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Question specifically about US economy.

I have a kid in college and so far I have been paying directly for his fees. However, with the recent election victory, I am beginning to think this is a dumb move. If, as has been promised, that the government is going to pay off all college loans would it not make more sense to borrow the money as a college loan, risk the few percentage points of interest, against the possibility that the government might just pay it all off?

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  • Don't count on campaign promises. I expect there are a lot of people - not all of whom voted for the other guy - who'd find this extremely objectionable.
    – jamesqf
    Nov 21 '20 at 16:32
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The risk is that you don't qualify for loan forgiveness.

  • They could limit it to community college students.
  • They could limit it to state school students, or only the amount of loans that would have been required for state schools.
  • They could limit it to students who already graduated.
  • It might only apply to specific majors.
  • They could limit it to families below a specific income level.

There is also the chance that the loan forgiveness could be a taxable event.

It could also take years to pass, and years to go into effect. How long will you wait. You will have to stretch out the payments to maximize the forgiveness while you are waiting.

There were stories in recent years about government workers who thought they were in a plan to forgive their loans after 10 years. Only to discover that they weren't, and the clock never started.

The risk is real when guessing about bills that haven't even been written.

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  • Definitely take all you can get in subsidized loans, beyond that, it's a bit of a gamble.
    – Hart CO
    Nov 21 '20 at 2:51
  • Above that it seems like a bad gamble. I'd expect they would restrict any plan such as this to not let people jump on the bandwagon at the last minute and get free money. That wouldn't be the intent of student loan debt forgiveness.
    – JohnFx
    Nov 21 '20 at 13:28
  • It's definitely not all debt. "Biden had said he would forgive $10,000 of the debt for all borrowers, and the rest for those who attended public colleges or historically Black colleges and universities and earn less than $125,000 a year." Nov 21 '20 at 21:22

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