Obama to Announce Student Loan Relief Plan

Eighty Deuce said:

As I noted in an above post, this only makes it worse. It creates a moral hazard, and fuels education inflation.

Here's an example. You got $250K in loans to get your dream degree but which you are unlikely to ever make much money. But why you worry !! They can only compel you to pay 10% of what you earn clear of the poverty line, and then only for 20 years. So now that you have your dream degree, you can also opt for your la-la job !! Which in many scenarios, won't pay back half the loan.

Obama has chosen to address this by making it worse. This is exaclty what happened starting in 1997 with housing and sub-primes. Government sponsored moral hazards that created inflation and bad loans.

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Let me put it to you this way. I'm 18, for arguments sake. I know ****. I am told I need an education, and I spend the 250 k only to find I simply can't pay it back. No intent, just a fact, I can't pay it back. **** happens.

Now, those loans have been made, the fact is they won't be paid back, pragmatically what shoudl the country do? The crash is coming.

Actually, Obama isn't doing much at all. While I would like him to, the fact is what he proposes will hardly be notice in the coming crisis.

Boo Radley said:

Let me put it to you this way. I'm 18, for arguments sake. I know ****. I am told I need an education, and I spend the 250 k only to find I simply can't pay it back. No intent, just a fact, I can't pay it back. **** happens.

Now, those loans have been made, the fact is they won't be paid back, pragmatically what shoudl the country do? The crash is coming.

Actually, Obama isn't doing much at all. While I would like him to, the fact is what he proposes will hardly be notice in the coming crisis.

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I agree. It seems like there will be very few people who actually benefit from this executive order...and most of them won't benefit very much. Grossly inadequate. This looks a lot more like a gesture to pretend that he's doing something about the problem, than a serious effort to solve it.

Boo Radley said:

Let me put it to you this way. I'm 18, for arguments sake. I know ****. I am told I need an education, and I spend the 250 k only to find I simply can't pay it back. No intent, just a fact, I can't pay it back. **** happens.

Now, those loans have been made, the fact is they won't be paid back, pragmatically what shoudl the country do? The crash is coming.

Actually, Obama isn't doing much at all. While I would like him to, the fact is what he proposes will hardly be notice in the coming crisis.

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Like anything, you have to look at options before you, and then plot the course. If you can't afford the full $250K, then you can reduce that with 2 years of Community COllege, many of which have curriculum than then transfer with full credit to the larger state universities. It also keeps you from being someone who goes to college for a year or two, who has no business in college, blowing $100-125K figuring that out. There are other more prudent ways as well.

The solution is not to do as Obama has. Which is pure politics and vote buying. It is 100% the wrong solution.

Anyhow, I wish you well moving forward. My choice many moons ago was the military, which ended up being a 7 year stint in some fine units. And then I went to college, as a 25 year-old, amongst 18 year olds, on the GI Bill. Fox in the hen house for sure And I went from having been a mediocre HS student to a straight A student at a very good College in Virginia. Had I attempted college right out of HS, I would have not done as well.

What Obama has done is all wrong. He has been such a mistake.

Boring Bob said:

Is it necessarily a poor decision to limit maximum payments to 10% of income while still holding people accountable for those payments until the debt is fulfilled?

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Because, for some of these loans, those debts will NEVER be filled at 10% income for some of the owners of those loans. You got people that spent 160K to go to an ivy league school, in order to get, say, a degree in english. Guess what? Demand for teachers is low right now. So they are working at Starbucks. Making 11 bucks an hour. For, let's say, 27 hours a week. You do the math.

Thing is, between my wife and I, we pay about...800 a month on our student debt. Now, I'm out of a job, and unemployment gives me about 300 a week, after taxes.

I'm not looking for a handout, just a little leeway. Deferments are not the answer, they have 3 and 6 month deferments, but when they come back on, your interest rate has gone up, and, of course, the interest building itself has increased the size of the loan, let alone the "catching up" you have to do to stay on track.

I don't want my neighbor to have to foot the bill, part of the bill, or anything remotely like that. All I want is for a little under ****ing standing. Kinda like what some home owners who are out of work want. But what did the banks do? Kick them out. And then they lost money on the house. So much that they cut their losses by giving the house to the state, lol. Seems kinda silly, to me. Same with student loans. I've never not paid a debt in my life. It may have taken me a while, but I've always paid my debts. The same is true of my student loan, but jesus, I feel like I'm being kicked while I'm down. You can't squeeze water out of stone, man. And for what? What's the BEST possible result of the student loan companies not being negotiable? I cut back on my utilities and groceries, but eventually, I fail to pay may mortgage. That happens, I lose my credit rating, so guess what, student loan company, while that debt isn't dropped vie bankruptcy, I don't care about late payments anymore, because I have no credit for you to go after. that 20-25 year loan is now going to take your ass the next 60 years to collect, I swear it.

Your Star said:

Mr.V will always make his political opponents into bad people, who do bad things.

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I'm sorry you don't understand that there are real world consequences and less benevolent reasons behind the things politicians do, however I'm just trying to help educate you.

KevinKohler said:

Thing is, between my wife and I, we pay about...800 a month on our student debt. Now, I'm out of a job, and unemployment gives me about 300 a week, after taxes.

I'm not looking for a handout, just a little leeway. Deferments are not the answer, they have 3 and 6 month deferments, but when they come back on, your interest rate has gone up, and, of course, the interest building itself has increased the size of the loan, let alone the "catching up" you have to do to stay on track.

I don't want my neighbor to have to foot the bill, part of the bill, or anything remotely like that. All I want is for a little under ****ing standing. Kinda like what some home owners who are out of work want. But what did the banks do? Kick them out. And then they lost money on the house. So much that they cut their losses by giving the house to the state, lol. Seems kinda silly, to me. Same with student loans. I've never not paid a debt in my life. It may have taken me a while, but I've always paid my debts. The same is true of my student loan, but jesus, I feel like I'm being kicked while I'm down. You can't squeeze water out of stone, man. And for what? What's the BEST possible result of the student loan companies not being negotiable? I cut back on my utilities and groceries, but eventually, I fail to pay may mortgage. That happens, I lose my credit rating, so guess what, student loan company, while that debt isn't dropped vie bankruptcy, I don't care about late payments anymore, because I have no credit for you to go after. that 20-25 year loan is now going to take your ass the next 60 years to collect, I swear it.

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Yes, banks kick you out for not paying your debt, car loan payment failures get your car repo'd, failure to pay your cable bill get's it turned off and the same with electricity.

Sorry life took a bad turn for you, but that's life, **** happens. DEAL WITH IT.

MrVicchio said:

First off, didn't he try this failed idea with mortgages?

http://www.google.com/url?sa=t&rct=...D3e4FmDr4AKn-w9Sw&sig2=FXohxhZvNiOCjdxdCWdU4Q

And secondly, this folks is just a President, bribing a voter block with YOUR MONEY!

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Lets get honest here...Perry throws out a 20% flat tax so the very rich get a HUGE tax cut...and to buy the rest of the country he says ok you can use the same tax code youve always used if you like that TALK ABOUT PANDERING AND BUYING VOTES....and someone tell me what this does for debt reduction lol

Herman Cain...999 SUPER HUGE tax cut for the rich SUPER HUGE tax hike on everyone else...ooops wait how bout 909 TALK ABOUT BUYING VOTES

Stop being hippocritical....obama is doing nothing different than the GOP only hes helping the bottom...they are sucking up to the top..pfffffffffffft

KevinKohler said:

Thing is, between my wife and I, we pay about...800 a month on our student debt. Now, I'm out of a job, and unemployment gives me about 300 a week, after taxes.

I'm not looking for a handout, just a little leeway. Deferments are not the answer, they have 3 and 6 month deferments, but when they come back on, your interest rate has gone up, and, of course, the interest building itself has increased the size of the loan, let alone the "catching up" you have to do to stay on track.

I don't want my neighbor to have to foot the bill, part of the bill, or anything remotely like that. All I want is for a little under ****ing standing. Kinda like what some home owners who are out of work want. But what did the banks do? Kick them out. And then they lost money on the house. So much that they cut their losses by giving the house to the state, lol. Seems kinda silly, to me. Same with student loans. I've never not paid a debt in my life. It may have taken me a while, but I've always paid my debts. The same is true of my student loan, but jesus, I feel like I'm being kicked while I'm down. You can't squeeze water out of stone, man. And for what? What's the BEST possible result of the student loan companies not being negotiable? I cut back on my utilities and groceries, but eventually, I fail to pay may mortgage. That happens, I lose my credit rating, so guess what, student loan company, while that debt isn't dropped vie bankruptcy, I don't care about late payments anymore, because I have no credit for you to go after. that 20-25 year loan is now going to take your ass the next 60 years to collect, I swear it.

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I think you are the exact person (and your wife) that deserves this help. I hope what Obama's done makes a difference for you both.

MaggieD said:

I think you are the exact person (and your wife) that deserves this help. I hope what Obama's done makes a difference for you both.

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It won't. We won't qualify. And besides, this is not the sort of help I want...all I freaking want is to be able to negotiate with my lender, or at least, the people that bout my loan from my orig lender.

MrVicchio said:

Yes, banks kick you out for not paying your debt, car loan payment failures get your car repo'd, failure to pay your cable bill get's it turned off and the same with electricity.

Sorry life took a bad turn for you, but that's life, **** happens. DEAL WITH IT.

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Listen, bub, I wouldn't BE in this position if certain people hadn't committed certain crimes, both in washington, and on wallstreet. That's my point. Some shady men made some illegal, shady deals, both representatives, and private business, and THAT is what got all of this started. I was doing JUST fine before the crash. So yeah, when someone comes along and STEALS your lively hood, you have recourse. But if someone comes along and steals MILLIONS of people's lively hood, we have NO recourse. Get it? In that respect, again, I'm not trying to apply legal FORCE to anyone, I just want a tiny ****ing god damn SHRED of common ****ing since to permiate the thick ****ing skulls of some of the dumb bastards around here.

Of COURSE, I'm not referring to YOU.

conservativeguy said:

If those students are too stupid to realize borrowing $50k to $100k to get a degree that pays them a few dollars more than a skilled trait position, and we are relying on them to carry the future economy, we are screwed as a Nation.

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The cost of college is going up and up... so sooner or later you're going to be calling everybody stupid for going to college. ****, a college professor is a PHD and that's potentially 100,000 plus in student loan debt for a job that could pay you from 50,000 to 100,000 a year.

Damn college profs... :roll:.. they are stupid for wasting that money. It's not like we need them or anything.

Most young doctors and PHDs working in hospitals and ERs are loaded down with debt. The government trying to find out a way to get people through med school with less debt could potentially mean more doctors in our country.

KevinKohler said:

Because, for some of these loans, those debts will NEVER be filled at 10% income for some of the owners of those loans. You got people that spent 160K to go to an ivy league school, in order to get, say, a degree in english. Guess what? Demand for teachers is low right now. So they are working at Starbucks. Making 11 bucks an hour. For, let's say, 27 hours a week. You do the math.

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Yes but, without the cap on payments, won't those Starbucks employees end up bankrupt and unable to pay anything altogether?

Kandahar said:

I just ran the numbers for myself...and as someone who is currently $150K in debt from college and b-school, it wouldn't help me at all to take advantage of this option to lower my monthly payments. In fact, it would cost over $100K (I'd eventually get $80K of my principle forgiven, but I'd pay $180K in interest). If this plan doesn't even help someone with as much student debt as me, I'm not so sure it will help anyone. Not that this applies to me anyway...as I understand it this plan will only apply to new student loans.

I like the idea of the government taking action on student debt, as it is indeed one cause of the massive debt overhang facing our economy. But this particular executive order doesn't really seem to do that much.

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The principle on my debt is over 60,000 and the interest makes it nearly 100,000... and I have a masters in accounting. ****. I could own a house for this amount of debt. I am in my 20s, not married, no kids, and being in this situation sucks, especially with the ****ty job market. I am not going to be able to afford buying a home or even having kids for years. I really do think the cost of our education is unbelievably high and ridiculous, and it should be addressed. I'd love to see the political discussion shift to this issue for once.

Boring Bob said:

Yes but, without the cap on payments, won't those Starbucks employees end up bankrupt and unable to pay anything altogether?

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Potentially, yes. I think these sorts of things need to be dealt with on an individual basis, not with such a broad brush. When you whip out the big brush, is when you run the risk of having your policy get taken advantage of.

SheWolf said:

The cost of college is going up and up... so sooner or later you're going to be calling everybody stupid for going to college. ****, a college professor is a PHD and that's potentially 100,000 plus in student loan debt for a job that could pay you from 50,000 to 100,000 a year.

Damn college profs... :roll:.. they are stupid for wasting that money. It's not like we need them or anything.

Most young doctors and PHDs working in hospitals and ERs are loaded down with debt. The government trying to find out a way to get people through med school with less debt could potentially mean more doctors in our country.

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I worked my way through college and came out with a BSBA and a MBA and zero debt. I had to work two jobs during the summers and a part time job during the school year. The argument everyone needs to borrow a ton of money to go to schools they can't afford is complete BS. People should attend the schools they or their families can afford. I guess I am very old school since I have always lived within my means.

muciti said:

I have like very few of Obama's plans, but I do like this one.

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Why is it that people can't evolve or adapt past being short sighted and willingly ignorant of the facts?

You like the SOUND of the plan. Who wouldn't like the sound of a plan that makes it easier for people to be educated? What you are leaving out of your poorly formed opinion is HOW DO WE IMPLEMENT A PLAN LIKE THIS?

Is it not completely obvious that Obama is trying to buy votes with the only skill he has...Talking? All of thes ideas sound great in theory but they just don't work. We don't need anymore false hope, we need the change he promised and has failed to deliver on entirely.

Eighty Deuce said:

Like anything, you have to look at options before you, and then plot the course. If you can't afford the full $250K, then you can reduce that with 2 years of Community COllege, many of which have curriculum than then transfer with full credit to the larger state universities. It also keeps you from being someone who goes to college for a year or two, who has no business in college, blowing $100-125K figuring that out. There are other more prudent ways as well.

The solution is not to do as Obama has. Which is pure politics and vote buying. It is 100% the wrong solution.

Anyhow, I wish you well moving forward. My choice many moons ago was the military, which ended up being a 7 year stint in some fine units. And then I went to college, as a 25 year-old, amongst 18 year olds, on the GI Bill. Fox in the hen house for sure And I went from having been a mediocre HS student to a straight A student at a very good College in Virginia. Had I attempted college right out of HS, I would have not done as well.

What Obama has done is all wrong. He has been such a mistake.

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Many are doing that, but will still end up with too much debt. More debt than they can repay.

What I gave you was a hypothethical, as I said for arguments sake. I'm 53. But I see students every day, and I pay attention. The math simply doesn't add up. And just like the housing crisis, we can bury our heads in the sand, throw around blame mindlessly, or we can start trying to figure out a reasonable and pratical solution. I'm betting we do nothing and then fain being stunned once it happens, because NO ONE saw it coming. Then of course we can throw around some more mindless blaming.

SheWolf said:

The principle on my debt is over 60,000 and the interest makes it nearly 100,000... and I have a masters in accounting. ****. I could own a house for this amount of debt. I am in my 20s, not married, no kids, and being in this situation sucks, especially with the ****ty job market. I am not going to be able to afford buying a home or even having kids for years. I really do think the cost of our education is unbelievably high and ridiculous, and it should be addressed. I'd love to see the political discussion shift to this issue for once.

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The point you raise about the cost of higher ed is a good one and should be discussed. That being said there seems to be a lot of choices someone has that greatly impacts the cost of college. In some states if you are able to enter as an honors student then tuition is often free or greatly reduced. Next most of not all states have two year colleges where the tuition is less, they are closer to home so you do not have to live on campus and if you are successful then you can transfer the credits to the 4 year college. Most schools have scholarships both for academics and hardship, not sure why you did not qualify.

Our best schools usually have "need blind admissions". Thus you get in and then if it found you can't afford the place they work on financial assistance. I feel more sorry for someone like me. We are in the middle class, so our child received no aid. The school he picked is highly ranked but the downside is they did not offer any scholarship dollars.

Last as an accountant in his/her 20's so let's say 5 years out of school. If you at a big 4 firm you should be making about 50K or so. So yes it sucks to have a loan, but don't you feel a bit queasy about reneging on a pledge you made that allowed you to be an accountant.

MrVicchio said:

Yes, banks kick you out for not paying your debt, car loan payment failures get your car repo'd, failure to pay your cable bill get's it turned off and the same with electricity.

Sorry life took a bad turn for you, but that's life, **** happens. DEAL WITH IT.

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sounds like a winning campaign slogan for the republicans. you guys should totally run with that. it will draw in tons* of independents.





















































































*1% or so

Boo Radley said:

Many are doing that, but will still end up with too much debt. More debt than they can repay.

What I gave you was a hypothethical, as I said for arguments sake. I'm 53. But I see students every day, and I pay attention. The math simply doesn't add up. And just like the housing crisis, we can bury our heads in the sand, throw around blame mindlessly, or we can start trying to figure out a reasonable and pratical solution. I'm betting we do nothing and then fain being stunned once it happens, because NO ONE saw it coming. Then of course we can throw around some more mindless blaming.

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So it would seem that I extended the Fountain of Youth to you for a moment

One reason that the cost of education has skyrocketed is precisely because of access to student loans.

You can see that student loans have grown by 511% since 1999. Meanwhile, disposable income has grown by just 73%. As this chart also shows, most outstanding student loan debt (82%!) was accrued by students over just the past decade.

http://cdn.theatlantic.com/static/mt/assets/business/student%20loans%20v%20disp%20inc%202011-q2.png

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This growing notion among those debtors that they should not be obligated for full repayment is absurd ! Why is their debt any more forgiveable than any other citizen's ? As I have noted, Obama taking these actions will only make all things worse, as he is fueling the bubble, creating moral hazards, and teeing up the economy for an even bigger hit.

The way to drive down the price of education would be stop giving out student loans like candy, and certainly not forgive the debt, ie. shift it to other taxpayers.

Eighty Deuce said:

One reason that the cost of education has skyrocketed is precisely because of access to student loans.

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This is true, but is a different issue. Personally I think that our government should end the practice of loaning however much money students need for the full tuition at private schools. They could start by saying that, say, $40K is the maximum that students can borrow per year for college, then gradually cut that number back until it's more in line with what students pay at a state school. Not that I'm against federal assistance for students at private schools...but at most they should be eligible for loans for 150-200% the cost of a state school IMO. This would encourage private schools to cut their tuition back to more reasonable levels.

Nevertheless, the debt overhang from student loans that currently exists still poses a major economic problem for our country, for the same reason that the mortgage debt overhang does. If a person's income goes disproportionately to paying off debts, then they have less money to spend on things that will grow the economy. We need some sort of solution in place for them.

This growing notion among those debtors that they should not be obligated for full repayment is absurd ! Why is their debt any more forgiveable than any other citizen's ?

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It's not. In fact, it's LESS forgivable under the current system. Every other type of debt will be wiped out if a person declares bankruptcy, but not student debt. That stays with a person for their entire life until it's paid off. This is grossly unfair, and flies in the face of the whole reason that we have bankruptcy protection in this country. The only reason this exception exists is because the student loan companies lobbied for it.

As I have noted, Obama taking these actions will only make all things worse, as he is fueling the bubble, creating moral hazards, and teeing up the economy for an even bigger hit.

The way to drive down the price of education would be stop giving out student loans like candy, and certainly not forgive the debt, ie. shift it to other taxpayers.

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There are two separate problems here, that require two separate solutions. The first is the skyrocketing cost of an education, for which I agree with your assessment. The second is the debt crisis which still infects our economy, for which some sort of relief will be necessary.

The numbers were run by an economics correspondent today in The Atlantic magazine. And It turns out what he is offering the students is between $4.50 and $7.70 a month of relief." ...............If his audience had known how minuscule is the benefit, he would have been laughed out of that auditorium.





Krauthammer: If Students Knew Truth Of Loan Plan, Obama Would've Been "Laughed Out Of Auditorium" | RealClearPolitics

fishinRod said:

The numbers were run by an economics correspondent today in The Atlantic magazine. And It turns out what he is offering the students is between $4.50 and $7.70 a month of relief." ...............If his audience had known how minuscule is the benefit, he would have been laughed out of that auditorium.

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Honestly I'm surprised it's even that much. When I ran the financial numbers for myself, I found that I would be WAYYYYY better off just paying my debt as scheduled, rather than taking advantage of this program (even if I was eligible for it, which apparently I'm not). But I agree, it's a pittance. It looks more like a campaign issue than a serious proposal to me.

Everyone of you who are critisizing the President's college loan repayment plan have it WRONG! It's not more federal spending; it's not even a discount. It's a reduction in the out-of-pocket payments college student pay directly toward their federally guaranteed student loan.

The loans ARE NOT forgiven. Those who borrowed the money will still have to pay it back only instead of making payments at the higher repayment amount including interest, the President has instead taken a program that's already written into law* (I'll have to do more research to find the exact piece of legislation that covers this) that allows students to instead pay up to 10% of their "discretionary income" to pay off their loan. In other words, repayment is based moreso on how much money the student makes vice a set repayment amount like, for example, a home mortgage.

Example:

$10,000 loan

$500/wk income

10% of 500 = $50

So, if your repayment was $250/month you save $50 per month on your loan repayment. However, if on the other hand your repayment was $150/month, you might have to pay an additional $50 per month. Of course, there's also loan deferments.

Bottom Line: Some student will benefit from the repayment measure (and I have to assume there will be many who qualify since most live on Ramen noodle diets and work part-time jobs to help pay for college and). Others may not, but it's a step in the right direction and it won't cost the government one dime of taxpayer money.

To learn more about the President's college student loan repayment plan, go to:

We Can't Wait to Help America's Graduates; or,

Press Release: "Remarks by the President on College Affordability" (President's speech in Denver, CO on October 26, 2011)

You can also learn more about the President's proposal and use the repayment calculator on the Federal Student Aide website to see if your revised repayment amount under the plan would provide you with savings.