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"Student Loan Forgiveness"
Posted by: haveaminute, April 15, 2010 03:20AM

Suze Orman has always said that student loans cannot be written off even in bankruptcy. You are responsible to pay them for as long as you are alive.

However, something she just put on her website homepage confuses me.

I ask this on behalf of a friend who has not paid on his student loan for over 20 years and does not have any means to pay it. Can it be written off with the new rules? He did not even bother listing it when he claimed Chapter 7 bankruptcy, because the lawyer said that they would not write it off.

Suze's site says, "If you already have student loan debt, or you take out loans between now and July 1, 2014 you will still have to meet the 15% discretionary income rule, and your loans will be forgiven only after 25 years."

By "forgiven" does she mean written off and you don't owe the money anymore? If so, does this apply to my friend's student loan?

I've read elsewhere that "The Obama-Biden administration wants to forgive unpaid federal student loans after 20 years (vs. 25).

Can someone please clarify?

Thanks so much.

Re: "Student Loan Forgiveness"
Posted by: Drewremedy, April 22, 2010 01:44AM
I've read of "undue hardship" being a limited window in bankruptcy to get student loans extinguished--but not my area of expertise. .

From what I read the desire to wipe out loans afer 20-25 years is not so much to aid students but to cover up certain pockets or profiles of folks which disproportionately seem not to bother to repay--and BTW certain institutions are give extra slack for student who do not repay--there is a whole list of categories --interesting read-- and there must be soothing in the water--students in Washington DC as I recall were about 10X more likely to stiff lender than were students in South Dakota, matched only by the propensity of students in PR not pay .

I have real problems with writing a rule that says if you can stiff society not to pay for 20-25 years you get a free pass.....

Re: "Student Loan Forgiveness"
Posted by: Boutwell, April 22, 2010 09:13AM
In the current income-based repayment program, federal student loan borrowers are not required to pay more than 15 percent of their discretionary incomes on loan repayments. If, after 25 years, the loan still has a balance, the remainder is forgiven.

The new law provides for the payment to be no more than 10 percent of discretionary income and calls for forgiveness to kick in at 20 years for new loans after July 1, 2014.

The income-based repayment program is available only for certain federal student loans, such as Stafford and Grad PLUS, but not Parent PLUS.


Re: "Student Loan Forgiveness"
Posted by: Viciman, February 11, 2012 06:26AM
When you applied for a student loan, you know how hard is the payback payment process. You will be in debt trouble. Considering the government's legislation, what are the possible solutions? The same article:Student loans becoming a major contributing factor to bankruptcy . The typical student loan debt of a university graduate has now topped $25,000. This is how the education as a basic need of every individual, affects the society. The value of education is now equal to higher financial liability that might result in individual's bankruptcy.

Re: "Student Loan Forgiveness"
Posted by: Bill Brown, February 11, 2012 09:21PM
Yeah, 18 year olds have a real firm grasp on how difficult it is to pay off large loans. Sure they do.

Re: "Student Loan Forgiveness"
Posted by: ursulaM, March 26, 2012 06:30AM
Yeah, 18 year olds have a real firm grasp on how difficult it is to pay off large loans. Sure they do.

I am very much aware of the present issue on student loans wherein more and more students found themselves having trouble paying for their loans.

Re: "Student Loan Forgiveness"
Posted by: Drewremedy, April 2, 2012 12:06AM
If you sleep your way thru high school we have a moral duty to have you retake remedial courses in college and run up student loans you feel morally obligated not to repay--after all society owes it to you.....
And one of my neighbors, quite correctly , did the math that it was cheaper to send his deadbeat daughter to local community college and keep her on the family medical coverage than for her to get a job....
And the ROI on spending 9 years to get a PhD in French tax history is just underwhelming (negative ).
But keep in mind if you take a job in a title I school (most public schools qualify) the Feds give you a free write off in 5 years--no matter how big the debt.
And its remarkable how many students take 6-7 years to complete a 4 year degree.
And we have just about thrown in the towel to guarantee that students who are unable or unwilling to work get a free pass to not repay loans.

OK, its equally true that some institutions seem geared to generate guaranteed tuition flow and not too much else --and very high compensation for "recruiters."

Re: "Student Loan Forgiveness"
Posted by: sarahjones, July 18, 2013 05:27AM
I am confused whether to opt for the student loan or not? I have friends who are struggling with their loans..I do not want to end up like that..

That is why I am thinking to enroll in an online college.

Re: "Student Loan Forgiveness"
Posted by: Drewremedy, July 18, 2013 03:07PM
Attitudes may be changing ..a bit...but the marketability and acceptability of an on line degree from some diploma mill accredited by some industry group is still up,for debate in many be careful...

To some extent to do 2 years at a community college with an exchange agreement to a well recognized 4 year institution may be quite value effective for some folks?

Re: "Student Loan Forgiveness"
Posted by: cpw, July 18, 2013 11:38PM
Drew is correct...on-line degrees are worth almost nothing. The comm college to 4 year school is the most economical legitimate path to a "real" degree. If you're not prepared to complete in 4 years (or not much more), you need to rethink the whole college thing.

Re: "Student Loan Forgiveness"
Posted by: vicky456, May 7, 2014 11:03AM
I think student loan has its own merits and demerits eventhough it act as a helping aid to the low income genius students the interest caused by the student loan is so high that the students never afford to repay it<a href="">windows xp 8</a>

Re: "Student Loan Forgiveness"
Posted by: sandy20020, March 6, 2015 11:52AM
A few years ago I in helped in the VITA program. I learned that IF credit cards balance was forgiven that balance was reported as "taxable income". Does the Student Loan Forgiveness consider taxable income?

Re: "Student Loan Forgiveness"
Posted by: Art, March 6, 2015 10:24PM
There are programs which establish as a condition of the student loan that upon graduating you, for example, teach in very poor communities, work as a physician in very rural areas, etc in exchange for student loan forgiveness. If you meet those conditions, the loan forgiveness is not taxable.

Else it is.

Re: "Student Loan Forgiveness"
Posted by: abhi.paul, April 28, 2015 07:16PM
Here is an interesting article on this subject


According to this if you want salliemae loan forgiven you have work for non-profit organization. Excerpt from the article.

To qualify, borrowers must be in a full-time public service position with a state, federal or local government, or an organization deemed a nonprofit by the Internal Revenue Service.
This is about salliemae but i don't know about [] other lenders. You may probably have check their websites and see what is their loan forgiveness criteria

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