Why does everyone on TLS disregard IBR? Forum

[Tanicius]

To put it another way: Cutting Pell grants and loan subsidies hurts the eligible poor, especially minorities. Cutting loan forgiveness hurts working professionals, and your kid's ability to afford to become one. There would be a different kind of outrage.

Congress has been slashing programs that are useful for the middle class left and right. It's not about facts anymore, but the rhetoric. Most people probably don't know what IBR even is, let alone how it helps. All it takes is for the proponents of the cut to say the program is too expensive.

[vanwinkle]

Although I see where you are coming from, I don't have that kind of faith in our system. This is because we have all seen things change with each incoming administration.

It's not the political system I expect to do this, it's the PR system.

Putting poor black parents on TV and having them talk about how their children can't go to college = meh.

Putting white doctors, accountants, and businessmen on TV and having them talk about how IBR redaction would substantially raise their loan payments, with those costs passed onto the public through either fewer services or higher bills = SCANDAL.

The current budget cuts are easy to make because there's nobody to put on TV that the angry middle class is sympathetic toward. That changes once the cuts start affecting them personally, or affecting the people they hope their kids will become. (This is also why the public supports tax cuts for the rich more than maintaining welfare services; they may not be making that much, but it doesn't mean they don't hope to someday.) You put a face on something like this, it won't go well.

[txadv11]

Someone explain this to me,

Take out 150,000. Get lucky and get an County attorney job making 45,000.
Under the 10% rule, you'd pay 450 a month, right?

450/month*12month*10yrs= 54,000 payed in, and at that time, your balance is now 0.00?

It can't be that easy?

[Borhas]

Moreover, when it does, the forgiveness amount will be treated as taxable income. Since for most people IBR payments won't even cover interest payments (almost $20k the first year if you take full loans) your principal will keep growing and the resulting tax bill will be enormous.

One small thing to point out, just for clarity: Interest does not compound under IBR. If your IBR payment is too small to cover the interest payment alone, any leftover interest is added to your debt but interest does not accrue on the added amount. There's no resulting compounding or snowball effect. You still can end up with a rather large debt after 25 years, but it's not as terrible as people might initially imagine.

Also, eligibility for PI forgiveness is counted non-consecutively and calculated on a monthly basis. While it's often described simply as "after 10 years", it's actually eligibility after 120 months of eligible employment. The 120 months can be non-consecutive. If you work in PI for ten years (120 months) TOTAL somewhere before you hit 25 years, you're eligible for non-taxable PI loan forgiveness. Something else to consider.

didn't know this bit, thanks man!

[vanwinkle]

didn't know this bit, thanks man!

If it weren't for the occasional previously-unrealized info buried in my 7,000-word wall-o-text screeds, I doubt that anyone would still be reading them.

[DeeCee]

Although I see where you are coming from, I don't have that kind of faith in our system. This is because we have all seen things change with each incoming administration.

It's not the political system I expect to do this, it's the PR system.

Putting poor black parents on TV and having them talk about how their children can't go to college = meh.

Putting white doctors, accountants, and businessmen on TV and having them talk about how IBR redaction would substantially raise their loan payments, with those costs passed onto the public through either fewer services or higher bills = SCANDAL.

The current budget cuts are easy to make because there's nobody to put on TV that the angry middle class is sympathetic toward. That changes once the cuts start affecting them personally, or affecting the people they hope their kids will become. (This is also why the public supports tax cuts for the rich more than maintaining welfare services; they may not be making that much, but it doesn't mean they don't hope to someday.) You put a face on something like this, it won't go well.

I think it is political though. What you are saying about putting professional-looking white people on TV could be helpful, but really, depending on how the program gets portrayed on TV (if this ever happened) would really determine where IBR would end up. So I think it could go both ways.

However, with people like TP-ers in the mix, if it isn't about saving fetuses or getting the government to stay out of their lives they'll be against it. And making government less bloated could be the strategy this type of group would employ in order to cut IBR, so that they can say they are attempting to balance the budget.

As someone said above, once that rhetoric gets going, you'd have people on the bandwagon against IBR that don't even understand it. Then IBR just looks like another welfare program, even though it is meaningful and for the middle class.

[Nicholasnickynic]

Someone explain this to me,

Take out 150,000. Get lucky and get an County Attorney job making 45,000.
Under the 10% rule, you'd pay 450 a month, right?

450/month*12month*10yrs= 54,000 payed in, and at that time, your balance is now 0.00?

It can't be that easy?

http://www.ibrinfo.org/calculator.php

IBR calculator says you would *Probably* qualify for IBR. And it would be around 360 (assuming 8.8% interest- as you cant get them all at 6.

Risk there- not qualifying.

[vanwinkle]

As someone said above, once that rhetoric gets going, you'd have people on the bandwagon against IBR that don't even understand it. Then IBR just looks like another welfare program, even though it is meaningful and for the middle class.

This may be controversial, but having grown up in the heart of Tea Party country, I think I know what I'm talking about when I say this: Many of the anti-welfare-state protesters internally define "welfare" as "things that benefit the poor and minorities". If you portray something as meaningful and for the middle class, they'll stop seeing it as "welfare" and start seeing it as a "rare useful benefit" (rare in the sense that it's useful to them). Once something moves into the realm of benefitting middle-class whites, it stops fitting what they see as "welfare" and they stop being so reactionary against it.

I'm not saying they do this consciously, but I am saying they do this. I knew a guy who took subsidized student loans and Pell grants, and would rage in college about his (future) tax dollars going to "single mothers in Harlem". I really don't think he had a clue how I was taking what he was saying at all.

[txadv11]

Someone explain this to me,

Take out 150,000. Get lucky and get an County Attorney job making 45,000.
Under the 10% rule, you'd pay 450 a month, right?

450/month*12month*10yrs= 54,000 payed in, and at that time, your balance is now 0.00?

It can't be that easy?

http://www.ibrinfo.org/calculator.php

IBR calculator says you would *Probably* qualify for IBR. And it would be around 360 (assuming 8.8% interest- as you cant get them all at 6.

Risk there- not qualifying.

How do I know what interest rate to figure in? Stafford is rumored to do away with subsidized, so let's assume I borrow the 20,500 @ 6.8 and 18,000 through grad loan plus...at 7.9%

Also, are those the correct rates? I have heard of ".5% fees" and -1% discounts for paying things on time, etc... I can't make sense of this, and I get they make it this complicated, it is because fed loans are a scam. (but my only option I guess)

[DeeCee]

As someone said above, once that rhetoric gets going, you'd have people on the bandwagon against IBR that don't even understand it. Then IBR just looks like another welfare program, even though it is meaningful and for the middle class.

This may be controversial, but having grown up in the heart of Tea Party country, I think I know what I'm talking about when I say this: Many of the anti-welfare-state protesters internally define "welfare" as "things that benefit the poor and minorities". If you portray something as meaningful and for the middle class, they'll stop seeing it as "welfare" and start seeing it as a "rare useful benefit" (rare in the sense that it's useful to them). Once something moves into the realm of benefitting middle-class whites, it stops fitting what they see as "welfare" and they stop being so reactionary against it.

I'm not saying they do this consciously, but I am saying they do this. I knew a guy who took subsidized student loans and Pell grants, and would rage in college about his (future) tax dollars going to "single mothers in Harlem". I really don't think he had a clue how I was taking what he was saying at all.

This all sounds like where I am currently living, haha. At one point in my life, as a child, my family was on food stamps for a year while my parent got their job situation straightened out. I get upset when people think that programs that benefit the less fortunate are a waste, same goes with programs that enable people to perform services (such as IBR, where we need lawyers working in the public interest but they can not afford to do so).

[tooswolle]

I think many posters overlook the fact that those benefitting from IBR and or loan forgiveness are all highly educated and highly vocal. Most of the time they are politically active and as others have addressed they'd raise hell of they tried to cut finding. More importantly alot of us forget that were the future and people from our generation will be taking up political power and hopefully their more enlightened then our current politicians. That being said, I agree that it's easier to cut programs for the poor but when trying to cut programs that affect the well to do, get ready to pay the political fall out because it's most likely to occur.

[3ThrowAway99]

Income Based Repayment. NM (saw the link in the thread clarifying my question)...

[Tanicius]

As someone said above, once that rhetoric gets going, you'd have people on the bandwagon against IBR that don't even understand it. Then IBR just looks like another welfare program, even though it is meaningful and for the middle class.

This may be controversial, but having grown up in the heart of Tea Party country, I think I know what I'm talking about when I say this: Many of the anti-welfare-state protesters internally define "welfare" as "things that benefit the poor and minorities". If you portray something as meaningful and for the middle class, they'll stop seeing it as "welfare" and start seeing it as a "rare useful benefit" (rare in the sense that it's useful to them). Once something moves into the realm of benefitting middle-class whites, it stops fitting what they see as "welfare" and they stop being so reactionary against it.

I'm not saying they do this consciously, but I am saying they do this. I knew a guy who took subsidized student loans and Pell grants, and would rage in college about his (future) tax dollars going to "single mothers in Harlem". I really don't think he had a clue how I was taking what he was saying at all.

But things like universal healthcare would be extremely helpful for a great many of these same white, middle class Tea Party people, and they're still furiously against it.

[Anonymous Loser]

It's sort of ridiculous to assume that forgiveness under the 25-year repayment program will remain taxable. The CCRAA has gone (and will continue to go) through the same growing pains that any new legislation undergoes. As the result of subsequent regulatory and legislative changes, tax liability for forgiveness under the the 10-year repayment program was removed, and significant changes have been made to the eligibility assessment for married borrowers. I honestly don't understand why TLS posters seem to think that the CCRAA is sui generis, and will not develop in the same manner as every other piece of legislation dealing with lending.

[vanwinkle]

But things like universal healthcare would be extremely helpful for a great many of these same white, middle class Tea Party people, and they're still furiously against it.

Would it really? Most of them have jobs that provide health insurance. Even if it would provide insurance to them cheaper, the real perception of who it helps most is those who don't currently have health insurance at all... and those tend to be people who are either unemployed or in less respected jobs that don't provide benefits. So, it really becomes another "perk for unemployed single mothers in Harlem" type thing.

[Patriot1208]

But things like universal healthcare would be extremely helpful for a great many of these same white, middle class Tea Party people, and they're still furiously against it.

Would it really? Most of them have jobs that provide health insurance. Even if it would provide insurance to them cheaper, the real perception of who it helps most is those who don't currently have health insurance at all... and those tend to be people who are either unemployed or in less respected jobs that don't provide benefits. So, it really becomes another "perk for unemployed single mothers in Harlem" type thing.

Not too mention many small businesses and corporations have talked about cutting their employee health insurance policies because of it.

[DeeCee]

But things like universal healthcare would be extremely helpful for a great many of these same white, middle class Tea Party people, and they're still furiously against it.

Would it really? Most of them have jobs that provide health insurance. Even if it would provide insurance to them cheaper, the real perception of who it helps most is those who don't currently have health insurance at all... and those tend to be people who are either unemployed or in less respected jobs that don't provide benefits. So, it really becomes another "perk for unemployed single mothers in Harlem" type thing.

I won't get into the healthcare argument because I think we should have a European-style system, and most will not agree. However, I will say that I thought the new healthcare bill was shit until my brother got really sick several months ago. He lost his job as a result of the sickness, and now there is a state/federal insurance (can't remember which) he can be on because he can't be turned down for his health condition. Beats the hell out of paying four times the price for Cobra!

And hopefully the crazy rhetoric of the past few years will die down so we can start thinking about the complexities of problems, rather than what TV ads tell us

I'm probably being way too optimistic here.

[vanwinkle]

Not too mention many small businesses and corporations have talked about cutting their employee health insurance policies because of it.

Yeah, this too. The middle class is convinced (though I don't think it's true) that they'll lose their current health insurance because of the bill.

[D. H2Oman]

It's sort of ridiculous to assume that forgiveness under the 25-year repayment program will remain taxable. The CCRAA has gone (and will continue to go) through the same growing pains that any new legislation undergoes. As the result of subsequent regulatory and legislative changes, tax liability for forgiveness under the the 10-year repayment program was removed, and significant changes have been made to the eligibility assessment for married borrowers. I honestly don't understand why TLS posters seem to think that the CCRAA is sui generis, and will not develop in the same manner as every other piece of legislation dealing with lending.

Really dude? This is actually one of the dumber serious post I've seen on here.

I don't think anyone is making the case that, it will 100% without a doubt remain taxable. But in care you're not paying attention there will be serious cuts to social programs in the next few years. (whether people think it's wise or necessary, it's going to happen) Honestly, and I'll probably get killed for this, I think IBR is one of the most expendable programs we have. We're taking about transferring a benefit to people who already got AT LEAST 3 years of subsidized education and probably 7 or more. These are people with law degrees, and I'm finding it really difficult to believe many of them are really in the segment of the population that needs a government benefit. Not to mention that IBR creates an incentive to borrow irresponsibly, which is the exact thing we DON'T want in a government program. If we're gonna subsidize graduate education we should be funneling future public defenders or small firm lawyers into cheaper state schools and not into places Cardozo at 50k a year. But that rant besides the point here, the point is, if I have to cut middle school lunches, Medicare for grandma, funding for community college, or the forgiveness on loans that some 27 year old with a JD has. I'll cut IBR every single time. I'm not saying that the forgiveness over the 25 year plan will remain taxable (though I hope it does) but when you're taking out loans right now you HAVE TO ASSUME it's staying the way it is or getting rolled back. You don't plan for the best case scenario.

[aliarrow]

The usefulness and flexibility of IBR seem to be underestimated here. Say you dont hit the biglaw lottery - lots of jobs qualify for the public forgiveness option, it doesnt even have to be a legal job (peace corps, americorps, any public school job, politician, judge, etc). IBR also offers deferments for periods unemployment or continued education. The only way to be screwed under IBR/debt in general is if you have massive debt and take a low paying private sector job. This really is awful, as the tax debt after 25 years of payments can VERY easily be 6 figures. The only good thing is at that point you can discharge the tax debt in bankruptcy.

[aliarrow]

It's sort of ridiculous to assume that forgiveness under the 25-year repayment program will remain taxable. The CCRAA has gone (and will continue to go) through the same growing pains that any new legislation undergoes. As the result of subsequent regulatory and legislative changes, tax liability for forgiveness under the the 10-year repayment program was removed, and significant changes have been made to the eligibility assessment for married borrowers. I honestly don't understand why TLS posters seem to think that the CCRAA is sui generis, and will not develop in the same manner as every other piece of legislation dealing with lending.

Really dude? This is actually one of the dumber serious post I've seen on here.

I don't think anyone is making the case that, it will 100% without a doubt remain taxable. But in care you're not paying attention there will be serious cuts to social programs in the next few years. (whether people think it's wise or necessary, it's going to happen) Honestly, and I'll probably get killed for this, I think IBR is one of the most expendable programs we have. We're taking about transferring a benefit to people who already got AT LEAST 3 years of subsidized education and probably 7 or more. These are people with law degrees, and I'm finding it really difficult to believe many of them are really in the segment of the population that needs a government benefit. Not to mention that IBR creates an incentive to borrow irresponsibly, which is the exact thing we DON'T want in a government program. If we're gonna subsidize graduate education we should be funneling future public defenders or small firm lawyers into cheaper state schools and not into places Cardozo at 50k a year. But that rant besides the point here, the point is, if I have to cut middle school lunches, Medicare for grandma, funding for community college, or the forgiveness on loans that some 27 year old with a JD has. I'll cut IBR every single time. I'm not saying that the forgiveness over the 25 year plan will remain taxable (though I hope it does) but when you're taking out loans right now you HAVE TO ASSUME it's staying the way it is or getting rolled back. You don't plan for the best case scenario.

IBR does affect all fed school loans, not just law school loans. So the positive is that it encourages more MDs and other useful to society yet expensive degrees (dentistry, optometry, masters programs), encouraging more lawyers is just a necessary evil for an overall benign program.

[D. H2Oman]

IBR does affect all fed school loans, not just law school loans. So the positive is that it encourages more MDs and other useful to society yet expensive degrees (dentistry, optometry, masters programs), encouraging more lawyers is just a necessary evil for an overall benign program.

1. Assumes that programs like IBR do not contribute to the high cost in the first place

2. Assumes that we actually need that incentive to get people into medical school, dentistry, etc. I assure that is not the case. Sure it creates a very very small useless further incentive, but an it's a complete unnecessary one. A doctor is not even going to qualify The AMA is very restrictive on how many doctors we're producing, IBR is not giving us more doctors, or better doctors.

3. Why do want to give breaks to people in high paying jobs, this is a huge benefit that's going to professionals while high school graduates who go work in a manufacturing plant are getting....what?

4. Perverse incentive, we want people to take cost into account when they're deciding where to go. Right now it makes no sense NOT to max out your law school living expenses loans every semester.

5. There are plenty of lower paying masters degrees (and BA's) that are covered. We don't want to bail out some jackass who got another useless degree. Again bad incentive. I agree there are some low paying PI fields that we need programs like IBR for, but as a fucking catch all for every degree out there. Pass.

[Tanicius]

IBR does affect all fed school loans, not just law school loans. So the positive is that it encourages more MDs and other useful to society yet expensive degrees (dentistry, optometry, masters programs), encouraging more lawyers is just a necessary evil for an overall benign program.

1. Assumes that programs like IBR do not contribute to the high cost in the first place

2. Assumes that we actually need that incentive to get people into medical school, dentistry, etc. I assure that is not the case. Sure it creates a very very small useless further incentive, but an it's a complete unnecessary one. A doctor is not even going to qualify The AMA is very restrictive on how many doctors we're producing, IBR is not giving us more doctors, or better doctors.

This is not true. You are right about the AMA restrictions, but med students who miss out on residencies are often times screwed into being stuck with 70k starting salaries as general treating physicians. Med school loans can be just as substantial as law school loans.

[DeeCee]

med students screwed into being stuck with 70k starting salaries

Wish I was stuck like that

[D. H2Oman]

IBR does affect all fed school loans, not just law school loans. So the positive is that it encourages more MDs and other useful to society yet expensive degrees (dentistry, optometry, masters programs), encouraging more lawyers is just a necessary evil for an overall benign program.

1. Assumes that programs like IBR do not contribute to the high cost in the first place

2. Assumes that we actually need that incentive to get people into medical school, dentistry, etc. I assure that is not the case. Sure it creates a very very small useless further incentive, but an it's a complete unnecessary one. A doctor is not even going to qualify The AMA is very restrictive on how many doctors we're producing, IBR is not giving us more doctors, or better doctors.

This is not true. You are right about the AMA restrictions, but med students who miss out on residencies are often times screwed into being stuck with 70k starting salaries as general treating physicians. Med school loans can be just as substantial as law school loans.

Oh I feel oh so terrible for them. Having a 70K starting salary and a medical degree definitely puts you in the class of society that needs assistance. I was being facetious when I said they wouldn't qualify. Of course there will be some doctors who will qualify for some years, I get the debt burden is large. But show me a doctor that's going to qualify for the majority of his 25 years. Not just a year or five. They're making enough money to pay back their own loans. Why are we concerned (when resources are scarce) with paying back some of his/her debt?