We heard a lot about President Obama’s student loan relief?program last summer
when it had been announced.
Most students are like the turkey during the picture, waiting for (student loan) relief.
Hoping they don’t get slaughtered.
Total student loan debt continues to rise.
Student loan defaults are rampant, though, challenging figure, because of deferments and forbearance.
Student loans in those categories will demonstrate to as performing, that is, current, not in arrears.
Even though the student may be kicking the can in time, by taking more student loans, to use more classes, in grad school, to have the loans in forbearance.
So their loans look current, although balances are increasing, along with the likelihood that they will not be repaid.
The Obama program was expected to assure that everyone would be able to repay student loan debt, regardless of income.
You pay whatever you can afford, for a number of years, Ten or twenty or 25, and the balance of your respective student loan debt would be forgiven.
Anna Bahr from the New York Times took a close look:
But if you look at the numbers closely, PAYE helps save money only if you borrowed big and produce little.
The revised program caps monthly loan installments at 10 percent of discretionary income, described as income exceeding 150 percent with the federal poverty level for that single person. Well-paid graduates and others working minimum-wage jobs will dedicate equal proportions of their income to paying off debt.
Less than 4% of student loan debtors owe more than six figures.
Those for the reason that group with low incomes benefit the most.
IF that debt forgiveness is NOT taxable income.
If you qualify for the ten year Public Service Loan Forgiveness, there\’s no debt cancellation income.
That is not case for the 20 year Obama PAVE program.
In this respect, PAYE does the thing it was designed to do: act as a stopgap. Hypothetically, it accommodates the unpredictability of life, offering young borrowers limited flexibility to pay off their debt at a rate that leaves enough left to pay rent each month. Not surprisingly, the premise of a stopgap assumes an improved, permanent and fast-approaching alternative solution.
For that, Mr. Obama considered Congress, asking that it pass a bill that would allow current students to gain access to at a cheaper rate or refinance their current loans down to match that lower monthly interest. On June 11, Senate Republicans filibustered the measure, arguing that the bill was midterm election political fodder which would have done little to lower education costs. \”The Senate Democrats,\” said the Senate minority leader, Mitch McConnell, \”want a difficulty to campaign on to save his or her hides this November.\”
She is just not critical as I am.
Student loans must be dischargeable again in bankruptcy, after decade, say.
It used to be 7 years. ?Now, while using 2005 bankruptcy amendments, you\’ll find income/expense hoops to jump through just to file bankruptcy.
Congress should remove the extra hoops that remain to discharge student loans.