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Politico: You Don’t Have To Pay Off Student Loans

From the Politico:

Half of $1 trillion in federal student loan debt not repaid

By LIBBY A. NELSON | August 5, 2013

About half of the outstanding $1 trillion in federal student loan debt in the U.S. isn’t being repaid. And 1 out of 8 borrowers are defaulting on their loans despite unprecedented federal attempts to help.

An analysis released Monday by the CFPB shows borrowers are struggling to repay their loans and are seemingly unaware of options that could them help avoid default or forbearance.

“That can have serious consequences for their economic future,” said Rohit Chopra, the bureau’s student loan ombudsman. “The troubling part is that many of those defaults could have been avoided if borrowers knew about their options and were able to easily enroll in them.”

Only about 10 percent of borrowers are enrolled in any kind of income-based repayment program. The others are in either standard 10-year repayment programs or in extended programs, which stretch loan payments — and interest — out over many more years but don’t take borrowers’ financial situations into account.

New repayment programs base loan payments on borrowers’ discretionary incomes. If borrowers really can’t afford to make payments, a common reason for default and forbearance, they can pay very little or nothing at all.

Isn’t that great? Their debt just disappears. It’s magical!

The Obama administration has made those programs more generous than ever. Borrowers can now pay 10 percent of their discretionary income each month and have their loans forgiven after 20 years if they work in the for-profit sector; after 10 years if they work for nonprofits or federal, state or local governments.

In other words, if you don’t work or you hide you income, you can get your loan forgiven in 20 years. And if you work for a liberal non-profit or for the government — any government — it disappears after ten years. What a great way to increase government dependence.

But the numbers [of people not paying their loans] trouble Chopra and other experts, who say there is no reason for federal borrowers, especially direct loan borrowers, to be in default or forbearance at all.

The low enrollment in programs to help suggests students aren’t aware of income-based repayment or they’ve struggled to sign up…

“We’ve tried to do our part with the Department of Education,” Chopra said. Both agencies have worked to raise awareness about the repayment programs…

Because we must find new and better ways to make more people dependent upon the government.

This article was posted by Steve on Tuesday, August 6th, 2013. Comments are currently closed.

4 Responses to “Politico: You Don’t Have To Pay Off Student Loans”

  1. GetBackJack says:

    The 13th Amendment reads …

    Sec. 1 – Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

    I hope S&L’rs will note this Amendment to our Constitution does not outlaw voluntary slavery or servitude.

    “Hey, kid. It ain’t my fault you requested Federal Loans to attend college,” the federal debt agent told him.

  2. Dupree says:

    The gov is taking your paycheck and divying it up. The first 30% is payroll taxes. 10% to student loan debt after restructuring. 10% to heathcare premiums after subsidies. Wonder what theyll steal the next slice for.

  3. mr_bill says:

    I’m glad to hear that the mediocre are being given such generous terms. As a member of the productive class and a person who has dutifully paid his student loans for the last 5 years, can I please deduct the interest paid from my taxes. If you’re going to allow the deadbeats to not pay, at least allow me to avoid being hit both coming and going.

    I forgot, I’m not a member of the professional parasite class, so I have to pay twice as much to make up for all the shirtballs that don’t handle their own business.

  4. bousquem25 says:

    I wonder how long this takes to disseminate to all the liberal colleges and other white towers. Now the wonderful little marxists can take 10 years getting their political science/philosphy/women studies/racial studies/russian lit/underwater basket weaving degrees before heading off into goverment or working at some liberal non-profit doing political work before the tax payer is stuck holding the bag for their six-figure student loan debt. After all going to Harvard or some high priced school is great on your resume to be a future leach. Of course others will rack up more debt becoming PhDs or lawyers to then work in academia or for the liberal causes and still stick the taxpayer with the bag.

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