Dear Charlie,
Trump's temporary pause on student loan interest isn't "front page news" because:
1) He didn't release an actual plan. He made a quick remark & if the past is prologue it will get "clarified."
2) It doesn't even begin to cover the problem.
Here's why... (1/8)
Trump's temporary pause on student loan interest isn't "front page news" because:
1) He didn't release an actual plan. He made a quick remark & if the past is prologue it will get "clarified."
2) It doesn't even begin to cover the problem.
Here's why... (1/8)
First of all, monthly student loan bills won't go down under this "plan." You read that right. Folks will pay the same amount they currently do. (The benefit is that the payment will temporarily go toward paying down principal, rather than some going toward interest). (2/8)
Second: The interest being "waived" may still be *added back* after this freeze ends. @ronlieber "asked about this repeatedly but the Department of Education didn't offer an answer." Guess they’re just trying to keep things fun, and surprise us. (3/8) nytimes.com/2020/03/14/bus…
Another reason people aren't doing jumping jacks over this "plan"? It doesn't cover *all* student loans. It would apply to loans the government holds directly, meaning if your loan was issued through a private lender, state agency or most FFEL loans, you're out of luck. (4/8)
Another area of concern: Some who are struggling & looking for a life-line may wrongly think this "freeze" means you can temporarily stop paying your loans. That could be disastrous. If you stop paying, you could incur late fees & be thrown into default after 270 days. (5/8)
Something similar happened after Hurricane Katrina: some in the NOLA area were given a 6-month forbearance on their student loans, but never told if/when they'd have to resume payments. And many ended up in default - a worse position than they were in before the hurricane. (6/8)
Let's say you're excited about this "plan" anyway. What's the likelihood that the patchwork of servicers handling federal student loans -- always a joy to deal with, BTW -- will be able to incorporate these changes over the next few days, without delay or complication? (7/8)
In short, the president's potential "plan" doesn’t reduce your loan bill or cover all loans, may inadvertently push borrowers into default and ultimately not eliminate any of their interest.
@charliekirk11, here’s the “reporting” on this plan that you requested.
/END.
@charliekirk11, here’s the “reporting” on this plan that you requested.
/END.
