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Posts tagged with: student loan forgiveness

Loan Forgiveness Failure

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When I graduated from my PhD program, I had nearly $100,000 of student loan debt.

So, one might say it’s a topic “near and dear” to my heart. I’ve been opposed to entering into any type of student loan forgiveness program in the past. Ultimately, I just want to repay my own dang loans rather than depending on the government to maybe one-day pay them off for me. In fact, I wrote here about some of the horror stories that make me worried to rely upon a government forgiveness program.

So imagine my surprise (cough *sarcasm* cough) when I saw this story float across my Facebook feed a couple days ago. The headline reads: “This government loan forgiveness program has rejected 99% of borrowers so far.”

According to the article,

“So far, roughly 99% of processed applications for forgiveness under a government program aimed at helping public servants manage their federal student-loan debt had their applications rejected……Of the roughly 29,000 applications processed so far, only 96 borrowers have had about $5.52 million in debt discharged under the program.”

I know a couple of these people. The first year of the program was 2007 and it requires 10-years of on-time payments for debt to be discharged. That means the first “cohort” to receive debt forgiveness would’ve occurred just last year, in 2017. I personally know 2 different friends from grad school who have posted publicly (Facebook) about thinking they were entered into this loan forgiveness program for a full 10 YEARS, fully expecting and planning to have remaining debt discharged….only to have the rug pulled out from under them. Complicated explanations and nitpicky reasons for why they were not eligible.  It’s a pretty devastating thing to realize and come to terms with.

So I keep on making those monthly payments. I may do a temporary forbearance (still paying interest) while my life-situation is so up-in-the-air. But I’ll pay these loans off eventually. Hopefully sooner rather than later!!!

(Unless the US wants to just cancel student loans in order to grow the US economy. That would be pretty cool. I kid, I kid!)

 

 


Canceling Student Loans to Grow US Economy

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You guys! I know I just posted this morning, but I came across an article I HAD to share!

If you’re a new reader, you may not know about my excessive amount of student loan debt. I graduated with a Bachelor’s debt-free, but after 6 years of graduate education (2 for my MA, and 4 for my PhD), I ended up graduating with just shy of $100,000 of student loan debt. I’ve been working hard to tackle this debt (along with my other personal debts), but even so – I still have over $60,000 to go!

So I was SUPER INTRIGUED when I came across this article by A.P. Joyce titled, “Want to grow the US economy? Cancel student debt, new report shows”

Here are some of the big talking points that jumped out at me:

The report finds that canceling all student debt would likely lead to an increase in U.S. GDP between $861 billion and $1,083 billion over the course of 10 years. It would also lead to an increase of 1.18 to 1.55 million additional new jobs over the same period — that’s about 50% to 70% more jobs per year compared to an average of recent years.

The report also finds that total loan forgiveness would cost the U.S. government approximately $1.4 trillion over the course of 10 years — a number that is almost exactly the same as what the CBO recently projected the Republican’s new tax bill would cost. But researchers said that the positive impacts of canceling student debt would likely be more broadly felt than those of the tax bill.“What our report shows is that you get a greater macro economics impact, bigger bang for the buck, and that student debt cancellation has about half the budgetary effect of the Trump tax cuts,” Kelton said.

The story is based on a report from the Levy Economics Institute, titled “The Macroeconomic Effects of Student Debt Cancellation”

I went back to the original source and checked it out, too. Here’s the key takeaway from that source:

The authors find that cancellation would have a meaningful stimulus effect, characterized by greater economic activity as measured by GDP and employment, with only moderate effects on the federal budget deficit, interest rates, and inflation (while state budgets improve). These results suggest that policies like student debt cancellation can be a viable part of a needed reorientation of US higher education policy.

It’s a radical idea, no doubt. Obviously I’m drawn to it (in no small part due to my own excessive student loan debt). I’ve always been proud to work on repaying my loans, rather than relying on one of the existing loan-forgiveness programs. BUT – some of this research is pretty compelling regarding the possible economic benefits of such a cancellation.

What are your thoughts on the topic? 


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