2y ago

Biden launches ‘most affordable ever’ student loan repayment plan

www.theguardian.com Biden launches ‘most affordable ever’ student loan repayment plan

Announcement comes two months after supreme court struck down Biden’s original debt forgiveness plan

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.

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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.
  
  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.
  
  Fed loans should be scrapped, the reason college is so expensive is colleges see that the gov will give loans to anyone and back them up. The second that this became the norm, these colleges just saw a blank check.
- He tried total elimination. But Republicans and the activist SCOTUS ruined that dream.
  
  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!
  
  What's to stop them from ruining this one?
  
  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.

- poverty line is such a joke now, just like the inflation numbers. they have to double and triple it to get to a more realistic figure.

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.
- 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.

Whenever a politician says the word affordable in quotes, I get nervous.

This actually seems quite managable. ICR loans are used for student debt in the UK too.

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.

Biden also launched a significant increase to both interest rates and payments. His plan is worse than how things were when he took office.

49 comments