Should I start paying my student loans again?

2 years ago by JeSuisUnHombre to c/asklemmy

I, like many and hopefully some of y'all, stopped paying my student loans during Covid and never restarted paying because we're supposed to have gotten relief from this debt that should've never existed in the first place. Now we have Trump coming back which kills the possibility of debt relief. So should I start repaying so I don't get my wages garnished? Or do we think the government is going to be too inefficient to come after it?

Edit: At one point when I heard that it was the only way to get forgiveness, I moved all my debt from a third party to being a government loan. Does that change anything?

BombOmOm 58 points 2 years ago

It continues to gather interest. If you don’t pay it down, you will have a larger loan in the future.

Pay your debt.

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BakerBagel 21 points 2 years ago

I cant afford it either way. Before the pandemic there was more student loan debt in the US than credit card debt. It's the 2008 housing bubble all over again, only this time there aren't even millions of worthless homes to compensate lenders.

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StaticFalconar 6 points 2 years ago

Did the interest rates change over time for your student loan debts?

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C126 -62 points 2 years ago

Why cant you afford it? Didn't you think about how you were going to pay it back when you signed the papers agreeing that you would pay it back?

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Captainvaqina 52 points 2 years ago

You can fuck right off with that bullshit. An 18 year old pressured into signing a predatory loan does not have the capacity to understand the bullshit they are in for.

Why do you blame the consumer instead of the scam loan company?

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thisguy1092 -24 points 2 years ago

I mean, I always understand the fact that if you borrow money you have to pay it back. With interest. pretty simple concept learned in like 6th grade.

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wizardbeard -26 points 2 years ago

You're never stopping predatory businesses from being predatory.

There are many ways to get assistance with student loans. There's FAFSA before you start, there are federally backed ones that can't pump up the interest rates, there's income based repayment plans (that can go as far as full deferment), and if for some reason someone made the mistake of not using any of that there's still options for loan consolidation/refinancing to better rates when better rates are available. On top of all that, most loan providers will work with you. They want your money, not the hassle of selling your loan to a collections agency for a lower amount.

None of that eliminates predatory loan providers, or the targeting of unprepared 18 year olds, but the impact can be blunted.

Beyond all that, at some point, some amount of personal responsibility must be taken for one's actions. None of us will always have the capacity to fully understand every choice we make, or the knowledge to make those decisions from a fully informed position, but we all have to make certain decisions in life anyway and live with the consequences. Not fair, but that's life.

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BakerBagel 17 points 2 years ago

I was 17 and had never even seen $1,000 before, never had an actual job, and had no concept of what it could mean to lose a job. I was paying everything i owed plus extra until 2022, then i could only afford the massive minimum payments, then i lost my job this year and couldn't afford that anymore. I can either put all my money into payments that ultimately do nothing for me, or i can put what little i have left into rent and food. If you can't understand that, then you are very fortunate and i hope you never have to face down these sorts of choices because it is a truly terrible way to live.

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JeSuisUnHombre 8 points 2 years ago

All the adults in my life told me (an 18yo kid) if I wanted to have a decent future I would have to sign that contract for an unknown amount of debt (it's just student loans you're not borrowing a specific amount until you're actually done with school). I was told the job I would get would be able to pay for that loan (which was not true), and the loan started accruing interest before I even got that mythical job to pay for it. How is any of that my fault?

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Yearly1845 4 points 2 years ago

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NateNate60 29 points 2 years ago

Student loans are collected by contracted third-party loan servicing organisations, not the Government.

If you don't pay, the servicer can initiate legal proceedings against you on their own regardless of what's happening within the Education Department.

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JeSuisUnHombre 5 points 2 years ago

At one point when I heard that it was the only way to get forgiveness, I moved all my debt from a third party to being a government loan. Does that change anything?

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Hyperlon 24 points 2 years ago

Don't gamble with your future. You should have never stopped paying. Your loan is probably in a worse position now than you were 4 years ago due to interest. The longer you wait the worse your situation will be.

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EveryMuffinIsNowEncrypted 15 points 2 years ago

Only assuming they made enough to cover interest. I certainly don't.

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mosiacmango 2 points 2 years ago

Interest was paused for 3+ years due to covid.

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Hyperlon 2 points 2 years ago

That ended quite a while ago. Their loan could have grown by thousands since then

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redbr64 20 points 2 years ago

I hate that, as someone who was truly on top of this 4 years ago and submitting paperwork for public service forgiveness and all, I have no fucking clue as to what is happening now or what's next. So, as someone who definitely owes money on that, and had a kid right before the pandemic hit, and is desperately adrift keeping shit together, I really hope someone has a great ELI5 coming on this thread lol

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thisguy1092 -22 points 2 years ago

ELI5 Pay your debt that you willing took on yourself.

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JeSuisUnHombre 8 points 2 years ago

Thank you daddy please spank me more

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thisguy1092 1 point 2 years ago

Lol

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redbr64 2 points 2 years ago

I mean, I have been paying this whole time lol, did I say otherwise? That shit is on autopay. What I do mean is that I haven't kept up with the constant shifting of rules and programs that start and then get stopped by the courts, etc. I am busy working my ass off, and if last time I had to deal with this is any indication, I have to take the equivalent of a whole day off, do research, spend hours on the phone with the servicer, then do a bunch of paperwork just to ensure I have things the way they are supposed to be (unlike a whole year I was overpaying because I didn't know about some consolidation process).

These are government loans that are then managed by private companies. Considering I pay not only interest but also taxes, I think is fair to ask that the way it be managed by some better means than some shifty inefficient third party business, that makes me do their job for them just so I can be paying the fair amount I am supposed to, and also get the forgiveness the government promised me for applying my advanced degree to non-profit work for 10 years: that's not a fucking hand out, it's a deal the government made with me to satisfy a policy need they had. I am doing my part and making all these payments for a decade, and they're not exactly doing their best to keep their end of the bargain when you have some byzantine program they outsourced and screws over a bunch of people that have kept up their end of the bargain.

So, get over yourself. I don't understand what's your fucking problem here

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thisguy1092 -3 points 2 years ago

My problem is you expecting a bail out for something you signed up for yourself. I’m not over here complaining about my my loans. I pay them.

How does a 30 year mortgage sound then? Gonna whine and complain about that for ten years and just expect it paid off by others? Get outta here loser

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redbr64 2 points 2 years ago

What fucking bailout are you talking about? I signed up for IDRF, a 10 year program that I knew about from the get go, as did the government, and I am paying the entirety of it, at year 9 as of now. I know how it worked. But they also changed several terms since, as I said. When did at any point did I say I am not paying? I am saying they have a shitty service outsourced service provider and keep changing the rules back and forth. I expect better than that, as I am keeping exactly to the terms of my deal...

Are we talking about the same thing here?

Edit: to put in the terms you mentioned, if I got a 30 year mortgage - I would you expect that I would be paying to the same bank, on the same terms, for the duration of the loan - and that the bank wouldn't keep losing your shit or taking months to process each piece of paperwork you submit

It seems you're really just parroting some political view, I am not expecting some magical bailout for getting in over my head. The government asked me to apply my degree to non-profit work for less pay than I would get in industry, for a price - since I guess the free market is not exactly throwing around PhDs to go teach when they can make better money. They would compensate me for filling an underserved need by reducing the overall term of the loan if I kept up with my end of the bargain. AKA they were paying me to go work where they needed it, instead of where I could make up that same money on my own. See there, a clear business transaction between us: they offered to pay me to fix something they decided was a policy priority - how is any of this transaction a bailout, when we both entered into with knowledge of its terms almost 10 years ago?

Now, them being really bad at managing that, and outsourcing it to some poorly run outfit, that's them not keeping their end of the bargain.

The world is not black and white my friend, think before you spew hate at strangers. What you're proposing is akin to the government hiring a contractor and stiffing them. This program is intended to get people with good educations into needed public service positions. You obviously don't care about teachers/education, but I sense you would be up in arms if I said that instead I got a degree in criminology to be a cop, and then took a deal from the government to go work where officers were needed, and the government didn't pony up on their end of the bargain.

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lattrommi 19 points 2 years ago

I moved all my debt from a third party to being a government loan. Does that change anything?

Yes, that is the wisest move you could have mmade considering your circumstances as I understand. I am not an accountant, lawyer or professional of any kind that's relevant. Some of what I say here may be incorrect. To the best of my knowledge it's accurate. I am someone who had the entirety of their student loans forgiven, thanks to president Joe Biden. It took a large amount of time spent reading legalese, time on the phone with loan servicer representatives and way too much time worrying about shit which I could not change quickly or easily.

First thing: No one should ever be trapped in a situation, where they feel they must choose between bills/food/rent or paying loans granted for educational purposes and enabled/encouraged by the government. No one. Honestly it's ironic in my opinion, that there is a lack of educational resources available for mitigating debt gained solely for the purpose of education.

Thankfully, there are also many, many rules in place, made to prevent your situation and others like it from occurring.

Call your loan servicer or spend time on their website.

If you suck on the phone, go to their website. If the website sucks or is confusing, take short notes and write down any questions. The most likely best option for you is an Income Driven Repayment plan. IDR. However, some people may not qualify due to whatever loan scams were available when the loan was first taken out.

The servicer representatives are paid regardless of what you do.

The person you talk to is not getting a commision. Your payments do not go to them. They are there to answer your questions. Their job is to keep the account out of default. They (probably) do not want you to go into default or declare bankruptcy. They (hopefully) want you to communicate, work with them and eventually make payments or contribute to society (more on that later). The government owns your debt. That debt is also probably insured or negligable. The government probably does not NEED your balance in full on time. They have other ways of generating income, like literally generating physical currency. Having wages garnished and getting drops in your credit score are from not doing anything and gnoring the debt and their notices.

IDR.

On an IDR they will look at your income and any other expenses you might have. Some things count in your favor like paying your electric bill and rent, other things are irrelevant like a nyetflix subscription or paying for ubers. They determine through algorithms or math or something if you can afford to make payments or not. If you are truly in dire finanacial stress, you probably will get a deferment if you aren't already on one.

There are other debt forgiveness programs.

If you work as a teacher you can get loans forgiven. Same goes for certain types of public service. There are other repayment plan options. Check studentaid.gov, it has a forgiveness page with a wealth of information. It isn't always easy to understand because there is a lot of nuance and circumstances covered. You can try calling their hotline number too but I had better luck with the servicer. Mine were forgiven due to being totally and permanently disabled. I had no idea it was an option.

Conclusion.

There are other comments here basically saying "jUsT pAy it" which aren't contributing to the conversation at all. They should be treated as what they are: trolls and losers. Fuck them. They deserve nothing, not a second glance, not a reply, not even a downvote. Fuck. Those. Pricks.

Good luck, don't let your past define your future. Unless you want it to.

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JeSuisUnHombre 3 points 2 years ago

I appreciate the great info listed here. And yes absolutely to your conclusion. I am wondering your thoughts on the Trump admin's ability to come collect / how that might affect me long term.

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lattrommi 6 points 2 years ago

The key words there are 'long term'. It takes forever to get these rules and regulations in place and they aren't going to be dismantled immediately. Rome didn't fall in a day. I think IDR's and most of the alternative payment plans have fixed interest rates. You're likely at a fixed rate already. Ask about those if you call the loan servicer. Any significant change will take time and have pushback. Get your shit sorted out ASAP for sure, you should be doing that anyways. Then worry about what changes a bankrupted pedophile might try to pull.

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2ugly2live 18 points 2 years ago

Start paying, even if it's minimum payments.

You want to be in good standing (if you aren't already) before the changing of the guards. They will garnish your wages, and it'll be worse than whatever you were gonna pay. It'll so fuck up your credit. Check the interest and see if you can at least start tackling that if it's not too egregious. Republicans are securely on the side of the loan companies and there a chance they'll let them loose with the right bribe or two, and it make get worse before it gets any better.

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JeSuisUnHombre 1 point 2 years ago

At one point when I heard that it was the only way to get forgiveness, I moved all my debt from a third party to being a government loan. Does that change anything?

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2ugly2live 5 points 2 years ago

Unfortunately, no. You can't even get rid of that debt with bankruptcy. I have the same government loans. You can apply for forbearance to at least protect your score a bit if you can't pay.

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wizardbeard 9 points 2 years ago

As much as it sucks, we most likely aren't getting student loan forgiveness. It didn't happen while Biden was in the height of his presidency, so it's even less likely to happen now. It's especially not happening now when the next guy up would most likely just repeal anything shoved through for it at the last minute before he takes office.

Switching to a government backed loan like you did should give you more options to potentially continue deferment based off your income, but that is something you would need to sort out with your loan provider. The term is "income based repayment".

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lattrommi 1 point 2 years ago

It didn’t happen while Biden was in the height of his presidency

It didn't?

In his first year in office I remember loans were getting partially forgiven through the public service forgiveness, (for firefighters, teachers, first responders and other civil servants) Prior to Biden, that program forgave ~7,000 loans in full or in part since it started in 2007. Overall, the current leadership has forgave some or all student loan debt for over 4 million people so far. That's pretty great I think. Hopefully they manage to help a few more of the remaining 10 million victims.

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JeSuisUnHombre 1 point 2 years ago

I think I acknowledged that first paragraph. But is the new administration going to have the manpower to do anything about it?

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lowdude 4 points 2 years ago

An interesting essay I read at some point: https://www.bitsaboutmoney.com/...

Especially the following sentence:

This effectively makes paying consumer debts basically optional in the United States, contingent on one being sufficiently organized and informed.

Now, I don’t know how risky that would be and whether it also applies to student debt, but the system seems to be pretty wild, to say the least.

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hedgehogging_the_bed 7 points 2 years ago

This would not be effective for student loan debt because it's still non-dischargable, unlike consumer debt.

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lowdude 2 points 2 years ago

You are correct, while rereading I also noticed that the essay is specifically talking about consumer debt. And for that it would probably not be helpful to ruin credit scores over a few hundred dollars, if one ever wanted to finance a house or something like that later in their life.

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HoneyMustardGas 1 point 2 years ago

I haven't paid mine. If you can prove financial hardship you won't get wages garnished. All my bills are necessary and so, if they tried to take my wages, I would be homeless. Either way they would not get their money.

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