What Happens Now? For Both Federal and Private Debt with the New President/Administration?
Posted by ProleDBA@reddit | studentloandefaulters | View on Reddit | 66 comments
If they eliminate the DOE - what is the outcome for people with student loans?
What are our options? It seemed we were close to some sort of relief, but now what?
Green_Communicator58@reddit
I’d wager on the hook for all of it.
Drunkinskater@reddit
Even if Biden does something, they'd repeal it after Trump is in office.
Long_Pig_Tailor@reddit
If they do anything they also need to leverage the Trump immunity decision and destroy documentation in the process. Forgive and make it impossible to undo. Destroy MPNs, wipe/corrupt databases, etc. Which won't happen of course so we're just fucked.
Soccermom233@reddit
I’m curious if I’m getting back interest will get applied. Between the pandemic and SAVE I haven’t had to pay, interest hasn’t been accruing. It would disastrous to have that added onto my balance at this point.
BayouGal@reddit
Rafael Cruz specifically wants to reinstate all of the former interest charges. Of course, Texas has reelected him 🙄
Pantextually@reddit
Lyin' Ted (or Cancun Cruz?) can fuck a cactus.
Drunkinskater@reddit
The interest is criminal
gixxer5223@reddit
I got an idea 💡 pay them off like the rest of us had to.
SavagePlatypus76@reddit
Go away
gixxer5223@reddit
Free ride is over come January 😂😂😂
716TLC@reddit
If they eliminate D.O.Edu, then who will be around to try to collect on the federal student loans? Through all the talk of the last year or so, that part never made sense to me.
I'd guess PSLF is going to disappear (I'm 8.5 yrs into my 10 - bastards), along with any other type of "forgiveness" or IBR plans. Lawsuits will ensue since some of the processes are written into MPN and/ or laws. The courts will take forever, likely 4+ years, and it will all become the next administration's problem. Of course that all assumes we aren't under a full dictatorship or Gilead by then.
From another perspective, if inflation continues to rise, and tariffs increase some expenses as some people project, then there's no money to pay student loans. I look forward to the mass default and student loan collapse - they can't catch us all. In my mind, it all starts to look like the end of the Fight Club movie. I hope a few solidly rogue federal employees kill the data servers that track us all.
Although I say some of this with a tiny bit of humor, it's just my coping mechanism for the shit show that's swallowing us all. I'm so glad I passed my SOL on private student debts in 2023. Good luck, fellow defaulters, I hope to see you all on the other side.
RB3910@reddit
They will sell all the outstanding debt to private lenders who are not bound by forbearance, borrower defense or anything else. There will be record numbers of bankruptcies
716TLC@reddit
I can see them selling the debt to proivate lenders. But, the current laws prevent student loans (federal or private) are not eligible for bankruptcy discharge.
RB3910@reddit
If they are sold off, then anything from the original loan is bound and it all goes to the new lender. They will 1000% be able to be bankrupted just like how they will throw forbearance and borrower defense, PSLF -‘d everything else out the window. anything from the DOE is going to be null and void. There are multiple attorneys who have covered this topic in depth on YouTube and on other platforms. There actually is a clause in your master promissory note that if the that is ever sold to a private lender then it could be bankrupted, it’s only not eligible for bankruptcy if federally held
ProleDBA@reddit (OP)
Thanks. This is awesome to know!
SavagePlatypus76@reddit
Inflation is not rising.
ProleDBA@reddit (OP)
Good point 716. I am hoping there will not be a dictatorship here. I am curious about the lawsuits that could be filed. I am almost at the SOL for my state for my private loans - 2025 for a few and 2026 for the remainder. I have no idea what to do for the federal ones because I am on IBR.
716TLC@reddit
I'm on SAVE & PSLF for my Fed Loans. I'm literally in a holding pattern because they're frozen & tied up in 2 courts right now. In general, I'm just waiting to see what happens cuz no one can predict crazy. If you have a payment amount on your fed loans, try to make the payments to avoid future trouble. At least until we see what happens with DOEdu. As for private loans, I hope you can pass the SOL. Good luck.
ProleDBA@reddit (OP)
I hope things work out for you 716. I hope they work out for all of us.
A313-Isoke@reddit
If the loans go private, can we discharge them through bankruptcy?
ProleDBA@reddit (OP)
This was my first thought.
A313-Isoke@reddit
Well...that would be great.
Reasonable_You4113@reddit
Nope unfortunately. Student debt isn’t dischargeable
TriGurl@reddit
But if it's a student loan through a private bank as opposed to a federally backed loan then it is considered a private loan even though it's still a student loan. And private loans can be discharged in bankruptcy I believe. Or you can at least run out the SOL on a private loan and they will eventually write it off... of course you'll have to claim that amount in taxes that year that you file your taxes.
Reasonable_You4113@reddit
No, it is considered a private student loan which is a different distinction but still classified as student loans. Student loans whether private or federal are exempt from a bankruptcy discharge. I just went through this unfortunately myself. Chapter 7 was a smooth process but I’m still paying my private student loans.
TriGurl@reddit
Got it
TriGurl@reddit
Yes
Indyonegirl@reddit
Yes
Drunkinskater@reddit
Funny how they keep swapping them around.....like they're trying to keep them renewed and not old loans. THEYRE ALL NEW LOANS...JUST THIS YEAR. WOO fucking bastards
davebone6195@reddit
Oklahoma Education Superintendent Walters issues memo on dismantling US Department of Education
SavagePlatypus76@reddit
Guy is an ass
ProleDBA@reddit (OP)
Wow. Thanks for sharing that. It seems that the OK superintendent is in support of this.
BayouGal@reddit
That guy wants to put a Trump Bible in every classroom.
ProleDBA@reddit (OP)
Sadly, that very well may happen.
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stardustscrolls@reddit
Well, since it’s going to be a full on Republican Party with the presidency, senate, AND the house, we’re all royally screwed.
ProleDBA@reddit (OP)
This makes me so sad. Maybe we can still mobilize to organize and fight for ourselves.
BrooksBorrowers@reddit
The ‘debt collective’ is a union of debtors and has been actively organizing since 2016. Look up debt strike.
ProleDBA@reddit (OP)
Thanks. I have visited their site off an on for the past few years, but it seemed inactive. I haven't been there lately.
DarthWeenus@reddit
And Sc !! Yay
stardustscrolls@reddit
Oh for fucks sake, don’t remind me. I just know he’s going to load the SC with conservatives and we’re going to be dealing with this for decades.
pdoherty972@reddit
He already did.
BrooksBorrowers@reddit
They will be privatized. That’s the plan.
Any sort of forgiveness programs are out. So PSLF gone. Borrower defense gone.
Bankruptcy for student loans, even private ones have not been restored.
The only silver lining is that you can default with your states statute limitation. Your credit will be destroyed, but can be rebuilt, but so would bankruptcy. I strategically defaulted an ad actually was easier to recover than I’ve bankruptcy would. They could possibly sue you. But if so, many people default at once and not paying into their machine they won’t be able to afford to sue anyone.
With privatized loans, they won’t be able to take your tax return or Social Security however, Social Security will likely be gone too.
SOL is going to depend on the state you live in. They only have that time frame to sue you.
ProleDBA@reddit (OP)
Hope against hope. I am willing to fight this. I have already defualted on my private loans and my credit is tanked. However, I am worried about my federal ones.
DroppedThatBall@reddit
I would also say interest rates on student loans will go up. So if you can pay em off asap. Or default. Whatever.
ProleDBA@reddit (OP)
This will probably be a default for me. I can't begin to pay them off.
Drunkinskater@reddit
Stay in Income driven Repayment
ProleDBA@reddit (OP)
Definitely for as long as I can,
Drunkinskater@reddit
We were never close to relief
ProleDBA@reddit (OP)
I was praying that we were. It seemed like Biden and that even people in society who used to be so hard towards student loan borrowers were softening towards us. This was after much work of course.
Drunkinskater@reddit
Honestly, Im still holding out hope...but Im cynical
ProleDBA@reddit (OP)
I am trying to remain hopeful too.
WiretapStudios@reddit
Opening a letter from the government saying all my debts were wiped felt pretty fucking close, but in retrospect, ughhhhhh.
Drunkinskater@reddit
Did the Texas Judge get ya? I can't believe those 2 TWATS ruined it for everyone else. Just cuzz they're jealous little fucks
Valahiru@reddit
This administration will give loan handlers much larger legal "teeth" to come after defaulters. Expect discharged loans to be resurrected and a lot more people to face legal troubles and garnishment for strategic default. This is one thing many people who voted for DJT will praise and applaud sonce they think everyone with student loan debt went to school for Gender studies and Avian psychology.
ProleDBA@reddit (OP)
Wow. I really hope not. I am sure many of the wealthy use strategic bankruptcy to their benefit. I mean people fled Europe for this reason. Financial opression was one of the reasons for the American Revolution.
I hate that Americans diminish higher education in this way. Yet, I see how American comapnies will hire highly educated and skilled workers from countires with free/low cost education/training.
SillyName1992@reddit
At this rate I do not see myself potentially finding a job that pays enough that I'd be required to start repayment on the loans I have left. It hasn't been a concern of mine for several years ever since I saw how low most places were paying despite our state minimum wage going up.
ProleDBA@reddit (OP)
Sadly, we are in similar situations. It is always something.
Whale-Tank@reddit
I think the much more likely outcome is understaffing of the Dept of Ed (which could create just as many more problems!)
ProleDBA@reddit (OP)
This would be bad as well. I was under the impression that Bestsy DeVos wanted to be over the DOE so she could control it.
king_dingus92@reddit
Likely won't actually get rid of the DOE. But it is likely that the Save plan and anything associated with it will be dead quickly. Could also go after pslf potentially. Gotta wait and see i guess.
ProleDBA@reddit (OP)
I think they want to privatize everything so they can earn massive amounts of wealth for themselves. This includes pre k-12th grade education nationwide. I think they want to get rid of the middle class by getting rid of quality free public education and higher ed.
Apprehensive-Ad-80@reddit
If they ditch the DOE they’ll do what republicans love to do, deregulate and privatize. There will be a small number of private sector banks and/or investors will buy the previously public loans and will transition them to some BS version private loans
ProleDBA@reddit (OP)
Thanks. I hope not.
Sugartaste81@reddit
I’m still waiting for my loans to be send to a new servicer, and have the default status lifted. I signed up for the default forgiveness program in September right before the deadline..now I’m worried it’s going to be all for moot. All because idiots don’t understand how the economy works and think Trump is going to magically lower grocery costs.
Gemfrancis@reddit
A lot of "if's" and speculation. We just don't know. I would say pay as much as you can, while you can before shit hits the fan.