Obama's plan for student loans

Why is failure to pay your obligations a fantastic idea?

 

Standard repayment is a locked 10 years. No wiggle room (unless you consolidate, are in the process of getting back into good grace repayment after a previous default, which then makes it a whole new loan, etc etc).

Desk, you are theoretically / partially correct. But as someone who spent the better part of 2 decades in financial aid / enrollment management....99.99999999% of students coming out of college, don't have the financial knowledge / discipline to make your plan work. Actually, the BEST thing to do (as it's a flat rate w/ no early payment penalties) would be to add a little extra principal to each payment...IMO

 

But at least on my loan, there are a number of other payment options. I have whatever the longest one is -- not that it matters, as I've stuck it in forbearance until I find a damn job.

And of course they don't. But having said that, those financially undisciplined students are better off putting any money they do have toward credit cards, or even car loans, than toward their student loan.

 

When I went back to finish school, I somehow ended up getting loans from two different lenders. I'm not even sure how that happened, to be honest. So, I consolidated last spring, just before I was due to start re-payment. Pretty sure I'm paying on it for 180 months (15 years). Can't remember if I had the option to pay it off in 10 years. Probably so.

Edit: I think we pay an extra $80 a month on my loan, which will cut about 6 years off it.

 

Desk, are you sure they were all Stafford or Ford loans? If you took any private / alternative loans (for additional funding above the standard fed loan), or are repaying a Parent PLUS loan, you may have different repayment options.

I'd also say that most students have no business having their own credit cards at that point either. THAT'S a whole different story of predatory banking, though....

 

Ryan, if you were going back to school, you probably hit your federal loan cap & your aid office routed you into a private / federal loan combo, to cover the gap. Happens a lot (has to), particularly if you were at a private (pricier) institution.

 

It's subterfuge to try to win back the middle class.

 

Oh great. Another, "Let's give people free stuff, and call it a success when people tell us that they like free stuff," program.

If you take a loan, you have a responsibility to pay it back. Nothing good will come of this.

But academics & bleeding hearts will love this, because they can go get some fancy degree and then go try to save the world. They'll pay 10% of their salary for 10 years & then walk away from the balance of the loan.

Great program.

 

I think I used SunTrust as one of my lenders. Not sure about the other. My first student loan was paid off years ago.

 

Also, yes, this will drive more people into the "service sector". But, is this a great idea?

Shouldn't we actually be trying to drive some people into the "money making" & "job creating" sector.

Without a strong tax base, you can't pay for all of these social programs.

 

Before introducing more stuff he should get everything done he has already put on the table.

As far as priorities student loan program seems way down the totem pole.

 

No, in fact I'm pretty sure they're not. Pretty sure it's a PLUS loan. So maybe that's a whole different ball of wax.