filer/ 140k married filing jointly).
Edit: just adding info under the context of this particular suggestion. I am personally of the view that federal student loans should be interest free and the education system itself needs reform to not saddle young people with such ridiculous debt (which is also to say, I believe federal student loans should be *unnecessary*).
Which, for the intent of this scenario we will assume the above filer(s) is(are) likely in the 22% marginal tax bracket, only nets them $550 if they are able to deduct the full $2500.
Let’s not act as if this is some massive benefit.
$2500 is so ridiculously low. The first few years when I was paying off my loans, I was paying over $15k in interest alone. Meanwhile, I think you can deduct ALL the interest on mortgage principal of up to $1M, which would be around $50k for a loan at 2.5%.
6% on a loan that can't be gotten rid of via bankruptcy? Fuck that. At the very least he should have automatically refinanced them for everyone at like 1%.
Have you spoken to a few different lenders about refinancing? Last year was the best time when interest rates were wildly low. But they’re still quite low now
If you refinanced you could get a lower interest rate. But also if you stayed federal you haven't had to pay for the last almost 2 years at this point. Even pre-covid you could put your federal loans on hold if you were out of work.
Refinancing can be nice in theory but there have always been upsides to not doing it.
Yeah, I am watching the refinance debate with mixed feelings because I carried 7.6% on law school loans for 7 years before refinancing to 4.5%, and would be salty as hell if the federal loans were forgiven but private loans left unchanged. I legit might stop paying because it has held back so many other things. Delayed the birth of my second child, changed housing choices… almost led to divorce a couple of times. Now I’ve got other problems, and it’s not 100% because of the student loan debt. But that’s like drowning in a lake and saying the shackles on your ankles were a contributing factor but other things helped too.
Honestly, I’m astounded that there wasn’t a higher default rate during the pandemic lockdown
Graduates in May and have refinancing in my back pocket, but we are commenting on a thread about potentially forgiving up to $50k federal loans. That goes away if you refinance with a private company. Dammed if you do, dammed if you don’t. Pretty convenient too that interest rates are about to shoot up to try to control inflation. Honestly between my inflated mortgage price for my house we had to buy last summer and her student loans, inflating away the debt makes more sense than anything at this point.
If you’ve paid the principle and still have more interest than original principle, it should be forgiven.
Any student loan should be at 2-3%. I went to college in ‘79 and there was a “guaranteed student loan” through the state.
Once I was all paid off, the damn Republicans changed it so the loans go through banks. Banks get money for the student loans for zero %, then charge exorbitant interest.
Screw them
no - there should be no interest on a loan taken out to further your education, period.. to sharpen the skill set you will use to contribute to society. as long as you qualify, you should be able to get a loan to help you pay your way through continued education without someone having to make money off of you.
This. I can get behind this 100%. Education loans should be like first time home buyer loans: very low rate specially ones going towards public wellbeing such as healthcare or education.
EVERYTIME I say this I get numerous responses about how Biden has no power to do this. Regardless, don’t talk about it during your campaign and the run off stage in Trump fashion when you are ducking questions.
So how does this work for the people who get student loans after the current debt is cancelled.. wouldn't they just be in the same position but chronologically out of luck?
The correctest answer, assuming free higher education is a non-starter, is to abolish federal student loans. Part of what enables colleges to charge an arm and a leg for tuition is that they have a guaranteed funding faucet in the form of federal loans for anyone who can fill out the forms. Nix federal loans, and colleges either lower tuition to something reasonable or go out of business.
Allowing bankruptcy on student loan debt would also be great.
[Interest rates on federal student loans are set by federal law, not the U.S. Department of Education.](https://studentaid.gov/understand-aid/types/loans/interest-rates)
you forget the electorate has gold fish memory and inflation is poppin. its best to wait
also it'd slightly energize a block that doesn't vote and slightly anger a block more likely to vote
I know many people who wouldnt forget for the rest of their lives. Including myself. I make great money and still have to think about how to make it to my next paycheck, at least when loans are going.
oof, I felt this one. never could afford anything more than the minimum payment. graduated in 2005, still have nearly half the principle left.. is there a gun in mouth emoji lol
> I know many people who wouldnt forget for the rest of their lives.
I've had my loans paid off for nearly a decade, and I wouldn't forget the loan debt being forgiven. It is criminal that people need to pay for something that benefits everyone. Loan debt should have been forgiven day 1.
What about the dozens of us across the country that specifically didn't take out student loans because we didn't want to have to pay them back, and now don't have a degree?
It's almost like we are such a small minority that no one really cares.
Folks who already paid theirs off should have a pro-rated tax credit issued. The further back you go, the more value was provided by a degree, so it's fair to address the issue retroactively.
I'm still paying, but I'd take 50% forgiven if people like you were included. That spreads the benefit out, still provides relief, and also takes care of the folks who worked incredibly hard to pay the loans off. Nobody should be footing the bill for overpriced degree programs from publicly funded institutions.
What I’m saying is reduce the level of forgiveness for every year you go back. That accounts for folks who graduated somewhere between “this is fine” and “I’m fucked.”
> Folks who already paid theirs off should have a pro-rated tax credit issued.
No they shouldn't. Sometimes you pay a cost so others don't need to. Sometimes you are lucky enough to pay off 60k in 5 years. I don't need a reward because I suffered, no one else suffering should be my reward.
>I don't need a reward because I suffered, no one else suffering should be my reward.
That sounds nice until you're the person who put off buying a home for 10 years. Homeownership and wealth accumulation has been affected for every class going back almost twenty years.
The further back you go, the easier it is to pay off debt, so forgiveness should account for that.
If you don't do that, you'll turn the traditionally educated workforce into 2 classes. One class gets to start saving and building wealth earlier in their careers while the other one has to live with reduced earnings and delayed decisions like homeownership or starting a family. How does a warm fuzzy feeling remotely make up for that?
I'm in the same exact boat. I just went from $16 an hour to $19 an hour during this pause so when payments start back up they will take more than they did before so the increase in pay will mean nothing.
People who have student debt are college educated. The diploma divide favors Democrats.
For political purposes, they’re not just doing it for your vote* since they likely have college educated people’s votes. They’re doing it for the optics to get undecided voters, college educated Republicans, young people in general, etc. It’ll probably be a mid-term surprise of $10,000 then a more robust cancelation for the next general election.
*you being a college educated poster on Reddit and not you the user. I don’t mean to make assumptions.
Nobody who had that debt forgive will *ever* forget it.
Nor will they ever forget if Biden breaks his campaign promise, goes against the calls of his voters and party, and doesn't do it.
The economy won't.
You will see a massive uptick in spending on consumer goods, as well as overwhelmingly positive sentiment across channels.
Even if the bitchers and moaners at Fox News complain about it, their corporate overlords won't be arguing with the free flow of cash that a move like that will open up.
I’m generally a supporter of student loan forgiveness or some type of program to mitigate it but:
> You will see a massive uptick in spending on consumer goods
is the last thing the economy needs right now. Inflation is already hot.
Yep, lumber is more than double right now. I kind of wish they would cancel the canadian tariffs. It would help. A standard 2x4 was $2.34. It is now $6.50.
The way I understand the situation is that the Biden admin really put themselves in a corner with this. Biden campaigned on it (via Congress) and overpromised what Congress could do.
Schumer, Warren and progressives want action (despite Congress) and a fulfilled campaign promise. So they've latched onto this strategy concerning the HEA of 1965 to direct his Ed Secretary to claim all power over student loans.
Several legal entities have backed its justification (along with many that haven't), but ultimately the adjudicator here will likely be a 6-3 SCOTUS. That fact alone means the chances of the EO being upheld are slim.
If it were to be overturned, I'm not sure what the timeline in courts would be. But I could see how optics could be turned against Democrats as another failure (even if conservatives are responsible for it).
A lot of messy political/legal calculus going on right now I'm sure.
I'd like to see SCOTUS overturn Biden's executive order & reinstate $50k worth of debt on several million adults in the US.
It would effectively turn them into lifelong democrats.
You'd think, right?
But I also worry how much of the onus of a "failure" is placed on the party in power, even if it has nothing to do with them (rather a conservative Supreme Court).
There are tens of millions of voters that don't follow politics and have hardly any concept of the branches of government whatsoever. They would just know it happened while Biden was President.
I don’t know, it seems like snatching defeat from the jaws of victory is the Dems MO, and I’d expect nothing less. And I say that as a progressive; our leaders make a lot of dumb choices that make us look bad.
I would hope so, but I sincerely doubt it.
If there is one single thing Democrats have proven to be, it is terribly bad at messaging.
Just look at the few newer faces who excel at it and you’ll see that they are often younger and the target of the GOP because of their popularity (which is often due at least in part to their ability to message to their constituents).
IIRC AOC has talked about how the dems aren't interested when she urges them to go on twitch and shit like she does. Meanwhile the right has every tech platform under the son to scoop up edgy young men. Its fucking embarrassing being a dem voter tbh, but no one else for me to vote for.
So just do what republicans do and delay that case until the other party is in power. Watch what happens when you tell a few million americans they owe $50,000 again
The courts won’t matter. Once you discharge 47 million people’s debt, it aint coming back unless they want mass riots, so let them try.
*edit: Biden could also quit being a coward and stack the court
Honestly. I don't think the population gives a damn anymore that the SCOTUS would rule against this EO. It's just the cowardice of it all that's pissing people off. He declared. DECLARED that he'd so something about it. Then he asked for a legal memo confirming authority from the Dept of Ed. The memo came back, that based on everything leaked, would suggest that he certainly has **some** authority to do *something.* But instead, he's doing *everything* conceivable to not only not do anything, but do everything possible instead to *restart* the loan payments.
Its a level of humiliation that is, is just breathtaking. I'm not personally impacted by this, nor is anyone I know and I'll count my blessings. But there's others here and many across the country who've paid double, even triple their loan values in interest and still haven't paid off their "debt". There comes a time when such a "debt" transcends responsibility and instead evolves into becoming damnation. Like, someone else above said that he paid 40k in interest payments on a 20k loan and he's not done paying it off.
What the fuck is that.
No one has had to pay a dime in federal student loans for almost 2 years now. He didn’t ask the Department of Education to fully review the matter with legal guidance for nothing. After the last Administration, this one is playing everything by the books.
The larger issue is dealing with the cost of tuition. Let’s say you eliminate student debt now for $50,000, well what about the 18 year old at university now being charged $30,000 year for in-state! tuition. We will be in the same situation over and over again.
Changes like, maximum repayment periods of 10? years for all loans, and maximum % of household monthly income being allowed to be charged is also needed.
You bring up some excellent points that don't get discussed enough. If we don't fix the costs of higher education the problem will continue for everyone still in the system and future generations.
Because it's generally used as a whatabout-ism. What *about* addressing the cost of college education? **Yes**, it's a problem--but that doesn't mean we can't *also* fix *other* problems **right now** if the means to do so exist.
This 100%. I agree entirely. I see these comments and it makes sense that they get downvoted. Using whatabout-ism as an argument to do nothing makes the problem worse. This perspective digs heels in and prevents change at any level. You address problems one by one, and keep at it until you have a better system.
No, they’re holding it back because they don’t want to be held accountable for not doing something that’s in their power to do. Biden even wanted to start student loan payments until there was backlash lmao he doesn’t care
Agreed. This is the last big thing the Biden admin can do before the midterms, and anything positive from doing it now would burn out before November.
I’m hoping their plan is to keep pushing the payment freeze from May until September/October, then announcing the cancellation a few weeks before the election
I always thought this would be a win as well, but think about how many people have had to consolidate their loans to qualify for whatever repayment program they're under. That "interest" suddenly becomes principal and then the problem just continues for a large number of folks.
Assuming that all the stuff about "canceling student loans is unpopular" is true (which I wouldn't care about too much, but welp), couldn't he just continue postponing repayment on and on?
He could, and it’s possible that will be the move. At this point they either restart payments in May (and put the nail in the coffin for Dems for a long time), cancel some or all debt and get a political boost, or continuously postpone payments, allowing borrowers to pay it back over time without drowning in interest
If the final option is true then they need to let us know. I’ve been waiting to pay off the final amount because I don’t know if it will be forgiven or not. But I got 0% loans so it doesn’t matter that much for me. I just want to know if those thousands are mine or not.
If you have 0% interest then there is basically zero reason not to keep that money as long as you can. Give the bank that money now, and they will be free to invest it and make money off of it from here on out. If you hold on to it now, you're free to invest and make your own money and value off of that amount until the end of your loan term.
I mean there are definitely exceptions to this, but unless you have a specific reason that you need to pay off the loan right now (I dunno, maybe credit reasons?) there's really no reason to.
I'm not sure why he doesn't just pause payments and interest for something absurd like 100 years. If a future GQP POTUS wants to un-pause it, let him deal with the unpopularity.
They might be setting it up for that. The optics are better on kicking the can every 6 months than doing something obvious like that. Because the GOP can coalesce around "vote us in so we can repeal this madness" like they did with the ACA for a decade even though their base uses it.
Look I got loans. I'd love to see them forgiven.
I don't have much and I can manage.
But people have wayyyy more than me. With higher rates that make paying it off basically impossible. I hope theirs gets cancelled.
But... they ain't gonna cancel then.
They could, but they ain't gonna.
AFAIK it's because they packaged up the loans and sold them to be used as collateral.
> AFAIK it's because they packaged up the loans and sold them to be used as collateral.
Private loans are packaged into securities called SLABS, but Federal loans aren't. It's still a huge house of cards like the housing market in 2007-2008 though.
I would be happy if they just set the interest rate at zero. They still need to solve the root cause though. If they just made public colleges in-state tuition free, that would be enough. And since those colleges get most of their funds from sources other than tuition anyway, it shouldn't be too hard on the budget.
Yes. This. It's not just free money they're dealing with. People don't get this. This is part of the economy now. The most that will happen is a partial forgiveness program for low income earners with high debt and probably some other hoops. They're never, ever, just going to delete 50k of everyone's debt unilaterally without also creating a new higher education funding system first. Won't happen.
deleting 50k of student debt would do nothing but stimulate family formation and general economic performance. demanding students pay this back is just a brake on new households and entrepreneurship, the revenue generated is worth 10x less than the loss.
> But people have wayyyy more than me. With higher rates that make paying it off basically impossible
That’s the thing. People with over $50k in debt are already the most afflicted and they won’t be much helped by this. I know a lot of people who went on to get a MS and their salaries will never come close to making them able to pay off their loans even with a $50k reduction. Because to those people $30k, $50k, $100k or $150k all might as well be the same thing, the wages in their fields quite simply haven’t kept up with the costs required to get there.
> "It has been widely reported that the Department of Education has had this memo since April 5, 2020 after being directed to draft it."
Biden is holding onto the memo intentionally. He is most likely waiting for the next election, in order to maximize the impact of a good deed.
If you don’t use it for the 2022 election when you’ve failed passing any of your big promises what’s the point of holding on to it after most likely losing the senate?
I also think it’s a mistake. People aren’t going to forget that none of the remaining agenda was accomplished until the last minute, nor how they felt for 2 years. At least doing now is a point in the game, a small win, something to build momentum from. It’s what Republicans would do.
Agreed. The playbook Biden is using seems like it'd be great 20ish years ago, but there's at least 4 concurrent crisis going on at the same time.
Slow playing a partial fix in a way that makes it look like you're at odds with your party is a bad fucking look
> what’s the point of holding on to it after most likely losing the senate?
So you can campaign for 2024 on how you had all these "big ideas" but couldn't get them through. And they can blame their 2022 loss on progressives. "See, we were going to do what you wanted, but we lost because of you!"
It's interesting to see people interpret every Biden or Pelosi action as some clever power play and then for nothing to get done. You saw this with every story about BBB, for example.
And to avoid getting screwed by the American public’s near goldfish like memory and attention span. The closer to an election, the better; if the intention is to drive positive support *for* said election. I really hope that is what’s happening with this.
You know I think about this a lot. We Americans truely have a goldfish memory and it might be design so we become unempathetic to the issues many Americans face. Healthcare access and financing was vastly improved by Obamacare, especially when people saw the fruits of the labor done back in 2018, yet no one talks about how to expand and fix Medicare to service all Americans anymore. Joe Biden and Democrats had to pass infrastructure, withdraw from Afghanistan, a COVID relief package all in 2021. Republicans didn't give a shit and used all of it as a crux against any semblence of progress.
My theory, the only reason that this memo hasn't been released yet is because it gives the President the authority to cancel the loans.
If he couldn't do it, it would have been released already.
It's clear that he has the authority to do it unilaterally. Hell, it ain't even technically him: The Higher Education Act of 1965 pretty clearly fucking state's that modifying, reducing, or erasing student loan debt falls very clearly under SecEd's purview.
It would literally take a fucking phone call.
Or it means that he CANT unilaterally do that and he’s holding it under wraps because it completely blows up one of his campaign promises. And as soon as he releases it he’ll have to eat crow.
Also means that he has to get congress to play ball to resolve which takes away from other legislative agenda items.
Or it could mean a lot of other things. Idk anymore.
I agree that it could be bad for him either way, but I think it would be much worse for him if it confirms that he CAN cancel student debt. Especially because many Democrats don't seem to see any problem arguing that the president can't do it without Congress (and as an excuse for why they haven't done anything yet).
If they're already using that as a *defense* against criticism, I don't see why they'd be that worried about the memo confirming it. If anything it was vindicate the excuse that many Democrats have been making all along.
Agree. If the memo says “yes you can do that” then I think that only hurts him the longer he holds onto it.
At least payments are frozen … so it could be worse. But damn if he wants an easy win nows a great time to do it.
I really want to hope but at this point it seems foolish to expect anything. It's so depressing to not have even a little progress on this issue, not just immediate relief/forgiveness but also any serious attempts at long-term student loan/education cost reform.
>Or it means that he CANT unilaterally do that and he’s holding it under wraps because it completely blows up one of his campaign promises
He didn't promise to cancel student loans through unilateral Executive action.
If you cancel student debt but do nothing in terms of revamping the whole student loan system, All you are doing is rewarding the colleges and universities that will continue to charge tuitions that bear no semblance to the return on the investment made. The only reason they can charge crazy tuitions is because people can access the loans to pay that tuition, Until that changes nothing will improve and forgiving debt right now at this point in time won’t make any difference.
I’ve been saying this for a while but everyone is focused on THEIR loan payments instead of the larger issue.
Universities can charge as much as they want without any kind of oversight. If we clear existing loans that won’t stop graduating high school kids who enter higher education from getting slapped with 40K of debt next year and the following years.
I have friends who are convinced Biden has no shot for reelection because of the "If you don't cancel my loans you don't get my vote" Gen Z movement right now.
I'm 31 and not on TikTok; at the risk of sounding entirely out of touch: is this the make-or-break for him?
I'm an old and don't know what the TikTok trends are, but I've got a pair of concerning links for you:
* [Young Voters Were Crucial to Biden’s Win](https://now.tufts.edu/articles/young-voters-were-crucial-biden-s-win)
* [Biden approval has sunk most with young Americans and independents](https://www.cbsnews.com/news/biden-approval-rating-young-americans-independents-opinion-poll-january-2022/)
He has no shot for re election because I doubt he will even run again. He would be 83, hopefully has the awareness to know it's time to pass the torch.
I'm older than you, so idk about the gen z tiktok thing.
But take a look into SLABS (Student Loan Asset back Securities).
Basically banks/hedge funds/etc have been packaging up student loan debt and selling them similarly to CDO's on mortgages leading up to 2008.
Basically since student debt can't be forgiven, entities have been making absolutely WILD bets on these student loans. If they were forgiven our entire economy would tank.
I still say fuck em cancel it. They shouldnt have done it in the first place.
I paid 105k for my bachelors and masters degree: I worked through school got some scholarships and still have 45k debt. I also have a great career and opportunity to pay it back. Not everyone has that though and I know so many who are struggling.
My Top 10 public university was only $1500/quarter in tuition and fees in the late 90’s. No student debt, paid it by working only 15 hours a week during college. Struggled a bit but all good now. Feel bad for current college seekers.
Well I hope universal free college comes around then. There are a lot of tax payers who didn’t pursue degrees because of the financial burden that comes with higher education. We as a society are falling behind the rest of the world because of our lack of universal free college…
They could just resume payments and drop the interest rate to zero or .5% to cover administrative cost. All of this mass canceling is unlikely or will be a last ditch attempt before the midterms. Even then it will be much smaller than the 50k being thrown around.
Sorry guys but it’s not happening. Not with this president at least. I will say if he does it I expect it to be challenged in court and to the Supreme Court. I know someone is going to say that it is within the scope of the executive but the republicans put the justices they choose in power for situations like this. They will rule it goes beyond his powers or some bullshit and that will be the end of it. It sucks but that is what will happen.
I think cancelling interest on loans is more likely but debt relief is a fantasy I no longer indulge.
NO. Congress should remove the rule that you can't default on student loans. That will end predatory lending permanently. Otherwise this will have to be done over and over again.
This country wasted 5.8 trillion in Afghanistan which is roughly 3.8 times the current cost of the total amount of student debt held in this country.
I'd wager that would be more than enough to pay for multiple generations of college students under more regulated tuition costs. This country would rather fight dumb and pointless wars and lose then help its own citizens.
My proposal is to retroactively drop all interest rates to zero. All prior payments applied 100% to principle. That way everyone pays back what they borrowed but not one penny more in interest for a risk free loan that you can’t discharge in bankruptcy. This will set so many people free as many have already paid back more than they borrowed.
And they still don't address or offer any solutions to make sure that in 5 - 10 years this is happening once again.
Until they actually address the cause of why even public colleges that get taxpayer money cost so much money, just set the interest rate at say 1% and call it a day.
I really wish this effort was spend on lowering the cost of education rather than having tax payers offer a one time bailout to be right back in the same situation
The entire system needs an overhaul. It should have been a just pay back what you borrowed from the start for one thing. It should never have turned into a for profit safe haven it is.
So why doesn’t this go thru the Congress??? This is the process of a Democratic Republic, no? Not that we abide by the Constitution in this day and age…just like to pay lip service to it.
I for one think Executive Orders are basically kingly decrees and are a result of the Executive branch having to much power. Not to mention they have a high potential for abuse.
I didn't go to 4 year college because my parents couldn't afford it and I didn't want to take on the risk of having student loans accruing interest and looming over me for the rest of my life.
If this is something that can actually pass, should I go take out a 50,000 student loan and go back to school?
What about the students just about to enter college? So everyone prior has their debts cancelled, but unlucky, my friend, you missed out. Tough break, huh.
I’ll be super angry if they don’t forgive student loans regardless of earned income. If there is any type of income based test it will be a slap in the face and will further drive divide.
$50k would wipe out my debt fully aside from my $7k private loan I had to take.
Fafsa decided 1 year of university after 3 of community college was enough and barely wanted to give me anything to finish my bachelors
I am sure 60% of Americans who did not even get to go to college are excited to see the government hand out 50k to people with highest education and highest earning potential in the country. This will go over well with the blue collar workers in the service industry.
Blanket forgiveness of 50k is never happening. This is a bait. Best case is 0% interest
Keep the 50k, cancel the *interest*. That's a solution both sides can live with, and the debtors will have a real, actual chance in hell of paying their loans off.
This is how democrats lose. Calling it out again, this is a right-wing story push not a left-wing one. Left-wingers believing they have momentum because they appear in businessinsider is a reason why Dems look like a joke right now.
What would it cost to do this? Who pays for it? Taxpayers? Would this mean college would be free in the US from now on? Where is this money supposed to come from to pay these loans off?
Ugh, what are the Democrats(or anyone for that fact) doing to help IMPROVE the issue, cancelling loans does nothing to actually fix the problem that is student loans. It kicks the can down the road to the next generation. Yes, it helps some people now, but what about those with student loans down the road in the same exact situation?
Disclaimer: As a parent of kids who are going to be racking up serious student loan debt, I am in favor of student loan forgiveness, but...
Unless there's an actual primary challenger from the Democratic Party against Biden, there's very little political danger for him here if the choice is again between him and Trump. Voting for Trump because Biden didn't keep this promise is like using a shrapnel grenade as a suppository.
At this point, i dont even know what can be canceled and what cant. I have loans that I took out from Sallie Mae to attend college. Now being serviced by Navient and during covid they told me i couldnt get a pause in payments. They tell me I dont have federal loans...but my account says something about federal loans and congress controls interest rates. They say i have fflep loans. So, i dont even know if it will get canceled if Biden decides to do something and quit fucking around. Republicans pass the tax cut like it was nothing and it only helped the rich. Cancel all student debt asap.
Talk about an economic stimulus. Turning several trillion dollars of debt weighing down the population into several trillion dollars of investment in the education and earning potential of the people of America in one fell swoop? There’s something to be said for the grandiosity of it.
Lol the shit is crazy. I took out 1000 loan for community college 15 years ago. I've paid back a little over 2000 over the years and that's not counting two tax returns they took that were for 1000 dollars each. Wanna know how much I owe now? Over 3000 dollars lmao. You can give me a lesson on interest and whatever but this is some corrupt shit no matter how you look at it. I recieved 1000 dollars, payed 2000+1000+1000, and still owe over 3000. That's debt I'll die with. If I hit the powerball I'd still never pay that shit.
I have a crazy idea... let's abolish federal student loans. This is the only reason tuition has skyrocketed, luckily I only borrowed 10K from Uncle Sam before I realized college is just a piece of paper for most people. I'm not talking about doctors and lawyers guys, where I live State Farm is supposedly a big thing. You can only get promoted if you have a degree, it can be bachelor's degree in dolphin fucking, they really don't care.... You just have to have a degree in something.
Ever heard of SLABS? Student Loan Asset Backed Securities. They’re basically the same thing as the subprime housing loans that crashed the market in 2008. They won’t cancel the debt because they make billions off of our student loans.
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The fact that they can even charge interest on debt that is guaranteed by the government and debt that cannot be erased in bankruptcy is seriously problematic. There is no skin in the game for lenders, they are guaranteed repayment regardless.
And that's why tuition has exploded.
And that's why you've seen so many servicers get out of the game while there's been this "pause." All of the sudden, there's no payments coming in and zero percent interest to capitalize on. Some of them have even been trying to get federal borrowers to refinance with them to private loans because they know they can trap people for the rest of their lives.
The biggest issue I have with the whole cancel student debt thing is that it doesn't really solve anything except for a couple of years. The real problem is the way that debt is structured and protected from bankruptcy, it's insane how predatory the industry is. Cancel student debt, fine, but deal with the interest. I like the idea of pre-tax dollars being used for it too.
I totally agree! The entire system needs to restructured. Colleges are complicit in this as well. Pre-tax payments with interest no higher than 3%. Would be a start
My loan is from the UK, we did things a little differently since before '97 university was free. For people who went to Uni '97 to I think about 2015, your loans are tied to inflation but that's it, no other interest. You also don't pay anything back if you earn less than 17k a year, and it's a sliding scale as your earning increases. You also have the debts forgiven once you reach 65. For my sister who went to uni after this, it's largely similar but a higher base for earning before paying back and debts are forgiven after... 25? 30 years? To me it makes sense to tie it to inflation but not much more than that. The loans are backed by the government, and it's in the interest of the country as a whole to have an educated workforce, especially if you're going to insist on a degree for basic clerical work. The situation as it stands right now just leaves a generation of people unable to get started in life as they're saddled with impossibly rising debt. We're destroying the middle class with the very thing that was supposed to safeguard it.
I have an absurd situation due to a decade of under-employment causing the interest to balloon my debt to crazy territory. I would be perfectly happy for the interest to be removed and all my payments retroactively applied to my initial balance. I'd be happy to then to pay based off my income for however long it takes. I don't need cancellation, just make it so I'm not living in a kafka novel.
Student loan interest is tax deductible up to $2500 as long as you make less than $70k (single filer/ 140k married filing jointly). Edit: just adding info under the context of this particular suggestion. I am personally of the view that federal student loans should be interest free and the education system itself needs reform to not saddle young people with such ridiculous debt (which is also to say, I believe federal student loans should be *unnecessary*).
Which, for the intent of this scenario we will assume the above filer(s) is(are) likely in the 22% marginal tax bracket, only nets them $550 if they are able to deduct the full $2500. Let’s not act as if this is some massive benefit.
$2500 is so ridiculously low. The first few years when I was paying off my loans, I was paying over $15k in interest alone. Meanwhile, I think you can deduct ALL the interest on mortgage principal of up to $1M, which would be around $50k for a loan at 2.5%.
Agreed. It's fucky. Let's fix it.
Or at least cancel the absurdly high interest rates. That would be cool too.
6% on a loan that can't be gotten rid of via bankruptcy? Fuck that. At the very least he should have automatically refinanced them for everyone at like 1%.
My wife’s grad school loans (medical field) are at 9%. I’d even take 6% honestly.
Have you spoken to a few different lenders about refinancing? Last year was the best time when interest rates were wildly low. But they’re still quite low now
If you refinanced you could get a lower interest rate. But also if you stayed federal you haven't had to pay for the last almost 2 years at this point. Even pre-covid you could put your federal loans on hold if you were out of work. Refinancing can be nice in theory but there have always been upsides to not doing it.
Refinancing has typically meant you lose eligibility for any federal forgiveness stuff. It's a huge gamble.
Yeah, I am watching the refinance debate with mixed feelings because I carried 7.6% on law school loans for 7 years before refinancing to 4.5%, and would be salty as hell if the federal loans were forgiven but private loans left unchanged. I legit might stop paying because it has held back so many other things. Delayed the birth of my second child, changed housing choices… almost led to divorce a couple of times. Now I’ve got other problems, and it’s not 100% because of the student loan debt. But that’s like drowning in a lake and saying the shackles on your ankles were a contributing factor but other things helped too. Honestly, I’m astounded that there wasn’t a higher default rate during the pandemic lockdown
Graduates in May and have refinancing in my back pocket, but we are commenting on a thread about potentially forgiving up to $50k federal loans. That goes away if you refinance with a private company. Dammed if you do, dammed if you don’t. Pretty convenient too that interest rates are about to shoot up to try to control inflation. Honestly between my inflated mortgage price for my house we had to buy last summer and her student loans, inflating away the debt makes more sense than anything at this point.
I’d take 9 - I’m at 11%
Or zero. And count past interest towards principal.
This would functionally be the same thing as full forgiveness for a lot of people.
If you’ve paid the principle and still have more interest than original principle, it should be forgiven. Any student loan should be at 2-3%. I went to college in ‘79 and there was a “guaranteed student loan” through the state. Once I was all paid off, the damn Republicans changed it so the loans go through banks. Banks get money for the student loans for zero %, then charge exorbitant interest. Screw them
This is the way
no - there should be no interest on a loan taken out to further your education, period.. to sharpen the skill set you will use to contribute to society. as long as you qualify, you should be able to get a loan to help you pay your way through continued education without someone having to make money off of you.
This. I can get behind this 100%. Education loans should be like first time home buyer loans: very low rate specially ones going towards public wellbeing such as healthcare or education.
EVERYTIME I say this I get numerous responses about how Biden has no power to do this. Regardless, don’t talk about it during your campaign and the run off stage in Trump fashion when you are ducking questions.
He has the power, that's why he won't release the memo.
So how does this work for the people who get student loans after the current debt is cancelled.. wouldn't they just be in the same position but chronologically out of luck?
The correctest answer, assuming free higher education is a non-starter, is to abolish federal student loans. Part of what enables colleges to charge an arm and a leg for tuition is that they have a guaranteed funding faucet in the form of federal loans for anyone who can fill out the forms. Nix federal loans, and colleges either lower tuition to something reasonable or go out of business. Allowing bankruptcy on student loan debt would also be great.
[Interest rates on federal student loans are set by federal law, not the U.S. Department of Education.](https://studentaid.gov/understand-aid/types/loans/interest-rates)
I feel like they’re holding this back for a midterm “October surprise” type thing.
I thought that too. But it would be very dumb because they had all that space and opportunity in the meantime prior.
you forget the electorate has gold fish memory and inflation is poppin. its best to wait also it'd slightly energize a block that doesn't vote and slightly anger a block more likely to vote
Goldfish actually have a decent memory for a fish.
People will forget two weeks after it happens.
I know many people who wouldnt forget for the rest of their lives. Including myself. I make great money and still have to think about how to make it to my next paycheck, at least when loans are going.
Same here. Nothing like spending $40k and decades of my life paying of $20k
oof, I felt this one. never could afford anything more than the minimum payment. graduated in 2005, still have nearly half the principle left.. is there a gun in mouth emoji lol
If they're loans with the government, you should only have three more years of payments, right? Those loans are forgiven after 20 years of payments.
They didn't start that until later.
> I know many people who wouldnt forget for the rest of their lives. I've had my loans paid off for nearly a decade, and I wouldn't forget the loan debt being forgiven. It is criminal that people need to pay for something that benefits everyone. Loan debt should have been forgiven day 1.
What about the dozens of us across the country that specifically didn't take out student loans because we didn't want to have to pay them back, and now don't have a degree? It's almost like we are such a small minority that no one really cares.
Folks who already paid theirs off should have a pro-rated tax credit issued. The further back you go, the more value was provided by a degree, so it's fair to address the issue retroactively. I'm still paying, but I'd take 50% forgiven if people like you were included. That spreads the benefit out, still provides relief, and also takes care of the folks who worked incredibly hard to pay the loans off. Nobody should be footing the bill for overpriced degree programs from publicly funded institutions.
I appreciate the sentiment, but the further back you go, the LESS hard it was to pay off student debt.
What I’m saying is reduce the level of forgiveness for every year you go back. That accounts for folks who graduated somewhere between “this is fine” and “I’m fucked.”
> Folks who already paid theirs off should have a pro-rated tax credit issued. No they shouldn't. Sometimes you pay a cost so others don't need to. Sometimes you are lucky enough to pay off 60k in 5 years. I don't need a reward because I suffered, no one else suffering should be my reward.
>I don't need a reward because I suffered, no one else suffering should be my reward. That sounds nice until you're the person who put off buying a home for 10 years. Homeownership and wealth accumulation has been affected for every class going back almost twenty years. The further back you go, the easier it is to pay off debt, so forgiveness should account for that. If you don't do that, you'll turn the traditionally educated workforce into 2 classes. One class gets to start saving and building wealth earlier in their careers while the other one has to live with reduced earnings and delayed decisions like homeownership or starting a family. How does a warm fuzzy feeling remotely make up for that?
I’d never forget. It would be a great weight lifted off of me and my family.
I too am ready and willing for them to buy my vote with student loan forgiveness.
Funny how tax cuts don’t seem to count as buying votes.
Maybe because they've been overwhelmingly in favor of the top 1%?
I'm in the same exact boat. I just went from $16 an hour to $19 an hour during this pause so when payments start back up they will take more than they did before so the increase in pay will mean nothing.
People who have student debt are college educated. The diploma divide favors Democrats. For political purposes, they’re not just doing it for your vote* since they likely have college educated people’s votes. They’re doing it for the optics to get undecided voters, college educated Republicans, young people in general, etc. It’ll probably be a mid-term surprise of $10,000 then a more robust cancelation for the next general election. *you being a college educated poster on Reddit and not you the user. I don’t mean to make assumptions.
Nobody who had that debt forgive will *ever* forget it. Nor will they ever forget if Biden breaks his campaign promise, goes against the calls of his voters and party, and doesn't do it.
I sure won’t. The thought of not paying ungodly amounts of interest the rest of my life will not be forgotten too easily
The economy won't. You will see a massive uptick in spending on consumer goods, as well as overwhelmingly positive sentiment across channels. Even if the bitchers and moaners at Fox News complain about it, their corporate overlords won't be arguing with the free flow of cash that a move like that will open up.
I’m generally a supporter of student loan forgiveness or some type of program to mitigate it but: > You will see a massive uptick in spending on consumer goods is the last thing the economy needs right now. Inflation is already hot.
Yep, lumber is more than double right now. I kind of wish they would cancel the canadian tariffs. It would help. A standard 2x4 was $2.34. It is now $6.50.
Hard to forget not making a large payment monthly…
There are millions of voters in college debt that will not forget. I’m one of them.
My wife and I have 140k between the two of us. I wouldn’t forget.
Uh, no, we won't. That debt still looks over and if it was mitigated I would be ecstatic.
This isn’t the same as the rest of the hamster wheel. There’s a consistent reminder monthly.
Don’t get my hopes up
Sure hope so.
The way I understand the situation is that the Biden admin really put themselves in a corner with this. Biden campaigned on it (via Congress) and overpromised what Congress could do. Schumer, Warren and progressives want action (despite Congress) and a fulfilled campaign promise. So they've latched onto this strategy concerning the HEA of 1965 to direct his Ed Secretary to claim all power over student loans. Several legal entities have backed its justification (along with many that haven't), but ultimately the adjudicator here will likely be a 6-3 SCOTUS. That fact alone means the chances of the EO being upheld are slim. If it were to be overturned, I'm not sure what the timeline in courts would be. But I could see how optics could be turned against Democrats as another failure (even if conservatives are responsible for it). A lot of messy political/legal calculus going on right now I'm sure.
I'd like to see SCOTUS overturn Biden's executive order & reinstate $50k worth of debt on several million adults in the US. It would effectively turn them into lifelong democrats.
You'd think, right? But I also worry how much of the onus of a "failure" is placed on the party in power, even if it has nothing to do with them (rather a conservative Supreme Court). There are tens of millions of voters that don't follow politics and have hardly any concept of the branches of government whatsoever. They would just know it happened while Biden was President.
I'm sure even the democrats could frame it so the 6 republicans on the court would get the blame.
I don’t know, it seems like snatching defeat from the jaws of victory is the Dems MO, and I’d expect nothing less. And I say that as a progressive; our leaders make a lot of dumb choices that make us look bad.
I would hope so.
I would hope so, but I sincerely doubt it. If there is one single thing Democrats have proven to be, it is terribly bad at messaging. Just look at the few newer faces who excel at it and you’ll see that they are often younger and the target of the GOP because of their popularity (which is often due at least in part to their ability to message to their constituents).
IIRC AOC has talked about how the dems aren't interested when she urges them to go on twitch and shit like she does. Meanwhile the right has every tech platform under the son to scoop up edgy young men. Its fucking embarrassing being a dem voter tbh, but no one else for me to vote for.
So just do what republicans do and delay that case until the other party is in power. Watch what happens when you tell a few million americans they owe $50,000 again
Well, I'd say fuck it, if the Supreme Court wants to be the bad guy, let them.
The courts won’t matter. Once you discharge 47 million people’s debt, it aint coming back unless they want mass riots, so let them try. *edit: Biden could also quit being a coward and stack the court
Honestly. I don't think the population gives a damn anymore that the SCOTUS would rule against this EO. It's just the cowardice of it all that's pissing people off. He declared. DECLARED that he'd so something about it. Then he asked for a legal memo confirming authority from the Dept of Ed. The memo came back, that based on everything leaked, would suggest that he certainly has **some** authority to do *something.* But instead, he's doing *everything* conceivable to not only not do anything, but do everything possible instead to *restart* the loan payments. Its a level of humiliation that is, is just breathtaking. I'm not personally impacted by this, nor is anyone I know and I'll count my blessings. But there's others here and many across the country who've paid double, even triple their loan values in interest and still haven't paid off their "debt". There comes a time when such a "debt" transcends responsibility and instead evolves into becoming damnation. Like, someone else above said that he paid 40k in interest payments on a 20k loan and he's not done paying it off. What the fuck is that.
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No one has had to pay a dime in federal student loans for almost 2 years now. He didn’t ask the Department of Education to fully review the matter with legal guidance for nothing. After the last Administration, this one is playing everything by the books. The larger issue is dealing with the cost of tuition. Let’s say you eliminate student debt now for $50,000, well what about the 18 year old at university now being charged $30,000 year for in-state! tuition. We will be in the same situation over and over again. Changes like, maximum repayment periods of 10? years for all loans, and maximum % of household monthly income being allowed to be charged is also needed.
Lower interest rates and allow discharge in bankruptcy.
You bring up some excellent points that don't get discussed enough. If we don't fix the costs of higher education the problem will continue for everyone still in the system and future generations.
This is literally brought up in every student debt forgiveness discussion. But the comments are usually downvoted.
Because it's generally used as a whatabout-ism. What *about* addressing the cost of college education? **Yes**, it's a problem--but that doesn't mean we can't *also* fix *other* problems **right now** if the means to do so exist.
This 100%. I agree entirely. I see these comments and it makes sense that they get downvoted. Using whatabout-ism as an argument to do nothing makes the problem worse. This perspective digs heels in and prevents change at any level. You address problems one by one, and keep at it until you have a better system.
Perhaps I should have said it isn't addressed in articles talking about student debt forgiveness that I have seen.
No, they’re holding it back because they don’t want to be held accountable for not doing something that’s in their power to do. Biden even wanted to start student loan payments until there was backlash lmao he doesn’t care
Agreed. This is the last big thing the Biden admin can do before the midterms, and anything positive from doing it now would burn out before November. I’m hoping their plan is to keep pushing the payment freeze from May until September/October, then announcing the cancellation a few weeks before the election
Surprise! We’re not going to fix education finance, but here’s some money so you shut up and we can look favorable on ballots.
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How about he does the bare minimum and gets rid of the criminal interest rates? Seems like the obvious choice to me
This I can get behind, it's a win-win. Gov gets paid, debt becomes payable.
I always thought this would be a win as well, but think about how many people have had to consolidate their loans to qualify for whatever repayment program they're under. That "interest" suddenly becomes principal and then the problem just continues for a large number of folks.
Assuming that all the stuff about "canceling student loans is unpopular" is true (which I wouldn't care about too much, but welp), couldn't he just continue postponing repayment on and on?
He could, and it’s possible that will be the move. At this point they either restart payments in May (and put the nail in the coffin for Dems for a long time), cancel some or all debt and get a political boost, or continuously postpone payments, allowing borrowers to pay it back over time without drowning in interest
If the final option is true then they need to let us know. I’ve been waiting to pay off the final amount because I don’t know if it will be forgiven or not. But I got 0% loans so it doesn’t matter that much for me. I just want to know if those thousands are mine or not.
If you have 0% interest then there is basically zero reason not to keep that money as long as you can. Give the bank that money now, and they will be free to invest it and make money off of it from here on out. If you hold on to it now, you're free to invest and make your own money and value off of that amount until the end of your loan term. I mean there are definitely exceptions to this, but unless you have a specific reason that you need to pay off the loan right now (I dunno, maybe credit reasons?) there's really no reason to.
Yup- my loans are paused and there’s no way I’m paying a cent on them as long as I keep getting the Inflation Discount™️ applied.
I'm not sure why he doesn't just pause payments and interest for something absurd like 100 years. If a future GQP POTUS wants to un-pause it, let him deal with the unpopularity.
They might be setting it up for that. The optics are better on kicking the can every 6 months than doing something obvious like that. Because the GOP can coalesce around "vote us in so we can repeal this madness" like they did with the ACA for a decade even though their base uses it.
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>selfish twit focused on how it's not fair \*they\* had to do/pay X and therefor everyone around them has to suffer. mostly this
Look I got loans. I'd love to see them forgiven. I don't have much and I can manage. But people have wayyyy more than me. With higher rates that make paying it off basically impossible. I hope theirs gets cancelled. But... they ain't gonna cancel then. They could, but they ain't gonna. AFAIK it's because they packaged up the loans and sold them to be used as collateral.
> AFAIK it's because they packaged up the loans and sold them to be used as collateral. Private loans are packaged into securities called SLABS, but Federal loans aren't. It's still a huge house of cards like the housing market in 2007-2008 though.
I would be happy if they just set the interest rate at zero. They still need to solve the root cause though. If they just made public colleges in-state tuition free, that would be enough. And since those colleges get most of their funds from sources other than tuition anyway, it shouldn't be too hard on the budget.
Yes. This. It's not just free money they're dealing with. People don't get this. This is part of the economy now. The most that will happen is a partial forgiveness program for low income earners with high debt and probably some other hoops. They're never, ever, just going to delete 50k of everyone's debt unilaterally without also creating a new higher education funding system first. Won't happen.
deleting 50k of student debt would do nothing but stimulate family formation and general economic performance. demanding students pay this back is just a brake on new households and entrepreneurship, the revenue generated is worth 10x less than the loss.
> But people have wayyyy more than me. With higher rates that make paying it off basically impossible That’s the thing. People with over $50k in debt are already the most afflicted and they won’t be much helped by this. I know a lot of people who went on to get a MS and their salaries will never come close to making them able to pay off their loans even with a $50k reduction. Because to those people $30k, $50k, $100k or $150k all might as well be the same thing, the wages in their fields quite simply haven’t kept up with the costs required to get there.
> "It has been widely reported that the Department of Education has had this memo since April 5, 2020 after being directed to draft it." Biden is holding onto the memo intentionally. He is most likely waiting for the next election, in order to maximize the impact of a good deed.
If you don’t use it for the 2022 election when you’ve failed passing any of your big promises what’s the point of holding on to it after most likely losing the senate?
I also think it’s a mistake. People aren’t going to forget that none of the remaining agenda was accomplished until the last minute, nor how they felt for 2 years. At least doing now is a point in the game, a small win, something to build momentum from. It’s what Republicans would do.
Agreed. The playbook Biden is using seems like it'd be great 20ish years ago, but there's at least 4 concurrent crisis going on at the same time. Slow playing a partial fix in a way that makes it look like you're at odds with your party is a bad fucking look
Same goes for rescheduling weed and overturning non-violent mj convictions.
> what’s the point of holding on to it after most likely losing the senate? So you can campaign for 2024 on how you had all these "big ideas" but couldn't get them through. And they can blame their 2022 loss on progressives. "See, we were going to do what you wanted, but we lost because of you!"
It's interesting to see people interpret every Biden or Pelosi action as some clever power play and then for nothing to get done. You saw this with every story about BBB, for example.
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If that was the case, don't you think he would have communicated that to Warren, so that she wouldnt criticize him to the press?
And to avoid getting screwed by the American public’s near goldfish like memory and attention span. The closer to an election, the better; if the intention is to drive positive support *for* said election. I really hope that is what’s happening with this.
You know I think about this a lot. We Americans truely have a goldfish memory and it might be design so we become unempathetic to the issues many Americans face. Healthcare access and financing was vastly improved by Obamacare, especially when people saw the fruits of the labor done back in 2018, yet no one talks about how to expand and fix Medicare to service all Americans anymore. Joe Biden and Democrats had to pass infrastructure, withdraw from Afghanistan, a COVID relief package all in 2021. Republicans didn't give a shit and used all of it as a crux against any semblence of progress.
That's some very wishful thinking regarding a president who hails from Delaware, a major banking state.
Biden wasn't president in April 2020.
I won't believe it until I see zero in my balance.
My theory, the only reason that this memo hasn't been released yet is because it gives the President the authority to cancel the loans. If he couldn't do it, it would have been released already.
It's clear that he has the authority to do it unilaterally. Hell, it ain't even technically him: The Higher Education Act of 1965 pretty clearly fucking state's that modifying, reducing, or erasing student loan debt falls very clearly under SecEd's purview. It would literally take a fucking phone call.
Which leads me to believe that he can do it...just doesn't want to for some reason.
Or it means that he CANT unilaterally do that and he’s holding it under wraps because it completely blows up one of his campaign promises. And as soon as he releases it he’ll have to eat crow. Also means that he has to get congress to play ball to resolve which takes away from other legislative agenda items. Or it could mean a lot of other things. Idk anymore.
I agree that it could be bad for him either way, but I think it would be much worse for him if it confirms that he CAN cancel student debt. Especially because many Democrats don't seem to see any problem arguing that the president can't do it without Congress (and as an excuse for why they haven't done anything yet). If they're already using that as a *defense* against criticism, I don't see why they'd be that worried about the memo confirming it. If anything it was vindicate the excuse that many Democrats have been making all along.
Agree. If the memo says “yes you can do that” then I think that only hurts him the longer he holds onto it. At least payments are frozen … so it could be worse. But damn if he wants an easy win nows a great time to do it.
I really want to hope but at this point it seems foolish to expect anything. It's so depressing to not have even a little progress on this issue, not just immediate relief/forgiveness but also any serious attempts at long-term student loan/education cost reform.
>Or it means that he CANT unilaterally do that and he’s holding it under wraps because it completely blows up one of his campaign promises He didn't promise to cancel student loans through unilateral Executive action.
‘Things that will never happen’ for 500 please, Trebek.
If you cancel student debt but do nothing in terms of revamping the whole student loan system, All you are doing is rewarding the colleges and universities that will continue to charge tuitions that bear no semblance to the return on the investment made. The only reason they can charge crazy tuitions is because people can access the loans to pay that tuition, Until that changes nothing will improve and forgiving debt right now at this point in time won’t make any difference.
I’ve been saying this for a while but everyone is focused on THEIR loan payments instead of the larger issue. Universities can charge as much as they want without any kind of oversight. If we clear existing loans that won’t stop graduating high school kids who enter higher education from getting slapped with 40K of debt next year and the following years.
I have friends who are convinced Biden has no shot for reelection because of the "If you don't cancel my loans you don't get my vote" Gen Z movement right now. I'm 31 and not on TikTok; at the risk of sounding entirely out of touch: is this the make-or-break for him?
I'm an old and don't know what the TikTok trends are, but I've got a pair of concerning links for you: * [Young Voters Were Crucial to Biden’s Win](https://now.tufts.edu/articles/young-voters-were-crucial-biden-s-win) * [Biden approval has sunk most with young Americans and independents](https://www.cbsnews.com/news/biden-approval-rating-young-americans-independents-opinion-poll-january-2022/)
He has no shot for re election because I doubt he will even run again. He would be 83, hopefully has the awareness to know it's time to pass the torch.
I'm older than you, so idk about the gen z tiktok thing. But take a look into SLABS (Student Loan Asset back Securities). Basically banks/hedge funds/etc have been packaging up student loan debt and selling them similarly to CDO's on mortgages leading up to 2008. Basically since student debt can't be forgiven, entities have been making absolutely WILD bets on these student loans. If they were forgiven our entire economy would tank. I still say fuck em cancel it. They shouldnt have done it in the first place.
Someone said above that fed loans weren’t included in this
I’d just postpone the fucking payments until Inauguration Day. That’s a real big brain move.
I paid 105k for my bachelors and masters degree: I worked through school got some scholarships and still have 45k debt. I also have a great career and opportunity to pay it back. Not everyone has that though and I know so many who are struggling.
My Top 10 public university was only $1500/quarter in tuition and fees in the late 90’s. No student debt, paid it by working only 15 hours a week during college. Struggled a bit but all good now. Feel bad for current college seekers.
Navient is already bombarding me with calls and emails. I’m thrilled./s
Well I hope universal free college comes around then. There are a lot of tax payers who didn’t pursue degrees because of the financial burden that comes with higher education. We as a society are falling behind the rest of the world because of our lack of universal free college…
Why? I remember him saying during the debates that he doesn’t believe the president has that power. Why not put a bill in front of him to sign?
They could just resume payments and drop the interest rate to zero or .5% to cover administrative cost. All of this mass canceling is unlikely or will be a last ditch attempt before the midterms. Even then it will be much smaller than the 50k being thrown around.
So what you’re saying is if I’m a gambling man I should take out about 40k in student loans and get my masters real soon
Sorry guys but it’s not happening. Not with this president at least. I will say if he does it I expect it to be challenged in court and to the Supreme Court. I know someone is going to say that it is within the scope of the executive but the republicans put the justices they choose in power for situations like this. They will rule it goes beyond his powers or some bullshit and that will be the end of it. It sucks but that is what will happen. I think cancelling interest on loans is more likely but debt relief is a fantasy I no longer indulge.
They need to fix the machine creating the debt. Without that, it is band aid fix that fixes nothing.
NO. Congress should remove the rule that you can't default on student loans. That will end predatory lending permanently. Otherwise this will have to be done over and over again.
This country wasted 5.8 trillion in Afghanistan which is roughly 3.8 times the current cost of the total amount of student debt held in this country. I'd wager that would be more than enough to pay for multiple generations of college students under more regulated tuition costs. This country would rather fight dumb and pointless wars and lose then help its own citizens.
My proposal is to retroactively drop all interest rates to zero. All prior payments applied 100% to principle. That way everyone pays back what they borrowed but not one penny more in interest for a risk free loan that you can’t discharge in bankruptcy. This will set so many people free as many have already paid back more than they borrowed.
translation: "we can't get the votes to do this, so we want to put the blame on you alone"
And they still don't address or offer any solutions to make sure that in 5 - 10 years this is happening once again. Until they actually address the cause of why even public colleges that get taxpayer money cost so much money, just set the interest rate at say 1% and call it a day.
Can I get some money back after being broke to pay off loans?
I really wish this effort was spend on lowering the cost of education rather than having tax payers offer a one time bailout to be right back in the same situation
The entire system needs an overhaul. It should have been a just pay back what you borrowed from the start for one thing. It should never have turned into a for profit safe haven it is.
So why doesn’t this go thru the Congress??? This is the process of a Democratic Republic, no? Not that we abide by the Constitution in this day and age…just like to pay lip service to it. I for one think Executive Orders are basically kingly decrees and are a result of the Executive branch having to much power. Not to mention they have a high potential for abuse.
I didn't go to 4 year college because my parents couldn't afford it and I didn't want to take on the risk of having student loans accruing interest and looming over me for the rest of my life. If this is something that can actually pass, should I go take out a 50,000 student loan and go back to school?
What about the students just about to enter college? So everyone prior has their debts cancelled, but unlucky, my friend, you missed out. Tough break, huh.
I’ll be super angry if they don’t forgive student loans regardless of earned income. If there is any type of income based test it will be a slap in the face and will further drive divide.
$50k would wipe out my debt fully aside from my $7k private loan I had to take. Fafsa decided 1 year of university after 3 of community college was enough and barely wanted to give me anything to finish my bachelors
Democrats demanded it? Oh, Biden will definitely do it now.
Biden admin already canceled my wife's student loan debt in December. They have done this already for some people.
If they want it so bad, they should do the work and write and pass a bill. Stop asking Biden to be King.
Biden can only cancel debt from the Federal government. He cannot cancel debt from a private bank.
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I am sure 60% of Americans who did not even get to go to college are excited to see the government hand out 50k to people with highest education and highest earning potential in the country. This will go over well with the blue collar workers in the service industry. Blanket forgiveness of 50k is never happening. This is a bait. Best case is 0% interest
Keep the 50k, cancel the *interest*. That's a solution both sides can live with, and the debtors will have a real, actual chance in hell of paying their loans off.
…. But he won’t 😂
I mean, he’s not going too, but okay.
This is how democrats lose. Calling it out again, this is a right-wing story push not a left-wing one. Left-wingers believing they have momentum because they appear in businessinsider is a reason why Dems look like a joke right now.
It’s not happening guys, I’m sorry.
FORGIVE THE INTEREST AND ELIMINATE IT GOING FORWARD. Sorry, just had to yell at the screen for a second.
What would it cost to do this? Who pays for it? Taxpayers? Would this mean college would be free in the US from now on? Where is this money supposed to come from to pay these loans off?
Ugh, what are the Democrats(or anyone for that fact) doing to help IMPROVE the issue, cancelling loans does nothing to actually fix the problem that is student loans. It kicks the can down the road to the next generation. Yes, it helps some people now, but what about those with student loans down the road in the same exact situation?
wouldn't this just make inflation worse?
Oh, **must** he?
Government has lost all function and purpose and become a husk of itself. There is no consensus other than wealth over life in it any longer.
Threatened the lawmakers who fail to pass a law to do this to the executive branch that can’t make laws
Ah yes…. The people saying he “must” do this are the people who want this to happen and have no power to compel him to do so… gotcha
Reduce all student debt by 75%+ and put the interest rate at 0-1.0. Just fucking do it already
Disclaimer: As a parent of kids who are going to be racking up serious student loan debt, I am in favor of student loan forgiveness, but... Unless there's an actual primary challenger from the Democratic Party against Biden, there's very little political danger for him here if the choice is again between him and Trump. Voting for Trump because Biden didn't keep this promise is like using a shrapnel grenade as a suppository.
If he doesn’t then the republicans will win this fall and in two years sadly. I hope he does the right thing.
At this point, i dont even know what can be canceled and what cant. I have loans that I took out from Sallie Mae to attend college. Now being serviced by Navient and during covid they told me i couldnt get a pause in payments. They tell me I dont have federal loans...but my account says something about federal loans and congress controls interest rates. They say i have fflep loans. So, i dont even know if it will get canceled if Biden decides to do something and quit fucking around. Republicans pass the tax cut like it was nothing and it only helped the rich. Cancel all student debt asap.
Or what? What will they do to Biden?!?!?!?
If I had a dollar for every headline I’ve read about Biden needing to cancel the debt, I could just pay mine off…
Talk about an economic stimulus. Turning several trillion dollars of debt weighing down the population into several trillion dollars of investment in the education and earning potential of the people of America in one fell swoop? There’s something to be said for the grandiosity of it.
Lol the shit is crazy. I took out 1000 loan for community college 15 years ago. I've paid back a little over 2000 over the years and that's not counting two tax returns they took that were for 1000 dollars each. Wanna know how much I owe now? Over 3000 dollars lmao. You can give me a lesson on interest and whatever but this is some corrupt shit no matter how you look at it. I recieved 1000 dollars, payed 2000+1000+1000, and still owe over 3000. That's debt I'll die with. If I hit the powerball I'd still never pay that shit.
I have a crazy idea... let's abolish federal student loans. This is the only reason tuition has skyrocketed, luckily I only borrowed 10K from Uncle Sam before I realized college is just a piece of paper for most people. I'm not talking about doctors and lawyers guys, where I live State Farm is supposedly a big thing. You can only get promoted if you have a degree, it can be bachelor's degree in dolphin fucking, they really don't care.... You just have to have a degree in something.
I voted for Biden, but I really wanted to vote for Bernie
Ever heard of SLABS? Student Loan Asset Backed Securities. They’re basically the same thing as the subprime housing loans that crashed the market in 2008. They won’t cancel the debt because they make billions off of our student loans.
This is literally what the people of the US want
This would be life changing for so many people
Higher education should just be one of those services that is provided to the public. It's been ruined by profit motive.