Harvard law professor gloats that thousands of his rich former students will be getting their debts paid off by taxpayers

[Hutch Starskey]

$250k for a married couple.

And?

 

[Sixties Fan]

How did we get here?​

Higher education has long been viewed as a path towards lucrative earnings, but the ballooning cost of tuition and rise in student debt has left some wondering if it's worth the cost.
The total federal student debt has more than tripled over the past 15 years, rising from about $500bn in 2007 to $1.6tn today.
Meanwhile, wages have stagnated and tuition has increased, which means it's harder for young people to pay it off.

Marshall Steinbum, who teaches economics at the University of Utah and studies student borrowing, said this debt mountain is proof that the current business model for education is broken.

"[The] mantra is 'a college degree pays off, because it causes you to have higher earnings in the labour market,'" he said. "If that were true, we shouldn't have such a student debt problem."

About 43 million Americans owe money on their student loans. That means that about one in six American adults, or about a third of Americans with at least some post-secondary education, has some student debt.
The median student loan debt is just over $17,000, according to the Federal Reserve. About 17% owe less than $10,000 in federal student loans, while on the other extreme, 7% owe more than $100,000.

While that may not seem like an insurmountable debt load, the majority of the debt is concentrated among relatively few people. Over half the total debt load is held by just 16% of debtors, with debts over $60,000.

For these big borrowers, $10,000 may seem just a drop in the bucket.

How will this affect the economy?​

Student debt is currently the second-largest type of household debt, after mortgage loans, accounting for about 10% of total household debt. On average, people spend about $222 every month on student loan payments, according to the Federal Reserve.
The problem with debt, in the big picture, is that it reduces the amount of money that people can spend on goods and services, which in turn, reduces the country's overall economy. The other problem with debt is that it can ruin a person's credit score, which means their future ability to borrow and spend money might be hampered as well.

Before the pandemic, approximately 3% of federal student loan holders were behind in their payments. Loan repayments have been paused since spring 2020, and as part of his debt relief plan, Mr Biden said he will extend this moratorium until the end of the year.

Perhaps one of the most significant parts of Mr Biden's plan is his intention to cap undergraduate loan repayment at 5% of a person's discretionary income. The White House estimated that this will cut many loan payments in half.

Mr Steinbum said this is essentially another form of loan forgiveness, since under the new plan, interest payments that exceed this repayment cap won't be added to their future debt load. This will especially cover people who hold large amounts of debt.

Is Biden's student debt forgiveness fair?

While tens of millions will benefit from loan relief, the plan has critics on both sides of the aisle.

www.bbc.com

 

[Ralph Norton]

[ The More You Know ]

Report Highlights. The average student borrower takes 20 years to pay off their student loan debt.

• Some professional graduates take over 45 years to repay student loans.
• 21% of borrowers see their total student loan debt balance increase in the first 5 years of their loan.
• The average medical school graduate’s salary is not sufficient to make their student loan payments.

Related reports include Student Loan Debt Statistics | Average Student Loan Debt | Student Loan Debt by State | Average Student Loan Interest Rate | Student Loan Refinancing

Undergraduate Class of 2022 Projected Student Loan Repayment Timelines (3.73% APR, $37,175 Average Debt†)

Monthly Payment	Ultimate Cost	Time to Zero Debt
$461‡	$42,863	7 yrs, 9 mos
$372	$44,595	10 yrs, 0 mos
$345◊	$45,341	10 yrs, 11 mos

†The average debt is based on the federal student loan debt portfolio and does not necessarily reflect the true average debt for 2022 undergraduates.
‡ 10% of the typical starting gross income value for recent graduates (Bachelor’s).
◊10% of the typical starting net income value for recent graduates (Bachelor’s).

Average Student Loan Repayment Timelines​

The amount of time it takes for an individual to repay their student loan debt depends on the initial amount borrowed, the loan’s interest rate, and repayment habits, among other factors.

• 10 years is the ideal timeline for paying off student loan debt according to financial experts and the U.S. Department of Education (ED).
• In practice, it takes borrowers closer to 20 years to pay off their student loans.
• 21.1 years was the average length of repayment in a 2013 study of 61,000 respondents.*
• 45% of student loan borrowers decrease their balance in the first five years of repayment.
• 21% of student loan borrowers increase their balance in that same period.
• The average medical school graduate’s salary is not sufficient to make their student loan payments.

*More recent reports claim shorter timelines (~18.5 years), but this comes from a poll of 2,200 borrowers between the ages of 26 to 45.

Class of 2021 Student Loan Repayment Timelines​

Because student loan interest rates are at historic lows, current students may reasonably expect to pay off their student loan debts within the recommended 10-year timeline.

• 3.73% is the 2021-2022 interest rate for Direct Subsidized and Unsubsidized federal student loans to undergraduate borrowers.
• 2.75% is the 2020-2021 interest rate for Direct Subsidized and Unsubsidized federal student loans.
• 10% of income should go toward paying off debts according to federal guidelines.
• 36% of income is the maximum amount that should go toward paying off debt.
• $42,500 is the low-end starting salary for a new graduate with a bachelor’s degree.
• $73,800 is the high-end salary.
• $64,900 is the average annual salary for a recent graduate with a bachelor’s degree.
• $52,000 is the median salary for new graduates with bachelor’s degrees.
• 4 to 12+ years is the projected student loan debt repayment period for bachelor’s degree holders who graduate in 2021.

Associate’s Degree Debt Repayment (2.75% APR, $384 Monthly Payment)

Average Debt	Ultimate Cost	Time to Zero Debt
$17,800	$18,800	4 yrs, 1 mos
$28,300	$31,000	6 yrs, 9 mos
$30,100	$33,200	7 yrs, 3 mos

Associate’s Degree Debt Repayment​

Student borrowers with associate’s degrees are significantly less likely to take on student loan debt if they attend public institutions. Private school attendees are actually more likely than their bachelor’s degree-seeking peers to use student loans to pay for school.

• Just 41% of Associate’s degree holders who graduated from public institutions use student loans to pay for school.
• 84% of attendees of private, nonprofit schools take on student loan debt.
• 88% of attendees of private, for-profit schools take on student loan debt.
• $46,100 is the average annual salary for a recently graduated associate’s degree holder.
• 4 to 7+ years is the projected student loan debt repayment period for associate’s degree holders who graduate in 2021.

Bachelor’s Degree Debt Repayment (2.75% APR)

Monthly Payment	Average Debt	Ultimate Cost	Time to Zero Debt
$354	$29,500	$32,800	7 yrs, 9 mos
$354	$35,000	$39,700	9 yrs, 4 mos
$354	$45,300	$53,700	12 yrs, 8 mos
$541	$29,500	$31,500	4 yrs, 10 mos
$541	$35,000	$37,900	5 yrs, 10 mos
$541	$45,300	$50,400	7 yrs, 9 mos
$615	$29,500	$31,300	4 yrs, 3 mos
$615	$35,000	$37,500	5 yrs, 1 mos
$615	$45,300	$49,700	6 yrs, 9 mos

Graduate Student Loan Debt Repayment Timelines​

Graduate and professional students, on average, borrow more for school than undergraduate students. Their income rates tend to be higher, as well.

• 4.3% is the interest rate for Direct Unsubsidized federal student loans to graduate or professional borrowers.
• 5.3% is the interest rate for Direct PLUS loans, which go to graduate or professional borrowers as well as parents of undergraduates borrowing on their behalf.
• $58,300 is the average student debt for a borrower who graduated from a public institution with a Master’s degree.
• $96,700 is the average debt for master’s degree holders who attended a private, for-profit institution.
• $101,200-$175,600 is the range of average debt for doctoral degree holders.
• $243,300 is the average debt for professional degree holders who attended private, nonprofit institutions.
• $77,800 is the average salary for a master’s degree holder.
• $96,800 and $97,900 are the average respective salaries for people with professional and doctoral degrees.

Master’s Graduate Student Loan Repayment ($669 Monthly Payment)

APR %	Current Debt	Ultimate Cost	Time to Zero Debt
4.3%	$58,300	$70,000	8 yrs, 9 mo
4.3%	$77,000	$99,500	12 yrs, 5 mos
4.3%	$96,700	$136,500	17 yrs, 0 mos
5.3%	$58,300	$73,700	9 yrs, 2 mos
5.3%	$77,000	$107,800	13 yrs, 5 mos
5.3%	$96,700	$154,400	19 yrs, 3 mos

Doctoral Graduate Student Loan Repayment ($833 Monthly Payment)

APR %	Current Debt	Ultimate Cost	Time to Zero Debt
4.3%	$98,700	$128,700	12 yrs, 11 mos
4.3%	$100,700	$132,200	13 yrs, 3 mos
4.3%	$171,400	$311,300	31 yrs, 2 mos
5.3%	$98,700	$140,000	14 yrs, 0 mos
5.3%	$100,700	$144,300	14 yrs, 5 mos
5.3%	$171,400	$452,600	45 yrs, 3 mos

Postgraduate Student Loan Debt Repayment Timelines​

When indebted students return to school, they may not be required to make payments on any outstanding student loan debts. This does not mean, however, that these debts stop collecting interest. Students seeking postgraduate work may take out additional loans on top of existing student loan debt.

Professional Graduate Student Loan Repayment ($843 Monthly Payment)

APR %	Current Debt	Ultimate Cost	Time to Zero Debt
4.3%	$152,600	$246,500	24 yrs, 4 mos 292
4.3%	$237,400	NA**	NA
4.3%	$203,600	$472,700	46 yrs, 9 mos 561
5.3%	$152,600	$307,400	30 yrs, 5 mos 365
5.3%	$237,400	NA	NA
5.3%	$203,600	NA	NA

Alternative Professional Graduate Student Loan Repayment

Monthly Payment	% of Income	APR %	Current Debt	Ultimate Cost	Time to Zero Debt
$1,685	20%	4.3%	$237,400	$331,100	16 yrs, 5 mos
$2,528	30%		$237,400	$289,900	9 yrs, 7 mos
$1,685	20%	5.3%	$203,600	$291,700	14 yrs, 5 mos

(full article online)

Average Time to Pay Off Student Loans [2023]: Data Analysis

An in-depth analysis of how long it takes to pay off student loan debt with various incomes and educational attainment levels.

educationdata.org

Yeah, that's how loans work. Do you have a point?

 

[ColonelAngus]

In a related story, skyrocketing cost of college shocks dumb lefties.

 

[marvin martian]

And?

And a couple of rich white lawyers who make $249,999 a year are getting their loans paid off by you!

LOL

 

[Hutch Starskey]

And a couple of rich white lawyers who make $249,999 a year are getting their loans paid off by you!

LOL

Nope. It means they each get $10k like everyone else.

 

[Sixties Fan]

In a related story, skyrocketing cost of college shocks dumb lefties.

Democrats and Republicans are shocked by it. Stop make it into just one party.

 

[Dekster]

More than that, since the limit for married couples is $250K.

Think of that, Biden cultists. A rich white couple making $249,000 a year is getting their student loans paid off by you.

LOL

Won't change my taxes either way. We make what we make and they take what they take. The rest is just a matter of their bookkeepers.

 

[marvin martian]

Nope. It means they each get $10k like everyone else.

So you think two rich white lawyers making $249,999 deserve $10K, no strings attached, from your taxes?

 

[Sixties Fan]

And a couple of rich white lawyers who make $249,999 a year are getting their loans paid off by you!

LOL

Like Who?

 

[marvin martian]

Like Who?

Anyone who has a student loan they don't want to pay back. Pick someone.

 

[Sixties Fan]

And a couple of rich white lawyers who make $249,999 a year are getting their loans paid off by you!

LOL

And you do know of the financial status of each one of those lawyers, how their career is going, how many children, etc......

You are playing on the ignorance of too many people on the lives affected by those debts.

Some Christian giving.

 

[Sixties Fan]

Anyone who has a student loan they don't want to pay back. Pick someone.

As I thought. You do not know of anyone, you just throw it to the wall and hope it sticks.

 

[Dekster]

Nope. It means they each get $10k like everyone else.

Or $40K if they both had Pell grants in undergrad and maybe get released years ealier from an IDR plan if their payment count adjustments happen depending on their ages. Lots of balls in the air for borrowers right now. By waiting until the last minute to make this announcement that could have been made months ago, they have sent a lot of people scrambling like mad at the 11th hour trying to redo their loans to land in the Direct Loan pile for relief by October 31.

 

[Hutch Starskey]

So you think two rich white lawyers making $249,999 deserve $10K, no strings attached, from your taxes?

I think each qualify under the rules. Neither you nor I will pay anything more.
I find paying farmers to cover for bad tariffs a far bigger waste.

 

[M14 Shooter]

How about the Republicans?

^^^^
Whataboutism.
Thank you for agreeing that the Democrats are buying votes.

 

[Hutch Starskey]

Or $40K if they both had Pell grants in undergrad and maybe get released years ealier from an IDR plan if their payment count adjustments happen depending on their ages. Lots of balls in the air for borrowers right now. By waiting until the last minute to make this announcement that could have been made months ago, they have sent a lot of people scrambling like mad at the 11th hour trying to redo their loans to land in the Direct Loan pile for relief by October 31.

Great. They also then have $100k in loans for their law degrees.

 

[Sixties Fan]

^^^^
Whataboutism.
Thank you for agreeing that the Democrats are buying votes.

Thank you for not caring about all of those Republicans whose debts are making their lives and finances more difficult to move on.

Such Christian giving.

 

[M14 Shooter]

Thank you for not caring about all of those Republicans...

Irrelevant to the fact you agree the Democrtats are buying votes.

 

[Sixties Fan]

Irrelevant to the fact you agree the Democrtats are buying votes.

I agreed to no such thing. Because it is not the case.