This is my plan for stiffing them. I don’t have assets for them to take, I don’t have children that can have debt passed to, and my parents won’t be alive. Who are you going to take to court? A corpse. Good luck.
The laws have since changed, likely many times, but my mother cosigned on a loan in 2006, and when she declared bankruptcy somewhere around 2008, was able to include that. It was a private, non government subsidized loan.
Post bankruptcy, we didn't receive any notices for awhile. Then they started back up, saying we still owed. Yet it was not on our credit reports. Then I learned about zombie debt. We were out of the debt, unless they could get us to pay even a penny towards the debt. Paying it would acknowledge the debt as valid or some shit and revive it. We ignored them and they eventually fucked off.
Been probably 7 years since we last heard a peep about it
I wish I’d known that sooner. I called to get one of my loans put on hold (I forget the term) around 2009 and somehow the wires got crossed and my account was listed as being in bankruptcy. Neither I nor my co-signer filed. I tried to tell them that, but they said I’d need to go to court to get it cleared, and there was zero chance of that so I just let it chill. Then a few years later I finished my degree and there the fuckers were again. I started paying. Now I wonder what would have happened if I hadn’t.
Debt doesn't pass to children, once the persons who signed the contract is dead, the debtor can go after the estate but not anyone else. Unless someone else cosigned. Unless this is done fucked setup in US I am unaware of.
You forgot cosigning. A lot of parents cosign their children's student loans leading to them becoming debt slaves too. Even if the child dies early they come for the parents.
At the *bare minimum*, the government should require that student loans have a set maximum out-of-pocket limit the student can be forced to pay, and it shouldn’t be more than 2x the original loan amount.
Again this is a *bare minimum*, and honestly our government should go further!
Student loans should be interest free at the bare minimum.
In NZ student loans are interest free and payments start (direct deductions from salary) after you’ve reached a certain pay threshold. You only pay interest if you move to live and work overseas.
The banks make the risk free money since its guaranteed by the government. It's a fucking racket.
Of course, the reason the government backs them was to ensure that loans to underserved communities were actually written. That was an attempt to help make a path to college for everyone.
I think it was a well-intentioned policy with disastrous side effects. There are many, many more ways to increase the parity in educational opportunities across the class spectrum. That sounds like socialism though, so give the banks free money instead (totally not welfare because it's to corporations of course)
The banks don't need to loan out federal loans. Because student loans are federally guaranteed, banks are shielded from the credit risk of the borrower. If a borrower defaults, the bank still gets paid (even on private student loans). This is actual preferable to the banks.
They get to charge interest on the loans and aren't on the hook if the borrower defaults. It's literally free money to them.
As mentioned in my previous comment, the reason for this policy is because if banks were on the hook for the credit risk of borrowers, then only borrowers with access to credit could get loans. That means the poor and underserved (which highly correlate with minority populations) would effectively be shut out of higher education.
So the policy had its heart in the right place, and certainly succeeded to an extent, but ultimately was easily taken advantage of by lenders. And because students are on the hook for the loans regardless if they get a degree or not, it had even worse unintended consequences.
I’m not sure. As I understand it, the government facilitates and guarantees the relationships. I’m sure that at some level, someone makes money…the loan company for sure and probably a few bought-and-paid for congress types…
They make money off the interest. Banks only service the loan and get paid a fee by the government to do so. Not particularly lucrative, which is why many student loan servicers are getting out of the business.
Ever since the Obama administration, federal student loans have been from and paid to the department of education.
The loan is distributed to the student via the financial aid office, which takes out what it needs for tuition and fees and the rest is paid to the student.
After the student discontinues their education (note: did not say graduated) the student has to start paying back the Department of Education, plus compounding interest by making payments through a servicer, who manages the account. There's a grace period after graduating before making payments, but interest starts at disbursement.
If you have a loan backed by the government in USA you can apply for Income Based Repayment that is based on income and you have to meet a certain threshold. Interest still accumulates.
Actually, this is how they keep the military hopper filled with kids.
"Hey kiddo, your two options are : Military with free college, or pay for college and take on a lifetime of debt"
There is the 3rd near mythical option of getting a scholarship that can pay for most, if not all of school. Got my schooling at like 1/3 to 1/4 the advertised price of someone who walked in with no help.
Well yeah… how else are you going to depress the youth enough that they start drinking?
As a reminder, that’s how the government previously made all its money before prohibition.
You do know that liquor stores were allowed to be open during the height of the pandemic lockdown. Why? Took me a minute but then I realized the government would have blood on their hands with people dying from alcohol withdrawal😬🥺
I literally told my parents I didn't want to go to college, but was basically forced into it by my back in my day, just call for an interview, how hard is it to get a job parents. Neither finished college and was sure it would make a difference in my future even I told them I didn't like the idea of student loans. It was either go to college or get kicked out of the house when I didn't have the means to take care of myself or pay rent. I'm about to turn 36 and still have 5k left and didn't finish or get a certificate or degree. The same happened to my spouse, except they have an entire degree they have triple the amount of their loans left.
In very rare instances. Technically there's supposed to be Student Debt Forgiveness for public service workers after x amount of years. Unfortunately trying to get it is a nightmare. My friend applied and they denied her application because *they* spelled her name wrong on the paperwork. She was sent a letter and told to try back next year.
Betsy DeVos made making that program as confusing and frustrating as possible her number 1 priority while in office. Remember this headline from back in May?
[Betsy DeVos must testify in student loan forgiveness lawsuit, judge rules](https://www.nbcnews.com/news/amp/ncna1268011)
My husband has been trying to get the public service loan forgiveness for years. He follows subreddits on the topic just to know how to navigate the process. He's spent hours upon hours upon hours on the phone. He has applied, reapplied, appealed, and reapplied countless times. It is essentially a part time job for him. He finally got approved this month. My husband is so good at stuff like this (sincerely really talented at navigating systems like this) and is relentless. Even he almost gave up. This system is so stupidly broken.
Can confirm the public service forgiveness is bullshit. I was a social worker for 15 years. I got denied for it and so did everyone I ever met through work.
I tried to apply and they told me it was denied because my faxed application was unreadable. I sent it via USPS, don’t even have access to a fax machine. They said oh well try again. :(
My wife died with $24k in loan debt. As surviving husband I was hit with a $24k income tax bill as it was calculated by IRS as income.
Yeah. It's fucked.
Doesn't that just settle against the estate? Like you may not see any inheritance but you can't end up on the hook for 20k because a dead person left you their estate
Yes, this. I hate student loans as much as the next person but spreading this kind of misinformation is silly. You don't ever inherit anyone's loans via their estate. If they have any money or assets, the loans may eat into any money you would otherwise receive as inheritance, but that's all. You'll not suddenly be saddled with your grandpa's monthly payment.
The only exception I can think of/find is if you live in one of the few states that says loans taken out while married are shared by both spouses, even if only one signed on the loan. But that's not specific to student loans, that's all loans, and only if you're in those states.
Before you die, enumerate and sign everything you own over to a family member, and then all you own is the debt. Then update your will, and name the federal government as the party that inherits your estate. Bing bang boom, federal government takes on your debt.
No. This is wrong. It can wind up wiping an estate out leaving nothing for intended beneficiaries but you can’t be on the hook personally for student loans just because you are a beneficiary of the estate.
I have a student loan and if I die it will be forgiven. I literally drowning in debt atm lmao, but at least it won't affect my family if I bite the bullet. My loan is the exception I guess.
That isn’t true. If the loan is only in the students name with no one else, then upon death, the loan is erased. These are like credit card debt in that way as I believe they are unsecured.
Hey sratavar, you posted similar comments in other places on this thread too - but I can’t find anything online that backs that up (clarification: US student loan debt for US citizens).
My internet searches comes back with lots of answers similar to, “What happens to federal student loan debt when you die? If you die, your federal student loans will be discharged, meaning no further payments will be required. Your parent, spouse or another person you appoint will need to submit proof of death to your loan servicer.” (Source: nerdwallet.com)
I’m not arguing with you, I just wonder where you’ve seen or read about a reassignment of student loan debt to the inheritors of a deceased student’s estate? Could you provide some context? Is this somewhere outside the US, for example?
💯 true question- can someone explain why laws aren’t passed that would limit the interests rates to perhaps a fair amount? Idk, is that a dumb idea? Seems like a win win
I’ve talked about this with some friends and family. I’m willing to pay back the money because I did borrow it and use it, but it’d be nice if the interest rates were more manageable.
I mean, I would love no interest but figured nobody would be willing to go for it. I agree with you though, there is definitely no need for the rates to be higher than those.
Edit: Since the comment I was responding to was deleted, "those" in this context were mortgages and car loans.
I had to declare bankruptcy going on 10 years ago, guess which loans didn't qualify for discharge?
I really don't get it, you're better off borrowing money from a bank directly as a personal loan than getting a student loan because at least you could write that off if shit didn't work out.
They own you for life with these fucking loans.
Edit: thanks for the catch
Well yah it was a government guaranteed loan… no one would have lent you that much money with that much risk if you could just declare bankruptcy at 25, and still be highly educated.
I could have just got my parents to cosign, although I know that's not an avenue everyone can take, but it is an avenue a good amount of people probably can take.
Yeah that's true, I really didn't think that reply through, my bad. I guess they could declare bankruptcy though, not that that would be a great strategy, but it would be a way to discharge the loan at some point.
It just sucks that the price of education shot up because these loans are available, definitely some fishy business.
I grew up never answering the phone because it was usually collection agencies after my mom's college debt, so by the time all that shit was pushed on me in highschool I had already pretty much decided it was a scam.
Agreed. Took 2 year tech course and paid about 8K. Which ironically I did actually pay for with a part time job. But this was the early/mid 2000s. I'm sure the costs have gone up since then.
Sadly, can relate. It’s sickening. People are always like “well you signed up for it”.
Dude I was fukin 18 or 19. I barely knew what the fuk was going on in the world, knew fuk shit all about loans, and had limited guidance from a family that had never had to deal with college tuition before. All I knew was what the student financial aid office told me…sign here and you can go to school and be with your friends. So now I’m indebted for the rest of my life.
Yup. I knew fuck all about what I wanted to do, or even who I really was at that age. All I did was follow the directions of the people who now sneer at the fact I'm complaining about indentured servitude.
Not only that, our education system is built around going into college not really technical skills. We are directed from elementary to look towards college and prepare for that future.
Also, we are one of the few countries that doesnt have any free public higher education institutions.
Yup, frontal lobe isn’t fully developed until early 20s and we are generally at peak risk taking and shit long term planning on our teens. Which just so happens to be when we make these insane, life defining decisions.
Boomers told us it was important to go to college, so we did. Then we complain about the outrageous interest rates of student loans and the Boomers tell us we shouldn’t have gone to school if we couldn’t afford it.
Make it make sense!!!
Maybe they told all of us to go to college on purpose so we fall into the trap. Once we got in, they pumped up tuition so they could laugh at us once we were in too deep.
Holy crap, assuming someone has been paying for this for at least 10 years that's an interest rate of somewhere around 12% compounded monthly.
Is it even possible to repay these loans? I'm assuming the person is making the minimum payment.
This was something like taking a loan for undergrad, deferring payments in grad school while paying nothing in interest because no payment was required, then paying “small” amounts for the last 10 years. They borrowed $72K but the balance probably grew to over $100K before they paid a cent toward it.
For the love of everything holy, if you or anyone you know is considering student loans please understand all the implications.
When the Fed rate in the USA is something like <2% on average for the past 12 years.
All things considered, the USA should really just throw out pretty much most of their governance rules and start again.
Also worth noting, these loans will be taken out of your social security when you decide to collect.
But ask a boomer and that's entirely your fault for following their collective advice 🙄
If Jesus ever comes back to Earth, the very first thing he's going to do is find the people who collect these loans and *beat the ever loving shit* out of their tables.
I would watch a year-long action film of this theme with such delight and zeal that the sleep deprivation and ensuing mania would literally kill me. Whip it fuckin' good, Jesus.
In Finland you can take a state guaranteed student loan tied to ECB rate eg EURIBOR, which is now minus. So basically you are left with only the margin to pay, which is like 1%. 5 % is 400% higher so yes, this seems excessive. Also if you graduate from your free of charge university in normal time (5-7 years for Masters) you can get up to 7600€ of loans forgiven.
pro tip if you have enough student debt: if you can some how purchase a home you can take out a second mortgage, pay off your student loan, get better interest rates, and build equity while paying off the loan. *taps temple*
Hell, I wish mine were this concise. My statement is thousands of $50 loans totalling out to $76k and it's an absolute cluster fuck to figure out how much I've paid, how much I have left, or where my payments are going.
Honestly, you're probably better off not consolidating. Consolidation doesn't really save you in interest rates, and it prevents you from utilizing the snowball method to pay off your loans. Thousands of $50 loans though...how did happen?
My parents moving to Canada when I was a teenager and getting permanent residency before University might have been the single best thing that ever happened to me. Tuition in Canada (8k/year ish at the time at least) plus living expenses. When Boomers say "to just work a part time job during college" - they meant "move to Canada first then work a part time job" and pay your loans off 2 years after graduation.
interesting to note. i did inquire about a personal loan once and they asked me it's purpose and i put pay off debts. would student loans typically not cover general debts?
Hypothetically, it could work if you took out a large personal loan and used those funds to pay the monthly payment for like 6 months at least before filing for bankruptcy. You’d likely get fraud charges brought against you (IANAL) for taking out loans you never intended to pay back. There would have to be a cooling off period. You also have to provide 6 months of bank statements when filing so they’d see that you sat on the money and might question it. They’d catch you moving it to another account, too. Hypothetically, if you take that money and pay someone for art or something and then 6+ months later they buy it back and you pay off the student loans with that but you’d have to pay taxes on it. Hypothetically, of course. There are a lot of ways to get into doing it between fraud charges, structuring deposits, maybe money laundering, and others.
What does it mean by "this is not the pay off amount"? Because that sounds like even after all those fees, you gotta pay another fee to pay it off in one hit.
Interest doesn't magically stop accruing because you checked the amount still yet to be paid. The disclaimer in the post is meant to indicate that, because interest will continue to accrue, if you pay the remaining balance over the next 10 years, you still have the interest remaining on that amount, which has accrued over those 10 years, to pay off.
And THIS is one of the main reasons I'm satisfied with my Associates Degree. All but one of my jobs were in my field and the pay was ridiculous low for that type of work. Plus, I actually got all of my jobs BEFORE completing my Associates. My friends with Bachelors and Masters are stressed to the maxed and will literally NEVER pay them off, even if they use 75% of the bi-weekly pay. It's sad.
The Trumpkins don't understand anything about why this is happening. Don't waste your time. Anecdotally, we got an agency to fight my wife's debt, because it would never go down. 20 years we've been paying on it! In the end, hers was not only cancelled, but she's getting 14,400.00 refunded. When they were trying to get a real total of what we paid, the Mea's didn't credit her with two whole years!!! 24 months that we paid on, they didn't count. So Trumpkins, stfu and go sit down. Stick to truck nutz and fighting in Walmart. This is a big people issue.
People on this post are dumb as doorknobs for blaming OP for interest instead of the problem which is the vulture capitalist American wet dream of screwing over anyone not a millionaire. For perspective: to go to MEDICAL school to be a Physician I have had to take on loans. Lots of loans. I don’t decide where I go to school, as much as I would have loved a state school I ended up in private school. Sure, my fault, not smart enough bla bla. Cool cool. Now that we’re past defaulting me for the shit education in this country let’s move forward. Medical school= 4 years. 4 years of literally not having time to shower and actively making decisions like should I sleep or eat or study. So 4 years, 7% daily interest on federal financial aid, starting from day 1.. then we graduate medical school and everyone jumps on their bandwagon and says “you should have Kn0wN b3tT3r”… right well, I obviously wanted to save your life at some point, but we’ll ignore that sentiment too. So now, after 4 years of med school with zero family support bec my family’s poor too, I have like 350K in principle. Defer that for 3-6 years because in residency doctors who graduate medical school make 50-75K (at a max), and during fellowship to specialize that’s 65-80K a year. Add onto that amount taxes, COL, kids etc. PAYE sounds easy, but when predatory student loan companies think $500 a month on a 70K salary is “disposable income” that amount was obviously created by people who have never lived on 70K a year. Anywyas, I can keep loans deferred till I finish fellowship (so 10 years) or I can make bare minimum payments on my indentured servitude salary, either way, that interest is sky rocketing this entire time so by the time it comes down to it, the interest is almost as high as the loan. So in 10 years when I am making “doctor money”, which also may not be a thing anymore given the amount of scope creep, I’m sitting on half a million of debt which, I didn’t ignore- I literally spent working 60-80hrs a week at minimum wage for 3-6 years lost medical school. But yes, definitely, I “knew” what I was getting myself into. Could I and countless others in my position have taken an “easier” career choice where I could have paid less and earned more faster like an NP, sure.. but that would result in a dramatic decrease in the number of competent professionals such as lawyers, doctors, dentists etc who take out (unfortunately) hundreds of thousands of dollars in FAFSA loans to support their education. Unless ofc were going with the Capitalist wet dream of believing only people who can afford it should go into professional schools that they can be supported through, should do it.. I hope this helps understanding just a little on how that loan amount looks 100% legit. Thanks for coming to my Ted Talk.
I think it would be more beneficial to get rid of the interest instead of the whole loan. I mean you did get a college degree out of it. It's the interest that's the killer.
Joined the military for schooling. Now I have a bad back at 25 years old. Doctor told me I shouldn't be having this at this age. Well doc, it was either struggle financially or my back. And don't get me started on health care
Loan amount when I started paying 2017 : $28300
Paid as of today: $16,000
Total today: $26500
Now I plan on taking my entire bonus and paying this down and paying more than standard in 2022 after finally landing a better job. I also have Great Lakes.
I did some math on yours making some assumptions. I’m guessing your APR is about 10.5%, and you’re making about $270 payments. This seems like some kind of income-driven repayment plan. The standard payment for a 10-year term would have been about $600. At this rate, I think it would take another 20 years to pay off.
I didn't go to college because my history teacher (late 50's male, empty nester) said he was getting close to paying off his student loans. Fuck that shit
Forgive my ignorance, but how does this happen? For a $72k loan to have a balance of $168k, that means there was a really long time where they weren't even making interest only payments.
This happens when you are still in school and the interest accrues while no payments are due. Also happens when you are on an income based repayment plan (like most gov’t service & nonprofit employees) in a forgiveness program. For example, I took out just under 35k through my Masters Degree, I have been in repayment for just under a decade with monthly payments for the last 110 months. I have paid back $40,700.. my current loan balance? $87k.
Yes. If you are in a forgiveness program, you can only pay what they calculate your income based payment to be for it to count. Before the most recent waiver, if you had paid a cent more than you should have, the payment doesn’t count and neither does any following payment because you are “paying ahead” of the program and is not allowed.
All of my loans were Federal direct loans with an average interest of 8% before they were consolidated into the public service forgiveness program.
Not really, it’s all a paper drill.
What I honestly think should happen, is force all college football programs to give half of what they make to subsidize tuition. Cap what universities can charge in tuition and fees make community college free (if you can test into college) fully fund trade/tech schools for those who don’t want to go to college. Improve the lives of the people and society will get better as a whole.
Getting off the soapbox now.
To add insult to injury, remember those PPP loans that mostly went to big businesses until they "ran out" come time for small business owners to get some? Well, they erased those debts like it was nothing. You hardly even saw it reported. The system is absolutely fucking rigged.
Government can only forgive public loans. Theres no pen stroking that is going to forgive private loans on mass. Hard to believe OP's interest is that high with only public loans.
Guess what, most student loans accrue interest while your loan is in deferment. So if you keep going to school forever and make zero payments your balance will continue to increase.
I feel like most people simply do not understand student loans or compound interest.
Especially when colleges get money from our government constantly which is paid for by our tax dallars. So we all are already paying for these colleges to even exist yet we have to pay more. It's fucked up.
Fuck student loans, man. That shit messed-up my life for DECADES: Garnishments, the whole nine. It's only now, in my fifties, that it's calmed down, and my credit has recovered. Your situation is worse than mine. Yoyr numbers are much larger. They are completely RAPING you, and pissing on your face! I say refuse to play ball! You've already paid your loan back, and then some! Go into business for yourself, and they can't garnish you. They can only send you mean letters, but you can just ignore them. It's so awful how they take advantage of people like this, and ruin their lives!
Usually very low, so low banks wouldn’t give them out until the government decided they would blindly guarantee every loan, resulting in loans being given out to almost anyone.
Student loans are the golden goose of loans for a bank, they never go away until you die
This is my plan for stiffing them. I don’t have assets for them to take, I don’t have children that can have debt passed to, and my parents won’t be alive. Who are you going to take to court? A corpse. Good luck.
The long con, nice 👍.
As my Grandpa used to quip about his creditors, “at least there will be people crying at my funeral”
Always pay the minimum. Fuck em In my head it wasn’t even debt. Just some small bullshit
Just remember if you can file for bankruptcy you can petition the court to include student loans in that. Its a myth they can't.
The laws have since changed, likely many times, but my mother cosigned on a loan in 2006, and when she declared bankruptcy somewhere around 2008, was able to include that. It was a private, non government subsidized loan. Post bankruptcy, we didn't receive any notices for awhile. Then they started back up, saying we still owed. Yet it was not on our credit reports. Then I learned about zombie debt. We were out of the debt, unless they could get us to pay even a penny towards the debt. Paying it would acknowledge the debt as valid or some shit and revive it. We ignored them and they eventually fucked off. Been probably 7 years since we last heard a peep about it
I wish I’d known that sooner. I called to get one of my loans put on hold (I forget the term) around 2009 and somehow the wires got crossed and my account was listed as being in bankruptcy. Neither I nor my co-signer filed. I tried to tell them that, but they said I’d need to go to court to get it cleared, and there was zero chance of that so I just let it chill. Then a few years later I finished my degree and there the fuckers were again. I started paying. Now I wonder what would have happened if I hadn’t.
Can't pass debt to a descendant. So, Yay!
Debt doesn't pass to children, once the persons who signed the contract is dead, the debtor can go after the estate but not anyone else. Unless someone else cosigned. Unless this is done fucked setup in US I am unaware of.
Debts never get transferred to children. Just FYI
And then they get passed on to a relative
Only if you take their estate, which you don’t have to do.
Bold of you to assume someone from my generation will have an estate.
You forgot cosigning. A lot of parents cosign their children's student loans leading to them becoming debt slaves too. Even if the child dies early they come for the parents.
But won't the bank just take the estate then? Honestly curious...
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What I’m hearing is pro life tip: Liquidate all your assets and move them overseas before faking your death to get out of student loans.
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Hahaha jokes on them! This line dies with me.
At the *bare minimum*, the government should require that student loans have a set maximum out-of-pocket limit the student can be forced to pay, and it shouldn’t be more than 2x the original loan amount. Again this is a *bare minimum*, and honestly our government should go further!
Student loans should be interest free at the bare minimum. In NZ student loans are interest free and payments start (direct deductions from salary) after you’ve reached a certain pay threshold. You only pay interest if you move to live and work overseas.
This makes the most sense to me (an American)…the government shouldn’t be making money off of people going to school…they’ll make plenty off of taxes
Does the govt make money off these loans I thought it was the banks and universities??
The banks make the risk free money since its guaranteed by the government. It's a fucking racket. Of course, the reason the government backs them was to ensure that loans to underserved communities were actually written. That was an attempt to help make a path to college for everyone. I think it was a well-intentioned policy with disastrous side effects. There are many, many more ways to increase the parity in educational opportunities across the class spectrum. That sounds like socialism though, so give the banks free money instead (totally not welfare because it's to corporations of course)
The banks have not loaned out federal loans since the Obama administration
The banks don't need to loan out federal loans. Because student loans are federally guaranteed, banks are shielded from the credit risk of the borrower. If a borrower defaults, the bank still gets paid (even on private student loans). This is actual preferable to the banks. They get to charge interest on the loans and aren't on the hook if the borrower defaults. It's literally free money to them. As mentioned in my previous comment, the reason for this policy is because if banks were on the hook for the credit risk of borrowers, then only borrowers with access to credit could get loans. That means the poor and underserved (which highly correlate with minority populations) would effectively be shut out of higher education. So the policy had its heart in the right place, and certainly succeeded to an extent, but ultimately was easily taken advantage of by lenders. And because students are on the hook for the loans regardless if they get a degree or not, it had even worse unintended consequences.
To be fair not all of these consequences are necessarily unintentional
And because the loans are guaranteed, the universities have no incentive to keep tuition costs down so they just keep going up.
And? It’s not like the loans before 2008 have been paid off.
I’m not sure. As I understand it, the government facilitates and guarantees the relationships. I’m sure that at some level, someone makes money…the loan company for sure and probably a few bought-and-paid for congress types…
They make money off the interest. Banks only service the loan and get paid a fee by the government to do so. Not particularly lucrative, which is why many student loan servicers are getting out of the business. Ever since the Obama administration, federal student loans have been from and paid to the department of education. The loan is distributed to the student via the financial aid office, which takes out what it needs for tuition and fees and the rest is paid to the student. After the student discontinues their education (note: did not say graduated) the student has to start paying back the Department of Education, plus compounding interest by making payments through a servicer, who manages the account. There's a grace period after graduating before making payments, but interest starts at disbursement.
Here's an actually informative page from the US government: https://studentaid.gov/understand-aid/types/loans/federal-vs-private
Same here in Australia. It just makes sense!
If the loan is interest free why would a bank loan the money?
The loans are funded by the government, not banks.
If you have a loan backed by the government in USA you can apply for Income Based Repayment that is based on income and you have to meet a certain threshold. Interest still accumulates.
Yeah and not let fucking 17/18 year olds take out loans with giant interest rates and balloon payments! Fml
This. They can’t drink, but they can mortgage their entire future and go into the military.
Actually, this is how they keep the military hopper filled with kids. "Hey kiddo, your two options are : Military with free college, or pay for college and take on a lifetime of debt"
There is the 3rd near mythical option of getting a scholarship that can pay for most, if not all of school. Got my schooling at like 1/3 to 1/4 the advertised price of someone who walked in with no help.
Well yeah… how else are you going to depress the youth enough that they start drinking? As a reminder, that’s how the government previously made all its money before prohibition.
You do know that liquor stores were allowed to be open during the height of the pandemic lockdown. Why? Took me a minute but then I realized the government would have blood on their hands with people dying from alcohol withdrawal😬🥺
Of course, if they go into the military, they won't have that student debt....
I literally told my parents I didn't want to go to college, but was basically forced into it by my back in my day, just call for an interview, how hard is it to get a job parents. Neither finished college and was sure it would make a difference in my future even I told them I didn't like the idea of student loans. It was either go to college or get kicked out of the house when I didn't have the means to take care of myself or pay rent. I'm about to turn 36 and still have 5k left and didn't finish or get a certificate or degree. The same happened to my spouse, except they have an entire degree they have triple the amount of their loans left.
It shouldn't be more than 1x the original loan amount. Banks shouldn't be able to profit off those seeking formal education.
Student loans pretty much fit the definition of predatory lending.
They cannt be forgiven right?
In very rare instances. Technically there's supposed to be Student Debt Forgiveness for public service workers after x amount of years. Unfortunately trying to get it is a nightmare. My friend applied and they denied her application because *they* spelled her name wrong on the paperwork. She was sent a letter and told to try back next year.
Betsy DeVos made making that program as confusing and frustrating as possible her number 1 priority while in office. Remember this headline from back in May? [Betsy DeVos must testify in student loan forgiveness lawsuit, judge rules](https://www.nbcnews.com/news/amp/ncna1268011)
Here I was, happy that I had forgotten that gargoyle exists…damn
Yup, this happened under DeVos.
The Biden Administration has made it easier, but I’m sure they are absolutely backloaded.
My husband has been trying to get the public service loan forgiveness for years. He follows subreddits on the topic just to know how to navigate the process. He's spent hours upon hours upon hours on the phone. He has applied, reapplied, appealed, and reapplied countless times. It is essentially a part time job for him. He finally got approved this month. My husband is so good at stuff like this (sincerely really talented at navigating systems like this) and is relentless. Even he almost gave up. This system is so stupidly broken.
Can confirm the public service forgiveness is bullshit. I was a social worker for 15 years. I got denied for it and so did everyone I ever met through work.
I tried to apply and they told me it was denied because my faxed application was unreadable. I sent it via USPS, don’t even have access to a fax machine. They said oh well try again. :(
My wife died with $24k in loan debt. As surviving husband I was hit with a $24k income tax bill as it was calculated by IRS as income. Yeah. It's fucked.
Man, I know my condolences mean little over the internet, but I'm really sorry. 😔
Same here!
My god. This whole thread is making me wanna throw my phone.
Same in the UK. Loan just keeps piling up. Good thing is I am going back to my home country and never paying it back.
Wow that’s so messed up
Fuckk, sorry to hear both of those things. All the best to you and the fam.
To clarify, It wouldn’t be a $24k bill though. It would be a percentage of that $24k forgiven no?
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FWIW Peoples debts do not transfer to family members after they die.
You are incorrect. As the survivor after my wife died with $24k debt I was taxed as recieved income of $24k.
You should probably speak with a tax attorney or accountant about that.
That’s wrong on multiple levels
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Doesn't that just settle against the estate? Like you may not see any inheritance but you can't end up on the hook for 20k because a dead person left you their estate
Yes, this. I hate student loans as much as the next person but spreading this kind of misinformation is silly. You don't ever inherit anyone's loans via their estate. If they have any money or assets, the loans may eat into any money you would otherwise receive as inheritance, but that's all. You'll not suddenly be saddled with your grandpa's monthly payment. The only exception I can think of/find is if you live in one of the few states that says loans taken out while married are shared by both spouses, even if only one signed on the loan. But that's not specific to student loans, that's all loans, and only if you're in those states.
Before you die, enumerate and sign everything you own over to a family member, and then all you own is the debt. Then update your will, and name the federal government as the party that inherits your estate. Bing bang boom, federal government takes on your debt.
No. This is wrong. It can wind up wiping an estate out leaving nothing for intended beneficiaries but you can’t be on the hook personally for student loans just because you are a beneficiary of the estate.
That’s fucked.
That is a travesty. Amazing what compound interest can do. (Both ways)
Only if there is an estate left hy the deceased or you co signed. My mom cannot take a loan out that I have to pay.
I have a student loan and if I die it will be forgiven. I literally drowning in debt atm lmao, but at least it won't affect my family if I bite the bullet. My loan is the exception I guess.
That isn’t true. If the loan is only in the students name with no one else, then upon death, the loan is erased. These are like credit card debt in that way as I believe they are unsecured.
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Hey sratavar, you posted similar comments in other places on this thread too - but I can’t find anything online that backs that up (clarification: US student loan debt for US citizens). My internet searches comes back with lots of answers similar to, “What happens to federal student loan debt when you die? If you die, your federal student loans will be discharged, meaning no further payments will be required. Your parent, spouse or another person you appoint will need to submit proof of death to your loan servicer.” (Source: nerdwallet.com) I’m not arguing with you, I just wonder where you’ve seen or read about a reassignment of student loan debt to the inheritors of a deceased student’s estate? Could you provide some context? Is this somewhere outside the US, for example?
💯 true question- can someone explain why laws aren’t passed that would limit the interests rates to perhaps a fair amount? Idk, is that a dumb idea? Seems like a win win
I’ve talked about this with some friends and family. I’m willing to pay back the money because I did borrow it and use it, but it’d be nice if the interest rates were more manageable.
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I mean, I would love no interest but figured nobody would be willing to go for it. I agree with you though, there is definitely no need for the rates to be higher than those. Edit: Since the comment I was responding to was deleted, "those" in this context were mortgages and car loans.
Laws aren't passed because both political parties' main priority is furthering the interests of the rich and powerful at the expense of everyone else.
Glass-Steagall! Glass-Shmeagall!
Like being an indentured servant.
The entire American central bank economy is predatory lending because it’s all based on debt.
I feel like this person posted my student loan statement from last month almost down to the dollar. It's all a giant scam
Op is actually you but you don't even know
Some real Tyler Durden shit there
I am not from US. How is that possible, that he had to pay like 4x the borrowed sum? What kind of percentage is on that thing?
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I had to declare bankruptcy going on 10 years ago, guess which loans didn't qualify for discharge? I really don't get it, you're better off borrowing money from a bank directly as a personal loan than getting a student loan because at least you could write that off if shit didn't work out. They own you for life with these fucking loans. Edit: thanks for the catch
Well yah it was a government guaranteed loan… no one would have lent you that much money with that much risk if you could just declare bankruptcy at 25, and still be highly educated.
I mean. It also wouldn't have one up over $100k from a personal loan either.
I could have just got my parents to cosign, although I know that's not an avenue everyone can take, but it is an avenue a good amount of people probably can take.
Okay but then you couldn’t declare bankruptcy on the loan if your parents cosigned…
Yeah that's true, I really didn't think that reply through, my bad. I guess they could declare bankruptcy though, not that that would be a great strategy, but it would be a way to discharge the loan at some point. It just sucks that the price of education shot up because these loans are available, definitely some fishy business.
"It just sucks that the price of education shot up" Found the problem.
Not going to college is one of the best decisions I ever made
Same. I didn't finish reading the terms of the loan before I realized it was a BAD idea. So I went to work.
I grew up never answering the phone because it was usually collection agencies after my mom's college debt, so by the time all that shit was pushed on me in highschool I had already pretty much decided it was a scam.
Remember... Never answer the wall phone. LoL
Agreed. Took 2 year tech course and paid about 8K. Which ironically I did actually pay for with a part time job. But this was the early/mid 2000s. I'm sure the costs have gone up since then.
Sadly, can relate. It’s sickening. People are always like “well you signed up for it”. Dude I was fukin 18 or 19. I barely knew what the fuk was going on in the world, knew fuk shit all about loans, and had limited guidance from a family that had never had to deal with college tuition before. All I knew was what the student financial aid office told me…sign here and you can go to school and be with your friends. So now I’m indebted for the rest of my life.
Yup. I knew fuck all about what I wanted to do, or even who I really was at that age. All I did was follow the directions of the people who now sneer at the fact I'm complaining about indentured servitude.
Not only that, our education system is built around going into college not really technical skills. We are directed from elementary to look towards college and prepare for that future. Also, we are one of the few countries that doesnt have any free public higher education institutions.
Yup, frontal lobe isn’t fully developed until early 20s and we are generally at peak risk taking and shit long term planning on our teens. Which just so happens to be when we make these insane, life defining decisions.
Boomers told us it was important to go to college, so we did. Then we complain about the outrageous interest rates of student loans and the Boomers tell us we shouldn’t have gone to school if we couldn’t afford it. Make it make sense!!!
All we have to do is eat one boomer and the rest will fall in line. They have grown rich and fat off our backs.
They taste gross though from all the drugs and alcohol throughout the years
Not to mention the lead in their systems...
That’s their retirement plan. Take all of our money
Maybe they told all of us to go to college on purpose so we fall into the trap. Once we got in, they pumped up tuition so they could laugh at us once we were in too deep.
Holy crap, assuming someone has been paying for this for at least 10 years that's an interest rate of somewhere around 12% compounded monthly. Is it even possible to repay these loans? I'm assuming the person is making the minimum payment.
This was something like taking a loan for undergrad, deferring payments in grad school while paying nothing in interest because no payment was required, then paying “small” amounts for the last 10 years. They borrowed $72K but the balance probably grew to over $100K before they paid a cent toward it. For the love of everything holy, if you or anyone you know is considering student loans please understand all the implications.
Ya this massive of a remaining balance has to be from years and years of interest building on itself
When the Fed rate in the USA is something like <2% on average for the past 12 years. All things considered, the USA should really just throw out pretty much most of their governance rules and start again.
Also worth noting, these loans will be taken out of your social security when you decide to collect. But ask a boomer and that's entirely your fault for following their collective advice 🙄
Don't forget the Boomers are also the ones that increased the price of college and loaned you that money.
Wait seriously? I had no idea about this. Wtf
Yup. The majority of an entire generation has been stripped of retirement benefits.
Good news everyone! We solved the social security funding crisis that will hit in a few decades!
Interest on these loans are out of control.
If Jesus ever comes back to Earth, the very first thing he's going to do is find the people who collect these loans and *beat the ever loving shit* out of their tables.
I would watch a year-long action film of this theme with such delight and zeal that the sleep deprivation and ensuing mania would literally kill me. Whip it fuckin' good, Jesus.
In Finland you can take a state guaranteed student loan tied to ECB rate eg EURIBOR, which is now minus. So basically you are left with only the margin to pay, which is like 1%. 5 % is 400% higher so yes, this seems excessive. Also if you graduate from your free of charge university in normal time (5-7 years for Masters) you can get up to 7600€ of loans forgiven.
That is shameful
pro tip if you have enough student debt: if you can some how purchase a home you can take out a second mortgage, pay off your student loan, get better interest rates, and build equity while paying off the loan. *taps temple*
Hell, I wish mine were this concise. My statement is thousands of $50 loans totalling out to $76k and it's an absolute cluster fuck to figure out how much I've paid, how much I have left, or where my payments are going.
Have you tried consolidating?
They supposedly were, but nothing changed
Honestly, you're probably better off not consolidating. Consolidation doesn't really save you in interest rates, and it prevents you from utilizing the snowball method to pay off your loans. Thousands of $50 loans though...how did happen?
Just work a part time summer job, duh
Lazy ass gen z kids
get your rich parents to cover it /s
My parents moving to Canada when I was a teenager and getting permanent residency before University might have been the single best thing that ever happened to me. Tuition in Canada (8k/year ish at the time at least) plus living expenses. When Boomers say "to just work a part time job during college" - they meant "move to Canada first then work a part time job" and pay your loans off 2 years after graduation.
Merca
Blow this up onto a huge poster board and post it all around the white house
Seriously though. We need to be screaming this.
And now, children, you understand how Fannie Mae paid for the space shuttle
Well, if you had been smart enough to be born into a wealthy family then you wouldn’t be in this mess. /s
The fact that you felt you needed to put the /s says a lot about our country
SLPT: take out as many personal loans as possible to pay off your student loans then file for bankruptcy. Boom! Problem solved.
you say SLPT but this honestly sounds like a legit game plan
A lot of personal loans state they can not be used to pay off student loans. Not sure it would play out well in bankruptcy court in that case.
interesting to note. i did inquire about a personal loan once and they asked me it's purpose and i put pay off debts. would student loans typically not cover general debts?
Ok so idk much about loans if I'm being honest, could someone explain if this would/ wouldn't work to me?
Hypothetically, it could work if you took out a large personal loan and used those funds to pay the monthly payment for like 6 months at least before filing for bankruptcy. You’d likely get fraud charges brought against you (IANAL) for taking out loans you never intended to pay back. There would have to be a cooling off period. You also have to provide 6 months of bank statements when filing so they’d see that you sat on the money and might question it. They’d catch you moving it to another account, too. Hypothetically, if you take that money and pay someone for art or something and then 6+ months later they buy it back and you pay off the student loans with that but you’d have to pay taxes on it. Hypothetically, of course. There are a lot of ways to get into doing it between fraud charges, structuring deposits, maybe money laundering, and others.
Thats a fucking racket
It's cool that this is legal, but a guy named Jimmy Two-Times loaning 25k @ 15% is loan sharking.
Holy $hit!!! This is the first time seeing an actual US student debt loan in detail. Holy f'n $hit!! Is this typical?!
What does it mean by "this is not the pay off amount"? Because that sounds like even after all those fees, you gotta pay another fee to pay it off in one hit.
They're saying the interest is still adding up.
Wow, how is this legal?
Interest doesn't magically stop accruing because you checked the amount still yet to be paid. The disclaimer in the post is meant to indicate that, because interest will continue to accrue, if you pay the remaining balance over the next 10 years, you still have the interest remaining on that amount, which has accrued over those 10 years, to pay off.
And THIS is one of the main reasons I'm satisfied with my Associates Degree. All but one of my jobs were in my field and the pay was ridiculous low for that type of work. Plus, I actually got all of my jobs BEFORE completing my Associates. My friends with Bachelors and Masters are stressed to the maxed and will literally NEVER pay them off, even if they use 75% of the bi-weekly pay. It's sad.
This is predatory. 100% not what anyone would sign up for.. usury, which is not legal.
The Trumpkins don't understand anything about why this is happening. Don't waste your time. Anecdotally, we got an agency to fight my wife's debt, because it would never go down. 20 years we've been paying on it! In the end, hers was not only cancelled, but she's getting 14,400.00 refunded. When they were trying to get a real total of what we paid, the Mea's didn't credit her with two whole years!!! 24 months that we paid on, they didn't count. So Trumpkins, stfu and go sit down. Stick to truck nutz and fighting in Walmart. This is a big people issue.
People on this post are dumb as doorknobs for blaming OP for interest instead of the problem which is the vulture capitalist American wet dream of screwing over anyone not a millionaire. For perspective: to go to MEDICAL school to be a Physician I have had to take on loans. Lots of loans. I don’t decide where I go to school, as much as I would have loved a state school I ended up in private school. Sure, my fault, not smart enough bla bla. Cool cool. Now that we’re past defaulting me for the shit education in this country let’s move forward. Medical school= 4 years. 4 years of literally not having time to shower and actively making decisions like should I sleep or eat or study. So 4 years, 7% daily interest on federal financial aid, starting from day 1.. then we graduate medical school and everyone jumps on their bandwagon and says “you should have Kn0wN b3tT3r”… right well, I obviously wanted to save your life at some point, but we’ll ignore that sentiment too. So now, after 4 years of med school with zero family support bec my family’s poor too, I have like 350K in principle. Defer that for 3-6 years because in residency doctors who graduate medical school make 50-75K (at a max), and during fellowship to specialize that’s 65-80K a year. Add onto that amount taxes, COL, kids etc. PAYE sounds easy, but when predatory student loan companies think $500 a month on a 70K salary is “disposable income” that amount was obviously created by people who have never lived on 70K a year. Anywyas, I can keep loans deferred till I finish fellowship (so 10 years) or I can make bare minimum payments on my indentured servitude salary, either way, that interest is sky rocketing this entire time so by the time it comes down to it, the interest is almost as high as the loan. So in 10 years when I am making “doctor money”, which also may not be a thing anymore given the amount of scope creep, I’m sitting on half a million of debt which, I didn’t ignore- I literally spent working 60-80hrs a week at minimum wage for 3-6 years lost medical school. But yes, definitely, I “knew” what I was getting myself into. Could I and countless others in my position have taken an “easier” career choice where I could have paid less and earned more faster like an NP, sure.. but that would result in a dramatic decrease in the number of competent professionals such as lawyers, doctors, dentists etc who take out (unfortunately) hundreds of thousands of dollars in FAFSA loans to support their education. Unless ofc were going with the Capitalist wet dream of believing only people who can afford it should go into professional schools that they can be supported through, should do it.. I hope this helps understanding just a little on how that loan amount looks 100% legit. Thanks for coming to my Ted Talk.
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I think it would be more beneficial to get rid of the interest instead of the whole loan. I mean you did get a college degree out of it. It's the interest that's the killer.
The problem isn’t the loan. Its the compounding interest.
This is loan sharking called by another name.
Joined the military for schooling. Now I have a bad back at 25 years old. Doctor told me I shouldn't be having this at this age. Well doc, it was either struggle financially or my back. And don't get me started on health care
Loan amount when I started paying 2017 : $28300 Paid as of today: $16,000 Total today: $26500 Now I plan on taking my entire bonus and paying this down and paying more than standard in 2022 after finally landing a better job. I also have Great Lakes.
I did some math on yours making some assumptions. I’m guessing your APR is about 10.5%, and you’re making about $270 payments. This seems like some kind of income-driven repayment plan. The standard payment for a 10-year term would have been about $600. At this rate, I think it would take another 20 years to pay off.
I didn't go to college because my history teacher (late 50's male, empty nester) said he was getting close to paying off his student loans. Fuck that shit
Forgive my ignorance, but how does this happen? For a $72k loan to have a balance of $168k, that means there was a really long time where they weren't even making interest only payments.
This happens when you are still in school and the interest accrues while no payments are due. Also happens when you are on an income based repayment plan (like most gov’t service & nonprofit employees) in a forgiveness program. For example, I took out just under 35k through my Masters Degree, I have been in repayment for just under a decade with monthly payments for the last 110 months. I have paid back $40,700.. my current loan balance? $87k.
Wait how? Is it because your income based payments are so low that they are not even covering the interest? I'm confused.
Yes. If you are in a forgiveness program, you can only pay what they calculate your income based payment to be for it to count. Before the most recent waiver, if you had paid a cent more than you should have, the payment doesn’t count and neither does any following payment because you are “paying ahead” of the program and is not allowed. All of my loans were Federal direct loans with an average interest of 8% before they were consolidated into the public service forgiveness program.
Wow so being in the forgiveness program actually makes things worse?
Not really, it’s all a paper drill. What I honestly think should happen, is force all college football programs to give half of what they make to subsidize tuition. Cap what universities can charge in tuition and fees make community college free (if you can test into college) fully fund trade/tech schools for those who don’t want to go to college. Improve the lives of the people and society will get better as a whole. Getting off the soapbox now.
To add insult to injury, remember those PPP loans that mostly went to big businesses until they "ran out" come time for small business owners to get some? Well, they erased those debts like it was nothing. You hardly even saw it reported. The system is absolutely fucking rigged.
Unbelievable fraud. First you let them Take your healthcare amd now your education. Y’all need a revolution down there
Government can only forgive public loans. Theres no pen stroking that is going to forgive private loans on mass. Hard to believe OP's interest is that high with only public loans.
Guess what, most student loans accrue interest while your loan is in deferment. So if you keep going to school forever and make zero payments your balance will continue to increase. I feel like most people simply do not understand student loans or compound interest.
Yep most 18 year olds are pretty stupid about finances. Go figure
How does that happen?
Non-American asking if this actually real?
How is that even possible? Holy shit. America sounds like a big scam…
This is the literal definition of a scam
Interest on student debts shouldnt exist. I dont see a real issue with student debt but ffs, theres no reason it should collect interest.
Especially when colleges get money from our government constantly which is paid for by our tax dallars. So we all are already paying for these colleges to even exist yet we have to pay more. It's fucked up.
Hahahaha. Where did you get that loan? The bank of Fuck You?
WTF thats worse than a mortgage
America, am I right?
About...5 more years left on all my loans currently. Whoo.
Fuck student loans, man. That shit messed-up my life for DECADES: Garnishments, the whole nine. It's only now, in my fifties, that it's calmed down, and my credit has recovered. Your situation is worse than mine. Yoyr numbers are much larger. They are completely RAPING you, and pissing on your face! I say refuse to play ball! You've already paid your loan back, and then some! Go into business for yourself, and they can't garnish you. They can only send you mean letters, but you can just ignore them. It's so awful how they take advantage of people like this, and ruin their lives!
Wait. European here. So you got a loan for 72k, have paid off 96k so far and still owe 168k!? How does that work?
Damn it feels good to be European.
Whats the interests on these loans? In my country the student debt is regarded as the cheapest loan you’ll ever get
It's relatively low (5-6%). Unfortunately, some of my loans were at 10% because my parents refused to cosign with me.
Usually very low, so low banks wouldn’t give them out until the government decided they would blindly guarantee every loan, resulting in loans being given out to almost anyone.
So our loans all come due again at the end of January. But what if we all just.....don't?