Student Loan Debt Settlement

Education
21

I read every word of what you wrote . You need to consider everyone-not just the ones throwing a tantrum. Also it is 100% a windfall to let people out of money owed, especially if you made others pay for 40 years. People aren’t magically restored to whole after they pay their loan off. They are forever financially harmed so it makes no sense to only help the ones with current loans. Many of them simply haven’t worked as hard as others and we really need to stop rewarding the dumb, the weak and the lazy while acting like we had hardworking successful people.

Do you not understand that there are people that are paying or paid on their student loan for 30+ years so 7 years of payments is laughable and unfair to everyone that has paid beyond 7 years. But the number of years someone pays is arbitrary. The number of dollars they paid is what matters. Explain your plan in actual numbers. How much is paid off in your proposed 7 years of payments, 125% of the principal loan amount or 25%?

You also said college students aren’t very smart but that’s a reflection of poor parenting and education, which is making this so much worse. All parents know when their child is not college material as do the teachers so your sweeping conjecture (or maybe just your personal experience) about how they are ALL told they should go to college by everyone in their life is just not true. Not that many more kids got to a 4yr college than 20 years ago -maybe 10% more…if that.

Do you understand how much tax payer money goes to universities? Your thoughts that this is not a transfer of wealth from tax payers isn’t realistic. Sending a bill to a university is largely the same as sending a bill to the tax payer unless you are aiming this at only non-profit universities. In that case, I’m fully on board with some of your ideas about making them take on risk. Maybe they will just stop offering the stupid degrees. Schools only do it now because it make them so much money. But what’s keeping someone from under employing themselves so they don’t have to work hard to pay it back? Are you going to give the school control over what jobs the graduates have to take? You can’t leave it all up to the graduates if you are going to force the school take the risk. Are you going to make the successful graduates pay a portion of their fortune back to the university because the university took on risk and deserve more upside?

Further, as of the last few years ALL of them knew the consequences of taking these loans but yet they are still doing it so none of them deserve to be given anything.

If a school is too expensive, don’t go. I got into some of the most expensive schools in the country but I didn’t go because I didn’t have enough scholarship for it to seem like a good idea. My parents literally said, go to graduate school wherever you want but don’t get into a bunch of debt for something as banal as an undergraduate degree. Kids are taking these risks because they are likely so self-absorbed, think they are so special that they need or deserve a degree from a pricey school. THEY ARE NOT VICTIMS. Not a single one went into a student loan not understanding how the loan worked.

You either correct the student loan situation for everyone that has ever had a student loan or for no one. The recent student loan forgiveness is nothing but a bribe and a misuse of Federal money. The banks are the winners here, do you not see what is going on? Even in your idea the BANKS are the winners because you shift the risk to the college. The BANKS are the problem. The schools aren’t giving these kids the loans. This isn’t about the student loans or students. If this were about the difficulties of the American people they would do what was fair for everyone that has paid too much for a student loan but this is about BANKS. Our government loves to give money to what is already the most profitable business in the country and this is what they are doing now.

A better solution if to limit the total amount of student loan to a reasonable amount. Maybe align loan amounts with the actual degrees. If schools can’t get students into their schools because the loan limit prevents it, the schools will have to lower their tuition or provide more scholarships. Bottom line, these students shouldn’t be able to get their hands on this money in the first place.

Also, the bank that made all the money on the students of the past are the ones that need to pay those people back, not the government. The government has given the bank plenty of money and they need to pay back these people that made them rich with the student loans.

This is all hypothetical but for recent graduates, they should be released from their loan if they pay 110% of the loan amount within a certain number of years.
Maybe for the older loans, for everything above 120% of the loan amount, it should be returned to the the student with interest.

I know this goes against some of the rules of banking and finance…but lets be real, so does just forgiving loans…and bailouts for that matter.

You have to be fair to everyone or it just looks like a bribe.

22

Do something about the interest rates on student loans and most could afford it.

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23

A ton of doctors work in the public sector…think state university medical centers. Doctors that work in private practice make LOTS more money than your doctor at the University of Whatever Medical center so maybe we should give them the low interest loan to encourage working for those place. It increasingly difficult to get people to work for the places associated with the medical schools because their pay can be half of what it would be in private practice. It is so important that we have good doctors here because they are the ones training the medical students. Let those private practice doctors pay 10% because they can certainly afford it. Most private practice doctors make enough the first year to completely pay off all their loan with plenty left over.

24

what about the parents? Obama administration gave me a second mortgage 130k I am going to be 80 if I live that long and maybe then I will have it paid off. I am too rich to go bankrupt and the “help” is not for parents. literally 50%-75% of my tKe home pay goes for making payments. I can’t refinance a bank won’t do it. Can parents get something like a tax free direct payroll deduction or a break on the interest I need help and the lottery is NOT panning out

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25

Also restructure the way the interest is calculated. Right now a third of what I owe is interest and I have been paying for 10 years.

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26

First off, I completely agree with there being a major problem with higher education debt. I just don’t agree with your solution. The typical college freshman (entering college right from high school) is not as stupid as you are making them out to be. You can not hold their hand forever. At some point you have to give them the proper information so they themselves can make the appropriate decisions regarding their life. They were able to graduate high school with a high enough GPA to enter college. That means they do have an understanding of how life works. I do understand what you are saying about them being told when they can talk, go to the bathroom etc. I just don’t think that makes them stupid. I think that teaches them how to follow the rules…and I don’t care who you are there are always rules to follow.

I have 3 kids who are all in college at this time. Since our kids were little we taught them the value of education. We taught them that doing well in school would result in them being able to apply for scholarships that would help tremendously toward not having a lifetime burden of student loans. I think the whole issue needs to start with parents actually being parents and teaching their kids about life skills. This should also be taught in high school.

If you hold their hands and tell them it’s not their problem that they took on the debt you’re just creating a lifelong problem for them. They will think they will never have to be responsible for their problems. The real issue is colleges and universities are charging way too much to attend. I believe that’s where things need to change. There needs to be a cap on interest rates for student loans…and I’m talking low like 2-3%. Schooling just needs to be affordable. Let’s not just shove the financial responsibility around. Make if affordable and people will be able to meet their loan responsibilities.

If you think making the colleges and universities responsible for loans that reach a certain age you are going to severely limit the kids that get accepted. I don’t think anyone should be denied an education. There are other options available if you don’t want to take on all the debt. There are trade schools and community colleges. I believe when a student is looking at furthering their education there should be some type of “class” that teaches them about loans and debt. Actually show them if they have x amount in loans how long it will take to pay that back. I know the high school my kids went to they had 2 semester long classes all about choosing a career path. They had to put together a presentation about what they chose and why. This was a required course and they had to complete it for graduation. I think it really needs to be expanded into the financial portion as well. This type of class should be a requirement for all high school seniors. This would give them a real heads up about what they are stepping into. But they can handle and comprehend it. It is very hard at that age to choose a lifelong career path that you want to study. Many student’s are lead to believe they can study “underwater basket weaving” and will get a prosperous job upon graduation. I don’t think universities are doing any favors for offering programs that will lead a student to no where but debt. I think part of a class should be showing the students graduation rates, employment rates upon graduation in the field they are interested in, wages in their field of study etc. For example, if the student is interested in the “underwater basket weaving” program show them that placement after graduation is 0% and they will still be responsible for paying the $100,000 loan back at a rate of $500/month. They more than likely will think twice.

So, what I am saying is I definitely agree that student debt is out of control I don’t believe we need to make anyone else responsible. And I definitely don’t believe we need to be pushing for anyone to be filing for bankruptcy because they think they have paid enough of their loan. That’s just teaching irresponsibility.

As a side note I think our country needs to rethink it’s priorities. The students are our future. It would be wise to invest in them. As an example something like using tax dollars for education vs. funding endless overseas ventures. This would give every student the opportunity of higher education.

Anyways, I mean no negativity towards any of your ideas, just having an honest conversation with my ideas.

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27

just allow it dischargeable through traditional bankruptcy, it doesn’t have to be that complicated. change that one aspect of the laws and the system will self correct, bk used to be a blight but not anymore.

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28

Interesting proposal but I have some questions.

In part one, you mention discharging the debt through chapter 7 bankruptcy. Debt can usually be discharged either through chapter 7 or chapter 13. Is there a reason you specifically want chapter 7? I think borrowers should probably have the option to do either 7 or 13, like normal debts.

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29

I love this so much. I was lucky enough to graduate without debt, but I see what loans have done and are doing to my peers and the next generation. I know people who have been paying for years and still owe money, and in some cases will have eventually paid far more than the original value of the loan. One of my biggest issues is that I don’t believe the government should be making a profit on these loans. The federal government is not designed to be a for-profit institution, so there’s no reason to charge interest - let alone at the rates we’ve seen over the last 20+ years. It was over 10% in the 90s. One idea we could consider would be to restructure any loan with exorbitant interest - I’m not wise enough on this matter to know what that might be other than “not 10%” - and if someone has already overpaid on the loan, provide a refund. The government should not make a profit off our children.

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30

This is a good plan for those how have taken on debt already. However, I would eliminate the federal education lending in the future. There are other means where low income families can get funding such as scholarships. The free money lending encourages too many people to go to college and while we have a severe shortage of tradesman.

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31

Sorry but I don’t buy your argument that they are adults. You are the one signing the loan. The government is the lender for all intents and purposes which is why this got out of hand in the first place. There are ways to go through this without debt but many people aren’t serious about their education and want the “College Experience Package”.

Adults can get into legal contracts, sign up for the military, peace corps, etc. There are many ways to get educated without going into six figure debt. Parents etc. all pushing kids to go to college should be also pushing them to get degrees that matter in the real world.

Many high schools have deals with local community colleges or small 4 year colleges that allow students to earn credits while going to high school by cross enrolling. There are also folks who graduate, live at home and attend these colleges to get an education and then transfer onto larger universities as needed to complete degrees.

You want to end all of this debt. Get the government out of it. Go back to the way it was before the Gov took over & guaranteed the money. My wife, myself, & my kids didn’t have loans as we all worked within the system to pay for college as we went. There are also military options, peace corps, etc that will pay for a majority of your college expenses even to be doctors, lawyers, etc. A person has to apply themselves. They won’t allow you to get a many worthless degrees in these programs but that is what we need to be teaching our young students.

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32

In addition, very few student loans can be verified through a detailed accounting of the fees and interest that is automatically added by the student loan service providers without knowledge of the student - resulting in ballooning the debt to levels that cannot be repaid in a lifetime. This ballooning debt and inability of the student loan service providers should be prohibited. It’s not only young people that suffer from these irregular practices, but there are millions of older people over age 65 who are still working to repay these loans and who cannot afford these payments because these added fees and interest rates have just tripled the original loan amount. I agree that the institutions should take responsibility for any student loans that cannot be repaid within 10 years after they were borrowed or after the student completed the program. As it is right now, student loans and their exorbitant fees and interest are attached to social security checks making it extremely difficult for people who have worked their entire lives to repay these loans (the amounts of which have increased over 100x due to fees and interest) only after retirement to have a terrible time trying to repay them and afford food and housing at the same time.

33

I agree - Interest on student loans (subsidized and unsubsidized - currently around 5% AND Parent Plus Loans - currently at 8% and 9% in my case) should be a very low rate, like 2-3%

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34

Reduce the interest rate on all existing and future loans to 1%. This goes for parent loans too.

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35

You proposed a thoughtful and a complex response to the issue. A college education is still important in many fields (say healthcare/medicine). The quality of the programs AND the quality of the instructors, students accepted and actual graduate competency has gone down in recent years, while the cost of education has gone up. As someone who sacrificed greatly to pay for my two college degrees (BSN and MSN) without ANY student loans by working two full time jobs, living in yucky apartments and driving old cars, minimal vacations or new clothes for years at a time, I deeply resent the notion of paying for someone else’s student loans OR having them file bankruptcy as a relief.
There are many issues to the problem of student loans, namely that the cost of tuition is too high and the ROI is low in many fields due to job market, degree choices, lack of quality graduates, lack of internships, tuition reimbursement with job contracts, predatory lenders, poor financial literacy/ advice/planning for college students.
A college education used to mean a graduate was well educated, well prepared to launch into a job or internship that led to a competitive, well-paying job. Now the programs and expectations for students are low, the quality of graduate is undesirable, and many chosen career programs are not matching with or meeting the demand of the work force.
The solution is not to just forgive the loans, but fix the underlying problem of needing to take out the loans in the first place. How can we make college/university more affordable?
1). Need to go back to more frequent and comprehensive assessment of work force needs/ projections (2 year projections for vocations, 5-10 year increments for professionals) and partner more closely with colleges/universities to tailor degree programs to meet those current needs.
2). More career exploration/aptitude testing, shadowing, skill building options in high school.
3). Increase financial literacy and planning in high school.
4). Partner with high school, parents, colleges of interest to get financial plan in place.
5). Student may need to take a year or two off to save money, parent may need to work extra job to contribute. Student may need work-study program, go to school part time, etc. Loans should be a last resort, and they should be used for tuition and books.
6). Consider 2 year civil service (for junior college) or 4 year military service to contribute to college tuition.
7). Colleges/universities can increase contracts with work force for more tailored programs, and more work-study/ internship opportunities for approved candidates.
8). Cost analysis of college/Universities. Where is the tuition money being spent? Administrators? Sports? Where are the federal monies being spent? Is cost of tuition proportional to how much federal money is received across the board?

9). Forgiving student loans does not fix the problem, it puts financial burden on tax payers, or as you propose, the banks that lent the money. Loan forgiveness also places burden on those who did not go to college, or those who went to college and worked multiple jobs/sacrificed on college budget for years so as not to take out student loans, and those who took out loans but sacrificed greatly to pay them back.

10). Entire education system needs to be torn down and re-built. From type and quality of programs, to quality of applicants, instructors and graduates, to available work-study/internships, job market availability.

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36

I would propose eliminate all student loans that are older than 10 years and getting rid of all interested accumulated while in deferment/forbearance. Also, for those that have paid them off completely in the last ten years all servicers should be reimbursing interest rates to those people to make it fair for all.
I also believe that future borrowers should be allowed to choose their services rather than college institution delegating what servicers you are going to be using. NELNET has terrible practicing for apply payments to your newest loans/lowest interest rates 1st and you end up paying out more in the interest that the start of the loan; and they should be held accountable! Kaplan University now Purdue University (no affiliation with ivy league school) loans should be removed as well as they had some shady practices as well for claiming that money was owed meaning double dipping form student loans and putting it on the student before obtaining the degree.
I would propose that the newest regulation (at lease in NYS) to change the title of colleges to “university” for colleges be removed as well as this is just another reason to price gouge the student.

37

I strongly agree that student debt is a huge burden. We must first change the narrative.
Common narrative: Go to college no matter what, it is the only way you will be successful.
Truth: Go to college to become indoctrinated and come out with debt and hating your own country.
Needed reality: Lower education costs. Acceptance that trade schools are good routes too. Neutral educators and if they show to lean one way or the other there should be swift repercussions. Educators that love our country. Strengthen our young people and prepare them, stop tearing them down by brainwashing them and filling them with harmful agendas.

38

just getting rid of the predatory interest rates would be huge. At least you could see the light at the end of the tunnel to pay the debt off. Credit to those that have already paid in interest.

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39

Hey Amanda, I totally agree that capping interest would help; I pitched an idea for it here if you are interested.

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40

Start by eliminating interest on these loans, but anyone who barrows money must pay it back. That has to happen. Next, cap loans from the taxpayer to students. They have to be amounts that can reasonably be paid back in the two decades after graduation. Eliminate loans for these dubious “areas of Study” such as “social justice” that have no use in the real working world.

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