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President Trump says that he’s waiving interest on federal student loans
- alamortsubite 7y agoAssuming it actually happens (unlike the recent European cargo ban), it sounds like this will be a temporary measure for more-or-less the duration of the pandemic. OK, but I think taking it to the next level of automatic deferments/forbearance is also in order.
- deleted 7y ago[deleted]
- gentleman11 7y agoOnly interest, not payments? Better than nothing
- lostapathy 7y agoThere are already systems in place to defer payments on student loans if you are unemployed or otherwise unable to pay. Normally doing so still accrues interest - I assume under the announced plan you'll continue to be able to do that, but not accrue more interest.
- WalterBright 7y agoMortgage interest rates dramatically affect the price of a house. House payments for the first few years are nearly all interest. It's a LOT better than nothing. A car lot salesman told me once that the dealerships don't make money selling cars - they make the money selling financing, i.e. the interest. Consider that when saying "better than nothing".
- droithomme 7y ago> A car lot salesman told me once that the dealerships don't make money selling cars - they make the money selling financing. I believe it. I prefer to pay cash for cars, and it is extremely difficult to purchase new cars for cash at many dealerships. They don't like it and will do things like refuse to honor advertised prices.
- LynxInLA 7y agoThat's why a lot of people do financing, pay the first monthly payment so that the seller/financer gets their kickback, and then pay off the rest of the loan on day 31.
- wingspar 7y agoI don’t even do that. Bought the last car in a Friday with their fiancé guy matching my credit union rate. Went in to th credit union on Monday and refinanced the loan, paying off the loan from the dealer. The dealer wanted over twice what the credit union wanted for GAP insurance.
- deleted 7y ago[deleted]
- to11mtm 7y agoIn some cases if you pay it off in less than 3-6 months the kickback doesn't happen. Of course, there's nothing they can do at that point...
- lonelappde 7y agoWhy buy a new car?
- nwallin 7y agoThis is absolutely true. Pro tip. If you're buying a car with cash, decline to state how you're paying for it until you have already negotiated the price and gotten it in writing. They will ask. Tell them you'll work out finances with their finance person. If you tell them you're paying in cash before you have the price in writing, your price negotiations will go poorly.
- deleted 7y ago[deleted]
- monksy 7y agohttps://www.youtube.com/watch?v=gLxVyeFmod8 https://www.youtube.com/watch?v=gLxVyeFmod8
- seanmcdirmid 7y agoBut low interest rates also allow more leverage to be brought to bear in a bidding war...ultimately causing housing prices to rise. There is no free lunch.
- qes 7y ago> It's a LOT better than nothing. That's quite a stretch. People won't see a realized benefit for years, even decades. And with this being a temporary measure, 3-6 months of no interest doesn't amount to very much - maybe a few thousand for people with somewhat larger loan amounts that are also all federal.
- WalterBright 7y ago> People won't see a realized benefit for years, even decades. This is how people get seduced into being eaten alive by interest payments, and how lenders make a fortune. Understanding compound interest and the time value of money is a big part of how people move up financially, and how not understanding it leaves people at the bottom tiers. For example, that mere "few thousand" can be applied to buy down the principle, which will have a sustained benefit to you for the life of the loan, and you'll pay it off much earlier.
- gonational 7y agoThey’ve just made it 100% free (no interest OR payments) to spend your first four years after high school doing actual work and learning actual skills, instead of drinking while continuing 4-6 more years of high school.
- standardUser 7y agoTrump sure has a way of doing as little as possible to respond to this particular global crisis. At least he's not in a rush /s
- jessaustin 7y agoThis could just be a first step. If he restores bankruptcy for these loans, it will be one more issue on which he can criticize Biden from the left...
- RickJWagner 7y agoSome of his political opponents suggested this move. If it seems good (and bad) to both sides, it's probably something good for most.
- Tiktaalik 7y agoThis crisis sure is exposing a whole lot of things as quite possible that people keep saying is 'impossible'.
- baryphonic 7y agoWhat was it Rahm Emanuel said? "Never let a serious crisis go to waste."
- bbatha 7y agoThat was Churchill
- baryphonic 7y agoDefinitely Emanuel[1], and with elaboration. [1] https://youtu.be/1yeA_kHHLow https://youtu.be/1yeA_kHHLow
- isoskeles 7y agoThen he’s definitely repeating an idea that has been around for a long time.
- deleted 7y ago[deleted]
- roenxi 7y agoIf someone says sprinting cross-country is impossible; seeing them sprinting away from a beach when a tsunami hits does not undo their claim. Nearly any arrangement is economically possible for 6 months. The government can implement price controls, enforce unlimited paid vacation and give everyone a million dollars; even that might hold together for a month before people start starving. Holding together over the medium-long term is a completely different story.
- supercanuck 7y ago
- humaniania 7y agoDuring record low interest rates. Saving $80/mo isn't exactly life changing if you're paying $500/mo on $50k in loans. Better than nothing, but where is the rent and mortgage relief? Suspension of evictions?
- Mountain_Skies 7y agoHow could the Federal government suspend evictions? Foreclosures, sure, but tenancy laws are typically state or local.
- deleted 7y ago[deleted]
- sitkack 7y agoMake a temporary federal law that overrides local laws. The federal government can basically do anything it wants. It is only because it is so gracious that it lets states have any laws at all.
- briandear 7y agoThe 10th Amendment specifically limits the federal government’s power.
- freepor 7y agoI agree that the Supreme Court has basically torn up federalism, but technically rent is not interstate commerce.
- awayfromhomenow 7y agothere was a case where the USSC ruled that growing food on your own land for your own consumption was interstate commerce, and forced the farmer to stop. Never underestimate the ability of political justices to contort the Constitution.
- jhauris 7y ago
- justjonathan 7y agoWhile interest may not be charged, the payment remain the same. From:https://www.nytimes.com/2020/03/13/us/politics/trumps-coronavirus-false-claims.html https://www.nytimes.com/2020/03/13/us/politics/trumps-corona... WHAT MR. TRUMP SAID “To help our students and their families, I have waived interest that all student loans held by federal government agencies, and that will be until further notice.” This needs context. Interest rates will be temporarily waived for borrowers, but their monthly payments will not actually decrease, according to a Department of Education spokeswoman. Instead, borrowers’ full payments will go toward the principal on their loans.
- briandear 7y ago> Instead, borrowers’ full payments will go toward the principal on their loans. That’s good right? There are already forbearance programs to cover those who can’t make payments.
- Aeolun 7y agoThat... doesn’t help anyone right now?
- kube-system 7y agoDeferment and/or income-based-repayment plans already exist. Presumably, you'd take advantage of it in conjunction with one of those existing programs. https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/deferment https://studentaid.gov/manage-loans/lower-payments/get-tempo... Think of this announcement as an amendment to the section titled "Be Aware That Interest Might Accrue During Deferment"
- jackson1442 7y agoThat's great and all, but how on earth is it supposed to help the present situation? Isn't the point of these moves to provide economic relief now? I'd be more interested to see minimum payments temporarily set to 0 with no interest.
- 7y ago
- alexmingoia 7y ago[deleted]
- VWWHFSfQ 7y agowhy would they get refunds
- LeoTinnitus 7y agoSo if I'm being charged interest on my Stafford unsubsidized loans while currently attending, interest will not be accrued? What about private loans too? This is pretty sweet for currently attending students. I hope it lasts a while cause that save me tons while I'm back in school. Especially if I need private loans through like Sallie Mae.
- myegorov 7y agoIs this a sign of a forthcoming job market collapse? I don't remember anything similar during the previous recession.
- kube-system 7y agoEconomic activity supports employment, and large portions of the world economy are being paused. There are many people already losing their jobs over this event. The question at this point is: how bad will it be?
- godelski 7y agoIt is important to not that this is 1) only for federal loans (so not Sallie Mae or Navient), 2) this is only interest, so you still have your monthly payments (you are paying the same amount, but it goes directly to principal), and 3) this is almost certainly temporary. Given this, specifically #2, I'm not sure that this really helps people that are having financial problems __right now__. You are paying the same bill after all.
- valar_m 7y agoNavient services federal student loans. They actually tweeted about implementing the change earlier: https://mobile.twitter.com/Navient/status/1238576684913299459 https://mobile.twitter.com/Navient/status/123857668491329945...
- AdmiralAsshat 7y agoNavient collects on behalf of Department of Ed loans, so those would be affected, since they don't actually own the debt.
- swagtricker 7y agoWow. What the fuck ever happened to forbearance for hardship in federal student loans?! When my wife and I were at university ('94-97, transfer from paying our way through community college) we both had Stafford government subsidized loans through Sallie Mae. When we graduated and I got a job as a software developer & her as a teacher, I then got hit with the layoffs after the dot-com bust all of three years later and was unemployed for 6 months (e.g April - October). During that time, both my wife and I waere able to take advantage of what is known as "forbearance" on both our student loans because I was out of work - deferring payments, but still accruing interest on about $500 perm month in 2000's money for our $40k worth of loans combined. It made the difference between keeping & loosing our car and apartment in Seattle between her meager paycheck as a teacher and my unemployment checks. Why in the HELL isn't this still an option? Why the hell should Trump or any politician be crooning about simply cutting the goddamned interest alone that students today are getting soaked for when they could simply put all the payments on "pause" for the weeks it will take for this to blow over?
- fareesh 7y agoSounds like the crisis is bringing people together, even politically opposed folks. Really nice to see this happening. Wish it could happen under normal circumstances.
- solstice 7y agowell, it sure seems that crises-within-crises is the new normal so your wish could be granted...
- isoskeles 7y agoI'm pretty happy about this too. I briefly felt somewhat hopeless that our political leaders are so focused on scoring points over petty bullshit that they might not be able to work together on something critical like this. It's not like we need or even want them to act like they agree with each other or are friends or something else, we just need them to use their power to help make the situation not-as-bad as it could be. And I also wish it didn't take an imminent crisis for this to happen.
- peter303 7y agoHah, The crisis is turning Trump into a socialist: trillions injected into the banking system, more health care paid for, more aid for students ... Rand Paul must be having a fit. (librrtarian who votes no on most federal funding)