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Student Loans and 2 Trillion Stimulus

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  • Student Loans and 2 Trillion Stimulus

    Looks like interest on fed student loans will be zero for 6 months, not just 2 months from Trumps exec order
    I read that, "The proposal also appears to make student loan payments from employers not taxable."
    Does anyone know what this actually means?

    https://www.forbes.com/sites/wesleyw.../#6572e59f1f2f

  • #2
    I believe it means that it can be treated as an expense (benefit) by the business as a pre-tax deduction and will not be included in taxable income for the employee.

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    • #3
      But of course that will only further the pricing bubble as loans are made to look more cheap. And the government induced education inflation will erode into wages and discretionary income as it has with healthcare.

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      • #4
        It will be interesting to see which handouts will stick around forever after coronavirus is long forgotten.

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        • #5
          I may be incorrect. The text details in this phase 3 bill had not been released to actual Senators involved in the negotiations.
          The author of the article is employed by a think tank that was advocating for some provisions. Probably need to wait for the final bill. There was some “noise” about getting what was agreed to in negotiations accurately on paper. Payments directly or reimbursement? Lots of wiggle room.

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          • #6
            I submitted an application to Earnest about a month ago and was approved right as COVID-19 started picking up in the states. Fortunately, I have yet to accept the loan terms and I'm glad that I didn't given the news of the 6 month forbearance. Somewhat stinks as I'm happy with Earnest and the term options they've given me, but 0% interest is obviously too good to pass up. I think I will use the money that was going towards my monthly payment and put it in the market (taxable, 529). Then reapply with Earnest in Sept/Oct. I wonder if the loan terms I was offered will be as good, though.

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            • #7
              This is a slippery slope for student loans. Once the gov starts a subsidy, a social program or just some kind of leniency...it usually continues and expands over time (just like social security and medicare). I will never even think about refinancing. #silverlining

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