President Biden does not want student loan payments to start. The easiest way is to make it an understaffed, complicated mess.
Purposeful Student Loan Mess
Interest on student loans restarts on September 1 with payments starting in October. Few are prepared. If you are a student with questions, good luck getting answers.
And who is the servicer one needs to call?
Transferred to a New Servicer
About four-in-10 borrowers’ loans transferred to a new servicer during the pause that began in March 2020, according to government data.
Why was anyone transferred to a new servicer when literally nothing was getting serviced?
Borrowers Confused by Complicated Process
The Wall Street Journal reports Student Loans Are Emerging From Deep Freeze, and Borrowers Are Confused
‘Most complicated process I’ve ever been involved in’
Geri Critchley, a 75-year-old former nonprofit employee, is among those attempting to navigate the system. She paid graduate-school loans for more than 20 years. She has $14,000 left, but no clarification as to what she will owe each month and how to pay.
After three years of no payments, she called her loan servicer and the Education Department to ask about forgiveness options, payment deadlines and amounts. But getting through to a human at each place took some work. Critchley encountered what many borrowers fear: long hold times, constant redirections and dropped calls. When she finally got through to her loan servicer, the voice on the other end of the line suggested she call back in January when call volume would be lower—three months after repayment is set to start.
“The Department of Education person said to me, ‘I’ve been working in this field for many years, and I admit it’s the most complicated process I’ve ever been involved in,’ ” Critchley said.
Beyond answering questions about the payment restart, servicers also advise borrowers about complex financial decisions such as whether to consolidate loans or enroll in the income-driven program, called Saving on a Valuable Education, or SAVE.
A complication for the administration is that some features of the plan, such as cutting monthly payments from 10% to 5% of discretionary income, won’t be available until next summer, after the regulatory process concludes.
“A lot of folks just have no idea where to start,” said Meagan McGuire, a consultant at Student Loan Planner, a financial-advisory firm. “With the website and servicers not being super helpful right now, that’s leading to more confusion—newer borrowers are just throwing their hands up.”
Call Back in January
“Call back in January” but payments start in October. What a hoot.
Why any of this is complicated would normally be a mystery. But 1) we are talking about the government and 2) the last thing Biden wants is for a smooth restart.
If it’s complicated, it’s complicated on purpose. Who picked the start date for SAVE?
Biden does not want payments to start at all. And the bigger the mess, the more he is likely to extend forgiveness for as long as he can, by decree of course.
Urging Biden to Ignore the Supreme Court
The Journal notes “Senate Majority Leader Chuck Schumer, wrote to Biden last week about their repayment concerns and urged him to try again on mass cancellation using other legal authorities.”
There are no other legal authorities and even Nancy Pelosi understood that.
Who’s Impacted?
More than 16 million borrowers who thought their loans would be forgiven have to repay.
Please consider Who’s Impacted by the Supreme Court’s Student-Loan Forgiveness Ruling
Once payments resume, the typical student-loan payment will be between $210 and $314 a month, according to a new report from Wells Fargo. Overall, more than 40 million borrowers would have qualified for loan forgiveness through a required application. Before legal challenges halted the plan, borrowers in every state were approved for loan cancellation. Big states such as California, Texas, Florida and New York had the most approvals overall. The District of Columbia had the most approvals in proportion to its adult population, followed by Georgia and Ohio.
That’s a free link courtesy of the WSJ. It contains lots of charts on the 43 million people who collectively owe $1.6 trillion in federal student-loan debt as of March 31.
The Shocking Truth About Biden’s Proposed Energy Fuel Standards
Totally unrelated, but a typical example of Biden-sponsored messes, please consider The Shocking Truth About Biden’s Proposed Energy Fuel Standards
The WSJ says $1.6 Trillion? I thought it was only $440 Billion that would be rolled back into the National Debt when Joe said he’d “forgive” the loans.
If a Bank President says don’t pay your loan. The bank still has to pay the $ back to their depositers or the Fed. If they can’t, then the FDIC has to pay it. And who backs them up? The US government. We all know they don’t have the cash, so it rolls up to the National Debt. Which is where the government barrowed it from originaly. Too bad the Majority Media didn’t tell people that debt can’t be made to go away. Only transfered to some one else.
Is the Federal government itself the lender of $1.6 trillion in student debt, or is the debt owed to banks and the government just guaranteed it? They shouldn’t be making loans to anyone, but they hold a lot of mortgages too.
“Geri Critchley, a 75-year-old former nonprofit employee… paid graduate-school loans for more than 20 years. She has $14,000 left.”
Yikes! Someone chose their degree poorly.
VERRRRRRRY INteresting……(like on laugh-in)
BEYONG ironic that the “class of ’68” is beginning to eat their own. Yep. keep laughing…
There will be another delay next month. Biden will be declaring another pause on student loans as the “pandemic” is back. Mask mandates and unlimited boosters for the most recent varient.
“The Complicated Mess to Restart Student Loan Payments Is On Purpose”
What was the purposeful plan from the very beginning? Those on the inside, knew that government backed student loans would result in skyrocketing college tuition and lead to where we are today. What was their end game? Single payer college?
Their end game is the same as any policy’s end game: Get re-elected.
Costs and issues can be ignored, downplayed, blamed on others, or used as the excuse “we didn’t do enough” to double down. See various iterations of QE for further examples of the last. Welfare programs too. As long as they can be seen doing something and then sell that to the media.
About four in ten borrowers with good collateral were transferred to new servicers.
No debt jubilee for them.
“President Biden does not want student loan payments to start. The easiest way is to make it an understaffed, complicated mess.”
Same deal as trying to get unemployment payments in Florida under DeSantis.
Just horrific numbers from the Dallas Fed Manufacturing Survey today. The economy’s deflationary themes just get louder and louder.
And complicating the student loans mess won’t be the inflationary “stimulus” that Obama, I mean Biden, hopes it will be. People won’t just turn around and spend the money just because they’re having difficulties paying.
We’re going to see a lot of attempts globally at idiotic Keynesian stimulus, as cover for their social engineering projects. which will provide short term inflationary bursts to the economy that will fizzle out till the next time they throw more money into the black hole.
That will just worsen the volume of uneconomic activity in the global economy and make the crash all that much painful. Almost looks like that’s the plan. Because then the people will beg the authorities to make a new monetary system, (which they will have at ready hand, just like a genetic therapy was ready for a “new” virus), and it’s all over for the little people.
This confusion is part of the plan. Once social media gets it around that “this is too complicated, screw them” and “this is so messed up you don’t have to pay and no one will even notice”, well, there will not be a flood of repayments. There will not be a drag on the economy. By Jan 2024 I’ll bet the repayment rate will be single digits. People are fed up with government *and* corporate phone/internet systems being insanely complicated and irritating. Think of it as a widespread strike against the breakdown of civil discourse caused by these inhumane phone systems.
“There are no other legal authorities and even Nancy Pelosi understood that. ”
Someone didn’t tell old Joe that. He just modified the parameters of the SAVE repayment plan to cut the max payment to 5% of disposable income, and the period of payment before total loan forgiveness down to 10 years. This is expected to reduce the percent of people completely repaying their loan from 59% to 21%.
Had to laugh at “understaffed”. A better term might be underproductive.
Last I knew American Education Services (AES) was my current provider. I logged in to apply for these new reduction programs only to find my loan had been sent to the Pennsylvania Higher Education Assistance Agency (PHEAA). When I contacted PHEAA, I was told AES holds my loan. Then I logged into StudentAid.gov to get an answer, only to see that, according to the federal government, I owe $0. I have sent MULTIPLE emails to all three, but my only replies are automatic responses with reference numbers and promises to respond in a few days. This is ridiculous!
Yes
As long as we interpret the term ‘Biden’ to mean the anonymous collective that has wrested executive power in the country.
SAVE is an ironic acronym. They call it Savings on A Valuable Education … but if the education was valuable … wouldn’t you be able to pay back the loan? Or did teaching kids that they could follow their heart, put it all on the credit card, then magically that gender studies degree will parlay into a $150K corner office job … and all is good
I am NOT making this up: my wife and I were on the Coast of Cal about six years ago, on a summer trip. We ran into three young men in Backpacks. We finally asked them, “what’s up in the Fall?” Figuring it would be the start of school.
They said, “Oh, we are going to Europe for the winter on our student loans, totaling $25K average EACH.
Military recruitment was never an issue until they no longer had the free tuition and GI Bill tools. You had to EARN the money. Yet all the branches are crying about recruitment. BS. They know damn well what happened. Easy student loans, grand promises of forgiveness ruined their system.