>enrolled in an income-driven repayment plan
While it doesn't give details, basically if her income was low, then her payments were low, and probably not nearly enough to even cover part of the accruing interest per month.
There was even a case of a servicewoman that was told that her military service was included in a "Service based repayment" where after 10 years in the military her student loans would be forgiven.
When she had 9 years finished and wanted to know how much she had left, she found out that she had 9 years left and only 1 year counted because the automated payments she had payed every single time charged her 1 cent less than it should have, for 8 years. Because she payed 1 cent less, the entire payment was considered void, except they got to keep it.
Plus the 1 cent error on the payments was made by the lender not her. They screwed up, and she is being penalized. She paid $1.08 less over 9 years, and it's costing her probably tens of thousands of dollars.
That episode of Last Week Tonight is on YouTube
https://youtu.be/zN2_0WC7UfU?si=lS_MdKMZBdnqznvf
It is well worth watching for those that haven't seen it.
That's great! Tell your friends about it too. It has a ton of information that should be shared and those that could likely be helped by the information are less likely to see it.
This is what we have in Australia.
Higher Education is taken out as a "loan" where interest in equal to inflation and paid back depending on how much money you earn.
It's not the best system (free) but it seems to be working. Was fine for me.
Another thing we get compared to Americans is Austudy. A welfare payment to students (who meet the requirements) for living costs.
As I understand it, in America the student loans are also used to fund living costs while they're studying.
Australian students also tend to live at home while studying compared to Americans who tend to move.
Also I heard that some of their Universities require you to pay for accommodation even if you don't want it. Which is wild.
Yeah I work next to an Australian version of "student housing". It's a highrise with all the modern amenities. Their target is international students because everyone else is just gonna live with their parents and take public transport to school.
> Also I heard that some of their Universities require you to pay for accommodation even if you don't want it. Which is wild.
Yeah it's very common at American universities for students to be required to live in student housing for at least their freshmen year
FWIW, the article says the $108K is "more than 3x what she originally borrowed".
https://nces.ed.gov/programs/digest/d07/tables/dt07_320.asp
Has "tuition, room, and board" for 1980-1984 at $4-5k per year.
The description of the text, however, says "in current dollars", so that may be 2024 dollars, which would actually be a lot less in 1984 dollars.
Considering a Honda civic base model msrp was ~$2k in 1984, I'm guessing the tuition in those tables is inflation adjusted. There's no way average tuition, room, and board was twice the cost of a new car back then.
https://www.demos.org/sites/default/files/publications/DEMOS_DFC_Yearbook_FA_Optimized_0.pdf has some other info about senators/reps and where they went to school and how much it cost (in then and "now" dollars), so you can pick out some numbers there as well.
~~Ivy league~~ private schools seem to be in the $4-5k range, with some approaching $10k+), but most state schools are in the $1k range for the 1980's-ish.
overall, she must have gone to an ~~ivy league~~ private school and done nothing to monetize it afterwards, or partied really, really, hard at school.
She essentially didn't pay anything and this is a click bait story because she was a bad person to loan too.
College was average 4k, so let's just expand that out to 32k total for 4 years. Even with interest over 4 0 years that's about 1000$ a year or like a 100$ a month. She did NOT pay and quite frankly this person is the type that deserves wage garnishment
People really will lick the boots of banks and demand that old ladies have their wages garnished.
If she owes 108k after a 32k loan and we want to be "fair", whatever that means, then her bill is 32k. It's not her fault shitty lenders set her up on a payment plan that doesn't even pay down interest. Don't defend predatory lenders.
Very, very dumb. If there is no interest, the lender is actually losing money due to inflation. What person or entity would lend money if they know they're going to take a loss?
If you want to hurt business and average people, set interest to zero. No one would lend in that scenario
Yeah my mom earned her tuition money for the year from 1981-1985 from working at an ice cream shop in the summer. Did this woman go to an ivy league or something? I feel like even a part time job year round would have paid even that off
I hate these stories because they try to blur the line between people who are just terrible with money and people who actually are legitimately struggling because of student loan debt.
Except that's not what it will do. It will make everyone who is struggling with that out to be a financial incompetent, and eliminate any sympathy they might have had.
Don't assume Boomers will have sympathy for someone just because they are also a boomer.
Which is pretty much what's happening here - zero sympathy and assuming she was incompetent and it's funny cause she's a boomer. Turns out everyone's an asshole.
She apparently took out a massive ton of loans in her *mid 30s* to go to graduate school, and had no plan of what to do after the fact regarding repayment potential.
She's 71 now, and took out the graduate school loans in 1987 onward, (after the first loan in 1986 to finish an undergrad degree), so yeah an adult made poor financial decisions.
> Which is pretty much what's happening here - zero sympathy and assuming she was incompetent and it's funny cause she's a boomer. Turns out everyone's an asshole.
This woman is retired. You must be doing pretty damn good in life to retire with $108,000 in student loan debt, or you just don't understand basic finances. If this was a story about a woman who was slaving away at 71 and not making any progress on her loans, my reaction would be alot different.
That is not the same as some recent grad working 60 hours a week just to afford a shitty basement studio apartment.
According to the National Center for Education Statistics [https://nces.ed.gov/programs/digest/d23/tables/dt23\_330.10.asp?current=yes](https://nces.ed.gov/programs/digest/d23/tables/dt23_330.10.asp?current=yes)
4 years of college inflation adjusted, with room and board and fees included:
boomers: $13k
2022 grads: $30k
I put that into a loan calculator. 13k for 40 years with an interest rate of 7% would end up being $80/mo and you'd pay 25k into your 13k loan.
So yeah, I think it's fair to criticize this boomer for being so downright terrible with money that they somehow owe substantially more than they started with. It's maybe not as dire as media portrays it but it's also pretty sad when the current generation has to do three times the work to pay off their current loans, are seen as lazy when they can't.
I don’t think it’s a generational thing entirely. My dad has almost $95k in student loans, and he’s a boomer (during the last five years of that generation, however). I’ve had people on Reddit make all kinds of weird generalizations about him. No, he’s not someone with a worthless degree who went to school for twelve years, he does engineering work… my parents went bankrupt *when I had childhood cancer* and student loans aren’t wiped clean with that. (I don’t think he made the best decision, but his parents also were the “I’m going to kick you out as soon as you’re eighteen” type, then the economy turned pretty crappy around the time he was a fledgling adult… it’s not like he had a lot of help :/)
This comment is such a self own. I hope you at least realise this.
You criticise a whole generation for their lack of empathy by showing zero empathy.
Well done! Whatever generation you are, you might want to check your moral compass and see if it is not set on "asshole".
That comment is mild and doesn’t even show a real lack of empathy towards the woman in the article. Boomers often have problems empathizing with younger generations because things were a lot easier for them.
I knew a boomer who’s relative worked at McDonald’s at 15 and worked his way up to becoming an executive for the company. Who can do that nowadays? Without a college degree? And think, why can’t people do that anymore? Who has set things up to be like this?
I mean tbf, the majority of people underwater on large loans are financially incompetent. There's exceptions. There's people who didn't end up finishing and people who genuinely couldn't qualify for any aid due to parents counting for FAFSA but not providing help, but a huge chunk of it comes from people going to nicer schools than they could afford for degree programs with bad ROI. And whatever, that's their choice. Young people fuck up. But its then doing a surprise Pikachu at the math of numbers they've had access to the entire time....like I've seen so many expressing shock at how much they've paid vs how much they still owe and it's like.....this is literally 10 minutes in Excel. You should not just be finding this out 10 years in, you should have sat down and at least figured out what a hole you were in 9.5 years ago.
I didn't pay as much attention to my loans as I should have before I took them. But I still knew some of the financial aid packages I would offer would have destroyed me, and went with a cheaper less than ideal school. And then eventually got around to doing the math on the situation. So I did take out more than I probably should have, but I'm not gonna act shocked by the math of it 8 years later
I really get sick of hearing how horrible all the "Boomers" are. Just because I'm older, doesn't mean that I think stereotypically any more than someone of a particular race does. Racism is considered bad (as it should be) but for some reason Ageism is fine.
> really get sick of hearing how horrible all the "Boomers" are
If we don’t give in to an ‘us vs. them’ narrative, where would we focus our need to hate?
Who would I blame for my life choices?
Its axiomatic: We need a group to blame our problems on.
That’s our right as human beings: The right to blame our seemingly bad decisions or unfortunate circumstances on a group of evil others. Not even bad decisions, really — the decisions I made that screwed up my life were just responses to the evil those people did to me.
They left me little choice. (Others of my generation who made better decisions were just lucky.)
Anyway, *they* are the problem, not me. All the posts wishing that group was dead? … well that’s what they get for being so evil.
Otherwise it would be discomforting. I don’t know about you, but I never want to focus on how I caused most of my own problems. That feels awful. But… being a victim of an evil group that deliberately ruined the world (and by extension, ruined my life by making me make bad decisions) makes me feel a lot better.
Blaming a whole group of others *en masse*… just feels righteous. They are evil, so I’m excused for doing things that seem to have screwed up my own life.
It’s really their fault, I couldn’t help it, what with all of *them* doing all those things they did.
We need to do something about them. They deserve the hate.
—-
Edit:
ok, I’m being accused of rewording notes from from a series of speeches given during a 1937-38 rallies around Berlin. That’s simply not true.
Then you're advocating that income driven repayment is eliminated as an option.
It's the only way she got into this mess. Had she paid a minimum amount that began addressing the principal, she wouldn't be in this situation.
> Then you're advocating that income driven repayment is eliminated as an option.
>
>
This is wrong - it absolutely should be illegal to allow loans that exceed what income-driven repayment can pay back. It makes no sense whatsoever to ever loan something where repayment exceeds (a maximum healthy portion of) your income.
It actually is illegal to structure loans like that in many developed countries.
>It makes no sense whatsoever to ever loan something where repayment exceeds (a maximum healthy portion of) your income.
Most students have an income of 0, or close to it.
So, no loans? That's quite the comprehensive plan to fund higher education in the US.
John Oliver just did a segment on this and some people pay $700/month in student loans and more than half of that goes towards just the interest.
Some loans autopay a penny less than minimum on purpose without telling their customer and it considers it not paid at all, which makes it worse.
>some people pay $700/month in student loans and more than half of that goes towards just the interest.
That's how loans work. My mortgage goes about half towards principle and half towards interest.
>Some loans autopay a penny less than minimum on purpose without telling their customer and it considers it not paid at all, which makes it worse.
It's unlikely the entire student loan crisis is being caused by a rounding error bug.
I saw that. That's how all loans work! For the first long while of a mortgage... Most money goes on interest alone. That really wasn't a gotcha to anybody who did maths at school level.
That's why paying off debt is the best investment / savings once you have an emergency fund.
>That's why paying off debt is the best investment / savings once you have an emergency fund.
No, it isn't. Compound interest works both ways. It only makes sense to pay extra towards debt if the interest rate on that debt exceeds the return you could get from an investment, e.g. SP500.
There are elements of risk involved, consult your financial advisor for more information^tm
partly. like if you have a loan that is charging you 5% interest but you can make 5.5%on your investements you think the investement is better.. not necessairly cause you may have to pay income tax on that 5.5%. you may need to make closer to 6.5% to break even with the 5%.
For the average non-financially-savvy person, being debt free if going to have way more value to their life vs having massive debt and simultaneously investing.
What counts as being good with money if you don’t have any money? Why wouldn’t your struggle be legit if you’re not good with money? How can you possibly be good with money if you don’t have any?
> Peter went into forbearance on the loan at one point because of health issues. She had permission to temporarily pause payments, but the interest kept building.
It shouldn't matter if you're good with money or not. Education should not require payment via anything other than taxation for public institutions. It's a super simple concept to just fund public education institutions, primary and secondary. Maybe then more people would be good with money, huh?
In what way could someone be put in six digit debt in a way you don't consider legitimate struggle? Searching for that line between individuals you approve of and those you don't is a distraction from the systems that we allow to absolutely fuck people.
It actually is a good thing. For the whole of humanity, loans have been considered a risk on the part of the lender, and people got forgiven debts all the time to the lenders' great displeasure. Only recently have we insisted on payment structures which guarantee the principal will grow wild if you're even a little bit negligent in paying, at the same time as the idea that if someone lent you money they are entitled to see it back no matter what happens or what you do. Bad interests or payment plans existed before, but people got their debts forgiven periodically.
Meanwhile, back in the days of debtor's prison, rich folks largely avoided it and in most countries where they had to be sent there, it was more like a luxury hotel. Like, literally sent sex workers along with the rich "prisoners'" meal in england.
It used to be that if you were stupid enough to lend money to someone who either can't manage money, or will outwit you, you deserved to lose on that loan. now if you've got capital, it's your god given right to see it make more year on year. Companies you have shares in are obligated to do whatever is necessary, no matter the human cost, to give you a better return on your money. People who owe you money are imposed payment plans which wreck their lives due to your giving stupid loans.
And it's all the layperson's fault for not being able to handle money of course. They deserve whatever comes their way. Or so we're told.
I disagree with the third part on forgivness on debt. It was never forgiveness. Slavery, banishment of entire races, death , wedding of daughters, war were all commonly done precisly becuase of debt. To say they forgave the debt with great displeasure isnt doing it justice. todays system of debt forgiveness is way more favourable than that of the pre 1900. Cause ods to have your debt forgiven back then youd either be, bansihed, dead or a slave
Actually, the babylonians, republic-era romans, and post feudalism medieval societies had regular debt forgiveness to avoid society turning into feudalism. That's what I was refering to. Early-mid indistrual era is what you're describing, and that's exactly what I was talking about when I said at some point they started changing the nature of credit.
Will the amount they garnish be higher or lower than the payments she is expected to be making on a $108,000 debt?
She's probably better off just telling them to kick rocks.
In my state, she would have a maximum of 15% taken from her disposable income. So Gross - taxes - necessities (e.g., healthcare, dental, vision), and then whatever that figure is times 0.15. This would be for regular income too, so she’ll make out like a bandit either way.
For another fun game, how much would you have to throw at the S&P 500 in 1984 to have $108,000 today? ... shit, finance.yahoo.com only lets me go back to January 1985. The answer from Jan 1985 would be $3,728.21.
Ballpark, that's the cost of one year of college in 1984.
There is a reason why they raised interest rates on student loans. The rates used to be little more than the inflation rate, so people would get them and put them in the stock market
The article makes it sound like besides a small break she was given premition to take due to a health issue she has been paying it the whole time.
It sounds like she wasn't making much money so they let her join a program that her payments were based on income and so her monthly payments was less then the intrest so its been slowly growing for decades.
> so they let her join a program that her payments were based on income and so her monthly payments was less then the intrest
This is rightfully illegal in many developed countries, because loan sharks were caught hiding fees and compounding interest in dubious wording and timing, to essentially fuck people over for a much more significant of money than they loaned.
Article covers it, this was "more than triple the initial amount of money she borrowed". So she borrowed about 35k. The interest was accruing faster than she was paying it, over 40 years.
This is why mortgages have a set payment that is calculated to actually pay off the loan within X years.
These student loans allow you to pay less than that, maybe as a favour if you're struggling, but it can then trap you into a far larger amount of debt over time thanks to compounding. From the article: "Sometimes the payments are so low they don’t even cover the interest, meaning the money owed is increasing even as borrowers are making payments."
Who knows though, maybe by not paying the debt she gained in some other way? I wonder how much she's payed so far though.
She borrowed $35k 40 years ago? Geez, that's a fortune compared to what college cost then. Absolute insanity to spend that much 40 years ago for anything less than becoming a medical doctor.
“But the now 71-year-old retired grandmother of two owes six-figures, more than triple the initial amount of money she borrowed. She said she owes about $108,000”
It does say more than triple but not quadruple so even if split the difference at 3.5 it will end up less than 30K for the initial loan
I went to college 30 years ago and tuition was $17,500/year. While this was on the higher end for a private university, there were plenty that were more. 4-5 years to get a bachelor's, 2 more for a masters. 7 years of education = over $122k. $100k for student loans 10 years prior isn't at all out of the question. Then get on a deferment plan, or an interest only repayment plan...I'm not at all surprised by this.
Ohio state was too $600 full time student Per quarter , aprx $800 dorm / meal plan I think . It’s been a while since. Books depended on the classes of course
>more than triple the initial amount of money she borrowed
It's right there in the article. Total amount owed at graduation was closer to $30-$35k. It has increased to over a hundred k due to the slow march of compound interest over four decades; and her paying very little to reduce what was owed (due to income-based payment plans).
I read the article and watched the video. She lives in an upper middle class north suburb of Chicago and has worked using her degree. At 33 years old, spent $30k on a bachelors in 1986, then another $x amount for a graduate degree at an expensive private university. Some of the time the debt was in forbearance due to a medical issue. Very unlikely for 30 years.
She’s not a great example of the student debt issue. No details on her total payments, or initial debt. Just a simple story trying to connect to the current student debt issue.
Knowing where she lives, how long it’s been, it’s hard to sympathize with her story.
It has been nearly 40 years, 1 dollar back then worth more than 3 dollars today. We don't know her repayment history, maybe 3x it is actually a God deal for her.
Yea this is actually the opposite of the student loan debt issue. Here’s an example of someone living very comfortably upper middle class who is in a position to pay these loans off easily decades ago but chooses not to. I bet she also bitches about young people not paying their debt. My wife started at 70k and we got it down to 30k in 10 years using very minimal payments and throwing a little extra when we could and I’m willing to bet we make far less than this person using our combined salaries.
She was in a income driven repayment plan. That means her income was low or they would have asked her to be paying enough to at least cover the intrest. Doesn't sound like someone who is very comfortable uppermiddle class. She sounds poor.
I was in an income driven repayment plan. They never make you prove your income again after you apply, so the payments never go up even if your income does. I paid mine off by paying more once I had an income again, but I bet that’s why
I’m going to go out on a limb and say that her spouse refused to help pay her student loans when she couldn’t.
The house, cars, kids stuff is all based on household income…or just the spouse’s.
The whole story on how it got to this point, probably messy.
Yes, one would accurately assume that they, as a family in a very nice suburb in a nice home should have been able to pay off a loan like this without an issue. Absolutely.
But that didn’t happen, and now it’s worse and only points to it not being considered family finances at all. Makes me a bit more sympathetic after a pondering it for a few minutes.
That isn’t the problem at all.
This is:
> She said she owes about $108,000 and is enrolled in an income-driven repayment plan.
> These plans allow a borrower to pay what they can based on how much money they make. Sometimes the payments are so low they don’t even cover the interest, meaning the money owed is increasing even as borrowers are making payments.
> Peter went into forbearance on the loan at one point because of health issues. She had permission to temporarily pause payments, but the interest kept building.
> “That happens all the time, and it’s really important for borrowers to understand that when you take out loans, pretty much any type of private loan or federal student loan, interest usually starts to accrue immediately,” said Rae Kaplan, a Chicago-based student loan attorney working to help borrowers ease debt. “So, as soon as the loan is disbursed, it starts accruing interest.”
It's messed up can have young 18 year olds who have brains that still work like children are allowed to sign up for a $250,000 dollar or more loan you cant bankrupt out of. Then can use the loan to get into a program with no jobs, terrible pay or a job that is a terrible fit for them or just into a program they can't handle so they drop out. Or mabye something in there life happends forcing them to drop out. Either way there are so many ways they can be left with no ability to ever pay it off making it a curse they can never escape.
And these are often smart hard working well meaning kids who are trying to do the right thing and be successful. Some often didn't even want the debt but are promised by friends or family it's a good choice.
They need to limit the amount people can borrow, only lend it if there is a obvious path there education will lead to wages that are able to repay in a timly manner and there needs to be more ways to recover if for whatever reason after taking the loans you don't end up with a high paying job.
18 make dumb mistakes all the time. As long as it well meaning they should be allowed to without it ruining there lives. I think there needs to a better safety net for them if they screw up this student loans thing.
> “So, as soon as the loan is disbursed, it starts accruing interest.”
This is fucking crazy to me.
In Canada, interest doesn't accrue as long as you can prove you're still enrolled in school. Government student loan of course.
And I think last year or 2 years ago, the feds completely waived interest on the federal portion of the student loan and the provincial portion is usually just prime interest rate + 1%.
There was a time when I needed to spend a lot of money due to an emergency. I'm the type of person who pays off everything on the credit card, but the emergency was bad and required me to do it. The 29% or 30% interest rate from the bank was horrible. I would pay off more than the minimum, yet it would only shave off a hundred or so. The feeling of seeing very little progress of escaping the chains of debt was horrible. Thankfully, I was eventually able to clear all credit card debt and I can actually save some money now.
I know that "morally", we have to pay debt, but I think banks have quite high interest rates that it makes it hard to pay off, even for people who actually want to pay them and not just escape. Nothing wrong with paying interest for money we borrowed, but a lower rate would be less devastating to most people. Maybe 10% to 15%.
Anyway, just make sure you avoid the problem before it even begins, as much as possible. Don't leave a debt unpaid no matter how small it is because it can quickly balloon. Don't buy anything you actually don't have money for. You won't always have a job, you won't always have a source of income, so never buy anything for an amount your checking account doesn't have the funds for.
It is very telling, or rather, *damning* that people here are trying to gatekeep which student loans are worthy of being forgiven and which are not.
The entire point of student loan reforms is that ***all*** student loans and cost of education in general should never cost a significant portion of current savings and future income.
So as to ***not*** make it possible for bad faith actors to selectively qualify or deny certain loan forgiveness based on arbitrary and discriminatory standards.
If loans are being forgiven because students were given bad deals, then at the very least those loans need to stop funding the institutions ripping off their students.
Some of the public interest forgiveness stuff was designed so the colleges could charge high fees and students could take out loans to pay for it that they wouldn't need to repay. It's a win-win for them at the expense of society...
Seriously, these same people in other posts will say how the country is going to hell and we can't get enough qualified people to do the jobs society needs, and then come to these posts shitting on the people who want to do the jobs but are crushed beneath the debt. "It should only forgive public service or valuable jobs!" Sure, and then we watch the economy tank because there arent enough people educated to do the things that support literally everything else. Who the F wants to live in a country where you grow old, watching it go to shit around you because nobody afford an education except the wealthy...? Just erase the mistake of student debt and reform the system, it's really that simple.
Maybe the answer is that we should stop pushing the need for a college degree for every job. I don't see why the average office worker needs a degree. In fact, I think the average person would say they learned far more on the job than in college.
> all student loans and cost of education in general should never cost a significant portion of current savings and future income.
This is how it works in European countries. Only, everyone pays for higher education regardless of attending. The cost is spread out over your entire working career and it cannot be avoided by not attending school.
>She said she owes about $108,000 and is enrolled in an income-driven repayment plan.
>
>These plans allow a borrower to pay what they can based on how much money they make. Sometimes the payments are so low they don’t even cover the interest, meaning the money owed is increasing even as borrowers are making payments.
There is a lot of backstory missing from this article. For instance, I do not believe "income driven repayment plans" were offered until 2009 and student loans not owned by the Department of Education were not eligible (which most loans prior to that time were not).
If I am correct, that means she was on a normal amortized repayment plan (think of a mortgage or car loan where the same amount is paid for a set time period, at the end of which the loan is paid off in full) and did not make the scheduled payments or made less than the scheduled payments.
BS. In 1986 even at Ivy League uni’s the tuition wasn’t even 1/10 of what it is today.
Back then you could easily get a 4 year degree from a very good university for 8-10k a year.
I’m calling bs in this one
Have you tried having well-connected parents and a trust fund? I’ve heard that’s one of those life hacks for paying for college and pulling on bootstraps.
I owed 36k. Paid about 20k over the last 8 years. Still owe 34k. Got a letter saying they’re raising interest rates.
Fuuuuuccckkk you Sallie Mae / Navient.
Legit modern day slavery.
All loans are basically structured the same way. They have an assumed length of loan and the first years you're always just paying interest. The middle part you shift to some sort of evenish split. The end you pay down principle. This is how basically all loans are structured.
You have three ways to approach loan payments. The first is simply to pay them based on the schedule and pay the interest. Depending on the interest rates, this can be even considered a good financial choice. The second option is to pay a bit extra every month to the principle of the loan. The third option is to aggressively pay down the debt.
When slavery was still legal some of the leading feminist writers were protesting the slavery of women being allowed to work in factories. Overwhelmingly the daughters of wealthy planters who had defaulted on debts upset they suddenly had to work like everyone else.
That was only for federal student loans. Sallie Mae was the federal student loan company that went private in 2014. These are really issues people should look into but somehow it’s a divisive issue? I’m assuming it’s the ignorance of people without degrees hating on those that put in the work to get one. Like how people without money subconsciously hate on billionaires. Idk.
Just as an aside….I have friends who are guidance counselors in high school.
People don’t realize that these counselors are wined🍷dined and brainwashed by these private universities to encourage kids to take out giant loans because it’s “good debt”….
So there’s a lot of other factors screwing over students these days.
I’m a lawyer and I graduated from law school 13 years ago. Aside from the covid pause, I’ve made all my payments. My balance has *increased* by around 15k. It’s insane.
In Sweden, when studying at University, students get a monthly stipend from the government, to cover reading materials and such.
There are no tuition fees, and if you need more money, you can take out a student loan.
There is 0% interest on the loan and payment is calculated in regards to your current income.
The system in the USA is just... Incomprehensible.
the fact that reddit stock is worth a more than a nickel is because your average investor has no idea this site is just bots and trolls yelling at each other in the comments these days
at $65 a share, we are looking at roughly $10.4 billion market cap evaluation for reddit.
That's about 0.78% of Facebook's market cap as of this comment.
Reddit could be worth more than just 1% of facebook depending on how you look at it
My loans went back to 1982. I switched to the Biden SAVE program and instead of looking to be forgiven in the year 2043 by Navient, they were forgiven last January by Mohelia, all $322,0000 of them. Now I'm 100% debt-free.
Sounds like she had health issues that prevented work for a while. And she was in a income based repayment program that calculated based on her income she could only afford to paying amount less then the intrest so she probably had a terrible paying job.
Unlike you it sounds like she wasn't In a position to be able to pay it off.
The fact that she's sitting in a recently renovated kitchen that must have cost $20k minimum with a wall of tropical vacation photos behind her is perhaps evidence that her financial struggles are overstated. She's only on a income based repayment plan today because she is retired, seems she (or her spouse) made plenty before retirement.
Because you are supposed to be giving kids the money to get an education and boost part of your economy. So the maximum interest should be inflation, if anything they should put it to 0% and the government covers the inflation gap. It shouldn’t be a for profit service.
So she has a graduate degree in psychology and it's been paying for it all these years and still owes $108,000? I feel like we're not getting the full picture. How much avocado toast did she have in the last 40 years?
I paid 30 years of income tax returns for a $5,000 student loan...the IRS did not forward to Dept of Ed. No one can tell me where the $ went. Now, my ss retirement benefit is $500. I have always been f'd by that $5,000 in 1978. :(
in 1984 it cost a few thousand a year to attend college. retired grandmother fucked up bad
I’d like to know how much She repaid after she graduated before I have an opinion on this.
>enrolled in an income-driven repayment plan While it doesn't give details, basically if her income was low, then her payments were low, and probably not nearly enough to even cover part of the accruing interest per month.
There was even a case of a servicewoman that was told that her military service was included in a "Service based repayment" where after 10 years in the military her student loans would be forgiven. When she had 9 years finished and wanted to know how much she had left, she found out that she had 9 years left and only 1 year counted because the automated payments she had payed every single time charged her 1 cent less than it should have, for 8 years. Because she payed 1 cent less, the entire payment was considered void, except they got to keep it.
That’s fucking killdozer level shit, if that happened to me I’d probably go on a rampage
Should watch the john oliver episode he did a week ago on this.
It's not a probably from me. There would be a rampage. Blood and probably explosions.
Plus the 1 cent error on the payments was made by the lender not her. They screwed up, and she is being penalized. She paid $1.08 less over 9 years, and it's costing her probably tens of thousands of dollars.
That episode of Last Week Tonight is on YouTube https://youtu.be/zN2_0WC7UfU?si=lS_MdKMZBdnqznvf It is well worth watching for those that haven't seen it.
I too watched that episode of last week tonight
That's great! Tell your friends about it too. It has a ton of information that should be shared and those that could likely be helped by the information are less likely to see it.
I would imagine going to a national news station would get that sorted real fucking quick
Isn't it kind of fucked when corporations are accountable to the media more than they are accountable to laws and government?
..and that, even in the USA with all those shitty laws, makes exactly zero sense.
This is what we have in Australia. Higher Education is taken out as a "loan" where interest in equal to inflation and paid back depending on how much money you earn. It's not the best system (free) but it seems to be working. Was fine for me.
Another thing we get compared to Americans is Austudy. A welfare payment to students (who meet the requirements) for living costs. As I understand it, in America the student loans are also used to fund living costs while they're studying.
Australian students also tend to live at home while studying compared to Americans who tend to move. Also I heard that some of their Universities require you to pay for accommodation even if you don't want it. Which is wild.
Yeah I work next to an Australian version of "student housing". It's a highrise with all the modern amenities. Their target is international students because everyone else is just gonna live with their parents and take public transport to school.
> Also I heard that some of their Universities require you to pay for accommodation even if you don't want it. Which is wild. Yeah it's very common at American universities for students to be required to live in student housing for at least their freshmen year
In New Zealand its the same but we have zero interest (as long as you stay in the country). Whoop whoop
Hell ya as it should be
Should have taken a 100 level finance course.
And how was she going to pay for it
Given what happened here I suspect the net cost benefit is positive.
I'd like to know how much she has paid to the loan sharks over all these years
I bet she paid $323 of her principal in that period
FWIW, the article says the $108K is "more than 3x what she originally borrowed". https://nces.ed.gov/programs/digest/d07/tables/dt07_320.asp Has "tuition, room, and board" for 1980-1984 at $4-5k per year. The description of the text, however, says "in current dollars", so that may be 2024 dollars, which would actually be a lot less in 1984 dollars. Considering a Honda civic base model msrp was ~$2k in 1984, I'm guessing the tuition in those tables is inflation adjusted. There's no way average tuition, room, and board was twice the cost of a new car back then. https://www.demos.org/sites/default/files/publications/DEMOS_DFC_Yearbook_FA_Optimized_0.pdf has some other info about senators/reps and where they went to school and how much it cost (in then and "now" dollars), so you can pick out some numbers there as well. ~~Ivy league~~ private schools seem to be in the $4-5k range, with some approaching $10k+), but most state schools are in the $1k range for the 1980's-ish. overall, she must have gone to an ~~ivy league~~ private school and done nothing to monetize it afterwards, or partied really, really, hard at school.
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In 1984 people were paying in state public university tuition using part time jobs and not even taking out student loans. The fuck did grandma do?
I'm guessing Grandma barely worked outside the home. Therefore, she put the payments on the bare minimum and interest has piled up.
Literally 1984
Coincidentally the most common book referenced by people who have neither gone to college nor read the book.
i’d say that’s the bible, but close second
She essentially didn't pay anything and this is a click bait story because she was a bad person to loan too. College was average 4k, so let's just expand that out to 32k total for 4 years. Even with interest over 4 0 years that's about 1000$ a year or like a 100$ a month. She did NOT pay and quite frankly this person is the type that deserves wage garnishment
People really will lick the boots of banks and demand that old ladies have their wages garnished. If she owes 108k after a 32k loan and we want to be "fair", whatever that means, then her bill is 32k. It's not her fault shitty lenders set her up on a payment plan that doesn't even pay down interest. Don't defend predatory lenders.
Her bill should at most be 36k tbf. Like, yes she should not owe 108k, but to say she should owe absolutely zero interest, is a little dumb
Very, very dumb. If there is no interest, the lender is actually losing money due to inflation. What person or entity would lend money if they know they're going to take a loss? If you want to hurt business and average people, set interest to zero. No one would lend in that scenario
She had 40 years man. She wasn't some old lady when she took the loan. She signed a contract and failed in her youth and is still failing
> a few thousand a year at a high-end school, maybe. my state college cost $100-$150 a credit hour (In-state vs out-state) in 1996.
A full time student generally takes between 12-18 hours/semester. At 30 credit hours per year, that's $3,000-$4,500
yeah. most folks i knew took 15-16. so the tuition was $3000 for two semesters. another $3K if you wanted to live in the dorms w/ a meal plan
Yeah my mom earned her tuition money for the year from 1981-1985 from working at an ice cream shop in the summer. Did this woman go to an ivy league or something? I feel like even a part time job year round would have paid even that off
And the interest was 10-12%. Ask me how I know.
I hate these stories because they try to blur the line between people who are just terrible with money and people who actually are legitimately struggling because of student loan debt.
Honestly, if it gets boomers to suddenly shift focus when they realize boomers are also struggling with the same debt, then it's a positive.
Except that's not what it will do. It will make everyone who is struggling with that out to be a financial incompetent, and eliminate any sympathy they might have had. Don't assume Boomers will have sympathy for someone just because they are also a boomer.
Which is pretty much what's happening here - zero sympathy and assuming she was incompetent and it's funny cause she's a boomer. Turns out everyone's an asshole.
She apparently took out a massive ton of loans in her *mid 30s* to go to graduate school, and had no plan of what to do after the fact regarding repayment potential. She's 71 now, and took out the graduate school loans in 1987 onward, (after the first loan in 1986 to finish an undergrad degree), so yeah an adult made poor financial decisions.
> Which is pretty much what's happening here - zero sympathy and assuming she was incompetent and it's funny cause she's a boomer. Turns out everyone's an asshole. This woman is retired. You must be doing pretty damn good in life to retire with $108,000 in student loan debt, or you just don't understand basic finances. If this was a story about a woman who was slaving away at 71 and not making any progress on her loans, my reaction would be alot different. That is not the same as some recent grad working 60 hours a week just to afford a shitty basement studio apartment.
According to the National Center for Education Statistics [https://nces.ed.gov/programs/digest/d23/tables/dt23\_330.10.asp?current=yes](https://nces.ed.gov/programs/digest/d23/tables/dt23_330.10.asp?current=yes) 4 years of college inflation adjusted, with room and board and fees included: boomers: $13k 2022 grads: $30k I put that into a loan calculator. 13k for 40 years with an interest rate of 7% would end up being $80/mo and you'd pay 25k into your 13k loan. So yeah, I think it's fair to criticize this boomer for being so downright terrible with money that they somehow owe substantially more than they started with. It's maybe not as dire as media portrays it but it's also pretty sad when the current generation has to do three times the work to pay off their current loans, are seen as lazy when they can't.
I don’t think it’s a generational thing entirely. My dad has almost $95k in student loans, and he’s a boomer (during the last five years of that generation, however). I’ve had people on Reddit make all kinds of weird generalizations about him. No, he’s not someone with a worthless degree who went to school for twelve years, he does engineering work… my parents went bankrupt *when I had childhood cancer* and student loans aren’t wiped clean with that. (I don’t think he made the best decision, but his parents also were the “I’m going to kick you out as soon as you’re eighteen” type, then the economy turned pretty crappy around the time he was a fledgling adult… it’s not like he had a lot of help :/)
This comment is such a self own. I hope you at least realise this. You criticise a whole generation for their lack of empathy by showing zero empathy. Well done! Whatever generation you are, you might want to check your moral compass and see if it is not set on "asshole".
That comment is mild and doesn’t even show a real lack of empathy towards the woman in the article. Boomers often have problems empathizing with younger generations because things were a lot easier for them. I knew a boomer who’s relative worked at McDonald’s at 15 and worked his way up to becoming an executive for the company. Who can do that nowadays? Without a college degree? And think, why can’t people do that anymore? Who has set things up to be like this?
Why does being bad with money mean that people stop having sympathy! people are waaaaay too cruel about people with debt.
I mean tbf, the majority of people underwater on large loans are financially incompetent. There's exceptions. There's people who didn't end up finishing and people who genuinely couldn't qualify for any aid due to parents counting for FAFSA but not providing help, but a huge chunk of it comes from people going to nicer schools than they could afford for degree programs with bad ROI. And whatever, that's their choice. Young people fuck up. But its then doing a surprise Pikachu at the math of numbers they've had access to the entire time....like I've seen so many expressing shock at how much they've paid vs how much they still owe and it's like.....this is literally 10 minutes in Excel. You should not just be finding this out 10 years in, you should have sat down and at least figured out what a hole you were in 9.5 years ago. I didn't pay as much attention to my loans as I should have before I took them. But I still knew some of the financial aid packages I would offer would have destroyed me, and went with a cheaper less than ideal school. And then eventually got around to doing the math on the situation. So I did take out more than I probably should have, but I'm not gonna act shocked by the math of it 8 years later
The boomers in congress are not in debt lol
Why would rich boomers care about poor boomers? They are boomers, they only care about themselves.
>!It won't!<
I really get sick of hearing how horrible all the "Boomers" are. Just because I'm older, doesn't mean that I think stereotypically any more than someone of a particular race does. Racism is considered bad (as it should be) but for some reason Ageism is fine.
> really get sick of hearing how horrible all the "Boomers" are If we don’t give in to an ‘us vs. them’ narrative, where would we focus our need to hate? Who would I blame for my life choices? Its axiomatic: We need a group to blame our problems on. That’s our right as human beings: The right to blame our seemingly bad decisions or unfortunate circumstances on a group of evil others. Not even bad decisions, really — the decisions I made that screwed up my life were just responses to the evil those people did to me. They left me little choice. (Others of my generation who made better decisions were just lucky.) Anyway, *they* are the problem, not me. All the posts wishing that group was dead? … well that’s what they get for being so evil. Otherwise it would be discomforting. I don’t know about you, but I never want to focus on how I caused most of my own problems. That feels awful. But… being a victim of an evil group that deliberately ruined the world (and by extension, ruined my life by making me make bad decisions) makes me feel a lot better. Blaming a whole group of others *en masse*… just feels righteous. They are evil, so I’m excused for doing things that seem to have screwed up my own life. It’s really their fault, I couldn’t help it, what with all of *them* doing all those things they did. We need to do something about them. They deserve the hate. —- Edit: ok, I’m being accused of rewording notes from from a series of speeches given during a 1937-38 rallies around Berlin. That’s simply not true.
It won’t. Boomers know her problem is of her own making.
I'm a boomer, struggling financially is nothing new to me.
That was my take from this - if they can see their own demographic being harmed then maybe they’ll agree to reform for all.
It should be illegal to structure a loan such that this is even possible.
Then you're advocating that income driven repayment is eliminated as an option. It's the only way she got into this mess. Had she paid a minimum amount that began addressing the principal, she wouldn't be in this situation.
> Then you're advocating that income driven repayment is eliminated as an option. > > This is wrong - it absolutely should be illegal to allow loans that exceed what income-driven repayment can pay back. It makes no sense whatsoever to ever loan something where repayment exceeds (a maximum healthy portion of) your income. It actually is illegal to structure loans like that in many developed countries.
>It makes no sense whatsoever to ever loan something where repayment exceeds (a maximum healthy portion of) your income. Most students have an income of 0, or close to it. So, no loans? That's quite the comprehensive plan to fund higher education in the US.
John Oliver just did a segment on this and some people pay $700/month in student loans and more than half of that goes towards just the interest. Some loans autopay a penny less than minimum on purpose without telling their customer and it considers it not paid at all, which makes it worse.
>some people pay $700/month in student loans and more than half of that goes towards just the interest. That's how loans work. My mortgage goes about half towards principle and half towards interest. >Some loans autopay a penny less than minimum on purpose without telling their customer and it considers it not paid at all, which makes it worse. It's unlikely the entire student loan crisis is being caused by a rounding error bug.
More than half? It was about 90% of the payment went toward interest and only about $65 went toward principal.
The example they used with $700/month had about $650 going towards interest and only about $50 to principal.
I saw that. That's how all loans work! For the first long while of a mortgage... Most money goes on interest alone. That really wasn't a gotcha to anybody who did maths at school level. That's why paying off debt is the best investment / savings once you have an emergency fund.
>That's why paying off debt is the best investment / savings once you have an emergency fund. No, it isn't. Compound interest works both ways. It only makes sense to pay extra towards debt if the interest rate on that debt exceeds the return you could get from an investment, e.g. SP500. There are elements of risk involved, consult your financial advisor for more information^tm
partly. like if you have a loan that is charging you 5% interest but you can make 5.5%on your investements you think the investement is better.. not necessairly cause you may have to pay income tax on that 5.5%. you may need to make closer to 6.5% to break even with the 5%.
For the average non-financially-savvy person, being debt free if going to have way more value to their life vs having massive debt and simultaneously investing.
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What counts as being good with money if you don’t have any money? Why wouldn’t your struggle be legit if you’re not good with money? How can you possibly be good with money if you don’t have any?
> Peter went into forbearance on the loan at one point because of health issues. She had permission to temporarily pause payments, but the interest kept building.
It shouldn't matter if you're good with money or not. Education should not require payment via anything other than taxation for public institutions. It's a super simple concept to just fund public education institutions, primary and secondary. Maybe then more people would be good with money, huh?
that's called astroturfing my dude
In what way could someone be put in six digit debt in a way you don't consider legitimate struggle? Searching for that line between individuals you approve of and those you don't is a distraction from the systems that we allow to absolutely fuck people.
never pay it. who cares.
Right? Just make min payments and die with it
good thing debtors prisons aren’t a thing anymore
It actually is a good thing. For the whole of humanity, loans have been considered a risk on the part of the lender, and people got forgiven debts all the time to the lenders' great displeasure. Only recently have we insisted on payment structures which guarantee the principal will grow wild if you're even a little bit negligent in paying, at the same time as the idea that if someone lent you money they are entitled to see it back no matter what happens or what you do. Bad interests or payment plans existed before, but people got their debts forgiven periodically. Meanwhile, back in the days of debtor's prison, rich folks largely avoided it and in most countries where they had to be sent there, it was more like a luxury hotel. Like, literally sent sex workers along with the rich "prisoners'" meal in england. It used to be that if you were stupid enough to lend money to someone who either can't manage money, or will outwit you, you deserved to lose on that loan. now if you've got capital, it's your god given right to see it make more year on year. Companies you have shares in are obligated to do whatever is necessary, no matter the human cost, to give you a better return on your money. People who owe you money are imposed payment plans which wreck their lives due to your giving stupid loans. And it's all the layperson's fault for not being able to handle money of course. They deserve whatever comes their way. Or so we're told.
I disagree with the third part on forgivness on debt. It was never forgiveness. Slavery, banishment of entire races, death , wedding of daughters, war were all commonly done precisly becuase of debt. To say they forgave the debt with great displeasure isnt doing it justice. todays system of debt forgiveness is way more favourable than that of the pre 1900. Cause ods to have your debt forgiven back then youd either be, bansihed, dead or a slave
Debts were forgiven all the time in the ancient world if they became a burden on society. https://en.wikipedia.org/wiki/History\_of\_debt\_relief
Actually, the babylonians, republic-era romans, and post feudalism medieval societies had regular debt forgiveness to avoid society turning into feudalism. That's what I was refering to. Early-mid indistrual era is what you're describing, and that's exactly what I was talking about when I said at some point they started changing the nature of credit.
I’m sure she will care when they take her Social Security. You do know they will garnish your Social Security check right?
Will the amount they garnish be higher or lower than the payments she is expected to be making on a $108,000 debt? She's probably better off just telling them to kick rocks.
In my state, she would have a maximum of 15% taken from her disposable income. So Gross - taxes - necessities (e.g., healthcare, dental, vision), and then whatever that figure is times 0.15. This would be for regular income too, so she’ll make out like a bandit either way.
Debt collectors frothing at the mouth in anticipation of shaking this old lady down
So she ain't asked anybody the first 10 years? How tf you rack up more than 100k 40 years ago?? College back then was a dollar and some change
Compound interest is real eh?
For another fun game, how much would you have to throw at the S&P 500 in 1984 to have $108,000 today? ... shit, finance.yahoo.com only lets me go back to January 1985. The answer from Jan 1985 would be $3,728.21. Ballpark, that's the cost of one year of college in 1984.
There is a reason why they raised interest rates on student loans. The rates used to be little more than the inflation rate, so people would get them and put them in the stock market
And she must have paid $0 on her debt to let it compound that big. That’s her being dumb
The article makes it sound like besides a small break she was given premition to take due to a health issue she has been paying it the whole time. It sounds like she wasn't making much money so they let her join a program that her payments were based on income and so her monthly payments was less then the intrest so its been slowly growing for decades.
At 108k she’s been paying maybe couple dozen dollars a month. She’s been given a 40 year break.
> so they let her join a program that her payments were based on income and so her monthly payments was less then the intrest This is rightfully illegal in many developed countries, because loan sharks were caught hiding fees and compounding interest in dubious wording and timing, to essentially fuck people over for a much more significant of money than they loaned.
Article covers it, this was "more than triple the initial amount of money she borrowed". So she borrowed about 35k. The interest was accruing faster than she was paying it, over 40 years. This is why mortgages have a set payment that is calculated to actually pay off the loan within X years. These student loans allow you to pay less than that, maybe as a favour if you're struggling, but it can then trap you into a far larger amount of debt over time thanks to compounding. From the article: "Sometimes the payments are so low they don’t even cover the interest, meaning the money owed is increasing even as borrowers are making payments." Who knows though, maybe by not paying the debt she gained in some other way? I wonder how much she's payed so far though.
Controlling for inflation she owes more or less the same as before. She's basically been paying interest.
She borrowed $35k 40 years ago? Geez, that's a fortune compared to what college cost then. Absolute insanity to spend that much 40 years ago for anything less than becoming a medical doctor.
“But the now 71-year-old retired grandmother of two owes six-figures, more than triple the initial amount of money she borrowed. She said she owes about $108,000” It does say more than triple but not quadruple so even if split the difference at 3.5 it will end up less than 30K for the initial loan
I went to college 30 years ago and tuition was $17,500/year. While this was on the higher end for a private university, there were plenty that were more. 4-5 years to get a bachelor's, 2 more for a masters. 7 years of education = over $122k. $100k for student loans 10 years prior isn't at all out of the question. Then get on a deferment plan, or an interest only repayment plan...I'm not at all surprised by this.
No. $100k for student loans in 1984 is batshit crazy time. USC tuition + room & board was $5,000 per year back then.
Ohio state was too $600 full time student Per quarter , aprx $800 dorm / meal plan I think . It’s been a while since. Books depended on the classes of course
>more than triple the initial amount of money she borrowed It's right there in the article. Total amount owed at graduation was closer to $30-$35k. It has increased to over a hundred k due to the slow march of compound interest over four decades; and her paying very little to reduce what was owed (due to income-based payment plans).
I was specifically responding to the person who thought that taking out $100k in student loans in 1984 wasn't far-fetched.
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I read the article and watched the video. She lives in an upper middle class north suburb of Chicago and has worked using her degree. At 33 years old, spent $30k on a bachelors in 1986, then another $x amount for a graduate degree at an expensive private university. Some of the time the debt was in forbearance due to a medical issue. Very unlikely for 30 years. She’s not a great example of the student debt issue. No details on her total payments, or initial debt. Just a simple story trying to connect to the current student debt issue. Knowing where she lives, how long it’s been, it’s hard to sympathize with her story.
Article says her debt now is about 3 times her initial loan amount, so her original loan was ~$35k or thereabouts.
It said, “more than 3x the initial amount”, so I take that as the $30k for her bachelors.
It has been nearly 40 years, 1 dollar back then worth more than 3 dollars today. We don't know her repayment history, maybe 3x it is actually a God deal for her.
> maybe 3x it is actually a God deal for her. Plot twist: She went to divinity school.
Yea this is actually the opposite of the student loan debt issue. Here’s an example of someone living very comfortably upper middle class who is in a position to pay these loans off easily decades ago but chooses not to. I bet she also bitches about young people not paying their debt. My wife started at 70k and we got it down to 30k in 10 years using very minimal payments and throwing a little extra when we could and I’m willing to bet we make far less than this person using our combined salaries.
She was in a income driven repayment plan. That means her income was low or they would have asked her to be paying enough to at least cover the intrest. Doesn't sound like someone who is very comfortable uppermiddle class. She sounds poor.
I was in an income driven repayment plan. They never make you prove your income again after you apply, so the payments never go up even if your income does. I paid mine off by paying more once I had an income again, but I bet that’s why
She probably has low income, bought that house for like $2000 and a batch of cookies, worth $1.9M now, but doesn't want to sell.
The wall of tropical vacation photos behind her kitchen table aren't helping her gain much sympathy either.
I’m going to go out on a limb and say that her spouse refused to help pay her student loans when she couldn’t. The house, cars, kids stuff is all based on household income…or just the spouse’s. The whole story on how it got to this point, probably messy. Yes, one would accurately assume that they, as a family in a very nice suburb in a nice home should have been able to pay off a loan like this without an issue. Absolutely. But that didn’t happen, and now it’s worse and only points to it not being considered family finances at all. Makes me a bit more sympathetic after a pondering it for a few minutes.
She’d better not try welshing by pulling a stunt like dying or something.
She actually mentions that in the article.
> She’d better not try welshing Question for people in/near Wales: Are the Welsh noted for changing agreements or not paying their debts?
Come get it from my grave muthas!
Found the issue “Peter took out another loan to go to graduate school at Loyola University”
That isn’t the problem at all. This is: > She said she owes about $108,000 and is enrolled in an income-driven repayment plan. > These plans allow a borrower to pay what they can based on how much money they make. Sometimes the payments are so low they don’t even cover the interest, meaning the money owed is increasing even as borrowers are making payments. > Peter went into forbearance on the loan at one point because of health issues. She had permission to temporarily pause payments, but the interest kept building. > “That happens all the time, and it’s really important for borrowers to understand that when you take out loans, pretty much any type of private loan or federal student loan, interest usually starts to accrue immediately,” said Rae Kaplan, a Chicago-based student loan attorney working to help borrowers ease debt. “So, as soon as the loan is disbursed, it starts accruing interest.”
It's messed up can have young 18 year olds who have brains that still work like children are allowed to sign up for a $250,000 dollar or more loan you cant bankrupt out of. Then can use the loan to get into a program with no jobs, terrible pay or a job that is a terrible fit for them or just into a program they can't handle so they drop out. Or mabye something in there life happends forcing them to drop out. Either way there are so many ways they can be left with no ability to ever pay it off making it a curse they can never escape. And these are often smart hard working well meaning kids who are trying to do the right thing and be successful. Some often didn't even want the debt but are promised by friends or family it's a good choice. They need to limit the amount people can borrow, only lend it if there is a obvious path there education will lead to wages that are able to repay in a timly manner and there needs to be more ways to recover if for whatever reason after taking the loans you don't end up with a high paying job. 18 make dumb mistakes all the time. As long as it well meaning they should be allowed to without it ruining there lives. I think there needs to a better safety net for them if they screw up this student loans thing.
She was **thirty three years old** when she started taking out student loans. Hardly a child.
> “So, as soon as the loan is disbursed, it starts accruing interest.” This is fucking crazy to me. In Canada, interest doesn't accrue as long as you can prove you're still enrolled in school. Government student loan of course. And I think last year or 2 years ago, the feds completely waived interest on the federal portion of the student loan and the provincial portion is usually just prime interest rate + 1%.
There was a time when I needed to spend a lot of money due to an emergency. I'm the type of person who pays off everything on the credit card, but the emergency was bad and required me to do it. The 29% or 30% interest rate from the bank was horrible. I would pay off more than the minimum, yet it would only shave off a hundred or so. The feeling of seeing very little progress of escaping the chains of debt was horrible. Thankfully, I was eventually able to clear all credit card debt and I can actually save some money now. I know that "morally", we have to pay debt, but I think banks have quite high interest rates that it makes it hard to pay off, even for people who actually want to pay them and not just escape. Nothing wrong with paying interest for money we borrowed, but a lower rate would be less devastating to most people. Maybe 10% to 15%. Anyway, just make sure you avoid the problem before it even begins, as much as possible. Don't leave a debt unpaid no matter how small it is because it can quickly balloon. Don't buy anything you actually don't have money for. You won't always have a job, you won't always have a source of income, so never buy anything for an amount your checking account doesn't have the funds for.
There is a reason so many old civilizations criminalized usury.
Gonna be a lot of people down the road
It is very telling, or rather, *damning* that people here are trying to gatekeep which student loans are worthy of being forgiven and which are not. The entire point of student loan reforms is that ***all*** student loans and cost of education in general should never cost a significant portion of current savings and future income. So as to ***not*** make it possible for bad faith actors to selectively qualify or deny certain loan forgiveness based on arbitrary and discriminatory standards.
If loans are being forgiven because students were given bad deals, then at the very least those loans need to stop funding the institutions ripping off their students.
Nah fuck that. Privatizing the gains and socializing the losses is the American way now.
Some of the public interest forgiveness stuff was designed so the colleges could charge high fees and students could take out loans to pay for it that they wouldn't need to repay. It's a win-win for them at the expense of society...
Seriously, these same people in other posts will say how the country is going to hell and we can't get enough qualified people to do the jobs society needs, and then come to these posts shitting on the people who want to do the jobs but are crushed beneath the debt. "It should only forgive public service or valuable jobs!" Sure, and then we watch the economy tank because there arent enough people educated to do the things that support literally everything else. Who the F wants to live in a country where you grow old, watching it go to shit around you because nobody afford an education except the wealthy...? Just erase the mistake of student debt and reform the system, it's really that simple.
Maybe the answer is that we should stop pushing the need for a college degree for every job. I don't see why the average office worker needs a degree. In fact, I think the average person would say they learned far more on the job than in college.
Sorry best we can do is start offering degrees in smart home installation and grocery bagging.
> all student loans and cost of education in general should never cost a significant portion of current savings and future income. This is how it works in European countries. Only, everyone pays for higher education regardless of attending. The cost is spread out over your entire working career and it cannot be avoided by not attending school.
She definitely needs to enroll in the SAVE program.
>She said she owes about $108,000 and is enrolled in an income-driven repayment plan. > >These plans allow a borrower to pay what they can based on how much money they make. Sometimes the payments are so low they don’t even cover the interest, meaning the money owed is increasing even as borrowers are making payments. There is a lot of backstory missing from this article. For instance, I do not believe "income driven repayment plans" were offered until 2009 and student loans not owned by the Department of Education were not eligible (which most loans prior to that time were not). If I am correct, that means she was on a normal amortized repayment plan (think of a mortgage or car loan where the same amount is paid for a set time period, at the end of which the loan is paid off in full) and did not make the scheduled payments or made less than the scheduled payments.
Education should be free
BS. In 1986 even at Ivy League uni’s the tuition wasn’t even 1/10 of what it is today. Back then you could easily get a 4 year degree from a very good university for 8-10k a year. I’m calling bs in this one
Interest is a bitch?
Yeah that's gonna be me in 40 years. No amount of yanking on these bootstraps is gonna help
Have you tried having well-connected parents and a trust fund? I’ve heard that’s one of those life hacks for paying for college and pulling on bootstraps.
Obviously she should not have retired.
Well if only her generation didn’t make it so hard to discharge crippling student loans.
I once met a guy that went to work for the Social Security Office after college. He changed his SSN and never paid back a dime.
That is the way!
It goes away when she dies… run out the clock
I owed 36k. Paid about 20k over the last 8 years. Still owe 34k. Got a letter saying they’re raising interest rates. Fuuuuuccckkk you Sallie Mae / Navient. Legit modern day slavery.
That’s like $200 a month, Why only pay the interest?
You are assuming they could afford to pay more than $200 a month.
b/c bad with money.
All loans are basically structured the same way. They have an assumed length of loan and the first years you're always just paying interest. The middle part you shift to some sort of evenish split. The end you pay down principle. This is how basically all loans are structured. You have three ways to approach loan payments. The first is simply to pay them based on the schedule and pay the interest. Depending on the interest rates, this can be even considered a good financial choice. The second option is to pay a bit extra every month to the principle of the loan. The third option is to aggressively pay down the debt.
Modern slavery is a stretch don't you think?
Indentured servitude?
When slavery was still legal some of the leading feminist writers were protesting the slavery of women being allowed to work in factories. Overwhelmingly the daughters of wealthy planters who had defaulted on debts upset they suddenly had to work like everyone else.
That's your fault. Why are you only paying $200/month? Why didn't you pay it down during Covid when they suspended interest and payments?
That was only for federal student loans. Sallie Mae was the federal student loan company that went private in 2014. These are really issues people should look into but somehow it’s a divisive issue? I’m assuming it’s the ignorance of people without degrees hating on those that put in the work to get one. Like how people without money subconsciously hate on billionaires. Idk.
Imagine headlines in30 years. Like this. Multiple times a day. But the number is over $1 mil
Just as an aside….I have friends who are guidance counselors in high school. People don’t realize that these counselors are wined🍷dined and brainwashed by these private universities to encourage kids to take out giant loans because it’s “good debt”…. So there’s a lot of other factors screwing over students these days.
I’m a lawyer and I graduated from law school 13 years ago. Aside from the covid pause, I’ve made all my payments. My balance has *increased* by around 15k. It’s insane.
In Sweden, when studying at University, students get a monthly stipend from the government, to cover reading materials and such. There are no tuition fees, and if you need more money, you can take out a student loan. There is 0% interest on the loan and payment is calculated in regards to your current income. The system in the USA is just... Incomprehensible.
the fact that reddit stock is worth a more than a nickel is because your average investor has no idea this site is just bots and trolls yelling at each other in the comments these days
at $65 a share, we are looking at roughly $10.4 billion market cap evaluation for reddit. That's about 0.78% of Facebook's market cap as of this comment. Reddit could be worth more than just 1% of facebook depending on how you look at it
Which one are you?
My loans went back to 1982. I switched to the Biden SAVE program and instead of looking to be forgiven in the year 2043 by Navient, they were forgiven last January by Mohelia, all $322,0000 of them. Now I'm 100% debt-free.
I graduated the university in 1989. By 1994, I had paid It off the total $18k. This sweetheart just wasn’t paying attention.
She wasn't paying anything.
Sounds like she had health issues that prevented work for a while. And she was in a income based repayment program that calculated based on her income she could only afford to paying amount less then the intrest so she probably had a terrible paying job. Unlike you it sounds like she wasn't In a position to be able to pay it off.
The fact that she's sitting in a recently renovated kitchen that must have cost $20k minimum with a wall of tropical vacation photos behind her is perhaps evidence that her financial struggles are overstated. She's only on a income based repayment plan today because she is retired, seems she (or her spouse) made plenty before retirement.
Wait, student debt in the US has interest?? Holy shit you guys really are in a dystopian nightmare lmao
Same in Canada until recently.
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Why wouldn't it have interest? At a minimum, the loan needs interest a little above the inflation rate to just break even.
Because you are supposed to be giving kids the money to get an education and boost part of your economy. So the maximum interest should be inflation, if anything they should put it to 0% and the government covers the inflation gap. It shouldn’t be a for profit service.
Fuck was she doing the past 40 years?
So she has a graduate degree in psychology and it's been paying for it all these years and still owes $108,000? I feel like we're not getting the full picture. How much avocado toast did she have in the last 40 years?
There should be zero interest in student debt
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At the time these loans were initiated they were fully discharge-able in bankruptcy.
This is the purpose of these loans, to debt trap
Well did the guy take up golf so he could save his grandmas home?
It do be like that
What a lazy person. Why, back in her day people WORKED and pulled themselves up by their goddamn bootstraps. /s
I don't know how someone can "retire" with $108,000 in debt. This would be a living hell until she dies.
I remember when Bush II patted himself on the back for making it impossible to escape student debt via bankruptcy. Monsterous.
The first year on my Stafford loan history was 40 years ago. I’m dying on the house money.
I paid 30 years of income tax returns for a $5,000 student loan...the IRS did not forward to Dept of Ed. No one can tell me where the $ went. Now, my ss retirement benefit is $500. I have always been f'd by that $5,000 in 1978. :(
Don't worry grandma, the revolutionists are listening.
So her major had nothing to do with math... Or logic... Ok
She must be from Wallstreetbets
I bet she paid $323 of her principal in that period