Capitol Hill Blue Forums Political Issues The Biden Administration Biden to Cancel $10,000 in Student Loan Debt

The Biden administration filed an appeal to the USSC asking that it cut the malarkey and reinstate President Joe Biden's student loan forgiveness program. The program was put on hold Monday by an injunction from the Eighth US Circuit Court of Appeals in St. Louis. In a separate case, the administration is also appealing a different ruling by a federal judge in Texas. That appeal is going through the Fifth US Circuit Court of Appeals in New Orleans.

The judge ruled the states didn't have standing to sue, because they weren't harmed by the program. The appeals court then...
As I wrote above. The loans don't have to stay with the originating loan granter. Anyone can move the loan to another servicer and the state would lose money on that loan. It's an asinine argument that the conservative states are trying to make.

The big problem in challenges to the loan forgiveness program has been finding anyone who can credibly claim to be harmed by someone else having their debts forgiven, but rightwing foundations and law firms are nothing if not enterprising in scraping up plaintiffs if there's a chance to wreck a popular federal program.

It's clear to everyone that only Republican presidents have unlimited executive authority - per Republicans.

I can't wait to see what these idiots do with Hunter's laptop that was in Rudy Giuliani's possession.

On a related note Judge rules to erase the student loans of 200K borrowers who say they were ripped off. I recognize that this is a different issue, but there are probably a million students in similar circumstances (435,000 have already applied). The last administration sat on over 200,000 of them.

This will make Rwingers' heads explode.

Currently ol' Joe's SecEd is prepping to go in front of the SCOTUS in March 2023 to argue against the various State Attorney's lawsuit to quash Joe's 10K - 20K student loan forgiveness.

Very cool.

...but the following is what will make Rwing heads explode.

Pretty much, everyone will be steered into Income Driven Repayment (IDR) currently set at 10% of discretionary income. On July 1, 2023, the maximum monthly repayment amount will go down to 5% of discretionary income.

Currently, if you have income-based repayment and your payments aren't enough to pay the interest on the loan, the unpaid amount of interest is capitalized back into your loan, so your balance still keeps rising every year.

Under the new plan, if a borrower’s payment isn’t high enough to cover the interest due that month, the remaining interest will not be charged or tacked onto the balance as it is today.

Additionally, the new proposal would tweak the definition of "discretionary income" - which currently uses a formula designed to exclude costs of food and rent for a given area - the new definition will exempt more income, which would result in lower payments, too. And instead of having to recertify your income-based repayment every year (oh yeah, I need to do that! Us student loan IDR'ers have to this by July 31st every year), borrowers who opt in to allow sharing of their information from IRS can just let the Student Loan program recalculate it annually.

But wait! There's more!!!

Back in April 2022, the Education Department announced it would be making up for some very bad behavior on the part of a lot of loan servicers by doing a one-time adjustment to the amount of time that borrowers need to make payments.

You see, the Education Department requires loan servicers to inform borrowers of all their repayment options so their loans won't go into delinquency, including the availability of income-driven repayment plans (IDR). But a review of actual practices found that instead of doing that, a lot of loan servicing companies steered borrowers who couldn't afford to make payments to put their loans in "forbearance," which means that the borrowers didn't have to make monthly payments, but the loans continued to accumulate capitalized interest, which rolled back into the total balance owed.

This is where I raise my hand and say "Oh yeah, that was me! Nobody told me anything about IDR plans until I applied for one a few years ago!"

So for ALL OF THOSE YEARS I was in forbearance, with interested being added and added and added and added, my loan will be reset this summer so that those forbearance months will be IDR months at $0 monthly payment (Yes! You can have $0 monthly IDR payments) and will count towards the 20 year termination of the loan.

Oh...did I forget that part? Yes I did! Every student loan will now terminate after 20 years - regardless. Grad loans will terminate after 25 years.

Pretty nifty huh?!? Thank you dark Brandon!!!

SOURCE: Federal Registry

Sounds nice.
I wonder why they don't apply something like that for my mortgage?

...because mortgages are dischargeable in bankruptcy, student loans are not. Student loans are a debtors prison thanks to the 2005 Republican bankruptcy reform.

Other than that, you think there should be forgiveness for mortgages?

THAT is a pretty big distinction between the two. Mortgages have always been able to be forgiven through bankruptcy. I don't see why that should change.

But once the bankruptcy occurs on a mortgage, do the people get to keep the house?

I'm not a bankruptcy expert, I'm not aware of bk outcomes. On basic level, mortgages are tied to a tangible object, student loans are not as education not tangible.

Why would there ever be foreclosures if you could discharge a house mortgage through bankruptcy? Home equity is most people's majority of assets.