The future of the middle class depends on student loan forgiveness

[DonViejo]

Canceling debt is what’s needed to ensure a solid, equitable middle class.

By Anne Helen Petersen Feb 25, 2021, 8:00am EST

Pieces like this almost always start with someone’s student debt story. Here’s a person who wanted to go to college — they’d always dreamed of a career that required it, or they had just internalized the idea that college was the only route to success. Their parents hadn’t saved enough to cover the costs, but when they filled out their FAFSA, a solution to their problems presented itself: an abundance of student loans, no questions asked. It was a no-brainer! College was the way to a better future, and student loans were what you needed for college.

That’s the first act of the story. In the second act, the student has graduated from college. Maybe they struggled to find a job, and convinced themselves that the real route was grad school. They took out more loans for law school, or med school, or architecture school; maybe they figured out they wanted to teach, and needed to get a master’s degree to do so. Someone might have told them about the Public Service Loan Forgiveness program: If they spent a decade, post-graduation, working in a field that qualified as public service and made regular, income-based repayments on their loans, the rest of the balance would be forgiven.

Then there’s the third act, which sets in anywhere from two to 10 years after graduation, when the enormity of their accumulated student debt becomes clear. Maybe they’re on an income-driven repayment plan, but the calculation doesn’t take cost of living into account and they’re struggling to cover their bills, even while living with friends or a partner. Their debt eats their ability to save: for retirement, for a down payment on a house, for their kids’ college, for potential catastrophe.

Maybe they get laid off and are forced to go into forbearance, with their payments on pause, but the interest just keeps accruing. They try to sort out their various loans and how to start paying a bit more, but every call to the loan servicer is another nightmare. They’re embarrassed and ashamed and don’t feel like they can talk to their friends or parents about it, so they spend hours on Reddit reading stories of people who’ve been paying off their loans for years and somehow still owe the same amount as when they graduated, if not more. They get up the courage to really study the details of their own payments and realize the same is true for them. They’ve spent five years scraping and struggling and the number’s somehow only gone up.

more
https://www.vox.com/the-goods/22297809/student-loan-debt-cancel-forgiveness-middle-class

[Johnny2X2X]

1. I have a great compromise PAYE

5% of income for 20 years then forgiveness after that. This is gross income less 1.5 times the poverty rate income.

This is what was on Joe Biden's website throughout his campaign.

The PAYE method of payment currently is 10% of your adjusted gross income minus 1.5 times the poverty rate with forgiveness after 20 years of payments. Changing it to 5% could be done with the stroke of a pen, Congress not needed.

Here's what that could mean for a college grad making $60K a year. Right now, poverty is just under $13K, so %60K - 1.5X13K= $41,000 a year, 10% of that is $4100 divided by 12 = $342 a month payment. Halving that to $171 a month is life changing.

And keep it simple, make enrollment in the PAYE program automatic, all student loans are eligible. Make your payments for 20 years and then you're done, period.

This can be done right away, it would change lives. and IT WAS JOE'S PLAN ALL ALONG!!! People can get on board with this, it is easy to implement.

[Goodheart]

2. Hyperbole.