Obama takes back promise on student loan forgiveness for public service

[yurbud]

Obama has proposed a cap of $57K on the amount of student loans that can be forgiven after ten years of payments for public employees.

The administration claims they're worried about schools and grad students "gaming" the system by piling on debt they know will be forgiven after ten years of payments.

Since I teach at public community colleges and didn't have health insurance or make enough to make regular payments on my student loans (that were more than my rent) for the first ten years I taught, so my original debt doubled through interest, from $50K to over $100K. I have probably paid more in interest than my original debt.

If that's gaming the system, student loan borrowers are the stupidest con men in history.

Please take a minute to sign this petition, telling him he got it right the first time.

[Brickbat]

1. People game the system when it's broken.

And IME, people who worry about others gaming the system are the ones doing it themselves.

[JJChambers]

2. Gut the military industrial complex

Reroute that money to finding free, public higher education for a home who wants it.

[yurbud]

4. it would be insanely cheap to do so compared to corporate subsidies, defense contracts and the like

[JJChambers]

5. Agreed.

By eliminating corporate tax shelters and subsidies, restructuring our tax system to shift the burden from the middle class to the rich, and reducing our military budget to a sensible fraction of it's current incarnation, we could afford Medicare for all, free higher education, better infrastructure, more scientific research and lower taxes for the 99%.

But instead we have corporatized America.

[yurbud]

6. an easy way to get it would be lobby for Wall Street transaction tax and dedicate it to educution

You could even figure out a way to make it sound like a complement to the assholes: giving an opportunity for the next generation of Wall Street titans to emerge or some nonsense like that.

[Chathamization]

35. Emphasis on _public_ higher education. We really don't need our tax dollars going towards

new football stadiums and the huge salary superstar professors like David Brooks are paid to teach one class. What we have now in higher education is something similar to the voucher system the right-wing has proposed for secondary education (and which receives a lot of well earned derision). City University was mostly free, from what I understand, until the New York financial crisis in the late 70's.

[ellisonz]

3. I'm hoping to take advantage of this program.

I'm in graduate public policy school and hoping to go into environmental/public lands management. I have a B.A. in History.

Considering how absurd the student loan system was before reforms in 2007 and 2009, I think it's fair play for many of us to get a bit of a break.

I would note that whoever drafted the petition got the name and acronym of the program wrong. It's the Public Service Loan Forgiveness (PSLF) program, not the Public Interest Loan Forgiveness program (PILF).

http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service

Also, this is part of a legislative package that doesn't have much traction in Congress: http://www.insidehighered.com/news/2014/03/05/obamas-2015-budget-would-keep-most-education-and-research-programs-flat

So it most likely won't pass: existential crisis averted.

Here's a calculator that lets you use Income-Based Repayment, on a 25-year William D. Ford Federal Consolidated Loan, with PSLF applied after 10 years: http://www.finaid.org/calculators/ibr.phtml

[yurbud]

7. your analysis is correct, but if Obama knows it's not going to pass, why throw supporters under bus?

[ellisonz]

8. Politics.

It's a really sweet deal. Moreover, most people likely taking advantage of this program (no one has yet) are likely going to be able to weather a cap being placed on it. If Obama wants to try and sell bigger Pell Grants to the Republican Congress (something with immediate effect, not in 2018 at the earliest), he needs to offer something like this; that's how sausage gets made.

Hey at least, my interest rates did go down for my loans for last semester

[bvar22]

9. Back in the 60s and 70s,

ANYONE could graduate from the State University DEBT FREE
if he/she were willing to work Part Time.

We could have that again,
IF we had a Party that represented the Working Class.



[font color=firebrick][center]"There are forces within the Democratic Party who want us to sound like kinder, gentler Republicans.
I want a party that will STAND UP for Working Americans."
---Paul Wellstone [/font][/center] [center] [/font]
[font size=1]photo by bvar22
Shortly before Sen Wellstone was killed[/center][/font]

[Octafish]

18. +1

I'm so old, I remember when there was a Democratic Wing of the Democratic Party.

[yurbud]

28. Paul Wellstone looks just like Sam Rockwell in that photo

If they made movies about real heroes, he'd be the man for the part.

[woo me with science]

10. Well, it was useful rhetoric at the time. nt

[ProSense]

11. Not exactly

"Obama takes back promise on student loan forgiveness for public service"

...accurate. While a cap is proposed, the program now applies to all students.

Student Debt Forgiveness

The budget expands the government’s current student loan forgiveness program. Pay As You Earn, or income-based repayment, caps the amount a borrower has to pay per month to 10% of the person’s discretionary income, and forgives loans after 20 years of payments. The the program currently is only open to borrowers who took out loans after October 1, 2007, but this budget proposes opening it to everyone with federal student loans, regardless of when the loans were taken out. However, it caps the amount that can be forgiven. Here’s Josh Mitchell:

Among the changes proposed Tuesday, individual borrowers would face new limits on how much debt that could have forgiven. The amount forgiven for public-sector workers would be capped at $57,500. Borrowers with debt loads above $57,500 would make payments for 25 years. And payments for married borrowers filing separately would be calculated on their combined household adjusted gross income.

http://blogs.reuters.com/counterparties/2014/03/04/president-obamas-2015-budget-everything-you-need-to-know/

[tammywammy]

14. Expanding the program to all students is awesome. n/t

[yurbud]

15. the expansion is good, the cap is not. My original loans were for less but doubled due to interest

and my inability to pay.

[magical thyme]

19. according to the article, if your loans are greater than $57,000, then they continue

to 25 years instead of 20.

So if I'm reading it correctly, the cap doesn't mean they don't ultimately get forgiven. Just that you have another 5 years of paying on them before they're forgiven.

Also, don't forget that once the loans are forgiven, you then owe a lump sum income tax payment on the forgiven amount.

For my student loans, I figure the tax I will owe on the forgiven loans will end up being probably worth the original loans. So it turns into sort of paying the student loan at a much reduced interest rate. Personally, I would prefer simply re-negotiating the loans at a reduced interest rate and then actually being able to pay them off. All these other games just leave me feeling very much at the mercy of winds.

[yurbud]

27. they did say they were trying to fix the tax part.

[jazzimov]

16. Wow! So, Obama improves a former proposal

but some people only report part of the story in order to make Obama look bad?

Gee - who da thunk it?

[Bobbie Jo]

20. Constant occurrence here.

You have to wonder why anyone would be motivated to do this.

[yurbud]

30. whether it's good or bad news depends on how big your loans are.

As I said in the OP, mine doubled because my jobs teaching at public community colleges didn't pay enough to make regular payments for the first ten years I taught.

I give him his props for expanding the program. If he counts payments made before 2007 and public service before that date, that would damn near balance out that cap.

[yurbud]

29. I refinanced old loans to qualify for the full forgiveness.

[truedelphi]

12. Thank you President Corporate Tool.

The recent Rolling Stone article on who Marc Rich was, and how closely intertwined your current AG and his career happened to be to Mr Rich's tells us a great deal.

Your "good buddy" Tim Geithner gamed the system for the Biggest Banks and the eighty ruling families, with those games starting the moment you appointed him in early 2009.


But never let it be said that you weren't on to us middle classers who through no fault of our own try and "game" the system.

We go to school, sometimes working all day and then attending school at night. We get the pre-requisit Master's degrees, and then the economy collapses out from under us.

Right now, even the damn employees who service the Student Debt agency are in third world nations.

But again, heaven help you! You wouldn't want jobs to be provided for Americans - as you hide behind your valiant efforts to raise the minimum wage. But a raise to minimum wage doesn't help the 18% of us who are unemployed in my County!

[underthematrix]

17. Hmmm I bet if a certain group of peeps stopped voting

for the REDS we would have a different set of policies. And I wouldn't be so fast to believe nothing is being done about the bankers.

[Octafish]

21. Like in 2008?

Know your BFEE: Goldmine Sacked or The Best Way to Rob a Bank Is to Own One

Looking back, I see I should've substituted "Treasury" for "Bank."

[truedelphi]

33. Statute of limitations has already run out on the more serious charges that

Could be leveled against the bankers. Plus most of the incriminating paperwork has already been shredded.

And few people I know voted for reds in 2008.

[bigwillq]

13. So, banks, Wall Street and Corporations can "game" the system

but college students can't.

We see you, Mr. President.

And it doesn't look good on you.

[okaawhatever]

34. The gaming the system comment was aimed at the colleges. By putting a cap on the amount

it's to keep the colleges from raising rates with the "oh well, don't worry it will be forgiven." Especially with the for-profit schools that the Obama administration is really going after.

[bigwillq]

23. Hello.

Welcome to DU!

[bigwillq]

25. Why so serious?

Just saying hello.

[enlightenment]

26. Gaming the system??

JHC on a pogo stick.

[Octafish]

31. Bust 'em down with debt peonage and wage slavery.

If it were otherwise, they'd want us to get educations for free. That's called progress.

[Catherina]

32. Speechless n/t

[uponit7771]

36. *******ANOTHER DAY ANOTHER BULLSHIT MISlEADING OBAMA BASH**********

People would like some REAL criticism of the president not half truths that leave out most of the story

[yurbud]

37. something that will cost me $60,000 minimum isn't bullshit