• Fester
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    1 year ago

    I am literally banking on the 20-year IBR forgiveness not being fucked up in the next 15 years. There is no way I’ll pay the loans off at this rate, especially with the interest. The loan terms should be locked in as a worst-case scenario, at least, including forgiveness. These political games are ridiculous.

    Now it will be interesting to see if these borrowers are hit with “tax bombs” upon forgiveness. If the forgiven amount is treated as income, like usual on debt forgiveness, it could mean they owe taxes on it come April next year. What are the chances that someone who’s been on an IBR plan has ~$20,000 in cash to pay a tax bill?

    • Changetheview@lemmy.world
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      1 year ago

      You’re absolutely not alone. Not by a long shot.

      Many PPP loans were forgiven without being considered taxable income, so there is precedent and there are many excellent arguments in favor of applying this for students who successfully paid income-based payments for literally decades.

      Hopefully progress against this incredibly dysfunctional system will keep happening. Would be nice to give the non-wealthy Americans a better chance at home ownership, retirement savings, and other crucial financial progress. Rather than just saddling them with federal debt while taxes are slashed for the wealthy.

      • Ænima
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        1 year ago

        As a millennial, I’ve all but given up on seeing any meaningful change in what remains of my life. I’m tired of living on hopeium that boomers will get the fuck out of positions of power so some of the very obvious lies the wealthy told them, of which was regurgitated and believed by them and us, can start to be fixed. They lied about everything from going to college to get a better job, to the TWO, “once in a generation” economic crashes, to the over-bloated military industrial complex, to a botched global pandemic, to the gaslighting about fossil fuels and global warming, I’m done. I just try find candidates and causes that seem to genuinely want change and throw what little extra money my wife and I have at them.

        My hope is that the Gen-Z kids continue to not give a fuck about shaking up the system and use their superior knowledge of technology to finally out these dinosaurs in Congress and enact some real change. I just don’t have any fight left in me, especially after COVID and the very obvious lies being told, to our face this time, that COVID was no big deal, all so some wealthy boomer could eat in a restaurant and get their hair done.

        I see this attitude reflected in many of my peers, too. It’s a generational burnout on life, and the best I can muster is to throw support behind those with fight left in them.

        I’m tired of being tired, ya’ll…

    • evatronic
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      1 year ago

      Part of the American Rescue Plan specifically exempts amounts forgiven through 2025 – https://www.congress.gov/bill/117th-congress/house-bill/1319/text

      Section 9675 (a):

       `(5) Special rule for discharges in 2021 through 2025.--
       Gross income does not include any amount which (but for this 
       subsection) would be includible in gross income by reason of the 
       discharge (in whole or in part) after December 31, 2020, and 
       before January 1, 2026, of--
      

      … blah blah federal college loans only. But the jist is, no, there’s no “tax bomb”, that’s a red herring.

    • stealthnerd@lemmy.world
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      1 year ago

      Well they wouldn’t so they’d end up having to setup a payment plan with the IRS but that would still be better than the debt load. I’d rather owe 20k to the IRS than 100K in fed loans. At the end of the day it’s all money owed to Uncle Sam.

      Personally though, I wouldn’t bank on IBR, I’d much rather consolidate my loans privately at a better rate and pay them off as quick as possible rather than pay a high interest rate to the fed in hopes that they forgive it one day. I understand that’s not an option for everyone though and some value the risk/reward differently.

      • Changetheview@lemmy.world
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        1 year ago

        You’re not wrong that private consolidation is great for those who can afford it, and I can see you acknowledge this doesn’t work for everyone. You seem quite reasonable about it.

        But one of the biggest pain points for the entire student loan crisis is specifically those who truly can’t afford to get out of their debt.

        For these struggling Americans, IBR plans aren’t being used as a savvy financial decision. It’s a lifeline. If that’s stripped from them, you’d see another wave of people who can’t afford basic necessities like housing. It’s sad that it even needs to be an option. And worse that for many, there’s no easy way out.

    • PatFusty
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      1 year ago

      Ive just come to terms that my student loans is just another tax