Will there ever be a student loan bailout? - Page 6

[claddaghmom]

Originally Posted by ShaggyDaddy

you can't discharge your mortgage and keep your house. But you always get to keep your diploma.

Can you imagine what interest rates would be like for student loans if they were not federally protected against bankrupcy? I will give you a hint... student loans are 3% to 15%, while non-protected credit cards are what like 8%-26% Do we want to see student loans end up with terms just like credit cards?

We used to joke that if you could just get enough credit cards to prepay college, and get cash advances for minimum payments, you could actually graduate, declare bankrupcy, then 7 years later boom, free education and start building credit.

Hey, I've financed most of my schooling through credit cards. 0% 1.9% 2.9% offers are great. The monthly payments are waay lower and I've been careful to pay them off before the offer was over.

I got one student loan and the terms are simply absurd.

I guess everyone has a different perception of college, but frankly I can't believe I paid more than a 1,000 total for it. All I've done is regurgitate carp, half of what I think is wrong or stupid anyways. i'm paying thousands for a piece of paper and a couple letters after my name. Fly the flag.

[bigeyes]

Originally Posted by choli

Well, I guess we all go on our own experience - it hasn't been my experience at all that the only way to get promoted was to have a degree. My experience was that the only way to get promoted was to be good at what you are supposed to be doing. It looks like you had the misfortune to come across very bad managers.

Oh, I could tell you stories!

I have also made some bad decisions along the way, but I believe most of it stemmed from not getting a degree, and taking the first job that would get me far far away from a dysfunctional family situation.

Had I had supportive family and been able to get the degree, I believe I could have been better situated to make career building decisions instead of merely working for a living until the next downsizing, illness or move. By the time I realized how important the degree was, I didn't have the time or the money to go back to school because I was too busy scrambling to make a living and no longer had my corporate job that would have actually allowed me to do both.

I really wish I could have those years back and use them more wisely, but I think people are sometimes so shell shocked they aren't thinking, yk? By the time you wake up, sometimes all you can do is serve as a bad example. God I hope my kids are smarter.

[ShaggyDaddy]

Student loan interest is tax deductable, I would love to see principle also be tax deductable, because c'mon really education is an expense that helps the country. That is my middle ground. A sizable tax break for people diligently paying back their loans, no need to modify existing loans between parties that may not want to modify them, best of all, no government payout (just decreased tax revenue)

[Pinoikoi]

Originally Posted by Maeve

I'm not saying that we should have our debts forgiven, but there are a lot of people out there worse off than us who should definitely get some sort of help. Leaving everyone to sink on their own I don't think is what's going to get us out of this mess, nor is bailing everyone out. But I think there is some sort of middle ground.

Do most of you have federal loans or state or private? I took out State loans but at the time everyone I knew that was taking loans took Federal as the interest rate was lower at THAT time.. but I refused to owe money to the Feds.. Now, the State one is lower so I am glad I did what I did... plus I get .25% off for paying online, and another .25% off for being ontime... still, I have had my percentage rates lowered over the years.. I think that would help a lot of people if even 1% were shaved off the interest rate..

Last year I was able to refinance my loans, and consolidate into a much lower rate.. so even though I still owe quite a bit, my payment was basically cut in half.

[choli]

Originally Posted by ShaggyDaddy

Student loan interest is tax deductable, I would love to see principle also be tax deductable, because c'mon really education is an expense that helps the country.

Some student loans went toward education expenses that help the country. A great deal went to allowing students live an unnecessarily unfrugal lifestyle, enjoy spring breaks abroad and avoid actual employment for as long as possible. Some went for degrees that are pretty much useless and are not helping the holder, let alone the country. How could any system differentiate between the loans?

[Pinoikoi]

Originally Posted by ShaggyDaddy

Student loan interest is tax deductable, I would love to see principle also be tax deductable, because c'mon really education is an expense that helps the country. That is my middle ground. A sizable tax break for people diligently paying back their loans, no need to modify existing loans between parties that may not want to modify them, best of all, no government payout (just decreased tax revenue)

in some ways it is as in Lifetime Learning and Hope learning credits.. I don't think it is dollar for dollar though..

Although I can list my current credits for tax writeoffs in these ways I don't thin k it works for the credits that originally got me into debt, though (I don't think those two programs were around back then..)

[polyhymnia]

Originally Posted by Pinoikoi

Do most of you have federal loans or state or private? I took out State loans but at the time everyone I knew that was taking loans took Federal as the interest rate was lower at THAT time.. but I refused to owe money to the Feds.. Now, the State one is lower so I am glad I did what I did... plus I get .25% off for paying online, and another .25% off for being ontime... still, I have had my percentage rates lowered over the years.. I think that would help a lot of people if even 1% were shaved off the interest rate..

Last year I was able to refinance my loans, and consolidate into a much lower rate.. so even though I still owe quite a bit, my payment was basically cut in half.

I have federal loans - two types. My Perkins loans were subsidized and are at a flat 5% interest. My Stafford loans, also subsidized, are now at 1.4%. They started out at 2.65% but I got a .25% reduction for doing online bill pay and then a 1% reduction after 3 years of on-time payments.

I cannot complain, at all, about that rate.

As for college degrees -my stepmother doesn't have one. She started working in the late 70s for a large insurance company in their actuarial department. She worked her way up and after 25 years was an AVP (very high up position in the large insurance company). She did very well for herself. Then her mother got very ill and she quit to stay home and look after her mother. Two years later her mom died. Since then, she hasn't been able to find anything even remotely similar to what she used to do - all of the positions now require a college degree and her 25 years experience, 10 years as an AVP, count for nothing. She's working as a church secretary.

I'm in the insurance industry too and at my company we do not hire anyone without a college degree.

Right or wrong, a college degree is required for a great many fields.

[Scullery]

Originally Posted by ShaggyDaddy

you can't discharge your mortgage and keep your house. But you always get to keep your diploma.

Can you imagine what interest rates would be like for student loans if they were not federally protected against bankrupcy? I will give you a hint... student loans are 3% to 15%, while non-protected credit cards are what like 8%-26% Do we want to see student loans end up with terms just like credit cards?

We used to joke that if you could just get enough credit cards to prepay college, and get cash advances for minimum payments, you could actually graduate, declare bankrupcy, then 7 years later boom, free education and start building credit.

What about medical bills? You can't give back your care, but the debt is still able to be discharged in bankruptcy.

I also don't think the tax deductible carrot is all that appealing for people who make barely a living wage, degree or not. Wasn't it Suze Orman who tells people they should pay off student loans with a credit card and then wait a little while, then declare bankruptcy?

Don't get me wrong, I still think there should be serious consequences to not paying your student loans, like never being able to qualify for financial aid ever again. But I don't think how it is set up now is fair.

[oneKnight]

Originally Posted by Pinoikoi

in some ways it is as in Lifetime Learning and Hope learning credits.. I don't think it is dollar for dollar though..

LOL
It's limited to $3,000 per year (less than one semester costs, much less two!), then divided in half to compute your credit!
AND LIMITED TO TWO YEARS per SSN.
I only went to school for 3 years so that means I could NOT claim the Hope credit thing for the 3rd year.

That thing is a JOKE. I didn't even need the credit when I was going to school and working part time hours, because I didn't make much money and always got a refund.

I can give you, in a paragraph, the content of "student loan counseling".

'This is real money. You WILL have to pay it back. You can't bankrupt it. If you end up on permanant disability, we can and probably will take payments out of your disability check.'

Nothing about debt to income ratio, or length of payback, or anything. Just a promise to hunt you down if you try to skip out.

That's all I got as well. Heck I didn't even really understand when they told me to "pick a lender" because I figured they just had a bank that they used for this stuff. (PM me if you want to know which one I would chose again and which one I wish would burn, lol) but at least I did know what a loan was. I thought it was stupid that they kept saying "you WILL have to pay it back" several times. It even says that on the back of my bills. I guess people think it's a scholarship or grant?? I dunno.

Thanks for the tip mpchez, I did the FAFSA thing online and I don't remember seeing that. Perhaps I can discuss it with the actual people at the school. I gotta submit a few more papers before they will talk to me, lol.

[Pinoikoi]

Originally Posted by oneKnight

LOL
It's limited to $3,000 per year (less than one semester costs, much less two!), then divided in half to compute your credit!
AND LIMITED TO TWO YEARS per SSN.
I only went to school for 3 years so that means I could NOT claim the Hope credit thing for the 3rd year.

That thing is a JOKE. I didn't even need the credit when I was going to school and working part time hours, because I didn't make much money and always got a refund.

One of the programs (and not the other) has a two year limit, but I can't recall which one. I used one program for the two years, but am still using the other one.. I think I am still using the lifetime learning one.. but for me, I don't go to school full time. I take about 6-12 credits in a year..

[Lysa]

Originally Posted by polyhymnia

As for college degrees -my stepmother doesn't have one. ... She worked her way up and after 25 years was an AVP ... Since then, she hasn't been able to find anything even remotely similar to what she used to do - all of the positions now require a college degree and her 25 years experience, 10 years as an AVP, count for nothing. She's working as a church secretary.

I'm in the insurance industry too and at my company we do not hire anyone without a college degree.

Right or wrong, a college degree is required for a great many fields.

I find this to be true in many many many fields, but particularly in larger corporations. My MIL worked her way up from a customer serv rep to an AVP in a bank, and now because of restructuring is unemployed. She is overqualified for any job that doesn't require a college degree, yet underqualified for anything in her skill-set, as she doesn't have the degree. So alas, she continues to be unemployed. No one wants to hire her for something they feel she is overqualified for, since they feel she will quit once something with higher pay is available.

My dh has also had the same problem. He was offered a FULL music scholarship for college, but since that didn't seem to offer a great 'future earning potential' he was discouraged from taking it. He tried to get into military, but couldn't make gain enough weight to qualify to enter. So he went to work. Worked hard, and learned many skills. After 7 years, had to make a career change, and worked hard in another field for 7 years, again increasing his skills and income. But came to a ceiling because he didn't have a piece of paper saying he was 'educated'. That company did offer some education benefits, and they did reimburse his class credits fees, but not books (almost as much). He's now with another company (who was willing to pay better), but in the same boat - corporate execs thinking that you must have a degree to know the skills to complete the work, yet hiring (degreed)supervisors who have no working experience in the field, and therefore very naive and lost when they are expected to make decisions.

I have a Master's degree - and my total loans were less than my projected first year salary. HOWEVER, we ended up starting a family earlier than anticipated, and well.... it's our CHOICE to have me stay home and pay more in interest over time than we could if I worked FT and enrolled kids in child-care/school. And we pay for that choice knowing we will pay more financially.

As far as a bailout: No. I don't like the corporate bailouts. I don't like the housing bailouts. I think that there is a serious entitlement problem in this country, and I do think that our country as a whole has to suffer in order for our society and government to bring about some productive change. Do I like it? NO. But I'm willing to do what I need to do for my family so that WE do not put a burden on our neighbors, and they do not put a burden on us. Some things are choices, some are mistakes, some are poor planning, some are lack of information, etc. But we don't all get to wipe the slate clean - we need to learn from these things so that we can hopefully prevent them from repeating in the future.

[milletpuff]

Originally Posted by oneKnight

LOL
It's limited to $3,000 per year (less than one semester costs, much less two!), then divided in half to compute your credit!
AND LIMITED TO TWO YEARS per SSN.
I only went to school for 3 years so that means I could NOT claim the Hope credit thing for the 3rd year.

That thing is a JOKE. I didn't even need the credit when I was going to school and working part time hours, because I didn't make much money and always got a refund.

The new stimulus package replaces the Hope Credit with the American Opportunity credit, which is 100% of the first $2,000 you spend for school and 25% of the next $2k, for four years. It also allows you to count books in these costs, which weren't allowed before. This credit is also partially refundable, so you get the benefit even if you are not working at all.

The Lifetime Learning Credit is 20% of the first $10k you spend for school, not limited to any particular year in school and you can be part-time.

You can also choose to deduct 100% of the first $4,500 you pay for school instead of taking the credit, if that works out better for you.

I think these changes are super significant, but then again I thought they were pretty decent benefits before, too.

[polyhymnia]

Originally Posted by milletpuff

The new stimulus package replaces the Hope Credit with the American Opportunity credit, which is 100% of the first $2,000 you spend for school and 25% of the next $2k, for four years. It also allows you to count books in these costs, which weren't allowed before. This credit is also partially refundable, so you get the benefit even if you are not working at all.

The Lifetime Learning Credit is 20% of the first $10k you spend for school, not limited to any particular year in school and you can be part-time.

You can also choose to deduct 100% of the first $4,500 you pay for school instead of taking the credit, if that works out better for you.

I think these changes are super significant, but then again I thought they were pretty decent benefits before, too.

Thanks for summarizing these!! I am hopefully going back to school this year and it never occurred to me that we might get a tax break!! Can I derail this slightly to ask how it works - "credit" means "refund"? So a $2,000 REFUND? Can you combine Lifetime Learning Credit and American Opportunity Credit?

[milletpuff]

You can't combine them, you pick the one that works best for you. It's a credit, so that means that it reduces how much tax you have for the year.

You won't necessarily get that amount *back* as a refund. A $2,000 credit will reduce how much tax you owe by that amount. How much you get back as a refund depends on how much money you had withheld from your check.

In cases where people aren't earning enough (and therefore don't have that much tax to "cancel"), they can get 40% of the credit back. So, if you are only earning, say, $8,000, you won't have any taxable income. In that case, you may not have had anything withheld from your checks. So, you could get up to 40% of the credit back *as a refund*. This is for the American Opportunity Credit only, which means you need to be half-time or more.

For Lifetime Learning, you will only get the benefit if you are earning enough to have a tax liability for the year (more than ~$8,500 if you are single, no kids, and it goes up from there).

[polyhymnia]

Originally Posted by milletpuff

You can't combine them, you pick the one that works best for you. It's a credit, so that means that it reduces how much tax you have for the year.

You won't necessarily get that amount *back* as a refund. A $2,000 credit will reduce how much tax you owe by that amount. How much you get back as a refund depends on how much money you had withheld from your check.

In cases where people aren't earning enough (and therefore don't have that much tax to "cancel"), they can get 40% of the credit back. So, if you are only earning, say, $8,000, you won't have any taxable income. In that case, you may not have had anything withheld from your checks. So, you could get up to 40% of the credit back *as a refund*. This is for the American Opportunity Credit only, which means you need to be half-time or more.

For Lifetime Learning, you will only get the benefit if you are earning enough to have a tax liability for the year (more than ~$8,500 if you are single, no kids, and it goes up from there).

Excellent, thanks!! We pay well over $2k in taxes so it sounds like we will benefit from this somehow. I'll definitely keep it in mind if I do get into this program for next year!

[FondestBianca]

There won't be any unsecured consumer dept bailouts that I could imagine. There wouldn't be any monitary return or direct stimulation. I think it would be even less likely than a credit card bailout and I think we all know that's never going to happen.

I could see some sort of debt refi programs or opportunity for better terms or rates or breaks for future school costs... but not debt that is already accumulated. There could be a gov program to help with already aquired costs but, I don't think that would fall into the "bailout" category.

[ShaggyDaddy]

Originally Posted by Scullery

What about medical bills? You can't give back your care, but the debt is still able to be discharged in bankruptcy.

Nobody dies because they couldn't afford life saving tuition.

[BetsyS]

We have pretty big student loans, which we pay on. If a bailout happened, it'd be great, but as it is, we just plod along. I owe like $50,000. My dh has massive loans, too, mostly from undergrad.

I regret my student loans, which were for a master's program. I graduated debt-free from undergrad, because of scholarships and living at home.

When it came time for grad school, I foolishly borrowed all the tuition (!), plus I could not work enough to pay for my living expenses (I underestimated the time commitment of my program), and I put a lot on credit cards. I'm now a SAHM.

I regret the loans and the credit card debt (which is all gone; the loans are another story), but honestly? I didn't really know better at the time. I was so young. So naive. I grew up in a small town, went to college in that town, and had never lived elsewhere until grad school. I was a nurse that got my midwifery degree. I asked about salaries, but I didn't realize that I was comparing the bottom of the barrel nurse salary (my hometown) with the top of the line, probably not possible anymore due to changing healthcare midwifery salaries (the midwives I knew). I finished grad school making the same thing as nurses in the "big city" made (there's not a lot of difference in most cases between nurses and midwives). My SIL "up north" works as a RN. She makes twice as much as my last midwifery job in the south. With a smilar cost of living (the midwest).

I HAD NO IDEA.

I had no idea that I could have made that much money as a nurse. No one warned me that debt saddles you for a long time and limits your life. I grew up low-income (one wage earner, and he was a social worker), and we didn't talk about money. Just spent all we had, whatever that was. My parents weren't in credit card debt because no one would give them a credit card. Stuff like that. Everyone was so proud that I got into school (and naive themselves) that no one, and I do mean no one, mentioned the money.

When I graduated, it was scary to do the bills and realize I didn't have enough to pay them all every month. Thank goodness I got married, and we had more income coming in.

It's been a long road since then, and I've accepted it, and I pay them back faithfully. But, I think it's really wrong to judge folks for the mistakes that they make with student loans when they are really young and, for the most part, naive.

I'm sure someone will come on here and say, "hey, I was 14 and I had the first of my 6 kids, and we are all.so.together, and I've never made a money mistake, and I'm a gazillionaire now, and so why can't you." But, most of us fall victim to the folly of youth. I was just telling my dh last night that I wish I could have lived my 30s before my 20s. LOL

[EFmom]

Originally Posted by Embo

While I agree we should all try to do a much better job managing our money in undergrad or grad school (not take out as many loans, not go to really expensive private schools, etc.) I think this discussion is disturbingly snarky about people who work in the social sciences and humanities. If your kids do choose to go to college, don't you want them to have an education that includes history, philosophy, and anthropology?

Anthropology teaches people about the diversity of our world, how to approach complex issues and problems, and how to write clearly. And who do you think does the research that backs up much of this community's claims about mothering? Um, anthropologists. (And psychologists, sociologists, and historians, of course). In the 1960s and 70s, feminist anthropologists turned their attention to gender and sexuality across the globe. And they realized that the Western way of raising babies is not the only one. I know not all of you root your parenting choices in this history, but the next time you discuss the research on co-sleeping or baby-wearing (and it usually draws on cross-cultural comparison), thank an anthropologist.

The central problem here is not the silly people who chose to work (or have a calling to work) in poor-paying fields, but a society and government that doesn't value education, teaching, or learning.

Embo
anthropologist & mama

Honestly, when my kids go to college, if they don't take a single history, philosophy or anthropology course, that would be just fine with me. I'm not opposed to them taking the isolated course or two, but I certainly wouldn't steer them into any of those fields unless they had a passion for the subject AND had a burning desire (and the personality) for a career as an academic. A bachelor's degree in those fields is not a wise financial investment, imo, and we churn out far, far too many Ph.D.s for what the job market can bear.

I work at a university, and serve on the various undergrad and grad academic councils from time to time. One of the things that absolutely infuriates me is the endless gen ed creep. I resented those courses like hell back when I was in college, and they have gotten even more out of control in the ensuing decades. I don't think they make people more well-rounded. Some may be interesting or entertaining, but overall I think they artificially increase the cost of higher education and have very little benefit to the student.

[whiddle]

Originally Posted by ShaggyDaddy

you can't discharge your mortgage and keep your house. But you always get to keep your diploma.

.

I'd give the diploma back to not have the loans....and I'm NOT kidding.

I don't agree with the bailouts either but I figure if they can help out big business, millionaire CEO's, and people that bought more house than they knew they could afford then they can help the rest of us that can't buy a house because we owe student loans or can't eat b/c of the loans.