STUDENT LOANS

mrussel1 said:

PJPOWER said:

static111 said:

PJPOWER said:

Gern Blansten said:

I remember when my older daughter was in school and one of her roommates couldn't pay rent until her student loans went through.  She was financing everything.  That's a horrible spot to be in and horrible that the vampires were allowed to loan her the money to do it.

Those are the kids that graduate with $80K in student loan debt.

I had one of those roommates too.  Took out maximum student loans to pay for rent, food, etc.  He would sit around playing video games and eating all of our food while my other roommate and I worked our part time minimum wage jobs to pay for school.  He is still paying those off 20 years later!  He should have never been allowed to take out that kind of debt, as you said. 

It was not his poverty that caused his problems, it was his work ethic...which was an issue when he actually had any job afterwards.
 Anecdotal example, I know, but it is a real tangible one that I have seen first hand.  The student loan program is shitty and preys on/enables poverty.

Must have been nice going to school with the dinosaurs when a part time minimum wage job paid for school.  I worked 3 jobs and still had to take out loans, for a trade school program from the community college.   Helped my career, but in all t he amount I will end up paying on t he loan is double what I actually borrowed. And these are all federally subsidized 

It wasn’t “that” long ago.  But you are right and hit the nail on the head.  Since I graduated, the cost of college has risen dramatically!  I think that the reason for this is that they are being enabled to do this because of federal loans.  The college gets the money regardless of whether you pay the loan or not, so they have nothing to lose by upping their costs.  The only way you are going to see lower college debt AND lower college fees is by ending the federal student loan program or dramatically decrease the limit of how much debt can be taken out.  

It should be a crime to send kids fresh out of high school into such massive debt...

Are you advocating that school should be free, or that only those that can afford college from their parents, etc. get to go to school?

I’m not 100% sure what the answer is.  It is never going to be “fair” for everyone.  If you have the aptitude to go through college successfully, financial burdens should not be what hold you back.  I do believe that an educated society is a successful society, but maybe the idea of a formal “college” needs to be changed to get rid of the idea that a degree=aptitude/education.  I rarely use anything I learned in college in my career, my knowledge/education came from on the job experience, but boy does that degree hold weight when applying for jobs.  Maybe we need to change the way we are educating society as a whole...

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

static111 said:

mrussel1 said:

PJPOWER said:

Gern Blansten said:

One effect that I've seen is forcing married people that both have student loans to file separately.  Or if one has loans and the other doesn't.  

A joint return causes the minimum student loan payment to be higher which forces a couple to file separately in order to keep their payments low.  I advise against this as much as I can but they tend to look at it from a monthly cash flow perspective rather than the overall savings perspective.  Of course those people probably read Dave Ramsey so getting through is difficult.

So you advise people to pay down student loans as quickly as possible and so does Ramsey...You may have more in common than you think.
Still not going to hire you, though.

Federal student loans have subsidized interest rates.  It's likely not better to pay them down sooner than later.  Private student loans are not, so that may make sense.  That sounds like dubious advice and it's also too general for most people.  I'm not opining on how a married couple should do it, which makes my point even more.  Advice from a celebrity is terrible.  

The sooner you pay them off the sooner they stop accruing interest and if you can lower the principal the amount of interest accrued goes down.  It’s a stupid system and absolutely it helps to pay it down quicker especially if you don’t want to be paying it for life.

Yes, but you pay higher interest debts off first, that's the point.  Federal loans will be your lowest interest debt (unless you have some intro rate from another lender, but that would run out). Or if you have the discipline, you borrow the gov't money and invest on your own.  In other words if your student interest rate is 2%, don't pay that off.  Take that money and invest it in another way to earn a higher return. 

Wow, you really are all about conning the system, ha. While this strategy is technically not illegal, I bet if people stat doing this in mass, lawmakers will put a stop to it.  Personally, I wish I didn’t have to pay any kind of social security because that money taken out of every paycheck could be invested and would earn so much more for retirement somewhere else.  

That's a con?  Paying off higher interest debt first is a con to you?  You are seriously misguided.  Here's another example.  I could pay off my house in cash right now if I wanted to do so.  But that's stupid.  I have a 2.x% interest rate, so I'm borrowing money from Quicken dirt cheap.  Why would I pay that off?  I wouldn't.  I take excess cash and put that in the market and earn a higher return than what I'm paying in interest.  It's literally the most basic personal finance strategy out there.  

I wasn’t talking about paying off your highest interest rates first, I was talking about using your student loans to buy stocks.  It’s borderline a con.  It’s a legal grey area that may get shut down if enough people abuse it.  From what I’ve read, the Department of Education may even sue you if they catch wind of the practice because it goes against the “intent” of the loan.  Mathematically, it is a sound thing to do, but morally and ethically...grey.  There are loans you can take out with no stipulations on how they are used, and ones that you can use specifically for investments.  

I’m not saying “don’t do it”, but it really is just a loophole that may get shut down (all they would have to do is require receipts for loan $ used).  

I sure wouldn’t be bragging about it on a public forum....

You're showing your genius by the post. You're not using your student loan to buy stocks, rather not paying more than the minimum in order to invest in higher returning assets.  You always borrow money when the rate is below your anticipated ROI of the next option.  I heard there's a guy in the radio or podcast that might be able to help you. Or a douche politician (I know...redundant) can help you. 

mrussel1 said:

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

static111 said:

mrussel1 said:

PJPOWER said:

Gern Blansten said:

One effect that I've seen is forcing married people that both have student loans to file separately.  Or if one has loans and the other doesn't.  

A joint return causes the minimum student loan payment to be higher which forces a couple to file separately in order to keep their payments low.  I advise against this as much as I can but they tend to look at it from a monthly cash flow perspective rather than the overall savings perspective.  Of course those people probably read Dave Ramsey so getting through is difficult.

So you advise people to pay down student loans as quickly as possible and so does Ramsey...You may have more in common than you think.
Still not going to hire you, though.

Federal student loans have subsidized interest rates.  It's likely not better to pay them down sooner than later.  Private student loans are not, so that may make sense.  That sounds like dubious advice and it's also too general for most people.  I'm not opining on how a married couple should do it, which makes my point even more.  Advice from a celebrity is terrible.  

The sooner you pay them off the sooner they stop accruing interest and if you can lower the principal the amount of interest accrued goes down.  It’s a stupid system and absolutely it helps to pay it down quicker especially if you don’t want to be paying it for life.

Yes, but you pay higher interest debts off first, that's the point.  Federal loans will be your lowest interest debt (unless you have some intro rate from another lender, but that would run out). Or if you have the discipline, you borrow the gov't money and invest on your own.  In other words if your student interest rate is 2%, don't pay that off.  Take that money and invest it in another way to earn a higher return. 

Wow, you really are all about conning the system, ha. While this strategy is technically not illegal, I bet if people stat doing this in mass, lawmakers will put a stop to it.  Personally, I wish I didn’t have to pay any kind of social security because that money taken out of every paycheck could be invested and would earn so much more for retirement somewhere else.  

That's a con?   Paying off higher interest debt first is a con to you?  You are seriously misguided.  Here's another example.  I could pay off my house in cash right now if I wanted to do so.  But that's stupid.  I have a 2.x% interest rate, so I'm borrowing money from Quicken dirt cheap.  Why would I pay that off?  I wouldn't.  I take excess cash and put that in the market and earn a higher return than what I'm paying in interest.  It's literally the most basic personal finance strategy out there.  

I wasn’t talking about paying off your highest interest rates first, I was talking about using your student loans to buy stocks.  It’s borderline a con.  It’s a legal grey area that may get shut down if enough people abuse it.  From what I’ve read, the Department of Education may even sue you if they catch wind of the practice because it goes against the “intent” of the loan.  Mathematically, it is a sound thing to do, but morally and ethically...grey.  There are loans you can take out with no stipulations on how they are used, and ones that you can use specifically for investments.  

I’m not saying “don’t do it”, but it really is just a loophole that may get shut down (all they would have to do is require receipts for loan $ used).  

I sure wouldn’t be bragging about it on a public forum....

You're not using your student loan to buy stocks, rather not paying more than the minimum in order to invest in higher returning assets.  You always borrow money at when the rate is below your anticipated ROI of the next option.  I heard there's a guy in the radio or podcast that might be able to help you. 

I misunderstood, I thought you were telling people to take out student loans to buy stocks.  If that isn’t what you meant, then I apologize.  

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

static111 said:

mrussel1 said:

PJPOWER said:

Gern Blansten said:

One effect that I've seen is forcing married people that both have student loans to file separately.  Or if one has loans and the other doesn't.  

A joint return causes the minimum student loan payment to be higher which forces a couple to file separately in order to keep their payments low.  I advise against this as much as I can but they tend to look at it from a monthly cash flow perspective rather than the overall savings perspective.  Of course those people probably read Dave Ramsey so getting through is difficult.

So you advise people to pay down student loans as quickly as possible and so does Ramsey...You may have more in common than you think.
Still not going to hire you, though.

Federal student loans have subsidized interest rates.  It's likely not better to pay them down sooner than later.  Private student loans are not, so that may make sense.  That sounds like dubious advice and it's also too general for most people.  I'm not opining on how a married couple should do it, which makes my point even more.  Advice from a celebrity is terrible.  

The sooner you pay them off the sooner they stop accruing interest and if you can lower the principal the amount of interest accrued goes down.  It’s a stupid system and absolutely it helps to pay it down quicker especially if you don’t want to be paying it for life.

Yes, but you pay higher interest debts off first, that's the point.  Federal loans will be your lowest interest debt (unless you have some intro rate from another lender, but that would run out). Or if you have the discipline, you borrow the gov't money and invest on your own.  In other words if your student interest rate is 2%, don't pay that off.  Take that money and invest it in another way to earn a higher return. 

Wow, you really are all about conning the system, ha. While this strategy is technically not illegal, I bet if people stat doing this in mass, lawmakers will put a stop to it.  Personally, I wish I didn’t have to pay any kind of social security because that money taken out of every paycheck could be invested and would earn so much more for retirement somewhere else.  

That's a con?  What are you insane?  Paying off higher interest debt first is a con to you?  You are seriously misguided.  Here's another example.  I could pay off my house in cash right now if I wanted to do so.  But that's stupid.  I have a 2.x% interest rate, so I'm borrowing money from Quicken dirt cheap.  Why would I pay that off?  I wouldn't.  I take excess cash and put that in the market and earn a higher return than what I'm paying in interest.  It's literally the most basic personal finance strategy out there.  

I wasn’t talking about paying off your highest interest rates first, I was talking about using your student loans to buy stocks.  It’s borderline a con.  It’s a legal grey area that may get shut down if enough people abuse it.  From what I’ve read, the Department of Education may even sue you if they catch wind of the practice because it goes against the “intent” of the loan.  Mathematically, it is a sound thing to do, but morally and ethically...grey.  There are loans you can take out with no stipulations on how they are used, and ones that you can use specifically for investments.  

I’m not saying “don’t do it”, but it really is just a loophole that may get shut down (all they would have to do is require receipts for loan $ used).  

I sure wouldn’t be bragging about it on a public forum....

You're showing your genius by the post. You're not using your student loan to buy stocks, rather not paying more than the minimum in order to invest in higher returning assets.  You always borrow money at when the rate is below your anticipated ROI of the next option.  I heard there's a guy in the radio or podcast that might be able to help you. 

I misunderstood, I thought you were telling people to take out student loans to buy stocks.  If that isn’t what you meant, then I apologize.  

You can't take federal student loans without being enrolled or accepted in school.  It's part of the FAFSA process.  

PJPOWER said:

mrussel1 said:

dankind said:

I have more than a quarter-million dollars in student loan debt that my children will inherit. My wife and I file separately. If we didn't, we would almost certainly, considering family size et al., be below the poverty line on a monthly income basis.

First and likely last college-educated member of my family.

So you know,  your family has zero legal obligation to your debt. 

True for federal loans, but may or may not be the case if they are private loans.  

Private loans are at market rates, and since they are unsecured and are usually loaned to individuals with shorter credit history, tend to have a pretty high interest rate.  You would never engage in a paydown strategy for private like you would for federal. 

mrussel1 said:

PJPOWER said:

mrussel1 said:

dankind said:

I have more than a quarter-million dollars in student loan debt that my children will inherit. My wife and I file separately. If we didn't, we would almost certainly, considering family size et al., be below the poverty line on a monthly income basis.

First and likely last college-educated member of my family.

So you know,  your family has zero legal obligation to your debt. 

True for federal loans, but may or may not be the case if they are private loans.  

Private loans are at market rates, and since they are unsecured and are usually loaned to individuals with shorter credit history, tend to have a pretty high interest rate.  You would never engage in a paydown strategy for private like you would for federal. 

“Duh”. You said “your family has zero obligation to your debt”.  That is not always the case.  If you have private student loans, they can be attached to your estate.  Dankind didn’t specifically say “federal loan debt”.

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

dankind said:

I have more than a quarter-million dollars in student loan debt that my children will inherit. My wife and I file separately. If we didn't, we would almost certainly, considering family size et al., be below the poverty line on a monthly income basis.

First and likely last college-educated member of my family.

So you know,  your family has zero legal obligation to your debt. 

True for federal loans, but may or may not be the case if they are private loans.  

Private loans are at market rates, and since they are unsecured and are usually loaned to individuals with shorter credit history, tend to have a pretty high interest rate.  You would never engage in a paydown strategy for private like you would for federal. 

“Duh”. You said “your family has zero obligation to your debt”.  That is not always the case.  If you have private student loans, they can be attached to your estate.  Dankind didn’t specifically say “federal loan debt”.

It doesn't matter if it's private or public.  If the estate has a positive net worth, then a creditor MAY try to collect the debt, but that is very rare.  Creditors consider this non-contractual charge off and write off hundreds of millions each year.  Two biggest players in this industry (DCM and EIS) never collect aggressively on this debt.  It's all soft talk off.  If the estate is net negative, there is no mechanism to attach that debt to another family member.  There is zero obligation.  

mace1229 said:

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

dankind said:

I have more than a quarter-million dollars in student loan debt that my children will inherit. My wife and I file separately. If we didn't, we would almost certainly, considering family size et al., be below the poverty line on a monthly income basis.

First and likely last college-educated member of my family.

So you know,  your family has zero legal obligation to your debt. 

True for federal loans, but may or may not be the case if they are private loans.  

Private loans are at market rates, and since they are unsecured and are usually loaned to individuals with shorter credit history, tend to have a pretty high interest rate.  You would never engage in a paydown strategy for private like you would for federal. 

“Duh”. You said “your family has zero obligation to your debt”.  That is not always the case.  If you have private student loans, they can be attached to your estate.  Dankind didn’t specifically say “federal loan debt”.

I still wouldn't call that as inheriting debt. It just means they take from your assets when you die before your kids get it. From my understanding, no one can inherit debt. You just won't inherit any assets or cash, that's not the same as inheriting debt. Its not like the kids now have to start paying off the debt out of pocket. The only exception is if they co-signed, and in that case it was their debt too, and not inherited.

Exactly correct

PJPOWER said:

mace1229 said:

PJPOWER said:

mrussel1 said:

PJPOWER said:

mrussel1 said:

dankind said:

I have more than a quarter-million dollars in student loan debt that my children will inherit. My wife and I file separately. If we didn't, we would almost certainly, considering family size et al., be below the poverty line on a monthly income basis.

First and likely last college-educated member of my family.

So you know,  your family has zero legal obligation to your debt. 

True for federal loans, but may or may not be the case if they are private loans.  

Private loans are at market rates, and since they are unsecured and are usually loaned to individuals with shorter credit history, tend to have a pretty high interest rate.  You would never engage in a paydown strategy for private like you would for federal. 

“Duh”. You said “your family has zero obligation to your debt”.  That is not always the case.  If you have private student loans, they can be attached to your estate.  Dankind didn’t specifically say “federal loan debt”.

I still wouldn't call that as inheriting debt. It just means they take from your assets when you die before your kids get it. From my understanding, no one can inherit debt. You just won't inherit any assets or cash, that's not the same as inheriting debt. Its not like the kids now have to start paying off the debt out of pocket. The only exception is if they co-signed, and in that case it was their debt too, and not inherited.

I mean, that’s true, it just gets taken from the estate.  Which is completely fair in my opinion.  If any property is jointly owned (married) couldn’t the surviving spouse still be liable for any of that debt whether or not they signed off on the deceased spouse’s loan?  That’s where my mind was going with this.
Also, what if one of the assets is a business or property that is partly owned by the children?  In order to keep that business, could the children be responsible for part of that debt?  I really don’t know the answer to these.

Personal debt does not xfer to a business.  Business debt does not xfer to a person unless there's a personal guarantee. 

Post your shit here.