...who bought a cheap car, lived in a 1-bedroom apartment, and worked his tail off to put himself through college?
Or the kid who never ran up a lot of debt because he counted every penny while he was in school?
How about the girl who chose a different University because she couldn't afford her first pick?
Oh, and then we have the thousands of people who will take out loans with the expectation that they, too, will get a handout. How are we going to feel about ourselves when they're sleeping in a cardboard box?
Sorry folks, but this idea is fundamentally unfair. It rewards irresponsibility. It gives the careless spender a competitive edge over the careful planner.
I know a lot of you are great people, with horror stories I can only imagine. But I've seen enough of my classmates run up twice their tuition in beer debt to know this plan is a stinker. I'm paying my way. I wish you the best of luck in paying yours. (May I suggest Ramen Noodles and Totinos Pizza as a good place to start ;-)
- Bill
I have come to conclusion that you may work for the lenders and are spoutting off the swill that you do.. I think I see that others are aware of your statements and it smacks of collusion ! And represent very few opinions, Robert has repeatedly stated the facts you choose to ignore it.. It is in front of you nose.. relief from loans will stimulate the ecconomy.. Try telling that to a hungry kid or Mom driving a clunker and could not qualify for trade as credit is with big ding for student loan. By the way I am making my payments , did I tell you that?? So I'm definitely not irresponsible.. so shut up alright already.. Di
GO PICK ON SOMEONE YOUR OWN SIZE I think your a big bully.. "A Slave to Sallie Mae".
I do not see where you make the connection that all students who take out student loans are irresposible. I attended grad school which I paid for entirely with student loans. Due to time demands of my class schedule the first year, I could not hold a regular job, so my rent was also being paid for by these loans. I did work study and had a weekend job so that I was able to at least pay for groceries and utilities out of pocket. My second year I was able to take on two part time evening jobs to further supplement my income and not have to depend so heavily on my loans to cover my expenses.
I was lucky enough to find a well paid job right out of school and I am able to make my (very high) minimum payments on my loans every month. I would have an extra 750$ every month if I did not have these loans to worry about for the next 9 years (I paid over 9000$ this past year and my principle balance only dropped by 2000$!). This proposal is not a bail out, but a valid suggestion on how to stimulate this economy. If student loan debt were to be forgiven, there would be alot of people out there who would be spending alot more on things like housing, cars, entertainment, and thus...stimulating the economy!
. . .to have a crystal ball, informing us of the impending near-collapse of the economy, years before it actually happened, when we signed for those loans.
With that line of reasoning, every modern day economy would take a huge hit as nearly ever one is built on the backbone of one thing - CREDIT.
I didn't buy a car before I went off to college.
I didn't even live in a one bedroom apartment. I stayed in crappy campus housing.
I worked my tail off and paid two years of college off ON MY OWN.
I counted every penny. I gave up social activities. I didn't party hearty. I got good grades and graduated with a job waiting for me.
I also graduated with $30,000 in debt from a STATE SCHOOL. NOT my first pick private school which would have run me $100K into the hole. I ate more Ramen Noodles and 99 cent Mrs T's pizza's than anyone should in four years. I'm lucky enough to have a job that allows me to make the minimum payments on my student loans - $19,000 in payments over 7 years and my current principle balance is down (*snort*) to ONLY $26,000. Let's not even get started on my husband's student loans ($45,000 for medical training, 6 years of payment on time and his current balance is somewhere around $54K)
Is student loan forgivenss unfair? Depends on what way you look at it. Is it unfair for someone to ring up a boat load of CONSUMER debt than declare BANKRUPTCY? Is it unfair for someone to take out a mortgage 10 times their income then cry about it and get help from the government? Is it unfair for a 17 year old to be told that student loan debt is GOOD debt? That its like a car payment? That you have 10 years to pay it off so don't worry about it? That, without a college education (and the loans that come along with it), you won't be able to get a job or make a living? Is any of that fair?
NONE of it is fair. But if you dig down deep within yourself, I could hope you could see the differences in fairness. NO ONE should have to pay for someone else's mistakes. There are a lot of us out, though, that are paying for someone else's lies. And THAT is not fair.
I'm sure there are more students than you or I care to think about that were irresponsible. But so were people that took out massive mortgages. So were people that ran up their credit cards. So were the Big Banks and the Car Manufacturers and Wall Street and everyone else who has been given a break. But I'll assure you ONE thing - 99% of Wall Street, Big Banks and The Car Companies were NOT 17-22 year olds who were/are wet behind the ears with little understanding of how the student loan industry "works".
Im in default and my loan is nearly 3 times what i borrowed at around 40k. Look, i know i was irresponsible (not like many posters, who have paid those interest payment for years, but have only worked off a fraction of the principal), but at 14 an hour i cant even afford to make the 550/mo interest payment (a few % points will go towards principal). I'm one of those temp tech guys with a few certifications, and without that (endless nights studying dhcp, dns, ip, tcp/ip etc) id be stuck in the 8 to 10 range like many. I wish someone would have told me (and believed them), that i could have achieved a professional level in computing without a degree (but it seemed like the whole world was telling me, I'll be a loser without a college degree, and i can never be a real tech without school (wrong)). I know many programmers and tech types who make a lot more money than i do, with self training over the years... so I'm still pursuing that course of action and would like to make amends with all my debt. Anyways to make a long story short... I just want some kind of reform at a minimum that will help me to clear my credit (so i can be "free" again (trust me folks... with a 500- credit score and defaulted loans, you do not pass go, and even lose job opps now), and to make a minimum payment I can live with. Right now, they have the deck so brutally stacked against any relief, i feel like I'm in hiding. As a life issue, Never-mind telling a good woman what a good man or husband or father i could make, when in fact if some woman married me, we would both never be able to purchase a home, let alone EVER finance anything. (I've only got a few more years left before im old(er)...).
This seemingly is a condition of lifelong fiscal punishment. Maybe in the near future there will be so many defaulters, maybe i will find the love of my life, and we'll be in the same boat. (Defaulters anonymous anyone? Dating sites for defaulters?)
Also, what irks me is all the programs that offer relief/re-fi etc, the defaulters are NEVER included in those programs. I did find one program (the only one for defaulters i think) that requires making 12 interest payments at 550 month for a year which barely wont scratch the principal, how is that relief or reasonable negotiation? So yes, Robert's idea is attractive to me. Even if they would meet a majority of us defaulters half-way. We would rejoice, and feel like there was hope for our future (fiscally). We need legislation that "will NOT" say... well you'll qualify for this second chance if you've been already making payments,(or) paid this much already, (or) haven't been in default for xyz years... NO NO NO... we need real reform ! Yes, Even for us defaulters, that many of you criticize mercilessly.
(btw im a dropout after 3 semesters due to clinical depression and homelessness at the time/years ago. I finally graduated from the school of hard knocks and woke up (a little late, but better than never right?), and began to apply my life towards something, (Im now 35+ years of age))
"Nonetheless, those taxpayers who made the right decisions in life should not be held responsible for the mistakes of those who did not - no matter how bad the advice they received."
You make a very good point. But you're also looking at it from only ONE angle.
Taxpayers who made the right decisions in life have ALREADY BEEN held responsible for MUCH poorer decisions than those of a student choosing higher education. MY tax dollars (not to mention my children's and my children's children's) are going towards bailouts for irresponsible spending that resulted in LUXURIES.
MY luxuries are no frills food when it goes on rock bottom sale at the grocery store. MY luxuries are buying a full priced outfit for my daughter for her christmas photos AFTER I've given up some necessity in order to pay for it. I'm going to assume that your luxuries are not yachts and expensive vacations and high rise apartments and bloated pension plans. You and I are not in that boat now, are we?
You gloss over the fact that many of us have already paid nearly the principle amount IN INTEREST towards our student loans, but you go in depth as to why bankruptcy should be allowed. I don't want to declare bankruptcy. That would be a bad mark on my credit, credit that I have worked hard to keep in good standing. I'm not looking to wipe out the balance on bad terms.
What I AM looking for though is for someone to take a look at the way students have been abused by student loan companies. I want there to be a change. I want ALL that interest I've paid, ultimately fattening someone else's wallet, to be applied to what it SHOULD be applied to - my principle.
If it takes going for the hail mary and asking for a bailout, then so be it. But, please Bill, don't just look at it as the bottom line of your wallet regarding taxes. Look at all the ways in which would help so many - including you - in the long run.
Wouldnt this be a sweeping Amendment?:
*All Federally backed (govt guaranteed) student loans will henceforth be charged a maximum 18% interest fee from their inception (not compounding interest, but 18% of principal) (yes, a one time flat fee of 18%, that can never EVER increase).
*All defaulters will hereby be forgiven, and a grace period of one year will be enabled to start making payments on their new balance.
*All credit reports will be swept clean by Any federally guaranteed education debt, at such a date as required by law (within a few months).
*Payments will be based on your current income and never more than 15% of your net wages (but you can choose to apply more towards the balance (which always will go negative with every payment no matter what now).
*All those who paid more than 18% of principal will receive a big fat refund check.
*If you're permanently disabled, your debt will be canceled.
*While living on unemployment benefits, or while looking for work, there will be automatic deferment programs suited for various circumstances.
*If someone refuses to pay the normal wage garnishments/tax refund will still exist (see bullet #2), and it will after the initial grace period, reflect on your credit score again.
*Successful payment for 4 months will once again remove you from default and process starts all over again.
Hows that for stimulating the economy !
Thousands of credit reports will rise overnight, and 100's of millions in refunds will stimulate the economy.
How's that for a start?
I went back to school for my Ph.d. I thought I was doing everything right. I had a stipend and a job at the university to cover costs. Then, the university cancelled my stipend and I lost a paid job b/c the university needed to save money. They realized that they could get students to work for free or for credit hours. Also, I became sick. The student health insurance that is required through Aetna did not cover most of it. So I had to take out loans for medical bills, food, rent and the required student health insurance. I am looking for gainful employment in my field, but guess what there is a recession and no one is hiring. I'm qualified, but not too many jobs out there. I was interview for one job that just paid $65k a year and I made it to the last round of the interviews. But I found out that 20 candidates made it to the last round of interviews. 20 --usually it's just 2 or 3. Anyways, I did not get it. I asked and it was a employee who was transferred within the company from a project that was concanelled due to the (you guess it) RECESSION. Now, I have to pay for the student health insurance this semester out of pocket and the price went up (thanks Aetna), which means more loans.
You know, students who find themselves in Major Debt are good people who make educated decisions, but then life, poor national policy and predatory bad bank behavior happens. There should be massive loan forgiveness. At the least, there should be a retroactive policy that:
lower interest rates (1-2%) or a low flat fee,
free student health care and
flexible payment schedules based on income.
interest should stop accuring in cases of hardship or forbearance.
A university education makes this country more competitive and the nation stronger with productive and rational individuals. Why are the bankers able to live a life of luxury on the backs of the American student. It's bad ethically and bad for the nation.
No one here is asking for a blank check made out in our names. We are asking for help paying back loans that are impossible to get out from under. I will gladly give the government the address to Sallie Mae in Wilkes-Barre, PA where our payments go. *I* personally do not want the money.
I think you and I can both agree that the Cash for Clunkers program was IRRESPONSIBLE on the government's part - yet again money was delved out, rewarding instant gratification which resulted in tangible goods for the buyer. How many of those people participating in the program bought a brand new car just cause they were "given" $4500? How many of those people walked away with a MONTHLY BILL because of it - during a time when unemployment is at its highest in decades? When the value of a dollar has plummeted?
Loan forgiveness would wipe OUT a bill, not create one, for students/consumers, unlike Cash for Clunkers. It is a bad analogy to use when comparing it to loan forgiveness.
Not to mention, while there will always be those people that "never learn", I can say with confidence that there is a very good majority of us who, after having gotten into student loan debt and seeing the impact is has had on our lives, will never be the instant gratification, get into debt above our heads, buy beyond our means type of people. We've BEEN there already, with little to show for it. I can say with confidence that most of us just want to live a comfortable life that doesn't require breaking out into a cold sweat when balancing our monthly budget.
That this is an economic stimulus plan, not a student loan bailout. Not everything in life is fair, nor should it be. The measure by which this proposal should be judged is not whether it's fair but, rather, whether it would accomplish what it purports to do - stimulate the economy.
You might want to check out the FAQ section and re-read the proposal - I've addressed each of your concerns repeatedly in many forums. If you still don't agree, that's your prerogative.
Are you a pr rep watchdog for sm or a guarantee agency? Im suspicious now.
Lol, thank you for stating something I've been thinking for quite a few days now.
For someone with little to gain or lose from this movement, he seems quite invested in denouncing it.
I hear your views. I hear everyones views. The FACT is that there is corruption in the student loan process. The corrupt process, which was actually allowed to flourish thanks to congressional legislation, is what perturbs most borrowers. (See process details on this site and the PBS special.) I suppose you think the IRS tax process is fair???? We are not singling ourselves out as a special group or cause, that we are the only ones that need forgiveness... we are just focusing on our cause. Many situations are unfair in this country which was supposed to be the land of equal opportunity, and we are supposed to have the right to the pursuit of life, liberty and happiness.... well, fairness and equity in all practices and processes would be a good place to start to keep our founding fathers dream alive.. don't you think???I am fighting for this cause because the process and the corruption has brought about disaster for people personally, and for this country as a whole. The greed and corrupt practices of the lenders, encouraged by congressional rule and lobbying pressures on them, have hurt ALL OF US IN THIS ONCE GREAT LAND. I don't think we need to borrow money if we could keep our money in our pocket and not have the government take more and more taxes without our voice being heard. This is all the same thing. This is about corrupt practices, corrupt legislation that is robbing most Americans of their incomes. From the IRS process, to state and local taxation, to tax on every little thing you buy and do.. It doesnt start or end with student loan lending, it is all over, rampant and destructive greed, alive and well, and encouraged by our own government. Then they spend it where they choose, and they give it to whom they choose -- like recently to the car companies, bankers, but not you or I. It's about greed. It's about abuse of process. It's about enough is enough and we are all getting robbed in one way or another. I myself borrow very little in my everyday life. I try to pay cash. But this country is set up in such a way that it encourages youth and others to live and use borrowed money at some point in time. True, most people go way over their heads. But it is validated and encouraged by our own congressional legislation. Lobbyists and special interests buy votes and could afford to do so. Groups like ours are trying to address issues that are causing us the greatest financial challenges, our student loan debts that we feel have unjust practices incorporated into the lending process. We can't pay a lobbyist to sway congress. We have to fight for our voices to be heard. We are not the only group who feels that our government encourages corrupt practices, and aren't being heard. We are fighting as a nation in general to correct the healthcare debacle. It's the same thing. Greed by the insurance companies who have execs that are paid millions while a young family goes bankrupt due to a medical illness because they can't afford insurance or copays. Corruption is everywhere. The AMA is a powerful lobby. We are fighting our battle to ask for justice for our cause using the power of the people and the internet. This many people aren't wrong. They have been wronged. We are a group like many others fighting to change the system, the process, to a more just and responsible system, and lending process, at the very least. This is what makes America great. If we don't fight for justice in process then we are going to be manipulated by those who are greedy and have no guilt about what they rob from our paychecks. Bill, this is not simple. It is complex. It goes way beyond our cause. It goes to the heart of the rights of a people who are clammering to once again be heard and treated with equity, respect and dignity. I guess you feel it is okay for the Sally Mae' lenders to gouge us through unfair practices, buy a few bigger planes and yachts at the expense of the taxpayers. I guess corrupt processes are okay and you would feel that they earned the money through these corrupt lending practices. I guess you think that the car dealers and the bankers earned their bailouts?? I don't. I think that Congress needs to change a lot of legislation, from student loans to taxation -- and I assume you think we all have fair and equitable representation, too??? Well, I don't. It's about change in corrupt practices, not about avoiding responsibility. Our government can't exculpate itself from responsibility in this economic mess.. the student loan debacle included.
I have MS, I am not a dead beat just really ill, have read the blogs if so you already know my story. Great wonderful you did it without problems, you know that your education got you the perfect job. You are not what we are talking about, you have a right to your opinion but I have a feeling that those that suffer at a terrible sacrifice to families and children all of it . We do not want a hand out we want justice as we have been sucked up into promises of great/ jobs salaries, and student loans at low percentage. It is distroying lives. Lucky you!! I disagree with you and I would defend that right to free speech every time even if I disagree. "A slave to Sallie Mae."
I again I will state that that was exactly as I said told to me by Student loan rep "you need to die as you are such a dead beat now" I resent your implication. Say to me my illness is fair and I'm not using it as a fact not for any other reason, I'm stuck under debt for my student loan that I will never be able to pay it off, and survive , no it is not just a little bit is is the adverage of many indebted students. And I'm not talking about health care reform, I have private insurance that I pay for not state or anyone else. I am committed to those and myself as you have seen everyone that has a story, Robert is also stating the obvious. Please do not judge me as you do not know the facts and you stated that.. so read about others and leave me alone because your inabilities/ compassion is showing. I do not fork off on heath care reform..
What behavior, precisely, are you referring to as irresponsible? And, if you haven't found my responses to the issues you've raised, you haven't looked hard enough.
Again I am very supportive every single person in this situation. I speak loudly against in justice and I say it loudly and often so those that are understanding or saying stupid things like we are irrisponsible are ill educated in my opinion to me, know nothing about predatory lending and I applaud your response to them. Keep it up I will back you up every time. Di
A lot of people have made the mistake of assuming that I'm equating irresponsible and wasteful spending. That is simply not true. Not everyone who is in trouble has been wasteful.
Irresponsible spending is the spending of money that you do not have, and can not pay back if borrowed. It is the use of money that you don't have, and can't get. By definition, everyone who is in financial trouble has been irresponsible. When you borrow, the burden is on you to see the future, and know that you will be able to pay it back.
So what if you can't see the future? Remember that no one is ENTITLED to higher education. If despite your best efforts, you can not afford to go to school, then you should not. Or better yet, you should wait. Take some time off, get a lower paying job, and save up the money you will need. There are no predatory interest rates or penalties on money you have not borrowed yet.
Think of it this way. There are three types of money:
Past Money | Now Money | Future Money
Past money is money you saved yesterday. Now money is money you made today. Future money is money you think you will make tomorrow. In order to spend future money, you have to borrow it. Past money and now money are cheap - it costs $1 to spend $1. Future money, as you know better than I do, is EXPENSIVE. So if you can't afford to pay for college on future money, you'll have to do it with past and now money.
Buying future money when you can't afford it is BAD news for you and our country. If the government bails out all the irresponsible borrowers, that will encourage the incoming generation of students to buy future money they can't afford... which will put us in an even deeper whole.