Canceling student loans

[Backintheday544]

4 hours ago, Chef Jim said:

Here is the thing that really pisses me off about this forgiveness.  Those that put in place forgiveness plans that were already offered such as Income Based Repayment will have their loan forgiveness taxed whereas these will not be.  And some of these plans?  The tax hit could be huge seeing they only pay based on their income.  Almost all of those don't cover P&I so the balance grows and I've seen some plans where the forgiven/taxable portion could be a few hundred thousand dollars.  Those people just got the ***** shaft. 

Those plans are not taxable Federally through 2026 as part of the recent bill that makes this not taxed.

 

Those amounts under the 20 year IBR rules always had the taxable income as an issue. It’s generally been assumed Congress would pass something once the first people would be affected (and they did through 2026). The PSFL never had the tax issue.

 

The people who have hundreds and thousands of negative amortization due to IBR will most likely not pay tax on all of that as the portion where they are insolvent is not taxed.

 

The plan Biden released fixes the negative amortization issue going forward but would be nice to see it retroactively fixed.

[Chef Jim]

4 hours ago, reddogblitz said:

 

Agreed.  Since these are government owned loans why can't they lower the interest rate to 1% or heck, even 0%?   Would help a lot of people AND be more cost effective.

 

Because they (the Biden Administration) are not looking to give by all this.  They are looking to receive.  

[reddogblitz]

20 minutes ago, Chef Jim said:

 

Because they (the Biden Administration) are not looking to give by all this.  They are looking to receive.  

 

Amen.

[Tiberius]

A public interest lawyer in Indiana is suing to block President Biden’s plan to cancel some student debt, arguing that the policy will force him to pay state taxes on the forgiven amount.

The lawsuit, filed in U.S. District Court for the Southern District of Indiana Tuesday, is the first significant legal action seeking to invalidate Biden’s policy before it takes effect.

 

https://www.washingtonpost.com/education/2022/09/27/lawsuit-student-loan-forgiveness/

[B-Man]

 

 

The Congressional Budget Office has set forth the direct economic cost of the illegal Biden student loan giveaway in a letter to Senator Richard Burr and Rep. Virginia Foxx. The letter is posted online here. Following up, Republicans on the House Budget Committee issued
this press release. The press release highlights these key points:

 

• $400 billion cost to taxpayers from Biden’s decision to cancel student loan debt for families earning up to $250,000.

• $20 billion cost to taxpayers from Biden’s decision to extend the student loan repayment moratorium another four months.

○ $105 billion total cost to taxpayers from loan repayment moratorium since Biden took office.

• $4+ billion per month cost to U.S. taxpayers from loan and interest repayment moratorium.

 

The press release adds that the CBO score does not include a cost estimate of the changes the Biden administration also made to student loan income-driven repayment plans, “which other analyses have projected could cost American taxpayers over $450 billion.” The press release then provides this assessment of the distribution of the benefits and burdens of the loan and interest repayment moratorium:

 

• 87% of adults without student loans will be forced to pay for the 13% of adults who chose to take on loans.

• 70% of the benefit from canceling student loan debt will go to those in the top half of the income spectrum.

• 56% of all student loan debt is owed by the 14.3% of individuals with advanced degrees.

 

 

The argument served up by the administration to support the legality of the giveaway is a glorified joke.

 

 

 

 

https://www.powerlineblog.com/archives/2022/09/analyze-this-44.php

 

https://www.cbo.gov/system/files/2022-09/58494-Student-Loans.pdf

 

https://republicans-budget.house.gov/press-release/cbo-reports-400-billion-price-tag-for-bidens-welfare-for-the-wealthy-student-loan-cancelation-scheme/#:~:text=“President Biden's transfer of student,security and peace of mind%2C”

 

https://www.justice.gov/olc/file/1528451/download

[dpberr]

Just now, B-Man said:

 

 

The Congressional Budget Office has set forth the direct economic cost of the illegal Biden student loan giveaway in a letter to Senator Richard Burr and Rep. Virginia Foxx. The letter is posted online here. Following up, Republicans on the House Budget Committee issued
this press release. The press release highlights these key points:

 

• $400 billion cost to taxpayers from Biden’s decision to cancel student loan debt for families earning up to $250,000.

• $20 billion cost to taxpayers from Biden’s decision to extend the student loan repayment moratorium another four months.

○ $105 billion total cost to taxpayers from loan repayment moratorium since Biden took office.

• $4+ billion per month cost to U.S. taxpayers from loan and interest repayment moratorium.

 

The press release adds that the CBO score does not include a cost estimate of the changes the Biden administration also made to student loan income-driven repayment plans, “which other analyses have projected could cost American taxpayers over $450 billion.” The press release then provides this assessment of the distribution of the benefits and burdens of the loan and interest repayment moratorium:

 

• 87% of adults without student loans will be forced to pay for the 13% of adults who chose to take on loans.

• 70% of the benefit from canceling student loan debt will go to those in the top half of the income spectrum.

• 56% of all student loan debt is owed by the 14.3% of individuals with advanced degrees.

 

 

The argument served up by the administration to support the legality of the giveaway is a glorified joke.

 

 

 

 

https://www.powerlineblog.com/archives/2022/09/analyze-this-44.php

 

https://www.cbo.gov/system/files/2022-09/58494-Student-Loans.pdf

 

https://republicans-budget.house.gov/press-release/cbo-reports-400-billion-price-tag-for-bidens-welfare-for-the-wealthy-student-loan-cancelation-scheme/#:~:text=“President Biden's transfer of student,security and peace of mind%2C”

 

https://www.justice.gov/olc/file/1528451/download

 

I'd say most previous POTUS would have had that information in hand before making the decision.  

 

There were lots of better ways to address this problem than the way selected.

[SoCal Deek]

I don’t oppose this stunt on the grounds of it being bad fiscal policy. I oppose it on the grounds that it’s really bad life skills policy. 

[Chef Jim]

20 minutes ago, SoCal Deek said:

I don’t oppose this stunt on the grounds of it being bad fiscal policy. I oppose it on the grounds that it’s really bad life skills policy. 

 

Just the opposite here.  It's not up the the government to teach good or bad life skills however it is up to the government to create and maintian good fiscal policy.  

[SoCal Deek]

2 minutes ago, Chef Jim said:

 

Just the opposite here.  It's not up the the government to teach good or bad life skills however it is up to the government to create and maintian good fiscal policy.  

I didn’t say it was the government’s job to teach life skills. I said it’s why I oppose it. 
 

If they want to give people the opportunity to have their loan erased then the people who took the loan need to return their degree. Now THAT would be good policy! 

[Chef Jim]

3 hours ago, SoCal Deek said:

I didn’t say it was the government’s job to teach life skills. I said it’s why I oppose it. 
 

If they want to give people the opportunity to have their loan erased then the people who took the loan need to return their degree. Now THAT would be good policy! 

They have the opportunity to erase their loans. Pay them off quicker. If a family making up to $250k a year can’t throw a little more to the principal then I can’t help them. 
 

How about we have them pay back the $10-$20k out of future inheritance?   🤷🏻‍♂️
 

[SoCal Deek]

3 minutes ago, Chef Jim said:

They have the opportunity to erase their loans. Pay them off quicker. If a family making up to $250k a year can’t throw a little more to the principal then I can’t help them. 
 

How about we have them pay back the $10-$20k out of future inheritance?   🤷🏻‍♂️
 

How about they just honor the commitment they made or return their degree?

[Chef Jim]

12 minutes ago, SoCal Deek said:

How about they just honor the commitment they made or return their degree?

Return their degree?  When did you ever get asked or ask when hiring for proof of a degree?  

[SoCal Deek]

3 minutes ago, Chef Jim said:

Return their degree?  When did you ever get asked or ask when hiring for proof of a degree?  

Proof? So you believe that people should be able to commit fraud on their resume now? Yikes! 

[Chef Jim]

1 minute ago, SoCal Deek said:

Proof? So you believe that people should be able to commit fraud on their resume now? Yikes! 

Good lord dude.  Where did I say that?  Don’t bother because I didn’t. 

[SoCal Deek]

Just now, Chef Jim said:

Good lord dude.  Where did I say that?  Don’t bother because I didn’t. 

You asked when I was asked for proof of  my degrees. No? The assumption is that you’re advocating for people to simply list a degree that they never earned. Did I misunderstand? Not sure where you’re going here. 

[Chef Jim]

3 minutes ago, SoCal Deek said:

You asked when I was asked for proof of  my degrees. No? The assumption is that you’re advocating for people to simply list a degree that they never earned. Did I misunderstand? Not sure where you’re going here. 

Ok I’ll explain. You said if their loans are forgiven they should just give up their degree.  My point is how will that change anything?  People could still list their degree on their resume.  I advocated for nothing. 

[SoCal Deek]

Just now, Chef Jim said:

Ok I’ll explain. You said if their loans are forgiven they should just give up their degree.  My point is how will that change anything?  People could still list their degree on their resume.  I advocated for nothing. 

If they didn’t fulfill the terms of the agreement they signed them they should reap the reward. If you don’t pay off your car loan, you don’t get to keep the car. 

[Chef Jim]

1 minute ago, SoCal Deek said:

If they didn’t fulfill the terms of the agreement they signed them they should reap the reward. If you don’t pay off your car loan, you don’t get to keep the car. 

Sorry but you can’t take away a person’s knowledge.  Education and knowledge are not tangible things. At some point, and typically pretty quickly, your level of experience in any given field outweigh your degree.  After 2 years I got a hell of a lot more traction on my resume based on where I worked vs where I got my degree. And my degree is from one of the most recognizable culinary school in world.  That and the fact the people can easily fudge their resume takes almost all the teeth out of you wanting to swap a degree for their loan. 

[SoCal Deek]

4 minutes ago, Chef Jim said:

Sorry but you can’t take away a person’s knowledge.  Education and knowledge are not tangible things. At some point, and typically pretty quickly, your level of experience in any given field outweigh your degree.  After 2 years I got a hell of a lot more traction on my resume based on where I worked vs where I got my degree. And my degree is from one of the most recognizable culinary school in world.  That and the fact the people can easily fudge their resume takes almost all the teeth out of you wanting to swap a degree for their loan. 

We agree there. But the loan was to purchase a degree, not to purchase knowledge. Now…the government can do whatever they want with the loan. My point is that there should be a trade. If you choose to not pay back the loan, the trade is that you cannot claim the degree (or knowledge…if that makes you feel better). 

[Chef Jim]

Just now, SoCal Deek said:

We agree there. But the loan was to purchase a degree, not to purchase knowledge. Now…the government can do whatever they want with the loan. My point is that there should be a trade. If you choose to not pay back the loan, the trade is that you cannot claim the degree (or knowledge…if that makes you feel better). 

And people will continue to list their degrees on their resume. So you accomplish nothing.  My idea of taking right off the top of any inheritance in essence pays the loan back. 

[SoCal Deek]

Just now, Chef Jim said:

And people will continue to list their degrees on their resume. So you accomplish nothing.  My idea of taking right off the top of any inheritance in essence pays the loan back. 

I like your idea as well. In some way shape or form, the loan should be paid back. I’m perfectly fine if the government just wants to renegotiate the terms (either interest rate or term). But forgiving the loan clear out of the blue is simply a ridiculous….what’s the word…political stunt.

[Chef Jim]

29 minutes ago, SoCal Deek said:

I like your idea as well. In some way shape or form, the loan should be paid back. I’m perfectly fine if the government just wants to renegotiate the terms (either interest rate or term). But forgiving the loan clear out of the blue is simply a ridiculous….what’s the word…political stunt.

How about if there was a plan that allowed people to take money tax free from inherited qualified retirement plans to pay off their loan.  Currently they have to distribute it over 10 years.  I hate that new rule BTW. Thanks Donald. 😡

[SoCal Deek]

1 hour ago, Chef Jim said:

How about if there was a plan that allowed people to take money tax free from inherited qualified retirement plans to pay off their loan.  Currently they have to distribute it over 10 years.  I hate that new rule BTW. Thanks Donald. 😡

I know this is your area of expertise but it sounds like you’re suggesting that you pull the money out of your 401k to pay off the loan. You can’t do that now? Or is your proposal just that you be allowed to do it tax free? Please clarify.

[Chef Jim]

3 minutes ago, SoCal Deek said:

I know this is your area of expertise but it sounds like you’re suggesting that you pull the money out of your 401k to pay off the loan. You can’t do that now? Or is your proposal just that you be allowed to do it tax free? Please clarify.

 

You missed the word inherited.  Take the money you've inherited from an IRA or 401k which you have to report to the IRS and use some of that tax free to pay off your loan.  I think that's actually a great idea.  

[SoCal Deek]

1 minute ago, Chef Jim said:

 

You missed the word inherited.  Take the money you've inherited from an IRA or 401k which you have to report to the IRS and use some of that tax free to pay off your loan.  I think that's actually a great idea.  

No, I caught the word, but I didn’t realize you meant literally inherited. So as I’m a person who inherited nothing, what would happen to me? And even though my daughter will, your proposal is that she doesn’t pay off her student loan until she’s in her senior years herself? Again, I’m in favor of pretty much anything EXCEPT loan forgiveness.

[Chef Jim]

9 minutes ago, SoCal Deek said:

No, I caught the word, but I didn’t realize you meant literally inherited. So as I’m a person who inherited nothing, what would happen to me? And even though my daughter will, your proposal is that she doesn’t pay off her student loan until she’s in her senior years herself? Again, I’m in favor of pretty much anything EXCEPT loan forgiveness.

 

If you have no inheritance you are "stuck" with your loan. 

 

Let me explain.  

 

Let's say your dad has a $1m IRA.  If you are the sole beneficiary you will inherit his $1m IRA and under current tax laws (again thanks Donald 😡) you MUST completely distribute the IRA in 10 years.  You can do it all at once or bit by bit over that time but it HAS to be distributed.  Prior to the Secure Act you could "stretch" it over your lifetime which would soften the tax blow vs the new rule.  But now you'd get this big income hit that would likely push that amount into a higher bracket.  Under my idea your dad NOW puts your daughter who has a student loan as a contingent bene (ideally in a trust) for the amount of the loan and it could go to her tax free as long as she uses to pay off her loan. 

 

Or how about this.  Dad while living distributes some of his IRA and gifts it to your daughter to pay her student loan and that distribution is tax free or penalty free if he's under 59 1/2.   Why I use dad and not you as the example is because we'd have a better idea if your dad could distribute a chunk of his IRA and still not run out of money.  You're too young to do that.   

 

There are a ton of ways to incentivize people to pay off student loans versus just erasing them altogether.   

[SoCal Deek]

13 minutes ago, Chef Jim said:

 

If you have no inheritance you are "stuck" with your loan. 

 

Let me explain.  

 

Let's say your dad has a $1m IRA.  If you are the sole beneficiary you will inherit his $1m IRA and under current tax laws (again thanks Donald 😡) you MUST completely distribute the IRA in 10 years.  You can do it all at once or bit by bit over that time but it HAS to be distributed.  Prior to the Secure Act you could "stretch" it over your lifetime which would soften the tax blow vs the new rule.  But now you'd get this big income hit that would likely push that amount into a higher bracket.  Under my idea your dad NOW puts your daughter who has a student loan as a contingent bene (ideally in a trust) for the amount of the loan and it could go to her tax free as long as she uses to pay off her loan. 

 

Or how about this.  Dad while living distributes some of his IRA and gifts it to your daughter to pay her student loan and that distribution is tax free or penalty free if he's under 59 1/2.   Why I use dad and not you as the example is because we'd have a better idea if your dad could distribute a chunk of his IRA and still not run out of money.  You're too young to do that.   

 

There are a ton of ways to incentivize people to pay off student loans versus just erasing them altogether.   

Again....we agree more than we disagree, but my plan is simpler. Just pay off your own debts, over time. Student Loans are a unique sort of 'investment' because the entire premise is that you'll advance your lot in life through education. If that's not true then what is ANY of this about?  Therefore, if you took out loans for a higher education degree and over the course of your lifetime have not saved enough money to pay them back then I put it to you that you're purposely CHOOSING not to. 

[Chef Jim]

43 minutes ago, SoCal Deek said:

Again....we agree more than we disagree, but my plan is simpler. Just pay off your own debts, over time. Student Loans are a unique sort of 'investment' because the entire premise is that you'll advance your lot in life through education. If that's not true then what is ANY of this about?  Therefore, if you took out loans for a higher education degree and over the course of your lifetime have not saved enough money to pay them back then I put it to you that you're purposely CHOOSING not to. 

So the only reason someone does not pay back their loan is because they’ve chosen not to?  There could be no other hardship reason why?  Maybe they tithed too much.  😁

[SoCal Deek]

Just now, Chef Jim said:

So the only reason someone does not pay back their loan is because they’ve chosen not to?  There could be no other hardship reason why?  Maybe they tithed too much.  😁

Correct. You cannot tell me that over the course of a lifetime that they haven’t earned enough money to pay back a lousy student loan. Of course they have! Now…if they want to trade the debt for some other sort of service, I’m once again fine with that too. And before we go down the rabbit hole of ‘what if’s’ then I’m sure there could be some death or disability excuse, but I’m going to assume that’s be a tiny fraction of the population. (Nice tithe reference though…I see what you did there. 😉)

[leh-nerd skin-erd]

6 hours ago, Chef Jim said:

Sorry but you can’t take away a person’s knowledge.  Education and knowledge are not tangible things. At some point, and typically pretty quickly, your level of experience in any given field outweigh your degree.  After 2 years I got a hell of a lot more traction on my resume based on where I worked vs where I got my degree. And my degree is from one of the most recognizable culinary school in world.  That and the fact the people can easily fudge their resume takes almost all the teeth out of you wanting to swap a degree for their loan. 

CIA?  

[Chef Jim]

3 minutes ago, leh-nerd skin-erd said:

CIA?  

Damn straight. And a perfect example of where you got your degree didn’t matter as much as what you do with it.  It was “oh you worked at Ma Maison? Nicky Blair’s? Champagne?” It was never “oh CIA grad?”   

[leh-nerd skin-erd]

3 hours ago, Chef Jim said:

 

If you have no inheritance you are "stuck" with your loan. 

 

Let me explain.  

 

Let's say your dad has a $1m IRA.  If you are the sole beneficiary you will inherit his $1m IRA and under current tax laws (again thanks Donald 😡) you MUST completely distribute the IRA in 10 years.  You can do it all at once or bit by bit over that time but it HAS to be distributed.  Prior to the Secure Act you could "stretch" it over your lifetime which would soften the tax blow vs the new rule.  But now you'd get this big income hit that would likely push that amount into a higher bracket.  Under my idea your dad NOW puts your daughter who has a student loan as a contingent bene (ideally in a trust) for the amount of the loan and it could go to her tax free as long as she uses to pay off her loan. 

 

Or how about this.  Dad while living distributes some of his IRA and gifts it to your daughter to pay her student loan and that distribution is tax free or penalty free if he's under 59 1/2.   Why I use dad and not you as the example is because we'd have a better idea if your dad could distribute a chunk of his IRA and still not run out of money.  You're too young to do that.   

 

There are a ton of ways to incentivize people to pay off student loans versus just erasing them altogether.   

 

 

4 hours ago, Chef Jim said:

 

You missed the word inherited.  Take the money you've inherited from an IRA or 401k which you have to report to the IRS and use some of that tax free to pay off your loan.  I think that's actually a great idea.  

Poppa converts the IRA to a Roth, inheritance time it comes tax free anyways, no?  If I understand it correctly, the inheritance still has to be withdrawn in the 10 year window, but no one says you have to spend the money taken.  
 

 

[leh-nerd skin-erd]

11 minutes ago, Chef Jim said:

Damn straight. And a perfect example of where you got your degree didn’t matter as much as what you do with it.  It was “oh you worked at Ma Maison? Nicky Blair’s? Champagne?” It was never “oh CIA grad?”   

Except for now of course.  I don’t know Ma, Nicky B or Champagne, but I do know the Culinary Institute.  I used to do quite a bit of work along Rte 9 in Wappingers, Fishkill and up in to Pough.  I was treated to a very nice meal there one day.  Cool spot. 
 

I agree on the degree.  
 

[Chef Jim]

31 minutes ago, leh-nerd skin-erd said:

 

 

Poppa converts the IRA to a Roth, inheritance time it comes tax free anyways, no?  If I understand it correctly, the inheritance still has to be withdrawn in the 10 year window, but no one says you have to spend the money taken.  
 

 

Correct on all accounts. 10 year rule is still in place but distributions are tax free. Ideally let the damn thing continue to grow tax deferred and after 9 years and 364 days distribute.  Roth conversions are a great tool. 
 

**the above is not a recommendation or financial advice.  

[Backintheday544]

First law suit comes in.

 

https://www.nytimes.com/2022/09/27/business/biden-student-debt-suit.html

 

The main issue with suing to remove the program is finding someone who has standing.

 

The person they think has standing is a lawyer in IN. IN is taxing the forgiveness (as of right now). The argument for standing is he is on PSLF. If he stays on PSFL, then he will get full forgiveness that is tax free in IN as IN conforms to that tax free forgiveness provision. If he takes the loan forgiveness, he needs to pay tax. Since he would have to pay tax, he is harmed and therefore has standing.

 

This is most likely going to fail. While he is hurt by paying tax, he can opt out of the forgives, not need to pay tax and therefore isn’t actually hurt.

 

In addition, if he’s doing PSFL, he’s on IBR. An argument that the tax paid will be less than the present value of future loan payments.

[PetermansRedemption]

21 minutes ago, Backintheday544 said:

First law suit comes in.

 

https://www.nytimes.com/2022/09/27/business/biden-student-debt-suit.html

 

The main issue with suing to remove the program is finding someone who has standing.

 

The person they think has standing is a lawyer in IN. IN is taxing the forgiveness (as of right now). The argument for standing is he is on PSLF. If he stays on PSFL, then he will get full forgiveness that is tax free in IN as IN conforms to that tax free forgiveness provision. If he takes the loan forgiveness, he needs to pay tax. Since he would have to pay tax, he is harmed and therefore has standing.

 

This is most likely going to fail. While he is hurt by paying tax, he can opt out of the forgives, not need to pay tax and therefore isn’t actually hurt.

 

In addition, if he’s doing PSFL, he’s on IBR. An argument that the tax paid will be less than the present value of future loan payments.

So, wait, the guy trying to stop student loan forgiveness is… getting forgiveness himself? What a hypocritical crock of *****. He’s getting his free lunch and wants to stop others from getting their own? I’d have a lot more respect from a lawsuit that actually came from someone who wasn’t simultaneously sucking the government teet while telling others to get off. 

[Backintheday544]

10 minutes ago, PetermansRedemption said:

So, wait, the guy trying to stop student loan forgiveness is… getting forgiveness himself? What a hypocritical crock of *****. He’s getting his free lunch and wants to stop others from getting their own? I’d have a lot more respect from a lawsuit that actually came from someone who wasn’t simultaneously sucking the government teet while telling others to get off. 

Yes his general premise is he qualifies for a different student loan forgiveness program that his state doesn’t tax, so he is hurt by this program. It fails to think thru that he can opt out of this program so he’s really not hurt.

Edited September 29, 2022 by Backintheday544

[Big Blitz]

"Quietly."  

 

Meaning.......we're trying our best to cover for him but we have to report this

 

 

[BillStime]

JFC - narrow the racial wealth gap and help Black borrowers

 

Todays CULT

 

 

[BillStime]

Another loss for the pathetic cult