A Boring Dystopia

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Millennials are watching monthly student loan payments skyrocket from $500 to $5000 under Trump: This will ‘crash the economy’ (fortune.com)

submitted 3 days ago by return2ozma@lemmy.world to c/aboringdystopia@lemmy.world

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[–] Dettweiler42@lemmy.dbzer0.com 25 points 2 days ago (2 children)

Most people are relying on income-driven repayment due to high interest rates and inflated tuition costs. IDR reduces your monthly payment to a fixed percentage of your income, but it does not scale the interest generated on the principle. The new SAVE plan was intended to scale the interest along with the monthly payment so your debt wouldn't keep piling up due to being on IDR.

Trump is removing all forms of IDR and blocking applications to renew existing plans, which means everyone will be forced to pay their full monthly amount (which is based on a 10 yr payoff plan). A lot of newer student loans are close to ~$100K or more, so imagine trying to pay that off in 10 yrs in the current job market.

Prepare for mass defaults on loans. This is absolutely going to crash the economy, and will very likely be worse than the housing market crash in ~2009.

[–] LovableSidekick@lemmy.world 1 points 1 day ago

Thanks for the details - it sounds like you're saying reduced payments under IDR are basically partial payments, which I assume would be applied only to the interest, thus making the debt last forever. Sounds like a plan bankers would come up with to create perpetual interest revenue. SAVE makes a lot more sense in terms of actually helping people - so no wonder Bonespurs & Company would block it. Can't have Big Gubmint interfering with the freedom to indenture people.

[–] Rivalarrival@lemmy.today 2 points 2 days ago

This is absolutely going to crash the economy

That's going to be offset by the coming war in Central America, ostensibly against the cartels that he is claiming are running the region.