Bill would cut student loan forgiveness time in HALF

On March 8, Congressman Hansen Clarke (D-Mich.) introduced H.R. 4170, the Student Loan Forgiveness Act of 2012.

Here's the part that should be of interest to all faculty and our students:

Improving Public Service Loan Forgiveness: The act would also provide for Public Service Loan Forgiveness after 60 monthly payments instead of 120. It is impossible for us to overstate how much this would help borrowers who have committed to careers at relatively low-paying public interest jobs, who could actually start saving for their kids' education and perhaps owning their own home half a decade earlier than they anticipated.

Read the details of the other improvements here.

If you are reading this, you need to contact your congressmember and senators and tell them to support his bill. It doesn't have to be a long, fancy letter, just say

I am your constituent, and I want you to actively support and vote for HR 4170, the Student Loan Forgiveness Act of 2012.

Even if you don't know who represents you in Congress, if you know your own zip code, you can find their contact information here.

You could even call 202 225-3121, or these numbers and if you know where you live, they can connect you to your representatives. 

Obama expands student loan forgiveness to ALL educators

The Obama administration has expanded the student loan forgiveness program, which previously only went to educators in high risk communities, to all educators and in fact, all public servants.

If you make payments for ten years, the rest of your debt is forgiven.

This is coupled with another program, Income Based Repayment (IBR) that will dramatically reduce payments for most borrowers and forgive their loans after 25 years. PLUS loans are not eligible.

The Department of Education has put up an IBR calculator (this link is dead, see update below), so you can see how much your payments will go down. I owe a little over $100,000, and my monthly payments are about $729. I originally only owed about $50,000, but it was so difficult to make the payments regularly until the last couple of years that my debt doubled.

Running my numbers through the IBR calculator, my payments dropped to $450, so I'll end up paying $54,000 more. Under the old system, I would have paid $218,000 more, so I'll save three-fourths. I've already paid $18,000, so I'll still end paying a more than my original debt--but not four times more.

This will definitely have a "trickle up" effect in my case. I'll be able to make a down payment on a house that much sooner, and others will likely do the same or get a new car or appliance sooner than they otherwise would have, which will help get the economy moving again.

For more information, read the Department of Education press release.

Here's the application for IBR if you're repaying your loans directly to the Department of Education. If you have a federally guaranteed loan you're repaying to a bank, contact your lender.

The application for loan forgiveness hasn't been posted yet.

Here's the actual regulation change for forgiveness.

PS: I would like to take credit for this since I wrote a letter asking the Obama administration to do it, but when I read the reg, the change was in the pipe before that.

LATEST UPDATE
March 7, 2014:

Obama has proposed a cap on the amount of student loans that can be forgiven after ten years of payments for public employees.

They claim they're worried about schools and grad students "gaming" the system by piling on debt they know will be forgiven after ten years of payments.

Since I teach at public community colleges and didn't have health insurance or make enough to make regular payments on my student loans (that were more than my rent) for the first ten years I taught, so my original debt doubled through interest, from $50K to over $100K. I have probably paid more in interest than my original debt. If that's gaming the system, I student loan borrowers are the stupidest con men in history.

Please take a second to sign this petition.MAY 9, 2013:

Sen. Elizabeth Warren bill would lower student loan interest rate to what Wall Street gets from Federal Reserve, 0.75%

Sign White House petition and write your senators and congressional rep and tell them to support it.

PREVIOUS UPDATE:

On March 8,2012 Congressman Hansen Clarke (D-Mich.) introduced H.R. 4170, the Student Loan Forgiveness Act of 2012. 

Here's the part that should be of interest to all faculty and our students:Improving Public Service Loan Forgiveness: The act would also provide for Public Service Loan Forgiveness after 60 monthly payments instead of 120. It is impossible for us to overstate how much this would help borrowers who have committed to careers at relatively low-paying public interest jobs, who could actually start saving for their kids' education and perhaps owning their own home half a decade earlier than they anticipated. 

Read the details of the other improvements here. 

If you are reading this, you need to contact your congressmember and senators and tell them to support his bill. It doesn't have to be a long, fancy letter, just say 

I am your constituent, and I want you to actively support and vote for HR 4170, the Student Loan Forgiveness Act of 2012. 

Even if you don't know who represents you in Congress, if you know your own zip code, you can find their contact information here. 

You could even call 202 225-3121, or these numbers and if you know where you live, they can connect you to your representatives. 

HERE'S THE LINK TO JUST THIS UPDATE 

UPDATE 8/31/14: The original IBR calculator link doesn't work, but I found this one that may not be a government site, but when I ran my numbers through came pretty close to what I'm actually paying.  Use at your own risk.

Repayment Schedule Estimator

even conservative magazine calls student loans a SCAM

In a review of a book on student loans, the conservative National Review pointed out that the system is rigged to benefit lenders more than students and remarkably recommends a solution that I'm pretty sure I first heard from Howard Dean.

Ironically, this is not just a problem for students, but for too many higher education faculty who get in debt up to their eyeballs to get the degrees required to do their jobs only to find that they don't make enough to pay back those loans or at times even have income every month.

KEY EXCERPTS:

Lenders of First Resort
More and more, student lending is becoming a rigged game.

By Robert VerBruggen


But there is a very important story in this book: Collinge, who is himself buried in defaulted debt, explores the alliances that student-loan companies have established with universities and the government. By sharing profits with schools in exchange for preferential treatment, the industry’s biggest players have shielded themselves from free-market competition; and through intense government lobbying, the industry has secured exemptions from laws that apply to other forms of lending. No matter how wrongheaded his analysis, Collinge’s facts should evoke cringes from Americans of all political stripes.

Schools’ relationships with the major lenders will come as a shock to many — especially those who’ve taken advice from purportedly neutral university employees. Through “school as lender” programs, lenders can essentially give schools a cut of the profits in return for financial-aid officials’ steering borrowers their way. (Technically, the school makes the loan, and then the lender buys the debt at a premium.) Lenders often sweeten the deal by offering officials lavish parties and trips. Sometimes, lenders have even run financial-aid call centers on universities’ behalf, with lenders’ employees claiming to represent the schools.

***

Today it’s a fully private entity, but Sallie and other big lenders have used their size and sway on Capitol Hill to their great benefit. For example, while there have long been limits on bankruptcy protection for student loans (some worry that it’s tempting to file for bankruptcy right after graduating), the student-loan industry managed to eliminate bankruptcy protection in 2005. No matter how long it’s been since you took out the loan, and no matter the size to which the debt has ballooned, you typically cannot discharge a student loan in bankruptcy. One can argue that bankruptcy laws in general should be stronger than they are, but it’s hard to make the case that student loans should be treated so differently from every other form of debt.


***

Many other foolish ideas have been adopted. According to federal law, a borrower can only consolidate his student loans once; then he’s stuck with that lender, even if a different lender is willing to pay off the loan and accept a lower interest rate. Also, to punish those who don’t pay their debts fast enough, collectors can have borrowers’ professional licenses taken away. Obviously, without being able to practice in the field for which they borrowed money to train, there’s little hope of these folks’ digging their way out of debt.

***

There are plenty of better ideas for rejiggering the way we pay for college. One is for students to give up a percentage of their income after graduation, instead of making traditional tuition and loan payments. Not only would this go easy on folks who have money troubles (no income, no payments due), it would take the burden off parents and the government. It would also provide schools with a very explicit way to compete on price: With loans, grants, and parental dollars out of the way, a student would have to ask himself if it was really worth X percent of his income to go with college A instead of college B...

***

FULL TEXT

To find out more & take action, go to Student Loan Justice.

VIDEO: Student loan debt crushing students & grads on Democracy Now!

As the Obama administration continues to spend hundreds of billions of dollars to bail out the nations banking system, a growing movement is calling on the government to do more to help students struggling to pay for college.

These are some of their stories.

click pic to see flick

Transcript & links

Tell your student loan story

Take action with Jesse Jackson

TO OBAMA: expand student loan forgiveness to ALL teachers

I read that Obama reads ten letters from the public a day, so I've sent a couple, like this:

President Obama,

Thank you for your emphasis on education in your recent state of the union and Saturday radio address.

There is one thing you could do that would be a tremendous encouragement to current educators and encourage others to become teachers: expand the student loan forgiveness program to all K-12 and public college instructors.

Those who currently get student loan forgiveness could get it at an increased pace or some additional incentive like a tax credit.

I teach community college, and because most schools hire mostly part time instructors at as little as a quarter the pay of full time faculty and don't us health benefits (I didn't get any from from any of my schools for the first eight years I taught), I was not able to make consistent payments on my student loans until just the last two or three years.

Consequently, my debt doubled from $50,000 to over $100,000, and my payments are greater than my rent.

The overuse and abuse of part time faculty at community colleges needs to be ended as well, but expanding the forgiveness of student loans would tell society that our work deserves at least one-tenth of one percent as much of the financial recognition that Wall Street gave themselves in bonuses with the bailout money.

Sincerely,

PS: You can write Obama yourself too.