As you might imagine, I’m on a few different student loan advocacy e-mail listservs. A few days ago, the listservs sent out this message regarding taking action for real student loan forgiveness:
Take Action for Real Loan Forgiveness!
In addition to lowering monthly student loan payments, the new Income-Based Repayment (IBR) program forgives any remaining debt – including interest – after 25 years. Most borrowers will pay off their debt before then, but under current law, if there’s anything left to forgive after 25 years, the amount forgiven would be taxed as income to the borrower.A bipartisan bill in the U.S. House of Representatives, H.R. 2492, would prevent the taxation of debt forgiven through IBR. Loan forgiveness is supposed to wipe the slate clean for responsible borrowers, not create a new financial obligation. Current law exempts some kinds of loan forgiveness from taxation, including Public Service Loan Forgiveness, but not IBR.
Please take a moment to write to your representative and urge them to support H.R. 2492 and ensure there’s really a light at the end of the tunnel for responsible borrowers.
Now granted, if I keep on keeping on, then I don’t qualify for this program, but rather I qualify for the Public Service Loan Forgiveness program. However, I did submit an automated message to my elected officials by clicking here. It only took a minute or two and hey, if enough people contact their legislators then something might happen.
Give it a shot – there are a lot of student loan borrowers who can benefit from this legislation.
This legislation is dumb in my own opinion. It is only going to encourage people to work less so that more of their loans will be forgiven in the end. It will encourage them to pay the minimum forcing them to pay MORE interest than if they just tried to pay them down. Instead, legislation should be put in place to educate borrowers before taking out loans. Or raise the limits on amounts you can take out through federal student loans. And if they are trying to help those who already have loans, they should offer assistance to those with private student loans. Like lowering the interest rate. That is where the real problem lies: 9% interest rate (if you are lucky) with 40k+ balances.
BTW I left school with >100k student loan debt (no NOT medical or law school).