Is This Student Loan Settlement A Good Deal?

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31 replies
  1. Jacob Greenstone
    Jacob Greenstone says:

    I wouldn't say 20%. He would be paying more 23-24% if he is already making 78k. Assuming the standard deduction he's down to 66. About half of that would be taxed at 22% and the other amount at 24%. I would save around $8,500, maybe a little more to be safe. Not sure how much he is already having withheld and if he would otherwise get a refund, it would be reduced by that amount. Still, rounding up to $15,000 is a lot less than $42,000+ interest.

    Reply
  2. HenryConnie Sun Conure
    HenryConnie Sun Conure says:

    Dave asked him if he got it in writing and he said yes, but I wish Dave would have asked about the criteria in which he qualified for the forgiveness. I believe the caller believes he made this agreement with Avian, but actually is working with a fraudulent company.
    Something of that nature happened to me, except it was my trusted loan provider, NelNet that I was sure I working with. I made the call, so it looks like I initiated the relationship with the fraudsters, but i made a call to NelNet. I lost 500.00 because of it, and they transferred my loans from NelNet to Fedloans. Which I have no reason to do. When talking with the Real NetNet customer service people, I found out I don't fit either of the two criteria for loan forgiveness. I borrowed the money, will I pay it back. I deserve the 500.00 hit for accepting the offer and not asking for it in writing.
    These people should be arrested for what they are doing though.
    They were able to provide information that gave me the impression I was working with NelNet

    Reply
  3. digital subliminal messages
    digital subliminal messages says:

    S T O P. R a P E I N G. B a b I E S
    No it's good here / just another issue with my sister/…see I've put it in print a looot of times / // it's not a ggear it a point of personal s er security// they keep selective hearing// // but half ov my point ,??why not hot to court in Chattanooga over that/ and what is stalking a chick across country gonna show// that's a bet/ not just give the blame , but take you part of responsibility /fix what you can and see the man

    Reply
  4. Heath McConnell
    Heath McConnell says:

    "Until you get the 1099, I wouldn't pay any taxes…If they never send you a 1099, then I would not pay taxes on it."

    That's VERY bad advice. The 1099 simply raises the debt forgiveness income to the IRS's attention. Legally, the taxpayer is still obligated to report and pay taxes on that income; and should the IRS decide to initiate an audit and find out about this debt forgiveness, they'll add it to that year's tax bill (plus interest and maybe penalties) notwithstanding the fact that the taxpayer never received a 1099 for it.

    The other thing I would recommend, given the taxpayer's other debt, is for the taxpayer to ask a CPA to run a solvency calculation. One of the exceptions to the general rule on recognition of income on forgiven debt is the insolvency exception. This exception basically says that debt forgiveness income does not have to be recognized to the extent that the fair market value of all the taxpayer's assets is less than the taxpayer's debt immediately prior to the debt forgiveness. Or, stated more simply, to the extent a taxpayer has a negative net worth, they do not have to recognize that portion as income.

    For example, let's suppose that the taxpayer has $100,000 in various assets and $120,000 in debts, of which $30,000 is canceled. The taxpayer is insolvent by $20,000. Therefore, the taxpayer's recognized cancellation of debt income is $10,000 ($30,000 total debt forgiven less the insolvent portion).

    Reply
  5. Lien Boy
    Lien Boy says:

    A very big hello from India…love your show …i can relate so many instances on the show..and try to used whatever i could from the show …i paid of my credit card and im a debt free…i still struggle to save money though… Im glad i find you on youtube….

    Reply
  6. Jules
    Jules says:

    It amazes me how many commenters are blaming the caller. Navient, the loan servicer he used, was committing massive fraud. He didn't "cheat" his way out of his loans, he was cheated. Instead of bitching about the caller, go stand outside the Navient head office.

    Reply
  7. 1
    1 says:

    This kid said once I pay my student loans. Then I have to focus on my wife’s student loans 😔 The next ten years they will be working to pay their student loans

    Reply
  8. Grant Goldberg
    Grant Goldberg says:

    The student loan program is slavery. I have no problem with private banks making student loans, but when those loans get backed by the federal governmment it introduces a huge moral hazard. If the banks won't take the risk with their own money I don't want the feds doing it for them. Since 2010 all student loans are federal which is why tuition is up 800% beyond inflation. Whatever you subsidize you increase. Whatever you tax you decrease.

    Reply

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