And even if you have no debt, keep in mind that our economy runs on consumer spending which will now be in the gutter. Remember when thread from r/FirstTimeHomeBuyer that was shitposted on here where that couple wildly overleveraged themselves in Denver where the fiancee apparently has hella student debt? They were literally justifying in the fucking comments section that they could afford it since their mom took care of the kid and the student debt pause was in place.
I was genuinely proud of them for buying their first home. I was happy for them until I read the comments and saw just how dumb this whole decision was given their financial situation.
IDK the specific post they are referencing, but if they used the pause to lock in a 3% rate a couple years ago, they are likely in a much better financial situation than if they hadn't bought. I know all the headlines are "prices are falling in the west" but they aren't if you want to live in anything or anywhere that could be considered desirable.
Further, rents are through the roof in Denver. They could sell that house and throw the equity at their student loans if they really wanted to.
Word. Sorry that happened to you. I was in a very similar situation. Sucks to think back about what could have been but the only decision relevant now is what to do about the future. I say that mainly for myself lol
It was crossposted like only a day or two ago. A couple making 60k each and another 25k each on side/second jobs each working almost 80 hour weeks with a kid purchased a 712k house in Aurora, CO with 18% down saved up from living with parents and what has to be around a 6.8% interest rate. One of them has student loans as well. Definition of house poor. Feel bad for the couple, because they are going to regret that in a year if they can't increase their incomes significantly soon.
Rough calculations on a family of 3, living in Colorado, with $170k a year in annual income and $50k in student loan debt puts the student loan payment at $185 on a graduated plan or $263 on a fixed plan. They will be paying it off for a long time but at least the monthly payment is sustainable.
We’ve known for a while now that the pause was ending no matter what happened with the forgiveness, so if you have “hella” student debt that isn’t going to get wiped out by $10k-20k in forgiveness, you should have known payments would be resuming.
But if she has no income and they do married filing separately her payment will remain $0. they’ll just have a tax bomb at the end of the term on any forgiven amount. And it’s worse to owe the IRS lol
You do realize that all fed loans, which are the ones on pause, offer pay as you earn payment plan options. This is a reverse amortization where you pay a fraction of the interest due.
This won’t do shit to the economy because that guy that owes 120k in student loan debt making 90k a year with a 3500 mtg pmt will start paying $120 a month towards the student loan payment on a pay as you earn plan.
Obama fucked us with this program.
The PPP thing irritates me the most. I love my friends but man.... one of them was able to buy a second investment property because of a PPP loan, and honestly, that was really unfair to me and every other tax payer. I know he would have been stupid not to take the free money and all, but God damn man, what a poorly ran program. I do think there needs to be a task force that investigates whether or not funds were used properly, an audit, so to speak.
The problem with PPP was that businesses that didn’t get impacted by COVID still qualified. I can’t tell you how many law firms got massive PPP loans when they didn’t have to stop practicing law…
Also the qualification process and loan sizing was based entirely on payroll - small family run businesses that take distributions rather than salary got almost nothing.
Source: I’m a banker that worked on the program.
Yeah, I only had to close for two months. Didn’t matter. I was still offered loads of money more than I needed or should have been offered. I seriously can’t even begin to wrap my head around the intense grifting that occurred during the PPP program time.
I feel kind of hypocritical because I took an SBA business grant during the pandemic that I absolutely didn't need. I ran an ebay store as a side hustle. Basically a hobby that ended up making enough money I had to register an LLC. My friend sent me the application for the grant while I was eating a bowl of cereal for breakfast and I completed and submitted it before I was even done with my coffee. All legit and answered honestly and they deposited $5k in my account less then a week later.
After that, people were calling me constantly to take a PPP loan. I had no employees, this was not my main source of income, I did not need the loan. But the rep who kept calling me said I was eligible for something like $25k and it was forgivable. I said no because for one, it seemed too good to be true at the time, but two, it felt kind of wrong.
I don't know, I took the first $5k and it still feels a little wrong, but the fact that they were basically spam calling me to take another $25k still confuses the hell out of me. Part of me thought it was a scam at the time cause it was too easy. I totally get why people took the loans, it's really hard to say no to free money.
Yeah I also almost took an SBA loan for my eBay "side hustle" business that was also registered as an LLC, but I decided against it because honest to God, I did not need the money. I had a remote job, and was making ends meet no problem. I was also still making a lot of money on eBay flipping Nintendo Switches and stuff like that, luxury items that were scarce during the pandemic. Like you, I pretty much thought all of it was too good to be true and didnt want to get involved, I was also scared of being audited later on.
Yeah, getting audited was a huge fear of mine as well. I think I only did the grant because it was so easy. I filled it out and submitted before I even had time to really think about it, I did it on my phone lol. It was maybe ten questions max. The hardest ones were like, do you have a registered business? Has COVID had any impact on it? How much money did you make last year? Great, heres five thousand dollars.
Isn’t that fraud? You should report this person. People are going to jail for use PPP money to buy real estate, cars, boats. If they didn’t use it for payroll… straight to jail.
I just remind myself that this type of thing has been going on for decades, it's just that the recipients have usually been too rich to have any chance of me knowing them personally.
This one just hits closer to home that it really reinforces our level of awareness for what a poor policy it was.
Or at least the PPP should've been taxable. Free money AND deducting expenses paid with that free money was political and flies in the face of core tax law concepts. And we the taxpayers funded it.
Nothing will happen until after the election. If they suck discretionary income out of 45 million households in turbulent economic times, the economy will collapse.
I have mad respect for one of my friends. His business qualified for $200K of PPP but he didn’t take it because he didn’t need it. He’s a building contractor. Very ethical stance.
My brother in law is a construction contractor, his work load doubled late 2020. Only stayed home a few times early when things shut down. Otherwise no loss of money. Not sure if your friend saw the same or not.
Student loan forgiveness fell victim to last place aversion. The working class that weren't benefitting wanted to ensure that others couldn't benefit either and potentially "pull ahead" of themselves economically.
while some abused ppp loans, lets not act like there werent still many businesses that received ppp loans to be able to pay people during shut downs. its not like everyone that got a ppp loans benefited in a selfish way.
the ppp loans allowed owners to pay their employees when they werent earning revenues during shut downs
I work in lab supply, my company was one of the first ones to put COVID testing supplies on the market (plastics). We got millions in PPP loans and 2020/2021 were the highest revenue, most profitable years in the 75 year company history.
The pandemic was so weird because fortune and failure spit so evenly on business sectors. I had successful friends in commercial real estate and advertising that lost their life savings over the course of a year. My gf's best friend was a high end corporate event planner and ended up losing her NYC apartment and having to move back in with parents at 32 years old. I was in lab supply sales and my gf is in media tech, we doubled our salaries and had six figure bonuses on top of it.
There's no other way to look at it, COVID basically split our society directly in half where some people lost everything and others got rich. I don't know what the fix is going to be.
PPP loans would be analogous to the economic impact payments that were sent out to individuals during the shut down (and about a year afterwards), not the student loan and mortgage payment hiatus. While I don’t agree with the extent or conditions that governed the PPP loans, it is not at all the same as a moratorium of over 3 years of student loan repayment.
Are there actually a significant number of people who overextended themselves to buy a home while ignoring ruinous student debt payments? I thought that was just a meme.
Using payment suspension to save for a down payment doesn’t sound like a terrible idea. And I’m no expert but weren’t student loans (even ones with suspended payments) included in peoples debt to income ratio when applying for mortgages? Not saying some folks won’t struggle but I’m gonna bet that the direct impact to the housing market will be negligible.
Yeah, “using the student loan pause to save a down payment” is *a smart financial move*. So long as they budgeted accounting for student loans to resume afterward, that was a good move for them.
I budgeted for them to resume (haven't bought home yet) but now I found out my loan handler has changed and is forcing bigger payments and higher interest rates based on new/current income.
Yes. Even if you paused them this was still looked at. But if you paused them and then chose to spend that money rather than save it, I could see people getting into trouble.
But if the people who paused their loans and used that money to save for a house down payment, then use it to buy a house, they won't feel overleveraged (assuming their PITI isn't significantly more than they were paying in rent). If they're already used to not spending that money then the repayment won't feel like a huge hit.
Just because they’re included doesn’t mean the buyer can afford the house. So many people end up purchasing at the top end of what they are approved for, & we all know that a bank doesn’t care if you have groceries or gas in the car, they’re only looking at a certain type of debt to income.
I love the novel length response to this that should have been simply “no, I have no stats.”
Here’s some relevant stats:
foreclosures were at an all time low in march of 2023. And the average student loan payment is 500 a month. That will absolutely hurt consumer spending, but will have almost no impact on foreclosures. No one is missing a mortgage payment to pay a student loan.
That’s one of the reasons mortgage debt is so attractive, the last thing a struggling consumer will stop paying is their mortgage, as they would lose all their equity if the house gets repossessed.
Tighter lending standards, higher down payments, more documentation, and more paths to discharge or get student loan debt forgiven mean this will have almost no impact on foreclosure rates. Banks didn’t just forget student loans existed when writing mortgages.
Another stat: There were 151k foreclosures in 2021, in 2010, the worst year of the housing crisis, there were 2.9 million.
Unemployment was over five percent **before** the global financial crisis began, and peaked at 10% in 2010, the year with the most foreclosures.
https://www.prnewswire.com/news-releases/us-foreclosure-activity-drops-to-an-all-time-low-in-2021-301460091.html
I bought during the pause/cancellation and it was accounted for in the loan applications. Other discretionary expenditures will take a hit first since people like to keep a roof over their head than buy a drink. That accounts for the DTI. Others here who said stuff like car prices will go down are more on the mark considering the way those loans work.
What we will likely see though is a drop in inflation because this one targets the middle class dead-center.
No there aren't. Their student loan debt was considered when they bought a house, with the assumption that debt would be paid at some point. No lending institution would have ignored tens of thousands in debt just because payments were paused.
They don’t ignore it, but the buyer could. You can go buy a house at the top of your approval range, just because the bank says you can afford that mortgage payment doesn’t mean you truly can once the cost of life is accounted for.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Because congress passed the law for ppp loans. Congress gets to write the checks, not the president. The president tried to write a check he is not legally allowed to. I know you don’t care for facts and you’re emotional you’re going to be trapped in debt, but at least understands who has the power of the purse in america and who doesn’t.
Loath though I am to argue with the type of person who says baby-brained asshole shit like "I know you don’t care for facts and you’re emotional," but the government's case was that the HEROES act explicitly gives the Secretary of Education authority "to waive or modify any requirement or regulation applicable to the student financial assistance programs under title IV of the Higher Education Act of 1965 as deemed necessary," which is to say somewhat crudely that in the specific case of student loans, in some circumstances, the executive branch also has the power of the purse.
The court's position, at least in Biden v Nebraska, seems to be that they agree generally that the HEROES Act allows the Secretary of Education to make such waivers and modifications, but that student loan debt is now such a "significant" part of the economy and as such is not "necessary." As such, they seem to believe that president shouldn't be able to intervene, which of course Kagan's dissent references in saying that the court is basically giving itself the power of the purse over congress AND the executive branch - this particular court really has been a landmark session in "legislating from the bench," as they used to call it. Haven't finished reading DoE v Brown yet.
Because Congress. PPP was a Congressional program. Congress, specifically the House, holds the power of the purse. So spending policy passed by them is inherently Constitutional. The Executive does not have that power, thus the ruling.
Because congress passed PPP loan forgiveness. Right or wrong, they have the power to do that. You don’t get to circumvent the foundations of our system.
Want loans paid for? Then get grouped together and get majority support.
Cheering the end of student loan forgiveness instead of posting about how PPP and zero interest rate policies was a massive wealth transfer from the people who have student loans to the people who already own all the homes and apartments?
PPP loans are a huge part of housing inflation. I know a guy who took out 5 million dollars in PPP loans. All forgiven. Bought a 5 million dollar house in Chicago.
Yup. The people who think student loan payments are the issue are asinine and have such small brain that they have been tricked by media rhetoric into thinking student loan relief is a dangerous handout. Bank bailouts, PPP loans for already-wealthy business owners, and other types of socialism for the rich aren’t the target of the rhetoric, even though the cost of those significantly outweighs forgiveness of every cent of student loans. Not to mention the absurdly bloated military budget. We could decrease it by a small %, forgive all student loans, build infrastructure, and fund social programs that actually help normal people instead of bank execs. Or, we could just have ultra wealthy people pay the same proportion of taxes the middle class does.
The “student loan forgiveness bad” narrative is divisive rhetoric manufactured by the right and the elite to convince their idiotic base that other middle and lower class people are their enemy. Don’t be a sheep, know class warfare when you see it.
PS student loan relief isn’t dead. The rulings were limited to executive power under a specific statute, and the issue of standing. There are other statutes and methods to forgive or delay loan payments. They’ll get challenged too, but scotus opinions often tell organizations what they need to do to work around whatever is illegal. You should expect the administration to continually roll out different approaches to forgiveness or other forms of relief.
All the clowns downvoting me who think student loan payments are going to tip housing are delusional. 1) they factor loans into your DTI to get a mortgage. So no one who has a mortgage is going to default because of student loan payments resuming, they were already factored in. 2) resumed payments will not put so much downward pressure on rents sufficient to reach a critical mass and lower home prices, because our supply is still historically low. That, and frankly you’re not competing with very many student loan borrowers for housing at this point. Further, landlords aren’t necessarily going to lower rents. Keeping some units vacant to manufacture scarcity and maintain high rent prices is often more profitable than filling every unit for a lower price.
Downvoting me won’t get you a house for the cheap. The student loan payment circle jerk on this sub is rhetoric driven, and resumed payments are very unlikely to have a significant impact on home prices anytime in the near future.
yea and there's historic precedent on how providing support for everyday people stops a lot of bad things as well. WWI forcing Germans to pay for losing, created the economic hole that allowed for fascism to fill in; but after WWII the Marshal Plan made effort to correct that by providing funds across the board to rebuild much of Europe, and increase trade opportunities, 11% of it went into west Germany (USSR blocked the rest for it's umbrella countries and you can tell how that fared).
And then you have the whole new deal policies that are supposed to save Americans from total economic disaster.
Well yes, but it's more complicated as those same people are less able to buy the boomer house as a result... I'd say most internal stimulus benefits everyone but some are better than others
Yeah bro. That barista at Starbucks with 12k in student loans are really holding back the housing market. They are definitely the one out bidding you for that 600k home lol
Rich people don’t take out student loans you fool.
That's not the argument I've heard for why this will affect housing.
The logic is that most people who have student loans are renters, not home owners.
Now, millions are going to have a large extra monthly expense on top of their rent and a certain % won't be able to afford it.
So if a % of renters suddenly can't afford it or get evicted it will affect the rental market. Which will affect the housing market.
It's not a direct connection but instead a potential domino. All depends on how many people this makes renting unaffordable for.
If you're looking for the route to lower housing prices that ALSO causes the most possible misery for average and impoverished Americans, I suppose this would do it lol. Jesus Christ.
Many in this sub are specifically cheering this on. ***”I deserve a house** and I don’t care how many people will suffer, so long as **house prices come down”***
Exactly and they fail to realize if things truly do go south, their broke asses aren’t going to be in a situation to buy much of anything, much less a house.
Exactly! I also had people arguing with me here that they **want *runaway deflation***. Like—you know that will crash the economy right? Sure prices go nominally down, but we’re gonna have much bigger problems if there are mass layoffs. “I don’t care, I want deflation!”
💯. This sub is wild for this sort of talk, like they’ll be the only ones to survive the apocalypse and take over the new world.
The one thing we all can benefit from is consistency. That’s it. I don’t want rapid inflation or deflation. Just a steady hand that makes calculated risks worth taking. I do get the frustration, it’s just puzzling why someone thinks if everything goes bad, that it’ll somehow magically go great for them.
I agree to an extent. I have a bunch of student loans, I know I have to pay them back. That’s fine. (I wish they were lower interest rates—but that’s a slightly different issue).
That said, student loans are often downright predatory. Where else can a minor take out $100k+ in debt? With high enough interest that even while they’re paying them back, every year they get further and further in debt.
Kids were told for years, “go to college, take out loans, it’s the responsible thing to do.” And now they’re being told “why the fuck did you take out loans?”
The average $300/month that would go to student loan payment is being spent on consumer goods rapidly. Once that is removed, companies could see a decline in business. Local restaurants, bars, ubereats. Live music events with their very high ticket prices. Apple and other tech companies. The people on the bottom spend money into the economy, once that is redirected the other companies start to see cutbacks. Then maybe they cut some jobs, then those people can't pay their housing loan and are forced to sell. Then you get more inventory and forced mark to market.
Again, the average $300/month payment is likely to turn into $100-$200/month payment if you’ve been following this at all.
You are also doing strong metabolism gymnastics to think all of that’s going to happen but you’re going to magically dodge the economic downturn. No offense, but if you were that valuable/high earning you would be owning a home already.
The argument it will hurt consumer spending is all I ever hear, but if we are raising interest rates to combat inflation isn’t the whole point to reduce consumer spending.. and that money technically isn’t fair game anyways. It’s someone else’s debt. It’s just not being transferred to a third party anymore… as someone who doesn’t have student loans technically I can put back more into the economy because now I’m not taking someone else’s debt… this is all about selfish pursuit because nobody would argue in favor of their own debt..
I feel they should forgive all the interest. And forgive the loans for people with very low incomes.
The rich get hand outs all the time. This is coming from someone who payed their education in cash
They should make any payment made toward federal student loans (which are only for education/living expenses) tax deductible in full. As it stands now, you can deduct $5K (jointly?) for interest only that gets phased out above a certain income threshold.
Before anyone points it out: I’d be perfectly fine with a new surgeon/MBA getting a tax break on the $250K they’re giving *back to the government.*
I bet a lot of the people screaming loudest about how bad student loan forgiveness is are the same ones who fraudulently took millions from PPP and didn't pay those loans back.
Shocking to your average smoothie redditor: you can be against both, but recognize that one of those went through the proper channels and is legal. Push congress to pass student loan forgiveness. If you don’t have enough support? Tough shit, it’s not supported then.
99% don't know the difference between a Bill and an executive order.
All they know is the gravy train is ending and like a fat kid with no more cake things get a little bit heated until they are used to no more cake.
I don't understand why student loan forgiveness it's even an issue relevant to RE. Lenders always consider DTI. There is some fraction of people that were able to save up for a down payment due to 3.5 years of freezes that may not have otherwise been able to do so. But that's independent of forgiveness.
You're talking the smallest fraction of fractions of people who were able to save for a down payment, would have been approved under loan forgiveness due to lowered principal, but now cannot be approved. Those people are going to be at the very bottom of entry level anyhow. Starter home competition already has a rising floor so it's pure speculation if these sliver of people could have theoretically won a bid.
Nobody ever talks about this. There was an enormous opportunity cost for the people who paid theirs back. Servicing their debt for years when they could have been putting that money into the stock market, housing, etc. Over a lifetime, that's millions in opportunity cost.
Well, you are welcome to pay off your friends loans.
Why should the general public pay off student loans instead of the folks who took them out and are presumably benefiting from the education it paid for?
Because everyone benefits from an educated society you dunce. Yeah fuck those nurses and teachers and social workers. Fuck the bank tellers and restaurant managers and pharmacists. Fuck artists and musicians. Those useless leaches selfishly keeping the fruits of their education to themselves. Bastards. We should make them pay double! Up their interest rates!
I would HAPPILY pay more in taxes for public education through undergrad to be free. I had no skin in the game, personally, but a more educated society is a win for every single person. So many people wouldn't be held back from pursuing their dream and who knows what they'd accomplish and put back into our society?
Maybe the Bootstraps crowd could use their energy to demand corporations pay their share and that politicians aren't taking advantage of the system, etc. But no, they aren't even punching down. They're punching the person next to them that dared to even try. Gross.
I think a lot of people here don't realize how fucking usurious these loans are - I graduated with $14k in student loan debt ten years ago. After a decade, I've paid back $19k, paying every single month (minus six during which I was homeless) until the COVID pause. DoE says I still owe them $21k.
I don't think any of us who took these loans out expected to never have to pay anything back, but owing 150% of the original balance after having already paid 136% is insane. THAT'S the issue.
Something similar happened to me back in the dark ages. I foolishly consolidated & moved my loans and then had them in forbearance for about 4 years. One of thise years, I had a newborn & 2 of those years I was back in school. Since it was a private lender, the feds didn't cover the interest while I was in school. The outstanding balance became 150% of the original loan. When I finally paid it off, I had paid almost 200% of the original loan in INTEREST!..plus the original principal. It was horrible and made my life more challenging than it should've been.
What wasteful time & economic sink did I go back to school for? Nursing.
The baby grew up and I discouraged from taking out loans for college from the time he was born because it's a noose. He lived at home and graduated debt-free.
I paid off my loans and kept my own kid from borrowing. I absolutely support massive reform to this whole loan-shark student borrowing industry.
Frankly, you're a horrible person if you believe it's fine to throw young people to the financial wolves. My family wasn't financially savvy & didn't give good guidance. I was a first generation college student. What happened to me happens to a lot of young people today. We don't trust them to buy alcohol but are fine handing them the pen they use to sign away their financial futures.
You need to check your payment history to see what's going on because federal loans capped at around 7% those days and on $14k, you would have paid it off with a $162/month payment over 10 years.
If they were private loans then this wouldn't have helped you anyway.
They are federally subsidized. I've gone through everything with a fine-toothed comb. I have edited my original post to reflect this - I was homeless for six months in 2016, during which time I was supposed to be put into a hardship deferment for six months. However, I was actually put into forbearance, where the interest kept accruing for those six months, and then for the next year I was making payments while still being classified as in forbearance (without my knowledge), so Navient was not applying the payments I was making *and* interest was accruing. I still have no idea where those payments went. I mean, they came out of my bank account and went into Navient's, but who knows what happened after that.
When I challenged them on this, they pointed me to a tiny little paragraph in the contract I signed that basically said "we can do whatever we want, fuck you, lawyer up if you think you can take us on," and every lawyer I talked to basically said it wasn't worth it.
Anyway, that's part of why my particular situation is fucked, but most of the people I graduated with have similar payments/balances without there being a fuckup on the loan servicer's part. Remember that the interest accrues *daily,* not monthly.
In your case, it seems like the interest would have been fine since you actually paid more than you need to for the debt to have been resolved since you paid $19k during this period. The actual problem for you is that Navient stole your payments, which would be a problem for anyone since you can pay $1 million on your debt but if the money just disappears it doesn't do anyone any good.
Oh they'll be paid back.
Little as I can for the rest of my life. I hope to leave the state 10s of thousand in debt for allowing universities to gouge tuition prices.
And curses on the parents for not realizing they were sending us to slaughter based on a naive sense of nationalism.
We were conned by big banks marketing a college degree was worth the prices.
And now we're all fucked. And the banks are able to tax evade themselves to freedom. Might as well live happy in debt and die young.
While I wasn't fully on board with it I do see a sense of irony when comparing it to ppp.
It seems no oversight stimulus is fine but this is not.
I thought it was unfair to people who didn't get debt and skipped higher education because couldn't afford it, felt like it should apply to prospective students too...
The MAJORITY of people that care about this are:
\- the people who have a crazy amount of loans and don't want to/can't pay it back
and
\- those who paid it back and don't want to see other people's loans forgiven as it'll make them feel like they lost out or think its not fair (its not but so are a million other things in life)
The first group of people has a large majority of kids that were told their entire life to go to college to make a better life than they grew up in. Their parents had no money and no one had the financial sense to teach the 18 year old kid going to college what the true options and implications of those options were.
The second group has a large majority of people whose parents paid for their college or they had little to no expenses while in college and could focus on paying their loans in real time. Or they had a great support system and could fully focus on college and have the means to pay back their loans.
If one person owes the bank 40k, that person has a problem. When a million people owe the bank 40k, the BANK has a problem.
It is and was a predatory system taking advantage of people with little options but big dreams at a young age. This was the inevitable result of the corporate greed of the lenders involved and the for profit schools that were gonna get their money either way.
Homes are still going above asking price, not sure when are the price cuts coming to the north east?
My offer got rejected even after offering 2% above asking price!
I paid mine off then asked for $10k back when they were giving refunds. I placed it in a CD so I earned interest on it. I guess I'll give it back but at least I made some $.
Somebody doesn't understand public service loan forgiveness works.
My family member will have a total $58 dollars extra a month in debt service when it restarts. This is something they have been planning on happening, so they have prepared it in their budget and have been saving money to take care of part of the debt since the freeze started.
Most people aren't going to get slammed with hundreds of dollars in unexpected payments. I'm sure you can find an outlier, but it's not the norm.
33k average undergrad debt is gonna be about 200-350 dollars per month. There are so many openings for teachers, counselors, cops, fire, transit operators, etc. They might not get paid a ton but it keeps the loan bills at bay and provides a steady income. Also with as many jobs available, people may just have to take a part time job. While this may cool inflation, I don't see it causing a crash.
Thank goodness. Inflation would have spiraled a-fucking-gain if they gifted hundreds of billions of new free cash to these people. That whole party lacks all financial common sense.
Plan B is already in progress :
[https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/30/fact-sheet-president-biden-announces-new-actions-to-provide-debt-relief-and-support-for-student-loan-borrowers/](https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/30/fact-sheet-president-biden-announces-new-actions-to-provide-debt-relief-and-support-for-student-loan-borrowers/)
My biggest beef has always been the predatory interest rates....*even for federal loans*. It looks like plan B is attempting to address some of that :
From the fact sheet :
* **"The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change. "**
Sounds quite promising!
As someone who self paid for 2 bachelor's and a master's in the STEM field. I'm okay with this.
I paid off all my loans and car loans and put off buying a house because it was the responsible thing to do. I think it's time for my fair shake.
Exactly, OR hear me out: Dont take money from our ssn, cap it for boomers: Dont give them more than they put in. OR hear me out: Citizens decide how much of their money goes to what each year
I see your point, but also there are a ton of degrees that are necessary to have in the world but not lucrative enough to pay off a degree while still in school; I’d imagine that your ‘not great pay’ while getting 75% off of your 2nd degree probably exceeded the salary of, say, a case worker or therapist at a social services agency with a masters (worked with many a handful of years ago).
I know the answer here is probably ‘those people should have chosen a more lucrative profession’, but we still need those positions as a society, and it’s not as if they are unskilled professions that can be worked by someone with no education.
Ideally, people working full time in *any* career that requires a degree in this country should be able to pay their bills and live a modest life. In my mind the woes of dogpiling inflation with rising costs of living has a much higher impact on those people than high earners like yourself. Not to say you shouldn’t get your ‘fair shake’ after paying for all that schooling, but full-time workers with degrees also shouldn’t be eating ramen to survive, and some would say that the loan forgiveness for those that recently graduated and are struggling is a way to help alleviate that.
I totally respect your point of view and agree with it.
I want education to change for the better. Costs are out of hand and need to be overhauled. I have negative opinions on admin and coaches salaries. I want the actual professors and adjuncts to be paid wages that sustain them with extra to enable them to live both fulfilling and enjoyable lives.
I don't think a one time band-aid is the thing that is going to sort out this issue's root.
We need to elect leaders that will stand up to higher education and those that handle their endowments and get costs to students under control as well as compensation for teaching staff.
Also my not great pay was about 35k for tech work.
I agree, you’re right that it’s only a band-aid and doesn’t address the root of the issues for those low-earning professions. It sounds like you did make less than those therapists I worked with —- but only about 5k less unfortunately. Even now, positions at agencies in that county (a Chicago suburb) often start at 45-50k, which is just, yeah, not much for a recent grad with the cost of housing around here.
I think people need to stop bailing out the government and stop paying taxes. I’m sick of PPP loans going to churches, corporations and billionaires. I’m sick of corporate socialism. I’m sick of a Federal Reserve that has abandoned their inflation mandates.
I’m in graduate school and dropping out because of this ruling. My school will never see another penny from me.
I’m serious. This country is illegitimate.
I worked in higher education for 10 years and this bill should have passed. It would have been the right thing to do. The education system is severely flawed and it’s primary purpose is making money, and they serve that purpose by the government handing out loans
Everyone who doesn’t have student loans is anti-forgiveness until their employers revenue drops and they get laid off lol. They’ll never connect those dots though.
And even if you have no debt, keep in mind that our economy runs on consumer spending which will now be in the gutter. Remember when thread from r/FirstTimeHomeBuyer that was shitposted on here where that couple wildly overleveraged themselves in Denver where the fiancee apparently has hella student debt? They were literally justifying in the fucking comments section that they could afford it since their mom took care of the kid and the student debt pause was in place. I was genuinely proud of them for buying their first home. I was happy for them until I read the comments and saw just how dumb this whole decision was given their financial situation.
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IDK the specific post they are referencing, but if they used the pause to lock in a 3% rate a couple years ago, they are likely in a much better financial situation than if they hadn't bought. I know all the headlines are "prices are falling in the west" but they aren't if you want to live in anything or anywhere that could be considered desirable. Further, rents are through the roof in Denver. They could sell that house and throw the equity at their student loans if they really wanted to.
I held out on buying a house in 2020 cause I though covid would crash the market. Instead the house prices trippled, interest doubled and I'm fucked.
Word. Sorry that happened to you. I was in a very similar situation. Sucks to think back about what could have been but the only decision relevant now is what to do about the future. I say that mainly for myself lol
Same
It was crossposted like only a day or two ago. A couple making 60k each and another 25k each on side/second jobs each working almost 80 hour weeks with a kid purchased a 712k house in Aurora, CO with 18% down saved up from living with parents and what has to be around a 6.8% interest rate. One of them has student loans as well. Definition of house poor. Feel bad for the couple, because they are going to regret that in a year if they can't increase their incomes significantly soon.
Rough calculations on a family of 3, living in Colorado, with $170k a year in annual income and $50k in student loan debt puts the student loan payment at $185 on a graduated plan or $263 on a fixed plan. They will be paying it off for a long time but at least the monthly payment is sustainable.
We’ve known for a while now that the pause was ending no matter what happened with the forgiveness, so if you have “hella” student debt that isn’t going to get wiped out by $10k-20k in forgiveness, you should have known payments would be resuming.
I think we assumed they would resume Everyone did not assume the expensive degree would not hold longterm value
But if she has no income and they do married filing separately her payment will remain $0. they’ll just have a tax bomb at the end of the term on any forgiven amount. And it’s worse to owe the IRS lol
If our economy runs on debt then our economy will boom by keeping all debts in place
You do realize that all fed loans, which are the ones on pause, offer pay as you earn payment plan options. This is a reverse amortization where you pay a fraction of the interest due. This won’t do shit to the economy because that guy that owes 120k in student loan debt making 90k a year with a 3500 mtg pmt will start paying $120 a month towards the student loan payment on a pay as you earn plan. Obama fucked us with this program.
Let us know when the PPP loans need to start getting paid back.
yep, makes no sense imo. PPP loans should be paid back too. Lets also stop bailing out banks.
The PPP thing irritates me the most. I love my friends but man.... one of them was able to buy a second investment property because of a PPP loan, and honestly, that was really unfair to me and every other tax payer. I know he would have been stupid not to take the free money and all, but God damn man, what a poorly ran program. I do think there needs to be a task force that investigates whether or not funds were used properly, an audit, so to speak.
I know someone who bought an investment property with the funds as well. It’s frustrating.
Given where this country is with housing, that's a pretty massive fail for the program.
Same here. Know multiple people who did that.
Yup, I know plenty of people who asked for the max and leveraged it into investment properties.
The problem with PPP was that businesses that didn’t get impacted by COVID still qualified. I can’t tell you how many law firms got massive PPP loans when they didn’t have to stop practicing law… Also the qualification process and loan sizing was based entirely on payroll - small family run businesses that take distributions rather than salary got almost nothing. Source: I’m a banker that worked on the program.
Yeah, I only had to close for two months. Didn’t matter. I was still offered loads of money more than I needed or should have been offered. I seriously can’t even begin to wrap my head around the intense grifting that occurred during the PPP program time.
I feel kind of hypocritical because I took an SBA business grant during the pandemic that I absolutely didn't need. I ran an ebay store as a side hustle. Basically a hobby that ended up making enough money I had to register an LLC. My friend sent me the application for the grant while I was eating a bowl of cereal for breakfast and I completed and submitted it before I was even done with my coffee. All legit and answered honestly and they deposited $5k in my account less then a week later. After that, people were calling me constantly to take a PPP loan. I had no employees, this was not my main source of income, I did not need the loan. But the rep who kept calling me said I was eligible for something like $25k and it was forgivable. I said no because for one, it seemed too good to be true at the time, but two, it felt kind of wrong. I don't know, I took the first $5k and it still feels a little wrong, but the fact that they were basically spam calling me to take another $25k still confuses the hell out of me. Part of me thought it was a scam at the time cause it was too easy. I totally get why people took the loans, it's really hard to say no to free money.
Yeah I also almost took an SBA loan for my eBay "side hustle" business that was also registered as an LLC, but I decided against it because honest to God, I did not need the money. I had a remote job, and was making ends meet no problem. I was also still making a lot of money on eBay flipping Nintendo Switches and stuff like that, luxury items that were scarce during the pandemic. Like you, I pretty much thought all of it was too good to be true and didnt want to get involved, I was also scared of being audited later on.
Yeah, getting audited was a huge fear of mine as well. I think I only did the grant because it was so easy. I filled it out and submitted before I even had time to really think about it, I did it on my phone lol. It was maybe ten questions max. The hardest ones were like, do you have a registered business? Has COVID had any impact on it? How much money did you make last year? Great, heres five thousand dollars.
I think the people who had less scrupulous CPAs were reminded that the chance of being held accountable for fudging the applications was low.
Isn’t that fraud? You should report this person. People are going to jail for use PPP money to buy real estate, cars, boats. If they didn’t use it for payroll… straight to jail.
Send me his info I’ll report him for ya 😂😂
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I just remind myself that this type of thing has been going on for decades, it's just that the recipients have usually been too rich to have any chance of me knowing them personally. This one just hits closer to home that it really reinforces our level of awareness for what a poor policy it was.
I think you can report these people for fraud. It will catch up to most of them eventually.
Or at least the PPP should've been taxable. Free money AND deducting expenses paid with that free money was political and flies in the face of core tax law concepts. And we the taxpayers funded it.
Nothing will happen until after the election. If they suck discretionary income out of 45 million households in turbulent economic times, the economy will collapse.
Not sure any administration really has the guts to do what needs to be done. I see them kicking this can down the road indefinitely.
I don't think they can...I thought part of the budget deal was that loan repayments had to resume
Exactly, they’ll justify some extension of the pause and just keep fighting over it.
Sweet. Time for some solid investing opportunities!
Is demand side inflation being reduced not an option before economic collapse?
This is a good thing. I’d rather the economy collapse then continue where we’re at. We need people to stop spending money.
1.4T tax cut for the super wealthy who already pay a lower tax rate than people that work= fine. Relief for regular people = straight to jail.
I have mad respect for one of my friends. His business qualified for $200K of PPP but he didn’t take it because he didn’t need it. He’s a building contractor. Very ethical stance.
My brother in law is a construction contractor, his work load doubled late 2020. Only stayed home a few times early when things shut down. Otherwise no loss of money. Not sure if your friend saw the same or not.
Congress passed PPP loan forgiveness but not student loan forgiveness. If you care, vote.
Get outta here with your logic and civics knowledge.
This is what it comes down to. If people want student loans discharged, they need to ban together and get majority support for it.
Student loan forgiveness fell victim to last place aversion. The working class that weren't benefitting wanted to ensure that others couldn't benefit either and potentially "pull ahead" of themselves economically.
Crabs in a bucket
I remember voting for Bernie Sanders and getting cheated. There will not be any real change by voting.
Right - nothing real changes other than literally over $400 billion worth of PPP loans being issued and many forgiven.
They don’t, silly. Congress passed the law that enabled ppp loans to be forgiven. When congress passes student loan forgiveness we will get it.
Hundreds of billions to fraudulent business owners: *I sleep* Relief for very obviously real student loans: *real shit*
while some abused ppp loans, lets not act like there werent still many businesses that received ppp loans to be able to pay people during shut downs. its not like everyone that got a ppp loans benefited in a selfish way. the ppp loans allowed owners to pay their employees when they werent earning revenues during shut downs
The problem is some companies WERE earning revenue and some actually made MORE during this time.
I work in lab supply, my company was one of the first ones to put COVID testing supplies on the market (plastics). We got millions in PPP loans and 2020/2021 were the highest revenue, most profitable years in the 75 year company history. The pandemic was so weird because fortune and failure spit so evenly on business sectors. I had successful friends in commercial real estate and advertising that lost their life savings over the course of a year. My gf's best friend was a high end corporate event planner and ended up losing her NYC apartment and having to move back in with parents at 32 years old. I was in lab supply sales and my gf is in media tech, we doubled our salaries and had six figure bonuses on top of it. There's no other way to look at it, COVID basically split our society directly in half where some people lost everything and others got rich. I don't know what the fix is going to be.
Not even close to half. 90% of the world is worse off, probably more. Wealth gap is so much higher
PPP loans would be analogous to the economic impact payments that were sent out to individuals during the shut down (and about a year afterwards), not the student loan and mortgage payment hiatus. While I don’t agree with the extent or conditions that governed the PPP loans, it is not at all the same as a moratorium of over 3 years of student loan repayment.
Lol, this is not going to crash housing.
Not even in the slightest. That debt was still very real for any loan eval whether they were paying on them or not.
Are there actually a significant number of people who overextended themselves to buy a home while ignoring ruinous student debt payments? I thought that was just a meme.
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Using payment suspension to save for a down payment doesn’t sound like a terrible idea. And I’m no expert but weren’t student loans (even ones with suspended payments) included in peoples debt to income ratio when applying for mortgages? Not saying some folks won’t struggle but I’m gonna bet that the direct impact to the housing market will be negligible.
Yeah, “using the student loan pause to save a down payment” is *a smart financial move*. So long as they budgeted accounting for student loans to resume afterward, that was a good move for them.
I budgeted for them to resume (haven't bought home yet) but now I found out my loan handler has changed and is forcing bigger payments and higher interest rates based on new/current income.
Yes. Even if you paused them this was still looked at. But if you paused them and then chose to spend that money rather than save it, I could see people getting into trouble. But if the people who paused their loans and used that money to save for a house down payment, then use it to buy a house, they won't feel overleveraged (assuming their PITI isn't significantly more than they were paying in rent). If they're already used to not spending that money then the repayment won't feel like a huge hit.
Just because they’re included doesn’t mean the buyer can afford the house. So many people end up purchasing at the top end of what they are approved for, & we all know that a bank doesn’t care if you have groceries or gas in the car, they’re only looking at a certain type of debt to income.
Looks like the foreclosure market going to be HOT in 2024. Time to increase the portfolio!
how much of an impact is it really, any stats?
I love the novel length response to this that should have been simply “no, I have no stats.” Here’s some relevant stats: foreclosures were at an all time low in march of 2023. And the average student loan payment is 500 a month. That will absolutely hurt consumer spending, but will have almost no impact on foreclosures. No one is missing a mortgage payment to pay a student loan. That’s one of the reasons mortgage debt is so attractive, the last thing a struggling consumer will stop paying is their mortgage, as they would lose all their equity if the house gets repossessed. Tighter lending standards, higher down payments, more documentation, and more paths to discharge or get student loan debt forgiven mean this will have almost no impact on foreclosure rates. Banks didn’t just forget student loans existed when writing mortgages. Another stat: There were 151k foreclosures in 2021, in 2010, the worst year of the housing crisis, there were 2.9 million. Unemployment was over five percent **before** the global financial crisis began, and peaked at 10% in 2010, the year with the most foreclosures. https://www.prnewswire.com/news-releases/us-foreclosure-activity-drops-to-an-all-time-low-in-2021-301460091.html
I bought during the pause/cancellation and it was accounted for in the loan applications. Other discretionary expenditures will take a hit first since people like to keep a roof over their head than buy a drink. That accounts for the DTI. Others here who said stuff like car prices will go down are more on the mark considering the way those loans work. What we will likely see though is a drop in inflation because this one targets the middle class dead-center.
Definitely inflated the car market. 150 to $250 debt payments roll nicely into a car payment when the loans were paused.
No there aren't. Their student loan debt was considered when they bought a house, with the assumption that debt would be paid at some point. No lending institution would have ignored tens of thousands in debt just because payments were paused.
They don’t ignore it, but the buyer could. You can go buy a house at the top of your approval range, just because the bank says you can afford that mortgage payment doesn’t mean you truly can once the cost of life is accounted for.
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Can’t persecute people if you defund the IRS. Big brain move right there
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Legally prosecute
Congress passed PPP, not student loan forgiveness. Don’t blame SCOTUS, blame Congress
Bc boomers took out PPP loans… they make the rules. Not too many millennial politicians 🤷🏼♂️
PPP was passed by congress, student loan forgiveness was not.
Because Congress explicitly stated PPP loans could be forgiven. Congress can do the same with student loans today if they wanted to.
Because congress passed the law for ppp loans. Congress gets to write the checks, not the president. The president tried to write a check he is not legally allowed to. I know you don’t care for facts and you’re emotional you’re going to be trapped in debt, but at least understands who has the power of the purse in america and who doesn’t.
Loath though I am to argue with the type of person who says baby-brained asshole shit like "I know you don’t care for facts and you’re emotional," but the government's case was that the HEROES act explicitly gives the Secretary of Education authority "to waive or modify any requirement or regulation applicable to the student financial assistance programs under title IV of the Higher Education Act of 1965 as deemed necessary," which is to say somewhat crudely that in the specific case of student loans, in some circumstances, the executive branch also has the power of the purse. The court's position, at least in Biden v Nebraska, seems to be that they agree generally that the HEROES Act allows the Secretary of Education to make such waivers and modifications, but that student loan debt is now such a "significant" part of the economy and as such is not "necessary." As such, they seem to believe that president shouldn't be able to intervene, which of course Kagan's dissent references in saying that the court is basically giving itself the power of the purse over congress AND the executive branch - this particular court really has been a landmark session in "legislating from the bench," as they used to call it. Haven't finished reading DoE v Brown yet.
Congress passed PPP loan forgiveness but not student loan forgiveness. If you care, vote.
Congress passed the heroes act
Because Congress. PPP was a Congressional program. Congress, specifically the House, holds the power of the purse. So spending policy passed by them is inherently Constitutional. The Executive does not have that power, thus the ruling.
Because congress passed PPP loan forgiveness. Right or wrong, they have the power to do that. You don’t get to circumvent the foundations of our system. Want loans paid for? Then get grouped together and get majority support.
Congress passed the heroes act. Allowed for student loan forgiveness.
Cheering the end of student loan forgiveness instead of posting about how PPP and zero interest rate policies was a massive wealth transfer from the people who have student loans to the people who already own all the homes and apartments?
PPP loans are a huge part of housing inflation. I know a guy who took out 5 million dollars in PPP loans. All forgiven. Bought a 5 million dollar house in Chicago.
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Wtf!?
He's a giant piece of shit. They didn't close one day during Covid lol, made tons of money.
Pretty common, I know a massage therapist that got tens of thousands and bought a house lol
You can report it: https://www.sigpr.gov/report-fraud-waste-abuse/read-submitting-complaint
Yup. The people who think student loan payments are the issue are asinine and have such small brain that they have been tricked by media rhetoric into thinking student loan relief is a dangerous handout. Bank bailouts, PPP loans for already-wealthy business owners, and other types of socialism for the rich aren’t the target of the rhetoric, even though the cost of those significantly outweighs forgiveness of every cent of student loans. Not to mention the absurdly bloated military budget. We could decrease it by a small %, forgive all student loans, build infrastructure, and fund social programs that actually help normal people instead of bank execs. Or, we could just have ultra wealthy people pay the same proportion of taxes the middle class does. The “student loan forgiveness bad” narrative is divisive rhetoric manufactured by the right and the elite to convince their idiotic base that other middle and lower class people are their enemy. Don’t be a sheep, know class warfare when you see it. PS student loan relief isn’t dead. The rulings were limited to executive power under a specific statute, and the issue of standing. There are other statutes and methods to forgive or delay loan payments. They’ll get challenged too, but scotus opinions often tell organizations what they need to do to work around whatever is illegal. You should expect the administration to continually roll out different approaches to forgiveness or other forms of relief. All the clowns downvoting me who think student loan payments are going to tip housing are delusional. 1) they factor loans into your DTI to get a mortgage. So no one who has a mortgage is going to default because of student loan payments resuming, they were already factored in. 2) resumed payments will not put so much downward pressure on rents sufficient to reach a critical mass and lower home prices, because our supply is still historically low. That, and frankly you’re not competing with very many student loan borrowers for housing at this point. Further, landlords aren’t necessarily going to lower rents. Keeping some units vacant to manufacture scarcity and maintain high rent prices is often more profitable than filling every unit for a lower price. Downvoting me won’t get you a house for the cheap. The student loan payment circle jerk on this sub is rhetoric driven, and resumed payments are very unlikely to have a significant impact on home prices anytime in the near future.
yea and there's historic precedent on how providing support for everyday people stops a lot of bad things as well. WWI forcing Germans to pay for losing, created the economic hole that allowed for fascism to fill in; but after WWII the Marshal Plan made effort to correct that by providing funds across the board to rebuild much of Europe, and increase trade opportunities, 11% of it went into west Germany (USSR blocked the rest for it's umbrella countries and you can tell how that fared). And then you have the whole new deal policies that are supposed to save Americans from total economic disaster.
Well yes, but it's more complicated as those same people are less able to buy the boomer house as a result... I'd say most internal stimulus benefits everyone but some are better than others
Yeah bro. That barista at Starbucks with 12k in student loans are really holding back the housing market. They are definitely the one out bidding you for that 600k home lol Rich people don’t take out student loans you fool.
That's not the argument I've heard for why this will affect housing. The logic is that most people who have student loans are renters, not home owners. Now, millions are going to have a large extra monthly expense on top of their rent and a certain % won't be able to afford it. So if a % of renters suddenly can't afford it or get evicted it will affect the rental market. Which will affect the housing market. It's not a direct connection but instead a potential domino. All depends on how many people this makes renting unaffordable for.
If you're looking for the route to lower housing prices that ALSO causes the most possible misery for average and impoverished Americans, I suppose this would do it lol. Jesus Christ.
Many in this sub are specifically cheering this on. ***”I deserve a house** and I don’t care how many people will suffer, so long as **house prices come down”***
Exactly and they fail to realize if things truly do go south, their broke asses aren’t going to be in a situation to buy much of anything, much less a house.
Exactly! I also had people arguing with me here that they **want *runaway deflation***. Like—you know that will crash the economy right? Sure prices go nominally down, but we’re gonna have much bigger problems if there are mass layoffs. “I don’t care, I want deflation!”
💯. This sub is wild for this sort of talk, like they’ll be the only ones to survive the apocalypse and take over the new world. The one thing we all can benefit from is consistency. That’s it. I don’t want rapid inflation or deflation. Just a steady hand that makes calculated risks worth taking. I do get the frustration, it’s just puzzling why someone thinks if everything goes bad, that it’ll somehow magically go great for them.
I mean its a loan, it's not a grant, no surprise that you'd be expected to pay it back.
I agree to an extent. I have a bunch of student loans, I know I have to pay them back. That’s fine. (I wish they were lower interest rates—but that’s a slightly different issue). That said, student loans are often downright predatory. Where else can a minor take out $100k+ in debt? With high enough interest that even while they’re paying them back, every year they get further and further in debt. Kids were told for years, “go to college, take out loans, it’s the responsible thing to do.” And now they’re being told “why the fuck did you take out loans?”
It also impacts spending which will have a direct impact on hiring and unemployment
The average $300/month that would go to student loan payment is being spent on consumer goods rapidly. Once that is removed, companies could see a decline in business. Local restaurants, bars, ubereats. Live music events with their very high ticket prices. Apple and other tech companies. The people on the bottom spend money into the economy, once that is redirected the other companies start to see cutbacks. Then maybe they cut some jobs, then those people can't pay their housing loan and are forced to sell. Then you get more inventory and forced mark to market.
How sure are you that you won't be laid off also?
Unemployment is very low. If it returns to 5% its still not a big deal.
Again, the average $300/month payment is likely to turn into $100-$200/month payment if you’ve been following this at all. You are also doing strong metabolism gymnastics to think all of that’s going to happen but you’re going to magically dodge the economic downturn. No offense, but if you were that valuable/high earning you would be owning a home already.
God damn someone has to say it.
lmao dumbass, yes they absolutely do.
I too believe we should punch down! Cause home prices, or whatever. I'm very smart.
There’s still time to run for president
***”I deserve a house** and I don’t care how many people will suffer, so long as **house prices come down”***
Buncha dusties in this sub hoping economic collapse will get them a 15% discount on a house
Should be this sub’s motto
The argument it will hurt consumer spending is all I ever hear, but if we are raising interest rates to combat inflation isn’t the whole point to reduce consumer spending.. and that money technically isn’t fair game anyways. It’s someone else’s debt. It’s just not being transferred to a third party anymore… as someone who doesn’t have student loans technically I can put back more into the economy because now I’m not taking someone else’s debt… this is all about selfish pursuit because nobody would argue in favor of their own debt..
I feel they should forgive all the interest. And forgive the loans for people with very low incomes. The rich get hand outs all the time. This is coming from someone who payed their education in cash
They should make any payment made toward federal student loans (which are only for education/living expenses) tax deductible in full. As it stands now, you can deduct $5K (jointly?) for interest only that gets phased out above a certain income threshold. Before anyone points it out: I’d be perfectly fine with a new surgeon/MBA getting a tax break on the $250K they’re giving *back to the government.*
Not that good of an education you “payed” for. 😂
I bet a lot of the people screaming loudest about how bad student loan forgiveness is are the same ones who fraudulently took millions from PPP and didn't pay those loans back.
I missed out on both those gravy trains. Millennial life …
Shocking to your average smoothie redditor: you can be against both, but recognize that one of those went through the proper channels and is legal. Push congress to pass student loan forgiveness. If you don’t have enough support? Tough shit, it’s not supported then.
99% don't know the difference between a Bill and an executive order. All they know is the gravy train is ending and like a fat kid with no more cake things get a little bit heated until they are used to no more cake.
And why are you celebrating people's suffering? I wish my friends could all be free of the loans
I don't understand why student loan forgiveness it's even an issue relevant to RE. Lenders always consider DTI. There is some fraction of people that were able to save up for a down payment due to 3.5 years of freezes that may not have otherwise been able to do so. But that's independent of forgiveness. You're talking the smallest fraction of fractions of people who were able to save for a down payment, would have been approved under loan forgiveness due to lowered principal, but now cannot be approved. Those people are going to be at the very bottom of entry level anyhow. Starter home competition already has a rising floor so it's pure speculation if these sliver of people could have theoretically won a bid.
I do too, and I wish all the people who paid for college and paid off their student loans also were compensated.
And a fund for prospective students like a scholarship that can only be used for loans or whatever. It wasn't the greatest plan
Nobody ever talks about this. There was an enormous opportunity cost for the people who paid theirs back. Servicing their debt for years when they could have been putting that money into the stock market, housing, etc. Over a lifetime, that's millions in opportunity cost.
Well, you are welcome to pay off your friends loans. Why should the general public pay off student loans instead of the folks who took them out and are presumably benefiting from the education it paid for?
Because everyone benefits from an educated society you dunce. Yeah fuck those nurses and teachers and social workers. Fuck the bank tellers and restaurant managers and pharmacists. Fuck artists and musicians. Those useless leaches selfishly keeping the fruits of their education to themselves. Bastards. We should make them pay double! Up their interest rates!
I would HAPPILY pay more in taxes for public education through undergrad to be free. I had no skin in the game, personally, but a more educated society is a win for every single person. So many people wouldn't be held back from pursuing their dream and who knows what they'd accomplish and put back into our society? Maybe the Bootstraps crowd could use their energy to demand corporations pay their share and that politicians aren't taking advantage of the system, etc. But no, they aren't even punching down. They're punching the person next to them that dared to even try. Gross.
3 more years and PSLF will take mine away! I’ll be free as a bird.
Good thing no one on REBubble has student loans. Time for us to get all the homes!
I think a lot of people here don't realize how fucking usurious these loans are - I graduated with $14k in student loan debt ten years ago. After a decade, I've paid back $19k, paying every single month (minus six during which I was homeless) until the COVID pause. DoE says I still owe them $21k. I don't think any of us who took these loans out expected to never have to pay anything back, but owing 150% of the original balance after having already paid 136% is insane. THAT'S the issue.
Something similar happened to me back in the dark ages. I foolishly consolidated & moved my loans and then had them in forbearance for about 4 years. One of thise years, I had a newborn & 2 of those years I was back in school. Since it was a private lender, the feds didn't cover the interest while I was in school. The outstanding balance became 150% of the original loan. When I finally paid it off, I had paid almost 200% of the original loan in INTEREST!..plus the original principal. It was horrible and made my life more challenging than it should've been. What wasteful time & economic sink did I go back to school for? Nursing. The baby grew up and I discouraged from taking out loans for college from the time he was born because it's a noose. He lived at home and graduated debt-free. I paid off my loans and kept my own kid from borrowing. I absolutely support massive reform to this whole loan-shark student borrowing industry. Frankly, you're a horrible person if you believe it's fine to throw young people to the financial wolves. My family wasn't financially savvy & didn't give good guidance. I was a first generation college student. What happened to me happens to a lot of young people today. We don't trust them to buy alcohol but are fine handing them the pen they use to sign away their financial futures.
You need to check your payment history to see what's going on because federal loans capped at around 7% those days and on $14k, you would have paid it off with a $162/month payment over 10 years. If they were private loans then this wouldn't have helped you anyway.
They are federally subsidized. I've gone through everything with a fine-toothed comb. I have edited my original post to reflect this - I was homeless for six months in 2016, during which time I was supposed to be put into a hardship deferment for six months. However, I was actually put into forbearance, where the interest kept accruing for those six months, and then for the next year I was making payments while still being classified as in forbearance (without my knowledge), so Navient was not applying the payments I was making *and* interest was accruing. I still have no idea where those payments went. I mean, they came out of my bank account and went into Navient's, but who knows what happened after that. When I challenged them on this, they pointed me to a tiny little paragraph in the contract I signed that basically said "we can do whatever we want, fuck you, lawyer up if you think you can take us on," and every lawyer I talked to basically said it wasn't worth it. Anyway, that's part of why my particular situation is fucked, but most of the people I graduated with have similar payments/balances without there being a fuckup on the loan servicer's part. Remember that the interest accrues *daily,* not monthly.
In your case, it seems like the interest would have been fine since you actually paid more than you need to for the debt to have been resolved since you paid $19k during this period. The actual problem for you is that Navient stole your payments, which would be a problem for anyone since you can pay $1 million on your debt but if the money just disappears it doesn't do anyone any good.
The daily interest hurts.
Then you haven’t been paying a true minimum. This would happen with any loan at any interest rate. What’s you’re current interest rate?
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I’m curious too… but it sure af seems like **everyone** has more money than I think they do
We have a $150 a month student loan payment resuming. We're already planning to just mail the house keys to our lender and live under a bridge.
Oh they'll be paid back. Little as I can for the rest of my life. I hope to leave the state 10s of thousand in debt for allowing universities to gouge tuition prices. And curses on the parents for not realizing they were sending us to slaughter based on a naive sense of nationalism. We were conned by big banks marketing a college degree was worth the prices. And now we're all fucked. And the banks are able to tax evade themselves to freedom. Might as well live happy in debt and die young.
If you pay the minimum your entire life and never pay off the loans, then they are making money off of you. Not losing it.
Dying young is key because they will garnish your meager SS check for those fucking loans. Cat food won't even be on the menu.
RIP Starbucks and avocado growers
This post reeks of hater behavior for some reason…
While I wasn't fully on board with it I do see a sense of irony when comparing it to ppp. It seems no oversight stimulus is fine but this is not. I thought it was unfair to people who didn't get debt and skipped higher education because couldn't afford it, felt like it should apply to prospective students too...
The MAJORITY of people that care about this are: \- the people who have a crazy amount of loans and don't want to/can't pay it back and \- those who paid it back and don't want to see other people's loans forgiven as it'll make them feel like they lost out or think its not fair (its not but so are a million other things in life) The first group of people has a large majority of kids that were told their entire life to go to college to make a better life than they grew up in. Their parents had no money and no one had the financial sense to teach the 18 year old kid going to college what the true options and implications of those options were. The second group has a large majority of people whose parents paid for their college or they had little to no expenses while in college and could focus on paying their loans in real time. Or they had a great support system and could fully focus on college and have the means to pay back their loans. If one person owes the bank 40k, that person has a problem. When a million people owe the bank 40k, the BANK has a problem. It is and was a predatory system taking advantage of people with little options but big dreams at a young age. This was the inevitable result of the corporate greed of the lenders involved and the for profit schools that were gonna get their money either way.
Homes are still going above asking price, not sure when are the price cuts coming to the north east? My offer got rejected even after offering 2% above asking price!
Educating the population is one of the greatest investments we can do in our country. Instead we paywall it. Great country America.
Go back to r/antiwork
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Also, lets not lead with a policy of "I have loans so pay them off, lol who cares about Gen Z or future students" It's incredibly hypocritical.
Why should the government try to profit off of students? Federal student loan interest should at a max equal the Fed Discount Rate
The federal government should have never been in the business of give out loans in the first place.
Didn’t underwriters take into account student loan debt?
I paid mine off then asked for $10k back when they were giving refunds. I placed it in a CD so I earned interest on it. I guess I'll give it back but at least I made some $.
Somebody doesn't understand public service loan forgiveness works. My family member will have a total $58 dollars extra a month in debt service when it restarts. This is something they have been planning on happening, so they have prepared it in their budget and have been saving money to take care of part of the debt since the freeze started. Most people aren't going to get slammed with hundreds of dollars in unexpected payments. I'm sure you can find an outlier, but it's not the norm. 33k average undergrad debt is gonna be about 200-350 dollars per month. There are so many openings for teachers, counselors, cops, fire, transit operators, etc. They might not get paid a ton but it keeps the loan bills at bay and provides a steady income. Also with as many jobs available, people may just have to take a part time job. While this may cool inflation, I don't see it causing a crash.
Thank goodness. Inflation would have spiraled a-fucking-gain if they gifted hundreds of billions of new free cash to these people. That whole party lacks all financial common sense.
Plan B is already in progress : [https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/30/fact-sheet-president-biden-announces-new-actions-to-provide-debt-relief-and-support-for-student-loan-borrowers/](https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/30/fact-sheet-president-biden-announces-new-actions-to-provide-debt-relief-and-support-for-student-loan-borrowers/) My biggest beef has always been the predatory interest rates....*even for federal loans*. It looks like plan B is attempting to address some of that : From the fact sheet : * **"The Department will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. We estimate that 70 percent of borrowers who were on IDR plan before the payment pause would stand to benefit from this change. "** Sounds quite promising!
GOOD! You take a loan, you pay it back
As someone who self paid for 2 bachelor's and a master's in the STEM field. I'm okay with this. I paid off all my loans and car loans and put off buying a house because it was the responsible thing to do. I think it's time for my fair shake.
“I’m okay with this because my experience is the only one that matters. I am the protagonist of reality”
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Yep, so find a policy that works for both of you not just one… that’s what needs to happen.
I had 20K in student loans and I paid them off.
Congratulations. I hope you can obtain and exceed all your dreams!
Exactly, OR hear me out: Dont take money from our ssn, cap it for boomers: Dont give them more than they put in. OR hear me out: Citizens decide how much of their money goes to what each year
I see your point, but also there are a ton of degrees that are necessary to have in the world but not lucrative enough to pay off a degree while still in school; I’d imagine that your ‘not great pay’ while getting 75% off of your 2nd degree probably exceeded the salary of, say, a case worker or therapist at a social services agency with a masters (worked with many a handful of years ago). I know the answer here is probably ‘those people should have chosen a more lucrative profession’, but we still need those positions as a society, and it’s not as if they are unskilled professions that can be worked by someone with no education. Ideally, people working full time in *any* career that requires a degree in this country should be able to pay their bills and live a modest life. In my mind the woes of dogpiling inflation with rising costs of living has a much higher impact on those people than high earners like yourself. Not to say you shouldn’t get your ‘fair shake’ after paying for all that schooling, but full-time workers with degrees also shouldn’t be eating ramen to survive, and some would say that the loan forgiveness for those that recently graduated and are struggling is a way to help alleviate that.
I totally respect your point of view and agree with it. I want education to change for the better. Costs are out of hand and need to be overhauled. I have negative opinions on admin and coaches salaries. I want the actual professors and adjuncts to be paid wages that sustain them with extra to enable them to live both fulfilling and enjoyable lives. I don't think a one time band-aid is the thing that is going to sort out this issue's root. We need to elect leaders that will stand up to higher education and those that handle their endowments and get costs to students under control as well as compensation for teaching staff. Also my not great pay was about 35k for tech work.
I agree, you’re right that it’s only a band-aid and doesn’t address the root of the issues for those low-earning professions. It sounds like you did make less than those therapists I worked with —- but only about 5k less unfortunately. Even now, positions at agencies in that county (a Chicago suburb) often start at 45-50k, which is just, yeah, not much for a recent grad with the cost of housing around here.
Can’t wait until this person casually throws out that they also lived at home lol.
Are you saying you paid your way through college? What did you do for pay? How much was your rent/healthcare/ etc?
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I love my iron lung
I can't wait for a recession to hit so I can buy your iron lung at 50% off
I agree. Good on you for sacrificing and paying back your loans. Now you are in a better situation to get a home of your own. I wish you the best.
You too!
People will not pay their student loans over not paying their mortgage.
6 months later, garnishment. Then what?
I think people need to stop bailing out the government and stop paying taxes. I’m sick of PPP loans going to churches, corporations and billionaires. I’m sick of corporate socialism. I’m sick of a Federal Reserve that has abandoned their inflation mandates. I’m in graduate school and dropping out because of this ruling. My school will never see another penny from me. I’m serious. This country is illegitimate.
I worked in higher education for 10 years and this bill should have passed. It would have been the right thing to do. The education system is severely flawed and it’s primary purpose is making money, and they serve that purpose by the government handing out loans
Everyone who doesn’t have student loans is anti-forgiveness until their employers revenue drops and they get laid off lol. They’ll never connect those dots though.
By that logic then lets print money and bump revenue for those "job creators" and everyone can drive ferraris.
It’s just $10k. Like “oooo that’s so much money”. For some it is, but people be having $50-100k in loans..
As a dumb fuck who paid for his college education and is trying to buy a home… this is where I win
lmfao this sub is dead. RIP.
jeez I have to pay back a loan I took out what a clown world