I don't believe they are cancelled ever. There is a special condition that if you work for the federal government for 20 years, they can be cancelled after 20 years if they aren't paid off, but AFAIK, that's it, and you have to attempt to pay them off during those 20 years.

If there is a new exception, please let me know. My wife has some.

If you opt into the income based repayment plan they are cancelled after 20 years of payments. I'm not sure how they retroactively count payments made under old repayment plans if you switch now.

I can't believe we're acting like taking 10% of disposable income for 20 years is a good deal

It's not 10% of your disposable income for 20 years. It's capped at 10% of your disposable income for 20 years.

It's designed as a safety net for people who can't find a decent job after taking out student loans.

If you get a high paying job you're not going to qualify for the income based repayment plan because you only qualify for the newer income based repayment plans if it will lower your monthly payments below the standard repayment plan.

>It's not 10% of your disposable income for 20 years. It's capped at 10% of your disposable income for 20 years.

Yes, and also there's lots of non-typical deductions that can furthur reduce your effective income for these plans, and ways to reduce the forgiveness period to 10 years. Lots of lawmakers say that program is not sustainable, and Congress may try to change it soon... If your not utilizing it and have student loan debt, I'd recommend looking into it sooner than later, as you may be grandfathered in if/when it's restructured. Most people who are elegible don't take advantage of it yet, and loan servicers do their best to steer students away from signing up for IDR.

I did not know that. So why all the noise about how expensive tertiary education is in the US?

As you can see from my sibling comments, people who make too much money to qualify for income based repayment (because they'd be paying more than the standard plan), people who went to college years ago, and the generally uninformed just don't know about income based repayment plans.

Not every loan is a federal loan. Additionally, federal loans almost NEVER cover the full amount of university, unless you're at a state school or community college.

My federal loans covered about 1/8 of my tuition.

Federal loans make up 90% of all loan disbursements.

The vast majority of college students only have Federal student loans.

>unless you're at a state school or community college

Private colleges enroll about 15-20% of students. If you don't want $100k in debt, go to a public school, or go to a top tier school like Harvard that has very generous financial aid.

If you can't get into a top tier school with excellent financial aid (or your parents make too much money to qualify), you have to decide whether $100k in debt is worth it.

It's not society's job to pay for private college.

I'm from CA. Even with the resident discount, UCs are just as pricy as private colleges.

UC Berkeley tuition and fees comes to about $13k per year for California residents. The average private school tuition is over $30k per year.

Not sure why you think that it's so expensive. I went to school in Georgia (much lower cost of living area) and UCs are only about 15% more expensive than our flagship schools (Georgia Tech and UGA, and GSU).

Cost of university education has risen much faster than inflation for decades primarily due to easily obtained loans and increasing bureaucratic overhead. At the same time, the job prospects for many degree-holders have decreased. Additionally, student loans are for life and can not be cancelled by filing bankruptcy now. The 20 year thing mentioned by the above comment only applies to very specific government jobs.

So education is more expensive, student loans are more expensive, student loans can't be cancelled, and job prospects and real income are worse.

>The 20 year thing mentioned by the above comment only applies to very specific government jobs.

No you are completely incorrect. For public sector jobs the loan forgiveness happens after 10 years. Under the income based repayment plan anyone who makes payments for 20 years will have the remainder cancelled.

https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...

Large student loans affect your credit and there is no threshold for your salary for when you have to start paying back.

>there is no threshold for your salary for when you have to start paying back.

There is. You pay back 10% of your disposable income. Disposable income is income above 1.5x the Federal poverty level.

If you make less than that, you pay $0.

The federal poverty level for a single individual is a bit less than $14,000.

Because a. not everyone qualifies for that, and b. 10% of disposable income for 20 years for something that didn't work out is still a pretty awful deal

>Because a. not everyone qualifies for that

Everyone who has federal student loans (90% of all loan disbursements) qualifies for income based repayment plans if the plan will lower your payment.

*PLUS loans your parents took out don't qualify, but you won't need those if you're going to a 4 year state school.

>20 years for something that didn't work out is still a pretty awful deal

Didn't work out meaning can't make much money. For a family of 4 making $50k (about the median household income), you'd pay back around $100 a month.

Not everyone qualifies for government loans.

Government loans are credit independent. Subsidized loans are need based (the interest that accrues while in school is subsidized by the government), but unsubsidized loans are not. The vast majority of students qualify.

If you are a felon, once you are released from jail, you can still qualify.

The only people who really can't qualify that I'm aware of are non residents, people who have been convicted of drug offenses that occurred while accepting federal financial aid, and people who already have degrees.