The limelight has entirely focused on the 10K/20k student loan debt forgiveness plan, but I haven’t seen a lot of discussion of the new SAVE repayment plan or the IDR waiver. Do you know about these plans? What are your thoughts on them? How are you impacted personally?

5 comments

1. I personally think these announcements were bigger than the blanket forgiveness and will have a longer term impact. But due to the fact that they are more complicated with lots of details, they didn’t grab the headlines. Maybe the 10k/20 forgiveness was a misdirection technique by the administration so these were not the subject of political scrutiny by the opposition?

   The SAVE plan in particular fundamentally restructures how student loan payment and servicing is going to be handled for good rather than being just a one time patch on the wall. Furthermore, the IDR waiver makes it so that relief is provided backwards to people that already fell victim to compounding interest from their loans. People who thought they were going to die with debt now will have their loans either forgiven or will be much closer to forgiveness.

   Relief is going to be provided to millions of Americans under SAVE by lowering their payments, while also giving individuals a bigger safety net so they don’t slip through the cracks into default, or are punished by periods of unemployment/health issues in which they are unable to work. Even when in unqualified periods of deferment, it allows borrowers to make catch up payments so their forgiveness date isn’t pushed back.

   Interest not accruing is absolutely huge and we will no longer see people’s loans balloon to gigantic amounts of money because they can’t make the full payment. I think this strikes a balance of having people be responsible for paying for their own education; while also having society as a whole take a bigger stake in the continued education of Americans so that loans are a true means to improve our workforce as well as creating a dynamic and educated population; something that is essential for democratic institutions to survive.

   There are a lot of details within both policies though. But these are my general thoughts. One thing that the plans DON’T address is high cost of college in the US. Perhaps the government is afraid to rock the boat too much at once and potentially harm the standing US higher education has on a global level. Our colleges are top of the line. But with the government taking a bigger role in subsidizing interest and offering more generous forgiveness, a lot of that cost will be on the tax payers.

2. I’d prefer loan forgiveness but I still think SAVE and IDR are great and pragmatic ideas. You help avoid swamping people with compound interest while pacifying more of the “pay what you owe” crowd.

3. Preface this by saying: I’m a crochety old man.

   Until someone addresses WHY college is so fucking expensive… this entire thing is nonsense that does nothing to remedy the actual problem.

4. These sound like restructuring or alternatives of existing options so they are hardly groundbreaking.

   The use of “forgiveness” in a lot of these is sketchy, as it often means generating a 1099-C and making you pay the taxes. PSLF doesn’t do this but many do, or some politician proposes some loan plan but never clarifies if it’s forgiven or cancelled.

5. I imagine if it helps people like me, the SC will figure out some reason to kill it.