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Thread: Obama to Announce Student Loan Relief Plan

  1. #81
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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Objective Voice View Post
    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.
    It is not that simple. You are correct that much of this is already law, scheduled to start kicking in in 2014. The President has moved it up two years, and apparently made some other changes.

    Here is an example of the potential cost.

    Borrow $250K for a 4 year degree. Be single, and take a job where your after-tax net is $50K. Your poverty line is $10K. You have $40K to target, so your 10% payment is $4K, for 20 years. That's $80K in total payments. That's taxpayers eating $170K of principal on your education choices. The inflation of your income would be offset by no calculation for interest.

    Under the prior plan, which was also part of the problem, the above example would be $6k paid per year for 25 years, or $150K, and the taxpayers eat $100K, not $170 K.

    The new plan took a moral hazard, which has been a big part of this education inflation bubble, and made it worse. Obama moved it up two years to buy votes. And made it worse again.

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Boo Radley View Post
    If you've paid for 20-25 years, what eactly is there to forgive or cancel?
    See my above post.

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Boo Radley View Post
    If you've paid for 20-25 years, what eactly is there to forgive or cancel?
    Wasn't it obvious? The excerpt indicated ‘remaining balance’. What is ambiguous?

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Dickieboy View Post
    Wasn't it obvious? The excerpt indicated ‘remaining balance’. What is ambiguous?
    I'm saying there would not likely be a remaining balance. Certainly not one to scare anyone.

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Eighty Deuce View Post
    See my above post.
    It doesn't answer the question. if you've paid on the loan for 20-25 years, you likley don't have a balance. And he seems to be speaking of interest lost, and not necessarily prinicple.

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Boo Radley View Post
    I'm saying there would not likely be a remaining balance. Certainly not one to scare anyone.
    Some people take on obscene amounts of debt and then aren't able to get a decent job to pay it off. Personally I have $150K in student debt. I have to pay $1,600 toward my loans each month...and that's if I make the minimum payment; usually I try to pay more than that. Fortunately I was able to land a job that will make it worth it (assuming I don't get laid off in the next couple years)...but there are lots of students who aren't so lucky. Some finish school with $150K or $200K and can't get a decent job due to the horrible economic conditions. For those students, there could definitely be a balance left even after 20-25 years.
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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Kandahar View Post
    Some people take on obscene amounts of debt and then aren't able to get a decent job to pay it off. Personally I have $150K in student debt. I have to pay $1,600 toward my loans each month...and that's if I make the minimum payment; usually I try to pay more than that. Fortunately I was able to land a job that will make it worth it (assuming I don't get laid off in the next couple years)...but there are lots of students who aren't so lucky. Some finish school with $150K or $200K and can't get a decent job due to the horrible economic conditions. For those students, there could definitely be a balance left even after 20-25 years.
    Not if they are paying the minimum, and that is what was suggested, that they paid for 20-25 years. The minimum is designed to have it paid off in a time, 20 years I think.

    The standard repayment term for this loan is 10 years. You may be able to extend repayment by deferring Stafford Loans or Stafford Loan Consolidation.

    (snip)

    •The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.


    Stafford Loan Frequently Asked Questions < Stafford Loan Information | StaffordLoan.com

    So, while I may not know or understand everything, 25 years seems to be the max. So if you're paid for 25 years, what could be left. Even 20 years might mean there is nothing left either, depending on circumstance.

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by Boo Radley View Post
    The standard repayment term for this loan is 10 years. You may be able to extend repayment by deferring Stafford Loans or Stafford Loan Consolidation.

    But the Stafford Loan program is part of the 'William D. Ford Federal Direct Loan (Direct Loan) Program' in which 'students borrow directly from the U.S. Department of Education (the Department) at participating schools'. From the Federal Student Aid program:

    Repayment Plans—The Direct Loan Program offers several repayment plans that are designed to meet the different needs of individual borrowers. Generally, you’ll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose.

    No mention of 'standard' or 'extended'.

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    Re: Obama to Announce Student Loan Relief Plan

    I'm sorry...disregard the previous post. The link you furnished was not relevent to this discusion. Per the disclaimer at the bottom of the page 'Stafford Loan dot com is not a United States Government website or associated in any way with the William D. Ford Federal Direct Loan Program, the U.S. Department of Education or Federal Student Aid.' My oversight.

    Hence it is not affected by BHO's plan.

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    Re: Obama to Announce Student Loan Relief Plan

    Quote Originally Posted by KevinKohler View Post
    Listen, bub, I wouldn't BE in this position if certain people hadn't committed certain crimes, both in washington, and on wallstreet.
    Yeah yeah yeah, it's not your fault, you['re a victim, woes you. I was unemployed for nine months last year into this. I didn't take a single handout, my wife and I lived off her paycheck and made huge cuts in what we were doing till I landed a job, I just got a raise, life is turning around.
    Quote Originally Posted by KevinKohler View Post
    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.
    We have common sense, we also realize that life, isn't fair. I have compassion for your situation, it sucks, but crying about it doesn't solve anything, demanding that you get a to steal from others so your life is a little better makes you better then the "criminals" you are complaining about how again?
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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