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Mon Jun 14, 2021, 04:23 PM

Can Biden make student loan interest 0%

This in itself would help all those people paying their student loans. Why should anyone profit off of our future? Education is an investment in the future workers of America!

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Reply Can Biden make student loan interest 0% (Original post)
Bluesaph Jun 2021 OP
brooklynite Jun 2021 #1
Dave says Jun 2021 #18
roamer65 Jun 2021 #2
Dave says Jun 2021 #19
roamer65 Jun 2021 #20
Ocelot II Jun 2021 #3
Budi Jun 2021 #9
questionseverything Jun 2021 #4
roamer65 Jun 2021 #21
questionseverything Jun 2021 #22
Hoyt Jun 2021 #5
Luciferous Jun 2021 #13
Hoyt Jun 2021 #14
Luciferous Jun 2021 #15
Hoyt Jun 2021 #16
bottomofthehill Jun 2021 #17
leopheard Jun 2021 #6
Tndem615 Jun 2021 #7
Hoyt Jun 2021 #8
betsuni Jun 2021 #11
flibbitygiblets Jun 2021 #12
TomSlick Jun 2021 #23
GoodRaisin Jun 2021 #24
MichMan Jun 2021 #10

Response to Bluesaph (Original post)

Mon Jun 14, 2021, 04:31 PM

1. Price controls are doable but extremely risky.

Acme Bank charges 4% for a loan.

Government forbids anything more than 1%

Acme Bank refuses to loan money to the next person who applies.

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Response to brooklynite (Reply #1)

Mon Jun 14, 2021, 08:38 PM

18. No. Feds pay interest.

True thatís a market distortion, too. But loans still will be made.

I much prefer getting the middle-men out of it altogether. No need for bankers. Feds can make loans directly. The cost can be covered by a hardly visible stock trading tax. Or a brutal wealth tax. I like the latter but will be happy with the former.

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Response to Bluesaph (Original post)

Mon Jun 14, 2021, 04:33 PM

2. IMO, banks shouldn't be involved in the process.

Should be handled directly through the Department of Education. If a loan defaults, you deal with them anyway.

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Response to roamer65 (Reply #2)

Mon Jun 14, 2021, 08:39 PM

19. Yup!!

We agree. I should have read on. I responded to the first post in this thread.

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Response to Dave says (Reply #19)

Mon Jun 14, 2021, 08:48 PM

20. No worries.

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Response to Bluesaph (Original post)

Mon Jun 14, 2021, 04:35 PM

3. He doesn't have that kind of power. Nor should he.

All these suggestions for executive orders to do this and that thing are constrained by the principle that they can only effectuate existing law or the operations of agencies but can't create new law. EOs have to be supported by some existing law or constitutional requirement. Rates for federal student loans are set by Congress annually. Since Congress sets those rates, the president can't unilaterally change those rates by EO. Private loans rates are set by lenders, and the borrower is contractually bound by the loan agreement. An EO changing those rates would probably be ruled an unconstitutional taking of the lenders' funds. If a president could do anything he wants just by signing EOs we would have an autocracy, not a democracy.

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Response to Ocelot II (Reply #3)

Mon Jun 14, 2021, 05:23 PM

9. K & R Thank You!

 

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Response to Bluesaph (Original post)

Mon Jun 14, 2021, 04:38 PM

4. Zero percent is probably undoable

After all there are cost associated with the paper work and billing, keeping track of payments

But

Lowering it to 2 per cent would be a huge helpÖ..

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Response to questionseverything (Reply #4)

Mon Jun 14, 2021, 08:50 PM

21. Lower it to the interest paid on 10 year Treasury notes.

Which is somewhere between 1 and 2 percent right now.

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Response to roamer65 (Reply #21)

Mon Jun 14, 2021, 09:05 PM

22. 1.25 right now

I think the rate has to be lil higher,than best customer rate but 2.5 would be way better than the 6.5 my neice is paying

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Response to Bluesaph (Original post)

Mon Jun 14, 2021, 04:45 PM

5. Over 90% of student loans are owned, or backed, by the federal government.

 

The interest rates are pretty reasonable.

More importantly, one can opt for a payback that is a percentage of "disposable" income. It's called an Income-Driven Repayment Plan. I would like to see that rate reduced, especially for those with lower incomes.

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Response to Hoyt (Reply #5)

Mon Jun 14, 2021, 06:25 PM

13. But the interest charges continue to be added to the loan, so in most cases those people

can never get rid of the loans.

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Response to Luciferous (Reply #13)

Mon Jun 14, 2021, 06:34 PM

14. If you go for the percentage of income repayment, at the end of the

 

payback period, any remaining balance is forgiven.

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Response to Hoyt (Reply #14)

Mon Jun 14, 2021, 07:10 PM

15. 25 year repayment plan, and the amount forgiven is taxed as income. So still not great.

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Response to Luciferous (Reply #15)

Mon Jun 14, 2021, 07:12 PM

16. So what? First, if you never earn much money, you don't pay

 

anything.

If you are making good money, you pay back a relatively small percentage.

Iím not for writing off $1 Trillion in loans for doctors, lawyers, and other making decent money. If they arenít making decent money, they donít have to pay. Canít think of anything fairer than that.

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Response to Hoyt (Reply #5)

Mon Jun 14, 2021, 07:46 PM

17. I have parent plus loans ( government loans)

Interest rate is about 7 percent. The loans commercial loans that I got for the kids is at about 4 percent

Go figure, the bank loan rate is lower than the GOTV rate. Plus, when you borrow 10,000 dollars you donít get 10,000 you get about 9500 bucks as the gove takes some of the interest up front.

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Response to Bluesaph (Original post)

Mon Jun 14, 2021, 04:46 PM

6. Unlikely

He has back peddled on this issue unfortunately, so it is very unlikely

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Response to leopheard (Reply #6)

Mon Jun 14, 2021, 04:49 PM

7. He promised

 

Student debt Forgiveness, didnít he?

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Response to Tndem615 (Reply #7)

Mon Jun 14, 2021, 05:13 PM

8. He committed to trying to forgive $10,000 in student loans.

 

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Response to Hoyt (Reply #8)

Mon Jun 14, 2021, 06:06 PM

11. He was called centrist/moderate/establishment/conservative and now it's as if he

ran around making wild populist promises about canceling all student debt for everybody.

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Response to leopheard (Reply #6)

Mon Jun 14, 2021, 06:21 PM

12. I hadn't heard about that

Please tell me more.

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Response to leopheard (Reply #6)

Mon Jun 14, 2021, 09:10 PM

23. I haven't seen reports of a back peddle. Can you cite to a news story or press release?

Student loan debt is a burden on individuals and the economy.

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Response to leopheard (Reply #6)

Mon Jun 14, 2021, 11:55 PM

24. No he hasn't.

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Response to Bluesaph (Original post)

Mon Jun 14, 2021, 05:54 PM

10. It could have been done in 2010 when Student Loan reform was passed as part of the ACA

They needed the interest to offset the costs of health care though.

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