It's rich that the generation who constantly told me "Life ain't fair" (which, they aren't wrong) in my experience are the loudest ones yelling "This isn't fair!" about the forgiveness plan by Dark Brandon.  

I've paid off loans for years. I have zero qualms nor do I feel slighted or compelled to talk about fair. I don't think others should suffer because I have - that's a super weird mindset. 
A rising tide lifts all ships. 



While people scream and whine about that, a lot of other good is being missed: 
"Department of Education is proposing a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans."

https://www.whitehouse.go...wers-who-need-it-most/

^ This is huge. It's just a good plan. I've yet to see anyone complaining about it, and it's likely because there's nothing wrong with it. It's just a good thing to do. 

DeadGator401


While people scream and whine about that, a lot of other good is being missed: 
"Department of Education is proposing a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans."

https://www.whitehouse.go...wers-who-need-it-most/

^ This is huge. It's just a good plan. I've yet to see anyone complaining about it, and it's likely because there's nothing wrong with it. It's just a good thing to do. 

Correct me if I’m wrong, but it looks like interest still accrues with this right?

If that’s the case, lowering the monthly payment might temporarily take away some of the sting but doesn’t help in the long run and creates more profit for lenders and greater burden for borrowers.

It’s like the car dealer trying to put you in a new vehicle instead of a used one at the same monthly payment for a longer term.

snagr
Correct me if I’m wrong, but it looks like interest still accrues with this right?

If that’s the case, lowering the monthly payment might temporarily take away some of the sting but doesn’t help in the long run and creates more profit for lenders and greater burden for borrowers.

I really hope the Feds aren’t getting in the sleaze ball game of sending people down that road. Luckily my father taught me that is how credit cards make a killing before I got one. Watched it first hand with some people I know paying the minimum, for ever…. Those sleaze balls will set up on college campuses giving away free stuff to students, knowing those “smart kids” will make them a fortune. Some people just can’t see financially beyond a week or two.

@Snagr:


To address these concerns and follow through on Congress’ original vision for income-driven repayment, the Department of Education is proposing a rule to do the following:

• For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
• Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
• Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department of Education estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.
• Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.

https://www.whitehouse.go...wers-who-need-it-most/

I’m not sure if I am reading correctly. Are these $10k and $20k are over the remaining life of the loan? It is saying for future loans, they are lowering the monthly minimum payment, but don’t see how they plan to for existing. I see repayments start again at the end of this year. If someone owes $10k/$20k or less are their loans completely wiped out? Or is it following that 5% of discretionary income formula, but tops out at $10k/$20k?

I personally wouldn’t have any issue with the 5% thing. I imagine over the life of most loans, that is mostly compounded interest.

My issue is with an instant addition of what amounts to $10k/$20k of disposable income addition to the economy for 40M people at about the worst time to do so. If it is slowly phased in, it should lower the risk of inflation. But how do you do that?

Do theses future payment plan reductions cap at $10k/&20k or are they basically unlimited?

EMitch, besides some political bs, I have always liked your posts. Even when not agreeing, I can tell you are just a good dude. I would bet that we agree on a lot of things of just life in general. How things have turn so polarizing in politics is insane and I have certainly been guilty of it too. Most of my family and I agree on most things in life in general, but have some that are all out MAGA and all out far left, but avoiding political talk are very similar. Don’t worry, we will likely butt heads on politics again at some point! Ha ha. I am very opinionated and at times like to stir the pot a bit. I have no political allegiance. For me, every issue, I look at all sides and will call it how I feel. Often though, I do find myself not completely informed on every issue and I have no issue admitting. I am completely open minded to all of our conservative and liberal members. I will often hear stuff on here that I don’t hear elsewhere, do some research and often opens my eyes a bit to how some think and at the very least, see where some are coming from. Granted, some things are just nuts to me…

As for retiring at 55, it is looking worse and worse every day with inflation and market seeming to be back on a deep downward trend. Remind you, I am not looking full retirement, travel the world and live a life of luxury. I will be doing at very least part time until at least 65. I live a very modest life as compared to most in my neighborhood at least. I don’t plan on that changing, besides living within 10-20 miles of the beach or lakeside somewhere. Most towns that I have been researching are equivalent or cheaper than here. My “retire”, just means to stop doing the same 40-70 hour weeks that I have been doing with my current company for 24 years. I’d drive my wife nuts if we were around each other 24/7. If we both did 20-25 hour part time jobs, we should hopefully have enough saved by then to live the modest life we live and stay out of each other’s hair enough.

DeadGator401

I don't forsee any people going "YOLO LETS GET IT" and jump up to buy cars and whatnot with money they already don't have. Besides, it's expensive to buy money right now.

I’m reading a mix between minor to moderate inflation from reliable sources. I’m not even looking at the whackos that claim it will lower or cause hyper inflation.

This is what upsets me about if not being more targeted. I fall in the $120k or under. I would definitely use $10k of freed up debt. I have some higher priced items that have run their effective life (noted about my truck), that I could use a nice influx.

Some perspective.
 
Forgiving $10k will give 43M student loan borrowers about $100 more disposable income per month.
 
The 5.9% COLA increase gave 42M retirees about $100 more disposable income per month.  

https://www.youtube.com/watch?v=qS5xAcU-_ns

MyWar

JerryS
Some perspective.
 
Forgiving $10k will give 43M student loan borrowers about $100 more disposable income per month.
 
The 5.9% COLA increase gave 42M retirees about $100 more disposable income per month.  

That’s a great point

So, 6% additional inflation is okay? Wow…. So, instead of giving away 10% of my lifetime savings, it is only 6%. Good to know that I will need to go get some old plywood and paint to make my MAGA sign.

Porktown
So, 6% additional inflation is okay? Wow…. So, instead of giving away 10% of my lifetime savings, it is only 6%. Good to know that I will need to go get some old plywood and paint to make my MAGA sign.

I think you misunderstood.

The point is that the annual 5.9% increase in social security payments due to cost of living increases will result in about the same number of people getting about the same increase in their monthly disposable income as student loan forgiveness.

So the point is that both things would in theory have a similar net effect on the economy and also inflation.

And nobody is throwing a fit because the COLA increase is gonna blow the roof off inflation. Probably because it won’t.

JerryS

Porktown

MyWar

JerryS
Some perspective.

Forgiving $10k will give 43M student loan borrowers about $100 more disposable income per month.

The 5.9% COLA increase gave 42M retirees about $100 more disposable income per month.  

That’s a great point

So, 6% additional inflation is okay? Wow…. So, instead of giving away 10% of my lifetime savings, it is only 6%. Good to know that I will need to go get some old plywood and paint to make my MAGA sign.

The point I was trying to make is many on here, and most of the right, are blowing this out of proportion.  The same amount of money was injected into the economy by the COLA increase but there was no outrage about inflation consequences.  I think most of us didn't get a 6% raise this year along with the retirees.  How unfair.  Next year the COLA is projected to be 9+%.
 
Looking at the the two groups in my comparison, as a whole, which group needs the inflation help more?
 
The right could care less about the inflation consequences.  They're outraged because this may give the Dems more votes.  Everyone forgets how Trump and his cronies pressured Jerome Powell for negative interest rates in 2020.  Can you imagine what the inflation would be if Powell listened? 
 
(Sorry for the repeated info due to the overlapping post from MyWar)

Curious…. Do you have a source for that SS COLA comparison?

DeadGator401

But I can confirm the usual MAGA signs are plywood and paint. You have to be sure they will fade and look hilariously bad within 2 years though. 
Also, please let us know what the process is like, I've always been curious about the mindset of those who make these trump like signs on plywood, and would love to see it recorded and put on Youtube.

You forgot to mention slamming a 6 pack of Bud tall boys before starting the project. If this does lead to runaway inflation, which I find to be at least somewhat of a concern if Democratic economists are saying so, I will be making my sign! I really hope a moderate Republican can make it through the primary though. Would be a no brainer vote at that point. But morons won’t allow that to happen.

MyWar

Curious…. Do you have a source for that SS COLA comparison?

Here is one of many articles stating the COLA figure:
https://www.yahoo.com/now/average-social-security-benefit-2022-140007748.html
 
per the article:
According to the SSA, the estimated average monthly benefits for all retired workers will be $1,657 beginning in January 2022. Prior to the COLA taking effect, the average is $1,565, meaning seniors will receive roughly $100 more each month and $1,200 over the year as part of the COLA increase
 
My other source was a student loan calculator that shows each $10,000 borrowed costing $104 per month based on a standard 10 year student loan at an interest rate of 4.66%.
https://smartasset.com/student-loans/student-loan-calculator
 
I couldn't find my 42M retiree source.  This site states 46M
https://www.zippia.com/advice/social-security-statistics/