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The Student Loan Forgiveness Act of 2012 Introduced in Michigan by Congressman Clarke

(Source: Rep. Hansen Clarke) – Rep. Hansen Clarke introduced The Student Loan Forgiveness Act of 2012 (H.R. 4170) on Thursday, March 8. This bill would forgive outstanding student loan debt for Americans who have made payments equal to 10 percent of their discretionary income for 10 years.

“This provides student loan borrowers with a second chance, those who have been struggling financially,” Clarke told his colleagues on the floor of the House. “And by cutting this debt, this frees up their money to invest on their own. That will create new jobs throughout this country. It’s time for Congress to stand up for the rights of student loan borrowers. It’s time to forgive these student loan debts.”

This bill would amend the Higher Education Act of 1965 by giving borrowers the option to enter the 10/10 loan repayment plan. Borrower’s discretionary income will be defined as any annual income exceeding 150 percent of the poverty line for an individual or family.  This bill would also allow graduates who enter public service professions, such as teachers and first responders, to have their loans forgiven in five years instead of ten as well as cap interest rates on federal loans at 3.4 percent.

Source: Rep. Hansen Clarke


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34 Responses to The Student Loan Forgiveness Act of 2012 Introduced in Michigan by Congressman Clarke

  1. Ken Glin says:

    Is it another thing for Federal Loans or does it actually help Private Loans, the real problem

      (Quote)  (Reply)

  2. Shae says:

    I don’t see why public service professions, such as teachers and first responders, are any different than any other tax paying member of society.
    What about military? What about Doctors? Where do you draw the line? I don’t think teachers & First Responders should have anymore precedence than others!

      (Quote)  (Reply)

  3. Nick says:

    Ken Glin,

    It makes it possible for taxpayers to take the loan losses rather than the bank by the federal government buying the bad loans. It reads like the Student Loan Industry wrote the bill. I have massive student loan debt and think this is wrong, Bankruptcy Protections just need to be restored to Private Student Loans, why should tax payers take the losses the banks earned?

      (Quote)  (Reply)

  4. Nick D says:

    Ken Glin,

    It covers Private Loans too, by allowing you to transfer them into Federal Loans. I’d love for this to pass (not that it will). Right now, my loans are nearly twice my mortgage. Have been wanting to start a business, but can’t risk making that little for the next 5 years. Gotta pay the piper.

      (Quote)  (Reply)

  5. Scott says:

    I am currently in graduate school and my federal loans from undergrad and grad school are in deferment. However, I have been slowing been paying them back, even though I don’t have to yet. Does anyone know if it would be a waste to keep paying them in advance, or do previous payments count toward the total 10/10 requirement?

      (Quote)  (Reply)

  6. Scott says:

    Scott,
    PS: Just hypothetically, of course, since the bill hasn’t passed the House yet, let alone been signed into law.

      (Quote)  (Reply)

  7. Tony says:

    Ken:It does count towards the Private loans as well.

      (Quote)  (Reply)

  8. M.McCoy says:

    I don’t understand. So are you proposing to screw the lender after 10 years or are you proposing to use tax revenue to pay off the remainder of the principal? I am not sure if I am ok with either.

    I think the lenders need STOP LENDING MONEY TO PEOPLE WHO CAN’T (or in this case, WON’T BE ABLE TO) PAY IT BACK!!! Some oversight is needed so they stop lending out more money than the eventual grad will be able to pay back and also live. Fifty thousand dollars (or in some cases much much more) to people who are getting degrees in history at private schools to then graduate and work as a bank teller or sell insurance.

    I can’t get a home loan for a house that isn’t worth it (appraisal/home inspection). Why can I get an educational loan for an education that isn’t worth it.

      (Quote)  (Reply)

  9. Lance says:

    When you’ve been oversea away from your family, or teaching the future of America, you come back to me.

      (Quote)  (Reply)

  10. David says:

    This is the stupid thing I’ve ever seen. I worked hard to pay off my loan and people are going to steal money from Americans around the country to pay theirs? I should start a counter petition, socialists like Clarke shouldn’t be allowed in government.

      (Quote)  (Reply)

  11. Kristee says:

    Shae,

    The reason public service careers “take precedent,” is because they are generally lower paying than working in the private sector. Therefore, the loan forgiveness acts as an incentive to keep the public sector staffed, instead of people taking higher paying jobs in the private sector to pay for their student loans. It is assumed that with a degree, any tax-paying member of society can make more money working in the private sector, so they need to add incentives to make the public service jobs more attractive.

      (Quote)  (Reply)

  12. Jace says:

    Shae,

    Shae,

    Read where the above states: SUCH AS

    SUCH AS meaning it is not limited to the examples.

      (Quote)  (Reply)

  13. NO says:

    Shae,

    I agree with military but go be a teacher for a week and tell me that they dont get paid enough for there jobs ,many states have very low incomes for teachers thus making it hard I have been a teacher for 9 years and do think that we should be on the top of the list. Doctors make way more money than teachers do FYI

      (Quote)  (Reply)

  14. Alex says:

    If this goes through I will gladly pay what is required….if not I will continue my plan of only making under 20kyr and getting income contingent with tiny payments for 25years till they are forgiven. If passed, the gov will get more money from me than the alternative. Responsible? no…. But it is a reality for me and thousands of others

      (Quote)  (Reply)

  15. John says:

    Shae,

    Doctors and military are public service jobs. Please read whats already in place, current proframs define this very well. The public sector can not afford to pay employees what the private sector does. We need viable candidates co spidering the public sector, and they deserve some additional incentives for working in the public sector.

      (Quote)  (Reply)

  16. GTR says:

    As a temporarily employed attorney with 200k+ in debt I must say that I find the current IBR and IBC programs sufficient and even generous. Education costs money and someone has to foot the bill. Continuing with current programs along with increased transparency and outreach education re: the true cost of post-secondary education is as far as i’m willing to go.

    As much as it hurts, especially my wallet, the buck stops here. Stop the government handouts.

      (Quote)  (Reply)

  17. So in order to get help with student loans they need to be “outstanding?” Can something be done about the ridiculous amount(s) of interest? It’s not very promising when your minimum monthly payments are $215 for 25 years and you don’t have the career that you hoped for 6 years removed from college.

      (Quote)  (Reply)

  18. Wendy says:

    Shae,

    I’m not disagreeing with you, Shae, but it should be noted that those in the military receive Montgomery GI Bill money and typically don’t incur a lot of student loan debt.

      (Quote)  (Reply)

  19. Kdance says:

    Scott,

    They count toward the repayment. Also, there is a limit on what will be forgiven, to encourage people to take responsibility for their financial choices. This isn’t offering a free ride.

      (Quote)  (Reply)

  20. derek says:

    It actually transitions private loans into federal loans and enrolls them into the 10/10 plan.
    Ken Glin,

      (Quote)  (Reply)

  21. Dena says:

    Scott,

    Past payments count too!

      (Quote)  (Reply)

  22. Kristin says:

    Shae,

    Doctors are included actually. The difference is that many of these professions have a cap on the amount of money they can make unlike much of the private sector. Not only that, but most of these jobs require a high degree of some sort meaning that many of these professionals are burdened with a high amount of student loan debt.

      (Quote)  (Reply)

  23. Joe says:

    EMTs, Police, Paramedics and Firefighters are underpaid across the country to save your life and property 24/7. Public service does deserve it a little more than everyone else involved in the situation. Military gets the GI bill which they absolutely deserve and pays for at least 50 % of their education. No one seems to understand the actual duties of someone in the public service field until your employed in one of the above fields. Try taking care of sick kids everyday or going into a burning building to discover a charred body. You wouldnt feel the same after any of those experiences. Just my opinion.

      (Quote)  (Reply)

  24. Paul says:

    M.McCoy,

    So what you are basically saying @McCoy is that if you come from a poor family that has not had the same opportunities that your family should not be allowed to goto college because you aren’t qualified for loans? That is ridiculous. Keeping people uneducated only raises crime and ignorance, especially racism and discrimination. Everyone in my family has taken loans, were poor, have gotten good jobs, and have paid them back just like anyone else. But if we were just disqualified on income we wouldn’t have a college education.

      (Quote)  (Reply)

  25. Paul says:

    Wendy,

    Wendy,

    Not necessarily true. I’m a GI Bill user and I still have just as much debt doing multiple degrees as a full-time student. The GI Bill pretty much pays for everything going forward but not backward!

      (Quote)  (Reply)

  26. Chris says:

    Underpaid? You obviously don’t live in New York where police, teachers, and firefighters easily make six figure salaries and retire at 57, or earlier, with very generous pensions and benefits.

      (Quote)  (Reply)

  27. Steve says:

    No sorry police, EMT and firefighters should not be placed above anyone. UNDERPAID???? Really is anyone underpaid in an economy where some people cant even find jobs? Perhaps they should just be grateful they have jobs and not expect special treatment. They are already paid by taxpayer money and will retire on taxpayer money and now you want more taxpayer money for them? Get out of here…

    Military people have the new Post 9-11 GI bill which pays 100% of tuition based upon the most expensive state funded school in the state you attend classes in and get money monthly to help with rent, if they take out loans on top of this that is their problem. I myself am a 9 year veteran and have taken out student loans….but here is my take on it…taxpayers paid for me to help keep them safe for 9 years and I did my part until I was medically retired…thank you taxpayers. Taxpayers now pay me monthly until I die for the injuries I sustained…thank you taxpayers. Taxpayers now pay for me to use the Post 911 GI bill….thank you taxpayers. Now after all I went through over 9 years of active duty I call it even. I have taken out student loans as I have said, no worries taxpayers I do not find that you are accountable for my borrowing.

      (Quote)  (Reply)

  28. rcls says:

    M.McCoy:
    I don’t understand.So are you proposing to screw the lender after 10 years or are you proposing to use tax revenue to pay off the remainder of the principal?I am not sure if I am ok with either.

    I think the lenders need STOP LENDING MONEY TO PEOPLE WHO CAN’T (or in this case, WON’T BE ABLE TO) PAY IT BACK!!!Some oversight is needed so they stop lending out more money than the eventual grad will be able to pay back and also live.Fifty thousand dollars (or in some cases much much more) to people who are getting degrees in history at private schools to then graduate and work as a bank teller or sell insurance.

    I can’t get a home loan for a house that isn’t worth it (appraisal/home inspection).Why can I get an educational loan for an education that isn’t worth it.

    M.McCoy,

    Some of us had/have really good intentions but the governent who gave us our loans also pulled the plug on the programs we were working for! So yes we have to unwillingly work outside our degreed field!!!

      (Quote)  (Reply)

  29. M.McCoy says:

    Paul,

    So what you are basically saying @McCoy is that if you come from a poor family that has not had the same opportunities that your family should not be allowed to goto college because you aren’t qualified for loans? That is ridiculous. Keeping people uneducated only raises crime and ignorance, especially racism and discrimination. Everyone in my family has taken loans, were poor, have gotten good jobs, and have paid them back just like anyone else. But if we were just disqualified on income we wouldn’t have a college education.

    @Paul
    I believe everyone that wants one should have a chance to go to college. One of the major problems with that is the outrageous expense, but that is not the issue. The issue is Rep Hansen Clarke’s blind socialism. He wants to forgive people’s debt for trying their best to pay it off after 10 years. What I see this bill doing is giving the green light to the banks to give out more bad loans. This is only for government loans, not private? Ok then, FASFA will need to get bigger because who in their right mind would take a private loan if their federal loans will be paid by someone else after ten years. Anyone in their right mind would then want to get as much Federal Student Aid as they could and currently our system gives more FSA according to people’s current financial status. That wouldn’t be fair anymore. Those loans will get forgiven after 10 years and then everyone else who had to supplement with private loans (more often it is much more than their federal loans at higher interest) are getting screwed.

    I am proud of you and your family, just like I am proud of my sisters currently going through the same thing. Working hard to pay off their student loans. They are an investment in your future, and should be treated as such. A home loan or vehicle loan or any other genre of credit isn’t. It sounds like you think I only want banks lending to wealthy people. My comments could be construed as that. What I am saying is the answer to giving out bad student loans that can’t be paid back is NOT a government bailout. Our government is spending itself into such a deep hole with crackpot ideas like this one.

    I don’t have a solution for the people who are already screwed by bad lending practices, but a start would be to stop the bad lending practices. Loans for your future should have relevant qualifications. Just like home loans and other large loans are denied if it isn’t worth it after an inspection or your personal credit history isn’t good enough (here is where those lucky ‘fortunate’ ones get help with cosigners; my parents did for a couple loans of each one of the kids).

    I really hope this bill doesn’t go anywhere, but if it does… Sign me up!

      (Quote)  (Reply)

  30. Slim says:

    I am all for the Student Loan Forgiveness…My only question is would it be retroactive for everyone with a student loan or just for recent college grads, like say within the past 5 to 10 years…I graduated college in 1996 and joined the military soon after…Would this act apply to me as well or what?

      (Quote)  (Reply)

  31. Murf says:

    Kristee,

    No, the reason public service jobs are favored is because they are unionized & unions pay to elect Clarke & likeminded colleagues. It’s not rocket science to figure that out.

      (Quote)  (Reply)

  32. Kalina says:

    Chris,

    6-digit? In NYC? Our salaries are public…. Just google a show me a single Police officer, firefighter, teacher that makes such figure….

      (Quote)  (Reply)

  33. Amelia says:

    I would much rather pay in taxes toward Americans who are getting their educations. Because of student loans people are decide not to have children. Some live like poverty. Some have children, then find its cheaper to stay home because of daycare cost to work that job they have degree in. Yet, they are still paying their loans. It’s the American dream to go to school and become something. To people who are upset about this bill- you need to be MORE upset about your taxes paying for lazy people who don’t want to work, or have multiple children they can’t afford, ect.. You would rather pay for that?

      (Quote)  (Reply)

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