Federal student loan borrowers can expect “the most affordable student loan plan ever”, Biden said in a video address on Tuesday announcing significant changes to the debt from higher education held by over an eighth of the country.
There just shouldn’t be an interest rate. It’s for education, you’re not investing it in commodities except ur big brain.
Sounds great, but someone would sue again. A loan servicer if not a republican
Let them. Let republicans sue and drive the youth vote away further, let loan servicers emphasize how fucking ghoulish they actually are. Let it fuel actual legislation to change this shit.
They aren’t trying to win the current youth vote really, they’re already enacting sweeping educational changes in Republican controlled states to just indoctrinate the next round of youth voter at the start.
Good luck with that. Does anyone really think passing gag rules about the LGBT is going to even wiggle the needle? Even in a pre-internet era no self-respecting teen is going to think religious grandpa bullshit is worth shit.
Oh yes, the PragerU strategy
Not someone. It was CATO. it was CATO that sued twice. Their argument was that with less needy people they would have problems hiring. This is from their filing btw.
Just so anyone is unaware, under the old system if you worked for CATO you were working for a non-profit which meant after dla decade you would be eligible for a lot of student loan breaks.
We are paying people to work for a lobbyist and when there was talk of stopping that the lobbyist sued. Never ever ever forget that it was CATO that did this. Not just someone.
Set it to 0.1-1%.
Still billions of profit for loan vampires, and a much, much reduced burden for actual people.
To me, the biggest wins is that interest cannot overcome your payment. So many people have loans that are more than they started with. Holding steady isn’t great, but it’s still a massive step forward. The forgiveness rules do mean that effectively some people have to pay until death. There’s no upper limit for forgiveness. More loans means longer payments. I was hoping for a cap help cool the cost of college because lenders would think twice with the interest cap and a known end of life.
Luckily there’s no payments until death in this plan, except for people with short lifespans I suppose. If you make minimum payments for twenty years, and the loans aren’t paid off yet, any remaining balance is forgiven. That includes zero dollar payments if your minimum payment is 0 because of low income. If you apply for forgiveness under public service loan forgiveness it’s shortened to 10 years of minimum payments. Prior payments under other repayment plans should count toward forgiveness too, clock isn’t suddenly resetting to twenty years for everyone.
Unfortunately Biden is not able to change the interest rate. Even though the law clearly grants him the power to forgive or modify many loan terms, it does not grant him the power to change the interest rates, which are set by statute. And even though the law clearly granted him forgiveness powers we all know how that went with the supreme court. So I don’t see them changing interest rates unless democrats get back the house and find a way to overcome a filibuster in the senate.
Wait $0 payments still count? Then I’m like 9 years from forgiveness. Thank you
More affordable than total elimination?
“Most affordable ever” does not mean “most affordable possible.” He tried that. SCOTUS stopped him. He’s doing what he can to make the situation better.
Honestly I think this is better on the whole. Not if you were going to get your loans forgiven - I get that - but for today and tomorrow’s borrowers, this policy will be a positive thing and will still help current debt holders, too.
It can actually end up having the effect of causing tuition to go up.
When student loans became loans that couldn’t get forgiven, and federal student loans became widely accessible for poor students, tuition prices got jacked up because the universities knew that they could get away with it. I imagine a similar thing will happen here.
The only true solution is to have free public higher education like the rest of developed nations do.
Sadly the “rest of” is not only unnecessary but also inaccurate
The true solution was to not mess with the system we had. Where the state schools were nearly free and debt was easy to discharge. The problem was they made it impossible to discharge.
This program will actually save my family more money than the program shut down by SCOTUS. Our loans were never (and are never) going to be completely forgiven, and that’s fine. We owe collectively ~$90k. This plan is a manageable path to payoff for us, at least.
He tried total elimination. But Republicans and the activist SCOTUS ruined that dream.
What’s to stop them from ruining this one?
🤷🏻♀️
This always baffles me. I hear people say “I’m never voting for a Democrat again! They couldn’t get student loan forgiveness done!!”
You think Republicans will get student loan forgiveness done? You think not voting will get student loan forgiveness done? Think again.
Biden and Democrats are doing everything they possible can in a hostile environment where Republicans sue as soon as any forgiveness is on the horizon. And Trump’s SCOTUS is there to help Republicans in that effort.
Elections have consequences! Vote!
No, he didn’t. He tried the motions. The President does not have to collect on a debt or collect a tax without Congress forcing it. Which Congress can’t practically do.
Biden chose to restart payments.
The .gov page has a pretty extensive FAQ.
Do you still pay interest on those loans with low monthly payments? Because that will just make the problem worse in the long run.
Yes, but the interest charged per month can’t be higher than what you pay, so your balance can never increase if you’re making payments.
Also there is a forgiveness period after 10+X years for $12+X thousand in subsidized loans (as I understand it).
This is great, but they should just have one gigantic green square that covers everybody.
It would be simpler, but then we would be subsidizing the 1% student loans. We already have that problem with social security: giving out massive payments to rich people while the program slowly runs out of money.
The 1% pays more in taxes, presumably, but their cost of education is not higher than anyone else. So who is subsidizing whom?
Whenever a politician says the word affordable in quotes, I get nervous.
Anyone know how this affects a homemaker that still has student loans. Is the income based on the household income or the loan holder whose current income is 0?
Edit:
From a nerdwallet article I found this:
Benefits for some married borrowers. Spousal income for borrowers who are married and file taxes separately will be excluded from IDR payment calculations; spouses no longer required to co-sign your IDR application.
So it looks like maybe filing separate can be a possibility though have to research any other tax implications.
This actually seems quite managable. ICR loans are used for student debt in the UK too.
Biden also launched a significant increase to both interest rates and payments. His plan is worse than how things were when he took office.
