Student Loan Forgiveness

[Snicks]

Sorry if this is not a popular opinion but I paid my student loans in full. So did DH. And we spent years saving in our children’s 529 plans. We could have lived larger, taken more trips, bought a bigger house but our children’s college is a priority for us. As a result we paid our sons’ undergraduate tuition. DD is 18 and heading to University this fall. But I wonder if we are being suckers to pay her tuition if she could borrow and one wave of the wand could make that loan disappear.

[disneysteve]

No argument here. I paid off over 100K that I borrowed. DW paid off however much she borrowed. DD paid off the money she borrowed and we paid off the money we borrowed for her as well.

The student loan system is deeply flawed. An 18-year-old shouldn't be free to borrow unlimited amounts. The Federal loan limits are quite reasonable but the private lenders will give you as much as you want which is nuts.

And no, I don't think there should be widespread loan forgiveness.

[Fishindude77]

If outstanding student loans are going to be forgiven, then it's only fair to reimburse others who saved and paid for their education some percentage of what they paid, as well as reimburse all that have repaid their student loans.
May as well go back 10-20 years or more when all of the student lending started.

I'll bet this sounds like a pretty ridiculous idea to those with those wanting loan forgiveness when you make it fair for all.

[riverwed070707]

I had a heated debated on FB about this a few months back. A person I went to high school with who is now a high school teacher herself and of whom I generally respect the opinion of made a post something along the lines of If you don't agree with student loan forgiveness you're sick in the head. I pointed out half a dozen reasons why it doesn't make sense for the economy, doesn't teach financial responsibility and ultimately punishes those who chose to save/borrow responsibly. EVERYONE disagreed with me. I was respectful and thoughtful in my responses and people were cussing at me and sending me hateful DMs Seeing this post was a good reminder that some of us just come from a different mindset, especially when it comes to finances and being in the minority doesn't make you wrong

[disneysteve]

I had a heated debated on FB about this a few months back.

That was your first mistake.

[riverwed070707]

That was your first mistake.

You're so right. I NEVER engage in politics with friends or family. I got worked up about how it was worded and the fact that this was a person I generally regarded as sane and rational. Learned my lesson.

[disneysteve]

You're so right. I NEVER engage in politics with friends or family. I got worked up about how it was worded and the fact that this was a person I generally regarded as sane and rational. Learned my lesson.

I fall into that rabbit hole from time to time despite knowing better.

[cypher1]

You're so right. I NEVER engage in politics with friends or family. I got worked up about how it was worded and the fact that this was a person I generally regarded as sane and rational. Learned my lesson.

I really don't think there is anything wrong with politics with anyone as long as both sides are at least willing to listen. It doesn't mean they have to agree in the end. In fact, I think people really should be talking about these topics...in person. As for using social media to discuss, now you're just wasting your time for being unproductive. But to each their own. One of the best things I did after my break up was delete FB over a year ago. No regrets. This forum is really my social media.

Going back to student loan debt, I absolutely disagree with student loan forgiveness, and the lack of accountability in making these types of financial decisions. Everyone's situation is different, and the choices we make will vary based on those circumstances. I'm fortunate in taking advantage of my employer's tuition reimbursement program (which I should have done years ago). But am constantly running the numbers of credits remaining in my degree, the time frame being part time, how much cash I need to have to pay out of pocket for the next remaining 4 semesters in case I'm laid off. I will add, having gone back and seeing the kids around me lack the time, planning/organization, just makes me appreciate my time management even more.

Even if we were able to forgive the 1+ trillion in debt, who is to say those same people could continue to get into more school debt again? Where is the line drawn? Instead of talking about loan forgiveness, why are we not talking about how to make college "affordable" or at least pushing for more reform in that industry?

[disneysteve]

Even if we were able to forgive the 1+ trillion in debt, who is to say those same people could continue to get into more school debt again? Where is the line drawn? Instead of talking about loan forgiveness, why are we not talking about how to make college "affordable" or at least pushing for more reform in that industry?

And not just school debt. I'm willing to bet that if you forgive everyone's student loans, you'll see credit card debt and auto debt skyrocket because people will suddenly be able to "afford" to spend more since they no longer have student loan payments to deal with.

College has definitely gotten proportionately more expensive than it used to be. However, there are still plenty of affordable ways to get a degree. It might not be from the idyllic campus that is at the top of your list but students and their families have got to start factoring cost into their school choice decision. It can't keep being left out of the equation.

Our daughter went to a fairly costly school but we knew that upfront, we knew how much we had saved in her 529, we knew how much she was getting in scholarship money, and we knew that when we added it all up, we could afford it. But she also knew that if anything changed such as her not maintaining the GPA needed to keep her scholarship ($19,500/year) then she wasn't going to be able to remain at that school.

Affording college is really no different than affording anything else in life. You need to balance your wants with your needs and your resources.

[riverwed070707]

And not just school debt. I'm willing to bet that if you forgive everyone's student loans, you'll see credit card debt and auto debt skyrocket because people will suddenly be able to "afford" to spend more since they no longer have student loan payments to deal with.

College has definitely gotten proportionately more expensive than it used to be. However, there are still plenty of affordable ways to get a degree. It might not be from the idyllic campus that is at the top of your list but students and their families have got to start factoring cost into their school choice decision. It can't keep being left out of the equation.

Exactly why I find it so frustrating. I see 20-somethings younger than me complaining about not being able to afford their student loans while living in a new construction house and driving a leased car. I have 5+ years of work experience and saving on them and I don't consider a new house or new car to be things I can afford, nor that people "should" be able to afford in a just society. My student loans are paid off though. Priorities I guess.

I honestly, was recently surprised by how cheap college can be after having it drilled in for so long that it is soooo expensive and parents have to save for their child's first 18 years to be able to afford it. In state tuition here is less than $9k/yr. No reason a student couldn't work the summer to cover tuition and only take out loans or work a PT job to cover room and board.

[Petunia 100]

I never took any student loans in the first place, so never faced paying them off. It did take me a long time to get through school, though. But it wasn't about finances, I just didn't have a clear goal for a long time.

[disneysteve]

I honestly, was recently surprised by how cheap college can be after having it drilled in for so long that it is soooo expensive and parents have to save for their child's first 18 years to be able to afford it. In state tuition here is less than $9k/yr. No reason a student couldn't work the summer to cover tuition and only take out loans or work a PT job to cover room and board.

Even if you look at private schools, the numbers don't have to be that bad. Our daughter's school was about 52K/year but she got about 22K in scholarship money so the net was 30K/year or 120K for 4 years. Yes, that's a lot of money, but if you save $350/month for 18 years with an average return of 5% which is certainly doable in a balanced portfolio, you'd have that 120K when college rolled around. And that's with taking zero loans. If you're okay with some modest and reasonable borrowing, the monthly savings needed is even lower. Plus if you live in a state where 529 contributions are tax deductible, it gets even easier.

ETA: I'm not suggesting that college is cheap or easily affordable for everyone. I'm just saying that there are definitely ways to handle it if you plan and prioritize.

[bjl584]

Sorry if this is not a popular opinion but I paid my student loans in full. So did DH. And we spent years saving in our children’s 529 plans. We could have lived larger, taken more trips, bought a bigger house but our children’s college is a priority for us. As a result we paid our sons’ undergraduate tuition. DD is 18 and heading to University this fall. But I wonder if we are being suckers to pay her tuition if she could borrow and one wave of the wand could make that loan disappear.

I don't see an issue with what you did.
The loan forgiveness program are as flawed as the student loan programs themselves.
Whether or not the expense of college for certain majors is worth the price tag is a different argument, but paying for it without loans is never a bad idea.

[rennigade]

There are ways to have your loans "forgiven." I know if you work for the feds they have some sort of program, maybe only $10k or so. We had several friends who are now doctors. They did some program where they taught for a year or two and their schooling was paid for those two years. It was something like that. Neither of these two options are just sit back and do nothing. They had to work for it, which isnt a popular mindset for most people.

[riverwed070707]

Even if you look at private schools, the numbers don't have to be that bad. Our daughter's school was about 52K/year but she got about 22K in scholarship money so the net was 30K/year or 120K for 4 years. Yes, that's a lot of money, but if you save $350/month for 18 years with an average return of 5% which is certainly doable in a balanced portfolio, you'd have that 120K when college rolled around. And that's with taking zero loans. If you're okay with some modest and reasonable borrowing, the monthly savings needed is even lower. Plus if you live in a state where 529 contributions are tax deductible, it gets even easier.

ETA: I'm not suggesting that college is cheap or easily affordable for everyone. I'm just saying that there are definitely ways to handle it if you plan and prioritize.

I don't necessarily agree with this. I couldn't have afforded to put away $350/mo from the day DD was born. I was a few months into my first real job and making $30k/yr. Even though expenses were low, there was little wiggle room in that budget. I think we all know it's optimistic to think the average person could or would do this. Most people can't even save up to pay cash for their cars, let alone cover a $500 repair bill. Not to mention, I - like you - only had one kid but that's certainly the exception and not the rule. Do families with 3 save $1,000/mo+ toward college??

I don't agree with paying for kids college being a given or that it should be an 18 year savings endeavor for the parents. To me "affordable" doesn't mean saving more and for longer than I've saved for anything in my whole life for my child's success. It needs to be affordable for the students to pay and make their own way, not something the parents should have to be able to afford.