Student loan forgiveness poll

[HPstache]

I thought this would be an interesting poll, obviously what has been proposed by Biden has not happened yet and can still be challenged by the courts, etc.  I am not so much interested in whether or not you think the proposed student loan forgiveness by Biden is the right or wrong thing, but in how it applies to a fairly large group of wealthy / strong wealth building individuals.  I think I covered most options, but can add more if need be.

[volleyballer]

I chose #1 as it's most accurate... However the remaining balance is going to be like 1,600 or something like that, rather insignificant. I wonder if the loan gets recast for the rest of the term? I don't really care either way for such a small balance at such a low rate (2.25%), just curious.
I would also be interested in the earnings profile of people who got forgiveness... I'm one of those people earning six figures who squeaked in under the limit. I'll take the free money, I guess?

ETA - I logged on to studentaid.gov and apparently I had a small pell grant my first year of college, so I guess change my answer to #2?

[Metalcat]

I chose the last one as I'm not in the US, but I'm interested in the results.

[mizzourah2006]

I paid mine off. I didn't have a ton, only about $25k. I was pretty frugal in gradschool to limit my loans. I actually started paying them when I got my first internship and finished them off after my first bonus. I wanted them gone as soon as possible. There was no way I'd have been eligible, because there is no way I would have kept my 6.8% interest rate for 7 years.

[Turtle]

I answered with how it affects my child rather than myself, since it still reflects upon our family unit.

[crimp]

My loans are paid off but my partner's are not. She's going for PSLF and the significant change is the proposed IBR program adjustment. The change proposed is that unpaid interest is covered as well, which means that her balance won't grow even if she only makes minimum payments. Prior to the payment moratoriums she had been paying a good bit extra each month to ensure the balance would slightly decrease over time (as a hedge against PSLF program changes).

[economista]

I will qualify for $20k in forgiveness and I will also qualify for PSLF. I am on track to have PSLF in September 2024.

[patchyfacialhair]

I paid my loans off already and voted as such.

Not a fan of the forgiveness in it's current form. First, I'd say just forgive it all if you're going to do this. That or just do nothing. There needs to be a combination/move to/of: better underwriting of loans (no more loans for unneeded degrees), caps on loans, free public 4 year college...just something different than what we're doing now.

The cost for college is insane these days and this bandaid does nothing but create division and it doesn't fix the core issue...college is insanely expensive no matter how you cut it. If nothing was forgiven, life would go on. On the flip side, if they forgave them all and made public college free, I'm sure there would be kicking and screaming for a little bit but eventually we'd line up with some European countries with how they do college. Not the end of the world either way.

[getsorted]

I attended college on a merit-based scholarship that paid full tuition plus room and board. Another scholarship gave me a stipend for books. So, I got my handouts up-front, no interest, no waiting.

[HPstache]

I will say that in the early stages of voting, the biggest standout to me is that no one has voted that their loan will be paid off in full after the forgiveness.  The reason that stands out is because I assume that is the ultimate/ideal result if the forgiveness would be passed... the next best thing (10K/20K reduced but still paying) will not have any relieving effect on what the individual is paying on a month-month basis.  Of course, this is a poll of Mustachians so we are a weird group to draw any sort of real conclusions from as it compares to the average person in the US.

[HPstache]

I chose the last one as I'm not in the US, but I'm interested in the results.

I added a choice for you.  It's too late (poll is set up not to change answers) but it might help for others.

[Sibley]

My loans are paid off.

My parent's Plus loan is not eligible.

[pressure9pa]

Took out a loan that I didn't need, and invested the proceeds when I qualified for 0%.  (Employer paid for my degree.)  Investments have done very well, and now I'm getting >90% of the remaining balance forgiven.  I am the worst example for those that think this is necessary.  I'm guessing I'm an outlier. 

[lifeisshort123]

I also am a PSLF person.  2026 is my year.  The fact PSLF existed when I began school is how I knew I could pursue the career I chose.

[Glenstache]

I think the forgiveness is fair and a good idea (when I went to college, it was much more heavily subsidized, so cheaper than today, so a wash on not getting forgiveness). Now I'd like to see a proactive rather than reactive approach to how higher education is funded and structured in this country.

[Loren Ver]

I graduated back in 2005.
I paid off all my private loans since they were higher interest and were worth knocking out right away (there were a lot, like 50k worth).
My federal loans were/are low interest.   I consolidated them and stretched them out as long as possible to use as leverage (like a low rate mortgage).  If this goes through, it will wipe out the last few thousand, which would be the last few years of payments. 
Since I'm several years retired, I can make sure income is low enough to hit the requirements as needed.

Loren

[teen persuasion]

Mine, DH, and oldest child's loans are paid off. 

DS2 will likely have his paid in full by forgiveness.  He'd been making payments for a while, and spent a year doing AmeriCorp, at the end of which he got a stipend to forgive a chunk of his loans.

DD3 and DS4 won't have theirs all wiped out, but probably 2/3 ish.  DS4 in particular hasn't made any payments on the majority of his loans, due to timing of the pause.  He did pay off entirely one small Perkins loan that didn't qualify for the pause.

DS5 is a HS senior, so has no student loans yet.

[Peachtea]

I'm selected will qualify for forgiveness but will still pay, but I might also refuse to apply. I haven't decided yet. I'm doing PSLF and will have all my loans forgiven in ~2 years anyways. I went to school planning on doing the PSLF program and graduated when the rules were more clear. So I'm not too worried about issues with PSLF and I'm not sure it's worth applying for the 10-20k forgiveness. Especially if it might complicate things with lawsuits etc. And the 10-20k is a drop in the bucket compared to my total loans (for undergrad + law degree).

[Arbitrage]

I graduated back in 2005.
I paid off all my private loans since they were higher interest and were worth knocking out right away (there were a lot, like 50k worth).
My federal loans were/are low interest.   I consolidated them and stretched them out as long as possible to use as leverage (like a low rate mortgage).  If this goes through, it will wipe out the last few thousand, which would be the last few years of payments. 
Since I'm several years retired, I can make sure income is low enough to hit the requirements as needed.

Loren

We're in a similar situation, with similar history, though with around $20k still of consolidated loans.  Only coast-FIRE though, not yet retired.  I'm assuming we'll be eligible?  The consolidation made it so that we weren't eligible for the COVID loan forbearance...but it sounds like different rules will apply for the forgiveness.  Have you confirmed that you'll still be eligible with the consolidated loans?

[uniwelder]

I paid off my loans soon after graduating 20 years ago. It was only a few thousand dollars. 

I went to community college for the first two years while living at home and working 25-30 hours per week. When I transferred to a university, I got a co-op (3 alternating semesters of paid internships) that paid nearly all the school expenses. I think I graduated with maybe 5k in debt.

[Tempname23]

I think the forgiveness is fair and a good idea (when I went to college, it was much more heavily subsidized, so cheaper than today, so a wash on not getting forgiveness). Now I'd like to see a proactive rather than reactive approach to how higher education is funded and structured in this country.

  I'm part of the 2.8% that "did not go to college/university", I don't want to pay for a loan that someone else signed and will benefit financially from because of the education they got.
 Two things I picked op from the poll. The numbers show 97.2% of the people responding graduated from college or at least got some college (enough to owe on a loan), that makes a college degree look important to FIRE. Making me one of the few that was able to FIRE with plenty for my kids inheritance. (although I didn't retire all that early)
  Second, about 1/2 of the respondents have paid off their loans, just shows what you can do if you "Live Below Your Means". This is what the people that will get the $10k loan cancellation should do rather than have the 51% of the workers that pay Federal taxes pay it for them.

[cupcakery]

My parents wouldn't help me and I didn't take out loans.  So I commuted to the local university.  It was HARD.  DH had the Army pay for it.  He had a small loan for his first semester, but that is it and that has long since been paid back.  We encouraged our kids to consider the profitability of their degrees and to go someplace affordable.  We will help, but want them to have skin in the game and will end up with small loans.

[YttriumNitrate]

My loans are paid off, and am on track to enable my kids to graduate debt free from all but the most expensive schools. If this goes through, I'll probably change my strategy so they graduate with the max amount of federal student loan debt (and an earmarked equivalent sized pile of money) to take advantage of the next time this happens.

[JupiterGreen]

Paid those off, but I'm really glad for the people who will benefit.

[FireLane]

I paid my loans off, but I'm happy to see this relief for people who are burdened by student debt. College education is a necessity for almost all high-paying jobs. "I had to suffer so you should too" is bad foundation for a public policy.

Going forward, though, it would be better policy to make college free for everyone, rather than forcing people to go into debt and forgiving some of it after the fact.

[wageslave23]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

[Dicey]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

Did you read the OP's post immediately below the poll?

[Raenia]

I graduated without debt, with a bachelor's degree, and voted as such.  My husband did the same.  Both of us had parents or grandparents who made provision for our educations, in conjunction with financial aid (grants) plus on-campus work.

My sister will be benefitting from this somewhat, as she has some loans from her post-bachelor's nursing school.  She has already paid off her private loans, and this will put a solid dent in the remainder of federal loans.  I'm very happy for her, nurses don't make a lot and she's been working hard while living below her means and still not getting ahead.  Hopefully soon she'll be able to start investing in her future, as we have.

[midweststache]

We've got ~$11K to pay off, and we won't qualify for the forgiveness plan since they're private, but we've easily saved $10K in payments by refinancing privately for a much lower rate.

I paid my loans off, but I'm happy to see this relief for people who are burdened by student debt. College education is a necessity for almost all high-paying jobs. "I had to suffer so you should too" is bad foundation for a public policy.

Going forward, though, it would be better policy to make college free for everyone, rather than forcing people to go into debt and forgiving some of it after the fact.

We haven't paid out loans off QUITE yet, but I am in complete agreement with the remainder of FireLane's sentiment here. Not bummed we won't qualify since we're on track to pay off next year anyway; happy for the relief this will provide others; hopeful for some serious revisioning of the higher education funding landscape more generally.

[Turtle]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

The vast majority of people who qualify for this are currently taxpayers &/or will be paying taxes in the future.  Some of those folks are already or will in the future be paying higher amounts of taxes due to better jobs enabled by their educations.  So I disagree that they aren't paying; just in a more roundabout way.

If it helps you sleep better at night to think of YOUR taxes paying for PPP loan forgiveness and MY taxes are going towards Student Loan Forgiveness, feel free. 

[therethere]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

The vast majority of people who qualify for this are currently taxpayers &/or will be paying taxes in the future.  Some of those folks are already or will in the future be paying higher amounts of taxes due to better jobs enabled by their educations.  So I disagree that they aren't paying; just in a more roundabout way.

If it helps you sleep better at night to think of YOUR taxes paying for PPP loan forgiveness and MY taxes are going towards Student Loan Forgiveness, feel free.

This is a silly statement. They would be paying taxes based on their job with or without the student loan forgiveness. It's not like they got a new job because loans were forgiven....

[charis]

There should be another category for people whose loans have already been forgiven.  I received PSLF and my loans were forgiven about two years ago.  There are also many other forms of forgiveness that have been around for years for teachers, nurses, legal aid providers, etc.

[jinga nation]

i paid mine off lump-sum, when the interest-free grace period expired 6 months after graduation.
in college, i had up to $100k of AORs going on, took that interest-free money and stuck it into CD ladders at ING Direct. (anyone remember those early/mid 2000s?)
The interest earnings were used to pay off the loan.

[Turtle]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

The vast majority of people who qualify for this are currently taxpayers &/or will be paying taxes in the future.  Some of those folks are already or will in the future be paying higher amounts of taxes due to better jobs enabled by their educations.  So I disagree that they aren't paying; just in a more roundabout way.

If it helps you sleep better at night to think of YOUR taxes paying for PPP loan forgiveness and MY taxes are going towards Student Loan Forgiveness, feel free.

This is a silly statement. They would be paying taxes based on their job with or without the student loan forgiveness. It's not like they got a new job because loans were forgiven....

Just not by the people who benefitted from the loan

That implies that the people who benefitted from the loan aren't paying any Federal taxes. 

[GuitarStv]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

The vast majority of people who qualify for this are currently taxpayers &/or will be paying taxes in the future.  Some of those folks are already or will in the future be paying higher amounts of taxes due to better jobs enabled by their educations.  So I disagree that they aren't paying; just in a more roundabout way.

If it helps you sleep better at night to think of YOUR taxes paying for PPP loan forgiveness and MY taxes are going towards Student Loan Forgiveness, feel free.

This is a silly statement. They would be paying taxes based on their job with or without the student loan forgiveness. It's not like they got a new job because loans were forgiven....

Everybody's going to get a job, sure.  Looking at median wages though, university grads make about 40% more, which means quite a bit more taxes paid . . . directly because of that loan.

[Raenia]

Guys, there are several other thread for discussing how you feel about the student loan forgiveness, who is paying for it, etc.  That's explicitly not what the OP asked for.  Can we please keep this thread for discussing who is getting forgiveness, and take the other chat to one of the other threads?

[Cranky]

My dh and I are old and did not have student debt, and our 3 kids got degrees without debt.

One adult child has grad student debt that will be largely covered by this.

[Psychstache]

Got mine forgiven by PSLF about 1 year ago. On time payments from the end of my graduation grace period until the pandemic started and my balance went up about $6k.

[kanga1622]

DH and I had a combined $15k in student loans when we graduated in 2000 and 2003. I don't remember the exact date but they've been paid off for about 17 years.

[bmjohnson35]

My employer paid 98% of mine and I paid the rest.  It would have paid for all my college, but company budget cuts in my last year of school resulted in me paying for the last few semesters. 

I personally don't agree with this approach.  I agree that the industry needs an overhaul, but arbitrarily throwing some money at debt after the fact is not addressing the issues that created it.  It also sends the wrong message to society.  Education has become a racket in the US and largely predatory.  It's terribly overpriced.  Unfortunately, throwing tax payer money at issues seems to be the go-to strategy of politicians.

[wageslave23]

You guys realize that the debts are still being paid right?  Just not by the people who benefitted from the loan.

Did you read the OP's post immediately below the poll?

Did you read the two posts immediately before mine?

[Loren Ver]

I graduated back in 2005.
I paid off all my private loans since they were higher interest and were worth knocking out right away (there were a lot, like 50k worth).
My federal loans were/are low interest.   I consolidated them and stretched them out as long as possible to use as leverage (like a low rate mortgage).  If this goes through, it will wipe out the last few thousand, which would be the last few years of payments. 
Since I'm several years retired, I can make sure income is low enough to hit the requirements as needed.

Loren

We're in a similar situation, with similar history, though with around $20k still of consolidated loans.  Only coast-FIRE though, not yet retired.  I'm assuming we'll be eligible?  The consolidation made it so that we weren't eligible for the COVID loan forbearance...but it sounds like different rules will apply for the forgiveness.  Have you confirmed that you'll still be eligible with the consolidated loans?

@Arbitrage I have done no looking in to this and did not looking into the COVID loan forbearance as my payments are small and it is just easier to let momentum keep things moving and not rock the boat (at 1.875%, I don't feel particularly burdened).  If the forgiveness holds and the hoops aren't too arduous, I might give it a try.  "Free" money and all that.  If my past consolidation prevents the forgiveness, then I think I still won, I've got a few thousand left at a crazy low interest rate that inflation has been chipping away for more than a decade. 

Loren

[CheapScholar]

I知 having $10,000 forgiven. Which is wild because I知 a millionaire, have a paid off home, no other debt whatsoever, and I知 FI. I致e maintained about $50,000 in debt from my JD over the years. The reason I致e done this is because my loans were often in 0% deferment, as I received two additional degrees after my JD while working at universities. I was a part time student, but paid no tuition because of the work benefit. Every time I enrolled, my loans were automatically frozen. Then COVID happened and my loans were frozen like everyone else痴.

I値l have about $40,000 in loans left. But, I doubt I値l pay most of that. We all know more student loan forgiveness is coming. My wife had a very similar situation.

[wenchsenior]

I’m having $10,000 forgiven. Which is wild because I’m a millionaire, have a paid off home, no other debt whatsoever, and I’m FI. I’ve maintained about $50,000 in debt from my JD over the years. The reason I’ve done this is because my loans were often in 0% deferment, as I received two additional degrees after my JD while working at universities. I was a part time student, but paid no tuition because of the work benefit. Every time I enrolled, my loans were automatically frozen. Then COVID happened and my loans were frozen like everyone else’s.

I’ll have about $40,000 in loans left. But, I doubt I’ll pay most of that. We all know more student loan forgiveness is coming. My wife had a very similar situation.

Do we know that? I am not at all certain this current forgiveness will get through the courts, let alone further attempts.

[BlueMR2]

I値l have about $40,000 in loans left. But, I doubt I値l pay most of that. We all know more student loan forgiveness is coming. My wife had a very similar situation.

Do we know that? I am not at all certain this current forgiveness will get through the courts, let alone further attempts.

Will have to see.  I'd expect a subsidy in the future for new students to get school affordable again is the more likely than continuing to forgive debt.  ACA for college if you will...

[fuzzy math]

Voted #1 on behalf of DH. I paid off my private 17% loan in the mid 2000s