Biden - should I take out student loans

amother

Wed, Feb 17 2021, 2:27 pm

With all this talk of Biden taking out student loans, should I take out student loans if it will get forgiveness anyways? I am eligible and scrimping, and the news is saying he wants to forgive up to 10,000

[wrong forum. Please feel free to repost in politics - mod]

Unlocked upon request of OP who would like relevant info as she is seriously considering this. Please keep it informative and avoid bringing unnecessary politics into it- Yael

amother

Floralwhite

Wed, Feb 17 2021, 2:43 pm

My understanding is that it is retroactive loan forgiveness. I don't know if it would apply to future loans. And in any case, nothing has been officially signed.

amother

Wed, Feb 17 2021, 7:14 pm

amother [ Floralwhite ] wrote:

My understanding is that it is retroactive loan forgiveness. I don't know if it would apply to future loans. And in any case, nothing has been officially signed.

I understand, but how retroactive?
Obviously after it's already signed it wouldn't apply to new loans which is why I want to do it now.
Interest rates are also extremely low now, and I think interest is actually deferred due to the pandemic or something, I'm not actually knowledgeable enough, though.

If anyone has Info on thai I would appreciate it

leah233

Wed, Feb 17 2021, 7:18 pm

If you are in college yes max out on student loans but DON'T spend any of it.

Put it in an interest bearing account and see what happens.

The way things are going, chances are that a big part of them will be forgiven and if not just give it back.

amother

Wed, Feb 17 2021, 7:22 pm

leah233 wrote:

Ooh that's a good idea!
(Also "big part of them" is relative.
I am eligible to take out loans I'm the 6 figures. Yea is referring to student loans.)
Obviously not going to take out all that.

cnc

Wed, Feb 17 2021, 7:59 pm

amother [ OP ] wrote:

Last week it was extended through the end of September 2021. Interest rates are currently zero.

amother

Taupe

Wed, Feb 17 2021, 8:10 pm

amother [ OP ] wrote:

Interests rates on gov student loans are the same I believe. Do you have any loans yet?

amother

Wed, Feb 17 2021, 9:02 pm

amother [ Taupe ] wrote:

Interests rates on gov student loans are the same I believe. Do you have any loans yet?

On the fed website I just checked it said federal loans are 0%.
No I don't have any federal loans yet.

amother

Wed, Feb 17 2021, 9:29 pm

simcha2 wrote:

He said yesterday that he is not going to forgive student loans.

He said he wouldn't forgive 50k for every single student, especially if their debt was from ivy learned schools which are super expensive
2) he said he was open to forgiving 10k for everyone

cnc

Wed, Feb 17 2021, 9:37 pm

amother [ OP ] wrote:

Also, are there any taxes you have to pay if you get a loan?
Are there any effects on your tax return?

No taxes- but there is an origination fee for Grad Plus Loan which mean that a certain percentage of the loan is taken off before the loan is applied.

cnc

Wed, Feb 17 2021, 9:39 pm

amother [ Taupe ] wrote:

Interests rates on gov student loans are the same I believe. Do you have any loans yet?

There is currently zero percent interest on student loans. That is effective through at least September 2021, and I wouldn't be surprised if that gets extended even further.

Amarante

Wed, Feb 17 2021, 9:47 pm

If you can use the money, take out the loan. If you are only taking it in anticipation of it being forgiven, don't. While $10,000 is nothing to sneeze at, it really isn't a life changing amount. Based on the very short response in his Town Hall, the idea is that lower income families (defined as making below $125,000) would have free tuition for state or community schools. The $10,000 would be a good sum to pay for books, lab fees and other expenses one might incur while attending school.

Since this hasn't even been presented as a proposal, no one knows the details. However, in general loan forgiveness is treated as income and taxed. So even though the loan isn't taxable income, theoretically you could be taxed if it is not repaid.

Last edited by Amarante on Wed, Feb 17 2021, 9:47 pm; edited 1 time in total

HonesttoGod

Wed, Feb 17 2021, 9:52 pm

Personally I am a huge Dave Ramsey fan and he said don’t rely on any politician for your personal finances.

So no I wouldn’t rely on Biden or anyone to do anything for you and I wouldn’t take out student loans either. But that’s just MO.

amother

Wed, Feb 17 2021, 9:56 pm

cnc wrote:

No taxes- but there is an origination fee for Grad Plus Loan which mean that a certain percentage of the loan is taken off before the loan is applied.

Right, so let's say it's a 10k loan - I may lose $100 on it.

cnc

Wed, Feb 17 2021, 10:00 pm

amother [ OP ] wrote:

Right, so let's say it's a 10k loan - I may lose $100 on it.

Around $500- the origination fee is between 4.5 and 5 percent .
But yes, that’s the basic idea....

amother

Thu, Feb 18 2021, 11:25 am

Amarante wrote:

Re the bolded - That isn't a attitude that I as a person live by.
If it was, then I would be taking out the maximum COA like most others I know.
My attitude is that every dollar counts.
So that $10,000 could go a long way.

I'm trying to find out if there is a CON.

amother

Thu, Feb 18 2021, 11:26 am

HonesttoGod wrote:

I'm a huge fan, too.
He is against loans mainly because of the accruing Interest.
BUT - there is 0% interest until September.
So the way I'm looking at it, and correct me if I'm wrong, is that the most I lose is the $100 origination fee.