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Student Loan Bill of Rights

I want to sign it but have some concerns.

First of all, if the bill just stated these loans would be treated like all others I am in. But I am struggling with things like
- income contingent repayment plans
- And canceling portions of the loans if you take a public service job

I would agree with the ability to include the loans like any other debt should one exercise bankruptcy.

Just realize, the unintended consequence of this type of legislation will be an increase in interest rates due to an easier way to get out of the loans.
 
I am on income contingent repayment. By the time my loan is forgiven, I will have paid back the amount that I borrowed and a bit more. Income contingent doesn't mean that a person doesn't pay back what they borrowed. It just means they don't spend years paying outrageous amounts of interest. My first few years out of college I was paying the full amount each month. After five years I had paid back about $30,000 to the loan. About $25,000 of it went toward interest. This is on $40,000. That's ridiculous and anyone that thinks it isn't is being intellectually dishonest, or doesn't understand how tying money up like this hurts the economy. Also, as far as increased interest rates, yes, rates will probably go up a bit, but keep in mind: With less cash flow out there, what do you think will happen to tuition increases? I'm fairly certain that they will stay closer to the rate of inflation, rather than 2-3 times the rate of inflation. The student loan situation is out of hand. Anyone that doesn't think this needs to be done is either uniformed or a fool, in my opinion. We will see $2 trillion dollars in student loan debt soon if people don't wake up and understand that we have a bad situation that is getting worse by the minute.
 
I agree, its a big problem. But all are to blame,

And yes, the cost of college is way out of hand. But a lot of this is the consumers fault. You have to understand what your signing. You can't use loans to get through school if the job your going to take provides a average income. Anyone attending MTSU, needs to consider that if they need to borrow more than about 5K per year they need another plan.

In your personal situation, I am trying to calculate the interest rate on paying 30K worth of payments over 5 years - this is $500 a month payment and yet 25K of your payments going toward interest on a 40K worth of loans.

40K @ 9% int for 10 years (120 months) gets you a $506 per month payment. After 5 years, the balance would be $24K, so this is 16K in principle not 5K. Don't have all your personal details, but something is off.

I agree we need some changes, but the borrower needs to be "aware" and make better decisions.
 
It's a predatory lending system. They are loaning to people that they know can't pay it back, so that when they do fail to pay, they can garnish their wages for life. They make more if you default than if you pay. As far as my loans, it may have been over 7 years. I honestly don't remember and I was using number from memory. Suffice it to say that they didn't go down much by the time I started paying on income based repayment. Yes, we are all responsible for the choices we make. Let me ask you: Have you ever made a poor decision? We all have. That's the reason we went away from debtors prison and enacted bankruptcy laws. I get so sick of hearing and reading "well, you made the choice." No shit, have you ever made a bad choice? It's like we should go through life making perfect choices or we should have to suffer for it for the rest of our lives. NO! WE HAVE BANKRUPTCY FOR DEBT FOR A REASON PEOPLE!
 
BRF,

I am on your side. I agree, these loans should be treated like other loans. Where we disagree, it they shouldn't have special provisions. Right now the lender gets special provisions and now the counter argument is not just about getting rid of those provisions but adding new special provisions for the borrower.

I have made MANY financial mistakes and have learned the hard way as well. Suffering is how we learn. When you feel pain, its a signal not to do something. In fact I am walking though something now; its no one's fault. You make the best decision you can at the time and when circumstances change it impacts you.
 
How are they getting special provisions? Student loans are the only consumer debt that you can't file bankruptcy on.
 
Anything more than treating it like consumer debt is a special provision.

Here are a few.

the Direct Loan program eligible for income-contingent repayment plans, including plans based on the President's Pay As You Earn repayment initiative; the Direct Loan or FFEL programs eligible for income-based repayment plans that enable borrowers who have a partial financial hardship to make lower monthly payments; and the Direct Loan or FFEL programs eligible for loan forgiveness for service in areas of national need. Specifies the regulation to be used in determining whether individuals have an adverse credit history that disqualifies them from borrowing a Direct Plus loan (provided to graduate or professional students or the parents of dependent students)

Directs the Secretary to cancel 50% of the balance of the interest and principal due on Direct loans that are not in default for borrowers who are employed in a public service job and make 60 monthly payments on such loans after October 1, 2015.

Amends the Internal Revenue Code to exclude discharged student loan debt from an individual's gross income.
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This is all it should do.

Removes educational loans from the list of debts that are non-dischargeable in bankruptcy.
 
So, you want fewer Americans to go to college than we have now? Because that's what will happen...
 
Originally posted by BlueRaiderFan:
So, you want fewer Americans to go to college than we have now? Because that's what will happen...
No, I want more Americans to be smarter about how they spend their money and make investments. An education is not a guarantee. Its an investment - which means there is risk attached to pursuing it.. Its not the right investment for everyone. Meanwhile, tweaking the rules is a good idea, making them like other loans is a good idea.

One can work 20 hours a week, qualify for a pell grant and lottery scholarship. If they do these things then they can get thru a 4 year degree only borrowing 20-25K. Some students can take 6 years to graduate and do it debt free. If you don't apply yourself in HS, then you may need to consider community college for a few years - there are ways to get it done. One can join the military or the guard.

If the medium starting income for a college grad is $45K, then you have to do the math and figure out if you can afford to borrow money and pursue the degree you want. If your going to be a school teacher its probably not a good idea to borrow much to go to school. .

Lastly, if life happens, then life happens, its not the responsibility of the govt or the bank.

Besides, the real issue here is the rising cost of going to college - even this bill address a symptom (loan practices), not the cause.
 
No way a person can work 20 hours a week and pay for college, even with the pell grant. Addressing bankruptcy is addressing the cause. Lastly and once again; The free market isn't always the best solution to every problem. It works well but sometimes a hybrid solution is best. Sonetimes a purely socialist solution is best. The investment in our education of our citizens is an investment we all benefit from.
 
I cash flowed my college education at MTSU. I had one loan of $2500. I use the pell grant my SR year, didn't even know it was an option for me until then. It took me 6 years. It can be done. I worked my ass off and still had a great college experience - I was President of my Fraternity and named Outstanding SR at MT. A few semesters I only took 6 hours because I was working full time. Two of the summers I went to summer school, the others I worked full time.

Lets do basic math...

Working 20 hours a week during the school year and Ft in the summer at $10 an hour is $13k. You add Pell grant and lottery to the number is another 9K. So if you cannot pay for school and live in a dorm or share an apartment on $21K per year your wasting money. It can be done. If you wait tables or bartend, work for UPS at night, you can make a whole lot more than $10 an hour.
 
Where was I supposed to get the original 9k the first year? Keep in mind I had zero support from family. They wont loan a person enough to make up arms9k as a freshman and I wasnt about to live on the street. Something tells me you had some type of help other than What you mentioned.
 
I always thought that instead of spending trillions bailing out banks and insurance companies and gigantic financial institutions - just use that cash to pay off student loan balances - that would give a whole heck of a lot of people a whole heck of a lot of cash to guy out and put right back into the economy.

I have way to much student loan debt from my time at UTK. I was 17,18,19 years old and they were handing me obscene amounts of cash simply by signing my name. I had zero help from my family - financial, or what would have helped more - someone to sit me down and explain what kind of mistake I was making. They gave me a loaded gun and pointed it, all I had to do was pull the trigger.

After I came to MT, I was a little older and wiser, and actually was able to get a few 'ships, a few grants, and worked and was able to pay for MT without taking out any cash.

I don't even know if that can be done anymore (I graduated in 2005)- the way the cost of college has exploded.

I think more people need to take advantage of the community college system - there's no sense paying MT, or UTK prices for crap like English 101.
 
I lived at home the summer before my F year. I worked 50 hours a week laying gas line in TX. I went to school FT the first semester, got a PT job when school started. After the first full year at school, I worked all summer and Fall FT, took classes PT. Figured out I could make better money waiting tables, then bartending.

Again, it did take me 6 years. You cannot fly by the seat of your pants to get it done in 4 years. I know my Brother did the Army reserve boot camp the summer before he started and joint ROTC and was able to make it without borrowing money.

You don't have to get the 9K all at once...They are happy to let you pay payments. If you get a Pell and Lottery money, that is like getting cash up front. Your food and rent (apartment or dorm) is not paid in a lump sum either.

The idea that you HAVE to borrow thousands to go to school is just not true. You may have to change your expectations. Why can't you just admit that you didn't know any better.
 
Originally posted by RaiderDoug:
I always thought that instead of spending trillions bailing out banks and insurance companies and gigantic financial institutions - just use that cash to pay off student loan balances - that would give a whole heck of a lot of people a whole heck of a lot of cash to guy out and put right back into the economy.

I have way to much student loan debt from my time at UTK. I was 17,18,19 years old and they were handing me obscene amounts of cash simply by signing my name. I had zero help from my family - financial, or what would have helped more - someone to sit me down and explain what kind of mistake I was making. They gave me a loaded gun and pointed it, all I had to do was pull the trigger.

After I came to MT, I was a little older and wiser, and actually was able to get a few 'ships, a few grants, and worked and was able to pay for MT without taking out any cash.

I don't even know if that can be done anymore (I graduated in 2005)- the way the cost of college has exploded.

I think more people need to take advantage of the community college system - there's no sense paying MT, or UTK prices for crap like English 101.
While I disagree with govt bailing out anyone, but I think if they are next time they should have paid off mortgages to get rid of the mortgage debt. I think this bill has the right idea, just make student debt like any other debt - dischargeable via bankruptcy. College is too expensive, mainly due to all the easy money available.
 
Originally posted by Blueraider_Mike:
I lived at home the summer before my F year. I worked 50 hours a week laying gas line in TX. I went to school FT the first semester, got a PT job when school started. After the first full year at school, I worked all summer and Fall FT, took classes PT. Figured out I could make better money waiting tables, then bartending.

Again, it did take me 6 years. You cannot fly by the seat of your pants to get it done in 4 years. I know my Brother did the Army reserve boot camp the summer before he started and joint ROTC and was able to make it without borrowing money.

You don't have to get the 9K all at once...They are happy to let you pay payments. If you get a Pell and Lottery money, that is like getting cash up front. Your food and rent (apartment or dorm) is not paid in a lump sum either.

The idea that you HAVE to borrow thousands to go to school is just not true. You may have to change your expectations. Why can't you just admit that you didn't know any better.
I didn't have a home to go live at for a summer. I got out of the army and went to work to pay rent, food, gas, utilities, etc etc etc. None of those entities were willing to let me live rent free and/or "make payments." No offense, but you had help. You may not have had it easy, I understand you worked for it, but so did I. The difference is; I didn't have any where to go and stay rent free to save money for school. I don't think you are really seeing this from my side of things.
 
Originally posted by Blueraider_Mike:

While I disagree with govt bailing out anyone, but I think if they are next time they should have paid off mortgages to get rid of the mortgage debt. I think this bill has the right idea, just make student debt like any other debt - dischargeable via bankruptcy. College is too expensive, mainly due to all the easy money available.
Exactly. We need to make college cheaper, in my opinion, by using grants, not by increasing the amount that can be borrowed every few months. All it does is allows the universities to raise tuition...and they ALWAYS do.
 
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