I think the "drop bales of $20 bills from helicopters over universities and shopping malls" plan is overall a lot simpler.Originally Posted by Iris lily
I think the "drop bales of $20 bills from helicopters over universities and shopping malls" plan is overall a lot simpler.
We currently have assets in the economy. We would have more assets in the economy as well (in the form of investments) which is part of the equation.
Yes, I wish I hadn't taken out student loans. Unfortunately, I was young, naive, and stupid at the time -- I honestly wasn't thinking and I bought the bill of goods that I would easily be able to pay it all back!
As I said, I've paid off 1/3. I am continuing to pay it off. But if I can benefit from this, why wouldn't I seek to benefit?
The only loans outstanding at this point are federal loans. I've tried every which way to get into the best financial position I can with them, and as I said, I'm still paying them off.
But hey, I don't see why I shouldn't benefit from a plan like this, when banks get bail outs.
(and yes, I noted that about the cap. I think it's a good idea, to be honest -- if there's going to be a program, there should be a cap!).
I'm a triple idiot. Not only did my parents go without a lot of things to put us through college I worked extra weekend shifts and doubles as a nurse to put my kids through so they had very little debt which was not fun as you can imagine.
and I paid for my house early and didn't move up when everyone else did so no mortgage help here.
Now they will probably means test my social security because we saved and lived frugally and they are busy giving money away hand over fist for all kinds of programs and the money will come from somewhere!
triple Duh.
I had very similar problems. Right now, I have two options: pay off the whole debt at once, or continue to pay interest-only until I can pay the whole debt off at once.
I do put into a savings account each quarter to pay off this debt in full. THen, when my CD comes due, I roll this money into it. it's a 12 month CD. Then, i keep adding to the savings account and so on. At the current rate, I'm looking at 7 years until I have enough paid, plus then paying the interest each month.
I've been paying interest-only on the debt since 2005. If I also add the next 7 years to it, I will have paid $25,000 in interest.
Likewise, I've already paid off $35,000 in student loans, which had $1200 in interest in that one.
I would say that -- overall in the last 10 years -- I've done really well to pay back my loans!
Looking at the numbers that way, I actually feel good.
And, if I can get the money together in the next 7 years, that would be awesome.
I will be 42 when I pay off all my student loan debt. That's 20 years of debt repayment. That number doesn't make me so happy. LOL
And to think that I worked and paid my way through undergrad/graduate schools without a loan of any kind. What was I thinking?
This is already in play.
When a person falls behind in payments, or is heading into default, they can get on a program to get back into good credit (i can't' remember the word for this!), and it's based on "discretionary" income.
In my own case, when it finally went to the creditor (even though I fought it every step of the way because I was making payments), they contacted me to set up a payment program.
This was based on my discretionary income. I supplied my tax forms -- and a copy of my monthly bills for 6 months. As I live simply, there was not much on there. My tax forms also showed what were business expenses (such as transportation costs -- maintaining the car, gas, etc; clothing and equipment and so on).
Then, the payment was based on that.
What is *very* interesting is that the interest payment was actually HIGHER than the amount I could afford to pay (and therefore, that they could go to court and garnish), and so they actually adjusted my interest rate. I was able to "lock in" to that (via a new contract) that asserted that so long as I made the monthly payment by auto-payment, then they would keep me at that rate.
Today, I still pay the same rate (even though I could pay more and pay down the principle), but the company will not allow me to do so.
Why?
Because the debts are bundled and then sold as investments. The more principles that they hold wherein they are getting money (rather than them being paid off), the more money the company makes from those investments.
Having me pay off the debt would hurt their bottom line -- as the investment would be gone, paid off. The whole thing hinges on me *not* paying it off, but continuing to make payments of some kind (interest).
Which is why I'm stuck with either A. making payments for the rest of my life (luckily, debt cannot transfer in death) -- which is effectively indentured servitude -- or B. saving up to pay the debt off entirely in one go (as per what they demand).
Presumably the "no early payoff" clause was contained in the renegotiated loan contract that you signed of your own free will?
I really find the sanctimoniousness off-putting.
There are a lot of people "out there" who are not stupid, non-working people who want a free ride. I simply see this as beneficial (as is the other student loan bit that came down recently -- Obama mentioned it in a speech some months ago and I didn't qualify for it!) for myself as well as the economy.
I said in the beginning that debt forgiveness was a good idea -- as we can see evidenced in Saudi Arabia and how it managed to help the economy and the people there. And also, how it set up interest-free loans and other opportunities for the common people as part of the economic stimulus.
I may not even qualify, once this process gets going -- just as I didn't qualify for the other recent changes.
But what I really dislike is the idea that I am a slouch.
I had no undergraduate debt. Working, scholarships and grants, as well as my parents paying for it and a generous subsidy from my grandmother for my living expenses made that possible. I was lucky in that I only had to work about 10 hours a week to make this happen, but I still worked and I enjoyed that part of my experience.
In graduate school, I received scholarships and grants -- which came to roughly 1/3 of the total tuition/fees costs -- and my parents contributed 1/5 of the total tuition/fees costs. I also worked which paid my living expenses, transportation, books, and materials (not part of the costs).
The loans covered only 47% of the expenses of law school. And I went to an inexpensive school, relatively, and graduated on time.
Of that remainder I've paid 1/3 of it, and I've paid the interest too. That loan wasn't consolidated with the others -- which is why I was able to pay it off. I do not know why it wasn't consolidated with the others -- as my paperwork clearly consolidated it, but whatever. At least some of it is paid off!
The remaining 2/3 is currently held by the credit company -- and I estimate I'll pay it off in 7 years at my current rate.
If I do not qualify for this program, I have no problem continuing on this path.
I will have paid off my student loans in 20 years -- which isn't bad considering most of my friends are still paying off their loans as well, and not nearly as aggressively as I have. Most of them will be paying theirs off for many years to come besides that.
And some of them may never pay them off -- I do not know. And most of them do work as lawyers.
If we were to qualify, then
Admittedly, I'm shooting to pay off this debt in 5 years or less. I'd love to do it in 3! I am aggressive about it as I possibly can be.
I work hard, we live simply, and so far 2/3 of our "discretionary income" (which is to say that which we put into savings, as the rest of it is fixed expenses) goes towards this. The other 1/3 goes to paying us back from our investment here, or in slightly increasing our quality of life (such as being able to buy more fresh fruit/veggies and less frozen).
I don't think I'm going to make it in 3 years, though.I do think it will be closer to 7.
---
And to flesh out more in regards to investments -- we would like to franchise the business into the US (and possibly move back carrying a franchise of our own), as well as own property there, as well as continue to grow our retirement IRAs and mutual funds.
Currently, we run two savings accounts, two checking accounts (one from which my auto-payment is made, the other is the fund that holds the money that I'm saving to pay off the debt until I roll it over into the CD that I hold to get higher interest on that money so that I can earn more on it and pay off the debt that much faster -- every dollar counts!), an IRA with mutual funds, and several CDs in the US. I understand that all of these things benefit the US economy.
I don't know if I want to live in the US again, but I would like that option.
And, if we do not get the next visa for here (hoping that we do!), then we'll have to take the franchise back to the US, and do our very best to get it off the ground back there.
Likely, DH would go back to regular work, DS would have to go into longer pre-school (steiner pre-school/kindy), and I would work this business. We've invested too much not to carry the basics with us -- brand, web site, and so on -- and we'd likely be able to manage this office as a franchise for someone who would be interested in maintaining it.
But there it is.
Last edited by Zoebird; 3-20-12 at 8:21pm.
Why debt forgiveness for student loans and not, say, car loans? Or home improvement loans? Or small business loans? Are tutions outrageous? Sure they are. But here, unlike a car or trip or any number of things you get a loan for, you are 'buying' something that will essentially never go away. Once you have that degree, you have it forever. You own it, and saying these kids need 'forgiveness' because, why? I don't get it. Ok, maybe help these kids restructure the loan so they can for sure pay it back, but forgiveness? Naw. If they are willing to get a 20,000 + loan for a car, and don't expect forgiveness for that loan, then they shouldn't expect forgiveness for buying a product that they will always have without much depreciation.
Now, more education towards the kid and parents at the front end explaining exactly what they can expect from that particular 'product' they are buying, that I can agree on. If we can require the government to mandate intrusive medical procedures on women in the name of 'educating' them, then we certainly can expect government mandates on the type of 'education' a prospective college student AND his/her parents will receive before starting on this path. I still believe a college education is beneficial in the long run. College graduates earn more over a lifetime than non college graduates, on the average, but that doesn't mean everyone shouldn't enter into this path without open eyes.
Education on the realities, yes. Forgiveness, no.
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