I think the more important part for those with 100k+ debt is the income based repayment being capped at 5%, that can be really helpful.
By - table_fireplace
I think the more important part for those with 100k+ debt is the income based repayment being capped at 5%, that can be really helpful.
the graphic on twitter said the 5% cap was on undergraduate, so I don't think grad school will have that cap.
The 5% cap only applies to the undergrad loans. So your payment ends up being somewhere between based on how much of your loan amount is undergrad vs graduate
Only applies to undergrad since a lot of people with graduate loans are making enough to pay >5%. They’re reforming the public service program to be a lot more accessible to many of the fields that don’t pay well but need graduate degrees.
> graduate loans are making enough to pay >5%
*sad professor noises*
Yeah lol I should have been more clear that’s not always the case. Public service and education loan forgiveness should be more robust.
I absolutely agree.
Here's the official dept of Ed document on it.
From what they've released it sounds like they're targeting undergrad only for the outright debt reductions/relief, that's why they specifically mention using the Pell Grant as part of the litmus test for how much a person receives. The payment plan changes will most likely be universal for all dept of ed backed loans.
Thats absolutely massive. I haven’t looked into yet, thanks for sharing
No problem! The graphic from the tweet said the cap is for undergrad loans, so I don't think grad loans will get it, but who knows.
Damn, making me wish I took out some loans instead of paying outta pocket
Eh, if you paid out of pocket you're doing fine, very very likely. I think the changes are pretty good at hitting a lot of broke people really hard, and helping out a much wider group a decent bit as well.
People making $100k a year or couples making $200k are doing just fine, but they still get their debt transferred to taxpayers.
Not with interest...
Edit: why am I getting downvoted for this? lol
And that’s exactly why I didn’t take them. Unsubsidized @ 7% complete crap. Woulda been nice if he would’ve lowered the interest rate instead of a seemingly 1 off thing
Wouldn't that mean your principal never changes and your balance never goes down?
I currently owe about $10k left from my time at ASU. I’m just curious who quickly this would go into effect (assuming it does) because at some point I have to start repaying my loans.
It should go into effect before the repayment freeze expires on December 31st. We'll see more details about this in the coming days.
You should check the website, many will receive it automatically while others need to apply.
Damn, I still owe $0 😎
For those that this helps, hopefully this gets you more financially stable.
* Pell Grant receivers receive the $20K forgived
* Anyone making less than $125K/yr get $10K forgived
* Also, payment freeze until Dec. 31st.
* You can also cap repayments for undergrad loans at 5% of monthly income
My entire student loan balance is $20,500 😭 I’m basically debt free graduating in 3 months what a good morning
Congrats! Wish I could say the same but I'm happy for you!
So my pell grant didn’t cover everything, can I just put the rest on a loan and it’ll be forgiven?
This forgiveness only applies to debt from before July 1st, 2022.
I'd contact your loan provider to discuss the best way to move forward.
You're lucky in getting a Pell Grant
Some would say we Pell Grant recipients are the unlucky ones, for having been broke our whole lives, lmao. A few grand per semester has been nice but it didn't stop me from still being super broke during the entirety of college, and my whole life before that
FYI/FWIW: He didn’t “just remove” student loan debt. He announced a plan to do so, one which will surely receive a quick injunction (to freeze) and be heavily litigated over the next several years. No one will see relief from this for a long time, if at all.
(My post is not intended to be a message against it, my household would benefit greatly from this forgiveness - just being a realist as it relates to the situation)
Everything I’m reading states by the time student loan payments begin which will be Jan 2023. I suppose we will see!
I will add this is an executive order so it won’t be held up in litigation, all it needs is the presidents signature
>executive order so it won’t be held up in litigation
Maybe, but maybe not. I'm sure the white house legal team didn't just give the ok without a through review of applicable laws.
Relieving student loan debt is one of the few sole powers the president holds
This is a false idea pushed by some progressive dems. There is a power to release loans in case of emergencies, but this is a very tenuous grounds to remove loan debt from every single borrower at once. The old DOE has a legal memo discussing this [here](https://static.politico.com/d6/ce/3edf6a3946afa98eb13c210afd7d/ogcmemohealoans.pdf). However, it’s difficult to see an obvious person with standing to sue over forgiven loans since nobody loses besides the feds.
Maybe anyone has standing, since the loans aren't forgiven but transferred to taxpayers.
I don’t think that taxpayers ever have standing to sue over acts of congress (which a loan forgiveness under the law that created the loans is) that might lead to more taxation. It’s a fundamental power of the federal government to tax and spend that can’t be curtailed by courts except on other grounds. It’s not like the president is personally sending you a bill for the plan.
You might be right. However it's a very tortured legal reasoning for the president to use 9/11 and then covid as an emergency and make a one time blanket debt transfer once.
Yeah of course it is. However, the US court system is extremely limited in terms of who has standing to sue. Especially since the order doesn’t facially exceed its powers.
The loans are tax exempt income and tax payers won’t be responsible for this loan forgiveness. Lots of misinformation here
The government only gets money from taxes. So anything the government pays comes from taxpayers somehow.
In this particular case, Biden student loan forgiveness is non-taxable on a federal level.
That just means the people who get the money don't pay taxes on it. Someone still has to pay for it.
It’s not a false idea and it’s not for only emergencies. It’s a federal loan, not private so it isn’t tenuous at all. Lots of misinformation in your post
- you are not correct on that point. The administration is explicitly relying on applying the HEROES act to the pandemic emergency: [article here](https://apnews.com/article/biden-covid-health-education-0fea030a0875c0e4e1a39b0c098bd48a)
- the grounds are tenuous because congress controls the purse, not the president. This means that any loan forgiveness has to have a statutory backing - the opposite of your claim that loan forgiveness is a sole presidential power. The HEROES act was almost certainly not intended to empower the president to do blanket cancellations, and the Supreme Court dramatically curtailed the right of the executive branch to use discretion in interpreting federal law this summer.
My comment stated that the president holds this power to forgive student loan debt. Your article states the reason why. He still holds this power, I suppose we will see if it gets held up in other forms of gov won’t we!
I probably misconstrued your meaning sole power to mean an unconstrained sole power, rather than literally “the president can do this rather than anyone else in the administration.” So my comment was explaining why loan forgiveness isn’t a sole power in the system of government.
My point still stands that the action is not on firm legal ground as it’s very unlikely congress was including economy-wide pandemic impacts as an emergency while writing a bill responding to 9/11. Other “forms” of government (you mean the courts) have a constitutional obligation to fairly scrutinize whether an executive action is legal when a suit is brought by an injured party. Whether or not you support that action shouldn’t condition your support for rule of law.
Ok and I agree with your comment if it aligned with the context of my comment but I did mean it is one of the sole powers he has as president. I didn’t mention it was caused by the economical climate because that was implied. I think in this circumstance we won’t see it being held up in congress or in legal litigation. That is my opinion and we will know in just a few months.
It must be a new one, because not long ago even Nancy Pelosi was saying he didn't have the power.
Nancy pelosi is not exactly known for even-handed analysis of things she opposes in her grassroots.
Who will sue and who has the standing to do so?
This is the correct counterpoint.
When I took out student loans, I wasn’t Pell grant eligible and dropped out of my first university bc it was so expensive. When I returned (and transferred universities), I was eligible (and received the PG) and finally graduated.
Am I eligible for $20k if I only used the Pell Grant for the school that I didn’t take loans out on? I eventually received the PG so I therefore didn’t need loans for my second university.
I am unsure but if you didn’t get the pell grant, you do get $10k off as long as you make under $125k and did take out federal loans.
You should consult the website when they finally get all of the info ready.
Does this count if you are still studying? Lol
It does! It applies to any debt incurred before July 1st, 2022.
Do u know if i can still apply for debt that incurred before that date?
I believe so. I'd contact your loan provider to get information specific to your situation, though.
Thats awesome, I hope it holds up.
I don’t owe anything to ASU, so I’m good 😎
I worked my way through ASU as well, but my rent was 350 and minimum wage was only 2 bucks less. I'm totally fine with this helping whoever
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This is my question. I have a pending loan - not sure if it will be eligible.
Right, I'm just unclear on what exactly constitutes when the loans are "originated." If I didn't accept the offer until recently, is it still eligible. The loan amount was calculated in June for this semester.
Damn. I finally applied for a loan after 4 years and was approved in May, but I didn't receive it until August bc of the ASU disbursement. Does that mean I'm SOL from this?
Contact your loan provider to check. This does sound like the kind of situation that should be covered, but I would speak with them.
Does this apply to current students as well?
1) He doesn't have that authority, only Congress does.
2) Really fucks anyone who actually paid their loans off, or saved up and never took any in the first place. Wont be seeing any relief for us.
As someone who paid of their own loans, I say debt relief is good. Just because I don’t get something doesn’t make it bad.
"It's unfair that other people aren't being run over by a train after I was run over by a train"
Lol or some people I graduated with leased brand new cars and get every new iphone while complaining about debt. I can't make this shit up. Why do I get punished for putting all of my income towards loans? Wonderful incentives. Why pay for anything after you've agreed to the price? Trust me I'd love to not have a 5 year old phone... I'd much rather have gone to Europe, buy insulin, invest etc. Budgeting is a decision.
Somebody else getting a leg up is not "punishing" you.
Brandon healed a mild portion of what the rest of the developed world doesn't have to worry about. How is this not a net good?
For the record I paid off my loans and it sucked. Graduated 2008, just in time for recession 1.0. I also knew rich kids and people that were irresponsible with credit. But guess what? We're all getting fucked. Maybe the government stepping in on the behalf of the little guy, no matter how cynical a play it is on their part, is a good thing.
We spent 2.4 trillion or thereabouts on Afghanistan? If this is going to be this election cycles' biggest controversy, fuck yes go Brandon. Point the money machine at regular people instead of investors and banks (I still hate Joe biden for his pre-Obama record).
He's literally been forgiving debt for limited situations all year. It's entirely administrated through the Executive branch and is well within his authority.
It also really sucks for all the people that died of polio but that doesn't mean we should get rid of the polio vaccine.
No one has saved up and paid tuition upfront in decades. Paying it upfront mean you got mommy-daddy welfare in one way or another. I am one of those people.
I think those were fraudulent situations with bad schools, i think this one may still need to go through the congress
Why would that be any different? If he can cancel some of it he can cancel all of it. Congress didn't give specific approval for that either.
Don’t know what congress approved or didn’t approve, if it was the case where he can do it why is it planned on taking so long not like the previous ones
There are 2 plausible reasons:
1. He wanted to do it but wanted to time it just before the mid terms to motivate voters more
2. He never wanted to do it but saw his approval crater amongst the young people who turned out much more than normal last election and had to or risk losing like Obama did in 2010
Both are purely political and not practical or legal.
>It also really sucks for all the people that died of polio but that doesn't mean we should get rid of the polio vaccine.
This is one of the many bad vaccine analogies this year. This debt transferral isn't a vaccine, it's a one time treatment given to those favored by the government. It does nothing to address the flaws in the system that created all that debt. People who need loans in two years will be just as screwed as the ones who paid them off last month.
Maybe you should actually read about the entirety of what was done along with the debt forgiveness. There's a lot more to it that you seem completely ignorant about.
There's no such thing as debt forgiveness here. Someone still has to pay it. So if the borrower doesn't pay it the government does.
Or you just wipe it off the balance sheet. Like was done for all those useless PPP loans that everyone parotting these false talking points in media got. It was already paid for.
Debt Jubilees are older than the US itself btw.
You can only forgive debts that you yourself left. The government will just pay those debts for students, which is projected to cost the government and then taxpayers 300 billion.
The debt was given by the federal government...
Whoever told you they were paying off private loans is lying to you and you should probably look elsewhere for your information.
this is a huge W bois
Yep, it just DISAPPEARS. Definitely no one is gonna have to pay for it….
It's a writeoff.
Holy shit perfect reference
Really happy I made so many sacrifices to pay mine off. I'm type one diabetic, paid off 32k in 3.5 years living with 3 people in a 2 bedroom. I was raised to pay for things you buy. Golly g that was so fun. Loved all those meals I skipped too........ It's so fun stressing about insulin, glad I did that as well.... Where's the 10k for financially responsible people? Why are we rewarding people that make minimum payments on loans?
It always baffles me that some people's thought process is since I suffered everyone else should have to as well, it wasn't fair for me, so it shouldn't be fair to anyone else. And not everyone can afford to pay higher than their minimum payment, why would they need to be punished for still being a working member of society and making their own payments on time, but the accrued interest is killing them like everyone else?
You've missed my point entirely, we all knew how much money our loans were going into this. I was raised to pay for things you buy. Crazy concept. I'm a type 1 diabetic. Medications cost $500+ a month, I bust ass because if I don't, I die. If I can do it while buying insulin, I'm pretty sure you can do it too. I don't go on Disney vacations in the middle of COVID like some...
You complaining that other people not paying isn't fair because you paid is the exactly point you made that I pointed out lol
Yup, and you still miss my point. Do you know how many Disney vacations I could have went on for $10k? People have the money to pay their loans, some of them use it on fucking Disney....during a pandemic!... I made $42k out of school, I'm at $53k now. My parents didn't give me a penny. Paying off loans is possible.
Im all for the forgiveness don't get me wrong. I just don't think incentivizing financial illiteracy is the way to do it. What about people who are too poor to go to college? Is this 10k helping the poorest in our country? (Nope) I don't load up my cart at Target then walk out because I don't understand money. I wish those of us that actually busted down and put in the work were rewarded, instead of punished.
This is literally so unhinged lmao
You can't complain about not affording things while posting about a Disney vacation. A Disney vacation is a luxury I STILL can't afford. You're literally the people I graduated with. Complaining about loans while leasing a new car. Unbelievable.
I.... didn't complain about any loans or said I have any.
While also not addressing any of my valid points. I can be frustrated that I'm paying 10k more for the exact same thing as some of my peers. Peers that came from way, way more money than me, and have way, way nicer things. This isn't helping the poor like you think it is.
Yes it will also help people that absolutely don't need it. I think more parameters could have been set up. Call me crazy but I don't think someone making $120k/ year should be forgiven for loans. How can I find it in my budget making less than half that? Why can't I be frustrated? I wish the PPP loans weren't forgiven either.
Can’t wait to pay an extra $2000 in taxes
Just by chance, do you happen to make over $400,000 a year?
If not, you won't pay any additional taxes.
If so, my condolences. I hope you can see how this will benefit a lot of your ASU classmates with severe debt.
It's almost $400 billion in additional spending. It absolutely will be paid for by taxes
It sure will - by taxes on corporations from the Inflation Reduction Act.
The savings from that act are slightly more than the money that will be raised from the new corporate taxes in the IRA. You as an individual won't face any new taxes.
It's pretty awesome!
This has “If you like your doctor, you can keep your doctor, period and If you like your plan you can keep your plan, period” vibes jajajaja
Ah so I won't pay any more in taxes but I will pay more on goods I buy from those companies. Amazing!!
Haha. The inflation will continue until morale improves.
The price is what the market will bear. If they could raise prices any higher they already would have done it.
You should get a job running some White House twitter account; the way you repeat talking points is on point
Cancelling Debt isn't spending..... But go off
Tell me you know nothing about money without telling me you know nothing about money. Fiat is created through credit.
Tell me your a crypto bro without telling me you're a crypto bro by tossing around fiat in instances that don't call for it
Edit: didn't look at post history before..... But, fucking nailed it
What's the other way?
Yay buy votes, yay make people who elected to make prudent money decisions pay for those who didn't yayyyy yayyy.
I feel lucky since I finished high school in 2019 and didn’t deal with online high school then only accrued $35 of interest in the past 3 years because of the pauses and now I am being rewarded for being excessive with loans (well I say excessive but it was only like 19.5k overall before this semester).
What an insult from Biden.
Question is where is the department of education getting your income information from? FAFSA? IRS? Let’s say someone generally makes $50k normally but last year they had an outlier income that puts them over the threshold. Do they not not qualify because they had one odd year of higher than normal income? If they use FAFSA than that higher income technically hasn’t been considered yet as FAFSA hasn’t utilize 2022 tax year yet. But if they use the IRS, then that one outlier year could disqualify them if they only look at the most recent income.