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A supposedly college educated American can't make $5 a month payments in order to clear their credit report and set themselves up for $0 per month payments from

• crooked-v 9y ago
  From the article: > All that's needed to enroll is some paperwork that enables contracted loan servicers to confirm borrowers' annual earnings, but experts inside and outside the government say they don't know why this step isn't completed, and distressed borrowers are left stuck in debt collectors' sights. My guess would be that the loan servicers in question aren't bothering to tell anyone about the program, and nobody else can make it available in the first place. Even this article just mentions "some paperwork" instead of mentioning any details.
• kpwagner 9y ago
  Parent loans, not loaning money from parents, will not restructure payments based on income of the student. About half of my undergrad loans are parent loans.
  • RHSeeger 9y ago
    Are you talking about PLUS loans? Because those ARE loaning money from parents; it's just that the parents borrowed the money to loan it and it's the parent's responsibility to pay it off. The government loan isn't to the child in the first place. Or am I misunderstanding?
    • kpwagner 9y ago
      I don't know the difference. Only that my parents have loans from my undergrad, and I can choose to just not pay them, but I'm not a piece of shit (aka, my younger two siblings). But those loans can not get adjusted payments based on my income.
• redwood 9y ago
  The institutions of higher learning taking this money could force their indebted students to study this process, learn about career and work options, or even nudge them toward likely job trajectories, but they don't and no one forces them to.. They're happy to continue selling a dream and hobble these poor students who haven't had proper guidance with debt. Frankly it's shameful.
• saghm 9y ago
  > Is it too hard to Google "income based student loan repayment" and read for a few minutes to know what to ask for? If you aren't already aware of this option, how are you supposed to know the exact phrase to Google for? Maybe the issue is that we need more education about the options available for repayment.
  • yequalsx 9y ago
    Well, adjust the search accordingly. How about, "I can't afford my student loan payments"?
    • saghm 9y ago
      That still presumes that the person who should be searching is aware that there are options to search for in the first place. If you assume that your only options are to either pay the amount you're billed monthly or default, it might not occur to you to try to solve your problem by searching Google.
      • yequalsx 9y ago
        An educated person ought to have enough perspicacity to know that there might be other options. At least one should have enough wherewithal to attempt a simple search.
        • cinquemb 9y ago
          >An educated person ought to have enough perspicacity to know that there might be other options. Probably depends on the degree someone would associate getting a piece of paper for time served in a university as well as coming out heavily in debt is equivalent to an education.
        • thephyber 9y ago
          This seems to ignore the fact that people are irrational (I cite the difference between classical Economics and Behavioral Economics). Especially when they are emotional, which is exactly the case when they are under an immense debt load, in default, with little to show for progress. > An educated person You seem to presume that just because someone has student loans, they are educated. If you look at the DoE and Congress going after the predatory loan practices of for-profit colleges in both misleading recruiting and sub-par {education, graduation, job prospects}, there is a sizable population of people with large student loans and nothing to show for them.
• accountyaccount 9y ago
  It's not that simple – parent loans are based on the parents' income, which makes income-based repayment useless – loan servicers don't want you on income-based repayment, so if you ask them about it they're not helpful whatsoever – they fuck up the paperwork CONSTANTLY, almost every year I have to apply for income based repayment 2-3 times because they lose the paperwork or make some asinine error – no one is actively educating grads about the program because there's nothing to be gained from it – if you get married your spousal income is factored into the payment, even if your spouse also has loans It's not a one time simple thing and you're done situation. It's a pain in the ass and almost no one will help you figure it out. This is an industry that thrives on the illiteracy the average American has in personal finance. I know multiple people who ruined their credit because they didn't know the unemployed get temporary loan deferments.
  • yequalsx 9y ago
    PAYE does not take into account spousal income if you file taxes separately. Your other statements are correct. One really has to research things and it appears many do not. EDIT: The PAYE plan does not take into account spousal income if you file taxes separately. People should be aware of this.
    • khuey 9y ago
      Married filing separately is a filing status of last resort. You really only want to do that if you'll save a ton of money through PAYE. Financially you'd be better off not getting married in these cases.
      • yequalsx 9y ago
        Yes it is better not to get married in such a situation. At least financially speaking. But it is still false to say spousal income is always taken into consideration.
      • showdead 9y ago
        Apparently you can file separately in order to not take spousal income into account, then file an amended return to make it joint instead without recalculating the debt relief. Seems a bit shady to me, but apparently not uncommon.
• tedmiston 9y ago
  Perhaps the burden on the loan holder is more than financial. Credit aside, paying $5 per month on student loans of say $80k isn't much better than paying $0. You still won't pay them off in your lifetime. Edit: I missed this part: > The consumer bureau estimates that the vast majority of borrowers who rehabilitate their defaulted debt with $5 monthly payments are eligible for $0 payments after they exit default, under an income-based repayment plan. But about 90 percent of debtors who rehabilitated their debt failed to enroll in these programs, according to the CFPB’s analysis. In that case $5 * N months is an inexpensive temporary peace of mind even if the looming debt remains.
  • Spooky23 9y ago
    My friend had this issue when health issues required her to drop out senior year. No degree, but saddling debt. The deals you make are always temporary and often misunderstood. If 90% of borrowers aren't doing something, there's a reason. The best thing that she was able to do was to declare chapter 13 bankruptcy, which shut down the collections bullshit and trickery and let her pay debt down. In her case, the student loans picked up a prorata share of her payment which put a dent in the balance.
• jupiter90000 9y ago
  Some 'anecdata': 2 people I've known personally basically seem to fall in the category of "my credit score is 300 and bill collectors call but I don't make enough money so screw them I'm not paying." Just because someone attended college doesn't mean they have made wise decisions about taking loans and what to study (if they've even finished a degree). That $5 is towards a pack of cigarettes or gas for their car, why would they 'give that away?' Then they go into rehabilitation with minimum payments, so they can get more student loans and not pay those back either. And the saga continues
• bitJericho 9y ago
  Income based repayment can be way too high. Think two or three hundred when you are already living paycheck to paycheck.