So Should I Pay my Tuition for Next Semester?

[YoshiMoshi]

I am having a hard time understanding the $10,000 in free money for student debt. Me and my spouse have no student debt and we were planning on paying upfront for our tuition in cash. But we might as well as take advantage of the free handout. We make less than $250,000 a year. Can we just take out student loans to pay for our classes this semsterand then have them wiped out? When can we expect the free handout to take place?

 

[CrysPhys]

Don't jump the gun. Wait for full details to be released through official government channels. A couple of news reports have stated that the debt forgiveness applies to loans in effect prior to July 1, 2022, but no government sources were cited.

 

[YoshiMoshi]

Don't jump the gun. Wait for full details to be released through official government channels. A couple of news reports have stated that the debt forgiveness applies to loans in effect prior to July 1, 2022, but no government sources were cited.

Hey thanks, I guess we will wait for the details, and from official sources.
From what it sounds like, it's for federal loans only and not private loans.
Until we get official sources, but under the assumption that is true...

Are these the loans that you get from filling out the FASFA and having to qualify for them on a need basis? In other words I don't think anyone can just get a federal student loan, you have to make under a certain amount of money to qualify?

I appreciate the information. It has been a very long time sense I filled out the FASFA. I remember when I did my undergraduate filling out the FASFA and qualifying. I then filled it out in graduate school and didn't get anything. Ever sense that, I didn't bother. It's been seven years, and I doubt if I didn't qualify then, I would qualify now.

I suspect if anybody makes anywhere close to $125K single or $250K a year jointly, filling out the FASFA is a complete waste of time, and you wouldn't qualify for federal loans. I mean even if you made half of that.

 

[Office_Shredder]

If the loans allow for immediate repayment with no penalty then it might be worth a shot, as long as you're comfortable with the pretty high likelihood it doesn't work.

 

[gwnorth]

It does not appear that you will qualify.

According to the article in the Washington Post this morning, privately held loans do not qualify and loans must have been originated prior to July 1.

https://www.washingtonpost.com/education/2022/08/24/student-loan-forgiveness-plan-explained/

 

[Vanadium 50]

I would wait and see.

There certainly will be a court challenge, and there are arguments that the Prsident cannot do this by executive order without Congressional authorization. For example, "I don’t think I have the authority to do it by signing the pen" (President Biden, Feb. 16 2021) I don't know who is correct: Biden-then or Biden-now, but I do know that there are definitely differences of opinions that will need to be sorted out.

This has also injected a lot of uncertainty into the system. I would carefully consider that before making any decision counting on actions of another party (e.g. refinancing).

 

[CrysPhys]

It does not appear that you will qualify.

According to the article in the Washington Post this morning, privately held loans do not qualify and loans must have been originated prior to July 1.

https://www.washingtonpost.com/education/2022/08/24/student-loan-forgiveness-plan-explained/

The Washington Post article was one of the news reports I read yesterday (see my Reply #2). You will note that there is no citation to a government source to support the July 1 cutoff. Here are two government sources that pop up on a Google search.:

* A White House Fact Sheet: https://www.whitehouse.gov/briefing...t-loan-relief-for-borrowers-who-need-it-most/

* A Dept. of Education FAQ page: https://studentaid.gov/debt-relief-announcement/.

Neither of these government sources mention the July 1 cutoff. So right now, there is no substantiation.

The FAQ page has this recommendation for potential applicants:

"This plan includes loan forgiveness of up to $20,000. Many borrowers and families may be asking themselves “what do I have to do to claim this relief?” This page is a resource to answer those questions and more. There will be more details announced in the coming weeks. To be notified when the process has officially opened, sign up at the Department of Education subscription page." <<Emphasis added>>

This seems like a wise recommendation to follow. If the July 1 cutoff is indeed valid, then it's too late for the OP anyways. The more vexing question is whether there is a looming cutoff that has not yet passed, but maybe soon will. [I ran into this situation with regard to a Social Security application. There was a pending deadline, but Social Security hadn't clarified the details yet.]

 

[vela]

CNBC published an article today which also says the cutoff for eligibility is June 30.

https://www.cnbc.com/2022/08/26/mor...en-federal-student-debt-forgiveness-plan.html

Here's the argument from the Office of the General Counsel for the legal authority to cancel the debt.

https://www2.ed.gov/policy/gen/leg/foia/secretarys-legal-authority-for-debt-cancellation.pdf

 

[YoshiMoshi]

Just checking to see if there's been any updates on this sense my original post.

It seems that they are doing reimbursement if you made payments while during the payment pause because of COVID.

• I never had any student loans.
• I paid tuition during the payment pause, in cash without a loan
• I make less than the required $125,000 while I was a student (and to this day)

It seems like I won't qualify for forgiveness or reimbursement because I actually worked hard, put money aside and paid my tuition? But if I was not financially responsible, took out a student loan and bought a $10,000 car instead, I would possibly qualify for reimbursement if I made payments to a loan during the pause? I mean I'm driving a rust bucket that's nearly 20 years old, a new car would be awesome!

This seems kind of backwards to me, but I just want to be sure. I mean I guess I can always apply and see what happens. I have my tax forms to prove it, I paid thousands and thousands of dollars in tuition during the payment pause. But I can't qualify for reimbursement on this money because I did the right thing and was financially responsible? Seems kind of backwards.

 

[CrysPhys]

Just checking to see if there's been any updates on this sense my original post.

It seems that they are doing reimbursement if you made payments while during the payment pause because of COVID.

• I never had any student loans.
• I paid tuition during the payment pause, in cash without a loan
• I make less than the required $125,000 while I was a student (and to this day)

It seems like I won't qualify for forgiveness or reimbursement because I actually worked hard, put money aside and paid my tuition? But if I was not financially responsible, took out a student loan and bought a $10,000 car instead, I would possibly qualify for reimbursement if I made payments to a loan during the pause? I mean I'm driving a rust bucket that's nearly 20 years old, a new car would be awesome!

This seems kind of backwards to me, but I just want to be sure. I mean I guess I can always apply and see what happens. I have my tax forms to prove it, I paid thousands and thousands of dollars in tuition during the payment pause. But I can't qualify for reimbursement on this money because I did the right thing and was financially responsible? Seems kind of backwards.

The federal website has been updated: https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info#eligible-loans. Note in particular the eligibility criteria:

Which Loans Are Eligible​

The following types of federal student loans disbursed (when you received your loan funds) on or before June 30, 2022, are eligible for relief: <<Emphasis added.>>

• William D. Ford Federal Direct Loan (Direct Loan) Program loans
• Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
• Federal Perkins Loan Program loans held by ED
• Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, graduate PLUS; and Perkins loans held by ED)

This means that subsidized loans, unsubsidized loans, parent PLUS loans, and graduate PLUS loans held by ED are eligible. Consolidation loans are also eligible for relief, as long as all of the underlying loans that were consolidated were ED-held loans and were disbursed on or before June 30, 2022.
Additionally, consolidation loans comprised of any FFEL or Perkins loans not held by ED are also eligible, as long as the borrower applied for consolidation before Sept. 29, 2022.
Private loans (i.e., non-federal loans) are not eligible for debt relief.
So now it's official: the cutoff date for eligible loans is June 30, 2022.

 

[Vanadium 50]

It seems like I won't qualify for forgiveness or reimbursement because I actually worked hard, put money aside and paid my tuition? But if I was not financially responsible, took out a student loan and bought a $10,000 car instead, I would possibly qualify for reimbursement if I made payments to a loan during the pause

That appears correct.

 

[YoshiMoshi]

That appears correct.

That's unfortunate. I would have liked the $10,000 of free money. I could have done a lot with that, gotten a car or done some remodeling. But it is what it is I guess.

 

[vela]

If you're still in school, your loans wouldn't be in repayment, so you still probably wouldn't qualify.

 

[Vanadium 50]

Well, all policies have winners and losers. Consider this a lesson in applied political philosophy.

 

[CrysPhys]

If you're still in school, your loans wouldn't be in repayment, so you still probably wouldn't qualify.

From the federal website I cited above:

"If you have eligible federal student loans and meet the income requirements, it doesn’t matter if you’ve been actively repaying your loans or are in school, a grace period, or default." <<Emphasis added.>>

 

[CrysPhys]

But I can't qualify for reimbursement on this money because I did the right thing and was financially responsible? Seems kind of backwards.

'Tis life in the US. If you study hard, get a good job, and work hard, you get taxed on your wages. If you are frugal and invest your savings, you get taxed on your dividends and capital gains. If you are very frugal and invest wisely, you get taxed on your estate when you die.

But if you drop out of school, become a bum, and squander whatever money you have, you collect welfare.

 

[YoshiMoshi]

'Tis life in the US. If you study hard, get a good job, and work hard, you get taxed on your wages. If you are frugal and invest your savings, you get taxed on your dividends and capital gains. If you are very frugal and invest wisely, you get taxed on your estate when you die.

But if you drop out of school, become a bum, and squander whatever money you have, you collect welfare.

I think your right. It's really odd that this is a welfare program. I guess that's what it is. If you make $124,999.99 a year, your by no means struggling to pay for food, housing, or clothing.

I'm all for welfare programs, and support them, but not when they have a $125,000.00 a year income cap. If it was a $20,000.00 a year income cap, that would be one thing that I feel most would support.

I meet the income requirement of less than $125,000.00 a year. I don't know if I feel more frustrated that I'm now apparently considered financially struggling enough, or more frustrated that I can't collect the $10,000.00,

Apparently we live in a world now were one person needs to make $125,000.00 a year or more to not be considered struggling financially. I'm pretty sure that's a significant portion of people.

 

[CrysPhys]

If you make $124,999.99 a year, your by no means struggling to pay for food, housing, or clothing.

What do you mean? Have you seen the exorbitant prices for champagne and caviar, a Manhattan penthouse apartment, and a Chanel dress?

 

[Vanadium 50]

I don't know who is correct: Biden-then or Biden-now

There was a recent ruling striking down the program. This will be appealed, but such appeals take time, and in the interim, the Department of Education has stopped accepting applications for loan forgiveness.

 

[CrysPhys]

All this is headed for the Supreme Court. The Biden administration wants an expedited hearing. But we'll see how long that actually translates to.

https://www.washingtonpost.com/politics/2022/11/18/supreme-court-student-loan-forgiveness/

 

[Vanadium 50]

I don't expect the Supreme Court will act quickly. They usually wait for things to settle in the lower court. There is one potential reason I might be wrong, and it's relevant to this thread. Anyway, I read the ruling, which is the easiest way for me as a non-lawyer to understand what was argued. The ruling made four points:

• An act to provide veteran's benefits cannot be construed as the will of Congress to provide the same benefits to non-veterans.
• Presidential emergency powers do not extend past the time when the President says the emergency is over. The judge referenced public comments by the President.
• The action did not follow the legislatively-mandated rules for executive actions, such as a mandatory comment period.
• People whose loans were not forgiven have standing to sue.

The last point is sort of the subject of this thread. The Supreme Court may well want to rule on that. Historiclly, people unaffected do not have standing. But what if the government said "everybody but Bob gets $100 from us. Bob, you're tax bill is a zillion dollars"? That's clearly absurd, and they may want a say in drawing that line.

 

[Office_Shredder]

But what if the government said "everybody but Bob gets $100 from us. Bob, you're tax bill is a zillion dollars"? That's clearly absurd, and they may want a say in drawing that line.

I mean, this isn't that far from the current tax code. Elon musk single handedly financed a round of stimulus payments and wasn't even allowed to collect one.

 

[Vanadium 50]

Well, I would argue that's a political philosophy question. Most people think progressive taxation is a good thing, but also think that having 51% of the people voting that the other 49% give them all their stuff is a bad thing. How do you have one and not the other? But that really isn't PF's focus.

I think it's fair to say that the judge found what he found, and not too far afield to opine a little on this. I've tried to avoid what should happen, which is political, and more on what I think will happen, which is opinion, but one formed by my experiences, including time with the federal government.

My opinion - or guess - is that the Supreme Court would prefer to let this work its way through the lower courts. They usually do. The one thing that makes me question this is the question of who has standing. Apart from that, I think Washington has decided that this is more use to both sides as an issue of politics, not policy, and as such a speedy resolution is unlikely.

So, based on the news and the posturing...er..statements from our august leadership, I don't think anyone should make plans that this will happen soon, and maybe not at all.

 

[Vanadium 50]

The 8th Circuit ruled. Now the Supreme Court will hear arguments in February, with a decision in summer.

 

[Vanadium 50]

That decision has occurred. The court held that, under the present legislation, the President lacks the authority to forgive the majority of such loans.

 

[CrysPhys]

Yeah, but Biden is already hunting around for some other alleged legal authority for him to reinstate the student loan forgiveness. What ever he cooks up will likely end up in appeals all the way up to the Supreme Court again. The plot thickens.

 

[berkeman]

Thread closed for Moderation...

 

[berkeman]

There doesn't seem to be any way to avoid a partisan political discussion going forward for this thread, so it will remain closed.