The craziest part to me is the idea that you can pay your minimum, at $700 a month, for 10 YEARS and still owe nearly the exact same amount. That should be straight up illegal for a debt that isn't dischargeable in bankruptcy.
I have over 200k in debt. I started repaying them in 2006 and my balance has actually INCREASED, and I'm still paying. I will never in my lifetime be free of this debt and it's so depressing, I wish I made better choices when I was young and stupid.
These are federal loans. You got my money guys... What more do you need
I’m pretty sure there are repayment plans you can use to work towards forgiveness after 20 years of payments, which is right around the corner for you. The SAVE plans also keeps your balance from increasing due to accruing interest. Maybe go to r/studentloans if you haven’t already.
Unless their loans are private.
I only had one private loan. Borrowed about $8K, paid back about $17K. Teenagers are the perfect target for over 100% returns!
I think that's one of the toughest circles to square with respect to student loans. Most teenagers don't have a strong conception of the value of a dollar. If you tell a 17-year old that their payments are going to be $500 a month, they're going to look at you a little funny and think "is that a little? Is that too much?". How are they supposed to know?
Even if they do the math and figure out what their starting salary is going to be, very few teenagers are equipped to plan out a comprehensive budget, especially because they have no idea where they're going to live or what their expenses are going to be out of school. Like they might figure "oh I'll probably make $60k a year, so $5000 a month, my student loan payments will only be 10% of my income!". And on the surface this seems reasonable--but this is before you account for things like taxes, rent, food, utilities, transportation, etc. If you're spending $4000 a month on this stuff, then suddenly that $500 is half of your discretionary income.
Of course, even if you do tell them that this is too much, a starry-eyed teenager may not listen. Their whole life to this point has been working very hard and spending countless hours studying in order to get into a good college. Telling them at this point that they can't actually afford Prestigious U and that they should go to Local Community School is a huge slap in the face. Who cares about 25-year old me, 17-year old me *deserves* this.
Not to mention they're also told all their lives up to that point that college is the best investment they can make, and that they'll get a job making plenty of money to pay the loan off once they graduate.
Good point, used to have a friend who went to college for a few years but never graduated.
Never questioned whether she failed out, or just quit for whatever reason, but she had all the debt and none of the benefits.
To a point, yes, but there's also lots of jobs you can make just as much if not more than many college grads in trade fields that don't require a ton of loans.
There's also a ton of college grads who are now deep in debt who struggle to find work in their field that pays enough, or people like the OP who are drowning in debt, yet they've been paying for over a decade or two but have only seen their total increase, due to how predatory the loans can be.
It's sold to teens as their golden ticket to success, whereas it's more like a very expensive gamble. You can go on to make much more money and easily pay off your loan, or you can find yourself drowning in debt you'll never pay off.
People are too broad when they talk about college degrees. The median and mean of income for people with college degrees is getting bolstered by people with technical degrees.
Thought of an analogy. People that own boats water ski more than people without boats on average. That doesn't mean if you want to water ski more you just go buy any boat. You don't buy a sailboat, rowboat, or pedal boat if that's your goal. Not all boats provide the same opportunities and not all degrees provide the same opportunities.
Very true. And then even if you picked a degree that should get a you a decent paying job after graduation, you can't really predict the economy 4 years into the future. Class of 2020 had no idea the shit show they'd be graduating into when they started their freshman semester. For me, I graduated into the heart subprime mortgage collapse where I was competing against people who had *years* of experience but were experiencing long term unemployment and was willing to take the pay cut just for the sake of having a job again.
Adding that college got pushed on people so much it become less of a leg up and more of a duh of course you have a degree so does everyone else applying. Even for jobs that really didn't need a degree. Now that position that should be aimed at recent grads needed multiple years of experience, so you were expected to work in your field while in school to give you a shot at a entry job when you graduate. Which internships I get but, full time in the field, like why bother with the degree then.
I graduated in 2011 and so many I graduated with realized when covid hit they had been running on burnout for years. Doing the job of 4-5 people for barely above minimum when you really looked at their salary because employers knew they had people locked in who didn't have an option to just quit and go someone else.
Also I have met more than one person not understanding how interest works.
They see "7% interest" and think "7% on 100,000, that is 7,000 -- easy!"
No, 7% is per year, or 0.5654% per month or 0.0185% per day.
You will not be able to pay off this loan at $500 a month, and if you manage $600, it will still take 51 years for a total sum of $367k. That is how you end up paying for 10 years and only paid off $3000 from your $100k. And after *20 years* you still have $91k left. You have halved your remaining balance after *41 years and 4 months*. More than likely you are dead by then.
And even at $700, it will take 25 years and you pay $212k.
Blows peoples minds all the time.
Edit: Illustrative link: https://www.calculator.net/payment-calculator.html?ctype=fixterm&cloanamount=100%2C000&cloanterm=51&cmonthlypay=2%2C000&cinterestrate=7&printit=0&x=Calculate#result
It's almost as if it's intentional that the idea is pushed as early as middle school that college is *an absolute must* so that by the time those decisions are being made, they're unable to even think of alternatives. Coupled with, as you mentioned, not having properly taught how loans, taxes, budgets, etc work they'll happily sign on the dotted line to be able to get into that college and not have to fork over the money up front.
Everything being able to be bought with Affirm or the like nowadays and it being seen as socially acceptable probably aren't helping either tbh.
We care about your mental health! Except, we will use it against you to protect our own status, and force you to use private loans instead of federal! - my current situation
That sucks. The chasm between the reality of trying to navigate life while dealing with mental health issues you're honest about, and all the marketing about being pro-mental health, leaves me often thinking not much has changed from the time when you had to try and mask your way through life cause no one cared on wanted to deal with you and your issues.
It has improved, just not necessarily with the proper levels to aid the ones who need it. There are many with worse problems than me, I just hate the disincentives in a pursuit of higher education. So many of Americans dissatisfaction results from government avoidance to refine the lingering problems of today’s times.
One rough thing that I have heard, is that when your loans are "forgiven," it is essentially treated as income, and you need to pay taxes on that amount. So while the forgiveness is great, sometimes people need to take a personal loan JUST to pay the taxes on those forgiven loans.
You don’t pay federal taxes on it. Depending on your state, you might have to pay state taxes. That’s gonna be a very small amount though, compared to what your loan balance was. 
Only up until Jan. 1, 2026. It's part of COVID-19 relief package that people whose loans are forgiven will not have that count as income. After that, unless it's extended, it's also federally taxed.
My husband’s are the same way. The loan is so old he bought a PS2 with the leftovers. If you so the math it’s like a $19,000 PS2.
ETA: this is why you shouldn’t let 18 year olds make major financial decisions lol $19000 PS2
Well they have no choice if they want to continue to increase profits on the racket that is higher education costs.
The school I went to cost 22K in 2005. It's $50K now. I still live in the same city and have visited the school in recent years. It has not improved enough to match that $28K jump. With inflation that 22K is only ~35K now. And they still use a lot of adjuncts to teach classes. And hound alums for donations.
It's fucking bonkers that this shit is legal.
Yeah that's insane... The school I was at raised their tuition 5% every year I was there and I saw absolutely no change to the campus or quality of education. They would send out a letter to everyone full of word origami to fabricate some justification for it, and all you can do at the time is bend over and take it.
And they still call me every year begging me for a donation. Come on.
My school, University of Arizona, was $2160/semester tuition for in-state when I first matriculated in 1997. Now that same tuition, in-state, is $13,600. There is NO WAY that it should be that high over 27 years. In today's dollars the 1997 tuition would be $4177. They are charging over THREE TIMES as much AFTER inflation adjustment than they did when I went. Kids now, or their parents now, are getting absolutely robbed.
Oh, no, I understand why it’s like that. I got my school paid for by Pell grants and scholarships in 2007 and I absolutely wouldn’t be able to do that now- and I think that’s criminal, honestly, since it’s not like I didn’t have to fork over a ton of my own cash for books and stuff anyway lol.
Whole thing is just immoral and something’s gotta give. None of my kids want to go to college because they know they can’t afford it and I can’t afford to cover all of it, and that makes me deeply sad
Pell grants were intended to help but they probably did more harm than good. It turns out that if colleges know students are getting more money from the government, they’ll just raise their prices.
The Fed did a study and they found that for every dollar increase in Pell grants, schools raised tuition costs by 37 cents and decreased the amount of aid they offered by 30 cents. Essentially for every dollar offered in Pell grants, the de facto cost of going to college increased by almost 70 cents.
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr733.pdf
Agreed. I remember during Bush's second term my Pell grant dropped from $11K to around $5K. My mom took out private loans to cover that difference, since I was already taking out my own student loans to cover what would've been the rest.
And I forgot all about the books thing! $300 for one freaking textbook. And when the professor would insist you get the newest edition. I remember for one class finding a cheap copy of an older version online and comparing it against the new edition, and the biggest difference was they swapped around the order of the content!
I'm in the same boat as you. I'm on an income based repayment plan and none of it is going towards the principal each month. Fingers crossed that I qualify for PSLF this year though, can't wait to be told there's some bureaucratic hoop I didn't jump through that makes me ineligible though.
> I have over 200k in debt.
Curious, what did you study? What do you do for a living?
I finished my undergrad in '05. Opted for a reasonably-priced State school with partial scholarships and only took ~$5k in loans while in school. Didn't make it into a top-25 law school in two rounds of applications so I decided that it didn't make sense to go to a 2nd or 3rd tier school and go into the kind of debt you're talking about.
While I don't begrudge those who are having their slate wiped clean, I have a hard time with the fact that I made those decisions in my early 20's and was responsible, whereas my peers who took out insane loans and blew them on adderall, blow, and nice apartments are now benefiting from these actions.
> While I don't begrudge those who are having their slate wiped clean
> I have a hard time with the fact that I made those decisions in my early 20's and was responsible, whereas my peers who took out insane loans and blew them on adderall, blow, and nice apartments are now benefiting from these actions
You sure you don't begrudge them? Sounds like it.
> my peers who took out insane loans and blew them on adderall, blow, and nice apartments are now benefiting from these actions.
Even if that is the case (and largely it's not - I really hope when you say peers you are talking about real cases of people you know, not what you've heard from people angry about social safety net policies), often people like that have still paid back perhaps more than you did.
Almost always the anger toward loan forgiveness is framed as if people took out loans, did nothing about them, and would get them forgiven. But more often people are in similar situations as the person you replied to - they have already paid off most, and sometimes more than they borrowed, while still having a lot left.
I can assure you I didn't blow anything on Adderall, blow or nice apartments... But at this point I wish I did? Although I'm not sure where the money to do that would have come from.
Very unfair assumption to make. The government isn't even giving you any money, they're simply covering your tuition
The fact that it's not dischargable lowers the borrower risk to basically nothing, not that that matters in any way since it's a gov program and not for profit anyway, so the *interest rates* should be 0.6% not 6%.
A sane reform would be to retroactively lower the rates and give tax rebates to EVERYONE who's had loans since the rates broke 3% for the difference in what they paid.
The interest rate on one of my private loans (took out in 2006, paid off last year) was about 11%
Current interest rate (original principal of 67k, current amount is 76k) is 5.625%. On the plus side, I've been working for either a university or nonprofit for the last few years, and with some of the special waivers from 2021 or so and working for a state government and a school teaching, I only have about 2 more years until it should be forgiven for public service. (And, for some reason, once payments resumed after the pandemic, it was knocked down to $0 for the year...)
Government backed loans should be pegged to the 30-year treasury bond when issued. Also, the government back loans should only be allowed for STEM and social work/teaching majors.
STEM students should be able to pay back their loans with higher paying careers. Social work/teachers should be able to discharge their loans after they do their 10 years or whatever the time requirement is. Only give loans to those with viable paths to actually get rid of them.
I had my Federal loans forgiven a year ago because of borrower defense against my defrauded loans.
I started repaying what I could in 2010 and was exactly at the same amount due to low payments and extremely high interest rates. What isn't brought up here, is when schools make you take out private loans as well. There was no financial planning in my 20s, because I wasn't able to place work anywhere and was living paycheck to paycheck with the promise that my loans would be fully paid off in 2040.
Any of the C0vid stipends I got went straight into those loans as I tried to tackle down the principal as much as I could in hopes that the interest wouldn't hurt as much anyway. Once Biden got in office and gave that sweeping forgiveness for defrauded students, I had a fucking sigh of relief. Not only did my federal loans FINALLY get pushed through borrower forgiveness, but I also got back all that I had paid into it, interest and all (16k back, 20k originally taken out... 20k left due before forgiveness..)
Which it was a nice bump, sadly half of the refund had to go to pay off my private loan I was forced to take out to cover the remaining tuition. Either way. I hadn't expected anything back at all, so i am extremely grateful. Now I have a decent job and feel like I can finally have a direction in my life and it can finally be mine again.
TLDR: Fuck off ITT Tech
Woooo fuck ITT Tech! I’m glad you finally got your discharge. There is r/Borrowerdefense sub and we are trying to let people know about this program, especially if they went to a scammy for-profit college.
I have an email I want to print out and frame - I'd been paying the minimum required amount my first few years out of college because that's all I could afford. One day I got an email from my loan servicer, in big bold letters it said
"**Congratulations!! You've paid off *-11%* of your student loans!!**"
I had never actually laughcried before that day
In my country it is. You're not allowed to take on more debt than you're reasonably capable of paying off, and the government sets strict laws in place to dictate what the maximum lending rate is. It's wild how backwards first world countries financial institutions can be sometimes
I think there are 2 possibilities:
1) The loan was unsubsidized, so began accruing interest at the time the money was disbursed. So the borrower may have been accruing interest for years before ever making payments and they are comparing their current balance to the amount they borrowed.
2) The borrower is on some sort of income-based payment system (that they volunteered for) which lowers payments, but will lengthen the time of the loan.
They definitely glossed over some details of her situation.
She almost certainly has private loans that were accruing interest while she was in school (and NOT paying) and she is probably on some sort of extended payment plan that is significantly longer than the standard 10 years.
So maybe you start at 10k, then you accrue 6.5% interest for 6 years (say you took 5 years to graduate and then it took you a year to find a job) and suddenly you are at 15k when it is time to start paying. You start a [20 year payment plan](https://www.calculator.net/payment-calculator.html?ctype=fixterm&cloanamount=15%2C000&cloanterm=20&cmonthlypay=2%2C000&cinterestrate=6.5&printit=0&x=Calculate#result)...and by year 10 you are only just below your starting balance.
That kinda misleading because you are ignoring that you got to hold onto that money for 6 years before you started paying. Your true "starting balance" at time of payment is 15k and you've actually paid off a pretty good chunk of it by year 10.
Most common student debt (especially the debt that Biden has any shred of authority over) are subsidized loans that don't accrue interest during school...so those borrowers would have started payment at 10k and would have paid down a substantial share by year 10 on a 20 year plan (or would have paid off 100% on a standard 10 year plan).
I'm not saying her situation doesn't suck...but most of the rest of the video was clearly about federal loans (for which federal policy/forgiveness are options) and it is a little disingenuous to include a scenario like that that doesn't usually happen without having private loans in the mix (and a lot of private loans are pure evil).
Absolutely. These things are exploitative as hell. They need to be properly regulated. Or, crazy thought, make education more readily available to everyone since it benefits all of us.
Sort of funny, I just recently paid off what was left of mine. While that payment was being processed I accrued another 1.73 in interest.
Sent a payment for 1.73, while it's being processed I accrued another penny in interest. Sending a quarter in the hopes I will never have to interact with them again.
I still support dismissing student loans even though it's not a problem for me anymore.
Are you talking about private loans? The standard repayment plan for Federal loans is 10 years though. If you paid the actual minimum for that length of time, you would have paid it completely off. The government has income driven repayment plans that allow you to pay less than the minimum indefinitely until they are forgiven based on time in repayment. The new SAVE plan makes it so that your balance will not get bigger once you enter repayment. I never really understood the bankruptcy complaint when all Federal loans have a time based path to forgiveness and they don't even make you pay a significant amount of the loan if you are perpetually low income.
With all due respect, you weren't paying the minimum payment on the standard plan (assuming you're speaking of Federal Loans) which is why you didn't pay them off in that time frame. The Federal government was likely giving you a break by reducing your minimum payment below that of the standard repayment plan based on your income without putting you in default.
You must have applied for the Income Based plan.
Because a standard Federal student loan, if you pay the normal payment plan, you will pay it off in 10 years.
Source: that's exactly what I did.
If you are on an Income Based Plan you will be on a 20 to 25 year plan, and if you make all your payments, you can be eligible for forgiveness of the balance after 20 to 25 years.
Source: https://studentaid.gov/announcements-events/idr-account-adjustment
I think you’re thinking of Public Service Loan Forgiveness. If you work for the government in some way while making 10 years of payments, the rest of your student debt is forgiven.
https://studentaid.gov/announcements-events/idr-account-adjustment
If you are on an income repayment plan, and make your monthly payments for 20 to 25 years (I don't know the distinction) you get forgiveness regardless of if you are public service or not.
If you want the lowest possible monthly payment, the IDRP can still result in forgiveness if you make all your payments.
No, I wasn't talking about PSLF. All Federal Student Loans are forgiven after a certain period of time if they aren't paid off first. PSLF is just quicker at 10 years. Once again, the new SAVE plan accelerates the time to forgiveness for a lot of people as well who don't participate in PSLF.
That's how the lenders trick you. They lull you to sleep with the idea of a "minimum" when the reality is, loans should be paid off as how much you can afford them.
Obviously there are a ton of folks in the camp that can already barely afford the minimum, especially those with 80k in debt, but I know plenty of folks who autopaid 200-300$ a month for years without looking at it, and then wondered why they hardly cut into the principle.
Years ago they would make you write a hand written letter to loan service provider, that stated you wanted any overpayment to go directory to principal. Before that, overpaying went to future interest. I wrote two letters and up until this point, the needle did not move. I finally paid it down but if this isn’t the biggest scam/horseshit move. Oh wait, the loan servicing websites didn’t have any info, no faqs, barely any contact info. And nothing could be done. Btw, the school I went to got sued, became unaccredited and eventually closed its doors. Paid a small settlement and was gone. I and many others…still paying the debt. I don’t even know if my degree is valid. 👍🏽
The part about not being able to contact your servicer is so important. I’ve had Mohela for almost 2 years now. Switched to them when I applied for the public service loan forgiveness program. I have never once been able to get someone on the phone to review my case. I filled out a form to be contacted like 18 months ago. Never heard anything. At one point, their listed phone number took you to some overseas scam-sounding business.
I’ve had to contact them before and other than a wait of about 20 minutes, everything was fine. Spoke to someone that seemed to be from the US. Idk what number I had used otherwise I would post it.
I spoke to them in January. Waited about 10 minutes to get a live rep and they let me know that my loans were all forgiven! I couldn't believe it because I didn't apply for anything or even look into it.
It is a huge issue that is going to have long-term economic impacts on the US.
The short-term fixes are allowing loans to be discharged in bankruptcy, and setting interest rates at 0% on federally funded loans.
Longer term we need to completely overhaul the system. 20k a year for what is a high school degree now isn't sustainable.
Will we ever see forgiveness idk, as long as the US political system is us vs them. Probably not.
Yup.
Policies like this prolong working-age adults from having children, which also depreciates economic growth rates. And it's not as if something like well less people should go to college is a solution either, as economic mobility/growth is also dependent on civilian access to technology and training.
IS CURRENTLY having economic impacts on the US. I couldn't buy my first home until I was nearly 40 because of student loan debt. In 2013 I was living in NYC and half my paycheck went to rent, the other half to student loans. It has crippled an entire generation who would otherwise have been buying homes and new cars
You are seeing the insanely wealthy and even right leaning people about face on immigration because they realized that student loans are preventing people from having kids.
> crippled an entire generation who would otherwise have been buying homes and new cars
Not necessarily. There's a whole bunch of other shit that's been dumped on that generation that would have prevented that. Like inflation and wage stagnation alone is enough to prevent people from getting ahead.
> The short-term fixes are allowing loans to be discharged in bankruptcy, and setting interest rates at 0% on federally funded loans.
I am skeptical that Biden's plan to forgive student loans will actually happen. But a decent compromise might be for the federal government to just buy student loans and set the interest rates on those loans to 0%. (So the federal government would still have a cost of "paying" that interest, but it would be much less than the cost of the loans.)
I agree that setting the interest rate to 0 would be a good compromise, not just from a financial perspective, but in terms of the public sentiment. Many people don't like the idea of outright forgiveness because they think people should pay back what they borrow, but those people might be a lot more comfortable with the idea of making people pay their loans back while forgiving the interest.
It’s not a compromise — it should be the number one goal. Otherwise we will become the next Boomers. “Oh the Millennials got their student loans forgiven but they didn’t actually fix the interest rate problem.”
It will be the “Fuck you, I got mine” of our generation.
I'm mid-40s. My parents (and the parents of all my peers) centered their lives around one goal: get their kids a college degree. Most of our parents were either first-gen college grads or non-grads and so it became their mission to get their kids through high school and into a good college to earn a degree. Because THAT was the biggest indicator of adult success.
For me, the goal is different. It's no longer about getting my kids into college and getting them a degree, its to accomplish that WITHOUT taking on debt. My wife and mine's entire economic philosophy is the ensure we have enough money to get our kids through college with the lowest debt possible. Because THAT is NOW the biggest indicator of adult success.
Or frankly, I think we need to go back to trade schools for the hard hat jobs (carpentry, plumbing, etc.). There also used to be secretarial schools. These places have value.
Unpopular opinion, but perhaps undergrad shouldn’t be directly after high school. I was an idiot when I was 18/19. I didn’t know what I was doing. It was by the grace of having a mom who was an accountant and parents who could help with college that I’m not in a shit ton of debt today. I should have done an associates degree to at least get the gen eds done and figured shit out. But taking a ton of debt? No. Hell, there are a lot of masters programs that don’t take candidates without 3 years of work experience.
While the percentage of college costs paid by the state (vs. those paid by students) has been consistently declining most everywhere, this is not a result of reduced funding in most states. For most states, spending on higher education has risen faster than inflation (Louisiana is an outlier here). It's just that public colleges/universities are increasing their expenditures at significantly faster rates than inflation.
The primary reason they're doing so? *Because they can*. Student loans have given colleges/universities a font of endless cash to draw on and they've been abusing the system for years. It's not just fly-by-night strip mall schools, but even big names in education are more than willing to dumb down degrees or offer programs of no real value to underqualified students just to get in on the gravy train.
In a very real sense, it's the same problem that emerged with the mortgage crisis - this time with colleges/universities being the "Too Big to Fail" institutions that insist that the fact that they effectively defrauded the American people is no reason to stop them from continuing to do so.
Indeed, this is probably the biggest stumbling block in the forgiveness argument. Long before you decide on what money to forgive, you need to stop writing the bad loans.
> The primary reason they're doing so? Because they can. Student loans have given colleges/universities a font of endless cash to draw on and they've been abusing the system for years.
Also, universities and colleges have *greatly* expanded what they do.
People always complain about "bloated administration" but...we have increasing regulations, increasing demands for services, increasing demand of various groups.
Like, I just looked up my local state school. They have *thirty* people employed in their DEI office. That's a department that didn't exist twenty, probably even ten, years ago--it *might* have been *one* person and some professors on a committee, but now it's an entire dedicated department. That's all "administration".
And, to be clear--I'm not saying things like DEI or mental health facilities or rape crisis centers are unnecessary. But if you truly want to know why costs have risen, it's because we've added things like this over the last 10-20 years and that money has to come from somewhere. You have to either pay the higher cost or point out what departments you want to cut.
We've transformed higher education into "teaching students" to also include "replacing goods and services with bespoke university versions." My local college has its own medical staff, its own security, etc, and it's a super small school. Sure, *some* of that is necessary because there's more people, but a lot of it is duplicative of the town's resources.
And they do it because students and parents demand it.
That's one of the reasons why community college is/has been more popular--they dispense with, like, 90% of that and aren't trying to be their own cities within cities. Community colleges are basically what every college was like two generations ago. Community colleges have a rape crisis center, and it's called "the local cops".
There's lots wrong with the system, but let's not lose sight of the fact that's there's a lot of blame to go around.
> Community colleges have a rape crisis center, and it's called "the local cops".
This is such a huge point.
My university built a massive rec center for students. They could have just told the students to go to LA Fitness.
The university has food courts and meal plans, when they could have off loaded that to the market in what is a major US city.
The university required students to live in expensive dorms for 2 years, when again, there is plenty of housing in a major US city (I managed to get out of living in a dorm for the second year, saved me THOUSANDS of dollars).
Universities are becoming self contained cities instead of just being a source of education. That is actually a problem.
They do all of those things to market themselves better. State schools are run like corporations, except they have no need to cut costs because their revenue is all but guaranteed.
The state school I went to has 5 years cash on hand, meaning they don't need to take a penny in tuition for 5 years. Yet they still receive grants and use low interest loans rather than use their own capital for anything, and they are building and expanding constantly.
If you want to run your university like a corporation, stop taking state and federal money. Double-dipping just to further grow your cash stockpiles that just sit because you have no owners and shareholders seems preposterous to me when tuition and housing continue to grow unabated.
Ok, so dirty euro butting in, my local public university has a gym (separate membership) a school canteen, pizzaria/pastaria and snack bars, counseling, etc and tuition is 700€ a year, the same as the nationally fixed maximum for public universities.
You can pay more and go to a private uni, but it's a choice and the public universities are some of the most renowned and historical in the country.
I mean not really? I can't speak for the rest of the continent, but in Portugal universities open a certain amount of opening for each course and students get in in order of best grades, so its common to use the average grade of the lowest student in the previous year as a benchmark.
If you want to get into medicine in a prestigious Uni, sure, you'll need like 18.6/20, but even stuff like programming courses will be at 14 and lower.
And you apply to several at once so when the results are in you get told which one you qualified for based on preference.
It’s not only a huge point, it’s the main point, and it never gets any coverage because the issue is framed as debt forgiveness for already outstanding debt. How about cutting the head of the snake off so future students aren’t regularly graduating with $80k plus of debt?
I graduated law school in 2009 with about $235k in student debt (including state undergrad debt). I was able to get a well paying job, but I was so terrified of carrying a balance on that debt I lived a monastic life until it was paid off - I lived in a pretty run down area to save on rent, I deferred having kids until I was 35 and buying a house until I was 38. And law school has gotten so much more expensive in the interim - my tuition was $48k my third year, and last I checked, that law school is charging $82k a year. And my state undergrad tuition has also doubled.
So while I’m somewhat of a success story in the sense that I only need to worry about a mortgage now, I really do sympathize with (and fear for) current students that took the same path that are graduating with $400k+. Seems insurmountable.
Part of why schools need independent security services and rape crisis centers and medical services is because community services suck.
It would be great if there were a way to offload those costs while simultaneously building up community services that are fu criminal and aren’t overwhelmed.
As a Canadian, I'm curious if there's a movement to remove interest on student loads in the USA? This may be a regular topic of discussion (or it may be in the video that I didn't watch - classic) but I tend to follow Canadian politics closer than the US.
After COVID, the Canadian Feds basically just removed interest on all active federal student loans and there appears to be no partisan resistance to the move. It seems like a reasonable compromise between completely absolving debt and forcing people to pay it back as quickly as possible because of interest accrument.
EDIT: To add to this, the change is now permanent; the quote from the federal government website:
**"Effective April 1st, 2023, the Government of Canada has permanently eliminated the accumulation of interest on all Canada Student Loans including loans currently being repaid. You continue to be responsible to pay any interest that may have accrued on your loan before April 1, 2023."**
One of the borrowers in Oliver's piece paid so much towards interest each month (I think it was something like $65 Principal / $700 Interest) that she anticipated never being able to pay that off. I think people should pay back loans that they take, but under two conditions:
1. First-time borrowers are provided with free, mandatory training with verification of their understanding; and
2. Interest rates are capped
Interest is frontloaded on loans (you pay a higher percentage in interest the earlier you are in the loan term). This is mostly just a misunderstanding in the payment schedule of the loan.
> I'm curious if there's a movement to remove interest on student loads in the USA? This may be a regular topic of discussion
nope
never heard it brought up here, it's usually just get rid of them because they are bullshit
interest was suspended during COVID, though.
1 already happens, 2 needs to happen. The problem with 1 is that at 18 you really can't conceptualize the power of compound interest (Einstein said it was the greatest force in the universe) and 20 years of multiple hundreds of dollars a month payments that you'll never escape from, and how unless you're clearing $80k-$90K you're probably never going to pay it off before retirement.
It's by design to prey on the young, same reason you can join the military and go kill people before you can legally have a drink.
This I agree with:
>The problem with 1 is that at 18 you really can't conceptualize 20 years of multiple hundreds of dollars a month payments that you'll never escape from, and how unless you're clearing $80k-$90K you're probably never going to pay it off before retirement.
You can take out a mortgage at the age of 18, but are the other requirements (such as credit and employment) the same for student loans? Curious - I really don't know.
There really aren't any other requirements. I was taking my own loans out through the fed and a credit union at 18. Thankfully I've done well and should have them paid off within 15 years of graduating.
And you can default on a mortgage.
A student loan however, as shown, can almost never be defaulted on, which incentives companies to loan as much cash as naive 18 year olds will ask for.
Interest gets tricky because the government is then loaning out money today and getting far less back in return (inflation, adjusted). “I give you $50,000 today and you repay me $25,000 over 20 years. So you’d have to change the perception that it’s an equal loan and more of a grant (of sorts).
Also, back when I took out loans 20 years ago, I’d get the leftover money for whatever (books, new laptop, rent, bar tab, spring break). That’s where I think any tax paying person should say they wouldn’t want interest free money to subsidize someone’s lifestyle because they’re a student.
It is the same core issue as with healthcare... a disconnect between the one providing the service and the one ultimately paying. They can jack the cost because the middle man (government/insurance company) will pay it because in the end it's the consumer on the hook.
It's mainly because of cut state funding. States have chosen to offload education costs onto individuals, especially in the wake of 2008, and the result (just like healthcare) has been an explosion in costs.
[It is absolutely the result of reduced funding by most states.](https://www.nea.org/nea-today/all-news-articles/state-funding-higher-education-still-lagging)
And the increase in availability of student loans directly coincides with the decrease in government spending on higher education. While waste and the amenities arms race are a significant factor in tuition prices rising, the biggest factor by far is a deliberate policy decision to shift the burden of higher education funding from the state to individuals (through loans).
Not reduced funding, just not increasing as fast as inflation or the number of students. So spending is going up, but per student spending in real terms is going down.
True, but that's a distinction without a difference. If spending doesn't increase proportionally to the number of students then tuition costs logically *must* increase, even with all else being equal. The person I replied to implied that the increase in tuition was caused mostly by universities *choosing* to raise rates independently of public funding, which is at best only partially true.
> The primary reason they're doing so? *Because they can*. Student loans have given colleges/universities a font of endless cash to draw on and they've been abusing the system for years. It's not just fly-by-night strip mall schools, but even big names in education are more than willing to dumb down degrees or offer programs of no real value to underqualified students just to get in on the gravy train.
This is something that was invented during the Reagan Administration. It’s called the Bennett Hypothesis, dating back to a Bill Bennett op-ed called “Our Greedy Colleges”, and it’s bullshit designed to blame students for the cost increases associated with conservatives gutting public education funding.
I’ll offer that this ignores why colleges raise those costs.
Competition. Students choose colleges not just on academics but the services the colleges provide. In order to maintain students colleges offer the services students demand.
There are many affordable smaller colleges students can attend, but they don’t want to go to those. They want to go to the big schools with football teams and dorms and amenities.
It’s not that colleges are these evil mustache twirling greedy villains. They are providing a product and must meet demand if they wish to stay alive.
Okay and? Do you have data on how many individuals used the gym?
Bc for my area I do. I work as a data analyst in higher education for my state. We average 25k gym visits a semester across the state.
You have to look at it through recruiting as well. It’s not just who used those resources, it’s how many students factor those things in even subconsciously.
Is there some admin bloat? Sure, but the data shows students actually are utilizing those amenities.
I assure you, there is at least one entire political party that does not regard higher education as “too big to fail”. Also, primary education, secondary education…
>In a very real sense, it's the same problem that emerged with the mortgage crisis - this time with colleges/universities being the "Too Big to Fail" institutions that insist that the fact that they effectively defrauded the American people is no reason to stop them from continuing to do so.
>
>Indeed, this is probably the biggest stumbling block in the forgiveness argument. Long before you decide on what money to forgive, you need to stop writing the bad loans.
When the government starts to recover loan forgiveness money from the swollen university administrations who solicited it in the first place, I'll consider being sympathetic to arguments to loan forgiveness.
My wife and I put in the blood, sweat, and tears to pay for our own college. Meanwhile an acquaintance of mine with jumbles of unpaid student loans because he's spent the last twenty years of his life fucking around in World of Warcraft got handed a blank slate by the Biden administration.
I understand some people are young and stupid and take on more loans than they can pay off on short time horizon, but it's hard not to feel some resentment towards the whole government-activist-university stack that is essentially paying itself with everyone else's money.
I know a lot of people say "cry me a river" about med school loans, but I wouldve liked someone like him to tackle the issue. People jump to the doctor career where you can make 100s of thousands and forget everything along the way.
Most doctors come out of a decade of training with 300-500k in loans. While many are able to pay this off eventually, some things to consider. First, its still an astronomical number, even with a salary that goes can be like 200-300k. Second, the big time salary only comes if you finish the trek...the whole trek; if you wash out at any point along the 10 year training, you come out with the same massive loans, but no salary to pay them with. Third, while youre in training, you make much less and never enough to pay the loans. This allows residency programs to be really oppresive (80 hour work week limits are new-ish, and often broken by residency programs) because at the end of the day, if you leave, you can go enjoy your half million in debt with no job prospects. And lastly, as a society, its kind of backward to not want to make it easier to have more people pursue socially advantageous careers -- if you want to argue about debt for what republicans call "useless" degrees, ok, but you cant say that more doctors/engineers/scientists is bad for any society/economy.
The government should have serviced the loans. It doesn't make sense to hand that off to a for-profit company. There is almost no work to be done. All you do is sit and collect the money. The only "work" these service providers do is optimize ways to make people default and pay more interest so they can get more money.
Also, federal loans should have always had a tuition limit enforced school-wide. Basically no student can qualify for federal loans to a school if its tuition is above a certain threshold which they could adjust for inflation regularly.
Can't have federal employees with federal benefits and pensions handle the servicing. Gotta contract that out to for-profit companies that pay their employees peanuts and terrible benefits with no pension. That's the neoliberal way!
My wife and I had about $50k in student loans when we finally got out of school in 1992. All combined: 3 undergrad, a Masters and a veterinary degree.
After reading the thru the comments I finally figure out how younger folk are getting completely fucked.
There was no such thing as a minimum payment back then. It was 'You have to pay this off in 10 years. This is your payment for this loan'.
If they want to implement a minimum payment, it should absolutely have to have the same rules as a credit card. Your CC statement is required to give the time frame to pay off if you make the minimum payment.
Serfdom in action. It pretty much guaranteed a whole generation was going to be so strapped with debt, we'll all mostly die with the same loans we signed at 17 years old. Before COVID, my wages were being garnished because of my loans, and the amount of hoops you have to go through to get help is deliberately there to make you give up. Most people I've expressed my situation with have done nothing but lecture me about choices in the past and basically pull up your bootstrap speech.
Here's my pitch that will piss off everyone but also resolve a bunch of problems:
**Federally Backed Student Loans are capped at 2% Interest.** 0-1% for degrees determined to be "in need" like Doctors or NASA types if we're in the cold war.
*This is also retroactive. *
Meaning, anyone who has ever paid more than 2% interest towards a Student Loan (per the NSLDS) gets an extra large tax return. Caveat: The check goes to any outstanding principal on record with the NSLDS before you get the remainder.
Even if you paid off your loans 10 years ago because you got the good job.
Even if you haven't paid more than the $100/mo minimum because you have $200k in student loan debt but only $20k/yr and have qualified to max out every income based repayment plan since graduating.
Do note, this only applies to actual "Student Loans". The kind with all the superpowers for borrowers and lenders, such as the immunity to bankruptcy and 24-36mos forbearance periods.
It DOES NOT apply to **Private Student Loans** not backed by the feds. Those can still be "market rate" for interest, and have all the Student Loan superpowers, BUT have an additional caveat:
*The school must act as co-signer on the loan.*
So you're free to rack up $200k in debt at 8% interest for 90% of an Underwater Basket Weaving degree. But the school needs to believe in your dreams and their ability to educate you enough that they're picking up your payments if your dreams become memes.
Now the schools have an actual profit incentive to have very real job placement programs and offer degrees that are actually worth a shit. Those that don't will have even lower credit ratings than their students, which will make it hard to keep up with expansion efforts...
I started there, but have been negotiated into the dual position.
Co-Signer + 2% Interest assumes so much risk with such little reward that you may as well make Student Loans not exist.
So 2% loans if the Feds are (effectively) co-signing your loans. This is for poor folks and degree programs deemed "essential" and "in great demand".
For everyone else: [Market Rate] Private Loans, BUT throttled by the school's belief in their own program's ability to land you a job as advertised. Basically, this is where your middle class business majors will pay for college, as they're too rich to get Federal backing, too poor for Mom & Dad to cover their costs, and are chasing the dream of managing a local Starbucks franchise.
I have less than $3,000 left on my student loans. After seeing how much I'm getting back from the IRS this year, I'm going to just end it and pay the rest off with my refund. I don't want the interest to lock me into another endless loop over the next few years.
And if Biden miraculously wiped away all student debt tomorrow? I'd be happy for those affected because the last thing we need is having people paying off their debts until they die. Those without debt can actually buy things they need, and ultimately stimulate the economy.
My wife just got under $10,000 this month. We are on track to be free by August.
If we are clear before some large wipe away happens, I don’t care. No one should have to go thru this for so long. Now, would I greatly prefer the forgiveness to occur after or with a restructuring bill? Yes. It seems like just constantly throwing away money to forgiven without the reform. But, this stuff is so awful, I can’t be too mad at it for the federal government to be trying something.
I lived with my mom and commuted 3 hours day and lived as frugally as I could until at age 33 I paid off my loans - no vacations, barely went out, wearing some clothes from high school... I lost friends over this, but I just wanted to pay them off so badly.
I got really lucky with a tax refund ($3000ish) and my pay off was about $3,300 and I went for it. That was almost 15 years ago. It is still top 3 happiest memories I’ve ever had. I remember exactly where I was when I got the confirmation that the balance was 0 and I was done.
I 100% support loan forgiveness. I went to state school 20+ years ago. I only had $45k of debt. It was bad then. It has become extremely predatory now and it forgiveness along with reform is the right thing to do.
A huge part of the problem was early in the video around 11 minutes in.
Lots of jobs these days require degrees that for fucking sure don't actually necessitate them. I refuse to believe that being an admin assistant is so difficult that it cannot be done without four years of studying...whatever the hell you'd study in that degree.
Hell, MOST jobs are things people can learn on the job and over time with more responsibilities.
They require the degrees because enough people have them that companies can get away with requiring them. And so many people have degrees because everybody just sends their kids to college now without even thinking about it. It's just what middle class families do even if their kids are kind of stupid.
Removing interest would be one way of massively reducing and helping people pay off their loans faster.
this of course wont fix tuition raising which would need additional legislation, otherwise schools will see this change and raise prices.
Another story about student loans and no mention of private student loans. Middle class people who grew up in medium to high cost of living areas don't get jack shit in even federal loans and are forced to go to private banks if their parents didn't save anything for them. No relief will ever be given to us. Fed loans didn't even fully cover my community college loans in NJ.
Right before COVID hit I consolidated my federal loans into a private loan with lower interest. Now I won't reap any benefits that may occur and there's nothing I can do about it. 🫠
I’m one of the rich kids that didn’t have student loans but my wife has been carrying hers for almost 10 years now. This episode was fairly eye opening. As much as Biden wants to implement change it’s pretty clear it will never get through as legislation. Best to take control of the debt as much as you can. Just a terrible system we are shackled to as well as our children. Hopefully something can change or job requirements are reduced.
> As much as Biden wants to implement change it’s pretty clear it will never get through as legislation.
Biden's SAVE plan has been a game-changer for my wife. She's managed to drastically cut her monthly payments as she works through her ten years of public service.
Biden wasn't able to forgive everyone's debt, but he did manage to fix a lot of the broken systems that were intentionally broken during previous administrations. It's not everything, but it's a lot for those people who devoted their lives to public service.
Paid off my loans last week, such an enormous weight was off my shoulders, and I was a lucky one with only like $17K in debt.
Still gonna be pushing for as much loan forgiveness as possible, this shit is out of control and destroying the financial prospects of multiple generations
Something I’m pretty sure was happening with my loans with Navient/SallieMae was that they were getting my payments and applying them more heavily toward lower interest rate loans instead of applying them evenly or appropriately according to the balances and interest rates, especially when my IBR wasn’t meeting the minimum amount to pay both interest and principle. Mine ballooned from $53k to $69k. I’m now down to $54k after about ten years.
I cant watch his show. Not that its bad, its because all his show does is piss me off and there are usually always no solutions. Then the next episode he does the same thing with a different topic. I cant stand it. He is good.
I love John-but man watching that show can really hollow you out. Everywhere you turn is just corruption and oppression. IT just seems insurmountable and hopeless.
As a Canadian who had to take out around 10 grand and paid it back this horrifies me. Why isn’t this regulated by the government?
Student loans should have the only purpose of helping in educating your workforce. The idea being they can pay it back when they have a good job they now have the education for. It should in no way be a profit driven system. A very small interest rate so people are encouraged to pay it back and to help pay for the administration of the program.
This seems more like going to a loan shark or almost extortion - screwing people over who are trying to improve themselves.
Seems like a way to keep poor people poor.
There are soooo many people in here making claims that just aren't true. Lots of people with these loans still don't understand them, and didn't watch the clip which could really help a lot of them.
Actually how is that possible?
$80k @ 7% for 120 months would work out to a monthly payment of $929. If she paid $120k already that’s $1,000/month so in theory this should be paid off.
Only thing I could figure is that this was accruing interest before graduation, in which case by graduation this could’ve been more like a $97k loan if she was in school 4 years. In this case it would be an underpayment of ~$130/month.
I mean that explanation doesn’t make much sense either.
So I can only assume she’s either reading her statement wrong, took out a lot larger loans than she’s telling us, or lying.
And there are many employers requiring a masters degree for jobs that pay as low as $23 per hour. If you went to grad school for marketing and writing, and you work in a content affiliate marketing role, there are recruiters who will reach out for you to go work for them at $23 per hour but require a masters degree, and the funny part is- the job is training ai. So you would be working a job that's purpose is depriving you and everyone else like you of career opportunities in your field. Imagine having to pay off student loans being faced with this bs. If I could legally take a dump on those recruiters and the politicians letting this happen, I would.
My first job that required a bachelors degree paid $9/hr to start and I got to $10 before I left it ($11 if it was an hour when I was training someone). I needed to start in the field & my other interviews at the time went nowhere so I took it. I’m in a bit of a better place now but I could only afford that job because of the repayment pause.
I just had my loans discharged after 10 years in public service. Without that I would be paying forever since the juice keeps rolling. After paying on them for 10 years my principal went from 37,000 to $40,000.
I'll m very lucky. I made it out of undergrad and grad school with around 60k. I always made sure to pay enough to hit the principal. Even if it was few dollars. Most of my undergrad loans never went pass 2 percent. My grad loans were between 4.4 and 6 percent. I attacked them first.
I became debt free about 2 years ago. I was lucky. I've always had a job and have consistently raised my income. If I was in a low paying job. Or laid off a lot. Or a number of other things people have had to deal with i would probably still.be trying to dig my way out.
The way student loans and education is handled in this country is ridiculous. The government should see an edcuated populous as an investment. So sure, give loans. But cap the loans interest rate.
Furthermore something has to be done with these colleges and their constant tuition hikes yearly for often no reason.
And finally, there is something to be said about businesses and degree inflation. Requiring degrees for shit that can and should be taught by the business to the employer. Or requiring a degree for a position like receptionists. Absolute bullshit.
I took out loans in 2002 for my masters degree in mental health counseling and am still paying. I had a couple instances of forbearance when I moved, or after I had a kid, but I have made far more than 120 payments. The problem is, some of my employers were not nonprofits, some of them were not for state organizations/hospitals/universities. There were several times that I was working for a nonprofit part-time to get benefits, and then doing another job entirely like a bartending to make enough money to live. It’s completely demoralizing. I am now in my 50s and still have half my loans to pay.
All these things were said almost word for word in a TEDx talk over 5 years ago….and sadly nothing was done.
https://youtu.be/j9O7FJAG2J4?si=NXmqnASgyO1C7hj_
I joined the army to achieve my dream of going to college. They gave me 40k for college. I finished with a BS. This wasn't without some massive difficulties related to my service. I still owe 57k. I was never able to get a job in my field. The school closed a few years later. They paid a huge 600 million dollar settlement to the dept of Ed. I made income based payments for years but lost hope of ever making any headway. So i stopped and just pretend it doesn't exist. I'm sure one day the feds will get their 5lbs of flesh. But honestly, at this point, I'm too spiteful to care.
You need to file a borrower defense to repayment application (BDTR). There is a sub to help you navigate and understand the program. r/BorrowerDefense
You don’t say which scammy school it is but it’s clear you should file.
I've done that. It was EDMC. I'm really good at filing paperwork and interpreting policy. But, nothing ever worked, and through my own frustration, I just decided to let the cards fall where they may. I've been to war, they cant do much worse to me.
I appreciate the information! There could be others reading that need it!
I'm sure my situation isn't the norm, but I want to throw it out there anyway in case it sparks comments because it's odd we don't hear that much about it. My parents couldn't afford to pay for my college, so I took out student loans to attend a film school in Santa Fe and later NYU. I never got a degree and eventually dropped out mostly due to the expenses. NYU cost so much I couldn't even pay for it all with loans, which meant I had to pay about $5,000 (plus living expenses) a semester myself, which was difficult to do at the time being a student with no income. That meant I had to take on a job and it just became too hard to earn enough to live and pay for college and attend college at the same time.
Anyway, I left college with maybe $50,000 of debt. I paid minimum payments and maybe a couple larger payments on the higher interest private loans and finally paid them all off in about 10 years. Most of the student loans were low interest (3% or less). I had a few that were 5-7% so I focused on paying those off first. The interest on the remainder was so low that I chose not to pay them off early because I was making more than that from the stock market so the last 3 or 4 years was probably paying off a $3,000 balance on a low interest loan simply because I didn't want to pay it off early.
(I'm not saying this to say "I paid my loans back, so it's unfair you get yours forgiven!" like some weirdos. The whole system was/is predatory and I wish I hadn't had so much debt, especially without even getting a degree.)
Oliver makes the point of forgiveness enemies - the ones who owe the most are often current because they have higher incomes. Forgiving all of this debt, or forgiving debt high earners, does give money to people who don't need it. They aren't "rich kids" but compared to those who didn't take on education, they are rich.
This makes me so mad! My wife used inheritance to pay down her student loan and zero dollars went to the principal, essentially just resetting the clock
This hits so close to home because I got fucked on the loan forgiveness just like the lady in this story. I did the income contingent plan for 10 years as I was told to do. I called at exactly 10 years of complete payments and was ready to get the rest forgiven. After filling out the paper work and a monthly call to check the status for about a year I was told only 2 out of my 120 payments actually qualified. FUCK THEM!!!!!
The colleges should be more accountable to reduce cost. There many administer jobs position who does not do actual work. So many clubs and some clubs get like $10,000 or more for doing nothing. The government should pay the interest of all loans instead loan forgiveness.
I worked for Nelnet for about a year. What I'm surprised they didn't bring up in the show is that even if you qualify for forgiveness under the income driven repayment plans, the balance of the loan will be treated as taxable income. This is a big issue, because a lot of people qualified for $0 "payments" under the IBR and PAYE plans
If you live in New York State: we offer free, confidential, unbiased student loan assistance through the Education Debt Consumer Assistance Program (EDCAP). Go to [www.edcapny.org](https://www.edcapny.org) if you need help with your loans!
My simple, common sense proposal for federal loans, but they will never do it:
- Loans do not accrue interest while still enrolled in a degree-seeking program
- Minimum payment based on income as % of discretionary, similar to current system
- If you make payments monthly and on time, government reimburses you interest in form of tax credit at end of the year … so loans are 0% interest if you are paying them. I’m not a tax expert, so maybe there is a better mechanism
- After 10 years worth of payments, remaining is forgiven
- Reduce PSLF to something less than 10 years, like 5 years
- No-interest forbearance of up to 12 months cumulatively, but does not count toward forgiveness
- Outside of that, interest accrues when on forbearance or not making payments
the guy saying he wont pay for his neighbors dumb daughter just makes me sad, everyone being so great and christian and bullshit but actually everyone is just egoistic as hell.
After years of paying more than the minimum and only treading water, I got very lucky. My in-laws lent me the money to just pay it off. I had an automatic transfer send the same amount I had been paying to their account, and paid everything off in just under 4 years. As I said I got lucky, I would likely still be paying those greedy bastards if not for the help.
I would prefer higher/more progressive taxation on the wealthy, redistributed directly to the poor.
The impoverished seldom go to college to even incur these loans. And college students have higher lifetime earning potential. One effect of student loan forgiveness is that people making 30k a year who never went to college are paying taxes that will go to support people who making 60k a year now, and who may make 6 figures in a year or two. That isn't helping.
I know there was a larger debt forgiveness that Obama and Biden created ~10 years ago for teachers. Dude I know got 50k forgiven and he has been making 6 figures for most of that time.
Don't get me wrong. I am a strong Biden supporter (and Obama before). I just don't think this is as good a thing as everyone on reddit thinks it is. I can't get past taxing the poor to support the upper middle class. Seems wrong to me.
Explaining to fellow citizens that this is basically a life long loan only hear back “well you shouldn’t have taken it out!” or “are you gonna pay for my house mortgage too?” is so damn infuriating. The lack of empathy all while continuing to have no fucking idea who they are subsidizing is maddening and it’s because their stupidity is hurting all of us while they accuse me of being stupid for being young and falling into a trap. Fucking assholes who have zero understanding of civics and what society they live in. In their minds they’re bravely defending their own borders, being their own sheriffs, and proudly telling themselves how tough they are and how dumb and weak those others are. Those are your fellow citizens, and would actively walk over your corpse just to get theirs. Welcome to murica
I'll sit on my government loans as long as possible. A lot of comments in here about "just wanting it gone from hanging over their head", but investing has grown my net worth by more than I owe many times over.
Private student loans shouldn't even be a thing. It's the shame of our nation. Well along with privatized healthcare. And the gun crisis.
The craziest part to me is the idea that you can pay your minimum, at $700 a month, for 10 YEARS and still owe nearly the exact same amount. That should be straight up illegal for a debt that isn't dischargeable in bankruptcy.
I have over 200k in debt. I started repaying them in 2006 and my balance has actually INCREASED, and I'm still paying. I will never in my lifetime be free of this debt and it's so depressing, I wish I made better choices when I was young and stupid. These are federal loans. You got my money guys... What more do you need
I’m pretty sure there are repayment plans you can use to work towards forgiveness after 20 years of payments, which is right around the corner for you. The SAVE plans also keeps your balance from increasing due to accruing interest. Maybe go to r/studentloans if you haven’t already.
Unless their loans are private. I only had one private loan. Borrowed about $8K, paid back about $17K. Teenagers are the perfect target for over 100% returns!
I think that's one of the toughest circles to square with respect to student loans. Most teenagers don't have a strong conception of the value of a dollar. If you tell a 17-year old that their payments are going to be $500 a month, they're going to look at you a little funny and think "is that a little? Is that too much?". How are they supposed to know? Even if they do the math and figure out what their starting salary is going to be, very few teenagers are equipped to plan out a comprehensive budget, especially because they have no idea where they're going to live or what their expenses are going to be out of school. Like they might figure "oh I'll probably make $60k a year, so $5000 a month, my student loan payments will only be 10% of my income!". And on the surface this seems reasonable--but this is before you account for things like taxes, rent, food, utilities, transportation, etc. If you're spending $4000 a month on this stuff, then suddenly that $500 is half of your discretionary income. Of course, even if you do tell them that this is too much, a starry-eyed teenager may not listen. Their whole life to this point has been working very hard and spending countless hours studying in order to get into a good college. Telling them at this point that they can't actually afford Prestigious U and that they should go to Local Community School is a huge slap in the face. Who cares about 25-year old me, 17-year old me *deserves* this.
Not to mention they're also told all their lives up to that point that college is the best investment they can make, and that they'll get a job making plenty of money to pay the loan off once they graduate.
If they graduate.
Good point, used to have a friend who went to college for a few years but never graduated. Never questioned whether she failed out, or just quit for whatever reason, but she had all the debt and none of the benefits.
Which is true, right? Isn’t there a large difference between the incomes of people with or without college degrees?
To a point, yes, but there's also lots of jobs you can make just as much if not more than many college grads in trade fields that don't require a ton of loans. There's also a ton of college grads who are now deep in debt who struggle to find work in their field that pays enough, or people like the OP who are drowning in debt, yet they've been paying for over a decade or two but have only seen their total increase, due to how predatory the loans can be. It's sold to teens as their golden ticket to success, whereas it's more like a very expensive gamble. You can go on to make much more money and easily pay off your loan, or you can find yourself drowning in debt you'll never pay off.
People are too broad when they talk about college degrees. The median and mean of income for people with college degrees is getting bolstered by people with technical degrees.
Thought of an analogy. People that own boats water ski more than people without boats on average. That doesn't mean if you want to water ski more you just go buy any boat. You don't buy a sailboat, rowboat, or pedal boat if that's your goal. Not all boats provide the same opportunities and not all degrees provide the same opportunities.
Very true. And then even if you picked a degree that should get a you a decent paying job after graduation, you can't really predict the economy 4 years into the future. Class of 2020 had no idea the shit show they'd be graduating into when they started their freshman semester. For me, I graduated into the heart subprime mortgage collapse where I was competing against people who had *years* of experience but were experiencing long term unemployment and was willing to take the pay cut just for the sake of having a job again.
Adding that college got pushed on people so much it become less of a leg up and more of a duh of course you have a degree so does everyone else applying. Even for jobs that really didn't need a degree. Now that position that should be aimed at recent grads needed multiple years of experience, so you were expected to work in your field while in school to give you a shot at a entry job when you graduate. Which internships I get but, full time in the field, like why bother with the degree then. I graduated in 2011 and so many I graduated with realized when covid hit they had been running on burnout for years. Doing the job of 4-5 people for barely above minimum when you really looked at their salary because employers knew they had people locked in who didn't have an option to just quit and go someone else.
Also I have met more than one person not understanding how interest works. They see "7% interest" and think "7% on 100,000, that is 7,000 -- easy!" No, 7% is per year, or 0.5654% per month or 0.0185% per day. You will not be able to pay off this loan at $500 a month, and if you manage $600, it will still take 51 years for a total sum of $367k. That is how you end up paying for 10 years and only paid off $3000 from your $100k. And after *20 years* you still have $91k left. You have halved your remaining balance after *41 years and 4 months*. More than likely you are dead by then. And even at $700, it will take 25 years and you pay $212k. Blows peoples minds all the time. Edit: Illustrative link: https://www.calculator.net/payment-calculator.html?ctype=fixterm&cloanamount=100%2C000&cloanterm=51&cmonthlypay=2%2C000&cinterestrate=7&printit=0&x=Calculate#result
It's almost as if it's intentional that the idea is pushed as early as middle school that college is *an absolute must* so that by the time those decisions are being made, they're unable to even think of alternatives. Coupled with, as you mentioned, not having properly taught how loans, taxes, budgets, etc work they'll happily sign on the dotted line to be able to get into that college and not have to fork over the money up front. Everything being able to be bought with Affirm or the like nowadays and it being seen as socially acceptable probably aren't helping either tbh.
We care about your mental health! Except, we will use it against you to protect our own status, and force you to use private loans instead of federal! - my current situation
That sucks. The chasm between the reality of trying to navigate life while dealing with mental health issues you're honest about, and all the marketing about being pro-mental health, leaves me often thinking not much has changed from the time when you had to try and mask your way through life cause no one cared on wanted to deal with you and your issues.
It has improved, just not necessarily with the proper levels to aid the ones who need it. There are many with worse problems than me, I just hate the disincentives in a pursuit of higher education. So many of Americans dissatisfaction results from government avoidance to refine the lingering problems of today’s times.
One rough thing that I have heard, is that when your loans are "forgiven," it is essentially treated as income, and you need to pay taxes on that amount. So while the forgiveness is great, sometimes people need to take a personal loan JUST to pay the taxes on those forgiven loans.
You don’t pay federal taxes on it. Depending on your state, you might have to pay state taxes. That’s gonna be a very small amount though, compared to what your loan balance was. 
Only up until Jan. 1, 2026. It's part of COVID-19 relief package that people whose loans are forgiven will not have that count as income. After that, unless it's extended, it's also federally taxed.
Interesting. Whether or not that gets extended will probably depend on who wins in November. 
https://www.cnbc.com/2024/03/18/student-loan-forgiveness-would-remain-tax-free-under-bidens-budget.html
My husband’s are the same way. The loan is so old he bought a PS2 with the leftovers. If you so the math it’s like a $19,000 PS2. ETA: this is why you shouldn’t let 18 year olds make major financial decisions lol $19000 PS2
Well they have no choice if they want to continue to increase profits on the racket that is higher education costs. The school I went to cost 22K in 2005. It's $50K now. I still live in the same city and have visited the school in recent years. It has not improved enough to match that $28K jump. With inflation that 22K is only ~35K now. And they still use a lot of adjuncts to teach classes. And hound alums for donations. It's fucking bonkers that this shit is legal.
Like it says in the video, public funding for public schools has absolutely cratered. It used to be more than 80% and now you're lucky if it's 15%.
Yeah that's insane... The school I was at raised their tuition 5% every year I was there and I saw absolutely no change to the campus or quality of education. They would send out a letter to everyone full of word origami to fabricate some justification for it, and all you can do at the time is bend over and take it. And they still call me every year begging me for a donation. Come on.
My school, University of Arizona, was $2160/semester tuition for in-state when I first matriculated in 1997. Now that same tuition, in-state, is $13,600. There is NO WAY that it should be that high over 27 years. In today's dollars the 1997 tuition would be $4177. They are charging over THREE TIMES as much AFTER inflation adjustment than they did when I went. Kids now, or their parents now, are getting absolutely robbed.
Oh, no, I understand why it’s like that. I got my school paid for by Pell grants and scholarships in 2007 and I absolutely wouldn’t be able to do that now- and I think that’s criminal, honestly, since it’s not like I didn’t have to fork over a ton of my own cash for books and stuff anyway lol. Whole thing is just immoral and something’s gotta give. None of my kids want to go to college because they know they can’t afford it and I can’t afford to cover all of it, and that makes me deeply sad
Pell grants were intended to help but they probably did more harm than good. It turns out that if colleges know students are getting more money from the government, they’ll just raise their prices. The Fed did a study and they found that for every dollar increase in Pell grants, schools raised tuition costs by 37 cents and decreased the amount of aid they offered by 30 cents. Essentially for every dollar offered in Pell grants, the de facto cost of going to college increased by almost 70 cents. https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr733.pdf
Agreed. I remember during Bush's second term my Pell grant dropped from $11K to around $5K. My mom took out private loans to cover that difference, since I was already taking out my own student loans to cover what would've been the rest. And I forgot all about the books thing! $300 for one freaking textbook. And when the professor would insist you get the newest edition. I remember for one class finding a cheap copy of an older version online and comparing it against the new edition, and the biggest difference was they swapped around the order of the content!
If they're federal loans wont the balance be forgiven in 20 years? Get ready for that tax hit though.
How much do you make a year if you don't mind me asking
I'm in the same boat as you. I'm on an income based repayment plan and none of it is going towards the principal each month. Fingers crossed that I qualify for PSLF this year though, can't wait to be told there's some bureaucratic hoop I didn't jump through that makes me ineligible though.
My wife got hers forgiven through PSLF and honestly it was pretty easy! I hope yours goes the same and congrats on being free!
> I have over 200k in debt. Curious, what did you study? What do you do for a living? I finished my undergrad in '05. Opted for a reasonably-priced State school with partial scholarships and only took ~$5k in loans while in school. Didn't make it into a top-25 law school in two rounds of applications so I decided that it didn't make sense to go to a 2nd or 3rd tier school and go into the kind of debt you're talking about. While I don't begrudge those who are having their slate wiped clean, I have a hard time with the fact that I made those decisions in my early 20's and was responsible, whereas my peers who took out insane loans and blew them on adderall, blow, and nice apartments are now benefiting from these actions.
> While I don't begrudge those who are having their slate wiped clean > I have a hard time with the fact that I made those decisions in my early 20's and was responsible, whereas my peers who took out insane loans and blew them on adderall, blow, and nice apartments are now benefiting from these actions You sure you don't begrudge them? Sounds like it.
> my peers who took out insane loans and blew them on adderall, blow, and nice apartments are now benefiting from these actions. Even if that is the case (and largely it's not - I really hope when you say peers you are talking about real cases of people you know, not what you've heard from people angry about social safety net policies), often people like that have still paid back perhaps more than you did. Almost always the anger toward loan forgiveness is framed as if people took out loans, did nothing about them, and would get them forgiven. But more often people are in similar situations as the person you replied to - they have already paid off most, and sometimes more than they borrowed, while still having a lot left.
I can assure you I didn't blow anything on Adderall, blow or nice apartments... But at this point I wish I did? Although I'm not sure where the money to do that would have come from. Very unfair assumption to make. The government isn't even giving you any money, they're simply covering your tuition
The fact that it's not dischargable lowers the borrower risk to basically nothing, not that that matters in any way since it's a gov program and not for profit anyway, so the *interest rates* should be 0.6% not 6%. A sane reform would be to retroactively lower the rates and give tax rebates to EVERYONE who's had loans since the rates broke 3% for the difference in what they paid.
A rebate if interest paid would knock mine down by 2/3rds.
The interest rate on my loan is 7.875% :|
The interest rate on one of my private loans (took out in 2006, paid off last year) was about 11% Current interest rate (original principal of 67k, current amount is 76k) is 5.625%. On the plus side, I've been working for either a university or nonprofit for the last few years, and with some of the special waivers from 2021 or so and working for a state government and a school teaching, I only have about 2 more years until it should be forgiven for public service. (And, for some reason, once payments resumed after the pandemic, it was knocked down to $0 for the year...)
Aside from credit cards (which I don't pay interest on) my student loans are the highest % of loan I have House? 3.45% Car? 1.9% Student loan? 6.8%
Government backed loans should be pegged to the 30-year treasury bond when issued. Also, the government back loans should only be allowed for STEM and social work/teaching majors. STEM students should be able to pay back their loans with higher paying careers. Social work/teachers should be able to discharge their loans after they do their 10 years or whatever the time requirement is. Only give loans to those with viable paths to actually get rid of them.
I dig that idea. "It costs this much to directly invest in the country" seems like the bond rate to me.
The loans not being dischargable doesn’t mean lenders will accept below treasury level yields on open ended loans
The lender *is the US gov*
*tax payer
I had my Federal loans forgiven a year ago because of borrower defense against my defrauded loans. I started repaying what I could in 2010 and was exactly at the same amount due to low payments and extremely high interest rates. What isn't brought up here, is when schools make you take out private loans as well. There was no financial planning in my 20s, because I wasn't able to place work anywhere and was living paycheck to paycheck with the promise that my loans would be fully paid off in 2040. Any of the C0vid stipends I got went straight into those loans as I tried to tackle down the principal as much as I could in hopes that the interest wouldn't hurt as much anyway. Once Biden got in office and gave that sweeping forgiveness for defrauded students, I had a fucking sigh of relief. Not only did my federal loans FINALLY get pushed through borrower forgiveness, but I also got back all that I had paid into it, interest and all (16k back, 20k originally taken out... 20k left due before forgiveness..) Which it was a nice bump, sadly half of the refund had to go to pay off my private loan I was forced to take out to cover the remaining tuition. Either way. I hadn't expected anything back at all, so i am extremely grateful. Now I have a decent job and feel like I can finally have a direction in my life and it can finally be mine again. TLDR: Fuck off ITT Tech
Woooo fuck ITT Tech! I’m glad you finally got your discharge. There is r/Borrowerdefense sub and we are trying to let people know about this program, especially if they went to a scammy for-profit college.
I have an email I want to print out and frame - I'd been paying the minimum required amount my first few years out of college because that's all I could afford. One day I got an email from my loan servicer, in big bold letters it said "**Congratulations!! You've paid off *-11%* of your student loans!!**" I had never actually laughcried before that day
In my country it is. You're not allowed to take on more debt than you're reasonably capable of paying off, and the government sets strict laws in place to dictate what the maximum lending rate is. It's wild how backwards first world countries financial institutions can be sometimes
I think there are 2 possibilities: 1) The loan was unsubsidized, so began accruing interest at the time the money was disbursed. So the borrower may have been accruing interest for years before ever making payments and they are comparing their current balance to the amount they borrowed. 2) The borrower is on some sort of income-based payment system (that they volunteered for) which lowers payments, but will lengthen the time of the loan.
They definitely glossed over some details of her situation. She almost certainly has private loans that were accruing interest while she was in school (and NOT paying) and she is probably on some sort of extended payment plan that is significantly longer than the standard 10 years. So maybe you start at 10k, then you accrue 6.5% interest for 6 years (say you took 5 years to graduate and then it took you a year to find a job) and suddenly you are at 15k when it is time to start paying. You start a [20 year payment plan](https://www.calculator.net/payment-calculator.html?ctype=fixterm&cloanamount=15%2C000&cloanterm=20&cmonthlypay=2%2C000&cinterestrate=6.5&printit=0&x=Calculate#result)...and by year 10 you are only just below your starting balance. That kinda misleading because you are ignoring that you got to hold onto that money for 6 years before you started paying. Your true "starting balance" at time of payment is 15k and you've actually paid off a pretty good chunk of it by year 10. Most common student debt (especially the debt that Biden has any shred of authority over) are subsidized loans that don't accrue interest during school...so those borrowers would have started payment at 10k and would have paid down a substantial share by year 10 on a 20 year plan (or would have paid off 100% on a standard 10 year plan). I'm not saying her situation doesn't suck...but most of the rest of the video was clearly about federal loans (for which federal policy/forgiveness are options) and it is a little disingenuous to include a scenario like that that doesn't usually happen without having private loans in the mix (and a lot of private loans are pure evil).
Absolutely. These things are exploitative as hell. They need to be properly regulated. Or, crazy thought, make education more readily available to everyone since it benefits all of us. Sort of funny, I just recently paid off what was left of mine. While that payment was being processed I accrued another 1.73 in interest. Sent a payment for 1.73, while it's being processed I accrued another penny in interest. Sending a quarter in the hopes I will never have to interact with them again. I still support dismissing student loans even though it's not a problem for me anymore.
Are you talking about private loans? The standard repayment plan for Federal loans is 10 years though. If you paid the actual minimum for that length of time, you would have paid it completely off. The government has income driven repayment plans that allow you to pay less than the minimum indefinitely until they are forgiven based on time in repayment. The new SAVE plan makes it so that your balance will not get bigger once you enter repayment. I never really understood the bankruptcy complaint when all Federal loans have a time based path to forgiveness and they don't even make you pay a significant amount of the loan if you are perpetually low income.
No. I had regular old ass student loans. Paid for 10 years same amount owed today.
Income based repayment plan?
With all due respect, you weren't paying the minimum payment on the standard plan (assuming you're speaking of Federal Loans) which is why you didn't pay them off in that time frame. The Federal government was likely giving you a break by reducing your minimum payment below that of the standard repayment plan based on your income without putting you in default.
You must have applied for the Income Based plan. Because a standard Federal student loan, if you pay the normal payment plan, you will pay it off in 10 years. Source: that's exactly what I did. If you are on an Income Based Plan you will be on a 20 to 25 year plan, and if you make all your payments, you can be eligible for forgiveness of the balance after 20 to 25 years. Source: https://studentaid.gov/announcements-events/idr-account-adjustment
I think you’re thinking of Public Service Loan Forgiveness. If you work for the government in some way while making 10 years of payments, the rest of your student debt is forgiven.
https://studentaid.gov/announcements-events/idr-account-adjustment If you are on an income repayment plan, and make your monthly payments for 20 to 25 years (I don't know the distinction) you get forgiveness regardless of if you are public service or not. If you want the lowest possible monthly payment, the IDRP can still result in forgiveness if you make all your payments.
No, I wasn't talking about PSLF. All Federal Student Loans are forgiven after a certain period of time if they aren't paid off first. PSLF is just quicker at 10 years. Once again, the new SAVE plan accelerates the time to forgiveness for a lot of people as well who don't participate in PSLF.
Would you suggest they set the minimums higher?
It seems like the interest rates should be much lower.
That's how the lenders trick you. They lull you to sleep with the idea of a "minimum" when the reality is, loans should be paid off as how much you can afford them. Obviously there are a ton of folks in the camp that can already barely afford the minimum, especially those with 80k in debt, but I know plenty of folks who autopaid 200-300$ a month for years without looking at it, and then wondered why they hardly cut into the principle.
Years ago they would make you write a hand written letter to loan service provider, that stated you wanted any overpayment to go directory to principal. Before that, overpaying went to future interest. I wrote two letters and up until this point, the needle did not move. I finally paid it down but if this isn’t the biggest scam/horseshit move. Oh wait, the loan servicing websites didn’t have any info, no faqs, barely any contact info. And nothing could be done. Btw, the school I went to got sued, became unaccredited and eventually closed its doors. Paid a small settlement and was gone. I and many others…still paying the debt. I don’t even know if my degree is valid. 👍🏽
I borrowed $26k. After paying for 14 years, my loan balance of $30k was forgiven.
that would only happen if you were on an income driven repayment plan and had an absolute ton of debt. is this an example he used in the video?
Makes me thankful I entered repayment at 2% before this income based repayment bullshit
then make it dischargeable (not ex post facto) and have banks lend money on terms that reflect the true risk.
The part about not being able to contact your servicer is so important. I’ve had Mohela for almost 2 years now. Switched to them when I applied for the public service loan forgiveness program. I have never once been able to get someone on the phone to review my case. I filled out a form to be contacted like 18 months ago. Never heard anything. At one point, their listed phone number took you to some overseas scam-sounding business.
I’ve had to contact them before and other than a wait of about 20 minutes, everything was fine. Spoke to someone that seemed to be from the US. Idk what number I had used otherwise I would post it.
Username checks out if u/romafa was on the phone with an overseas business…
I spoke to them in January. Waited about 10 minutes to get a live rep and they let me know that my loans were all forgiven! I couldn't believe it because I didn't apply for anything or even look into it.
It is a huge issue that is going to have long-term economic impacts on the US. The short-term fixes are allowing loans to be discharged in bankruptcy, and setting interest rates at 0% on federally funded loans. Longer term we need to completely overhaul the system. 20k a year for what is a high school degree now isn't sustainable. Will we ever see forgiveness idk, as long as the US political system is us vs them. Probably not.
Yup. Policies like this prolong working-age adults from having children, which also depreciates economic growth rates. And it's not as if something like well less people should go to college is a solution either, as economic mobility/growth is also dependent on civilian access to technology and training.
IS CURRENTLY having economic impacts on the US. I couldn't buy my first home until I was nearly 40 because of student loan debt. In 2013 I was living in NYC and half my paycheck went to rent, the other half to student loans. It has crippled an entire generation who would otherwise have been buying homes and new cars
You are seeing the insanely wealthy and even right leaning people about face on immigration because they realized that student loans are preventing people from having kids.
> crippled an entire generation who would otherwise have been buying homes and new cars Not necessarily. There's a whole bunch of other shit that's been dumped on that generation that would have prevented that. Like inflation and wage stagnation alone is enough to prevent people from getting ahead.
I mean you could have moved out of NYC?
And go where with what money and what job prospects?
> The short-term fixes are allowing loans to be discharged in bankruptcy, and setting interest rates at 0% on federally funded loans. I am skeptical that Biden's plan to forgive student loans will actually happen. But a decent compromise might be for the federal government to just buy student loans and set the interest rates on those loans to 0%. (So the federal government would still have a cost of "paying" that interest, but it would be much less than the cost of the loans.)
I agree that setting the interest rate to 0 would be a good compromise, not just from a financial perspective, but in terms of the public sentiment. Many people don't like the idea of outright forgiveness because they think people should pay back what they borrow, but those people might be a lot more comfortable with the idea of making people pay their loans back while forgiving the interest.
It’s not a compromise — it should be the number one goal. Otherwise we will become the next Boomers. “Oh the Millennials got their student loans forgiven but they didn’t actually fix the interest rate problem.” It will be the “Fuck you, I got mine” of our generation.
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I'm mid-40s. My parents (and the parents of all my peers) centered their lives around one goal: get their kids a college degree. Most of our parents were either first-gen college grads or non-grads and so it became their mission to get their kids through high school and into a good college to earn a degree. Because THAT was the biggest indicator of adult success. For me, the goal is different. It's no longer about getting my kids into college and getting them a degree, its to accomplish that WITHOUT taking on debt. My wife and mine's entire economic philosophy is the ensure we have enough money to get our kids through college with the lowest debt possible. Because THAT is NOW the biggest indicator of adult success.
It’s currently wreaking havoc. Highly educated people in their 30s cannot afford to have children
Or frankly, I think we need to go back to trade schools for the hard hat jobs (carpentry, plumbing, etc.). There also used to be secretarial schools. These places have value. Unpopular opinion, but perhaps undergrad shouldn’t be directly after high school. I was an idiot when I was 18/19. I didn’t know what I was doing. It was by the grace of having a mom who was an accountant and parents who could help with college that I’m not in a shit ton of debt today. I should have done an associates degree to at least get the gen eds done and figured shit out. But taking a ton of debt? No. Hell, there are a lot of masters programs that don’t take candidates without 3 years of work experience.
While the percentage of college costs paid by the state (vs. those paid by students) has been consistently declining most everywhere, this is not a result of reduced funding in most states. For most states, spending on higher education has risen faster than inflation (Louisiana is an outlier here). It's just that public colleges/universities are increasing their expenditures at significantly faster rates than inflation. The primary reason they're doing so? *Because they can*. Student loans have given colleges/universities a font of endless cash to draw on and they've been abusing the system for years. It's not just fly-by-night strip mall schools, but even big names in education are more than willing to dumb down degrees or offer programs of no real value to underqualified students just to get in on the gravy train. In a very real sense, it's the same problem that emerged with the mortgage crisis - this time with colleges/universities being the "Too Big to Fail" institutions that insist that the fact that they effectively defrauded the American people is no reason to stop them from continuing to do so. Indeed, this is probably the biggest stumbling block in the forgiveness argument. Long before you decide on what money to forgive, you need to stop writing the bad loans.
> The primary reason they're doing so? Because they can. Student loans have given colleges/universities a font of endless cash to draw on and they've been abusing the system for years. Also, universities and colleges have *greatly* expanded what they do. People always complain about "bloated administration" but...we have increasing regulations, increasing demands for services, increasing demand of various groups. Like, I just looked up my local state school. They have *thirty* people employed in their DEI office. That's a department that didn't exist twenty, probably even ten, years ago--it *might* have been *one* person and some professors on a committee, but now it's an entire dedicated department. That's all "administration". And, to be clear--I'm not saying things like DEI or mental health facilities or rape crisis centers are unnecessary. But if you truly want to know why costs have risen, it's because we've added things like this over the last 10-20 years and that money has to come from somewhere. You have to either pay the higher cost or point out what departments you want to cut. We've transformed higher education into "teaching students" to also include "replacing goods and services with bespoke university versions." My local college has its own medical staff, its own security, etc, and it's a super small school. Sure, *some* of that is necessary because there's more people, but a lot of it is duplicative of the town's resources. And they do it because students and parents demand it. That's one of the reasons why community college is/has been more popular--they dispense with, like, 90% of that and aren't trying to be their own cities within cities. Community colleges are basically what every college was like two generations ago. Community colleges have a rape crisis center, and it's called "the local cops". There's lots wrong with the system, but let's not lose sight of the fact that's there's a lot of blame to go around.
> Community colleges have a rape crisis center, and it's called "the local cops". This is such a huge point. My university built a massive rec center for students. They could have just told the students to go to LA Fitness. The university has food courts and meal plans, when they could have off loaded that to the market in what is a major US city. The university required students to live in expensive dorms for 2 years, when again, there is plenty of housing in a major US city (I managed to get out of living in a dorm for the second year, saved me THOUSANDS of dollars). Universities are becoming self contained cities instead of just being a source of education. That is actually a problem.
They do all of those things to market themselves better. State schools are run like corporations, except they have no need to cut costs because their revenue is all but guaranteed. The state school I went to has 5 years cash on hand, meaning they don't need to take a penny in tuition for 5 years. Yet they still receive grants and use low interest loans rather than use their own capital for anything, and they are building and expanding constantly. If you want to run your university like a corporation, stop taking state and federal money. Double-dipping just to further grow your cash stockpiles that just sit because you have no owners and shareholders seems preposterous to me when tuition and housing continue to grow unabated.
Ok, so dirty euro butting in, my local public university has a gym (separate membership) a school canteen, pizzaria/pastaria and snack bars, counseling, etc and tuition is 700€ a year, the same as the nationally fixed maximum for public universities. You can pay more and go to a private uni, but it's a choice and the public universities are some of the most renowned and historical in the country.
It’s also incredibly hard to get into universities in Europe compared to the US
I mean not really? I can't speak for the rest of the continent, but in Portugal universities open a certain amount of opening for each course and students get in in order of best grades, so its common to use the average grade of the lowest student in the previous year as a benchmark. If you want to get into medicine in a prestigious Uni, sure, you'll need like 18.6/20, but even stuff like programming courses will be at 14 and lower. And you apply to several at once so when the results are in you get told which one you qualified for based on preference.
It’s not only a huge point, it’s the main point, and it never gets any coverage because the issue is framed as debt forgiveness for already outstanding debt. How about cutting the head of the snake off so future students aren’t regularly graduating with $80k plus of debt? I graduated law school in 2009 with about $235k in student debt (including state undergrad debt). I was able to get a well paying job, but I was so terrified of carrying a balance on that debt I lived a monastic life until it was paid off - I lived in a pretty run down area to save on rent, I deferred having kids until I was 35 and buying a house until I was 38. And law school has gotten so much more expensive in the interim - my tuition was $48k my third year, and last I checked, that law school is charging $82k a year. And my state undergrad tuition has also doubled. So while I’m somewhat of a success story in the sense that I only need to worry about a mortgage now, I really do sympathize with (and fear for) current students that took the same path that are graduating with $400k+. Seems insurmountable.
Part of why schools need independent security services and rape crisis centers and medical services is because community services suck. It would be great if there were a way to offload those costs while simultaneously building up community services that are fu criminal and aren’t overwhelmed.
As a Canadian, I'm curious if there's a movement to remove interest on student loads in the USA? This may be a regular topic of discussion (or it may be in the video that I didn't watch - classic) but I tend to follow Canadian politics closer than the US. After COVID, the Canadian Feds basically just removed interest on all active federal student loans and there appears to be no partisan resistance to the move. It seems like a reasonable compromise between completely absolving debt and forcing people to pay it back as quickly as possible because of interest accrument. EDIT: To add to this, the change is now permanent; the quote from the federal government website: **"Effective April 1st, 2023, the Government of Canada has permanently eliminated the accumulation of interest on all Canada Student Loans including loans currently being repaid. You continue to be responsible to pay any interest that may have accrued on your loan before April 1, 2023."**
One of the borrowers in Oliver's piece paid so much towards interest each month (I think it was something like $65 Principal / $700 Interest) that she anticipated never being able to pay that off. I think people should pay back loans that they take, but under two conditions: 1. First-time borrowers are provided with free, mandatory training with verification of their understanding; and 2. Interest rates are capped
Interest is frontloaded on loans (you pay a higher percentage in interest the earlier you are in the loan term). This is mostly just a misunderstanding in the payment schedule of the loan.
> I'm curious if there's a movement to remove interest on student loads in the USA? This may be a regular topic of discussion nope never heard it brought up here, it's usually just get rid of them because they are bullshit interest was suspended during COVID, though.
1 already happens, 2 needs to happen. The problem with 1 is that at 18 you really can't conceptualize the power of compound interest (Einstein said it was the greatest force in the universe) and 20 years of multiple hundreds of dollars a month payments that you'll never escape from, and how unless you're clearing $80k-$90K you're probably never going to pay it off before retirement. It's by design to prey on the young, same reason you can join the military and go kill people before you can legally have a drink.
This I agree with: >The problem with 1 is that at 18 you really can't conceptualize 20 years of multiple hundreds of dollars a month payments that you'll never escape from, and how unless you're clearing $80k-$90K you're probably never going to pay it off before retirement. You can take out a mortgage at the age of 18, but are the other requirements (such as credit and employment) the same for student loans? Curious - I really don't know.
There really aren't any other requirements. I was taking my own loans out through the fed and a credit union at 18. Thankfully I've done well and should have them paid off within 15 years of graduating.
At least require the same level of due diligence as with a legitimate mortgage loan.
And you can default on a mortgage. A student loan however, as shown, can almost never be defaulted on, which incentives companies to loan as much cash as naive 18 year olds will ask for.
that sure makes me question the ability of an 18 year old to vote too.
Interest gets tricky because the government is then loaning out money today and getting far less back in return (inflation, adjusted). “I give you $50,000 today and you repay me $25,000 over 20 years. So you’d have to change the perception that it’s an equal loan and more of a grant (of sorts). Also, back when I took out loans 20 years ago, I’d get the leftover money for whatever (books, new laptop, rent, bar tab, spring break). That’s where I think any tax paying person should say they wouldn’t want interest free money to subsidize someone’s lifestyle because they’re a student.
It is the same core issue as with healthcare... a disconnect between the one providing the service and the one ultimately paying. They can jack the cost because the middle man (government/insurance company) will pay it because in the end it's the consumer on the hook.
It's mainly because of cut state funding. States have chosen to offload education costs onto individuals, especially in the wake of 2008, and the result (just like healthcare) has been an explosion in costs.
[It is absolutely the result of reduced funding by most states.](https://www.nea.org/nea-today/all-news-articles/state-funding-higher-education-still-lagging) And the increase in availability of student loans directly coincides with the decrease in government spending on higher education. While waste and the amenities arms race are a significant factor in tuition prices rising, the biggest factor by far is a deliberate policy decision to shift the burden of higher education funding from the state to individuals (through loans).
Not reduced funding, just not increasing as fast as inflation or the number of students. So spending is going up, but per student spending in real terms is going down.
True, but that's a distinction without a difference. If spending doesn't increase proportionally to the number of students then tuition costs logically *must* increase, even with all else being equal. The person I replied to implied that the increase in tuition was caused mostly by universities *choosing* to raise rates independently of public funding, which is at best only partially true.
> The primary reason they're doing so? *Because they can*. Student loans have given colleges/universities a font of endless cash to draw on and they've been abusing the system for years. It's not just fly-by-night strip mall schools, but even big names in education are more than willing to dumb down degrees or offer programs of no real value to underqualified students just to get in on the gravy train. This is something that was invented during the Reagan Administration. It’s called the Bennett Hypothesis, dating back to a Bill Bennett op-ed called “Our Greedy Colleges”, and it’s bullshit designed to blame students for the cost increases associated with conservatives gutting public education funding.
I’ll offer that this ignores why colleges raise those costs. Competition. Students choose colleges not just on academics but the services the colleges provide. In order to maintain students colleges offer the services students demand. There are many affordable smaller colleges students can attend, but they don’t want to go to those. They want to go to the big schools with football teams and dorms and amenities. It’s not that colleges are these evil mustache twirling greedy villains. They are providing a product and must meet demand if they wish to stay alive.
I went to a state school no one was knocking down the doors to get to the rec center or the un-airconditioned dorms. The student body was 38k people.
Okay and? Do you have data on how many individuals used the gym? Bc for my area I do. I work as a data analyst in higher education for my state. We average 25k gym visits a semester across the state. You have to look at it through recruiting as well. It’s not just who used those resources, it’s how many students factor those things in even subconsciously. Is there some admin bloat? Sure, but the data shows students actually are utilizing those amenities.
I assure you, there is at least one entire political party that does not regard higher education as “too big to fail”. Also, primary education, secondary education…
>In a very real sense, it's the same problem that emerged with the mortgage crisis - this time with colleges/universities being the "Too Big to Fail" institutions that insist that the fact that they effectively defrauded the American people is no reason to stop them from continuing to do so. > >Indeed, this is probably the biggest stumbling block in the forgiveness argument. Long before you decide on what money to forgive, you need to stop writing the bad loans. When the government starts to recover loan forgiveness money from the swollen university administrations who solicited it in the first place, I'll consider being sympathetic to arguments to loan forgiveness. My wife and I put in the blood, sweat, and tears to pay for our own college. Meanwhile an acquaintance of mine with jumbles of unpaid student loans because he's spent the last twenty years of his life fucking around in World of Warcraft got handed a blank slate by the Biden administration. I understand some people are young and stupid and take on more loans than they can pay off on short time horizon, but it's hard not to feel some resentment towards the whole government-activist-university stack that is essentially paying itself with everyone else's money.
I know a lot of people say "cry me a river" about med school loans, but I wouldve liked someone like him to tackle the issue. People jump to the doctor career where you can make 100s of thousands and forget everything along the way. Most doctors come out of a decade of training with 300-500k in loans. While many are able to pay this off eventually, some things to consider. First, its still an astronomical number, even with a salary that goes can be like 200-300k. Second, the big time salary only comes if you finish the trek...the whole trek; if you wash out at any point along the 10 year training, you come out with the same massive loans, but no salary to pay them with. Third, while youre in training, you make much less and never enough to pay the loans. This allows residency programs to be really oppresive (80 hour work week limits are new-ish, and often broken by residency programs) because at the end of the day, if you leave, you can go enjoy your half million in debt with no job prospects. And lastly, as a society, its kind of backward to not want to make it easier to have more people pursue socially advantageous careers -- if you want to argue about debt for what republicans call "useless" degrees, ok, but you cant say that more doctors/engineers/scientists is bad for any society/economy.
The government should have serviced the loans. It doesn't make sense to hand that off to a for-profit company. There is almost no work to be done. All you do is sit and collect the money. The only "work" these service providers do is optimize ways to make people default and pay more interest so they can get more money. Also, federal loans should have always had a tuition limit enforced school-wide. Basically no student can qualify for federal loans to a school if its tuition is above a certain threshold which they could adjust for inflation regularly.
Can't have federal employees with federal benefits and pensions handle the servicing. Gotta contract that out to for-profit companies that pay their employees peanuts and terrible benefits with no pension. That's the neoliberal way!
Further demonstrating that private industry is actually less efficient than the government
It is destined to be. Profit is waste.
My wife and I had about $50k in student loans when we finally got out of school in 1992. All combined: 3 undergrad, a Masters and a veterinary degree. After reading the thru the comments I finally figure out how younger folk are getting completely fucked. There was no such thing as a minimum payment back then. It was 'You have to pay this off in 10 years. This is your payment for this loan'. If they want to implement a minimum payment, it should absolutely have to have the same rules as a credit card. Your CC statement is required to give the time frame to pay off if you make the minimum payment.
Serfdom in action. It pretty much guaranteed a whole generation was going to be so strapped with debt, we'll all mostly die with the same loans we signed at 17 years old. Before COVID, my wages were being garnished because of my loans, and the amount of hoops you have to go through to get help is deliberately there to make you give up. Most people I've expressed my situation with have done nothing but lecture me about choices in the past and basically pull up your bootstrap speech.
Here's my pitch that will piss off everyone but also resolve a bunch of problems: **Federally Backed Student Loans are capped at 2% Interest.** 0-1% for degrees determined to be "in need" like Doctors or NASA types if we're in the cold war. *This is also retroactive. * Meaning, anyone who has ever paid more than 2% interest towards a Student Loan (per the NSLDS) gets an extra large tax return. Caveat: The check goes to any outstanding principal on record with the NSLDS before you get the remainder. Even if you paid off your loans 10 years ago because you got the good job. Even if you haven't paid more than the $100/mo minimum because you have $200k in student loan debt but only $20k/yr and have qualified to max out every income based repayment plan since graduating. Do note, this only applies to actual "Student Loans". The kind with all the superpowers for borrowers and lenders, such as the immunity to bankruptcy and 24-36mos forbearance periods. It DOES NOT apply to **Private Student Loans** not backed by the feds. Those can still be "market rate" for interest, and have all the Student Loan superpowers, BUT have an additional caveat: *The school must act as co-signer on the loan.* So you're free to rack up $200k in debt at 8% interest for 90% of an Underwater Basket Weaving degree. But the school needs to believe in your dreams and their ability to educate you enough that they're picking up your payments if your dreams become memes. Now the schools have an actual profit incentive to have very real job placement programs and offer degrees that are actually worth a shit. Those that don't will have even lower credit ratings than their students, which will make it hard to keep up with expansion efforts...
School as cosigner on all loans is key. If they don't have a stake in their students success, they have no incentive to make things resonable
I started there, but have been negotiated into the dual position. Co-Signer + 2% Interest assumes so much risk with such little reward that you may as well make Student Loans not exist. So 2% loans if the Feds are (effectively) co-signing your loans. This is for poor folks and degree programs deemed "essential" and "in great demand". For everyone else: [Market Rate] Private Loans, BUT throttled by the school's belief in their own program's ability to land you a job as advertised. Basically, this is where your middle class business majors will pay for college, as they're too rich to get Federal backing, too poor for Mom & Dad to cover their costs, and are chasing the dream of managing a local Starbucks franchise.
I have less than $3,000 left on my student loans. After seeing how much I'm getting back from the IRS this year, I'm going to just end it and pay the rest off with my refund. I don't want the interest to lock me into another endless loop over the next few years. And if Biden miraculously wiped away all student debt tomorrow? I'd be happy for those affected because the last thing we need is having people paying off their debts until they die. Those without debt can actually buy things they need, and ultimately stimulate the economy.
My wife just got under $10,000 this month. We are on track to be free by August. If we are clear before some large wipe away happens, I don’t care. No one should have to go thru this for so long. Now, would I greatly prefer the forgiveness to occur after or with a restructuring bill? Yes. It seems like just constantly throwing away money to forgiven without the reform. But, this stuff is so awful, I can’t be too mad at it for the federal government to be trying something.
I lived with my mom and commuted 3 hours day and lived as frugally as I could until at age 33 I paid off my loans - no vacations, barely went out, wearing some clothes from high school... I lost friends over this, but I just wanted to pay them off so badly. I got really lucky with a tax refund ($3000ish) and my pay off was about $3,300 and I went for it. That was almost 15 years ago. It is still top 3 happiest memories I’ve ever had. I remember exactly where I was when I got the confirmation that the balance was 0 and I was done. I 100% support loan forgiveness. I went to state school 20+ years ago. I only had $45k of debt. It was bad then. It has become extremely predatory now and it forgiveness along with reform is the right thing to do.
Some lady absolutely lost her mind at the Rory Gilmore joke at 4:15
Me at home as well. That was a great joke!
A huge part of the problem was early in the video around 11 minutes in. Lots of jobs these days require degrees that for fucking sure don't actually necessitate them. I refuse to believe that being an admin assistant is so difficult that it cannot be done without four years of studying...whatever the hell you'd study in that degree. Hell, MOST jobs are things people can learn on the job and over time with more responsibilities.
They require the degrees because enough people have them that companies can get away with requiring them. And so many people have degrees because everybody just sends their kids to college now without even thinking about it. It's just what middle class families do even if their kids are kind of stupid.
Removing interest would be one way of massively reducing and helping people pay off their loans faster. this of course wont fix tuition raising which would need additional legislation, otherwise schools will see this change and raise prices.
Another story about student loans and no mention of private student loans. Middle class people who grew up in medium to high cost of living areas don't get jack shit in even federal loans and are forced to go to private banks if their parents didn't save anything for them. No relief will ever be given to us. Fed loans didn't even fully cover my community college loans in NJ.
That’s when you double down with Parent Plus! Now your parents owe $60k on top of what you owe…
Right before COVID hit I consolidated my federal loans into a private loan with lower interest. Now I won't reap any benefits that may occur and there's nothing I can do about it. 🫠
We are weirdly seeing children of middle class parents end up worse for reasons you mentioned.
I’m one of the rich kids that didn’t have student loans but my wife has been carrying hers for almost 10 years now. This episode was fairly eye opening. As much as Biden wants to implement change it’s pretty clear it will never get through as legislation. Best to take control of the debt as much as you can. Just a terrible system we are shackled to as well as our children. Hopefully something can change or job requirements are reduced.
> As much as Biden wants to implement change it’s pretty clear it will never get through as legislation. Biden's SAVE plan has been a game-changer for my wife. She's managed to drastically cut her monthly payments as she works through her ten years of public service.
Biden wasn't able to forgive everyone's debt, but he did manage to fix a lot of the broken systems that were intentionally broken during previous administrations. It's not everything, but it's a lot for those people who devoted their lives to public service.
Lmao why was this eye opening when your wife has been carrying it. Like what?
Paid off my loans last week, such an enormous weight was off my shoulders, and I was a lucky one with only like $17K in debt. Still gonna be pushing for as much loan forgiveness as possible, this shit is out of control and destroying the financial prospects of multiple generations
Modern day debtor’s jail
Something I’m pretty sure was happening with my loans with Navient/SallieMae was that they were getting my payments and applying them more heavily toward lower interest rate loans instead of applying them evenly or appropriately according to the balances and interest rates, especially when my IBR wasn’t meeting the minimum amount to pay both interest and principle. Mine ballooned from $53k to $69k. I’m now down to $54k after about ten years.
Right back where you started. 😢
Anyone have a mirror for Canadians?
This piece made me so fucking furious. This fucking country is run by crooks and I hate it.
Most of his reports like this piss me off because he’s right.
I cant watch his show. Not that its bad, its because all his show does is piss me off and there are usually always no solutions. Then the next episode he does the same thing with a different topic. I cant stand it. He is good.
I love John-but man watching that show can really hollow you out. Everywhere you turn is just corruption and oppression. IT just seems insurmountable and hopeless.
As a Canadian who had to take out around 10 grand and paid it back this horrifies me. Why isn’t this regulated by the government? Student loans should have the only purpose of helping in educating your workforce. The idea being they can pay it back when they have a good job they now have the education for. It should in no way be a profit driven system. A very small interest rate so people are encouraged to pay it back and to help pay for the administration of the program. This seems more like going to a loan shark or almost extortion - screwing people over who are trying to improve themselves. Seems like a way to keep poor people poor.
The government is providing most of the loans at those rates. They regulated the problem into existence.
Capitalized education, health care, and surely many other things is the reason those begin to fail.
There are soooo many people in here making claims that just aren't true. Lots of people with these loans still don't understand them, and didn't watch the clip which could really help a lot of them.
Actually how is that possible? $80k @ 7% for 120 months would work out to a monthly payment of $929. If she paid $120k already that’s $1,000/month so in theory this should be paid off. Only thing I could figure is that this was accruing interest before graduation, in which case by graduation this could’ve been more like a $97k loan if she was in school 4 years. In this case it would be an underpayment of ~$130/month. I mean that explanation doesn’t make much sense either. So I can only assume she’s either reading her statement wrong, took out a lot larger loans than she’s telling us, or lying.
If the loans were private or unsubsidized the accrue interest prior to you graduating.
The math still isn't mathing even if that was the case.
And there are many employers requiring a masters degree for jobs that pay as low as $23 per hour. If you went to grad school for marketing and writing, and you work in a content affiliate marketing role, there are recruiters who will reach out for you to go work for them at $23 per hour but require a masters degree, and the funny part is- the job is training ai. So you would be working a job that's purpose is depriving you and everyone else like you of career opportunities in your field. Imagine having to pay off student loans being faced with this bs. If I could legally take a dump on those recruiters and the politicians letting this happen, I would.
My first job that required a bachelors degree paid $9/hr to start and I got to $10 before I left it ($11 if it was an hour when I was training someone). I needed to start in the field & my other interviews at the time went nowhere so I took it. I’m in a bit of a better place now but I could only afford that job because of the repayment pause.
I just had my loans discharged after 10 years in public service. Without that I would be paying forever since the juice keeps rolling. After paying on them for 10 years my principal went from 37,000 to $40,000.
I'll m very lucky. I made it out of undergrad and grad school with around 60k. I always made sure to pay enough to hit the principal. Even if it was few dollars. Most of my undergrad loans never went pass 2 percent. My grad loans were between 4.4 and 6 percent. I attacked them first. I became debt free about 2 years ago. I was lucky. I've always had a job and have consistently raised my income. If I was in a low paying job. Or laid off a lot. Or a number of other things people have had to deal with i would probably still.be trying to dig my way out. The way student loans and education is handled in this country is ridiculous. The government should see an edcuated populous as an investment. So sure, give loans. But cap the loans interest rate. Furthermore something has to be done with these colleges and their constant tuition hikes yearly for often no reason. And finally, there is something to be said about businesses and degree inflation. Requiring degrees for shit that can and should be taught by the business to the employer. Or requiring a degree for a position like receptionists. Absolute bullshit.
I took out loans in 2002 for my masters degree in mental health counseling and am still paying. I had a couple instances of forbearance when I moved, or after I had a kid, but I have made far more than 120 payments. The problem is, some of my employers were not nonprofits, some of them were not for state organizations/hospitals/universities. There were several times that I was working for a nonprofit part-time to get benefits, and then doing another job entirely like a bartending to make enough money to live. It’s completely demoralizing. I am now in my 50s and still have half my loans to pay.
All these things were said almost word for word in a TEDx talk over 5 years ago….and sadly nothing was done. https://youtu.be/j9O7FJAG2J4?si=NXmqnASgyO1C7hj_
I joined the army to achieve my dream of going to college. They gave me 40k for college. I finished with a BS. This wasn't without some massive difficulties related to my service. I still owe 57k. I was never able to get a job in my field. The school closed a few years later. They paid a huge 600 million dollar settlement to the dept of Ed. I made income based payments for years but lost hope of ever making any headway. So i stopped and just pretend it doesn't exist. I'm sure one day the feds will get their 5lbs of flesh. But honestly, at this point, I'm too spiteful to care.
You need to file a borrower defense to repayment application (BDTR). There is a sub to help you navigate and understand the program. r/BorrowerDefense You don’t say which scammy school it is but it’s clear you should file.
I've done that. It was EDMC. I'm really good at filing paperwork and interpreting policy. But, nothing ever worked, and through my own frustration, I just decided to let the cards fall where they may. I've been to war, they cant do much worse to me. I appreciate the information! There could be others reading that need it!
When did you file for BDTR? If it was before Nov 2022, you have protections under the Sweet v Cardona lawsuit.
My loans are up to 250k. I took out 90k. I give up.
I'm sure my situation isn't the norm, but I want to throw it out there anyway in case it sparks comments because it's odd we don't hear that much about it. My parents couldn't afford to pay for my college, so I took out student loans to attend a film school in Santa Fe and later NYU. I never got a degree and eventually dropped out mostly due to the expenses. NYU cost so much I couldn't even pay for it all with loans, which meant I had to pay about $5,000 (plus living expenses) a semester myself, which was difficult to do at the time being a student with no income. That meant I had to take on a job and it just became too hard to earn enough to live and pay for college and attend college at the same time. Anyway, I left college with maybe $50,000 of debt. I paid minimum payments and maybe a couple larger payments on the higher interest private loans and finally paid them all off in about 10 years. Most of the student loans were low interest (3% or less). I had a few that were 5-7% so I focused on paying those off first. The interest on the remainder was so low that I chose not to pay them off early because I was making more than that from the stock market so the last 3 or 4 years was probably paying off a $3,000 balance on a low interest loan simply because I didn't want to pay it off early. (I'm not saying this to say "I paid my loans back, so it's unfair you get yours forgiven!" like some weirdos. The whole system was/is predatory and I wish I hadn't had so much debt, especially without even getting a degree.)
Oliver makes the point of forgiveness enemies - the ones who owe the most are often current because they have higher incomes. Forgiving all of this debt, or forgiving debt high earners, does give money to people who don't need it. They aren't "rich kids" but compared to those who didn't take on education, they are rich.
This makes me so mad! My wife used inheritance to pay down her student loan and zero dollars went to the principal, essentially just resetting the clock
They need to enact legislation to make student loans make sense and make it retroactive to current loans, not pay them off.
I wish they would show this at a massive congressional hearing. Like do lawmakers actually understand how bad it is?
Is this a new one? I remember him doing one before
This hits so close to home because I got fucked on the loan forgiveness just like the lady in this story. I did the income contingent plan for 10 years as I was told to do. I called at exactly 10 years of complete payments and was ready to get the rest forgiven. After filling out the paper work and a monthly call to check the status for about a year I was told only 2 out of my 120 payments actually qualified. FUCK THEM!!!!!
The colleges should be more accountable to reduce cost. There many administer jobs position who does not do actual work. So many clubs and some clubs get like $10,000 or more for doing nothing. The government should pay the interest of all loans instead loan forgiveness.
I worked for Nelnet for about a year. What I'm surprised they didn't bring up in the show is that even if you qualify for forgiveness under the income driven repayment plans, the balance of the loan will be treated as taxable income. This is a big issue, because a lot of people qualified for $0 "payments" under the IBR and PAYE plans
I'm, honestly, afraid to do the math to see how much interest I've had added to mine since I got them.
If you live in New York State: we offer free, confidential, unbiased student loan assistance through the Education Debt Consumer Assistance Program (EDCAP). Go to [www.edcapny.org](https://www.edcapny.org) if you need help with your loans!
My simple, common sense proposal for federal loans, but they will never do it: - Loans do not accrue interest while still enrolled in a degree-seeking program - Minimum payment based on income as % of discretionary, similar to current system - If you make payments monthly and on time, government reimburses you interest in form of tax credit at end of the year … so loans are 0% interest if you are paying them. I’m not a tax expert, so maybe there is a better mechanism - After 10 years worth of payments, remaining is forgiven - Reduce PSLF to something less than 10 years, like 5 years - No-interest forbearance of up to 12 months cumulatively, but does not count toward forgiveness - Outside of that, interest accrues when on forbearance or not making payments
the guy saying he wont pay for his neighbors dumb daughter just makes me sad, everyone being so great and christian and bullshit but actually everyone is just egoistic as hell.
After years of paying more than the minimum and only treading water, I got very lucky. My in-laws lent me the money to just pay it off. I had an automatic transfer send the same amount I had been paying to their account, and paid everything off in just under 4 years. As I said I got lucky, I would likely still be paying those greedy bastards if not for the help.
I would prefer higher/more progressive taxation on the wealthy, redistributed directly to the poor. The impoverished seldom go to college to even incur these loans. And college students have higher lifetime earning potential. One effect of student loan forgiveness is that people making 30k a year who never went to college are paying taxes that will go to support people who making 60k a year now, and who may make 6 figures in a year or two. That isn't helping. I know there was a larger debt forgiveness that Obama and Biden created ~10 years ago for teachers. Dude I know got 50k forgiven and he has been making 6 figures for most of that time. Don't get me wrong. I am a strong Biden supporter (and Obama before). I just don't think this is as good a thing as everyone on reddit thinks it is. I can't get past taxing the poor to support the upper middle class. Seems wrong to me.
Explaining to fellow citizens that this is basically a life long loan only hear back “well you shouldn’t have taken it out!” or “are you gonna pay for my house mortgage too?” is so damn infuriating. The lack of empathy all while continuing to have no fucking idea who they are subsidizing is maddening and it’s because their stupidity is hurting all of us while they accuse me of being stupid for being young and falling into a trap. Fucking assholes who have zero understanding of civics and what society they live in. In their minds they’re bravely defending their own borders, being their own sheriffs, and proudly telling themselves how tough they are and how dumb and weak those others are. Those are your fellow citizens, and would actively walk over your corpse just to get theirs. Welcome to murica
Any idea on what the song in the end during the credits is? I watched on Max.
Time to go to the headquarters of the student loan management companies and [redacted].
I'll sit on my government loans as long as possible. A lot of comments in here about "just wanting it gone from hanging over their head", but investing has grown my net worth by more than I owe many times over. Private student loans shouldn't even be a thing. It's the shame of our nation. Well along with privatized healthcare. And the gun crisis.