Cancelling student loans isn’t some kind of money alchemy. It means that working taxpayers absorb the loans that student signed for.

Spending and taxing fall within the purview of Congress. In fact, Congress passed a bill, including the Democratic Party controlled Senate exercising their prerogative in blocking the last Biden executive action on student loans. Biden vetoed that bill.

It’s way past time for Congress to do their job. When a Democrat is in office, the Democrats love executive orders from the White House. Ditto for when a Republican is in office and the Republicans.

Budgeting needs to be done through what Joe Manchin has called “regular order”, meaning that spending bills go through committees, have amendments voted up or down, and then proceed to vote with compromises on both sides.

That voters and mainstream news journalists (who should know better but don’t) allow a President to put through student loan forgiveness that the Wharton School of Business last time estimated to be $400 billion tax to the American public by executive action is more than disheartening. This second attempt using a regulatory agency may cost far more than that.

That translates to $2500 per taxpayer. Why in the world is it reasonable for those who did not take out a student loan pay for the loans of others?

Look for this version of budgeting sleight of hand to also go to the Supreme Court and meet the exact same fate as the previous action from the Executive Branch.

Private loans from Sallie Mae are like private loans from any other lender: They have a set of rules you need to read very carefully and understand before you take them out. But most of them have the same pros and cons of other private education loans.

If used in moderation, they can help you complete school and start your career. If used in excess, they can be an anchor that keeps you from financial stability.

When taking out private loans, be sure that you have used your federal options first. Those have more safety features and repayment benefits.

Then, check what the rules are for repayment: What's the interest rate, how soon does repayment begin, what happens if you can't pay.

Private loans will usually require a co-signer. That means they're going to owe the money if you can't or don't pay. In some cases, after you've been paying for a while you can get a co-signer release: have the loan written over entirely to you. In other cases, you can't.

Also check into the worst-case-scenario plans: What happens if you die or become disabled? Is the co-signer still required to make payments? In many cases, yes! You'll want to be sure you have some insurance if that's the case.

No.

As I understand it right now, E. Warren is proposing to have the Secretary of Education forgive all government-owned student loans. That is a big chunk of the outstanding student loan debt, about $1.2 trillion.

The government doesn’t have the authority to cancel private contracts. The only way the government could do so would be to pay off the outstanding balance due on the debt portfolio. That would require a budget appropriation of about $400 to $500 billion dollars. Congress would have to do that. For context, our annual military budget is $700 billion.

Don’t hold your breath for either option. At the end of the day, there isn’t that much support for wiping out the debt of mostly white, middle-class, educated, 20–30 somethings. There is almost no support for spending half-trillion dollars for doing so.

Because the risk of student default is great and many of those majored in degree that don’t pay well so they decided to skip the payment.
Unlike the other loans such as mortgage with home is the collateral, business Ioan is back by inventory and equipment and so on. There is nothing back the student loan other than good faith that the student knows what he/she is doing (e.g finish degrees, get a job and payback).

In addition, getting a degree (or training or a skill) is suppose to improve your earning potential to get a better future. A successful worker with A bachelor degree makes anywhere from $40K to $100K a year and those with master degree or higher can make $60k to $160k a year. So in 5 -10 years, the student loan can be payoff. In the next next 25–50 years, those with degrees are continue reaping the benefits of a good incomes.

So I think it is not about the interest rate (around 6%) and the debt that come with it, it is about making the right choice of picking the right degree, finish the degree, get a job, and making paying off the student loan a top priority.

It can be, but not necessarily.

Say you graduated with a solid 3.0 GPA and got accepted at SUNY-Buffalo. However, you’re still wondering how to pay for it. Someone at SUNY sends you to their student financial aid office and helps you fill out the forms to get student loans. That’s probably going to turn out okay. SUNY is a decent school and you’re probably going to be able to pay those loans back.

However, say you have a 2.0 GPA and are headed for community college. However, you hear about the online courses at the University of South-West Eastern Tucson (at Albuquerque) and go to one of their seminars. They’re barely interested in your transcripts and fill out all the paperwork and ask you to sign it without reading it too carefully. That’s probably going to turn out very poorly. They might be “accredited” but that doesn’t turn out to mean much because their facilities are crappy with computers running Vista. You’re almost certainly going to default on your loans.

Problem is, Sallie Mae doesn’t much care, and it’s under political pressure to keep the money flowing into USWET@A because they donate a lot of money to politicians and the senator’s college just sold them stadium naming rights.

Vote with your feet!

If you don’t like Sallie Mae student loan rates, go get your money somewhere else.

College students are bad risks. Think about it. How many students drop out of school? How many students flake on their debts? How many students have little or no loan collateral with which to reduce the risk to the lender?

Sallie Mae presumably sets loan rates based on the marketplace. If too many students are defaulting, then Sallie Mae loses money hence rates need to go up. On the other hand, if rates are so high that no consumers are buying the product, then Sallie Mae has to consider lowering its rates or risk losing market share.

The questioner asks how can Sallie Mae “get away with” charging ridiculous rates? How? By following applicable laws and regs, that’s how. That is the direct answer to the question.

Bonus Comment: Who says the rates are ridiculous? By what measure?

Specialized financial institutions have, at times, deceived student borrowers into refinancing federal student loans by suppressing the dangers and opportunities of federal safeguards. They often advertise their interest rate being lower than advertised on federal loans, but they don’t tell you that taking out federal loans with a private lender means giving up on federal benefits. This involves graduated payment plan, income contingent plans, state loan and federal loan, deferment/forbearance during difficult circumstances, and loans discharge.

Sometimes, even private lenders offer refinancing as a way of getting rid of costly loans without regard for long-term implications of the process, including higher payments or loss of other programs that are more lenient in their terms than the new lenders. Borrowers should exercise care and ensure that they know the cost that is involved before they settle for refinance their federal loans with a private firm.

The way I look at it. Yes. Why? Because if you are receiving a private loan you won't have to pay so much back in federal loans. 2 ways to think. If a private loan gives you 10,000 and all you need is another 10,000 from federal. But if you get 20,000 from federal and then get 10,000 from a private loan. You are paying federal 20,000 no matter what. Every thing comes down to how much you need. The school just wants to know who's going to pay. But when you apply for different loans, then they might ask you about any other loans that you have that will be applied to your loan amount. If you needed a personal loan for 3,000. And 1 bank gave you 2,000. Then you could try to get another loan from another lender for 1,000. Or you could ask for 3,000 from the second bank. And pay back both loans. How much money do you need?

I would like to believe that the Gates Foundation truly supports this notion:
"Higher education should cost less, produce more graduates, and better serve low-income students, the Gates thinking goes."

There have been Many arguments (including many from the Federal Government) that the Federal student loan program has Increased the cost of a college education...........

Private Elite Colleges have turned into Big Businesses. As the Feds increase the level of aid (Stafford Loans, Pell Grants, etc.) the elite private colleges keep raising the total cost. They Gobble Up the Federal Aid and then require more. All the other colleges will follow the lead of the elite private colleges. Fewer and fewer private colleges will meet all of the difference between the Expected Family Contribution and the total cost. That continues to Raise the net cost of a college education and drives students to Federal and Private loans.

No, one should look at the Gates Foundation as trying to stop this trend.

And, as is illustrated with the new program at the Southern NH University, coming up with alternative methods for non-standard students to get a college degree.

Sallie Mae loans are like most private loans. Still, I would not recommend them. Sallie mae loans are unsubsidized meaning they require the borrower to pay interest while going to college. With subsidized loans, the government pays the interest. There’s more to it, but that's the basis. Unsubsidized loans should only be used if absolutely necessary. Private unsubsidized loans even more so.

I would recommend filling your FASFA and seeing if you qualify for Subsidized Stafford loans (people with financial need are eligible). Even unsubsidized Stafford loans are good because 1) you get more benefits from government unsub. loans than private unsub. loans and 2) there’s not much fine print i.e. the “rules” are more straightforward. If they are not enough, get a parent PLUS loan. Do yourself a favor, and stay away from private loans.

Going in reverse, even though I think that schools with enormous endowments need to spend more of that money for the benefit of society, most universities aren’t Harvard or Stanford, and they do genuinely need cash for operations. And even at the richer schools, there’s always something more that can be done to advance the mission of the university; no university president has ever said “that’s it, we’ve achieved perfection.” New professorships, new dorms, new research facilities, etc. all cost money.

As to why universities ask for money from young alumni, the primary reason is to form a lifelong relationship with the university and establish the habit of giving. Your alma mater wants you to remember that you are part of a community, something greater than yourself; if that relationship is severed at graduation, the odds are low that it’s going to be rebuilt over time. Alumni events and magazines (many of which are thinly-veiled requests for money) help keep people connected after they’ve left campus, as does contributing with charitable donations. And moreover, if you start donating to your alma mater when you’re young, odds are that it will become a permanent part of your life, and as you grow older, your contributions will increase. In other words, your alma mater likely doesn’t need your $50 when you’re 24, but it does need for some of your fellow graduates to become the kind of people who give $10,000/yr, and a handful to be the kind of people who will one day leave enormous sums to the university. All things being equal, it’s easier for fundraisers to talk someone who currently gives $5,000/yr into donating $10,000 than it is to find a new $10,000 donor, etc. So the goal of fundraising is to start people young, keep them engaged in the alumni community, and hope that down the road, some of those relationships pay off enormously.

Your first link, about the Lumina Foundation, only mentions the Gates Foundation in passing by comparing sizes - there is no indication that they are involved with each other at all.

There are two New America paper. One talks about a government program to reduce the maximum repayment rate on student loans to 15% of their incomes to make higher education more affordable. The article goes on to suggest that the limit for lower income people should be lowered to 10%. This will not make college more expensive to finance - the opposite.

The second paper suggests some revisions to the current system including things to encourage schools to accept more lower income students.

Neither makes specific reference to the Gates Foundation (in the executive summaries at least) and the Foundation itself has the goals of:
"New America is dedicated to the renewal of American politics, prosperity, and purpose in the digital age through big ideas, technological innovation, next generation politics, and creative engagement with broad audiences."

The last paper refers to the fact that the Gates Foundation funded a large number of studies at the same time to provide a variety of ideas to improve the student loan system.

"This project generated a vast number of recommendations for policy makers to consider. Despite the diversity of the viewpoints represented, a number of points of consensus emerged among the reports. While implementation strategies often differed, objectives were aligned, largely around the need for: simplification; better information for students and families; a system of institutional accountability; and new ways to serve the needs of non-traditional students."

This looks like it will help - not hurt students.

There are a variety of ideas but that seems to be the point of the exercise. They wanted to give the government a series of options to improve a system that no longer is working all that well.

I think that your premise that they are "advocate scaling back federal student loan programs and making college more expensive to finance?" is cheery picking the items you like the least while ignoring that consensus of the studies that were financed.

They do that for two reasons:

1. It works.
2. It makes you feel better.

A university education gives you certain advantages in life, but it's still life; there are variables far outside your control and success is far from guaranteed. Anyone who expects to be successful simply for graduating from a top university needs a reality check. In any case, the world is ready to provide that immediately upon graduation.

Some people coming out of university will tread the road of life and trip over all over good fortune along the way. Those people will be able to make a financial contribution to further the prestige of their school and they often do, in the hopes they can suggest luck had little to do with their success. But, no matter how well a university tries to screen for the best student body, it cannot know who ends up being successful. Given how much luck plays into the result, they canvas everyone for contributions.

And, even if you've not quite had such luck, it can be reassuring to know that your university still remembers you and still expects the most out of you, at least enough to eventually make a contribution. Maybe one day you'll get there or maybe you won't, but that eternal optimism is there, for better or worse.

For me, I went to USC for graduate school. While it's not a top school yet, it is famous for its rich alumna and massive fundraising every year, right up there with the big boys, Harvard and Stanford. While I'm no where close to writing a huge check, I know they're watching carefully, judging by how quickly they called for a contribution when they saw news that suggested I'd caught some luck.

Possibly, but not right now. The immediate problem of right now is that (1) a college degree is not nearly as valuable for most people as it is for some (esp given 40% of those who take student loans drop out within 6 years).

And (2) a college degree has become a gateway into jobs that previously required maybe a high school degree. I don’t know how long that will take to get sorted out, or if it can be sorted out by any other method than (feeding even more student into systems that will absolutely fail a sizable chink (read, millions) of them, ir simply making post-high school education a state covered necessity).

In any case, what you’re proposing is an interesting original idea, but what’s needed are immediate solutions to the quietly growing wave that’s threatening to topple the ship (if I might syretch the metaphor a bit) straight over.

Yes, Sallie Mae is a legitimate and well established student loan provider. Historically it managed both private and federal government-backed loans. However, in 2013 the company split into 2 different companies: Sallie Mae and Navient. This is because of a 2010 law that changed how federal-government backed loans worked. It’s worth noting that like most education lenders, there have been complaints against Sallie Mae.

Sallie Mae today focuses solely on private loans. They are one of many lenders in this space, so it’s worth comparing their offers with other lenders to find the best deal. Their previous loans, all of which had some degree of government backing, were spun into Navient. Navient now handles all of Sallie Mae’s previous federal student aid business.

If you are getting federal government-backed loans through your school (which you qualify for by filling out the FAFSA form every year), they will have a servicer assigned to then, and there are good odds it will be Navient. If you are shopping for private loans, Sallie Mae is one of many lenders. Shop around to find the best deal in that space, as interest rates on private student loans are NOT regulated by Congress the way federal government-backed student loans are,

.Are federal student loans better than private loans?

Federal loans, absolutely! What are Government Student Loans?

• Significantly Lower interest rates!
• Much more flexible repayment plans, at least five income based repayment programs.
• Programs for consolidation, forebearance, foregiveness, deferments, and cancellation if necessary.
• No credit checks or cosigner.
• No repayment until six months after graduation.

I discuss the advantages and options in this detailed post, Robin Hubbard's answer to student loans .

SOURCE: http://flooring.budget.com

State loans may offer lower interest rates but they can be just as inflexible as private lenders, depending on the state. Bother the state and federal government can withhold state tax returns if you go into default (90 days late) and do not take advantage of their hardship repayment plans. Are There State Student Loans I Can Borrow For College?

SOURCE: The differences between private & federal student loans

No and will never happen.

Why would they take that risk? Student loans are loans backed by the us government schools are paid in full on 100% of these. No business would take on risk they do not have to with no associated benefit. The schools are not responsible for your ability or inability to pay the tuition, if you can’t afford it don’t buy it. Just like a car its no different. There are multiple paths to go without loans its called planning. All three of my kids graduated with zero debt and no loans, we started the education planning fund on the first birthday. The same people that complain about student loans are the same losers that will start there retirement planning when there 50 or 60, the only thing they will learn is how to say “Welcome to Walmart”