Forgive student loans

Just like the banks paid all of their own bills. With a taxpayer bailout.

 

Not all banks took bailout money and those who did had their deals brokered by our elected officials + there was an expectation of being paid back. By the way, I was against the bailouts...I'm just trying to show you how your argument is apples & oranges.

 

Over here we have a system were by you begin to repay your student loan when your wages reach a certain level, at the moment it stands at £21,000 Then you repay at a rate of 9% of any income over that for example if you earn 25K then you pay out 9% of 4K
Interest on the loan is variable depending on again your earnings and it is taken directly from your wage, they are still working out about paying off larger sums LOL

 

See, that actually makes sense. Here, we are expected to start paying them back within six months of graduation, whether employed or not. It took me over a year to find paying work after graduation, meaning I had to defer payments. The interest continued to accrue and was capitalized into the total. So, another couple of thousand dollars was tacked onto a bill I already couldn't pay-- brilliant! Now that I have paying work, over half of my monthly pay goes to student loans. With the current stagnant wages in this country, I'm sunk for the next 25 years.

 

Guess what? Apples and oranges are both fruit. The student loan terms were also negotiated by elected officials, so I have no idea what point you're trying to make. There was also an expectation that the banks would use the stimulus money to make loans for businesses and homebuyers. They are refusing to do so. They have, again, broken their end of the deal, but republicans rush to their defense. If I break my end of the deal, the republicans tell me I should have "manned up."

 

Whooaaa buddy. The point of the bailout wasn't to get the banks to lend out money. The expectation was "dear god, let us buy these illiquid, uncollectable assets so you don't close your doors." And the banks did that...in terms of not closing their doors. So technically the banks didn't back out of their deal, especially since most either repaid or provided stock to the government.

 

That's why I differentiated between the bailout money and the stimulus money. Billions were given to banks to keep them from collapsing-- not what I would have done, but there you have it. Then billions more were given to banks to promote job creation through structured lending-- something they've steadfastly refused to do. They want to keep that money for themselves, fine. Take the student loan money from them and we'll call it even.

 

I know of no bank that received "stimulus" money. Banks only received TARP money which was for the bailout, as far as I know. Which stimulus money are your referring to? Are you referring to the March 2009 $15 billion governmental purchase of small business loans on the secondary market? Cause that is sort of stretching it.

 

The Capital Purchase Program was a part of the TARP funds given to healthy banks to encourage future lending. The banks that took the money aren't doing the lending. They should be forced to return the money with interest, or, lose money from another taxpayer-funded source. Whether it's from student loans or some other federal program, as long as they don't get to break the deal and still keep the taxpayer's dollars.

 

But the vast majority of the banks did return the money. With interest.

 

Citigroup has yet to repay the entire amount, but the difference is made up in stock and AIG is $4 billion short. Everyone else has repaid the amount, to the best of my knowledge.

 

So, it's ok for them to take money that is meant to increase lending, use the money for their own investments, then back out of the deal without consequence? I thought we were all supposed to "man up?" The banks took the CPP money for a clearly designated purpose. They didn't use it for that purpose and benefited from having it. They should pay interest plus any profits they made from holding onto the money against the original terms of the deal. Seems fair, right?

 

Actually, no it doesn't seem fair. Ok...where did it say that the money was supposed to be used to increase lending? The clearly designated purpose in the CPP wasn't to increase loans. The purpose was to protect against the banks failing and then get the government money out. Which CPP did. IN FACT, given that the reason the banks got into trouble in the first place was due to the banks making loans to people who couldn't pay back the money, and given the increased regulations regarding how loans are to be issued, loan amounts were bound to increase. Also take into consideration that fewer are buying homes for reasons that have absolutely nothing to do with banks and people are taking fewer financial risks, the amount of loans issued were going to shrink. The banks have to redo all of their lending practices to comply with new regulations. And they can't issue money like they have before. Yeah, the amount loaned out is going to decrease.

(Please do not take the above to mean I am against the new regulations. I really am not.)

 

I think you may be unclear on what CPP was designed for. It was meant to add liquidity to stable banks for the sole purpose of increasing lending. The banks used it as a personal investment piggybank, using tax dollars for capital projects and such. The federal government invested our money in these banks to encourage lending. The banks used the money to increase their own profits and now want to pay it back at a low interest rate and call everything square. That's like me robbing a bank, investing the money at 5%, then offering to pay it back at 1% without any jail time or fines.
Fewer people are buying homes, but lots of people and businesses are still trying to take out small loans.
Again, the banks CHOSE to make bad loans. I CHOSE to sign my student loan contract. I'm being held accountable, and rightly so. Why aren't the banks? They helped inflate housing prices to increase their own profit margins. They knew it was federally backed money, so they didn't do their due diligence before lending-- let them eat it. If the feds can show any instance where a reasonable person would have known it was a bad idea to make the loan, the bank should shoulder the burden.

 

I know exactly what the CPP was designed for. I get it. I also get that they paid the money back that they were given. YOU have yet to repay your debt obligation. SO YOU are still being held accountable because you still owe money. The banks no longer owe the money. They don't "want to pay it back," they did pay it back at the interest rate dictated by the government when the loan was made. Its a done deal.

As for choosing to make the bad loans...that is not entirely true. There were rules and regulations in place that sort of took the call to make loans out of the banker's hands. While motivated by the highest ideals to discourage racism, it also compelled banks to make loans they would not have otherwise have made. And since the 1990s, Fannie/Freddie was organized to promote homeownership at any cost. These groups created the environment that angers you.

Cracked.com had it best. The banks and businesses are in it to make money. Its their nature. THEY ARE LEGALLY PROHIBITED FROM HAVING ANY OTHER PRIORITY. Have been since 1922 when the court in Ford v. Dodge required corporations to place the money motive above all else, or else corporate officers can be held personally liable. So right now, the Banks and corporations are like tigers. And the tigers got out of their cages at the zoo and devoured some kids. Instead of being JUSTIFIABLY PISSED AT THE GOVERNMENT, whose responsibility it is to monitor these guys, you get pissed at the banks and corporations who did nothing illegal, complied with the regulations, and did what they were built for. You are kind of aiming at the wrong thing.

 

We have one among us who has fervently defended the student loan industry but has been remarkably silent here. Wonder why?

 

2 pages is nothing. Wait until you've been here 2 years.

 

If I had a magic wand, I would probably say 9% of all wages after you reach a certain amount not just 9% of the wages over the amount. Say you are making £70000 a year...I don't see a whole lot of reason for someone to not pay that extra £1900 a year.

But, then again, I am not real sympathetic towards forgiving student loan debt. I am ok with making the time frame that you start to pay it off a little longer (say 1 year or 18months) but, if you have a bachelors degree or higher, the median household income per the last census is north of $80k a year. They are not going to get a lot of sympathy from someone making what I make.

 

I think he is referring to me. So now I'm the defender of this imaginary student loan industry? Interesting.

The "why" is because I have no dog in the fight. As I keep telling you, and you have chosen to believe what you want anyway, I have nothing to do with student loans. I mean I spent 10 years paying mine back as my wife did but that was the last time I thought about them. That is until I had to put away three more college funds for the kids. That felt like having student loans again. Ouch!

You've always seemed resentful of student loans for some reason. I have an idea, don't take any out. Problem solved.

 

Riddle me this, all opposed: My sister's debt was $80k. When it went to collections, they tacked on another $50k. My hand to heaven, that's what they did. They tacked on another $10k every time she said "I cannot afford to pay $900 a month." Where is the honor and/or justice in that? It's a racket! Do you KNOW how much money would be stimulated into the economy if any portion of the student loan debts were to be forgiven? People are paying through the nose.