Student Loan Forgiveness

[Thrif-t]

I kept a spreadsheet for each kid. We generally all paid a 1/4 each year; from the 529, the scholarships, loans, and them working. Made it more manageable for everyone. Plus you can only get so much of the federal loans each year. But it can be done

[Snicks]

I mean, many of us have approached college with economics in mind. My oldest son lived at home and got an A.S. degree attending a local trade school. My other son lived at home for 2 yrs and commuted to the local branch and then moved on to University and is finishing his degree. DD is going to a college that is inexpensive and close to home. If money is no object and you can borrow to the hilt and just shrug it off then perhaps she should go to an IVY league school, take out the max loans and just shrug it off. These kinds of policies encourage that.

[Snicks]

The college system is what needs a hard look. Looking at the back end of the finances is missing the mark. The real question is do many degrees actually need to take 4 years to complete? And do we need extended breaks, summers off, etc? All of that prolongs the time it takes to complete a degree and you have to pay those living expenses, room, board, housing in all of that extra time. Do colleges need to offer classes in Lady Gaga or Beyonce? I mean, it's all become quite frivolous.

[Like2Plan]

I have a six figure student loan balance and I do not regret it for one second. I know that my education will pay dividends in a multitude of ways. However, I am part of the PSLFP and my student loan will be waived after I make 120 on-time payments. Sorry, my dad never made more than 40G a year and there was no account reserved for me. Luckily, I’ve seen the world from a myriad of lenses and empathy is the most beautiful one of them all. These programs can transform the lives of people that grew up in economically depressed spaces and many of them will not spend their money on cars or other foolish items. In my case, I’ll pay approximately $70,000 and $50,000 will be written off. I come from a family that will transfer “0” wealth back to me!

There are a lot of different things being tossed out here, but I thought I would comment on the PSLFP. I don't begrudge anyone who takes advantage of this program. My biggest heartburn with this program is that so far it has been difficult for folks to negotiate all the steps in order to qualify. You probably know better than I, but wasn't it just in the last couple of years that the first of the folks who applied for this program should have been seeing their loans paid off? I've read that very few who applied actually had their loans paid off due to glitches and technicalities.

The PSLFP--requires that you pay something for 10 years. It is not a free pass. And, you work in the public sector. I think it is a great program because it allows talented folks to work in a job that they might not otherwise be able to do because of the student loan overhead. So, win-win. Win for the person using this program and win for the public to have young talented folks work in the public sector.

[riverwed070707]

But riverwed, these are parents with more than enough money if they say drove accord instead of a mercedes could have helped their kids. But instead their income counts against them like you said and they still don't help. It just doesn't seem right.

100% agree on their income impacting students ability to get aid. Parents income should absolutely not be a factor. At 18 they are adults and eligibility should solely be based on the students income. At minimum, it should at least be taken into consideration if the student is living as a dependent or not - are they living outside the parents home? Are they working to cover their living expenses? If yes, parental income is irrelevant. I had been living on my own for over a year by the time I applied for college, but that didn't matter in terms of aid eligibility.

[docstudent]

The PSLFP is straight forward and not all that confusing. I did not get any conflicting statements from my loan servicer. I verify my employment and payments every 6 months, this will eliminate trying to track down records, ten years from now. If you don’t read the requirements and make up your own rules, then ....it becomes a headache. This program has allowed me to stay in the public sector and not venture off to business world. It’s a total win-win, for participants and society as a whole.

[disneysteve]

This program has allowed me to stay in the public sector and not venture off to business world. It’s a total win-win, for participants and society as a whole.

I tried to avail myself of a loan reimbursement program years ago. Unfortunately I didn't qualify because I wasn't right out of school, which I thought was a short sighted reason. I had worked elsewhere for several years before taking the job in the under-served area where the loan program existed. If someone is willing to come work there, it shouldn't matter if they just graduated or not. I took the job anyway but it would have been even better with loan reimbursement.

[Like2Plan]

The PSLFP is straight forward and not all that confusing. I did not get any conflicting statements from my loan servicer. I verify my employment and payments every 6 months, this will eliminate trying to track down records, ten years from now. If you don’t read the requirements and make up your own rules, then ....it becomes a headache. This program has allowed me to stay in the public sector and not venture off to business world. It’s a total win-win, for participants and society as a whole.

Glad to hear they have ironed out a lot of the confusion. Some of the news articles I've read on the first folks trying to get the loan paid off seemed to indicate that there had been a whole lot of confusion-- especially with the loan servicing folks saying they were nominal to profile only to find out that there was something wrong and they didn't qualify.
Here is a recent article about some changes they are proposing:
"The PSLF program has faced a lot of criticism. In December, the Department of Education had approved just 845 applications for forgiveness, giving it a 99 percent rejection rate."

https://www.forbes.com/sites/wesleywhistle/2020/05/20/senate-democrats-propose-revamp-to-public-service-loan-forgiveness/#355e6f7060bc

[Like2Plan]

100% agree on their income impacting students ability to get aid. Parents income should absolutely not be a factor. At 18 they are adults and eligibility should solely be based on the students income. At minimum, it should at least be taken into consideration if the student is living as a dependent or not - are they living outside the parents home? Are they working to cover their living expenses? If yes, parental income is irrelevant. I had been living on my own for over a year by the time I applied for college, but that didn't matter in terms of aid eligibility.

I totally agree with this. It is the weirdest thing--parents are not required to pay for a child's college, but the child is tied to the parent's income for getting aid. I just don't get it. That, and the kiddie tax all the way up through age 22. I thought "kids" were adults at 18.

[disneysteve]

I totally agree with this. It is the weirdest thing--parents are not required to pay for a child's college, but the child is tied to the parent's income for getting aid. I just don't get it.

I had a friend in college who had to include both parents’ financial info. Her parents had been separated for years and she was estranged from her mother. Hadn’t talked to her for years. She had the hardest time convincing the school that she didn’t have any way to contact her mother and didn’t have any desire to do so anyway.

[docstudent]

Umm, did you apply to the PSLFP? I finished my degree program five years after I signed on to the program. In addition, it’s a misnomer, you don’t have to work in an impoverished community to gain approval. For instance, I know a teacher that works in a wealthy school district and qualifies for the PSLFP. The program is about vocation not location....any teacher employed as a public school educator is eligible, and a myriad of other public service sector jobs. I know of a handful of people in the medical field that are part of the program. However, many didn’t see the value because your payment is based on your income level. Each year I must submit my tax returns and a new payment amount is generated. At the moment, I pay $600 a month and based on my income increase rate, I will end up paying more and more each year. Some people believe it’s totally free and that’s definitely not the case.

[disneysteve]

Umm, did you apply to the PSLFP? I finished my degree program five years after I signed on to the program. In addition, it’s a misnomer, you don’t have to work in an impoverished community to gain approval.

The program I'm referring to was location based. It wasn't a public sector job so totally different program. It was a program specifically for practicing in a medically under-served area. Had I taken that job straight out of residency I would have qualified. Since I had another job prior to that, I no longer qualified.

[Snicks]

I do not think parents should be REQUIRED to pay for College. That is a step too far in my opinion.

[disneysteve]

I do not think parents should be REQUIRED to pay for College. That is a step too far in my opinion.

I agree. However, if parents are not paying for college, then the student shouldn't need to include parental financial information on the aid applications. I guess the problem is how do you prove that the parents aren't helping in any way, especially if the student is still a dependent?

[cypher1]

I agree. However, if parents are not paying for college, then the student shouldn't need to include parental financial information on the aid applications. I guess the problem is how do you prove that the parents aren't helping in any way, especially if the student is still a dependent?

I also agree parents should NOT be required to pay for college. But that's a tough one. My initial thought was if the student had to show recent bank statements for income or lack of, when applying for financial aid, or when having to make a payment for tuition to make sure another member isn't moving money into their account on short notice. But I realize that isn't perfect either. Separate example, but I just refinanced my mortgage on Thursday. The night before, lender had to get a hold of my manager to verify employment didn't change within that one day before allowing me to close. That was even after showing last 2 months of banking statements, and last 3 pay stubs. So I could see student loan lenders trying to crack down, if the borrowing policy is changed to not require parents data for loans.