I have friends who have paid more than the original amount of their loan in interest and still have almost all the principal left. There should be a cap on interest.
As a tax lawyer you understand this is only part of the issue and as I recall Elliot Ness was a special agent assigned to the Treasury Department. The task force Elliot Ness was in charge of later moved to the the Department of Justice why the IRS maintains special agents today is the mystery. I suspect the tactics employed by J. Edgar Hoover at the time had something to do with it. In any case that is now history. On the other hand adding thousands of agents is not going to solve this problem. like so many institutions the answer always seems to be throw more manpower at the issue instead of doing that really needs to be done. An over haul of the tax code is direly needed but then simplification might put many tax lawyers and tax preparers out of business. 40 Years of Failure: IRS Unable to Fix Computer System A 60-year-old IRS IT system won't finish modernizing until 2030 The IRS completed most of its planned IT modernization activities for the last two fiscal years on schedule and within cost, but one of its efforts, intended as a replacement for a 60-year-old system, is now on track to replace core functions only—and it may not be complete until 2030.
And the antiquated IT is one of the consequences of decades of underfunding the IRS. The IRS is underfunded, but it needs more than cash to stop tax cheats Funding cuts prevented the IRS from replacing its aging technology, crippling its ability to pursue its mission. The IRS has some of the oldest computer systems in the federal government, dating back over 60 years — and as more and more returns are filed electronically, and data analytics platforms continue to mature, the agency finds it difficult to keep up with would-be tax cheats. Funding cuts also left the agency short-staffed: With personnel costs accounting for 70 percent of its budget, the IRS could not counter the attrition when employees retired or resigned. This is from seven years ago and little has changed although hopefully increased funding for the agency will help address the problem. Poor IRS Service Reflects Congress’s Deep Funding Cuts | Center on Budget and Policy Priorities Congressional appropriations provide the vast majority of the IRS’s resources, and Congress has cut funding significantly since 2010 for each of the three main parts of the IRS budget: taxpayer services, operations support (primarily information technology or IT), and enforcement.
Here's an interesting point made about all the old people who are complaining about young people getting debt relief: The hidden subsidy behind those old 'bootstrap' students In 1980, student tuition at Alabama public colleges and universities accounted for 27% of all revenue. That other 73%? Where did most of the money come from to run a state college? It came from state and federal funding, in addition to foundations and other nonprofit institutions, according to data from the State Higher Education Executive Officers Association. But mostly it came from the state. * * * Today, tuition in an Alabama public college or university pays 67% of the costs of higher education. In Alabama’s four-year colleges, it’s 74%. To review, in 1980, students’ tuition was 27% of higher ed revenue. Today in Alabama, it’s 74%.
The out of sync level of student loan interest rates is something that has been a silent issue for a long time. Rates that I've seen are often well above mortgage and even many unsecured loan rates. Conversely, when I was in school back in the dark ages of the mid 70s, my loan rate was 3% which at the time was well below all other borrowing rates. I may be wrong but it seems like the Feds' subsidy of student loans has changed over time. My first mortgage was 12% while my student loan was 3%. Needless to say, I took my time paying my 3% loan off.
True and the government shouldn’t be in the loan shark business either. The whole system needs to be overhauled.
The America of Trump and Betsy DeVos we live in believes that poor people who make financial mistakes for poor reasons need to be financially punished and behind the 8-ball for life.
Bait and switch alert, after the election it will suddenly become undoable without congressional approval.
Perhaps predatory is a better term. Happy? It cracks me up that for once, government is trying to work for the middle class and everyone has their panties in a twist. I’ll give the Republicans credit though, they’ve convinced a big chunk of Americans that cutting taxes for rich and screwing them over is in their best interests. Bravo
Reminds me of payday loans…. Most other types of loan had the interest only done away with, but not student loans. System revamp along with potential earnings and job potential
