Don't pay it and default.
You'll only have to pay the income tax on the defaulted loan.
It's not like you need credit anyways since almost no one in this generation is going to be able to afford a house down payment.
The Delinquent Borrowers Leading a Student Loans Revolt
41–50 of 67 posts
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#42One way to deal with the student loans crisis is for a nationwide student loan bailout. You don't have to erase the loans, just refinance them at a much lower interest rate. Currently the rate is 7%, which is just insane. For a virtually no-risk loan, which cannot even be discharged in default, that is a terribly high rate. Refinancing will be a transfer of wealth from the rich to the poor. Good for the economy, shor…
If the current interest rate is high compared to default risk, why hasn't some private company come in to undercut the government and make a killing? I don't think it's because the banks aren't greedy enough. My guess would be that it's because of the extremely high default rate on student loans, and the extremely favorable repayment terms that government loans offer: payments capped at 10% of discretionary income, a…
If that were true, why would private student interest rate be 7% also? It has no such favorable repayment terms.
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#43The absurd student loan system is what fueled tuition inflation in America. It needs to be abolished.
Monetary policies after 2008, causing price increases due to artifical housing shortaged and asset bubbles are to blame.
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#44Those numbers are horrific. My entire UK degree debt will be about $60k at 3% and I won't have to make any repayments until I earn about $30k pa. For my degree it should be a net profit for me. For less well paid occupations one is insulated against low wages. I am happy that I contribute to the advancements in non vocational learning. My fellow students and I are said to contribute $40m pa to the local economy which…
That $45k / year is for private non-profit colleges, which are the most expensive kind (even worse than for-profit), and not the norm. For an in-state public University, the number is more like a quarter of that. http://nces.ed.gov/programs/coe/indicator_cua.asp
> non-profit colleges, which are the most expensive kind (even worse than for-profit)
This sounds strange. How does that work?
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#45I have to be honest, if some kind of student-loan amnesty ever goes into effect, I'll be a little pissed that I prioritized paying mine off with my earnings for the first half-dozen years out of school. Just imagine what I could have done with those tens of thousands of dollars instead...
I know right! Someone else would be better off without making you worse off... The horror! If I can't have it, they can't!
> Someone else would be better off without making you worse off
That money doesn't come from nowhere; someone is paying for it.
Student loans are already provided at below-market interest rates[0], which means they're being subsidized by taxpayers, either explicitly or implicitly.
[0] Not all student loans, but the majority if not all of undergraduate federal student loans
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#46Don't pay it and default. You'll only have to pay the income tax on the defaulted loan. It's not like you need credit anyways since almost no one in this generation is going to be able to afford a house down payment.
If it's a federal loan, the government will garnish your wages [1] and eventually your social security payments [2], and will withold any tax refunds. And since student loans usually can't be discharged in bankruptcy, you'll have bad credit for literally the rest of your life.
Also, you pay income tax on forgiven loans, not defaulted ones.
[1] https://studentaid.ed.gov/sa/repay-loans/default#consequence...
[2] http://money.cnn.com/2014/08/24/news/economy/social-security...
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#47Earlier quoted context omitted.
If the current interest rate is high compared to default risk, why hasn't some private company come in to undercut the government and make a killing? I don't think it's because the banks aren't greedy enough. My guess would be that it's because of the extremely high default rate on student loans, and the extremely favorable repayment terms that government loans offer: payments capped at 10% of discretionary income, a…
If that were true, why would private student interest rate be 7% also? It has no such favorable repayment terms.
It's my impression that there isn't much private student-loan industry left, having been driven out by federal loans. What's left probably targets a different demographic from the usual one, like borrowers who have already maxed out their federal loans, which might be a riskier group.
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#48Earlier quoted context omitted.
That $45k / year is for private non-profit colleges, which are the most expensive kind (even worse than for-profit), and not the norm. For an in-state public University, the number is more like a quarter of that. http://nces.ed.gov/programs/coe/indicator_cua.asp
> non-profit colleges, which are the most expensive kind (even worse than for-profit) This sounds strange. How does that work?
There are a lot of old, prestigious private non-profit colleges (Princeton, Harvard, MIT) who can charge a lot because of their reputation. For-profit colleges are mostly very new and tend to have bad reputations.
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#49I have to be honest, if some kind of student-loan amnesty ever goes into effect, I'll be a little pissed that I prioritized paying mine off with my earnings for the first half-dozen years out of school. Just imagine what I could have done with those tens of thousands of dollars instead...
I know right! Someone else would be better off without making you worse off... The horror! If I can't have it, they can't!
It's not just about who's better or worse off. It's about the basic principles of meeting one's obligations and of applying the law equally. Would you be equally flippant about a law allowing any other group to shed their obligations without consequences? Bankers, perhaps? Or members of any ethnic group other than your own? It wouldn't affect you directly, as you'd be neither the debtor nor the creditor. Those people would be better off without you being worse off . . . except that we're all worse off when the foundations of civil society are weakened.
The situation with corrupt lenders and pseudo-educational institutions leaving others with nothing but massive debt cries out for relief. However, that relief should extend to a ll those who have been victimized - not just those who have yet to pay. Laughing or sneering at those who paid already, because it was both legally required and financially prudent that they do so, is pretty abhorrent.
Re: The Delinquent Borrowers Leading a Student Loans Revolt
#50Earlier quoted context omitted.
I know right! Someone else would be better off without making you worse off... The horror! If I can't have it, they can't!
It's not just about who's better or worse off. It's about the basic principles of meeting one's obligations and of applying the law equally. Would you be equally flippant about a law allowing any other group to shed their obligations without consequences? Bankers, perhaps? Or members of any ethnic group other than your own? It wouldn't affect you directly, as you'd be neither the debtor nor the creditor. Those people…
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." - Anatole France
To hell with your laws when they serve to oppress.