Tuesday, October 2, 2012

First Indication that Treasury is Serious about Student Loans Being Paid Back

In discussions with many students, I get the sense that the prevailing thinking seems to be that the government will "do something" to eliminate the student loan burden. Not so fast.

The Treasury has no money to bailout the loans and the banksters will want to get paid. I can see riots and protests down the road on the issue, but for now, the Treasury has fired its first shot indicating that those holding student loans should get serious about paying the loans back.

 The Treasury, the D2D Fund, and Center for Financial Services Innovation today announced the winners of the App Design portion of the MyMoneyAppUp Challenge—a contest offering cash prizes and recognition for the best mobile app ideas and designs "to help Americans make smart financial choices, access high quality financial products and services, and ultimately control and shape their financial futures."

So was the winner someone who came up with a way to balance personal budgets, track banking accounts, etc.? Not quite.

It's almost comedic, but the Grand Prize, "for making smart financial choices" app,  went to Nicole Kendrot, who designed MoneyApp: Z. From the Treasury release:
z helps to make student loans easy and simple to manage.  Among other features, the app allows users to:  link information about all of their student loans in one place; create a payoff plan that syncs with their budget; suggest ways the user can reduce their payment period and total interest paid by making extra payments; learn about managing student loans; and test their knowledge about student loans and personal finance.
(ht Bob English)

UPDATE:

A PR agent writes:
Nicole Kendrot, a good friend of mine, brought your post to my attention. The name of her app is actually Centz not Z. There was a typo in the Treasury's press release.

Nicole hopes that she will have the opportunity to make her app a reality to help the millions of individuals, including herself (and me), who have student debt.

15 comments:

  1. HAHAHAHAAHHA! Let me get this straight... The Treasury that bleeds $1.2 trillion a year... no wait... The Treasury, headed by a tax cheater... they know best how their subjects should manage their finances... and they're going to spend other people's money on bringing that "solution" to light.

    Wow. Thanks guys.

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  2. Don't worry student loan debtors. Some future demagogue will buy a few million votes in a close presidential race by signing an executive order relieving student loan debtors of their repayment obligation. Result: The corrupt "news" media will hail the policy as enlightened and compassionate and victory will be assured for another socialist hack.

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  3. But there is already a student loan bailout, two of them actually. One is income-based repayment (pay what you can and we will forgive the rest) and the other is the Public Service Loan Forgiveness program (work for govt or nonprofit and make payments for 10 years, then they forgive the rest). Of course this is forgiveness in the future, and just like spending cuts in the future it may change before liberation arrives.

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    1. You are leaving out the part where the "forgiven" portion is imputed to you as income in the year that it is forgiven, and then you owe the IRS income tax on it. (Presumably due immediately...as in the next APril 15th.) And on the IBR, you may end up at a higher balance than you started with, so that tax may be a pretty tough nut to come up with.

      Tell the whole story.

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    2. Are you saying this additional bailout has no benefit to the debtors and no cost to the taxpayers? Give me (or even just forgive me) $50k or so, and I will be happy to pay taxes on it come April 15. "The whole story" you want told is a government that is redistributing the wealth of responsible ones to the majority. It can't and won't last forever. To hell with it and people like you who defend it.

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  4. What has really sucked in the last go around with Student Loan indebtedness is the gun-to-the-head tactics of the powers to be to decide how much responsibility the parents MUST shoulder before they will enable their now hostaged children to be allowed to obtain the education they want to succeed in their future careers (the children's). I can't make this up...the legislators that can't make a balanced budget let alone present one, tell the bankers that in order that they can loan money, the parents not only have to cough up x amount of money for school but must co-sign to make a loan happen in addition to coughing up a certain amount of money. WOW That makes the parents responsible for the entire education whether they were planning on it or not..and if their young prodigees don't cough up the money on repayments...they will just come after the parents or some other mandated co-signer, even if it means their ss checks get a portion confiscated....cant make this up....thats what we get when we think career politicians really have the best interest of its electorate, or that the banks really care for anything except the greased bottom line...cause this is enforceable thru the Treasury and IRS I believe...another debt that follows you to the graveyard and most likely beyond.

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  5. The law was changed during the Bush 2 administration. Before, a student could declare bankruptcy like anyone else who was in completely over their head and get a chance to start over - without credit, but get a fresh start.

    Airlines declare bankruptcy. Congressmen and women declare bankruptcy. Businesses everywhere do. Homeowners can. Why are students singled out for debtor's prison or the modern equivalent thereof?

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    1. The reason student loans are different from business bankruptcies, is that in most cases the Federal Government made loan guarantees on those students loans (if not direct loans from the Federal Government), so the taxpayer is on the hook for the defaults.

      Generally, business bankruptcies do not involve taxpayer money or guarantees, unless, of course, it's a bailout of the 2009-2012 era for big banks or GM or Chrysler or other heavily unionized industries (or solar companies linked to Obama fund-raisers - almost forgot that one!).

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  6. It's scary to think of all of these students out there who feel that the gov't should forgive their student debt; our children and young people (and many adults who should know better) are increasing their sense of entitlement. Whatever happened to personal responsibility? I paid my way through school by working, as many people have done. Taking out a huge loan and just going to school and not having to have a job and work (the real world) is a luxury. I had to help take care of my family financially while going to school. Any last shred of hope and respect I have for our republic will be shattered if the gov't even considers forgiving any of this debt. An education isn't a guarantee of a job, it's an investment in yourself. And you'd think that any person going to college would have half a brain to realize that if their tuition costs $100,000+ it's going to take a long time to pay it off, especially if their chosen field doesn't pay too well. But I guess it just goes to show that a college education doesn't make you smart, it just makes you look smart to others who don't know any better. I never finished college as I found a trade I enjoy that pays well with just a year of schooling, and I speak, write, and utilize critical thinking skills better than most of my "college educated" peers. Seems the college education is a bit overrated.

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  7. be very carefull about student loan consolidation..get all the ends and outs...12 or so years ago i consolidated 42000. in student loans which had grown to 56000. with interest at 8.25percent..W.T.Ford tacked on 18000. in collection cost so the beginning balance on my loan was now 74000. startled me obviously...should have read the terms better. from 56000. to 74000. overnite just becuase i did not read everything..would not have done it had i known. the following couple years rates dropped to historic lows with some loans being consoled at around 3.25 percent . Was told i could not refi. as i had already consolidated. Moral to my story...as few student loans as possible , none if possible .. get a lawyer or accountant to read the fine print if you have to .

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  8. Some of the dumbest persons I know have degrees.

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  9. The main thing to remember is that when private banks were making "guaranteed student loans", college was affordable. Now the government grants the loans and services them. This has led to the rapid rise in college tuition. So when a presidential candidate still stumps with "We will make education more affordable.", watch out. Also still promising affordable housing and that is working well so far.

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  10. An education at a top school can cost $100,000. Students graduating recently are at the 50% unemployment rate because greedy corporations want "experienced workers". They have billions in cash, but refuse to spend even a couple million to train new recruits. Or, they force new hires to sign on as unpaid interns. So what hope do these kids have of ever getting out of "debt slavery". IMO, just avoid college, and don't become a debt slave of a government that gives trillions to banks but won't help it's recent graduates. Obama and Romney stress education as essential to future competition in the world economy, but then shackle recent grads with crushing debt burdens. Most college degrees are useless, and the schools are not interested in educating a future worker, they are just degree mills that are looking to make obscene profits.

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  11. Sometimes i wish i never went to college

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  12. If this app they speak of actually has a good chance of taking the student loan burden off our students, it's going to be a good help for the kids; might even make them perform better because they can focus on school work and not paying off debts.

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