So the essence of the real, unasked question is “How can I passive-aggressively slow roll my repayment to minimize the amount I actually legally-but-not-morally owe without suffering any actual penalty?”
Amiright?
Yeah. So my rough plan is to kick the can down the road a decade or so. I can’t talk about the far future, but I can take 6 hours a semester for a decade. Nobody ever said they have to be difficult courses, they could be “business ethics 301” or something, from a local community college online, where I just read the chapters real quick and 3 times a semester take an online open book test.
It could end up being a trivial amount of time spent, 20 hours a semester total, or 50 or so hours a year. I know I had courses that were that easy in college so they do exist. I kind of wanted to take stuff that would be more difficult and actually useful, but whatever.
And then, in the “far future”, well, I can legally stick my money in banks that do not honor forfeiture/seizure requests from the USA. I would do this openly and above board, reporting the existence of the accounts…but if the bank refuses to honor the legal request to freeze the account, what can the Feds actually do…
Anyways, I wouldn’t do anything but stick the money there, and then, maybe in the FAR far future, 30 years from now, I would have the option of leaving and dodging my debts that way.
I can’t really say. Just that I’m going to find the most optimal way that I can to pay as little as I can, and I won’t feel bad about it.
If I might ask just one more impertinent question, in the scenario of ‘possibly a share of millions’, is a repayment plan then a possibility? Just curious.
Well, see, this is where abusing that “in school deferment” loophole could be real handy. The year I actually “cash out” my share and for that year or 2, have a tax return income of several hundred thousand bucks, that’s when I’m a student in school. Then, the next year, living off the money I now have in the bank, I switch to income based repayment. Maybe work a part time job in the library or whatever. I only have to total up 10 years of that kind of work and my debt gets zeroed out, and it doesn’t have to be in a row.
Doing work for a private contracting business means I get to control better which years I cash out and which years I defer. So cash out years, I am in school on paper, and years I am living off the money from cash out years, that’s when I’m paying 15% of income.
Yeah, that’s the solution. It’s optimal and at no point have I broken any rules, at no point do I have the government debt collectors looking at freezing my bank accounts, nothing. Come to think of it, there’s other tricks, such as withdrawing the money during “income based repayment” years by actually borrowing against invested assets so I don’t pay capital gains taxes which also stops there being any capital gains that are part of my income…
My little scheme ain’t any worse than the tax avoidance schemes all the big boys use. Only problem is I have to be a lot more careful, because I don’t have the limitless protection against the consequences that say Bank of America gets when they get caught. If they get caught breaking the law, they just pay a fine, and none of their employees are ever at any credible risk of being punished…
Your plan still strikes me as deeply sub-optimal. You’re going to pay (by your estimate) $5000/year for ten years. And then you’re going to spend hundreds of hours per year in useless, waste-of-time classes. (There’s no fucking way you can continue to qualify for half-time enrollment, for ten years, while only putting in an hour of work per week. Even with “Ethics of basketweaving 101”).
Net money, out of your pocket, will be a pretty big chunk of your debt. Given that you say that you’re working more than full time now, it seems like any time you spend in school will seriously harm your professional prospects.
Undeserved debt sucks. But if you can get over your resentment, you can move on with your life with far less pain and resentment if you just fucking pay it off as soon as possible.
If you hadn’t gone to university at all and racked up this debt would you be anticipating earning six figures? In other words, was your entire university education a complete waste of time that has made no difference to your life other than the debt, or did you actually gain something out of the loan? I suspect you are absolutely morally obligated to pay a significant chunk of your debt.
One thing I’m confused about: usually the loan provider has nothing to do with the school. It’s either the Feds, the state, or a private firm. The school got their money either way, so trying to punish them by avoiding payment is misguided. Is that not the case here?
That’s not going to look weird at all, where every other year you are volunteering at the library (you need at least 30 hours a week to qualify for forgiveness, BTW). I hope you have some means of keeping your skills up during those years.
Why do you think you can always find new contracting work where they accept a sweat equity payment scheme? That’s a much narrower slice of the employment pie than salaried jobs. Because they’re less common, you have less negotiating power. You also have to deal with the risk of the company going under before you can cash out.
I say move to an area with a high cost of living, find a well-paid salaried job, and live simply for a few years. You’ll have a huge amount of disposable income. Pay off the debt and forget about your revenge fantasies.
The only way this works, for the long haul, is if you can maintain the same level of anger and bitterness. To do that you’re going to pretty much have to make it your daily bread.
Interesting life path choice.
Good Luck !
It’s tougher than you think, to borrow against investments. We did this once, for the down payment for our first home (there was an expected inheritance which was to come in about 6 months).
They only loaned about 60% of the value of the stock - and only because I had a good job and my husband was in grad school with a bit of a stipend. As you describe it, you won’t have ANY income those years. Many banks won’t even touch such a thing. Might be a better idea to, say, pay cash for a house during the flush years and set up a big HELOC you can draw on.
You could borrow against a secured asset such as a cash bank account, but at that point why not just use the bank account for living expenses.
For the years you’re in school (and deferring repayment) and years you’re doing public service, don’t forget interest is still accruing. Any routine borrowing you’d do in the interim is going to be affected by that rather huge elephant in the room - in other words, if you can pay everything in cash, you might be fine. In the US, it can be very difficult to get by with no credit rating.
Forgot to mention:
In the meantime, whatever you decide to do, look into refinancing the loans into a single loan at what is quite possibly a lower interest rate. Easier to keep track of, and quite likely to save you money if your Evil Scheme For World Domination doesn’t quite work out.
Consider tradeoffs between the cost of schooling and what you’d pay those years - a significant issue if your scheme doesn’t work out. It’s not worth shelling out 15,000 a year in tuition when your loan balance is increasing 8,000, if you wind up not being able to write off that loan. Then you’re out 23,000 versus just the 8,000 (plus principal), plus whatever additional interest accrues on the 8,000.
Is the annual payment required to service these loans truly more than the tuition you’d be spending? If not, it sure seems like you’d be cutting off your nose to spite your face. In other words, you’re spending more money to Stick It To The Establishment, than you’d have spent to just make the damn payments.