Student Loan Payments Restart After Three Year Pause
“It’s a sad day for student loan borrowers and for the country that student loans have to come back on, especially with the threat of a looming government shutdown, potentially on the same day.”
It’s truly amazing that the ‘pause’ lasted for as long as it did.
The Hill reports:
After 3 years, student loan payments are back
Student loan payments officially resume Sunday after borrowers were let off the hook for more than three years by a pause initiated during the economic turmoil of the coronavirus pandemic.
Despite continued pushback from advocates and concerns about a government shutdown, the Biden administration is reactivating all student loan accounts, and more than 28 million borrowers now have to deal with repayments.
“It’s a sad day for student loan borrowers and for the country that student loans have to come back on, especially with the threat of a looming government shutdown, potentially on the same day. It’s just wild,” Natalia Abrams, president and founder of the Student Debt Crisis Center, said earlier this week.
Back in July, a Life and My Finances survey found half of borrowers say they don’t make enough to afford their student loan payments, while only 22 percent at the time had a plan on how to make their payments.
Some borrowers are going on a “student debt strike” and refusing to make payments as a way to show their discontent with the system.
Meanwhile, President Biden, who had made relief a key pledge of his 2020 campaign, has released an “on-ramp” repayment plan that allows borrowers to miss their monthly payments for the next year with fewer consequences than before. The Department of Education will not put borrowers in delinquent status if they miss payments, garnish their wages or send them to debt collectors.
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Comments
Why is the government in the student loan business at all?
Because private lenders wouldn’t make loans to bad risks without government guarantees.
For the same reason they’re in the education business, the transportation business, the safety business, the grants business, the subsidies business, the employment business, the retirement business, and the medical insurance business.
Mission creep, and insufficient pushback from people who understand the constitution.
Back up a couple of steps:
Why is the government in the “education” business in the first place?
It’s a sad day for the morons who p**sed away the opportunity to pay down 100% of their loan principal over the past three years while their loans accrued no interest. I paid off the loans that I had taken out for my kids. It was great watching that number go down every month until it reached zero.
The sad part is that a lot of these morons, if they thought Uncle Sugar was going to make those loans go away, could still have banked the money that would go to the loans during the deferral period. They could have made 4 to 5% on that savings and then applied it to the loans when it was clear that they weren’t going to be forgiven. And if the loans had been forgiven, they’d have a down payment on a house or be able to buy a car without a loan.
Amen, friend. Likewise, during the pause I paid down over half my balances, all from PLUS loans, cutting my payment today by two-thirds. And I did it by living frugally and paying down a loan at a time. Everything’s quite manageable now.
Self-discipline and deferred gratification actually work.
I saw the NBC News sob story about this and just shook my head. One guy and his wife owe $1 million in student loans, and they plan to solve that problem, IIRC, by borrowing more money for one of them to go to law school. Wot??? I hope I misread.
There needs to be a lifetime limit for PLUS and graduate loans (where a lot of this is accumulated), and some fraction of these loans should be dischargeable in bankruptcy.
But still, you borrowed the money for educational services, you received those services, so pay it back. Period.
The NBC report on this is laughable–I can’t decide who is worse–the two lawyers who have a million dollars in loans, or the teacher who quit teaching and now makes $200 a month freelance writing.
We should not be required to reward their greed and stupidity
“It’s a sad day for student loan borrowers and for the country that student loans have to come back on”
F off, deadbeat. You took money and promised to repay it. Now repay it.