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Old 10-17-2010, 10:02 AM   #21
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Well, since you are on ignore you will not get to read my response....


I think that it is stupid to lend money to someone for school if they can pay for it themselves..... so the first thing that comes to a question is could Fuego and spouse have paid for their education with their own funds
Technically, no, we would not have had adequate cash flow to pay for our own professional educations in full plus the standard allotment of non-education living expenses. Obviously we would have figured out a way though.

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Second... I did not get a response on my question about income... it seems that the income threshold to pay for the loan in full is $66K right now... to me it is hard to imagine that FUEGO and spouse do not make this kind of scratch.... maybe he does, but is looking at the long term and is hoping to retire and have his income less than that... so, low payments on the middle years...
Apologies regarding my failure to respond to your Q regarding income. I was away from the thread for a while and had a lot of other responses to make! At least one disinterested poster had the courtesy to tell me that they are ignoring this thread, and hence no response was required!

To answer your question, yes, you can assume for the sake of this thread that our current 1040 AGI is in excess of $66k. Though due to the nature of the tax code, it isn't too much higher than that. Obviously our total gross income is MUCH higher than that.

Keep in mind though that we have 2 young children and both of us sacrifice to keep working and not spend time with our kids or be a stay at home mom (or dad in my case). In the parlance of 2010, we are "entitled" to have one of us stay at home to take care of the kids, hence our AGI would be well below $66k if we decided to exercise our "entitlement".


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On the income question.... heck, I can't see how two working people of higher education can NOT make enough to get to the income threshold where you have to pay full boat for the first few years... and I would HOPE there is an exception in this rule that does not forgive a loan if the person decides to stop working... if not, then they need to put one in....
Well, if you know you have to either slave away to pay low to mid six figure student loan debts, or just chill in a $25-30k/yr government job and have your loans forgiven in 10 years, you have to accept that some will take the low road. I hope to post more later to expand on this point as it affects my outlook on a certain piece of advice I might give my kids. It may be a separate thread since it is a bit more political than I want to go here. This thread is intended to get some folks commenting on the IBR loan repayment - there must be a few others out there in a similar spot as me.
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Old 10-17-2010, 11:34 AM   #22
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Well, if you know you have to either slave away to pay low to mid six figure student loan debts, or just chill in a $25-30k/yr government job and have your loans forgiven in 10 years, you have to accept that some will take the low road. I hope to post more later to expand on this point as it affects my outlook on a certain piece of advice I might give my kids.
I know you enjoy being a goad, but think carefully before you turn your kids into the equivalent of little communists- putting all their energy into gaming the system rather than into accomplishment. You may be old enough to escape some of the corrosion that always comes from this course, but they definitely are not. Find a way to get down to Cuba for a look see.

Ha
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Old 10-17-2010, 12:26 PM   #23
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I know you enjoy being a goad, but think carefully before you turn your kids into the equivalent of little communists- putting all their energy into gaming the system rather than into accomplishment. You may be old enough to escape some of the corrosion that always comes from this course, but they definitely are not. Find a way to get down to Cuba for a look see.
I see two distinct issues:

1. Proper form of government with proper economic incentives
2. Proper course of action given the government you got

Trust me, it isn't an easy decision for me to make.
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Old 10-17-2010, 12:27 PM   #24
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This is an Obama program. The voter backlash will be in less than a month.


An even bigger kick in the groin... a lot of that money is really consumer debt. Money spent on non-educational crap!
Nope solid bushie

hE TOOK CREDIT FOR IT

On September 27, 2007, President Bush signed into law the College Cost Reduction and Access Act (Pub.L.110-84) (CCRAA). The Act reduces payments to lenders and guaranty agencies participating in the Federal Family Education Loan (FFEL) Program, authorizes increases in the amount of Federal Pell Grants, establishes the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program, lowers the interest rates on some student loans, and expands loan repayment options for student borrowers. The Act also creates a new loan forgiveness plan for public service employees and directs the Secretary to undertake a pilot program for auctioning the rights to originate FFEL parent PLUS loans. In addition, the Act also provides funding for several institutional grant programs aimed at improving minority-serving institutions. Technical changes to the CCRAA were made in Pub. L. 110-153 signed in to law by President Bush on December 21, 2007. The changes made by the CCRAA and Pub. L. 110-153 are discussed in the attachment to this letter.



Watch for more GOP memory lapses
GEN-08-01: College Cost Reduction And Access Act Of 2007 (CCRAA) Summary
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Old 10-17-2010, 01:14 PM   #25
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I agree that the brickbats being thrown at Fuego should instead be directed at those who write the rules for these programs.

It can be argued that Fuego is now doing the most most productive (and patriotic) thing possible:
-- Looking to extend his repayment so the money stays at work in the private sector rather than going to Washington.
-- Most importantly, he's posting here and baldly exposing this crazy waste of taxpayer money. Over 250 people have read this post--that's a lot of publicity. Maybe each one will tell a few folks. Hopefully the awareness and anger about programs like this will contribute to outrage among the electorate and the curtailment of these giveaways.

So, Fuego, yell it from the rooftops and use every loophole written into these ill-considered laws. People need less faith in government and a lot more cynicism. This is how we get there.

Similar, but expanded, line of reasoning here, and some interesting discussion:
Housing stimulus
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Old 10-17-2010, 01:45 PM   #26
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Or tens of thousands to install solar panels.
Ahem. The logic behind these state/federal subsidies is that the govts avoid the environmental/legal/infrastructure costs of building more utility plants. Seems cheaper to just let a few foresighted individuals keep their money instead of raising everyone's taxes (or electric bills) to pay for more problem-creating industry.

Judging from your loophole-detection and -exploitation prowess, I'm pretty sure that the govt has reaped more of the taxable benefits of your knowledge & critical-thinking skills than they ever loaned you to acquire that education (plus whatever the school tried to teach you). Or at least they've given you all that money now in hopes of not having to pay you unemployment/welfare later. I can support that.

It's rare that the common taxpayer gets a chance to do to the taxing authorities what they regularly do to the taxpayers without a second's hesitation. This is the byproduct of misaligned incentives...
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Old 10-17-2010, 02:41 PM   #27
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Not wanting to turn this political, but wouldn't it be a Democratic/Republican program? After all the Dems gained control of the house and senate in 2006, as I recall, and Bush could not have signed it without those in control of congress passing it.
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Old 10-17-2010, 02:57 PM   #28
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what happens if you or spouse dies? I would think that the debt would have to be paid from the estate....
Nope, or at least not in the case of my student loans. They are specifically forgiven if I, the borrower, die before it is repaid. I treat this as an adjustment when I calculate my life insurance needs. However, my SL debt is just a bit above $5k and I will probably finish paying it off by the end of next year.

I think similarly to FUEGO, I think: I will vote and advocate for the government that I think properly aligns incentives (among other things that are important to me politically). And I will use the rules of the government I get to my full advantage, including tax laws and any other government programs that are ill-constructed.

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Old 10-17-2010, 03:46 PM   #29
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Not wanting to turn this political, but wouldn't it be a Democratic/Republican program? After all the Dems gained control of the house and senate in 2006, as I recall, and Bush could not have signed it without those in control of congress passing it.

He could have vetoed it. But the suggestion that it is somehow an Obama program simply distorts the truth.
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Old 10-17-2010, 03:55 PM   #30
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And I will use the rules of the government I get to my full advantage, including tax laws and any other government programs that are ill-constructed.

2Cor521

We call this the "I have no ethics I only have to comply with the law" approach, also known as the TITANIC defense that We don't have to make it safe, we only have to comply with the enforceable rules. Its also known as the Nuremburg defense. It was also Bill Clinton's defense strategy. I have no ethical problem in general with people who comply with the specific intent of ill-considered programs. The ethical issue is generally related to the effects of confusion in the regulation. A lot of people die because products are in legal compliance with regulations but violate the intent of a law or regulation.
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Old 10-17-2010, 04:08 PM   #31
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I know you enjoy being a goad, but think carefully before you turn your kids into the equivalent of little communists- putting all their energy into gaming the system rather than into accomplishment. You may be old enough to escape some of the corrosion that always comes from this course, but they definitely are not. Find a way to get down to Cuba for a look see.

Ha
Why does system gaming = communists? People have been gaming systems since systems were invented.
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Old 10-17-2010, 05:10 PM   #32
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I did not blame Obama! Unlike you, I blamed both the Republicans and the Democrats!
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Old 10-17-2010, 06:07 PM   #33
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snip...

Apologies regarding my failure to respond to your Q regarding income. I was away from the thread for a while and had a lot of other responses to make! At least one disinterested poster had the courtesy to tell me that they are ignoring this thread, and hence no response was required!

To answer your question, yes, you can assume for the sake of this thread that our current 1040 AGI is in excess of $66k. Though due to the nature of the tax code, it isn't too much higher than that. Obviously our total gross income is MUCH higher than that.

Keep in mind though that we have 2 young children and both of us sacrifice to keep working and not spend time with our kids or be a stay at home mom (or dad in my case). In the parlance of 2010, we are "entitled" to have one of us stay at home to take care of the kids, hence our AGI would be well below $66k if we decided to exercise our "entitlement".

snip....


Keep in mind that AGI is BEFORE itemized deductions and exemptions.... so your kids, taxes, etc. etc. do not reduce your AGI... you might be looking at the wrong number that will be used.... unless you put down the wrong info...

As an example.... my taxable income is about 65% of my AGI.... because of kids, deductions etc... this can make a big difference in how much is paid....
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Old 10-17-2010, 08:04 PM   #34
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Similar, but expanded, line of reasoning here, and some interesting discussion:
Housing stimulus
Interesting quote from me in that thread:

Quote:
I am setting a personal goal to extract $30,000 from the government this year and next. I will do whatever is legally allowable to achieve this goal. I figure with enough effort, hard work, and diligence I'll be able to get my fair share. If you don't get yours, well, thanks!
So this thread regarding student loan IBR and debt forgiveness is just me working toward my goal. I'll book those $30000 gains and then some if I decide to pursue this IBR/debt forgiveness plan. Those who think I'm a weasel: put me on ignore! But do so at your own peril, because you may miss out on a clever way to take a buck back from your ole Uncle Sam next time he dreams up some convoluted incentive to achieve some lofty and noble goal.
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Old 10-17-2010, 08:08 PM   #35
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I agree that the brickbats being thrown at Fuego should instead be directed at those who write the rules for these programs.

It can be argued that Fuego is now doing the most most productive (and patriotic) thing possible:
-- Looking to extend his repayment so the money stays at work in the private sector rather than going to Washington.
-- Most importantly, he's posting here and baldly exposing this crazy waste of taxpayer money. Over 250 people have read this post--that's a lot of publicity. Maybe each one will tell a few folks. Hopefully the awareness and anger about programs like this will contribute to outrage among the electorate and the curtailment of these giveaways.
Yes; I hope folks make some calls to congressman and say why are we subsidizing this almost-millionaire 30 year old FUEGO fellow by letting him shirk his six figure student loans. Let's get rid of the debt forgiveness altogether and save the federal coffers a couple hundred million (or billion(s)). If that can be my contribution to society, then it would be great!
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Old 10-17-2010, 08:16 PM   #36
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Ahem. The logic behind these state/federal subsidies is that the govts avoid the environmental/legal/infrastructure costs of building more utility plants. Seems cheaper to just let a few foresighted individuals keep their money instead of raising everyone's taxes (or electric bills) to pay for more problem-creating industry.
But "environmental/legal/infrastructure costs" are job creation! Why not create a couple million new jobs building new power plants using proven tech that works with known risks?

I seriously considered getting a couple kw's of solar panels up and running because I could net some cash from doing it, with a very decent payoff in 5 years. Not quite lucrative enough though given my latitude. Not that the feds or the state cares if it is appropriate at this latitude....
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Old 10-17-2010, 08:21 PM   #37
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Keep in mind that AGI is BEFORE itemized deductions and exemptions.... so your kids, taxes, etc. etc. do not reduce your AGI... you might be looking at the wrong number that will be used.... unless you put down the wrong info...

As an example.... my taxable income is about 65% of my AGI.... because of kids, deductions etc... this can make a big difference in how much is paid....
Our taxable income is also much less than AGI. But I was referring to the right stats about AGI being the key metric. The benefit of kids is the headcount in our household. IBR sets your repayment amount based on a threshold tied to the poverty level (150% of the poverty level). So 2 more kids equals a higher poverty threshold ($33k w/ 2 kids vs. ~$21k w/ just DW and I if I recall correctly).

So changing the number of kids doesn't change the AGI a lot (however kids still affect AGI some, due to things like dependent care costs and educational benefits potentially coming out before the AGI line at the bottom of 1040 pg 1).
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Old 10-17-2010, 08:29 PM   #38
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I think similarly to FUEGO, I think: I will vote and advocate for the government that I think properly aligns incentives (among other things that are important to me politically). And I will use the rules of the government I get to my full advantage, including tax laws and any other government programs that are ill-constructed.
You can either get angry at all of these wasteful unneeded spending programs, or you can get rich off of those that you legitimately qualify for. I figure everyone can think up something better to do with free money that they can get back from the government vs. the crap the government would spend it on. Hey, if your moral reservations prevent you from benefiting from these crazy government programs, then take the money and give it to your favorite charity.

I mean, I would do this. If I had an extra $100,000+ from not owing on student loans, I could give more to charity.
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Old 10-17-2010, 08:31 PM   #39
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Nope, or at least not in the case of my student loans. They are specifically forgiven if I, the borrower, die before it is repaid. I treat this as an adjustment when I calculate my life insurance needs.
Yes, federal student loan debt is forgiven in the event of death of the debtor. I consider it a free six figure life insurance policy. I also know that should DW or suffer from a premature demise, it would bump up the NW by a good bit immediately (that's the "grave" part of cradle-to-grave).
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Old 10-17-2010, 09:02 PM   #40
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I did not blame Obama! Unlike you, I blamed both the Republicans and the Democrats!

I didn't say you did . I clearly posted the quotation I was responding to.

"Originally Posted by chinaco
This is an Obama program. The voter backlash will be in less than a month."
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