Student loan forgiveness...

[TheHaitian]

Meet one of the first people that was able to get his student loans forgiven by being a public servant

after making just over $24,000 in payments over a decade, the federal government had wiped away his balance of roughly $170,000 tax free.

www.nytimes.com/2018/05/04/your-money/student-loan-forgiveness.html?rref=collection%2Fcolumn%2Fyour-money&action=click&contentCollection=your-money®ion=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=collection

[phil5185]

lol - if you read my rant about 15 minutes ago in 'House is your biggest asset' (#42), about how we have become hopelessly dependent on gov't for for even our most basic needs in a single lifetime, 70 years - then this one one almost exploded my head.

I (the taxpayer) paid $170,000 for this slacker musician/social worker's tuition bills cuz he wanted to be a professional student and obtain degrees in fields that are marginally marketable in the real world??

Disclosure: I've said for years that I don't think we, the taxpayer, should be ripping kids off with high interest rates, 6.8% is way over fair market. And maybe the rate should even be zero to encourage kids. But there also needs to be a hoop that limits basket-weaving classes - students should show that they have a career plan where there is a need for their education.

[wvugurl26]

I have six years left on mine. The 6.8 % really sucks when my car loan and the mortgage are both lower and those loans could be discharged in bankruptcy.

[haapai]

I find that article mildly terrifying and far too concise. 

The existence of such programs is being used to soothe the fears of students loan borrowers who are understandably nervous about taking on mountains of debt to enter professions with not-so-great pay and attrition rates that aren't mentioned by the career placement office.  Those folks deserve more stories like this that detail the level of tenacity that it takes to successfully complete the program. 

The article is far too light on what would have happened had Mr. Mitchell fallen out of compliance and how he plans to pay the tax bill triggered by forgiveness. 

ETA:  Subsequent posts made by folks with better reading comprehension make it clear that there is no tax bill triggered by loan forgiveness in this case. 

[sesfw]

Yea Phil …… I've always thought that 'fluff' majors should be excluded from the student loan group.  If they need a loan to get their 'fluff' classes, they can get private loans.

I too get ticked at the marginal majors in todays world.  If they want to try professional music, they can get real jobs to pay for their avocation.

Have a g-dtr that majored in psychology at Univ of Phx, and is now an unmarried mother working at Jimmy-John's.  Last time she said anything about it her SL total was around $50K with all the deferments added in.  She will never get out from under this and her credit future is shot.  Sad for her.  

[Deleted]

Jul 15, 2018 18:32:55 GMT -5 TheHaitian said:

Meet one of the first people that was able to get his student loans forgiven by being a public servant

after making just over $24,000 in payments over a decade, the federal government had wiped away his balance of roughly $170,000 tax free.

I thought the forgiven amount was taxed as ordinary income? 

[Deleted]

Jul 15, 2018 19:57:09 GMT -5 sesfw said:

Yea Phil …… I've always thought that 'fluff' majors should be excluded from the student loan group.  If they need a loan to get their 'fluff' classes, they can get private loans.

I too get ticked at the marginal majors in todays world.  If they want to try professional music, they can get real jobs to pay for their avocation.

Have a g-dtr that majored in psychology at Univ of Phx, and is now an unmarried mother working at Jimmy-John's.  Last time she said anything about it her SL total was around $50K with all the deferments added in.  She will never get out from under this and her credit future is shot.  Sad for her.  

I think Univ of Phoenix is probably more her problem than the degree choice. 

[TheHaitian]

Jul 15, 2018 20:35:42 GMT -5 minnesotapaintlady said:

Jul 15, 2018 18:32:55 GMT -5 TheHaitian said:

Meet one of the first people that was able to get his student loans forgiven by being a public servant

I thought the forgiven amount was taxed as ordinary income? 

2 different forgiveness plan, the other one is 25 years of income based repayment then the rest is forgiving but taxed as income (no
Matter the job you have).

This one you have to be a public servant, make 120 on time income based repayments (10 years); then the total remaining balance is forgiven ... tax free!

[weltschmerz]

Jul 15, 2018 20:37:03 GMT -5 minnesotapaintlady said:

Jul 15, 2018 19:57:09 GMT -5 sesfw said:

Yea Phil …… I've always thought that 'fluff' majors should be excluded from the student loan group.  If they need a loan to get their 'fluff' classes, they can get private loans.

I too get ticked at the marginal majors in todays world.  If they want to try professional music, they can get real jobs to pay for their avocation.

Have a g-dtr that majored in psychology at Univ of Phx, and is now an unmarried mother working at Jimmy-John's.  Last time she said anything about it her SL total was around $50K with all the deferments added in.  She will never get out from under this and her credit future is shot.  Sad for her.  

I think Univ of Phoenix is probably more her problem than the degree choice. 

^^This^^

If I needed a psychologist, no way in hell would I go to someone with a degree from the University of Phoenix.

[giramomma]

I'm giggling...according to YM, everyone should have engineering or accounting training. Can you imagine an engineer or accountant doing the job of a social worker.

And Phil, is always like "Work smarter, not harder."

But, yet, we want to crucify a guy who worked smarter, not harder, by really reading and becoming informed about student loan forgiveness program and using it to his advantage.

Because MUSIC was involved. and SOCIAL WORK.

I think we should have a contest. Give me a kid to teach the violin to for 6 weeks, and have an engineer or accountant try to teach a kid the violin for 6 weeks. See who might actually do a better job of it.

I'm guessing it won't be the accountant.

But, what do I know, I'm just a dumb music major.

[simser]

Jul 15, 2018 22:43:42 GMT -5 giramomma said:

I'm giggling...according to YM, everyone should have engineering or accounting training. Can you imagine an engineer or accountant doing the job of a social worker.

And Phil, is always like "Work smarter, not harder."

But, yet, we want to crucify a guy who worked smarter, not harder, by really reading and becoming informed about student loan forgiveness program and using it to his advantage.

Because MUSIC was involved. and SOCIAL WORK.

I think we should have a contest. Give me a kid to teach the violin to for 6 weeks, and have an engineer or accountant try to teach a kid the violin for 6 weeks. See who might actually do a better job of it.

I'm guessing it won't be the accountant.

But, what do I know, I'm just a dumb music major.

I’ll do it if we switch to cello! I may be able to pull off the violin, what level are we talking here?

Of course I have a double major in music and chemistry, but I can do it!!

[zibazinski]

Jul 15, 2018 20:37:03 GMT -5 minnesotapaintlady said:

Jul 15, 2018 19:57:09 GMT -5 sesfw said:

Yea Phil …… I've always thought that 'fluff' majors should be excluded from the student loan group.  If they need a loan to get their 'fluff' classes, they can get private loans.

I too get ticked at the marginal majors in todays world.  If they want to try professional music, they can get real jobs to pay for their avocation.

Have a g-dtr that majored in psychology at Univ of Phx, and is now an unmarried mother working at Jimmy-John's.  Last time she said anything about it her SL total was around $50K with all the deferments added in.  She will never get out from under this and her credit future is shot.  Sad for her.  

I think Univ of Phoenix is probably more her problem than the degree choice. 

I was thinking having children with no job skill was worse.

[OldCoyote]

Jul 15, 2018 22:43:42 GMT -5 giramomma said:

I'm giggling...according to YM, everyone should have engineering or accounting training. Can you imagine an engineer or accountant doing the job of a social worker.

And Phil, is always like "Work smarter, not harder."

But, yet, we want to crucify a guy who worked smarter, not harder, by really reading and becoming informed about student loan forgiveness program and using it to his advantage.

Because MUSIC was involved. and SOCIAL WORK.

I think we should have a contest. Give me a kid to teach the violin to for 6 weeks, and have an engineer or accountant try to teach a kid the violin for 6 weeks. See who might actually do a better job of it.

I'm guessing it won't be the accountant.

But, what do I know, I'm just a dumb music major.

I'm just a dumb music major.

I see the problem now!

Two of the best business men I have ever known, had degree's in music.

[NoNamePerson]

Jul 15, 2018 22:43:42 GMT -5 giramomma said:

I'm giggling...according to YM, everyone should have engineering or accounting training. Can you imagine an engineer or accountant doing the job of a social worker.

And Phil, is always like "Work smarter, not harder."

But, yet, we want to crucify a guy who worked smarter, not harder, by really reading and becoming informed about student loan forgiveness program and using it to his advantage.

Because MUSIC was involved. and SOCIAL WORK.

I think we should have a contest. Give me a kid to teach the violin to for 6 weeks, and have an engineer or accountant try to teach a kid the violin for 6 weeks. See who might actually do a better job of it.

I'm guessing it won't be the accountant.

But, what do I know, I'm just a dumb music major.

WOW and all along I thought everyone was expected to be a Brain Surgeon or Rocket Scientist. This country has become a bunch of friggin' snobs. And thank you for being a music major. Life without music would really suck but then I am beginning to see why some people who post have lives that really suck.     

[Deleted]

Jul 15, 2018 20:37:03 GMT -5 minnesotapaintlady said:

Jul 15, 2018 19:57:09 GMT -5 sesfw said:

Yea Phil …… I've always thought that 'fluff' majors should be excluded from the student loan group.  If they need a loan to get their 'fluff' classes, they can get private loans.

I too get ticked at the marginal majors in todays world.  If they want to try professional music, they can get real jobs to pay for their avocation.

Have a g-dtr that majored in psychology at Univ of Phx, and is now an unmarried mother working at Jimmy-John's.  Last time she said anything about it her SL total was around $50K with all the deferments added in.  She will never get out from under this and her credit future is shot.  Sad for her.  

I think Univ of Phoenix is probably more her problem than the degree choice. 

It's probably both, but the major in psychology is probably the worse problem.

An undergraduate degree in psychology doesn't qualify you to be a counselor or a psychologist.  Those require graduate degrees--it is a doctorate to be a psychologist.

You have to combine it with something marketable to do anything with it on the undergraduate level.  That can be business, education (but not counseling--still an advanced degree), social work, etc.  

This was drummed into our heads even as far back as the 1970s when I was in college.  Psychology is interesting, though.  That's why a lot of people like to take courses in it.  But it won't get them a job by itself with an undergraduate degree.

ETA:  You may be right after all when I thought about it.  I don't think you could get into a reputable graduate program in psychology with an undergraduate degree from U of P.

[Deleted]

I double majored in Psychology and Biology.  My company didn't care what my major was for my position, they just required a 4 year degree.   They've since changed that, now they only require a 2-yr degree.  They weren't getting enough applicants when spots opened up.

[Miss Tequila]

Jul 15, 2018 22:43:42 GMT -5 giramomma said:

I'm giggling...according to YM, everyone should have engineering or accounting training. Can you imagine an engineer or accountant doing the job of a social worker.

And Phil, is always like "Work smarter, not harder."

But, yet, we want to crucify a guy who worked smarter, not harder, by really reading and becoming informed about student loan forgiveness program and using it to his advantage.

Because MUSIC was involved. and SOCIAL WORK.

I think we should have a contest. Give me a kid to teach the violin to for 6 weeks, and have an engineer or accountant try to teach a kid the violin for 6 weeks. See who might actually do a better job of it.

I'm guessing it won't be the accountant.

But, what do I know, I'm just a dumb music major.

I think people should major in whatever they want to.  But I also think people need to weigh the cost of getting their degree to their potential income.  Perhaps if enough people bailed from very high cost educations the cost of college would decrease.  But taking out $130k in loans and then sticking the taxpayer with the tab is not ok with me.  Personal responsibility and all....

[Deleted]

Jul 16, 2018 9:12:36 GMT -5 minnesotapaintlady said:

I double majored in Psychology and Biology.  My company didn't care what my major was for my position, they just required a 4 year degree.   They've since changed that, now they only require a 2-yr degree.  They weren't getting enough applicants when spots opened up.

Do you do something that uses the psychology part or the biology part?  Or neither?

[midjd]

So yesterday in the "home as only asset" thread I mentioned that I wondered what leads writers to choose the people they profile. 

Here we have a music major (man bun and all) who discharged $170K in debt while paying off only about $25K. That is not remotely typical of PSLF participants (although admittedly not many have had their debt discharged yet), which makes me wonder whether this is just a way to portray those who do take advantage of the program as basket-weaving Millennials who purposely racked up six figures in debt for a non-marketable degree. 

The number of people whose SL balances are >$100K is something like 3%, and not all of them are participating in PSLF. But I'm guessing many are walking away from this article totally pissed off that their tax dollars are going toward subsidizing students' foolish career choices at $150K+ a pop. 

Maybe I'm just a little sensitive on this point. I did appreciate that it pointed out how difficult it is to qualify for the program and how obscure some of the regulations are. 

[Deleted]

Jul 16, 2018 9:17:43 GMT -5 @bamafan1954 said:

Jul 16, 2018 9:12:36 GMT -5 minnesotapaintlady said:

I double majored in Psychology and Biology.  My company didn't care what my major was for my position, they just required a 4 year degree.   They've since changed that, now they only require a 2-yr degree.  They weren't getting enough applicants when spots opened up.

Do you do something that uses the psychology part or the biology part?  Or neither?

Neither.  I'm a Quality Technician for an electronics manufacturer. 

[cktc]

Wow I found this article kind of horrifying. It's already such a gamble to go into public service and forgo potentially higher income to get loans forgiven. Now people have put in the time only to be left with compounded interest and are so far removed from school that changing to a more lucrative career might not even be possible. 

[Tiny]

IDK, I admire the guy.  I suspect he's good at his job and is probably making a positive difference for the people he serves.  

Isn't that how "loan forgiveness' is suppose to work?     Also, I suspect his loan balance was on the higher side.  I would think that most people who would take advantage of this might not be in the 129K SL range (or end with as much education as the guy in the article).   


I also think the interest rates on SLs is absurd. 

[swamp]

Most of the Assistant DA's and the Public defenders are using the student loan forgiveness program.     You can easily rack up $150k debt from law school alone without living high on the hog. 

We need to encourage people to take those types of public interest jobs.  They are also training grounds for future really skilled trial attorneys.  Or we can raise taxes to pay the jobs what they are really worth.  

[swamp]

Jul 16, 2018 9:47:17 GMT -5 cktc said:

Wow I found this article kind of horrifying. It's already such a gamble to go into public service and forgo potentially higher income to get loans forgiven. Now people have put in the time only to be left with compounded interest and are so far removed from school that changing to a more lucrative career might not even be possible. 

that is one of the downsides.  A few of the public defenders have had offers from firms, but they can't take them yet.  They'd have to pay back a pile of student loans.  It's too bad, they're damn good attorneys. 

[Deleted]

Jul 16, 2018 8:52:32 GMT -5 OldCoyote said:

Two of the best business men I have ever known had degrees in music.

When my professional society had a gathering to celebrate the 100th anniversary of its founding they decided to put together an orchestra composed of members. These are actuaries- mostly the much-touted STEM majors. That orchestra was huge and, judging from the YouTube video (I wasn't there), pretty good. They had a chorus, too. I can't sing worth a darn and never mastered an instrument but was amazed at how much proficiency there was among math and computer geeks.

[OldCoyote]

Hmmmmm, As a U.S. tax payer who has paid my taxes on time for many years,,, Where is my tax forgiveness package??

As a person that has paid personal, business taxes,, A bunch of licenses,  been a contribution member of society,, Where is my Tax forgiveness??

So we give (we the taxpayer) forgiveness because they were stupid enough to spend money on something that they can not repay now, a bad investment??

If I made a bad investment , are you you going to let me out of my bad decision??

Not even pay the taxes on that gift??

Another thing,, about the poor people being unemployed,, On I-10 in West Phoenix,, McLane, has a sign up,, Stock pickers $18. + an hour..

Some one on the same corner ,, will work for food!!

[swamp]

Jul 16, 2018 9:57:50 GMT -5 @athena53 said:

Jul 16, 2018 8:52:32 GMT -5 OldCoyote said:

Two of the best business men I have ever known had degrees in music.

When my professional society had a gathering to celebrate the 100th anniversary of its founding they decided to put together an orchestra composed of members. These are actuaries- mostly the much-touted STEM majors. That orchestra was huge and, judging from the YouTube video (I wasn't there), pretty good. They had a chorus, too. I can't sing worth a darn and never mastered an instrument but was amazed at how much proficiency there was among math and computer geeks.

A bunch of math teachers around here had a band called The Red Pens.

They were very good.  

[swamp]

Jul 16, 2018 10:02:35 GMT -5 OldCoyote said:

Hmmmmm, As a U.S. tax payer who has paid my taxes on time for many years,,, Where is my tax forgiveness package??

As a person that has paid personal, business taxes,, A bunch of licenses,  been a contribution member of society,, Where is my Tax forgiveness??

So we give (we the taxpayer) forgiveness because they were stupid enough to spend money on something that they can not repay now, a bad investment??

If I made a bad investment , are you you going to let me out of my bad decision??

Not even pay the taxes on that gift??

Another thing,, about the poor people being unemployed,, On I-10 in West Phoenix,, McLane, has a sign up,, Stock pickers $18. + an hour..

Some one on the same corner ,, will work for food!!

Did you choose to work in an underpaid public service field despite being qualified for a much more lucrative position? 

[Deleted]

Jul 16, 2018 9:57:50 GMT -5 @athena53 said:

Jul 16, 2018 8:52:32 GMT -5 OldCoyote said:

Two of the best business men I have ever known had degrees in music.

When my professional society had a gathering to celebrate the 100th anniversary of its founding they decided to put together an orchestra composed of members. These are actuaries- mostly the much-touted STEM majors. That orchestra was huge and, judging from the YouTube video (I wasn't there), pretty good. They had a chorus, too. I can't sing worth a darn and never mastered an instrument but was amazed at how much proficiency there was among math and computer geeks.

There are a lot of studies showing a correlation between math and musical ability. 

[midjd]

Jul 16, 2018 9:54:41 GMT -5 swamp said:

We need to encourage people to take those types of public interest jobs.  They are also training grounds for future really skilled trial attorneys.  Or we can raise taxes to pay the jobs what they are really worth.  

Sadly, given the choice, I'm guessing most people would say "ehh we don't really need public defenders anyway -- people should just stop committing crimes/having their kids removed by DCS/etc." Constitution schmonstitution. But I'd guess the PSLF program is far cheaper than paying market rate for these positions. 

My loans were consolidated in 2010 at a 7.5% interest rate. Keeping that interest rate and consolidation is the only way I qualify for PSLF. I get at least 3-4 pieces of junk mail a week from places like SoFi and others that promise a 2% or 3% consolidation rate. I'll never understand why lenders can charge double the market rate on non-dischargeable, federally-guaranteed loans, while the students are the bad guys...