Another SL payment is coming

[Ava]

Looks like we should change the name of this thread to Another SL payment is prolly comming

And the SC stroke down the payment relief plan.

Not sure what comes next. We go back to the same situation we were in before the pause? Looks like it.

Personally, I will probably have to reduce 401k contributions to make the SL payments.
Other people don't have where to cut. It's going to be an ugly picture come October.

[Cookies Galore]

Jun 30, 2023 12:01:47 GMT -5 Ava said:

Looks like we should change the name of this thread to Another SL payment is prolly comming

And the SC stroke down the payment relief plan.

Not sure what comes next. We go back to the same situation we were in before the pause? Looks like it.

Personally, I will probably have to reduce 401k contributions to make the SL payments.
Other people don't have where to cut. It's going to be an ugly picture come October.

Or take this opportunity to finally correct the word to "probably."
F this Supreme Court. As someone who paid off their SL in 2014 and my spouse's this past December, I feel for everyone who has been in limbo for so long. It's not about "personal responsibility," it's about how federal student loans in this country are set up for failure. Someone who borrows $20,000 shouldn't owe $42,000 after 10 years. We need to start from zero.

[grumpyhermit]

Jun 30, 2023 12:31:17 GMT -5 Cookies Galore said:

Jun 30, 2023 12:01:47 GMT -5 Ava said:

Looks like we should change the name of this thread to Another SL payment is prolly comming

And the SC stroke down the payment relief plan.

Not sure what comes next. We go back to the same situation we were in before the pause? Looks like it.

Personally, I will probably have to reduce 401k contributions to make the SL payments.
Other people don't have where to cut. It's going to be an ugly picture come October.

Or take this opportunity to finally correct the word to "probably."
F this Supreme Court. As someone who paid off their SL in 2014 and my spouse's this past December, I feel for everyone who has been in limbo for so long. It's not about "personal responsibility," it's about how federal student loans in this country are set up for failure. Someone who borrows $20,000 shouldn't owe $42,000 after 10 years. We need to start from zero.

My biggest issues with Biden's proposed relief plan is that it did jack shit to attack the underlying issue - the interest rate. 

I paid my loans off yeas ago, and I don't begrudge anyone a one time lump sum, but even if it had gone through it fell far short and we would have been right back here in a few years. 

[minnesotapaintlady]

Jun 30, 2023 13:22:27 GMT -5 grumpyhermit said:

Jun 30, 2023 12:31:17 GMT -5 Cookies Galore said:

Or take this opportunity to finally correct the word to "probably."
F this Supreme Court. As someone who paid off their SL in 2014 and my spouse's this past December, I feel for everyone who has been in limbo for so long. It's not about "personal responsibility," it's about how federal student loans in this country are set up for failure. Someone who borrows $20,000 shouldn't owe $42,000 after 10 years. We need to start from zero.

My biggest issues with Biden's proposed relief plan is that it did jack shit to attack the underlying issue - the interest rate. 

I paid my loans off yeas ago, and I don't begrudge anyone a one time lump sum, but even if it had gone through it fell far short and we would have been right back here in a few years. 

Part of the plan was restructuring future loans so that they could not negatively amortize like they do now. If you were on an IBR repayment plan your payments and your payment wasn't enough to cover the interest you didn't end up with double the outstanding balance after paying on it for years.  I don't know if this was part of what was shot down or not.

Otherwise, I feel about the same on the debt relief. It didn't really address the problem at all.  I would have happily skipped off with the funds had DS got it (I was going to pay his loans off once he graduated), but I don't know that I feel the greatest about a president being able to do something of that magnitude on his own either. 

[jerseygirl]

When the issue was first discussed, both Pelosi and Biden said it couldn’t be done by executive action. Congress is in charge of spending not president

Student loans are structured now as a nightmare and take advantage of young people. Congress should have used this break to put forward legislation to remedy the interest

Universities and colleges now have no responsibility but are happy to take in the money from the students . Verges on Ponzi schemes
Obama moved the loans to under the government with the premise it would make money and help students
A BIG mess now and sadly many who owed were taken in by a promise of loan forgiveness that was never realistic and the politicians who pushed it knew. Now the politicians just shake their heads and most it’s the fault of the not normal SC
Right- damn congress do your job

[grumpyhermit]

Jun 30, 2023 14:56:29 GMT -5 jerseygirl said:

When the issue was first discussed, both Pelosi and Biden said it couldn’t be done by executive action. Congress is in charge of spending not president

Student loans are structured now as a nightmare and take advantage of young people. Congress should have used this break to put forward legislation to remedy the interest

Universities and colleges now have no responsibility but are happy to take in the money from the students . Verges on Ponzi schemes
Obama moved the loans to under the government with the premise it would make money and help students
A BIG mess now and sadly many who owed were taken in by a promise of loan forgiveness that was never realistic and the politicians who pushed it knew. Now the politicians just shake their heads and most it’s the fault of the not normal SC
Right- damn congress do your job

"Universities and colleges now have no responsibility but are happy to take in the money from the students." 

They do have compliance responsibility when it comes to student loans. A lot of it actually. They are also impacted if their cohort default rates goes too high. 

Also, the way these loans are structured, a school can't really say no if a student qualifies based on COA calcs. Sure, it can be done but you are putting yourself out on a limb and unless you suspect actual fraud I'm not sure it would behoove you to do it. 

Here's a brief timeline of student loan history. www.bankrate.com/loans/student-loans/history-of-student-loans/#amendments

If I had to pick two things that I think most affected higher debt amounts it would be unsubsidized and PLUS loans. These are the tools that allow people to borrow immense amounts of money and accrue insane interest. 

[haapai]

Jun 30, 2023 13:38:39 GMT -5 minnesotapaintlady said:

Part of the plan was restructuring future loans so that they could not negatively amortize like they do now. If you were on an IBR repayment plan your payments and your payment wasn't enough to cover the interest you didn't end up with double the outstanding balance after paying on it for years.  I don't know if this was part of what was shot down or not.

It did not get shot down.  It has taken me over 24 hours to confirm that. 

The bad news is that it isn't up and running yet either.  It might be running by October, but I sorta doubt it. 

Here's another question.  If you are in one of the existing plans, does your payment get automatically re-calculated to account for the increase in the poverty line? 

[Knee Deep in Water Chloe]

link to Reuter's article
This was an informational read. 

[jerseygirl]

Reuters is an excellent news site.

[Rukh O'Rorke]

Jun 30, 2023 12:01:47 GMT -5 Ava said:

Looks like we should change the name of this thread to Another SL payment is prolly comming

And the SC stroke down the payment relief plan.

Not sure what comes next. We go back to the same situation we were in before the pause? Looks like it.

Personally, I will probably have to reduce 401k contributions to make the SL payments.
Other people don't have where to cut. It's going to be an ugly picture come October.

I might have to cut back on 401k too, still not sure how that will work out. I have not been living large by any means but there seems to be no extra money floating around for some reason.....

Not that I wasn't planning to anyway - but I really need to get serious with my budget and strip out a lot of stuff, change bank accounts, etc. as I am being charged monthly fee. Lots of small tweeks I have been putting off. like - no reason to have netflix and hbo and I haven't really watched TV in 2 years. But other people do use those subscriptions.....thinking to limit to 1 per year and rotate? I think there is likely 3-4 hundred in "recurring" monthly charges that are not necessary, been lazy about looking into this.

I'll need to pay off my vacation, which I haven't taken yet.....but already bought the plane tixs so still need to go.....visiting DD   But I'm not exactly clear where that money to pay off is going to come from at the moment. Have not an RI project in months, and looks like I was counting on those more than I thought! although - they did pay for the ibonds too....

[nidena]

Jul 1, 2023 11:23:56 GMT -5 Rukh O'Rorke said:

Jun 30, 2023 12:01:47 GMT -5 Ava said:

Looks like we should change the name of this thread to Another SL payment is prolly comming

And the SC stroke down the payment relief plan.

Not sure what comes next. We go back to the same situation we were in before the pause? Looks like it.

Personally, I will probably have to reduce 401k contributions to make the SL payments.
Other people don't have where to cut. It's going to be an ugly picture come October.

I might have to cut back on 401k too, still not sure how that will work out. I have not been living large by any means but there seems to be no extra money floating around for some reason.....

Not that I wasn't planning to anyway - but I really need to get serious with my budget and strip out a lot of stuff, change bank accounts, etc. as I am being charged monthly fee. Lots of small tweeks I have been putting off. like - no reason to have netflix and hbo and I haven't really watched TV in 2 years. But other people do use those subscriptions.....thinking to limit to 1 per year and rotate? I think there is likely 3-4 hundred in "recurring" monthly charges that are not necessary, been lazy about looking into this.

I'll need to pay off my vacation, which I haven't taken yet.....but already bought the plane tixs so still need to go.....visiting DD   But I'm not exactly clear where that money to pay off is going to come from at the moment. Have not an RI project in months, and looks like I was counting on those more than I thought! although - they did pay for the ibonds too....

I don't have any streaming.  When a specific show gets released on Netflix, I reactivate for a month.  I watch the show and whatever else I can cram into the one month and then pull the plug again.

[nidena]

Biden administration forgives $39 billion in student debt for more than 800,000 borrowers

The Biden administration announced Friday it would automatically forgive $39 billion in student debt for 804,000 borrowers.

The relief is a result of fixes to the student loan system’s income-driven repayment plans. Under those repayment plans, borrowers get any remaining debt canceled by the government after they have made payments for 20 years or 25 years, depending on when they borrowed, and their loan and plan type.

[Ava]

And it's official.

The student loans return to payment is a clusterf###ck.

I got a new servicer, Nelnet. I applied to the SAVE plan in early August.

Had to apply 3 times through the Department of Education website. Then would get another email inviting me to apply for the SAVE plan. Would go to the website, my application wasn't there.

Third time was a charm. Then it went to Nelnet August 23rd. Still not processed.

Received an email from Nelnet Friday with my pay date, October 13, and the payment amount, still on the old plan.

Called them. Wait time 46 minutes. Requested a call back. Was surprised they actually called me around 45 minutes later.

The rep. said they are late processing applications and mine was in the queue but not processed yet, and it would be a while till they get to it

I asked is it possible my application will still be pending by October 13. She said that's a very real possibility. In that case I will get an email from Nelnet telling me they are still processing my application and put me in some administrative suspense until it gets done. She thinks I should be all set by November 13.

Thing is, interest will continue to accumulate until I am processed for the SAVE plan. The whole purpose of the SAVE plan is to avoid accumulating more interest. I think it's unfair I get accrued interest because of mismanagement of the program.

To me, the blame lays with the Department of Education. They didn't give the servicers enough time to process the applications. The whole thing is so rushed and bad. We waited all this time, couldn't we wait 3 more months to get everything properly set up?

The SAVE plan will cost me $116 a month, the old plan $130 a month but interest will continue to accrue. In order to cover the monthly interest, I would have to pay $320 a month.

It was worth it to get an education, and I could have not attended school without loans. But the student loan thing is such a huge mess. I'm just one example, and mine will be fixed in November by the latest. I don't want to think about all the other applications lost, and all the other mishaps I'm sure are happening with student loans.

[haapai]

You are probably in better shape than a lot of student loan borrowers coming back into repayment.  At least you have confirmation that your application is in the queue, know what your new payment will be, and know what will happen if your application is not processed by October 13. 

Additionally, since you will almost certainly eventually receive forgiveness, being in administrative forbearance, possibly for months, may help you out in the long run.  There's a good chance that the forgiven amount will be large and it will be taxable.  If you stick the $116 that you aren't able to pay now in an investment account, it will (with growth) more than pay any taxes on the additional amount forgiven.  

ETA:  There really are two numbers that anyone in SAVE should be calculating.  One is the actual payment, the other is the amount that they will need to stick into an investment account (usually a Roth or after-tax account) in order to pay the taxes when the loans are forgiven. 

[haapai]

I don't trust that $116 a month number.  It seems a bit high compared to the previous $130 a month. 

Have you gotten a big raise or substantially reduced your 401(k) contributions in the last few years?  Otherwise, where did you get that number and what kind of data was it based on?  It looks way too high, especially if some of your loans are considered undergraduate loans. 

[Rukh O'Rorke]

Sept 23, 2023 22:27:22 GMT -5 Ava said:

And it's official.

The student loans return to payment is a clusterf###ck.

I got a new servicer, Nelnet. I applied to the SAVE plan in early August.

Had to apply 3 times through the Department of Education website. Then would get another email inviting me to apply for the SAVE plan. Would go to the website, my application wasn't there.

Third time was a charm. Then it went to Nelnet August 23rd. Still not processed.

Received an email from Nelnet Friday with my pay date, October 13, and the payment amount, still on the old plan.

Called them. Wait time 46 minutes. Requested a call back. Was surprised they actually called me around 45 minutes later.

The rep. said they are late processing applications and mine was in the queue but not processed yet, and it would be a while till they get to it

I asked is it possible my application will still be pending by October 13. She said that's a very real possibility. In that case I will get an email from Nelnet telling me they are still processing my application and put me in some administrative suspense until it gets done. She thinks I should be all set by November 13.

Thing is, interest will continue to accumulate until I am processed for the SAVE plan. The whole purpose of the SAVE plan is to avoid accumulating more interest. I think it's unfair I get accrued interest because of mismanagement of the program.

To me, the blame lays with the Department of Education. They didn't give the servicers enough time to process the applications. The whole thing is so rushed and bad. We waited all this time, couldn't we wait 3 more months to get everything properly set up?

The SAVE plan will cost me $116 a month, the old plan $130 a month but interest will continue to accrue. In order to cover the monthly interest, I would have to pay $320 a month.

It was worth it to get an education, and I could have not attended school without loans. But the student loan thing is such a huge mess. I'm just one example, and mine will be fixed in November by the latest. I don't want to think about all the other applications lost, and all the other mishaps I'm sure are happening with student loans.

Ava, but with SAVE I think it is 10 years repayment and balance forgiven. Am I wrong on this?

Hope I didn't give DD incorrect info!

[haapai]

Sept 24, 2023 13:51:15 GMT -5 Rukh O'Rorke said:

Sept 23, 2023 22:27:22 GMT -5 Ava said:

And it's official.

The student loans return to payment is a clusterf###ck.

I got a new servicer, Nelnet. I applied to the SAVE plan in early August.

Had to apply 3 times through the Department of Education website. Then would get another email inviting me to apply for the SAVE plan. Would go to the website, my application wasn't there.

Third time was a charm. Then it went to Nelnet August 23rd. Still not processed.

Received an email from Nelnet Friday with my pay date, October 13, and the payment amount, still on the old plan.

Called them. Wait time 46 minutes. Requested a call back. Was surprised they actually called me around 45 minutes later.

The rep. said they are late processing applications and mine was in the queue but not processed yet, and it would be a while till they get to it

I asked is it possible my application will still be pending by October 13. She said that's a very real possibility. In that case I will get an email from Nelnet telling me they are still processing my application and put me in some administrative suspense until it gets done. She thinks I should be all set by November 13.

Thing is, interest will continue to accumulate until I am processed for the SAVE plan. The whole purpose of the SAVE plan is to avoid accumulating more interest. I think it's unfair I get accrued interest because of mismanagement of the program.

To me, the blame lays with the Department of Education. They didn't give the servicers enough time to process the applications. The whole thing is so rushed and bad. We waited all this time, couldn't we wait 3 more months to get everything properly set up?

The SAVE plan will cost me $116 a month, the old plan $130 a month but interest will continue to accrue. In order to cover the monthly interest, I would have to pay $320 a month.

It was worth it to get an education, and I could have not attended school without loans. But the student loan thing is such a huge mess. I'm just one example, and mine will be fixed in November by the latest. I don't want to think about all the other applications lost, and all the other mishaps I'm sure are happening with student loans.

Ava, but with SAVE I think it is 10 years repayment and balance forgiven. Am I wrong on this?

Hope I didn't give DD incorrect info!

I think that you did.  You seem to have been describing PSLF.  SAVE usually entails 20-25 years of repayment unless you borrow a very small amount. 

On the other hand, SAVE is slow forgiveness and almost mind-bendingly generous for most.  I'm pretty much of the opinion that everyone leaving school should sign up for it.  (Almost everyone who is legally single will qualify immediately after leaving school because they were earning student wages in the prior tax years but that window can close quickly.)  Don't let the fear of signing up for a poor persons' program or the fear of making payments that exceed standard repayment amounts deter you from signing up for it.  You have to be making pretty darned good money for 5-10% of your discretionary income to exceed the payments that you'd be making in the standard repayment plan. 

[haapai]

Sept 24, 2023 7:52:16 GMT -5 haapai said:

There really are two numbers that anyone in SAVE should be calculating.  One is the actual payment, the other is the amount that they will need to stick into an investment account (usually a Roth or after-tax account) in order to pay the taxes when the loans are forgiven. 

I am wrong here.  I think that taking out a 401(k) loan would/will be the most common option.  I hadn't thought about how the 5-10 payments are effectively another tax.  That really kills the incentive to put earnings into Roths. 

[Ava]

The $116 came from the Dept. Education website.
The $130 is not standard repayment. That would be $727 lol.
No. The $130 is for my current IDR plan. I think it's PAYE.
Yes. The $116 is high. By my calculations it should be about $85.
I think some features of the SAVE plan are not active yet, that's why the payment seems high.
To me, the most important aspect of this is to stop the f@@@ing interest from accruing.

[Ava]

Dave Ramsey is recommending not enrolling in the SAVE plan.
He says you end up paying more interest and the plan is a scam.

I lost respect for him many years ago. But some people listen to him and follow his advice.

[haapai]

That number from the DoE might be right.  I don't think that they are dropping the repayment rate on undergraduate loans for a while.  I'd missed that. 

I don't have much respect for Dave Ramsey either.  On the other hand, I do have to confess that I'm looking at SAVE as a single person who has no interest in ever marrying or having children.  I haven't considered how the plan works for married people or parents much.  The poverty line does not increase very much as family size grows. 

[haapai]

I also haven't thought much about how having undergraduate and graduate loans forgiven at different times will work out. 

ETA:  This is not as common as it sounds.  In order for an unmarried individual to face this, they must have put their undergraduate loans into SAVE (or a prior IDR program) at a different time than their graduate loans. 

Married couples are much more likely to encounter multiple tax bombs and possibly a huge jump in their calculated repayment amounts, or at least a letter that scares the heck out of them. 

I'm going to start another thread on this subject.  It doesn't really belong here. 

[minnesotapaintlady]

Sept 27, 2023 9:41:37 GMT -5 Ava said:

Dave Ramsey is recommending not enrolling in the SAVE plan.
He says you end up paying more interest and the plan is a scam.

I lost respect for him many years ago. But some people listen to him and follow his advice.

Well, I haven't heard him talk about it specifically, but I would assume he's thinking about the dragging it out at least another 10 years and then hoping nothing changes in the administration to get in the way of eventual forgiveness of the balance.  Also, the forgiven amount being taxable.

I think the program will help a lot of people, but if you don't really need it just knock those things out and be free of them.  Of course, if you can enroll in SAVE and are still allowed to prepay it seems like a no brainer to do so.  Best of both worlds, the fallback of the low payments and forgiveness, but I think I'd still try to be done long before 10 years (or 20 or 25 or whatever it is resetting to).

[haapai]

You can read what Dave Ramsey has to say about SAVE here. 

Personally, I am not persuaded.  Dave has a tendency to avoid numbers and math.  I also think that he has imputed some of the awful booby-traps of previous IDR plans onto SAVE.  I take particular offense to his insinuation/assertion that anyone in SAVE will have to continuously re-qualify based on income. 

On the other hand, I think that it is quite dangerous for anyone to get used to the low payments that they can get under SAVE even if unpaid interest is not compounding.  The sheer complexity of the program, and the ease with which someone can easily overlook crucial components (such as the lack of caps on the amount of monthly repayments, or how repayments are based on the prior year's AGI, or the taxation of forgiveness) may be good reasons for avoiding the program if you possibly can.  SAVE is a fiendishly complex repayment program and just avoiding the complexities might be worth quite a bit.  KISS might apply here. 

[haapai]

Oh crap!  I've been googling combos of Dave Ramsey and CARE and what is showing up on video is scary.  What shows up in print is reasonably sane and measured but the video is scary.  The video is meant to scare the crap out of you.  Even if you have the good sense to understand that what the nice people (also known as actors) are saying is kinda on the slanted-to-bullshit spectrum, you will probably still be scared. 

It's very slick and very persuasive and no numbers are ever used.  The magic-for-nerds-and-accountants word "marginal" never gets said either. I really don't know how to refute or dispute this kind of stuff.  I'm out-gunned. 

[Ava]

I got an email from Nelnet last night.
I qualified for the SAVE plan.
My first payment due November 26, 2023.
It's for a 12 months period.
Then I have to manually recertify or I can enroll in auto recertification.
I went to the Student Aid website but couldn't do it. I think I already enrolled in re certification.
Right now, it's not the priority, but in a couple of months I'll reach out to Nelnet again to confirm I'm enrolled in recertification.

My monthly payment is $116.58. Didn't go down too much from the PAYE payment. But under PAYE I was sending them $350 a month so interest wouldn't continue to accrue. It was a huge financial sacrifice.
Now, my monthly payment under SAVE is much lower and serves the same purpose. Interest doesn't accumulate anymore.

I'm not happy I have to resume payments, who wants another bill? With inflation, and now my property taxes went up, it's not easy. I have to sit down and see where I can cut expenses.
But, taking everything in consideration, the SAVE plan is the best deal for me and I'm grateful I got it.

[nidena]

Biden cancels another $9 billion in student loan debt days after payments restart

The Biden administration has approved debt relief for an additional 125,000 student loan borrowers, totaling $9 billion in forgiveness, the White House said Wednesday.

The announcement comes just days after federal student loan payments restarted after a three-plus year pause.

Though the Supreme Court struck down President Joe Biden’s hallmark student loan forgiveness program, which promised up to $20,000 in debt relief for low- and middle-income borrowers, the administration has continued to find other ways to provide debt relief.

[haapai]

The amount is eye-popping but I have to wonder how much of this $9 billion should have been written off as uncollectible years and years ago and how much of it is interest on amounts that should have been written off years ago. 

I would like to know the dollar amounts of debt forgiven for each of the three groups of debtors.  Did the relatively small number of borrowers that had been declared totally and permanently disabled have more or less debt, on average, than the rest?  How much debt has been forgiven due to the Department of Education having lousy mechanisms for keeping track of payments that persons in PSLF or other income-driven repayment programs had made?  How much relief was given to folks who thought that they were in PSLF but weren't but had definitely made the ten years of required payments? 

[Rukh O'Rorke]

Sept 29, 2023 10:25:51 GMT -5 Ava said:

I got an email from Nelnet last night.
I qualified for the SAVE plan.
My first payment due November 26, 2023.
It's for a 12 months period.
Then I have to manually recertify or I can enroll in auto recertification.
I went to the Student Aid website but couldn't do it. I think I already enrolled in re certification.
Right now, it's not the priority, but in a couple of months I'll reach out to Nelnet again to confirm I'm enrolled in recertification.

My monthly payment is $116.58. Didn't go down too much from the PAYE payment. But under PAYE I was sending them $350 a month so interest wouldn't continue to accrue. It was a huge financial sacrifice.
Now, my monthly payment under SAVE is much lower and serves the same purpose. Interest doesn't accumulate anymore.

I'm not happy I have to resume payments, who wants another bill? With inflation, and now my property taxes went up, it's not easy. I have to sit down and see where I can cut expenses.
But, taking everything in consideration, the SAVE plan is the best deal for me and I'm grateful I got it.

My payment went through yesterday. I've forgotten where my loans are again! Gonna have to search again to keep track now.

[andi9899]

I'm thinking about paying of T1's student loan that I cosigned for out of the proceeds of my house sale. I'm hesitating because if I pay it off and then loans are forgiven, I'm gonna be pissed. Maybe I'll just make some payments until we see how the election ends up. The republican party is imploding right now and some stuff is coming out about conservative SCOTUS judges lately. Maybe some of the DT damage is getting remedied.