Thursday, June 05, 2014

Gross Income Is A Very Stupid Metric

On paper, I make pretty damn good money. I'm occasionally impressed by the number associated with my gross income.

Too bad I don't get all of it.

During the divorce last year, I put my student loans in forbearance. I maxed out my credit card and line of credit as well as wiped out my savings paying the financial vampire; I mean, divorce mediator.  Something had to go from my budget.

I'm no fan of student loans. They're a huge financial bubble as well as a government protected monopoly. But in one single point of defense, they are by far the easiest bill to call up and say "I can't pay right now. What can we do about this?" That won't work with rent, car, utilities, cell phone, mortgage, or anything else. But at least the government sanctioned and protected student loan monopoly is willing to deal. They've got you by the short hairs anyway.

So a year later, I'm still paying off the divorce and trying to get my life back together financially. And the student loan payment would really hurt. So I called to ask for another forebearance.

The operator tried to help me avoid a forbearance by offering me an economic hardship deferral. But when he asked my gross monthly income, he said I made too much money.

I said I had some mitigating factors. I don't have access to my entire gross income. Not only do I have to pay taxes and benefits, I also have a substantial portion that has to go to child support and alimony. I said if I had access to the entire gross income, we wouldn't be having this conversation. Then I asked "Do you have access to your entire gross income?"

He said "I see, sir" and processed the forbearance.

A lot of the apartments in my area are "income restricted". That means, they'll give you a break on rent if you don't make much money. But if your "gross income" is above a certain level, they charge you more money for the same apartment. It doesn't matter what mitigating factors are involved. On paper, you make too much money so you must be punished.

They need to come up with a better metric, like a real economic viability index or something. 

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