Author Topic: Ethical Dimensions of Student Loan Income Based Repayment Plans  (Read 48551 times)

RootofGood

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Ethical Dimensions of Student Loan Income Based Repayment Plans
« on: October 08, 2013, 03:49:39 PM »
I wanted to separate this line of discussion from my "Hello, I am" introductory thread.  http://www.mrmoneymustache.com/forum/welcome-to-the-forum/hi-i-am-rootofgood!-retired-at-33-life-is-good!/

The discussion went off topic into a discussion of the ethical dimensions of using the Income Based Repayment plans for student loan debt.  Specifically, should you use the plan if you retire early, knowing that you may eventually have part of your debt forgiven?

With due respect, in this case, it seems like taking advantage of the system. Not frugality.

"Income-Based Repayment (IBR) is designed to reduce monthly payments to assist with making your student loan debt manageable. If you need to make lower monthly payments, this plan may be for you."

"To qualify for IBR, you must have a partial financial hardship."

I believe the plan is for someone without enough income to make payments on the standard repayment plan nor consumerism.

I think I would feel the same if OP received food stamps... He doesn't have the need. Just my opinion.
Fwiw, we were considering putting our loans on ibr, for a yr, as a strategy to repay them all. Maybe this is why OP is FI and I'm not (i'm too proud/stupid and will pay off my debts)

To each their own.  It's your life and your choice to participate in a particular repayment program that would benefit you. 

Thought experiment: (1) What if I were a stay at home dad, merely taking time off from work to raise my kids for the next 17 years?
(2) What if I decided to pursue writing as a career, and write when it fancies me. 

In either scenario (1) or (2), it is unlikely we would pay a materially different amount on our student loans versus simply "being retired". 
« Last Edit: October 08, 2013, 03:51:53 PM by RootofGood »

NV Teacher

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #1 on: October 08, 2013, 04:46:27 PM »
I would not purposefully keep my income low just to avoid repaying student loans.  For me that would be unethical. 

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #2 on: October 08, 2013, 05:10:38 PM »
Interesting thought experiment but this discussion kind of reminds me of that scene from Office Space where Ron Livingston is explaining their scheme to Jennifer Aniston and she's continually making the point of "But it's not your money, and you're going to take it".
You borrowed money (in addition to all those other subsidies you discussed benefitting from) and now you're not going to pay it back, even though you could afford to.  I don't know that there is any hypothetical you can propose that gets you around that.

Dee18

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #3 on: October 08, 2013, 05:26:41 PM »
All the current loan repayment plans have minimums.  For public interest it's 120 months.  For PAYE it's 20 years. For IBR it's 25 years. 

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #4 on: October 08, 2013, 05:54:21 PM »
I thought this article was relevant to the discussion. I believe the OP had mentioned that he would deal with the taxes when they came. I don't know what your balance is but I can see it mushrooming over the next 15 years (I believe the OP had said he had been making payments for ten years). While it make seem cool that you have found a loophole from paying off this loan (as a result of early retirement), the resulting tax bill might be a lot higher than you bargained for, but only the OP has all the numbers to do the math.

http://www.thedailybeast.com/articles/2013/02/27/the-hidden-trap-of-income-based-repayment.html

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #5 on: October 08, 2013, 06:30:14 PM »
I thought this article was relevant to the discussion. I believe the OP had mentioned that he would deal with the taxes when they came. I don't know what your balance is but I can see it mushrooming over the next 15 years (I believe the OP had said he had been making payments for ten years). While it make seem cool that you have found a loophole from paying off this loan (as a result of early retirement), the resulting tax bill might be a lot higher than you bargained for, but only the OP has all the numbers to do the math.

http://www.thedailybeast.com/articles/2013/02/27/the-hidden-trap-of-income-based-repayment.html

This:

Quote
Of course, if this happens to enough people, I assume the government will change the rules, the way they did for the forgiven principle amount on short sales.

I'd say there is a good chance the forgiveness of indebtedness will not be taxed.  It will be a "completely unforeseen" shock to the first cohort of IBR participants and after hand wringing and head scratching, Congress will do what they do so well.

If not, the present value of my tax liability in 23 years is around $1200.  As a result, taxation of amount forgiven is not a significant concern. 

Rural

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #6 on: October 08, 2013, 06:37:38 PM »
Well, I'm on the public service plan. I'm also doing the public service, teaching at one of the lowest tuition, lowest debt colleges in the country.

I'm also doing it very well, partly because unlike some of my colleagues (by no means all), I'm there by choice, not by default. I make less than half of the median pay for folks in my position, even in ts low-paying state, so of course it's hard to get the best to work here. But here is where the first-generation students can afford college.

I don't think I have any real ethical dilemma, though it does bug me sometimes. What I'm doing is exactly what the program was designed to do, and if I'd agreed to teach here for ten years in exchange for the state or the feds paying the tuition upfront instead of after the fact, I don't think we'd be having this discussion.

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #7 on: October 08, 2013, 06:43:39 PM »
Well, I'm on the public service plan. I'm also doing the public service, teaching at one of the lowest tuition, lowest debt colleges in the country.

I'm also doing it very well, partly because unlike some of my colleagues (by no means all), I'm there by choice, not by default. I make less than half of the median pay for folks in my position, even in ts low-paying state, so of course it's hard to get the best to work here. But here is where the first-generation students can afford college.

I don't think I have any real ethical dilemma, though it does bug me sometimes. What I'm doing is exactly what the program was designed to do, and if I'd agreed to teach here for ten years in exchange for the state or the feds paying the tuition upfront instead of after the fact, I don't think we'd be having this discussion.

During my career, I've put in close to 10 years service that would qualify for PSLF, but elected not to participate in PSLF.  It didn't make sense since the IBR would satisfy my purposes without any risk I wouldn't put in 10 years or the PSLF program would change mid course. 

Rural

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #8 on: October 08, 2013, 07:22:39 PM »
Well, I'm on the public service plan. I'm also doing the public service, teaching at one of the lowest tuition, lowest debt colleges in the country.

I'm also doing it very well, partly because unlike some of my colleagues (by no means all), I'm there by choice, not by default. I make less than half of the median pay for folks in my position, even in ts low-paying state, so of course it's hard to get the best to work here. But here is where the first-generation students can afford college.

I don't think I have any real ethical dilemma, though it does bug me sometimes. What I'm doing is exactly what the program was designed to do, and if I'd agreed to teach here for ten years in exchange for the state or the feds paying the tuition upfront instead of after the fact, I don't think we'd be having this discussion.

During my career, I've put in close to 10 years service that would qualify for PSLF, but elected not to participate in PSLF.  It didn't make sense since the IBR would satisfy my purposes without any risk I wouldn't put in 10 years or the PSLF program would change mid course.

Fair enough if that's your choice, but there really is no risk since the PSLF requires the IBR to begin with. If the one doesn't work out, the other is already in place.

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #9 on: October 08, 2013, 07:31:07 PM »
Fair enough if that's your choice, but there really is no risk since the PSLF requires the IBR to begin with. If the one doesn't work out, the other is already in place.

There is risk in my situation.  I have a FFEL stafford loan through a local lender.  I would have to consolidate to a Direct Loan to participate in PSLF.  The local lender offers a 2.25% discount on interest rate for paying on time and using autodraft to pay.  I have a 0.75% interest rate locked in for the 30 year term.  It would go to 3% with the Direct Loan. 

Rural

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #10 on: October 08, 2013, 07:33:53 PM »
Fair enough if that's your choice, but there really is no risk since the PSLF requires the IBR to begin with. If the one doesn't work out, the other is already in place.

There is risk in my situation.  I have a FFEL stafford loan through a local lender.  I would have to consolidate to a Direct Loan to participate in PSLF.  The local lender offers a 2.25% discount on interest rate for paying on time and using autodraft to pay.  I have a 0.75% interest rate locked in for the 30 year term.  It would go to 3% with the Direct Loan.

Ah, that does make a difference. All of my loans were direct, so I don't know much about how the Staffords work(ed). Sounds like you got a good one with that interest rate.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #11 on: October 08, 2013, 08:21:40 PM »
I don't think it is possible to have put in 10 years that would qualify for PSLF since the program has only been around for a few years. No one has yet qualified for forgiveness, and won't until maybe 2017 or 2018 I think? I guess what you are saying is you worked for 10 years before retiring, and that job was in public interest?

I don't think there is an easy answer to this question. Of course, IBR and PSLF are two completely different things. I think there is something disingenuous about retiring with debt, using IBR to qualifying for very low or no payments, and just riding it out. I am also concerned that the ab/use of IBR in this fashion will result in the program being shut down. It does "reward" the indebted person the lower their income is, but for folks who really use the program as it was intended (to avoid people defaulting on student loans), I don't know many of those people who wouldn't take a raise if offered.

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #12 on: October 08, 2013, 08:50:52 PM »
I don't think it is possible to have put in 10 years that would qualify for PSLF since the program has only been around for a few years. No one has yet qualified for forgiveness, and won't until maybe 2017 or 2018 I think? I guess what you are saying is you worked for 10 years before retiring, and that job was in public interest?

I don't think there is an easy answer to this question. Of course, IBR and PSLF are two completely different things. I think there is something disingenuous about retiring with debt, using IBR to qualifying for very low or no payments, and just riding it out. I am also concerned that the ab/use of IBR in this fashion will result in the program being shut down. It does "reward" the indebted person the lower their income is, but for folks who really use the program as it was intended (to avoid people defaulting on student loans), I don't know many of those people who wouldn't take a raise if offered.

You are correct in that I was counting my total time worked in a job that today qualifies for PSLF. 

As for your second part, "folks who really use the program as it was intended": who knows what the intent is?  It seems starving artists or writers, or aspiring actors  (who opted out of potentially high paying jobs to follow their "passion") would benefit financially from IBR just as much as I would. 

IBR actually reduced our payments while we were both working full time by about 33%.  I don't think we ever felt like our loan payments were unreasonably high or unbearable. But it doesn't make sense to turn down legitimate programs that you qualify for.  I wouldn't forego tax credits or deductions that I qualify for.  If I qualified for cash for clunkers or the $8000 new homebuyer's credit (when these programs existed), I wouldn't turn these down either. 






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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #13 on: October 08, 2013, 08:58:36 PM »
Quote
Hi, my wife and I have over $100k in student loan debt.  We don't plan on paying much of it back because we are in the Income Based Repayment plan and gosh darn it I'm retired so our income is low enough where our monthly payment will be zero.  We also have 3 kids so that helps in the payment calculation formula (it is based on household size).  23.5 more years and they will forgive any balance not repaid. 

Once the kids leave the house over the next 17 years our repayment may creep up from zero to something higher, but probably no more than a couple thousand per year max (if we have tons of income from dividends and IRA withdrawals).

The 10 year Public Service Loan Forgiveness looks very sweet if you can stomach 10 years of working for the government or a non profit.  I opted not to choose that path even though I worked for the govt.  In hindsight it was a smart choice because I was only at the government job for 2.5 years. 

This IBR/PSLF program is awesome if your income happens to be low (due to crappy pay or your mustachian ability to craft a stream of income).  Couple this with Obamacare subsidies and it literally pays to look poor on your 1040.

I don't understand?? Your SL have only been on IBR for 2.5 years?? Or your wifes?? When did you guys graduate??

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #14 on: October 08, 2013, 09:10:17 PM »
Quote
Hi, my wife and I have over $100k in student loan debt.  We don't plan on paying much of it back because we are in the Income Based Repayment plan and gosh darn it I'm retired so our income is low enough where our monthly payment will be zero.  We also have 3 kids so that helps in the payment calculation formula (it is based on household size).  23.5 more years and they will forgive any balance not repaid. 

Once the kids leave the house over the next 17 years our repayment may creep up from zero to something higher, but probably no more than a couple thousand per year max (if we have tons of income from dividends and IRA withdrawals).

The 10 year Public Service Loan Forgiveness looks very sweet if you can stomach 10 years of working for the government or a non profit.  I opted not to choose that path even though I worked for the govt.  In hindsight it was a smart choice because I was only at the government job for 2.5 years. 

This IBR/PSLF program is awesome if your income happens to be low (due to crappy pay or your mustachian ability to craft a stream of income).  Couple this with Obamacare subsidies and it literally pays to look poor on your 1040.

I don't understand?? Your SL have only been on IBR for 2.5 years?? Or your wifes?? When did you guys graduate??

I'm not sure when we got on IBR.  Probably close to 2 years ago.  I had looked at it for a few years prior and saw the PSLF prior to starting my most recent government employment. 

Both our student loans are on IBR.  They look at the total marital student loan balance and total household AGI to determine your monthly payment.  We each graduated undergrad and law school between 2000 and 2005 (different dates for each of us as Mrs RootofGood worked in between undergrad and law school).  In other words, we have each paid student loans for 9-10 years.  I think we had deferrals during law school, so I'm not counting that time. 

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #15 on: October 08, 2013, 09:14:17 PM »
I don't think it is possible to have put in 10 years that would qualify for PSLF since the program has only been around for a few years. No one has yet qualified for forgiveness, and won't until maybe 2017 or 2018 I think? I guess what you are saying is you worked for 10 years before retiring, and that job was in public interest?

I don't think there is an easy answer to this question. Of course, IBR and PSLF are two completely different things. I think there is something disingenuous about retiring with debt, using IBR to qualifying for very low or no payments, and just riding it out. I am also concerned that the ab/use of IBR in this fashion will result in the program being shut down. It does "reward" the indebted person the lower their income is, but for folks who really use the program as it was intended (to avoid people defaulting on student loans), I don't know many of those people who wouldn't take a raise if offered.

You are correct in that I was counting my total time worked in a job that today qualifies for PSLF. 

As for your second part, "folks who really use the program as it was intended": who knows what the intent is?  It seems starving artists or writers, or aspiring actors  (who opted out of potentially high paying jobs to follow their "passion") would benefit financially from IBR just as much as I would. 

IBR actually reduced our payments while we were both working full time by about 33%.  I don't think we ever felt like our loan payments were unreasonably high or unbearable. But it doesn't make sense to turn down legitimate programs that you qualify for.  I wouldn't forego tax credits or deductions that I qualify for.  If I qualified for cash for clunkers or the $8000 new homebuyer's credit (when these programs existed), I wouldn't turn these down either.

IBR was intended for those experiencing economic hardship, so I think the intent was pretty clear. If you look at the law that enacted IBR, the terms default and default aversion are used. I don't think your starving artist example really proves your point, since by virtue of the "starving" part of the artist, they probably are experiencing a financial hardship. I think financial independence/early retirement does not really equal partial financial hardship/risk of default.

No doubt there is a loophole in the definition. You have found it. Perhaps 25 years goes by without that loophole closing. You could get lucky.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #16 on: October 08, 2013, 10:47:49 PM »
Look, i'm not going to act like the IP and try to find posts to poke holes through your arguement. And i'm not trying to negate all the great saving/investing you've done. I'm just trying to ask you to reconsider repaying all your SLs.

Because you bought something (an education) on credit (SLs) and now you have no intention of repaying your debt. You could've very easily (i suppose) cash flowed your educations, instead you chose SLs.

IBR is a repayment plan, not a tax credit/deduction.

Another reason to repay it, is because you can!!!

Because you like other languages, we have a word here in HI.. Pono.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #17 on: October 08, 2013, 10:52:53 PM »
I don't see a problem.  You make an agreement, you uphold your end.  That's ethical.  I believe in maximizing your personal outcomes within the confines of the law.  If you don't like the law, vote to change it.  Same reason why I often vote for measures that will increase my personal tax burden but I still take all allowable deductions.

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #18 on: October 09, 2013, 07:38:54 AM »
I don't see a problem.  You make an agreement, you uphold your end.  That's ethical.  I believe in maximizing your personal outcomes within the confines of the law.  If you don't like the law, vote to change it.  Same reason why I often vote for measures that will increase my personal tax burden but I still take all allowable deductions.

Glad to see at least one voice thinking in the same way.  I made an agreement.  I am repaying per my agreement.  Some years the IBR formula says we pay zero (when we have a bunch of kids listed as dependents, and moderately low income).  Some years the repayment will be small but non zero (when kid #1 and #2 are out of the house).  If our investments do really well, we may end up paying many thousands per year.   

Based on my latest financial model, we will pay between $700 and $3100 per year in years 2026-2036 (an eleven year period).  Our total payments over that period will be around $19000 (future year dollars). 

The payment is strictly based on AGI, federal poverty level, and household size.  Our federal lawmakers could easily modify the terms of the IBR and forgiveness plan. 

Possible modifications to prevent "wealthy" early retirees from "exploiting" the IBR are simple and numerous:
  • Asset test - food stamps and other social welfare programs already have this
  • Imputed income - could get messy
  • remove 25 year limit (make repayment continue for life of the debtor)
  • remove forgiveness of debt at end of IBR period
  • lower the % of poverty level in the payment formula (currently 150%, could be set to 100%)
  • increase the percentage of income you repay (I'm under the old 15% formula, new debtors repay 10% - wrong way Congress!)
  • increase the percentage of income you repay from non-earned income sources (like dividends, interest, IRA withdrawals, cap gains) - this type of income is a good surrogate for moderately wealthy people, and this type of income source test is already applied to the earned income credit eligibility tests

Just off the top of my head.  Maybe Congress, in their infinite largesse, can wipe out my student loan debt in exchange for a little bill drafting assistance...  Although their butts seem to be fully occupied by all the thumbs firmly lodged therein.  Feel free to forward my suggestions to your political representatives. 

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #19 on: October 09, 2013, 08:44:00 AM »
I didn't have any student loans so forgive my ignorance.  When you signed the loans were you planning to pay them back?  If they didn't have this program would you have borrowed so much money?

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #20 on: October 09, 2013, 09:02:18 AM »
It's not very mustachian to give money away when you don't have to. Your lender wouldn't hesitate to take such a deal if they were in your position, no reason you should see it any differently. There's no pride to be had by choosing the worse outcome for you and everyone you know when given a choice. The lender knew you had this option when they gave you the loan.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #21 on: October 09, 2013, 09:27:30 AM »
I didn't have any student loans so forgive my ignorance.  When you signed the loans were you planning to pay them back?  If they didn't have this program would you have borrowed so much money?

Yes to both. 

The bulk of my loans paid for law school and were incurred in the 2001-2004 period. 

When I was evaluating whether to borrow the money, a number of positives persuaded me it was good debt. 
  • Interest rates around 3% (versus market rate mortgages around 7%)
  • The lender offered a 2.25% discount off the interest rate for on time payments and autodraft payments
  • Above the line tax deduction for student loan interest payments (up to $2500/yr)
  • Interest did not accrue on the subsidized portion of the loans during school
  • I could consolidate loans into a 30 year fixed rate loan

The loan terms were very appealing at the time, and the IBR repayment program made them even better. 

It has me seriously considering funding strategies for my children's college education.  For example, why not live it up for 9-10 years, do some study abroad, spend a semester in Paris, whatever.  Maybe get a masters or PhD.  Rack up $180,000 in student loan debt.  Work for a public service job for 10 years (any job!), have all debt forgiven. 

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #22 on: October 09, 2013, 09:42:24 AM »
The would-be moralists here remind me of the choads who were ranting and screaming about the presumed lack of character of the benighted souls who were walking away from seriously underwater homes (strategic default).  You all do understand that both OP and the strategic defaulters are playing by the rules of the game right?  You do understand that we 'Merkins live in a society where we are incented and allowed to do the economically most rational thing as long as we color inside the lines?

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #23 on: October 09, 2013, 09:49:24 AM »
The would-be moralists here remind me of the choads who were ranting and screaming about the presumed lack of character of the benighted souls who were walking away from seriously underwater homes (strategic default).  You all do understand that both OP and the strategic defaulters are playing by the rules of the game right?  You do understand that we 'Merkins live in a society where we are incented and allowed to do the economically most rational thing as long as we color inside the lines?

Thanks for the comment.  I'm not sure what some would suggest I do.  Exit the IBR program, knowing that I qualify?  Gratuitously send Uncle Sam a big five figure check in year 24 right before my loans will be forgiven? 

One thing I am very confident about is my ability to spend and manage money more efficiently than 535 individuals in Washington D.C.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #24 on: October 09, 2013, 09:50:01 AM »
This would be against my own personal ethics (same for the hypotheticals of stay-at-home dad and lazy writer) to not repay the loan I took out* because I've vaguely met the requirements and it falls within the boundaries of the law. But the plan does seem to be legal, and my own principles have nothing to do with that, so go for it.

I'm a little confused how you managed work in public service and make 10 years of payments if you are only 33 and there were 3 years of law school in there where your UG loans were in deferment (so I assume you weren't earning an income in law school). To make 10 years of payments on your law school loans would also also mean you graduated law school at 23, unless I am misunderstanding the timeline.

* in the student loan situation. For example, I have no problem with people walking away from an underwater mortgage because the bank still gets some form a repayment (the house).

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #25 on: October 09, 2013, 10:01:07 AM »
The would-be moralists here remind me of the choads who were ranting and screaming about the presumed lack of character of the benighted souls who were walking away from seriously underwater homes (strategic default).  You all do understand that both OP and the strategic defaulters are playing by the rules of the game right?  You do understand that we 'Merkins live in a society where we are incented and allowed to do the economically most rational thing as long as we color inside the lines?

Indeed. When you get a mortgage, you're not agreeing that failing to make the monthly payments makes you a bad, immoral person. You're agreeing that you will either make monthly payments or allow your house to be foreclosed upon and auctioned off. Repayment and foreclosure are two equally valid options. You're no more of an immoral person for stopping your payments than the bank is for repossessing your house when you do. It's all part of the contract, a procedure that both parties agreed upon in advance.

I think the same is true for student loans. You agree to make the required payments. There's a provision in the contract where the required payments are lower for people with lower incomes. The government may not like that you intentionally reduced your income to reduce your payments, but it's part of the deal they agreed to when they loaned you the money, and they need to accept it.

Morality aside, I would question whether it's in someone's best interest to reduce their income in this way when they don't yet have enough savings to retire, since they're probably going to be better off with a higher salary and just making the full payments. But for someone who's already retired...more power to you for optimizing your loan payments in this way.

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #26 on: October 09, 2013, 10:17:01 AM »
This would be against my own personal ethics (same for the hypotheticals of stay-at-home dad and lazy writer) to not repay the loan I took out* because I've vaguely met the requirements and it falls within the boundaries of the law. But the plan does seem to be legal, and my own principles have nothing to do with that, so go for it.

I'm a little confused how you managed work in public service and make 10 years of payments if you are only 33 and there were 3 years of law school in there where your UG loans were in deferment (so I assume you weren't earning an income in law school). To make 10 years of payments on your law school loans would also also mean you graduated law school at 23, unless I am misunderstanding the timeline.

* in the student loan situation. For example, I have no problem with people walking away from an underwater mortgage because the bank still gets some form a repayment (the house).

I don't vaguely meet the requirements, I 100% meet the requirements without any question.  The "personal financial hardship" requirement is a formula, and I meet the formula's requirements. 

Yes, I graduated law school at 23.  I have only worked directly in public service (for a governmental employer) for around 7 years, which is why I said I was "close to" 10 years in my comments.  I worked during the school year and during summers for various governmental employers during high school and during my combined 6 years in undergrad and law school. 

brewer12345

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #27 on: October 09, 2013, 10:49:05 AM »
This would be against my own personal ethics (same for the hypotheticals of stay-at-home dad and lazy writer) to not repay the loan I took out* because I've vaguely met the requirements and it falls within the boundaries of the law. But the plan does seem to be legal, and my own principles have nothing to do with that, so go for it.

I'm a little confused how you managed work in public service and make 10 years of payments if you are only 33 and there were 3 years of law school in there where your UG loans were in deferment (so I assume you weren't earning an income in law school). To make 10 years of payments on your law school loans would also also mean you graduated law school at 23, unless I am misunderstanding the timeline.

* in the student loan situation. For example, I have no problem with people walking away from an underwater mortgage because the bank still gets some form a repayment (the house).

I don't vaguely meet the requirements, I 100% meet the requirements without any question.  The "personal financial hardship" requirement is a formula, and I meet the formula's requirements. 

Yes, I graduated law school at 23.  I have only worked directly in public service (for a governmental employer) for around 7 years, which is why I said I was "close to" 10 years in my comments.  I worked during the school year and during summers for various governmental employers during high school and during my combined 6 years in undergrad and law school.

And some of us overachievers went to grad school while working part time.

brewer12345

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #28 on: October 09, 2013, 10:50:22 AM »
The would-be moralists here remind me of the choads who were ranting and screaming about the presumed lack of character of the benighted souls who were walking away from seriously underwater homes (strategic default).  You all do understand that both OP and the strategic defaulters are playing by the rules of the game right?  You do understand that we 'Merkins live in a society where we are incented and allowed to do the economically most rational thing as long as we color inside the lines?

Thanks for the comment.  I'm not sure what some would suggest I do.  Exit the IBR program, knowing that I qualify?  Gratuitously send Uncle Sam a big five figure check in year 24 right before my loans will be forgiven? 

One thing I am very confident about is my ability to spend and manage money more efficiently than 535 individuals in Washington D.C.

I presume the father confessors want you to send big checks in and/or commit seppuku for daring to take advantage of a contractual provision of your loan agreement.

geekette

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #29 on: October 09, 2013, 10:52:57 AM »
Quote
One thing I am very confident about is my ability to spend and manage money more efficiently than 535 individuals in Washington D.C.
But it's not those 535 individuals who will be paying back your loan. It's me. And all those others who paid for what they got.

brewer12345

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #30 on: October 09, 2013, 10:58:56 AM »
Quote
One thing I am very confident about is my ability to spend and manage money more efficiently than 535 individuals in Washington D.C.
But it's not those 535 individuals who will be paying back your loan. It's me. And all those others who paid for what they got.

Google "tragedy of the commons."

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #31 on: October 09, 2013, 11:23:35 AM »


I don't vaguely meet the requirements, I 100% meet the requirements without any question.  The "personal financial hardship" requirement is a formula, and I meet the formula's requirements. 

Yes, I graduated law school at 23.  I have only worked directly in public service (for a governmental employer) for around 7 years, which is why I said I was "close to" 10 years in my comments.  I worked during the school year and during summers for various governmental employers during high school and during my combined 6 years in undergrad and law school.

And some of us overachievers went to grad school while working part time.

Yes, and some overachievers work full time while going to graduate school, but he said his loans were in deferment for that time, so it makes sense that he wasn't earning income then.

Ignore my timeline comment, it is just unusual to graduate law school that early. The thread seems to be conflating the PSLF 10-year track (which was my "vaguely" reference) and the 25-year IBR track. I still don't agree with the ethics of it, but I agree that is not your "fault" for taking advantage of it; it is poorly written legislation. I absolutely agree with some kind of asset test or adjustment for non-earned income.
I'm not sure this will still be a legitimate funding opportunity for your kids education down the road though, seems like such leaky legislation would sink before then.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #32 on: October 09, 2013, 11:32:10 AM »
Quote
One thing I am very confident about is my ability to spend and manage money more efficiently than 535 individuals in Washington D.C.
But it's not those 535 individuals who will be paying back your loan. It's me. And all those others who paid for what they got.

I pay taxes into the general fund just like you.  I'm sure I "pay" for things for you that I don't want to. 

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #33 on: October 09, 2013, 11:41:53 AM »
I think it is morally wrong.  I wouldn't do it.  If you qualified for free or reduced lunches for your kids in school would you participate in that too?  The money comes from the taxpayors.  Yes, we are all taxpayors you included but if we all did it where would the money come from to pay for it?  Telling kids to live it up and study abroad and rack up the loans they can just work for govt. for 10 yrs and all loans are forgiven sounds shady.  As much as people complain of goverentment wasting money isn't this just adding to it beacuse it is losing money on your loan. 

RootofGood

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #34 on: October 09, 2013, 12:10:29 PM »
I think it is morally wrong.  I wouldn't do it.  If you qualified for free or reduced lunches for your kids in school would you participate in that too?  The money comes from the taxpayors.  Yes, we are all taxpayors you included but if we all did it where would the money come from to pay for it?  Telling kids to live it up and study abroad and rack up the loans they can just work for govt. for 10 yrs and all loans are forgiven sounds shady.  As much as people complain of goverentment wasting money isn't this just adding to it beacuse it is losing money on your loan.

I looked into the free and reduced price lunches for my children.  We do not qualify as they look at gross income and not AGI or take home pay (Mrs RootofGood still works for now).  I refuse to lie about our income (that would be unethical and illegal), so I did not apply for free/reduced price lunch.  We will likely qualify for reduced price lunches at some point, and I will probably apply at that point. 

Unfortunately we can't opt out of our government's redistribution system completely, so I have chosen to make the most of a system I don't fully agree with.  To each their own.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #35 on: October 09, 2013, 12:25:11 PM »
Ok, so i see a bit of mixed reviews...maybe i am the idiot here, or i just spent toooo many years following Ramsey (and many other PF people who say "pay off your debt first")

And OP, i really am not trying to take away from all the great shit you've done, but i did think long and hard at this, from my own situation, and it just "felt wrong" which is why i was soo surprised that you did it and you were sorta bragging about it.

And although i still do kinda feel it's a bit unethical, i also feel like maybe that has been my downside (worrying too much about things other than the numbers) And because i asked you to reconsider...i'm now asking myself to reconsider.

Anyone care to look at my situation???

http://www.mrmoneymustache.com/forum/ask-a-mustachian/should-we-change-sl-repayment-plans/msg138447/#msg138447

ace1224

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #36 on: October 09, 2013, 12:39:51 PM »
I think it is morally wrong.  I wouldn't do it.  If you qualified for free or reduced lunches for your kids in school would you participate in that too?  The money comes from the taxpayors.  Yes, we are all taxpayors you included but if we all did it where would the money come from to pay for it?  Telling kids to live it up and study abroad and rack up the loans they can just work for govt. for 10 yrs and all loans are forgiven sounds shady.  As much as people complain of goverentment wasting money isn't this just adding to it beacuse it is losing money on your loan.

I looked into the free and reduced price lunches for my children.  We do not qualify as they look at gross income and not AGI or take home pay (Mrs RootofGood still works for now).  I refuse to lie about our income (that would be unethical and illegal), so I did not apply for free/reduced price lunch.  We will likely qualify for reduced price lunches at some point, and I will probably apply at that point. 

Unfortunately we can't opt out of our government's redistribution system completely, so I have chosen to make the most of a system I don't fully agree with.  To each their own.
i think this whole situation is more messed up than okay.  not illegal though.  you are working the system, so kudos for that.  but i still think its slightly fucked up.  reduced lunch is for people who need it, not people who worked the system right.  stuff like this makes me feel more right wing everyday.
on the other hand i will admit i am slightly impressed and wished i too did not give a shit and just worked the system. 

brewer12345

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #37 on: October 09, 2013, 12:49:05 PM »
Unfortunately we can't opt out of our government's redistribution system completely, so I have chosen to make the most of a system I don't fully agree with.  To each their own.

Ding, ding, ding, we have a winnah!!!

Actually, I would not want to opt out of the system.  I believe in a social safety net for one and all, myself included.

Undecided

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #38 on: October 09, 2013, 01:06:13 PM »

i think this whole situation is more messed up than okay.  not illegal though.  you are working the system, so kudos for that.  but i still think its slightly fucked up.  reduced lunch is for people who need it, not people who worked the system right.  stuff like this makes me feel more right wing everyday.
on the other hand i will admit i am slightly impressed and wished i too did not give a shit and just worked the system.

Most Americans have children intending to support them, but it doesn't stop them from claiming them as dependents on their taxes, or claiming the child care credits where available, or education credits, etc. I don't see much of an ethical difference w/ the OP's plan, but I don't see a lot of condemnation of those other maneuvers.

CommonCents

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #39 on: October 09, 2013, 01:09:22 PM »
You asked about the ethics rather than legality of this situation, so I'll focus on that in my answer, using two major ethical theories.

Kant simplified says one should only do what you can apply to all. You can't create special rules for you. So imagine if everyone did this action, would it work?  You can plug in any action - lying (no, if everyone lied then no one would believe anyone and the world would be more difficult), kindness (yes, great), or doing this method of failing to pay back loans (no).

Utilitarianism on the other hand cares more about the ends - the result, than how you get there. You consider what creates the greatest happiness - you not paying back (high happy for just one person but a lot of little unhappiness for many taxpayers).   I think again its a no.  Utilitarianism would be ok with setting off the atomic bomb possibly, to avoid more deaths in WWII. Kant on the other hand would not.

So based on this I would say its not ethical. Sorry if not explained well, typing on iPhone at airport.

beltim

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #40 on: October 09, 2013, 01:22:18 PM »
Well, I'm on the public service plan. I'm also doing the public service, teaching at one of the lowest tuition, lowest debt colleges in the country.

I'm also doing it very well, partly because unlike some of my colleagues (by no means all), I'm there by choice, not by default. I make less than half of the median pay for folks in my position, even in ts low-paying state, so of course it's hard to get the best to work here. But here is where the first-generation students can afford college.

I don't think I have any real ethical dilemma, though it does bug me sometimes. What I'm doing is exactly what the program was designed to do, and if I'd agreed to teach here for ten years in exchange for the state or the feds paying the tuition upfront instead of after the fact, I don't think we'd be having this discussion.

During my career, I've put in close to 10 years service that would qualify for PSLF, but elected not to participate in PSLF.  It didn't make sense since the IBR would satisfy my purposes without any risk I wouldn't put in 10 years or the PSLF program would change mid course.

Am I the only one who views the PSLF as completely separate from IBR?  I think of the PSLF as a benefit an inducement to work in areas of high need, by paying off your loan after 10 years of service.  It's not that different than a ROTC scholarship. 

IBR, on the other hand, is definitely and specifically for cases of financial hardship.  I can't say what I would do in someone else's shoes for sure, but I would be very squeamish about claiming financial hardship after having decided that you had saved enough money to retire early. 

dragoncar

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #41 on: October 09, 2013, 02:08:14 PM »
I agree it's very similar to the strategic default discussion.  Does anyone here hold separate views between strategic default and "purposeful" IBR?  Note that, as others mention, it may not even be economically beneficial to purposely keep your income low.  Likely a person with high earning potential would come out ahead just doing standard repayment (consider that Lawyers at bi firms can easily save $100k/year.)

I don't have a problem with the public paying for education.  See the mythical lands of Europe, where the grad shool is heavily subsidized.

Mr.Macinstache

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #42 on: October 09, 2013, 03:27:30 PM »
I think it is morally wrong.  I wouldn't do it.  If you qualified for free or reduced lunches for your kids in school would you participate in that too?  The money comes from the taxpayors.  Yes, we are all taxpayors you included but if we all did it where would the money come from to pay for it?  Telling kids to live it up and study abroad and rack up the loans they can just work for govt. for 10 yrs and all loans are forgiven sounds shady.  As much as people complain of goverentment wasting money isn't this just adding to it beacuse it is losing money on your loan.

Agree with this. It's ironic you're complaining about Congress managing money while you yourself are 'ok' with adding to the problem by exploiting a loophole.

All I am hearing that you are somehow entitled to it (because you choose to work in public service?), and the fact you found a loophole somehow justifies it as OK in your mind..CommonCents is right that this is utilitarian and a society with that mindset creates nothing good. And libertarians are called selfish? Ha.

You made a voluntary choice to take loans and enter contracts. Nothing on their end was breached, I think you have an obligation. Also to go as far as using a free lunch program when you obviously can afford it? Just because you can doesn't mean you should. I think its shameful.

Do you consider yourself a charity?

« Last Edit: October 09, 2013, 03:38:56 PM by Mr.Macinstache »

seattlecyclone

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #43 on: October 09, 2013, 04:18:33 PM »
You made a voluntary choice to take loans and enter contracts. Nothing on their end was breached, I think you have an obligation.

He has an obligation to repay the loan according to the terms of the contract that both parties entered into voluntarily. Nobody is breaching a contract here. The terms of the loan specifically allow for the borrower to have lower monthly payments in the event his income is below a certain threshold. His income is below that threshold. He's opting to pay less as is his right under the contract.

If I were offering a loan I wouldn't write terms like that into the contract. But the federal government did. Complain to your representatives if you wish to get the loan terms changed for future borrowers. I think that's an entirely reasonable thing to do, because people in RootOfGood's situation seem to have no real need to have their debt forgiven. It's totally reasonable for a taxpayer to expect the rules to limit loan forgiveness only to those who truly cannot afford to repay the loan in full. That said, I do not fault him one bit for choosing the cheapest option allowed under the terms of the contract he signed.

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #44 on: October 09, 2013, 04:54:59 PM »
You made a voluntary choice to take loans and enter contracts. Nothing on their end was breached, I think you have an obligation.

He has an obligation to repay the loan according to the terms of the contract that both parties entered into voluntarily. Nobody is breaching a contract here. The terms of the loan specifically allow for the borrower to have lower monthly payments in the event his income is below a certain threshold. His income is below that threshold. He's opting to pay less as is his right under the contract.

If I were offering a loan I wouldn't write terms like that into the contract. But the federal government did. Complain to your representatives if you wish to get the loan terms changed for future borrowers. I think that's an entirely reasonable thing to do, because people in RootOfGood's situation seem to have no real need to have their debt forgiven. It's totally reasonable for a taxpayer to expect the rules to limit loan forgiveness only to those who truly cannot afford to repay the loan in full. That said, I do not fault him one bit for choosing the cheapest option allowed under the terms of the contract he signed.

Just a point of clarification - IBR did not exist when OP took out his loans, so no, it was not a part of the contract. IBR is a relatively new repayment program designed for individuals experiencing a partial financial hardship.

The problem is with the definition of "partial financial hardship" since it does not accurately reflect the true economic status of a particular individual. It is merely concerned with AGI, and there are plenty of times that AGI does not reflect wealth. I don't believe anyone who passed this law had early retirement on the brain. I think they were more concerned with things like mass default during an economic crisis. I think the statutory language reflects that, even if the definitions do not.

I see this as exalting form over substance, personally. But in ethical matters, all that matters is if OP can sleep at night. Apparently that isn't a problem. 

dragoncar

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #45 on: October 09, 2013, 05:32:23 PM »
You made a voluntary choice to take loans and enter contracts. Nothing on their end was breached, I think you have an obligation.

He has an obligation to repay the loan according to the terms of the contract that both parties entered into voluntarily. Nobody is breaching a contract here. The terms of the loan specifically allow for the borrower to have lower monthly payments in the event his income is below a certain threshold. His income is below that threshold. He's opting to pay less as is his right under the contract.

If I were offering a loan I wouldn't write terms like that into the contract. But the federal government did. Complain to your representatives if you wish to get the loan terms changed for future borrowers. I think that's an entirely reasonable thing to do, because people in RootOfGood's situation seem to have no real need to have their debt forgiven. It's totally reasonable for a taxpayer to expect the rules to limit loan forgiveness only to those who truly cannot afford to repay the loan in full. That said, I do not fault him one bit for choosing the cheapest option allowed under the terms of the contract he signed.

Just a point of clarification - IBR did not exist when OP took out his loans, so no, it was not a part of the contract. IBR is a relatively new repayment program designed for individuals experiencing a partial financial hardship.

The problem is with the definition of "partial financial hardship" since it does not accurately reflect the true economic status of a particular individual. It is merely concerned with AGI, and there are plenty of times that AGI does not reflect wealth. I don't believe anyone who passed this law had early retirement on the brain. I think they were more concerned with things like mass default during an economic crisis. I think the statutory language reflects that, even if the definitions do not.

I see this as exalting form over substance, personally. But in ethical matters, all that matters is if OP can sleep at night. Apparently that isn't a problem.

Just because it wasn't in the original loan agreement doesn't mean the agreement wasn't modified by consolidation after 2007.

hoodedfalcon

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #46 on: October 09, 2013, 06:07:10 PM »
You made a voluntary choice to take loans and enter contracts. Nothing on their end was breached, I think you have an obligation.

He has an obligation to repay the loan according to the terms of the contract that both parties entered into voluntarily. Nobody is breaching a contract here. The terms of the loan specifically allow for the borrower to have lower monthly payments in the event his income is below a certain threshold. His income is below that threshold. He's opting to pay less as is his right under the contract.

If I were offering a loan I wouldn't write terms like that into the contract. But the federal government did. Complain to your representatives if you wish to get the loan terms changed for future borrowers. I think that's an entirely reasonable thing to do, because people in RootOfGood's situation seem to have no real need to have their debt forgiven. It's totally reasonable for a taxpayer to expect the rules to limit loan forgiveness only to those who truly cannot afford to repay the loan in full. That said, I do not fault him one bit for choosing the cheapest option allowed under the terms of the contract he signed.

Just a point of clarification - IBR did not exist when OP took out his loans, so no, it was not a part of the contract. IBR is a relatively new repayment program designed for individuals experiencing a partial financial hardship.

The problem is with the definition of "partial financial hardship" since it does not accurately reflect the true economic status of a particular individual. It is merely concerned with AGI, and there are plenty of times that AGI does not reflect wealth. I don't believe anyone who passed this law had early retirement on the brain. I think they were more concerned with things like mass default during an economic crisis. I think the statutory language reflects that, even if the definitions do not.

I see this as exalting form over substance, personally. But in ethical matters, all that matters is if OP can sleep at night. Apparently that isn't a problem.

Just because it wasn't in the original loan agreement doesn't mean the agreement wasn't modified by consolidation after 2007.

Sure. But I was addressing what seattlecyclone stated above. I am probably trying to make a distinction that doesn't really matter, other than to avoid misinterpretation of IBR. Also, I don't believe OP consolidated his loans, but that isn't really the point. Consolidation is not required for IBR (though it is for PSLF). You could apply for IBR regardless of the original contract terms (assuming other qualifications are met).

I mean, the only reason we are having this discussion about the ethics of this situation is because OP is planning on using the program in a manner allowed by law but (arguably) not the intended purpose of the program.


mlipps

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #47 on: October 09, 2013, 07:02:37 PM »
I agree it's very similar to the strategic default discussion.  Does anyone here hold separate views between strategic default and "purposeful" IBR?  Note that, as others mention, it may not even be economically beneficial to purposely keep your income low.  Likely a person with high earning potential would come out ahead just doing standard repayment (consider that Lawyers at bi firms can easily save $100k/year.)

I don't have a problem with the public paying for education.  See the mythical lands of Europe, where the grad shool is heavily subsidized.

I see them differently. For one, there is significantly more analysis that goes into giving someone a mortgage versus a student loan, for better or worse. If the creditor poorly assessed the value of a home, both present and future, that's on them as much as the borrower. Plus, they can take back the house which has at least some value to them.

On the other hand, student loans are almost a public good, intended to give access to education. Granted, they're not perfect, but that's at least the general intent of the program. There's a lot less assessment of credit worthiness & return on investment and lot more  of an emphasis on general access to higher education in the intent.

I'm not saying I necessarily think using IBR as Root of Good is is immoral. I haven't made a single payment on my subsidized loans since graduating in May 2011 and currently my IBR payments are based on my income from 2011 (hint, about 1/4 of my income now, and that's totally discounting what my husband makes). So far be it from me to argue. But I'm not sure that IBR can be directly correlated to strategic default.

Also, can I just say, that the thing that drives me nuts about student loans is that they're not FAIR because they keep changing the rules. I'm more pissed that Root of Good got to take out subsidized loans for grad school at an effective .75% rate and I can't get anything but unsubsidized at 7 something. Not to mention how I am one year off from qualifying for the income based repayment plan (not that I need it, it's just aggravating). I just wish Congress could make up their minds already.

TrulyStashin

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #48 on: October 09, 2013, 07:48:39 PM »
You asked about the ethics rather than legality of this situation, so I'll focus on that in my answer, using two major ethical theories.

Kant simplified says one should only do what you can apply to all. You can't create special rules for you. So imagine if everyone did this action, would it work?  You can plug in any action - lying (no, if everyone lied then no one would believe anyone and the world would be more difficult), kindness (yes, great), or doing this method of failing to pay back loans (no).

Utilitarianism on the other hand cares more about the ends - the result, than how you get there. You consider what creates the greatest happiness - you not paying back (high happy for just one person but a lot of little unhappiness for many taxpayers).   I think again its a no.  Utilitarianism would be ok with setting off the atomic bomb possibly, to avoid more deaths in WWII. Kant on the other hand would not.

So based on this I would say its not ethical. Sorry if not explained well, typing on iPhone at airport.

+1

Lawyers are so adept at justifying unethical but legal behavior.  I'm a lawyer so I'm familiar with this particular rabbit hole.  This is an example that illustrates the truth of the old saying "Just because it's legal, doesn't mean it's ethical."

I'm not sure why you posted this thread in the first place.  Perhaps you're proud of this but I sense an undercurrent of desire for approval from a frugal community.

I can't help you with that.  This reeks of entitlement and exploitation.  I gotta go open a window.   

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Re: Ethical Dimensions of Student Loan Income Based Repayment Plans
« Reply #49 on: October 09, 2013, 08:26:59 PM »
Lawyers are so adept at justifying unethical but legal behavior.  I'm a lawyer so I'm familiar with this particular rabbit hole.  This is an example that illustrates the truth of the old saying "Just because it's legal, doesn't mean it's ethical."

I'm not sure why you posted this thread in the first place.  Perhaps you're proud of this but I sense an undercurrent of desire for approval from a frugal community.

I started this thread because another thread was drifting off topic, and this particular topic seemed like a popular topic that warranted further discussion.  Based on the responses, I think I am on ethically sound ground using IBR.  Some agree with me, some disagree. 

I'm proud of the fact that I understand the program well enough to use it to my economic advantage.  I'm not proud of the system of sloshing money around to higher education seekers and then not requiring pay back.  It's not fair to the cash buyers.  I see IBR (or the forgiveness part at least) and PSLF as welfare for the middle class that isn't needed in the current form.

As I have stated, I have no problem with Congress modifying the program to exclude the class of people that includes me (no bills of attainder, please).  In the meantime, I expect everyone to use existing and future government programs to the maximum extent permissible by law.  That's how people work - rational economic behavior.  How could I ever judge someone for making an economically rational choice (as long as they don't resort to lying, cheating, fraud or misrepresentation to achieve their purposes)?