This new income-based plan is not available to people who graduated in 2011 or earlier and have no plans to take out any new federal loans. Instead, you must have at least one federal loan from no earlier than 2008 and also take out one more in 2012 or later to qualify.If you're already in default, you're ineligible.
October 27, 2011
Who gets to take advantage of Obama's new changes to the student loan program?
Not as many as you might think. The new rules only apply to federal loans, not loans from private banks, and...
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61 comments:
IT'S. NOT. FAIR!!!!!
Ahh an "optics" proposal. So how many votes will that buy? Probably a lot more than there are people who will qualify.
You may well be right but Barry got some serious free campaign coverage from the nets last night.
"Dude, what year is it man?"
This us a scam to foist the college cost from the student onto the blue collar tax payer. It is unfair.
This is a scam to foist the college cost from the student onto the blue collar tax payer.
You might have a coherent argument if this was about grants, not loans.
a student loan plan for those who have yet to really face the burden of their student loan choices.
MM
Parts (maybe large parts) of the loans need not ever be repaid.
Or as Peter Schiff says A Plan to Boost College Tuitions.
Why is college so expensive? Gov't involvement in the market (prior and now future).
Ann, he did this for YOU.
FTA:
"Also, loan forgiveness will happen after 20 years."
Sounds like a grant to me.
My solution is barter.
Swap houses for tuition.
An empty, cheap, jesture from an empty, cheat president. Yaaawnn.
Redistribute fairly. Doom.
you must have at least one federal loan from no earlier than 2008 and also take out one more in 2012 or later to qualify.
You only qualify if you double down on stupid!
You might have a coherent argument if this was about grants, not loans.
Good point! Loan guarantees have never cost the taxpayer a single dime.
GodZero giveth, GodZero taketh away.
glenn said...
You may well be right but Barry got some serious free campaign coverage from the nets last night.
But wait till the useful idiots find out their loans aren't being paid off after all.
We may see Occupy 1600 Pennsylvania yet.
Raise hopes just to disappoint. I see a pattern.
You only qualify if you double down on stupid!
It gets worse:
Graduate students are eligible, too
What could go wrong?
But the way he said it made it almost seem like a miracle. The Republican congress just want's to see you suffer, But I Barak Obama spoke and it came to pass.
They should just scarp the whole thing. Guaranteed student loans are like guaranteed mortgages, not worth the paper they are written on.
This plan will only raise the cost of education. It allows students to take on more debt without fear of having to pay it back. So they'll borrow more, and schools will charge more, and the situation will only get worse.
Why do we keep making the same mistakes? It's a get out the vote measure for college campuses, plain and simple, right?
You might have a coherent argument if this was about grants, not loans.
Loans forgiven are grants for all practical purposes.
An extra $8 a month for the upper middle class white kids that make up the preponderance of student loaners? And only if they are one of the select few who meet the criteria? Paltry, chimerical aid to those who don't need it. Hope nobody's dumb enough to sell their vote for that.
wv: moussli. Breakfast at the Palin house.
It's a get out the vote measure for college campuses, plain and simple, right?
Not just votes. I'm guessing that Organizing for Obama was having a hard time recruiting volunteers.
@Calypso--The interest-rate reductions may be negligible, but this directive extends coverage of a 2007 law limiting repayments. Previously only "direct" federal loans were covered, but now all federal loans (regardless of their origination) will have repayment rates that are limited to 10% (down from 15%) of "discretionary" income, and will offer partial forgiveness to federal employees.
Or so it appears from the NYT article.
Who gets to take advantage?
No one. It is illusory. Since this is done by a mere wave of Obama's hand, it can be undone by a wave of the hand. Obama has ZERO legal authority to bind the federal government 20 years from now. These are not legally binding promises and they do not create any actual enforceable rights by students against the BEAST that is the federal government lusting after your blood in the guise of a creditor.
As usual, another headline to generate confusion and then complicity. The thinking is that the student who can't really take advantage might become soft that Obama is helping other students who can. The lapdog media won't shine the light on the real numbers. Typical Obama!
"The lapdog media won't shine the light on the real numbers. Typical Obama!"
My link goes to the New York Times, which shines light on the real numbers.
You'd think that people with a lot of student loan debt who graduated in, say, 2007, might resent Obama more for this cynical ploy that doesn't apply to them at all but gets him lots of good press.
Only dirty hippies of course.
@Bender--You have a novel theory of government.
My guess would be that, once loan contracts are entered into that rely on this program's promises it will be very hard to retract those promises.
I wonder who in the White House is working to devise Obama's economic schemes.
I predict a total bailout loan forgiveness (We Can't Wait!) right around, oh, October 2012.
It sounds like what Obama is modifying is the regulations covering how the government collects from people who default on their student loans or request a hardship payment plan. It's probably binding for any one who enters into a payment plan with these provisions but that doesn't mean future administrations have to continue to offer these terms.
Good point! Loan guarantees have never cost the taxpayer a single dime.
Indeed, also the changes include lowering the interest raid to be repaid by the borrower to the taxpayers and increasing the eligibility for loan “forgiveness” which are also part of the proposal.
Chip -- if Obama could rewrite the contracts, you might have a point, but he can't.
The one person really taking advantage of the new changes is OBAMA himself. VOTES, more VOTES!!
You might have a coherent argument if this was about grants, not loans.
A loan that doesn't have to be paid back *is* a grant, or else please explain the difference to us.
Bender said...
Chip -- if Obama could rewrite the contracts, you might have a point, but he can't.
He rewrote the GM Bondholders contracts, so why not student loans?
He is ... the Zero.
"I predict a total bailout loan forgiveness (We Can't Wait!) right around, oh, October 2012."
That would be dumping around $1.2Trillion into the taxpayers lap right before the election.
Desperate times call for desperate measures but....
Here's my student loan reform plan: The terms of the loan of based on the marketability of the major field of study. Get a degree in engineering, statistics, chemistry, medicine, etc. we have a generous and reasonable loan for you. Get a major in art history, feminist eco-theory, or trans-gender equality studies, well, let's just say you better find yourself a rich uncle.
The benefits: 1) the loans get PAID BACK, and 2) we indirectly defund a lot of nonsense going on at the college level.
But but but Prez Obama claimed it would save the average student a couple hundred bucks a month? Was he lying or full of soup or just spewing propaganda?
if Obama could rewrite the contracts, you might have a point, but he can't.
Obama to Bender (channeling Gus Sands):
You're missing the point, kid.
I already have.
Very hard to unscramble an egg politically. Surely you've noticed this wrt social security and medicare reform.
It's a brilliant move. Which GOP President would DARE revoke student loan forgiveness when it's already on the books? This is how liberals do it - they get their agenda enacted defacto and then the optics of revoking it become so HORRIBLE that it stays forever.
I was a taxpaying working stiff until I found out in 1979 that my taxes were going to give students an almost free education at UT Austin law school. So I applied, got accepted, was awarded the Hispanic scholarship and graduated.
Now I'm "retired," drawing Social Security. What is to keep me from enrolling in med school, business school, etc, borrowing the $210,000 limit, and after 4 years going back to my personal cabinetmaking? I never practiced law and will probably have no income to qualify for payback of the debt, and, who knows, I may well not be dead in the 20 years it takes to forgive the debt. If I were 85, I'd do it in a (iffy!) heartbeat!
Sounds like a winner idea to me. I know they can't refuse me admission, since my grades are stellar, I'm a National Merit Scholar and Hispanic besides. If you are a student loan officer, drop me a note. I think a lot of folks at my local senior center might be interested.
“My solution is barter. Swap houses for tuition.”
Forgettabout it. Nobody wants your depreciating asset. My solution: 20 years’ indentured servitude.
More seriously, any plan to make higher education (or healthcare) “affordable” that does not create incentives for providers to reduce costs is DOA. Without that essential, it’s just a game of “Who’ll get stuck with the bill?”
And, surely, there are plenty of things that could be done to improve teaching productivity. Such as, distance learning and an end to a requirement for seat-time (credit hours) instead of the ability to pass comprehensive exams.
Speaking as someone who saved and therefore had to pay 90% cash to put his kid through MIT (graduated this year), I am not happy. Profoundly not happy.
(shakes his head)
No, Chip, you are missing the point. Obama is not going to be president five, ten, twenty years from now. He cannot bind the government beyond his term. Because a borrower's liability depends entirely on the terms of the loan contract, when Obama leaves, whatever he has done is subject to being changed and students being on the hook for their original contractual obligation.
Politics won't mean crap when the federal government starts sending bills and then bringing enforcement actions in court. It will mean exactly squat, when students get sued, to say, "but, but Obama said we didn't have to pay." The court is going to respond with the law, not politics, "The contract says what it says. Pay up."
Why do people take out giant loans for college? I don't get it. Go somewhere less expensive. I have no sympathy for this.
I didn't even apply to schools I couldn't afford. In fact, I only applied to one school because I knew I'd get in, it was good enough, and I was going to be able to go for free.
Me too, Freeman. And I finished my master's in my 40s. What do these people think?? Who told them this debt was okay?
I have one friend who got out of med school with a $100K debt. But she had prospects. A liberal arts major doesn't.
Hey Drinkwater,
Tough luck. I am a non-breeder who has been paying through the nose for years for the public mis-education of kids like yours.
If you sent your kid from K-12 to a private school, I take it all back and apologize.
Otherwise you and I are on a collision course. My property taxes on a modest 1100 sq ft house here in Austin, Taxes are almost $6000, most of which goes to mis-education of the brood that we really can import much cheaper, potty trained and ready and able to work from Mexico.
Explain to me why Obama's proposal will not anger more voters (those who paid off loans, chose cheaper schools, or bypassed college altogether) than it helps.
Christy--I'm guessing his strategy is one of trying to re-energize his base of support on college campuses which played such a big role in his 2008 campaign. These days he's not as popular on campus as he was, so he's hoping that announcing what seems like a free giveaway to benefit those currently in college or those who are recent graduates will inspire more people to volunteer for his campaign and help to insure that he gets young voters out to vote for him in 2012. I'm sure that part of the strategy is an assumption that the people who didn't go to college won't be paying attention--a flawed assumption, of course, but then again his campaign also contains the geniuses who gave us "Attack Watch," and obviously imagining unintended consequences is not one of their strong suits.
And tuition keeps going up and up so that salaries of “professors” teaching women’s studies, African studies, all kinds of studies, keep going up and up, and it all can be paid for by government loans. Then, to keep the cycle going, those professors contribute to the dems who just make more money available for loans so tuition goes up more and more and then . . . .The graduates cannot get any job with their worthless degrees so they become Obama’s indentured servants. He will grant them partial freedom if they help him get reelected.
How about "forgiving" the loans by deducting the amount owed from future Social Security benefits?
Jimbino: As it happens, I paid private tuition for 2 kids practically from start to finish. I also pay roughly the same property tax as you, and some of the highest gas and sales taxes in the country. I'm OK with that; the local public schools are actually pretty good, as are the roads, fire, police, public transit, etc.
I'm also currently working on a short-term contract, at less than 3x minimum wage, after 18 months unemployment. I've been unemployed for more than 12 months at a stretch several times in the past, including while I was paying those private tuitions.
I can even tell you how to make this work financially, if you want to know. But, it's going to cost you.
SV: frait - I'm a-frait my fees are high, but easy payment terms CAN be arranged.
My son who is a sophmore in a very good school and has large amounts of student loans, says this is a bribe by Obama. He has not bought the indoctrination and makes a lot of his prof's angry. We did good.
How about "forgiving" the loans by deducting the amount owed from future Social Security benefits?
Better.
For current and future college students, social security benefits probably may not be sufficient to cover their loan payments.
For current and future college students, social security benefits probably may not be sufficient to cover their loan payments.
Also those students are already expected to take a 25 percent cut off of what they were “promised” so there’s not as much left to cut to begin with.
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