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Obama's plan for student loans

Discussion in 'Sports and News' started by JayFarrar, Jan 25, 2010.

  1. JayFarrar

    JayFarrar Well-Known Member

    From the wire and reportedly to be in the State of the Union.

    I think this is a fantastic idea and I don't know how people could argue against it.
  2. JackReacher

    JackReacher Well-Known Member

    Anyone know what the average payment and payment length is for student loans? I finished up in just about two years, and my payment is about $125 a month for God knows how long. Might be set up for 10, 15 years. Can't remember off the top of my head.
  3. playthrough

    playthrough Moderator Staff Member

    Doesn't sound like a bad idea, but I wouldn't want to hear about doctors/lawyers who make a gazillion dollars a year skipping out on a balance just because it's been 20 years. I know some of those degrees require a gazillion dollars in loans, but if they can eventually afford it, they should pay it. I know that's not what this policy is about, but that's one area that came to mind for me.
  4. 93Devil

    93Devil Well-Known Member

    Wouldn't this just cripple the lending institutions?

    I have three college degrees, work in a school system (for 10 years now) and have tens of thousands still left on my loans. I consolidated all of them in 2002.

    Does the lending instution just eat my loan in a few years?
  5. JackReacher

    JackReacher Well-Known Member

    I read this would cost the taxpayers around $1 billion.
  6. JayFarrar

    JayFarrar Well-Known Member

    I'm looking for some numbers, but if your removed a student loan payment, that money would still most likely be spent, just on something else.
    Buy a car, buy a house. Buy something and the net impact, would seem, that it would quickly pump some serious money into the economy.
    Plus, it encourages new grads to go into public service, and that seems like a good thing as well.
  7. JackReacher

    JackReacher Well-Known Member

    Still, someone has to pay for those loans that are forgiven, right?
  8. 93Devil

    93Devil Well-Known Member

    That's it?

    It seems like chicken shit when you think of all the money being thrown around these days.
    Last edited by a moderator: Jan 1, 2015
  9. 93Devil

    93Devil Well-Known Member

    That logic seems sound, but I have a feeling people would save the money instead. But we are Americans, and we do like to spend.
  10. deskslave

    deskslave Active Member

    It would certainly further remove any incentive to pay back a student loan at any kind of pace. As it stands, the interest rates on many of them (or at least on mine, since my college years wrapped around the turn of the millennium) are so low that you're actually better off making a minimum payment and investing any extra money you would have put toward a loan in something else.

    The rate of return on even a basic investment is typically going to be higher than any interest charges you would save yourself by paying the loan off early.

    I would also imagine that lenders would immediately eliminate any long-range payment plan that sees the balance of the loan extended over more than 20 years, wouldn't they?
  11. Layman

    Layman Active Member

    Two kinds of federal student loan programs actually exist. Stafford loans are money you borrow from a bank, with the Dept. of Ed. (DOE) backing (guaranteeing) the loan. Ford Direct loans, you borrow directly from the DOE / Treasury. Same basic loan program (terms, repayment, etc), although the Stafford program may have a slightly higher interest rate (but...they will work with you more, if you have repayment issues).

    In the direct loan program, the feds would just eat the money. In Stafford (if it's allowed to continue.....that's the unspoken part of this...) the feds would have to repay the remaining amount to the lender.
  12. Starman

    Starman Well-Known Member

    Nothing Obama proposes or endorses will get passed. Period, end of story.

    The GOP will enforce a cast-iron filibuster, and the Dems are too stupid/chickenshit to do anything about it.
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