The right wing conservatives filed suit tonight against the SAVE program. I think the approach where Biden cancels and asks questions later was/is the way to go. What do you think?
https://www.washingtonpost.com/education/2024/03/28/student-loan-lawsuit-save-repayment-plan/
The catch is the SAVE program and any other pay X years and the rest will be forgiven (also a problem with disability discharge except VA disability determination) is all forgiven debt is considered taxable income after the pause ends (end of 2025). As a result you are trading one kind of debt for you can’t rid of it in bankruptcy debt (eg IRS debt and in 10 states state tax debt) because you get a 1099-C. THIS NEEDS TO CHANGE. Below is why (this is a copy/paste from my comment on that WP article). As far as I can tell the Dept of Ed isn’t dealing with this with their Negotiated Rules for Student Debt Relief efforts (committee meetings finished the end of Feb, there will be 30 days of comments in the federal registry but I can’t find it to comment on it).
Copy/Paste:
One big catch never mentioned with canceled student debt (and that includes that which is canceled for disability (except VA determined disability)) is that prior to the covid caused pause and now after it when that bill expires, is that canceled student debt is considered ordinary income (starting in 2026 it will be considered ordinary income again). This means you pay IRS taxes on it. It is counted as income for living in HUD and your rent (if enough is forgiven you will be tossed out of HUD when your income is too high). It is considered income for SNAP eligibility, TANF, ACA health insurance premiums (but not medicaid eligibility), if on medicare your medicare B and D premiums…
This creates a huge financial catastrophe for many. As interest used to be capitalized until recently, often people owe far more than they borrowed if their income is low, if they have had unemployment or hardship forbearance, if they were early in the repayment process and most of their money goes to interest and not principle (that last problem has been resolved as of this year interest is no longer capitalized).
When the pause on this ends the end of 2025 students will have a huge tax debt that they can only get out of if insolvent however to be considered insolvent could be difficult as literally the clothes on your back are considered assets and if you have any money in retirement saved you will need to empty out your retirement savings to pay. 10 states also tax this money as ordinary income and in most of those states insolvency can’t solve that problem.
THIS NEEDS TO CHANGE! If you are disabled and can’t earn money how do you pay a huge tax debt? If you are low income and have been paying all these years how do you pay a huge tax debt? The IRS charges a monthly penalty and interest on a payment plan. If you can’t pay that much a month they garnish your wages and social security… This is a problem no one is talking about.
Hi! Graduate of San Diego State University in 1994. In 1995 the bill I got was around $13,000, now it’s over $92,000. When I first got the bill I was shocked, I had no idea what I had gotten myself into, just signed the “Financial Aid Package” and got down to my education. The debt has influenced my life greatly, from always working as a freelancer after the ‘Education Department’ started garnering my wages, to not getting officially married because who’d want to tie someone they love to your debt? The burden of the monster debt is palpable. Why would I ever try paying a debt so far removed from the original size? There’s been no one to turn to, to plead my case, over these thirty years. The companies that have handled my debt over the years love to just kick my debt down the road with more interest. Cancel all student debt now. Pretty please. https://www.youtube.com/watch?v=CAsqf5ofoVA Link is to a video I made telling my story with the documents to prove it.
Hi, Yes. I’m 50, a solo mom of a 9yo, and owe at least $130k. I’m an Adjunct professor so I don’t qualify for PSLF, and have been trying to figure out what options that I do have. I also made the decision to work minimally (one class per semester) during the pandemic to keep connected to my school and build my career, so I built up a lot of debt just trying to pay rent, food, cloths for my growing daughter. I now realize that I would have been a lot better off financially if I had just gotten unemployment and not tried to pay all of my rent and incur credit card debt.
This is a Big Question. It’s connected to the “American Rescue Plan Act of 2021” and whether it is renewed or whether other action is taken. You should keep updated as to its status. For the moment, any forgiven debt will NOT be counted as taxable income until the beginning of 2026. * “Whether Congress or the president through administrative action forgives student loans… if it’s between 2021 and 2025, it will not be taxable income for federal purposes,” Jared Walczak, vice president of Tax Foundation, told Axios. Also see Tax-Free Student Loan Forgiveness: What it Means for Borrowers with Large Balances - Student Loan Planner
How many here have applied for the student loan payment count adjustment? Seven Things to Know About the Student Loan Payment Count Adjustment - ED.gov Blog
It goes a long way to addressing those with loans whose capitalised high interest student loans –initially 20k+, now balooned beyond 200k. Even if one diligently has been making payments over the years, this happens.
Also, please remember to vote!
I am 43 years old and it has taken me 15 years to finally be eligible to apply for my LCSW exam to become a social worker. I was also a student with disabilities enrolled in disability services at CSULA. In the US, students receiving disability services who are enrolled in public universities may have their tuition paid for by the US dept of rehabilitation services (DOR). I did not find out about this program until my last year of graduate school once my tuition was already paid for through the student loan process. I am now in over $100,000 in debt. Upon enrollment students who are enrolled in disability services their tuition should automatically be reduced to $0. There is no tool for debt cancelation based on this issue, however I am sure there are millions of us that were entitled to this program and never made aware either purposefully or negligently by our universities in order to cash in on the in-debt-ness of disabled students.
I hear you. I’m 69, retired nurse, barely making ends meet. I’m working part time, and sometimes more just for unexpected expenses.
No pension, 401 just SS.
The only thing I can say if that if you’re on the income plan, if you work less, the payment will be less.
Although, depends on what you bring in also, otherwise.
My ss is only 1,800. I made 9,000 last year, my payments are 0. They’ll keep increasing until I die I guess.
I borrowed 75K. It’s now at 325K .
Let me follow up here to say that today I received an email that said “Congratulations! The Biden-Harris Administration has forgiven your federal student loan(s) listed below with Nelnet in full.”
I am still re-reading this to see if I missed anything.
Oh, yes, this:
“Here are some important points on this IDR forgiveness:
Due to the American Rescue Plan Act of 2021 the balance of your loans that were forgiven is not considered taxable income for federal income tax purposes. Since state and local tax implications will vary, we recommend you contact a tax advisor for more information.”
65 yo, still working, hopefully another 5 years.
My newest “plan” from EdVision has me paying $92/month for 15 months (which amount is about 30% higher than what Dept of Ed said I would be).
Upon the 16th month, my payment goes to $3078.46/month. Yes, three thousand seventy eight and 46 cents. Per month.
Roughly 70% of my AGI.
I am filing an age discrimination complaint against EdVision and Dept of Ed alleging a scheme to claw back social security and municipality-based retirement monies. Not to mention driving me to be unhoused, unfed, and dying decades earlier than I would if I lived in a civilized nation.
Bear in mind, my US Senator Tammy Baldwin has been of no effective help in the root cause at hand: this debt is entirely forgivable as is all student loan debt. We can pay to eliminate decades worth of debt and interest payments for 43 million citizens with either a marginal tax rate or about the same money we are spending to conduct/prepare to conduct wars in Europe and the Middle East.
I fear the tactic of undervoting in a national election, but I have advised Wisconsin Senator Tammy Baldwin’s office that I will undervote in her next election. No help for me (and 43 million voters), the no vote from me.
No sense steering now. I am quite literally 15 months away from either defaulting/garnishment or being unhoused–and still having to work.
Pretty sad little oligarchy we have here, eh?
Yes, I’m 62 and have loans I took out for my daughter. She had hers forgiven because the school has many lawsuits due to fraud. I owe $107,000 and was overlooked completely
Amen! I know this is an old thread but wanted to add my two cents, nevertheless, as I feel this discussion needs to be revived. I am a 54 year woman that recently obtained her BFA in Graphic Design. I have a school loan now as well. I have been applying for Graphic Design jobs now for over a year and nothing - not even a reply for an interview. If I take a full time job that is not in this industry, it will make it extremely difficult for me to continue to job hunt for the position that returned to school for. It IS a catch 22. People need to know that college is not just for the young anymore - older people are opting in for endless learning and to better the 2nd half of their lives now as well. It seems, however, a horrible thing that I should have to pay a loan back when my degree did nothing for me. If I would have known now what I knew then, would I have went back to school? And this goes much deeper, but I will keep the cultural implications and politics aside for now.
Praise God to hear about that custodian at the church that helped you. I’m saddened to hear that the church turned you away. Most churches in these end of hours are NOT churches of God - most of them are all about the almighty dollar. I know this is an old post. I hope you are doing better these days. What a story you have. You are a good woman!
My Student Loan repayment started in the year 2000. I was in a Doctorate Program for counseling psychology. I was not able to finish, as I got thyroid cancer, and even though I had surgery and treatment, I was never the same as far as learning. I thought about going back, but they wanted me to repeat 10 courses over (even though I finished with A, B’s. plus, they wanted 45,000 more! Now, I realize, that doesn’t even seem legal. I’ve been on the repayment plan, as I’m not working in my field, and I haven’t made much money. Wait, I forgot, I’m retired now. 69 yrs.
I think I borrowed around 80-100K, don’t remember its’ been so long ago. I now owe 375K !!!. Most of it is interest, that keeps growing.
After 25 years, I want to buy a house, yeah right! No one will give me a mortgage, even though I tell them I’m on an income-based program and now pay 0. I’m not looking for a large loan. This is so frustrating. Now, I did read some information, that if repayment began before July, of 2000, the debt will be forgiven. Regardless, it’s at the 25 mark in July of 2025. I have been calling Student Aid, and Mohela, they tell me it should be done, and I should please be patient!!!
How long do I have to be patient? If anyone knows who I can talk to, I’d appreciated it. As long as that is on my credit report, I can’t get anything. Even though I’ve tried to show proof of my plan, and also the research I’ve found about the fact, it should have been forgiven in the fall this year. My debt-to-income ratio is like a big negative!!!
Agreed. I’m 69 and at 379K. Mental health counselor, never was able to get the higher degree I tried for, due to illness.
I’m trying to get just a small mortgage, and the same here., Nope.
I’m 42 and owe $37,000. It’s insane with a monthly bill of $3000 for preschool for our two kids (we’re in Seattle). They also put my loans in forbearance while deciding what to do with my loans after I applied for the SAVE plan and it was blocked by a court. I’ve racked up $1000 interest in the months it’s been in forbearance.
I’m at the border here. I’m 39, graduated about ten years ago. I started with $65k in debt. I now owe over $80k. While I have benefited from income-driven repayment plans, being on disability, I live in fear of the day I make enough to get off of benefits. Then, my student loan payments go up, I lose health insurance, my taxes go up, etc. It’s entirely possible to make just enough to not qualify for benefits but take home less money each month despite working ten times as hard. This actually happened to me, in a lesser form, several years back when I took a temp job with a canvassing company. Figuring out that financial gap has been a major problem in getting on my feet, apart from the usual issues of affording housing (I was effectively homeless for a year and a half), dealing with CPTSD and medical issues, etc.
As you are on SS disability you should have automatically qualified for a disability discharge of your loans. That was one thing Biden a ciyoke if tears agi.
Call the Federal Student Financial aid office and ask about that. Also call NetNet DISABILITY (not their regular website) as they are handling these things, Their website is down for “redesign/streamlining the process”.
Here is info
https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge
Federal student financial aid number : 1-800-433-3243 ( you will likely need to ask them what the disability number is).
From google since the nelnet site is down, their number is:
For assistance with federal student loan disability discharge, you can call the U.S. Department of Education’s Nelnet Total and Permanent Disability Servicer at 1-888-303-7818 or visit DisabilityDischarge.com (this is the site that is down but go there so you can see what they say in case they update it).
Phone Number: 1-888-303-7818
Thank you very much but mine’s have recently been discharged 
Cordially,
Lisa Scriven
Philippians 4:6 - Be anxious for nothing, but in everything by prayer and supplication, with thanksgiving, let your requests be made known to God; 7 and the peace of God, which surpasses all understanding, will guard your hearts and minds through Christ Jesus.
Philippians 4:13 - With God in my life, "I can do all things through []Christ who strengthens me.”
"Our lives begin to end the day we become silent about things that matter." Dr. Martin Luther King
" If there’s no struggle, there’s no progress" - Frederick Douglass
Scrivenl77 - that’s good to hear as you will miss having to pay taxes on that money too. That is very lucky. That starts up again 1/1/26.
Mine were discharged early (in the middle of the monitoring period - Biden did that with his 1/13/25 executive order) and the final discharge came through 2/26/25. I was very lucky as I was supposed to have that happen 11/26 and would have had to pay taxes on a ton of money.