Teacher with $303,000 in student debt...

[bjcheung77]

More debt news, I don't really know why, but I *side* with chrisjm18 on the sister board.
Basically, I also suggest "pay off your student debt" even if it's just the principle.

What Biden should do, is what many has asked "relief for all the amount or nothing", but as a taxpayer... 
I would rather it be "pay off all the interest", let the student pay off the principle...

Biden has already or probably is the president who has provided the most relief or forgiveness for student loans.
Why not go a step further and pay off all the interest, just charge them the principle + a lower interest starting next year!

Link: Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket' (msn.com)

[Alpha]

Perhaps the idea of eliminating the interest and requiring payment of the principle is gaining some traction. I think the whole thing is just going to be a band-aid unless there is some serious reform to the entire process of paying for college.  And that teacher in the story, the one who owes 300K and is enrolling her nephew in college, well I hope she learned something from her experience and doesn't get her nephew in such debt too.

[freeloader]

Perhaps the idea of eliminating the interest and requiring payment of the principle is gaining some traction. I think the whole thing is just going to be a band-aid unless there is some serious reform to the entire process of paying for college.  And that teacher in the story, the one who owes 300K and is enrolling her nephew in college, well I hope she learned something from her experience and doesn't get her nephew in such debt too.

Probably not. She was quoted as saying she was forced to take out the loans. She has also been paying $400/mo on her private loans while the government-backed loans have been in Covid forbearance.  Really, $400?  And she says she may have to get another job. Really, you are near as makes no difference 1/3 of a million in debt and you now may have to get another job?  

I am sympathetic up to a point. Perhaps when she says “another job” she means leaving teaching, but I read that to mean a second job. Most of my teachers had second jobs, particularly those who were unmarried or who were the main/sole earner in their household. 

I don’t appreciate her statement that she wants to pay off only the principle not the interest. Yeah, that would be nice. I’d like to do that on my house loan. Would save my family around $100,000 over the term of the loan and we’d get it paid off a lot sooner. That’s not really how (the vast majority of) loans work. 

Finally, I am just astounded at that amount of debt to become a teacher. She has an English degree so there is a good chance that math/personal finance are not her strong suits. But honestly people, that is just ridiculous.

[Alpha]

Perhaps the idea of eliminating the interest and requiring payment of the principle is gaining some traction. I think the whole thing is just going to be a band-aid unless there is some serious reform to the entire process of paying for college.  And that teacher in the story, the one who owes 300K and is enrolling her nephew in college, well I hope she learned something from her experience and doesn't get her nephew in such debt too.

...Finally, I am just astounded at that amount of debt to become a teacher. She has an English degree so there is a good chance that math/personal finance are not her strong suits. But honestly people, that is just ridiculous.

At the risk of offending any of the teachers out there, I think that you can get a perfectly good BA/MEd at your local state university (all online) for a lot less than 200K (I'm guessing that the other 100K is interest).  I don't know that spending all that extra money to go to an elite school actually makes you a better teacher or makes you more employable once graduated.  I can only hope that she had a fun "college experience" because it seems clear that she's paying for it now.

[dfrecore]

You know what I did back when I had credit card debt in my early 20's? I GOT A SECOND JOB! Yes, I figured out that I could pay if off more quickly if I did so.

You know what I would do now if I needed to get some extra cash for whatever reason? I would GET A SECOND JOB! (actually I have 2, but I'd find another way to earn some extra cash). This is not a new thing. Geez.

[freeloader]

At the risk of offending any of the teachers out there, I think that you can get a perfectly good BA/MEd at your local state university (all online) for a lot less than 200K (I'm guessing that the other 100K is interest).  I don't know that spending all that extra money to go to an elite school actually makes you a better teacher or makes you more employable once graduated.  I can only hope that she had a fun "college experience" because it seems clear that she's paying for it now.

Well, she isn’t really “paying for it now”. The original link is dead, so I found another version of this story. Not sure if it was in the one linked above, but it notes her $200/mo income based repayment has been on hold with the Covid-related pause. 

Depending on her income based repayment plan, she has to pay for 20 or 25 years. Let’s do some math: 12 payments per year of $200 is $2,400. If she has a 20-year program, 20x2,400 is $48,000; 25 years would be $60,000. 

I have this sinking suspicion her tuition was a lot more than $60,000 for her two degrees. So, more likely than not she will die with this debt (and the remainder will be forgiven/eaten by taxpayers) OR she will make her payments for 20/25 years…and the remainder will be eaten by the taxpayers. 

She says because of the pause in student loan repayments that she has $200 for gas and groceries. To me, that sounds like she is living without too much wiggle room in her budget. Paying $200/mo likely isn’t going to pay off her principle even if the interest is wiped out, but she says she wishes the interest will go away so she only has to pay the principle. IF SHE NEEDS $200/MONTH FOR BASIC EXPENSES, HOW THE HELL IS SHE SUPPOSED TO EVER PAY OFF THE PRINCIPLE???
 
The person in the article is 53. I think it would be really interesting to know a bit more about her life. Did she finish that BA 30 years ago?  When did she get her master’s degree in education?  How long has she been teaching?  Did she have unforeseen events (such as taking in a relative) that totally derailed her finances?

Without knowing some/all of those answers, it really is hard to get a sense of how justified this lady is in her displeasure/anger with the system.  It is possible she made choices which, while not ideal, were reasonable. If she got her teaching degree, say, 15 years ago and took on some debt to do it only to have to take in a relative unexpectedly, I am really sympathetic to that. Kids are expensive. If you have a fairly tight budget and suddenly have to spend thousands of extra dollars per year, unexpectedly, on a child, I get how you end up in a place like this lady. 

https://www.businessinsider.com/meet-tea...2022-5?amp

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OH, the more I think about this article the angrier I am getting.

Of course this woman doesn’t have a second job. If she had a second job, her income based repayment amount would increase. She would basically be earning pennies from that job, as the great majority would likely go to her loans. She actually has a very strong DISincentive to get a second job.

Ok, so she has basically gamed the system. Whatever. We can debate the system, whether income based repayment is good or bad, yada, yada, yada.  BUT NOW, this woman has the gall to complain about the system WHEN SHE Is GOING TO PAY 1/5 OR LESS of her debt.  

People in glass houses shouldn’t throw stones, AND PEOPLE WHO ARE GETTING HUNDREDS OF THOUSANDS OF DOLLARS WORTH OF THEIR DEBT WIPED OUT SHOULDNT COMPLAIN THAT IT ISNT ENOUGH.

[davewill]

My wife and I didn't spend as much as this woman owes to send THREE kids to school...and they all graduated from top ranked public universities. That includes room and board for two of them to go away to school.

Just more proof that our current student "aid" is nothing of the sort. The way we do it now is killing our economy, and the future of our young people (and not so young). This woman deserves plenty of blame for the position she's put herself in, but we nonetheless need to reform the system that encouraged and enabled her to do it.

We need to get rid of loans and insist on control of tuition and other costs as a prerequisite of providing aid.

[ifomonay]

Ok, so there's no need to panic. I didn't read the article, but if she said that the $300k is ruining her life, she's totally lying. You can sign up for IDR. You have to pay only 10% of your salary after discretionary income, which is post-tax, and after living expenses. If she's making 60k, and she's in the 10% tax bracket, then net pay is $49k after SS, Medicare, and Fed Income tax. Living expenses is 25k (she said she has a son), so that means she has to pay 10% of 24k. That would be $2,400 per year or $200/month. That's only 4% of her gross. I mean she paid 10% Federal Taxes, and 7.65% SS Tax, then 4% isn't that much more.
So no need to feel sorry for her, or feel like we have to figure out who to blame; she's not suffering as she claims to be.

[davewill]

... That would be $2,400 per year or $200/month. That's only 4% of her gross. I mean she paid 10% Federal Taxes, and 7.65% SS Tax, then 4% isn't that much more.
So no need to feel sorry for her, or feel like we have to figure out who to blame; she's not suffering as she claims to be.

No, it's no reason to panic, but $200 is not enough to actually RETIRE the debt, and probably not even enough to cover the interest, in which case she will literally be in ever increasing debt forever. Multiplied by the millions like her, that's a serious problem that deserves our attention, in my book.

[ifomonay]

... That would be $2,400 per year or $200/month. That's only 4% of her gross. I mean she paid 10% Federal Taxes, and 7.65% SS Tax, then 4% isn't that much more.
So no need to feel sorry for her, or feel like we have to figure out who to blame; she's not suffering as she claims to be.

No, it's no reason to panic, but $200 is not enough to actually RETIRE the debt, and probably not even enough to cover the interest, in which case she will literally be in ever increasing debt forever. Multiplied by the millions like her, that's a serious problem that deserves our attention, in my book.

I see what you're saying I agree with you that we do need to fix the system. It's completely broken as evident by the $1.6T collective student  loan balance. I was just saying that we don't need to lose sleep over her situation. Like you said, her repayments will never be anywhere close to covering the interest on her debt. 
One thing though you have to remember is that this isn't really a typical loan like credit card debt. It's actually student aid. They're calling it a loan, but it's more like hybrid grant/loan. When you fill out FAFSA, they let you know that you have the option to repay the loan over 10-30 years. But they also tell you that you have the option to pay only 10% of your income for 20-25 years, and the rest is discharged (like a grant basically).
That shows that Congress can't do math. Because offering these plans will end up exactly where we are today.
Personally, I am not in favor of the 10k loan forgiveness. Taking 5% off your paycheck is miniscule.
What we should do about this in the future? I'm in agreement with everyone here. We need to stop giving away so much money. Maybe offer free education if they attend select low-cost public universities.