Economic conditions on the backside of Forbearance

[Devneck]

Federal student loan payments suspended until end of January

U.S. Secretary of Education Betsy DeVos on Friday said the suspension of federal student loans payments and accruing interest set to end on Dec. 31 will be extended another month as the pandemic presents financial challenges to borrowers.

www.reuters.com

I was just discussing this with my wife. I suspect the 1 month extension was a result of some back room discussions to delay a little longer for Biden to be sworn in. At that point, he would need to fast track additional delays which will lead to complete forgiveness.

Even before covid, there was widespread complaint of people not able to afford the burden of the loans they agreed to pay back. Now after nearly a year of a pause, any administration that does not continue the pause will face the brunt of millions not being able to afford them again.

Covid and Trump opened the door for dems to pay through full blown forgiveness.

Full disclosure, I have student loans. Never had an issue paying them and was lucky enough that I've never needed a pause. But I received one without my requesting it.

 

[sobo]

I had a student loan 40 years ago, but I dropped out of school before the end of my first quarter. I went back to university 5 years later and actually graduated with a degree with which I could make a living - civil engineering. But, before I ever even considered going back, I repaid that loan - every penny plus interest.
This is my solution to the student loan debt "crisis"...

Now, HowTF complex of a concept is that to grasp?

 

[The Heretic]

I paid off my student decades ago - and paid it off few years early. I understand that many unemployed cannot make their payments. I would support postponing payments and interest - until they are employed again. Student loans already had something like that in place when you leave college until you are gainfully employed - but IIRC it was a one time thing (I did that until I got a job).

Disclaimer: I am on UI benefits.

I support extensions of UI benefits because:

1) Most of these people became unemployed due to gov mandated closures of their places of employment.

2) UI Extensions are the best targeting strategy IMO; a general stimulus check that goes to fully employed will just be deposited and not spent unless needed. Right now, any funds that go out are "relief" and not "stimulus" - they will reduce the impact on the economy, not stimulate it.

We are on the edge of a "double dip" recession. The "recovery" is slowing down and may stall. Hopefully this next CV-19 bill will prevent falling into that recession and along with the vaccine will get us back to a growing economy.

 

[awshoot]

I had a student loan 40 years ago ...

25 years ago for me, also paid them off (early). The student loan thing is rather a mess -- the only entities really benefiting are the schools as can be seen by the wild growth of administration positions and the proliferation of useless degrees. There's a political component -- when we started exporting our economy wholesale in the 90s, education was supposed to be the solution, but not every English major can get that managerial position and as a result, many degreed people end up working at jobs they could do without a degree. For those who do get useful degrees, many of the positions have reduced salaries (making it harder to pay loans) caused by the other edge of the policies we've been pursuing since the 90s -- imported labor, particularly H-1B abuses.

Anyway, I saw a comment somewhere I can't recall: any student loan forgiveness should come directly out the endowments of colleges and universities -- because that's where that loan money went in the first place.

 

[The Heretic]

My degree probably got me my first job out of college, but then I transitioned from H/W to S/W - the latter is self-taught, but still, it was probably my foot in the door.

I find it funny that I have almost 30 years of s/w dev experience and sometimes recruiters still ask about my 35 year old degree (AS in EE) which I no longer put on my resume because I can barely remember Ohms law and the knowledge of how a diff amp works is not really applicable to writing software. But they are so set in their ways that they just don't get it - half of s/w devs either don't have a s/w eng degree or any degree at all.

 

[ATCclears]

I took student loans long ago, paid them off.

We took a few student loans for my daughter to ease the cash flow in 2014-2016, and paid them off after she graduated in 2017.

Even back in 2014 the Feds had REALLY GOOD websites and education available to ensure people understood what it mean to take a loan. Moreover, the training was mandatory. So I'm really struggling with anyone who took a student loan from say 2014 forward and is now complaining about the burden of the loan.

 

[Provincial]

As I've been saying for years, "the student loan program is a mechanism for converting future income from students to current income for the Education Industry."

It is in the process of changing to "transferring current income from taxpayers to the Education Industry."

 

[Ironbar]

Buckle in.

This may be paid content. Snippet and attached chart.

Americans have skipped payments on more than 100 million student loans, auto loans and other forms of debt since the coronavirus hit the U.S., the latest sign of the toll the pandemic is taking on people's finances.

The number of accounts that enrolled in deferment, forbearance or some other type of relief since March 1 and remain in such a state rose to 106 million at the end of May, triple the number at the end of April, according to credit-reporting firm TransUnion.

View attachment 712601

WSJ News Exclusive | Americans Skip Millions of Loan Payments as Coronavirus Takes Economic Toll

The surge in skipped payments on debts including student loans suggests that the layoffs related to the coronavirus have taken a severe economic toll.

www.wsj.com

I feel extremely fortunate that the wife and I work in industries that are, "essential." My company posted record profits this year.

 

[gmerkt]

Tuition for my college education came from the VA.

The educations of our three adult children were all funded without loans. Our son was a good scholar and got grants for a big chunk of his tuition at Seattle U. My wife's father died around that time, and she inherited a little bit of money. Some of which she used to pay the balance of our son's tuition. He worked full-time in food service management all four years he was in school. Later he got an MBA on his own dime, which cost I believe over $30K.

Our older daughter went to CC for three years and became an RN. Her tuition wasn't that steep but books were were expensive. My wife covered those expenses. This daughter worked full-time while going to college.

Our younger daughter is a veterinary technician. She has a degree but not in that field. We paid for some of her tuition. She worked all the time she was attending college.

It can be done. We were fortunate but also frugal. While I was working, most of the years my children were at home, so was their mom. We didn't have the extra income to set aside to pre-fund college tuition. To this day, there isn't a boat, camper, fifth wheel trailer, snowmobile or $65K pickup around our place.

Some less fortunate people need the bump that a student loan can give. What I do not approve of are the people who don't really need to take out student loans but do it because they can. I'm more in favor of people making do and doing without some things in order to fund their children's education. Then there is also living at home and working while going to school. Some students must go to schools some distance away for a number of reasons. But there are a great many college students who live within commuting distance of school but want to live in the dorms. To experience the "full college life experience." Which is a social thing and if anything can detract from the serious nature of learning.

 

[The Heretic]

I had the GI Bill, but it was only $464/mo, and only paid for rent/food/etc.

I took out three student loans IIRC - total was $10K? Used it to pay for tuition, books and some odds and ends. Towards the end I more or less ran out of funds, so for the last few months I lived with my parents, and then some more until I found a job. I got out of college with a EE degree just as there was a downturn in the tech industry in Portland - Techtronix laid off 2K engineers with many years of experience, and I was just a lowly tech right out of college. I had to move to Seattle to get a job.

Once I had a decent job I paid it down and paid it off in 6 years. IIRC the payment was $110/mo so that wasn't too hard.

 

[The Heretic]

U.S. Job Openings Slipped in Early December

The number of job openings in the U.S. edged down slightly in the first week of December, a sign of a softening labor market amid an upsurge in coronavirus infections and ebbing fiscal support for households.

www.wsj.com

 

[Aero Denezol]

COVID is currently the leading cause of death in this country.

Leading cause of death when, today? This month? This year? Please provide a source.

 

[Dinglenutz]

I expect better from the party of "science".

"Party of science when it aligns with our notions" is more like it.

 

[Dinglenutz]

Even before covid, there was widespread complaint of people not able to afford the burden of the loans they agreed to pay back.

When we started making some debts guaranteed and not dischargeable in bankruptcy, we gave birth to this obscenity. The rest is just perfectly predictable consequences.

 

[The Heretic]

U.S. student loan system will lead to 'inevitable cancellation,' expert argues

Income-based repayment plans have been touted as an alternative to cancellation, to help borrowers to reduce their financial burden when it comes to paying back their student debt. Researchers say it’s not a feasible solution.

finance.yahoo.com

 

[Dinglenutz]

The problem is that if the lender is assured they will get paid back for even the worst loans, they will make money by loaning to everyone they can rather than everyone they should. If we decide to forgive these loans, the lenders are the ones who should be on the hook. That's how you prevent people from taking loans they can't afford.

 

[ATCclears]

This will not end well...

Millions of Americans broke, unemployed, behind on rent

Leading economists are warning that many Americans are no longer to meet basic needs due to the pandemic and its effect on the economy.

thepostmillennial.com

 

[The Heretic]

This will not end well...

Millions of Americans broke, unemployed, behind on rent

Leading economists are warning that many Americans are no longer to meet basic needs due to the pandemic and its effect on the economy.

thepostmillennial.com

Not sure if I mentioned it in this thread, but I follow a FB Oregon unemployment group.

Quite a number of Oregon unemployed on that group are falling off the federal extension programs (PEUC and PUA). Only a small percentage of them earned enough in their base year to go onto Oregon state extended benefits so most have lost or will lose UI benefits soon. They will also lose exemptions from paying rent/etc., and student loans.

The GOP and the left are playing political games with the relief legislation. Early on the left asked for a multi trillion dollar package, including a wish list of funding for all their favorite programs (e.g., museums, arts, etc.) - many of which had nothing to do with the unemployment issues. I am sure part of that was to make it so objectionable to the GOP that they would never compromise.

Now the left has cut way back and brought their position to much less than what the GOP wanted, but now the GOP keeps backing away, reducing their acceptable funding - dangling a carrot in front of the left, but pulling it back when the left concedes.

Add on top of that, the earliest they can probably get this "out the door" will be 12/18/20 which means checks won't go out the door until 1/20/21 if they have to go thru the IRS. UI benefits will probably take a couple weeks to catch up, at the soonest.

So yeah, not going well, probably not going to end well even if both sides agree today, much less next week.

 

[awshoot]

... they will make money by loaning to everyone they can rather than everyone they should. ...

This

 

[The Heretic]

Jobless claims rise more than expected after break from holiday

First-time claims for unemployment insurance totaled 853,000, an increase from the upwardly revised 716,000 total a week before.

www.cnbc.com