Another SL payment is coming

[TheOtherMe]

My stupid governor says it will hurt Iowa taxpayers to forgive the loans.  I have yet to figure out how.

[nidena]

Since today is 10/16, can I get some clarity:  Is that 10/23/2022 or 10/2023?  I've got some mental fog going on so the clarity is much appreciated.

[daisylu]

Oct 16, 2022 13:31:24 GMT -5 TheOtherMe said:

My stupid governor says it will hurt Iowa taxpayers to forgive the loans.  I have yet to figure out how.

Best I have come up with is that there is already a labor shortage, so maybe some people won't have to work extra jobs? 🤷‍♀️

[minnesotapaintlady]

Oct 16, 2022 14:39:31 GMT -5 nidena said:

Since today is 10/16, can I get some clarity:  Is that 10/23/2022 or 10/2023?  I've got some mental fog going on so the clarity is much appreciated.

10/23/2022

[NomoreDramaQ1015]

Put in my application with the beta web site.

Now we wait to see which forgiveness program wipes out the last of my student debt first.

I consolidated back in July so I could qualify for the PSLF forgiveness.   At this time I don't believe Iowa can stop you from consolidating into a Direct Loan and getting forgiveness that way but people are going to have to do it NOW because I believe that has a deadline.  I know for PSLF I had to be consolidated and get my form in by October 31st.

[Ava]

Now the debt relief is in limbo due to lawsuits.

I think this will delay but not stop the relief.
It's going to be a bumpy ride though.

If I'm reading the tea leaves correctly, lawsuits will take a while to sort out, and payments will not restart in January. I don't believe the Biden administration will restart payment until after borrowers have received relief.
I predict a later start date during 2023 or even in early 2024, till all the circus gets sorted.

[TheOtherMe]

A group of GOP governors are the ones that sued, including my governor.

Biden had to do this by Executive Order.  The next POTUS can take it away with the stroke of a pen.

[haapai]

Oct 25, 2022 22:29:55 GMT -5 Ava said:

Now the debt relief is in limbo due to lawsuits.

I think this will delay but not stop the relief.
It's going to be a bumpy ride though.

If I'm reading the tea leaves correctly, lawsuits will take a while to sort out, and payments will not restart in January. I don't believe the Biden administration will restart payment until after borrowers have received relief.
I predict a later start date during 2023 or even in early 2024, till all the circus gets sorted.

I think that you are right and the zero-interest pause will be extended again for everyone.

There are ways of having payments resume while things are in limbo but they require loan servicers and borrowers to be well-organized and we all know that isn't the case.  A blanket continuation of the pause is much more likely. 

[haapai]

It's rather ironic that the net effect of opposing loan cancellation seems to be that nobody is going to make any payments or be charged any interest for even longer. 

Folks that were never going to get loan forgiveness due to making too much money are making out like bandits.  They're shoveling money that would have gone toward student loan payments into tax-favored investments and letting inflation whittle away their debts. 

Perhaps "ironic" is not the right word.  Maybe forcing an extension of the pause was the reason behind tying it up in court. 

[schildi]

I wish they would somehow stop all this forgiveness nonsense.

[gs11rmb]

Oct 26, 2022 22:22:53 GMT -5 schildi said:

I wish they would somehow stop all this forgiveness nonsense.

I'm not opposed to forgiveness because I think there's a good chance that many people being 'forgiven' have paid back the principle.

I'm worried that it's going to cause college costs to increase even more because there will be an assumption that more forgiveness will be provided.  Through this policy there's no incentive for costs to be curbed.

[Rukh O'Rorke]

Oct 28, 2022 8:35:08 GMT -5 gs11rmb said:

Oct 26, 2022 22:22:53 GMT -5 schildi said:

I wish they would somehow stop all this forgiveness nonsense.

I'm not opposed to forgiveness because I think there's a good chance that many people being 'forgiven' have paid back the principle.

I'm worried that it's going to cause college costs to increase even more because there will be an assumption that more forgiveness will be provided.  Through this policy there's no incentive for costs to be curbed.

This brings us back to my plan! Just forgive the fees and interest charged, let everyone - or nearly everyone - pay back principal. There would be a lot less pushback on that I think and no room for the nonsense that "average tax payer" is paying for someone's fancy degree.

And then there could be a hardship clause for some people to get additional forgiveness.

[minnesotapaintlady]

I'm finding these latest comments by Biden about "checks being issued" interesting.  Are they really just going to send checks to everyone in the amount of the forgiven balance and expect them to use it to pay off the loans?   Many will not.  I know we wouldn't.

[Rukh O'Rorke]

Oct 29, 2022 16:33:30 GMT -5 minnesotapaintlady said:

I'm finding these latest comments by Biden about "checks being issued" interesting.  Are they really just going to send checks to everyone in the amount of the forgiven balance and expect them to use it to pay off the loans?   Many will not.  I know we wouldn't.

that is weird.

But biden....talking....who knows?

Wait for something in writing 

[scgal]

Oct 29, 2022 16:33:30 GMT -5 minnesotapaintlady said:

I'm finding these latest comments by Biden about "checks being issued" interesting.  Are they really just going to send checks to everyone in the amount of the forgiven balance and expect them to use it to pay off the loans?   Many will not.  I know we wouldn't.

I think it would be a terrible idea too. May I ask if you had/have loans and recieved govt money to pay for that specific reason why you wouldn't use it for that purpose?

[minnesotapaintlady]

Oct 30, 2022 7:55:39 GMT -5 scgal said:

Oct 29, 2022 16:33:30 GMT -5 minnesotapaintlady said:

I'm finding these latest comments by Biden about "checks being issued" interesting.  Are they really just going to send checks to everyone in the amount of the forgiven balance and expect them to use it to pay off the loans?   Many will not.  I know we wouldn't.

I think it would be a terrible idea too. May I ask if you had/have loans and recieved govt money to pay for that specific reason why you wouldn't use it for that purpose?

My son is a Jr in college now and received 8K in subsidized loans his first two years which are eligible for the forgiveness.  We only took the loans to let his investments ride and to stretch his savings in case he ended up going a 5th year or to graduate school.  If we got a check it would probably be tossed into I bonds until he was done.

[geenamercile]

Oct 29, 2022 16:33:30 GMT -5 minnesotapaintlady said:

I'm finding these latest comments by Biden about "checks being issued" interesting.  Are they really just going to send checks to everyone in the amount of the forgiven balance and expect them to use it to pay off the loans?   Many will not.  I know we wouldn't.

From what I am seeing this refers to those who paid their loans off during the COVID time, so they are supposed to get a refund for paying what they wouldn't have too.  Not for people with active loans.  So for your son, he would just have them forgiven.  However, if you had used savings to pay for them, then he would have gotten a refund check for paying them. 

[nidena]

You asked us about Biden's student debt relief plan. We found the answers -- from NPR

[nidena]

With that Q&A piece, it makes it easier to tackle the process.  I filed for the forgiveness.  If they pay it back to me, awesome!  If not, I'm not in any different of a place.

[schildi]

The whole thing is confusing.
My son just last month took out a (small) student loan. Can he apply for forgiveness?

I haven't been able to find a clear answer on that anywhere ...

[minnesotapaintlady]

Oct 31, 2022 19:22:54 GMT -5 schildi said:

The whole thing is confusing.
My son just last month took out a (small) student loan. Can he apply for forgiveness?

I haven't been able to find a clear answer on that anywhere ...

No.  It's only for loans distributed before June 30th 2022.

[teen persuasion]

Oct 31, 2022 19:22:54 GMT -5 schildi said:

The whole thing is confusing.
My son just last month took out a (small) student loan. Can he apply for forgiveness?

I haven't been able to find a clear answer on that anywhere ...

federal student loans disbursed (when you received your loan funds) on or before June 30, 2022, are eligible for relief:

One-time Federal Student Loan Debt Relief

[NomoreDramaQ1015]

Huh interesting on the refund.  IDK if I would get one because I was paying private loans before I consolidated but it would be cool to get $500 back.

[wvugurl26]

I continued making payments in 2020 on my loans. And in fact made bigger ones trying to get the balance down with 0% interest. At some point though I stopped. In October 2021, I applied for forgiveness under the expanded program for public service. I was granted forgiveness under that program and several weeks later I got a check for the payments I made during the payment suspension.

[Ava]

And now the SL forgiveness has been blocked by a judge in Texas.
For what I've been reading online, it may take months to sort it out.
I'm not surprised with this turn of events.

[TheOtherMe]

Congress wouldn't do it so it had to be done by Executive Order, I think.

That's what is the "basis" for the court cases.

I hope the loans are eventually forgiven.

[nidena]

Six more months on the pause...

What Borrowers Should Do Now That Biden Extended the Student Loan Payment Freeze Again

[haapai]

That's a longer pause than most of the others.  I kinda understand the reasons for it.  It gives everyone time to file their taxes, do the math on income-driven repayment, and wait for SCOTUS to rule.  It's kinda humane in that way.  

I sincerely hope that a whole lot of people who expected loan forgiveness/cancellation will use the time to come up with a plan to manage their loans.   I'm particularly worried about the folks who were in default when this started and have balances that would have been forgiven entirely.  I kinda doubt that they are emotionally or financially prepared to make payments.  It would be such a shame for them to default again, especially if they were eligible for an IDR program with a minimal payment that would keep garnishment away.  Garnishment is pretty horrible. 

I really have no idea how I would play my cards if I still had federal student loans.  I'm not sure whether the advice in the linked article to save several months of payments in a "high" interest account is the best advice.  It's advice that will keep you out of default, but it's quite conservative.  In an inflationary environment, it can be quite expensive to park money in a "high" yield savings account.  Folks who are close to paying their loans off, with or without cancellation, are probably tearing their hair out right now. 

[Ava]

I'm glad and I'm relieved about the extension.

At the same time, I don't think the Biden Administration is handling this well.
The way forgiveness was handled lent itself to numerous legal challenges, and here we are.
Even if it ultimately prevails, it's just a band aid for a mortal wound. A few years from now, outstanding student loans will return to current levels, and continue to grow from there.
It doesn't help current or future students, doesn't even help all the current loan holders.
It doesn't change the needle much for me, but it's 10K I currently don't have and I will graciously accept if it comes to be.

I feel student loan holders are heading towards the same kind of limbo Dreamers live in.
Current status unclear, situation can change for the worse quickly, no definite answers, no timeline.

[minnesotapaintlady]

Nov 22, 2022 23:00:12 GMT -5 Ava said:

I'm glad and I'm relieved about the extension.

At the same time, I don't think the Biden Administration is handling this well.
The way forgiveness was handled lent itself to numerous legal challenges, and here we are.
Even if it ultimately prevails, it's just a band aid for a mortal wound. A few years from now, outstanding student loans will return to current levels, and continue to grow from there.
It doesn't help current or future students, doesn't even help all the current loan holders.
It doesn't change the needle much for me, but it's 10K I currently don't have and I will graciously accept if it comes to be.

I feel student loan holders are heading towards the same kind of limbo Dreamers live in.
Current status unclear, situation can change for the worse quickly, no definite answers, no timeline.

Everyone has been focusing on the forgiveness, but the meat of the plan was in the restructuring of how loans would be handled in the future.  The no negative amortization of loans and lower minimum payments is pretty big for future borrowers.