[HN Gopher] U.S. forgives 40k student loans
___________________________________________________________________
U.S. forgives 40k student loans
Author : prostoalex
Score : 147 points
Date : 2022-04-20 15:28 UTC (7 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| [deleted]
| moralestapia wrote:
| Just to have some perspective, that's 40k out of ~40 million, or
| about 0.1%.
|
| The cynic in me is already speculating on why/how that 0.1% was
| chosen ...
| merpnderp wrote:
| By working for the government. People must be rewarded for
| taking jobs that pay more on average, have better benefits on
| average, and are much harder to be separated from on average.
| Barrera wrote:
| > Some 43.4 million borrowers are carrying about $1.6 trillion in
| outstanding student loans from the Federal Loan Portfolio, an
| average of more than $37,000 each, according to the Education
| Data Initiative.
|
| And yet the content of a college education can be had for free on
| YouTube. Colleges don't sell education, they sell a credential.
|
| Public policy has been lagging behind technological reality for
| decades on this one.
| johnqian wrote:
| Whether it be healthcare, housing, or education, the government
| always responds to rising costs by subsidizing demand rather than
| helping increase supply or fix incentive structures. Really
| frustrating but almost inevitable because subsidizing demand is
| the one "solution" that sounds good to almost everyone involved.
| The suppliers make more money, some consumers benefit short-term,
| few understand that this just drives prices up further. Anyone
| have ideas on ways this cycle could end?
|
| (I realize this article isn't what it seems, but I'm still taking
| the opportunity to discuss this issue)
| EnderWT wrote:
| This NPR article goes more in depth about this:
| https://www.npr.org/2022/04/19/1093310151/student-loans-inco...
| lr4444lr wrote:
| Do the recipients have to pay tax on the amount forgiven?
| [deleted]
| bnjms wrote:
| I have an unpopular opinion that forgiving loans hurts those that
| did not go to college because of ability or cost. This font read
| to me like a blanket forgiveness is object to though.
|
| I understand the support from those who've already paid off their
| loans but this does not apply to those who did not go. Also I
| suspect it depresses wages as people will not need to demand
| higher wages and this seems to be used to funnel them into
| government jobs.
| xwdv wrote:
| Canceling student loans will never happen. It's crazy how so many
| people have hung their hopes on this event occurring. To the
| point where they will likely die or become very poor if it
| doesn't happen.
| blippage wrote:
| I'm a UK guy in my 50's. I went to uni (the US term for college)
| in '83. At the time I was in the minority of the population. I
| was given a grant of PS3000pa and was able to make ends meet. I
| might have lived in, shall we say, the most salubrious of
| environments, but I emerged without debt.
|
| Same thing when I did my masters and PhD a few years after that.
|
| I basically caught the tail end of uni, when it was for the
| minority of folk. I shake my head at the monster that higher
| education has become. I'm hardly in the loop anymore, but I've
| noticed that the UK want to nickel-and-dime the students with
| tuition fees, graduation fees, and whatever fee that they seem to
| concoct on an ongoing basis. The US seems even worse, with books
| costing 100's of bucks.
|
| Shocking. Truly shocking. The whole thing is a shameful scam, and
| no-one is calling it out for what it is. The truth is, one rarely
| /needs/ a university education. It's really just a piece of paper
| to get you into an office job - if you're lucky.
|
| The problem is, now that everyone's got a degree, they're not
| particularly valuable in their own right. It's a foot in the door
| to a club that keeps upping its membership fees.
|
| Dare I say it, but it was better when a uni education was the
| preserve of the elite few. Now, I appreciate it that this is
| going to rankle a lot of sensibilities about "fairness". If fewer
| people had a uni education, then it wouldn't be considered quite
| so important, as employers would have to take what they could get
| rather than insisting on a degree. Plus it would also put an end
| to a large swathe of the population starting their young adult
| life with a small mortgage.
|
| In my eyes, what we're seeing today is morally unconscionable.
| Lambs to the slaughter.
| tppiotrowski wrote:
| Is this a by-product of reduced government funding? I know my
| state school received less funding from our state over time and
| that's where I thought tuition and fees had to make up the
| shortfall [1]. In turn universities increased frivolous
| spending on housing, sports and facilities that serve little
| education purpose but are intended to attract more tuition
| paying students.
|
| [1] https://wispolicyforum.org/research/uw-in-the-21st-
| century-l...
| AnIdiotOnTheNet wrote:
| > Dare I say it, but it was better when a uni education was the
| preserve of the elite few.
|
| I agree, but there is fundamentally no reason this level of
| education need be restricted to the elite few today even if we
| ran the clock backwards on everything related to university. We
| live in the information age now. I can have access, for free,
| to all the educational material of any university in the world.
| I can't have access to their equipment[0], and I can't have
| access to their professors[1], but the only real problem with
| that today is that I don't get a piece of paper at the end that
| says I got a piece of paper from a university.
|
| [0] Could be solved with some kind of rental program I guess,
| at least for equipment that isn't ridiculously rare and
| valuable.
|
| [1] How much access do the students have these days? From what
| I hear, TAs do a lot of the actual interacting with students
| part.
| strictnein wrote:
| A college degree, home ownership, etc were incorrectly seen by
| lawmakers as pathways to success as opposed to signals of
| success.
| MarcelOlsz wrote:
| I find myself in a very funny situation where I have a very
| high paying and great job, that I got without any education.
| Now that I want to emigrate to Japan, I need a degree, so I am
| going to study in Finland as real estate is cheap and I can get
| a degree for free there before moving. I literally just need
| that piece of paper.
| aksss wrote:
| I don't think Saul Goodman went to Finland for his degree.
| But seriously, it's dumb. People with years of demonstrated
| expertise and progressive responsibility denied opportunity
| to apply for jobs because they simply don't meet the MQ of
| the piece of paper. If you go back for it in the US you'll be
| confronted with extraordinary cost, silly pledges for DEI,
| and all the rest.
| sgjohnson wrote:
| There should be no student loan forgiveness. But bankruptcy
| should get you out of them.
|
| As it stands, not even bankruptcy gets rid of student loans. This
| is true in the UK too.
| theandrewbailey wrote:
| If we're going to be forgiving loans, we shouldn't be giving them
| out in the first place. Otherwise, we're going to be in the same
| spot in one generation's time.
| manuelabeledo wrote:
| The cost of higher education in the US is a joke.
|
| Universities are tax exempt, and highly profitable. Many have
| endowments over $1 billion [1]. Yet, the average cost in state
| is $10,000 per year, and almost $30,000 if out of state. For
| comparison, the tuition at Oxford College, one of the most
| prestigious institutions in the world, is $12,000 per year.
|
| Student loans may be considered even predatory [2], adding to
| the injury.
|
| There should be a better mechanism to allow people to go to
| college in the US, without subjecting them to half a lifetime
| of debt.
|
| [1]
| https://en.m.wikipedia.org/wiki/List_of_colleges_and_univers...
|
| [2] https://abcnews.go.com/US/wireStory/navient-settles-
| predator...
| phaistra wrote:
| I always found the following expression amusing:
|
| "Universities are actually hedge funds that happen to have a
| school attached to them".
| greedo wrote:
| Universities are football franchises that happen to have a
| school attached to them. The pull of NCAA sports is like a
| black hole.
| oh_sigh wrote:
| They were cancelled because it turns out the schools were
| scams. So it was a situation where the students got into a lot
| of debt, and got nothing(like an education or a worthwhile
| diploma) in return.
| thatguy0900 wrote:
| Are the schools no longer scams? All this does is help the
| schools, if new students think they might not actually have
| to pay that debt at the end.
| oh_sigh wrote:
| Do you think the schools aren't punished for being scams,
| and they're just free to keep scamming students? And debt
| relief helps the debtor, not the original receiver of the
| funds.
|
| Example: https://en.wikipedia.org/wiki/ITT_Technical_Instit
| ute#Legal_...
|
| > On August 25, 2016, the U.S. Department of Education
| banned ITT Tech from enrolling students who receive federal
| aid. The Department also doubled the surety funds that ITT
| Tech was required to have, and to produce those funds
| within 30 days. Stock markets reacted with a punishing 35%
| drop, which triggered a halt in trading, raising concerns
| about whether ITT Educational would be able to survive this
| latest decision.[73] On September 6, 2016, ITT Tech ceased
| operations and closed all of its locations, issuing a
| statement that attributed the closing to the Department of
| Education's actions.[28]
| bombcar wrote:
| The mistake ITT Tech did was being "for profit" - run it
| as a non-profit and be satisfied with enriching the
| management, and sail on.
| oh_sigh wrote:
| No, not really. The wikipedia page I linked lays out all
| of the illegal things they did, which are still illegal
| for non-profit institutions.
| uf00lme wrote:
| I don't know the Us system at all but it sounds like what they
| are doing are rewarding public service workers (eg teachers?)
| or charity workers which likely don't get paid well by
| cancelling their debt after a set time period of otherwise good
| behaviour. Which sounds equitable to me, although I'll never
| understand why high school is free but university isnt.
| [deleted]
| mc32 wrote:
| Just stop guaranteeing them, let students default on them. All
| these guaranteed loans that can't be discharged allows academic
| institutions to ratchet up the price. Let them calculate risk
| and price them accordingly.
| sharker8 wrote:
| This create market driven dynamics in which degrees basically
| are tailor made for industry. This approach disincentivizes
| pure research for scientific purposes.
| throw_m239339 wrote:
| > This create market driven dynamics in which degrees
| basically are tailor made for industry. This approach
| disincentivizes pure research for scientific purposes.
|
| Good, there is nothing wrong with all that. Degrees should
| exist so people find jobs in the real world. Research can
| be funded by the government itself. Absolutely no need for
| government backed student loans in either cases. People who
| want to go to private universities can get a regular bank
| loan, that's how it works in the rest of the world. The US
| system is unique and predatory.
| mc32 wrote:
| You're saying companies DON'T want researchers?
|
| In any case, if there is a specific need for specific
| research, I'm sure the gov can figure out a way to
| incentivize particular useful tracks which the market
| ignores. Grants programs, etc.
| abnry wrote:
| There is a tension between the two purposes universities
| have: To train students and to do research.
|
| I want both, but I have a hard time disapproving of more
| focus on training students, as they are the true customers
| of universities.
| bee_rider wrote:
| A future where universities looked more like community
| colleges situated next to research institutes, rather
| than weirdly blending the two, could be neat.
|
| Have people really interested in teaching rather than
| research teach the 100/200-level courses. The scientists
| next door can teach seniors and juniors, and show up for
| guest lectures.
| throwawayboise wrote:
| Pure research for scientific purposes is done by Ph.D.
| students and is already funded by research grants. Student
| loans are not part of the equation here.
| rendall wrote:
| This is the correct answer
| dehrmann wrote:
| The guarantee is the only reason the loans are made.
| Otherwise, you're lending a lot of money to someone with no
| income and no assets, and no one will want to make that loan.
| loeg wrote:
| They'd actually have to underwrite on the basis of the
| value of a degree -- yeah, no one is going to lend money to
| the same people who wouldn't be able to repay their loans
| after graduation. That's good!
| SamuelAdams wrote:
| This is a slippery slope though. This effectively turns
| universities into career-training centers. Eventually
| enrollment in less-profitable subjects, like dance and
| art, will decrease, forcing colleges to drop it from
| their programming.
|
| Then suddenly we have a society that does not appreciate
| art or dance or whatever other subjects were dropped.
|
| This is the slippery slope - creditors get to decide what
| others know and learn and pay attention to. Knowledge is
| no longer widely available - the experts (professors)
| might still teach at a college, but will be forced to
| either pivot or leave when the university slashes their
| programs. They could teach privately or for free, but I
| am guessing the number of students who they would
| normally teach drops significantly.
| bombcar wrote:
| > Then suddenly we have a society that does not
| appreciate art or dance or whatever other subjects were
| dropped.
|
| The assumption that you need a college degree in art to
| appreciate art is kinda ... out there.
| dcolkitt wrote:
| > Eventually enrollment in less-profitable subjects, like
| dance and art, will decrease, forcing colleges to drop it
| from their programming.
|
| If this is the goal, then the far simpler solution is for
| the government to explicitly budget a set number of
| grants for the most promising students in those fields to
| study specific subjects that supposedly have social value
| but low economic returns.
|
| It certainly doesn't make sense to subsidize loans for
| hundreds of marginal students to study "business
| administration" or "hospitality" at a tier four regional
| college to get one brilliant dance major at Carnegie
| Mellon.
|
| Far more efficient for the government to say "we have 800
| fully funded dance scholarships, 4000 art history
| scholarships, 2000 classics scholarships, etc. We're
| going to assign these scholarships to the most promising
| graduating high school students in these fields. And the
| scholarships will only be paid for top-tier universities
| that have demonstrated consistent excellence in these
| areas."
|
| That would by far subsidize a much higher level of
| cultural discourse at a tiny fraction of the cost of the
| current student loan system.
| kingrazor wrote:
| Is this really a problem though? Wouldn't arts programs
| simply move to being something offered to and studied by
| those wealthy enough to do so? I'm genuinely curious.
| theandrewbailey wrote:
| > This effectively turns universities into career-
| training centers.
|
| Isn't that the case already? Aren't most university
| students looking to increase their career prospects?
| Wasn't that the whole point of telling generations of
| kids to go to college, so that they'll get better jobs?
| loeg wrote:
| > This effectively turns universities into career-
| training centers.
|
| It's no change. That was already the premise of
| underwriting non-dischargeable loans.
|
| > Then suddenly we have a society that does not
| appreciate art or dance or whatever other subjects were
| dropped.
|
| Again, no change. If they were valued enough to support
| an expensive college degree, career prospects would be
| less dim.
| mc32 wrote:
| This is not a problem. Tooo many kids graduate with
| degrees in which they cannot find decently paying jobs,
| so they end up in a different field altogether. Why have
| that initial non-starter in the first place and place
| them into a career that has better potential in the first
| place?
|
| Once there are too few people in the arts, demand will
| incentivize more people to get into that field.
|
| Moreover, don't we currently have a problem where we
| don't have enough students going into STEM?
| BeFlatXIII wrote:
| Good. Accelerate and force the "everyone must go to
| college" issue. Revert it to scholarship-only (plus the
| rich dunces who can afford full tuition).
| bee_rider wrote:
| And then the colleges will have to reduce prices or go out
| of business.
| rhexs wrote:
| University employees are, unfortunately or not,
| consistent one party voting blocs. Cuts to them are
| highly unlikely.
| bee_rider wrote:
| Why not? I'm a university employee. Grad student, so
| maybe skewed a bit (are we talking about more permanent
| administrative employees? They I guess have different
| interests, since they aren't transient like me).
|
| 1) I'm going to, absent some massive political shift,
| vote for Democrats for the rest of my life anyway. So,
| they don't really have to play for my vote.
|
| 2) Playing around with boring stuff like tweaking market
| forces around by changing how loans work is sufficiently
| indirect that blame can probably be dodged.
|
| 3) We're all aware that the current system is pretty bad,
| a new solution that at least purports to be an attempt at
| something better can be sold to me pretty easily.
|
| 3a) Keep in mind that, at least in the STEM departments,
| the instructors are there for essentially irrational
| reasons -- they could make much more money in industry.
| At least some of the motivation is to produce interesting
| science and help students, paycheck be damned. Changes
| that hurt the last while helping the first two will
| probably be accepted with only minimal grumbling as long
| as they aren't too painful.
| mc32 wrote:
| If the program turns out successful students, I don't see
| why not? If the program turns out unmarketable skills,
| sure, charge through the roof and steer kids away from a
| useless degree.
| janejeon wrote:
| +1. Defaults exist for a reason - they force the lender to
| think about whether someone can pay off a debt or not, and we
| got here by giving everyone a loan, whether they could pay it
| off or not.
| tintor wrote:
| Is not giving out loans at all necessarily better? Stop giving
| out loans, and higher education becomes even more elitist and
| out of reach.
| bee_rider wrote:
| I think most people who'd like to get rid of the loans would
| also like to provide additional help to make college less
| elitist. Easy loans are just the local optimum we need to get
| out of.
| BeFlatXIII wrote:
| If it only becomes for the rich, that's a problem. If it only
| is for those who can earn merit scholarships (plus a
| smattering of rich flunkies to pay the bills), is that
| necessarily a problem?
| DocTomoe wrote:
| Or higher education institutions will consider if they really
| need the ever-growing bubble of useless administrators who
| empty their coffers.
| janejeon wrote:
| Plus, colleges and universities will think twice about
| increasingly charging an egregious amount for tuition if
| people aren't willing to buy their product _no matter the
| price_.
| fortran77 wrote:
| No. Tuitions will drop like a rock.
| mrep wrote:
| Maybe for the bottom schools but there are enough rich
| parents to pay/cosign a loan for like the top 50 schools
| and I highly doubt they would reduce tuition/spending and
| risk hurting their rankings.
| bombcar wrote:
| No matter how many loans or funding you get, it'll always
| be impossible for everyone to go to the top 50 schools,
| unless you simply outlaw all schools outside of the top
| 50.
| mrep wrote:
| That is not the point. The point is that kids whose
| parents cannot pay/cosign a loan can currently get into
| the top 50 schools but without the government backing the
| loans, none of them would likely be able to get in at all
| leaving the top schools only for rich kids.
| kevinsundar wrote:
| Not really, if a private lender believes your degree will
| pay off then you'd be able to easily get a loan for top
| 50 schools.
| mrep wrote:
| Nope, that is not how unsecured personal loans work.
| Those depend on your credit which most students don't
| have much/any and your debt-to-income which is normally
| infinite for students because they don't work.
| fortran77 wrote:
| Who cares about the top 50 schools? I went to Hofstra
| University, graduated with no debt (worked while going
| there and commuted by bus!) and I did just fine. I'll be
| damned if I'll subsidize someone else's 4-year country
| club experience at a "top school". Noting terrible will
| happen if only kids with rich parents went to them.
| frumper wrote:
| https://www.hofstra.edu/admission/cost-attendance.html
|
| If you can earn $53k plus living expenses in after tax
| dollars all while going to school then you are not the
| typical college student. Someone would be subsidizing
| your education if you get out of that debt free.
| true_religion wrote:
| I agree in theory. If the U.S. were a company dedicated to
| profit for its shareholders, then it certainly shouldn't give
| out bad loans.
|
| However, since the U.S. is a country dedicated to the benefit
| of its citizens then it's absolutely okay to provide loans as a
| form of social welfare, and accept a higher than normal rate of
| default. After all, providing these loans instead of the market
| was the entire point of the exercise.
| aaaaaaaaata wrote:
| Wait until you hear about the upward wealth redistribution
| through COVID loans...
| AtlasBarfed wrote:
| Are you complaining about the massive amount of not-really-
| loans given to small and not small during COVID?
|
| Right? You're vociferously complaining about that frequent game
| played by corporations with outsized lobbying abilities to get
| loans that aren't really ever expected to be paid? How much was
| that in the grand scheme of printing money by the fed, a
| billion?
|
| Or are you angry about little poor people getting a pittance of
| money in the grand scheme of things?
|
| It is so strange how much people shrug off corporate handouts,
| but get up in arms when poor folks get a pittance from the
| government.
|
| Edit: my tone was a bit harsh, probably because I get this knee
| jerk reaction.
|
| It's probably because corporations are like gods. You can't
| kill them. They are omnipresent. With data hoovering, they are
| some form of omniscient. They are tireless, sleepless, don't
| require air, water, or food. The modern way to kill a
| corporation is probably so serpentine that it puts the best D&D
| plot to kill a god to shame. They don't technically have a
| physical body. They have servants, followers, a clergy, and
| power. They can cast "summon army of retainer lawyers" and send
| you to hell.
|
| Who are we to question if the god of money hands the god of
| cars magic printed-but-never-actually-printed numbers that
| aren't based in something?
| nr2x wrote:
| Hit. The. Nail. On. The. Head.
| Zpalmtree wrote:
| We can dislike both of those things, you know
| Consultant32452 wrote:
| Don't forgive the loans, force the universities to refund the
| money. I shouldn't be punished for their malfeasance.
| rafaelreinert wrote:
| One question for the economists, how can U.S fight inflation if
| all I see on the news is the government printing money? As
| Brazilian I got used to that, the government create popular
| projects in order to increase the public opinions but it only
| generates more poverty's. Obs: I'm Brazilian and I really don't
| know nothing about USA economy and politics but seems the same
| that happened here.
| mark_l_watson wrote:
| I am a liberal, but I must say the President Biden is the most
| chicken-sh@t president in my adult lifetime when it comes to
| breaking virtually all campaign promises. I voted for him and
| regret it.
| qntty wrote:
| > At least 40,000 borrowers will receive immediate debt
| cancellation under the Public Service Loan Forgiveness (PSLF)
| Program.
|
| How is this news?
| musicale wrote:
| It used to be that for PSLF you had to make 120 sequential "on-
| time" payments and if your loan provider claimed (correctly or
| incorrectly) that one of them was late then the clock would
| reset, making it next to impossible for anyone to claim the
| benefit. A 10-year clock that can be reset at any time by the
| bank isn't good.
|
| I believe they fixed it (possibly temporarily) so that the
| clock no longer resets.
|
| This is a partial fix. The full fix would be to have PLSF pay
| out incrementally, say 10% after each 12 payments.
| bombcar wrote:
| The real solution is to stop figleafing the problem and have
| the government _handle all aspects of the loans directly_
| without the involvement of any banks.
|
| The government already has a large department of the Treasury
| that handles this kind of thing.
| ffggvv wrote:
| is it really next to impossible to pay on time? i assume you
| can dispute if they claim late incorrectly
| Fomite wrote:
| Given it was actively blocked during the previous
| administration? The PSLF Program actually working as intended
| _is news_.
| protonimitate wrote:
| > Several thousand borrowers with older loans will also receive
| forgiveness through income-driven repayment (IDR) forgiveness,
| plus another 3.6 million borrowers will receive at least three
| years of additional credit toward IDR forgiveness, the
| Education Department said in a statement.
|
| I think this is the actual news. Although it doesn't state what
| the selection process is.
| adoxyz wrote:
| I think historically, the number of loans actually forgiven by
| the PSLF program has been very very low, even for people that
| qualify.
| _moof wrote:
| I know folks who have worked towards PSLF and ended up
| getting screwed because they weren't on the right repayment
| plan. Absolutely devastating to find out you've spent ten
| years working on something only to have it fall apart because
| you checked the wrong box once. And apparently this is a
| very, very easy mistake to make.
| Spellman wrote:
| Particularly a while ago it was nearly impossible to utilize
| the program because it was a bureaucratic and underfunded
| mess. So the number who qualified was effectively zero.
|
| Now it's marginally less terrible and actually forgiving some
| people's loans.
| dv_dt wrote:
| It's news in that they're actually unblocking programs which
| actually had been long legislatively approved paths for
| forgiveness and were already supposed to have been operating to
| this end for years.
|
| It's not news in that these are not new categories of, nor
| expansions of previous commitments to student loan forgiveness.
|
| When you look at the overall stats of student loans, a
| increasing number of them (a majority!) look like they will be
| never paid off over their lifetime, and we are still in a
| situation where if an individual has a small loan problem it's
| the responsibility of an individual. But if an entire class or
| multiple-generations (or a big enough individual loan), has
| problems, then it's a problem for the bank - in this case the
| US gov't and an even bigger problem of our overall society and
| providing an sustainable economically competitive skilled labor
| pool.
| glial wrote:
| I wish they'd just make the interest on existing federal loans 0
| and be done with it.
| dan_quixote wrote:
| Sounds ideal in principle (principal?), but low interest/risk
| on student loans is what allowed tuition to inflate well beyond
| general inflation in the last several decades.
| musicale wrote:
| It was probably a mistake for the government to provide the
| funds and low interest rates and for private banks to reap
| the profits.
|
| And of course universities continue to raise tuition and fees
| with complete impunity.
| bombcar wrote:
| Which is why they need to allow bankruptcy. If the answer is
| "students will just declare bankruptcy after graduation" then
| at least the moral hazard is on the other foot.
| juskrey wrote:
| How about giving back money to people who paid back their loans,
| possibly going through even greater difficulties to do that.
| fuzzer37 wrote:
| Me me me! What about me!?
| dudul wrote:
| It is a case of "me me me" indeed. This is why people support
| canceling existing loans instead of changing the college
| tuition/loan system. They don't want to fix things for future
| generations, they want to fix their own problem with their
| own student loan and move on.
| xur17 wrote:
| And we're definitely in a spot right now where folks that can
| pay off their loan are holding off in case the US forgives all
| loans or something. A perverse incentive that is going to boost
| the number of student loans that are not paid off.
| n8cpdx wrote:
| Not just that, but with interest rates at zero and inflation
| at 8.5% per year (and growing!) it is incredibly stupid to
| pay even a single penny of federal loan debt early, unless
| you have a really good need to polish your credit score.
|
| Federal student loan debts are getting cheaper by the minute,
| why pay more now?
| bombcar wrote:
| Paying the minimum amount _on time_ often does better for
| your credit score than paying the whole thing off, anyway.
|
| The credit score is a number based on you being able to
| reliably make payments.
| halJordan wrote:
| How about the govt just obey the terms of the agreement they
| made? This program has been on the books since 2007. Anyone who
| didn't use it made their own decision.
| ohCh6zos wrote:
| I ended up working 60 hour weeks to not take out student loans.
| People talk about having a good time at college but all I
| remember is getting up at 4am to go to my first job, doing
| class all day and working my second job until 10pm. No spring
| breaks and no summers or holidays because I could work those
| hours to stay out of debt. It is hard to have much sympathy for
| people asking for student loan forgiveness.
|
| On the plus side I ended up graduating with $20 and no debt.
| zeku wrote:
| Don't fall prey to these tales to yourself.
|
| I worked full time thru college for bad pay and still needed
| 30k in student loans to make it out with my degree. I went to
| a state school, nothing fancy.
|
| I hardly ever had fun in college, it was awful. The working
| world is waaaaaaay better for me.
|
| Not everyone who has loan debt just partied away on borrowed
| cash.
| ohCh6zos wrote:
| >The working world is waaaaaaay better for me.
|
| Same for me, working seems so easy by comparison.
|
| You're absolutely correct. The people in my life who are
| the most vocal about loan forgiveness treated their time at
| university like a party, but that is not a representative
| sample.
| zapdrive wrote:
| I agree. I also remember working Friday/Saturday nights in
| the lab (as that was the only time I got to work on my
| projects), while everybody went out clubbing.
| fortran77 wrote:
| People in the US are always punished for being financially
| responsible.
| nr2x wrote:
| More people are punished for being born poor - lead paint,
| air pollution, and crumbling schools don't exactly lend
| themselves to upward mobility.
| Ancapistani wrote:
| Rewarding people who have worked for decades to climb out
| of that situation by lifting those who didn't do the same
| to the same financial position doesn't exactly encourage
| upward mobility, either.
| omegaworks wrote:
| So you would rather your neighbors be poor?
| [deleted]
| 31098347 wrote:
| People who have paid their student loan debt are in exactly
| the same situation they were after this forgiveness than they
| were before: that is, they have no student loan debt.
|
| People in the US are not punished for being financially
| responsible. They are rewarded for taking risks, but not
| punished for being responsible. Very different.
| gr33nq wrote:
| Correct - both people in your scenario end up having no
| student loan debt.
|
| But Person A, who paid their $30k loan in full, now has
| $30k less to spend on a home, a car, savings, etc. Person
| B, who did not pay their $30k, now has effectively $30k
| more in buying power either immediately or spread across
| what would otherwise have been their repayment timeline.
|
| Person A's responsibility for their obligation has set them
| back $30k, while Person B's lack of responsibility for
| making payments has put them ahead $30k. Maybe we shouldn't
| call it a direct punishment, but they're certainly coming
| out of the scenario worse off than their counterpart.
| 31098347 wrote:
| >Maybe we shouldn't call it a direct punishment, but
| they're certainly coming out of the scenario worse off
| than their counterpart.
|
| It's hard for me not to sound flippant when I say this,
| but -- this is life. As far as I'm concerned, anyone who
| has the means to pay off their student loans themselves
| practically won the lottery and they should be thankful
| they're not totally fucked like those who need the
| forgiveness.
|
| There's an ugly, underlying impression I get from this
| discussion that is oddly reminiscent of the "welfare
| queen" stereotype.
| gr33nq wrote:
| >As far as I'm concerned, anyone who has the means to pay
| off their student loans themselves practically won the
| lottery and they should be thankful they're not totally
| fucked like those who need the forgiveness.
|
| Let me share my personal experience with you so I can try
| to shed some light on our varying interpretations of what
| "won the lottery" means. I went to college full-time,
| four days a week, and was a commuter. I was responsible
| for my entire car payment, my parking pass, my
| books/material, and for taking out a loan for tuition. I
| took it upon myself to get a part-time job while
| continuing to study and go to class for four and a half
| years. I then got a full-time job upon graduating and
| lived very frugally for two years with a huge chunk of my
| paychecks going towards paying off my car and student
| loans. The thought of paying interest killed me, and I
| did everything in my power to put every penny I could
| afford towards paying down my debt. I didn't go on
| vacations, didn't spend money frivolously on a new iPhone
| every year, didn't buy anything that wasn't necessary
| until my obligations were fulfilled.
|
| Now let's revisit Person B (and to be clear, I personally
| know a Person B who's a close friend of mine who fits
| this description). They did not consistently work in
| college, but partied, went to festivals, took vacations,
| had a much easier schedule not having to factor in a job.
| They then graduate just like me. They have a few hundred
| dollars more every month that can go towards more
| vacations than I had the option to take, a more expensive
| car that I could not afford to buy, and more
| discretionary spending power than I had during that time.
| They work a job now, but have yet to begin repaying their
| loans yet (I understand the pandemic was a once-in-a-
| lifetime situation, but even so, there's a grace period
| after graduating where you aren't forced to pay). And
| even when payments resume, they will likely pay the bare
| minimum each month because they now have the prospect of
| having that debt potentially forgiven in its entirety.
|
| How do you tell me with a straight face that I won the
| lottery, and that Person B is actually the one who is
| "fucked" (as you so eloquently put it) and needs the
| forgiveness?
| 31098347 wrote:
| Zpalmtree wrote:
| Why do you want to encourage people to make bad financial
| decisions
| 31098347 wrote:
| wonderbore wrote:
| > are in exactly the same situation
|
| I don't know you could possibly reach that conclusion.
|
| I paid off my loan and lost 1000 hours of work.
|
| You didn't have to work 1000 hours to pay off your loan.
|
| We're not in _exactly the same situation_. I don't know how
| else I can put this without ELI5'ing
| mrep wrote:
| Also adding 1.75 trillion dollars worth of debt which
| taxpayers who paid off their loans are now on the hook
| for.
| fortran77 wrote:
| More than that! They won't have to pay income tax on that
| forgiven debt. You were taxed on the income you spent for
| college.
| greedo wrote:
| And you get tax breaks for tuition and college
| expenses...
| happytoexplain wrote:
| The parent said:
|
| "People who have paid their student loan debt are in
| exactly the same situation they were after this
| forgiveness than they were before"
|
| Not:
|
| "People who have paid their student loan debt are in
| exactly the same situation as those whose loans were
| forgiven"
|
| You may have a valid point about why it's bad that the
| two people are in different situations (if you
| elaborate), but the parent did not say that the two
| people are in the same situation.
| loeg wrote:
| > People who have paid their student loan debt are in
| exactly the same situation they were after this forgiveness
| than they were before: that is, they have no student loan
| debt.
|
| You're missing the point, either deliberately or on
| accident.
|
| (Prefacing this with: we should keep and honor the terms of
| the existing PSLF program that students relied on when
| taking on debt.) There's no particular reason people with
| current loan debt, but ineligible for PSLF, should get a
| wealth transfer from other taxpayers with similar income,
| net worth, and expenses -- but no current student loan
| debt.
|
| > People in the US are not punished for being financially
| responsible. They are rewarded for taking risks, but not
| punished for being responsible.
|
| In fact, a hypothetical student debt forgiveness event like
| GP was discussing _would_ punish those who responsibly paid
| off their student debts relative to similar-earning
| classmates who did not.
| 31098347 wrote:
| >In fact, a hypothetical student debt forgiveness event
| like GP was discussing would punish those who responsibly
| paid off their student debts relative to similar-earning
| classmates who did not.
|
| Punish how? This word keeps being used but it does not
| fit any definition of punish I'm familiar with. I'm not
| being obtuse.
|
| Some background of where I'm coming from: Worked
| 40+hrs/week for $7.25 to $10/hr from 2005 to 2009 to get
| a four year degree from a state school. Graduated with
| $35,000 in student loan debt myself and about $20,000 in
| debt through Parent Plus loans. My parents sent me some
| money for rent on occasion, but overall -- that's how I
| di it.
|
| I also paid off all my student loans, and my parent plus
| loans.
|
| If someone graduated with $100,000 debt because they
| partied all the time, didn't work, and tomorrow Biden
| just gave them a tax-free forgiveness....
|
| I am not punished by this. At all. It has no impact on my
| life whatsoever. I made the best choice I could make with
| my circumstances, and I paid off my loans because at the
| time that was the best way to secure my future. The day
| before the party-guy got his $100k write-off and the day
| after, I wake up in the same house, with the same car,
| with the same job, with the same spouse. My life doesn't
| change at all.
| loeg wrote:
| > If someone graduated with $100,000 debt because they
| partied all the time, didn't work, and tomorrow Biden
| just gave them a tax-free forgiveness....
|
| > I am not punished by this.
|
| Imagine a fair and equitable spending program that
| distributed $100k to everyone. It's fair, and people with
| debt could use it to pay off their loans (you could even
| require it to be used to pay off student loans first). If
| your goal is to help people with loans pay off their
| debts, it is an effective program. It's also obviously
| fair.
|
| Then, tax 100% of the distribution for people without
| student loan balances. This is the step that imposes a
| punitive expense, relative to a fair program, on people
| without student loans.
|
| That's what these proposals look like. There's no
| particular reason recent college students as a group
| should be the sole recipients of a wealth transfer.
| renewiltord wrote:
| Well, that is a fair point. I think the US Government
| should give me 1 billion dollars. This actually is a
| Pareto-optimal action too, since I will then have 1 billion
| dollars and the rest of you will be no worse off. In fact,
| you will be exactly the same amount off as before.
| happytoexplain wrote:
| This attitude, _as stated_ , is one of the fundamental evils,
| I think (the implication being "If I can't have it, nobody
| can", or, in this case, "If I didn't get it when it was
| relevant to me, nobody can"). In this case, the core
| grievance is valid ("I think there's a better way to address
| the problem"), but this expression of it makes the problem
| into the super common "us vs them" where "them" is defined by
| the terrible cultural obsession with the concept of
| "deserved" punishment and personal responsibility in an
| unqualified, absolutist manner ("He committed a crime, he
| deserves anything that happens", "He failed to pay a loan, he
| deserves anything that happens", "She had sex, she deserves
| anything that happens", etc).
| dudul wrote:
| The way you present the problem is inaccurate to me. It's
| not "I can't have it so nobody can" or "I couldn't have it
| back then, so nobody should have it now.".
|
| It is: "At the time, these were the rules, I ran the
| numbers, was responsible and ended up limiting my
| opportunities. Others, who were _not_ responsible, now not
| only have more opportunities thanks to their degree but
| will also end up not paying for it ".
|
| I'm sorry, but to me it feels extremely unfair that people
| who frivolously took loans will now end up being ahead of
| people who - at the same time - decided to be more
| financially responsible. You can't retroactively change the
| rules and expect people to take it quietly.
|
| The problem is made even worse because in the case of
| student loans, there is nothing to repossess.
|
| This has nothing to do with changing the rules now.
| omegaworks wrote:
| So you would rather your children continue to suffer the
| burden of a system that forces people into limited
| opportunities simply because you had to?
|
| So much for making the world a better place. The course
| that you took in life failed to teach you a fundamental
| truth about how a society grows.
| dudul wrote:
| Once again this is not the issue, either my post was
| unclear or you didn't read it carefully.
|
| I definitely do want the system to be fixed for _future
| generations_ to not go through this. I do not want past
| generations to get a free pass. Loan forgiveness does
| _nothing_ for future generations of students.
| omegaworks wrote:
| >Loan forgiveness does nothing for future generations of
| students.
|
| Loan forgiveness unlocks the spending potential of an
| entire generation. People have been holding off on buying
| their first home or having their first child because of
| the burden of their loans.
|
| It is _literally_ stymying our future generations.
| newfriend wrote:
| > forces people into limited opportunities
|
| No one was forced to do this.
|
| > So much for making the world a better place. The course
| that you took in life failed to teach you a fundamental
| truth about how a society grows.
|
| Idealism is great for virtue signaling. The reality is
| that rewarding bad behavior and punishing good behavior
| does not lead to a healthy society.
| omegaworks wrote:
| >The reality is that rewarding bad behavior and punishing
| good behavior
|
| You are confusing a societal failure with a moral one: we
| have failed as a society by forcing those that pursue
| higher education to bear the _entire cost_ of that
| education _and_ we have failed to guarantee a role for
| those people in our society that pays well enough to pay
| off an _inflated loan_ for that cost.
|
| These are not individual moral failures. Everyone that is
| not able to pay off their student loans is not a bad
| person. Student loans are a bad system for educating
| people. They were introduced when higher education was
| desegregated and opened to women. When the white men at
| the reigns of the government no longer saw fit to fund
| public higher education for people that were not white
| men.
| photochemsyn wrote:
| I think the solution is to allow student loan debt to be
| discharged under normal bankruptcy proceedings, on one hand, and
| to return to c. 1980 costs for a university education, on the
| other.
|
| The latter requires cuts of administrative salaries across the
| board in the American higher education system. For example:
|
| > "The university's highest paid chancellor is UC San Francisco
| Chancellor Samuel Hawgood, whose salary increased from $795,675
| to $819,545. At the bottom of the pay scale are the chancellors
| of UC Santa Cruz, UC Riverside and UC Merced, whose salaries
| increased from $394,655 to $406,495."
|
| https://www.dailycal.org/2017/09/18/uc-gives-pay-raises-8-10...
|
| In contrast, the governor of California makes $220K or so in
| salary. In 1980 UC tuition was $300 for the academic school year,
| plus a student services fee of $419. That sums to about $2500 a
| year inflation-adjusted today. Today's UC tuition is about
| $12,500 per year. On top of that, a minimal $20,000 per year for
| rent + food is tacked on. So if this is all paid by loans, ~120K
| debt is created for a four-year education - unless you have quite
| wealthy parents of course, then you get out free as a bird.
|
| In reality what's going on here is the conversion of the American
| 20th century education system - which put America on the leading
| edge of technological development for over half a century - to
| the British Empire education system, in which a small
| aristocratic class attends exclusive colleges to get networked
| into the posh system of aristocratic class privilege. Everyone
| else just becomes a victim of the parasitic investment capitalist
| sector which collects interest on the debt for the next 20 years
| (oh yes that includes feeding into 401K boomer retirement plans,
| so there's that lovely angle too).
| hahaxdxd123 wrote:
| Fuel for inflation
| apetresc wrote:
| One technical question I've never understood about this debate:
| when the government "forgives" loans like this, what are they
| actually doing? Is the government paying the creditors off on the
| debtors' behalf (like a bailout)? Or are they simply declaring a
| refusal to prosecute the debtors?
| Miner49er wrote:
| The government is the creditor. They just forgive the loan.
| Probably just 0 out a number in a database somewhere.
| apetresc wrote:
| Oh, I see - they're all federal loans, got it.
| henriquez wrote:
| Can Biden forgive my mortgage while he's at it? Why should I be
| in debt for 30 years, it's very inconvenient. Not everyone has
| the money to get a fancy university education, even with loans
| and other financial assistance, so we should be cancelling debt
| across the board. We should nationalize the banks and print money
| until all the debt is gone. Or it's racist.
| cr__ wrote:
| He probably won't forgive your mortgage but he (and virtually
| every politician of either party) will give you plenty of free
| money through the continuation of all the regressive policies
| that favor property owners to prop up the economy via the
| "property values always go up!" con game.
|
| So, I am not sure that you need to feel too aggrieved. Cheers!
| henriquez wrote:
| Nah I don't feel too aggrieved. At the rate they're printing
| money they'll inflate away everyone's debt in no time at all.
| aaaaaaaaata wrote:
| Why didn't they think of that?
| beart wrote:
| This is the result of the Public Service Loan Forgiveness
| program started in 2007.
| AtlasBarfed wrote:
| We did print money, multiple times over the last two
| recessions.
|
| Guess who got the money?
|
| Why are you angry at a small number of poor students?
| henriquez wrote:
| I'm not angry at students, I think everyone should have their
| debt forgiven. I think banks should be canceled to provide
| equity.
| loourr wrote:
| It's crazy to cancel student loans and still keep issuing the
| exact same loans. If we believe the loans are unjust then the
| government should stop handing them out as the very first step.
| throwaway894345 wrote:
| And also reimburse the people who sacrificed to pay theirs off
| or avoid them in the first place. I'd donate my reimbursement
| if they did, but of course they won't.
| madengr wrote:
| SSilver2k2 wrote:
| I paid off my student loans. My wife has student loans still.
|
| If next year all new college students get free tuition I'm
| not going to be upset that I had to pay.
|
| I'm going to be happy that they don't have my burden.
|
| We as a society need to push the next generation up, not
| complain that they don't have it as hard as we do.
|
| *Free Tuition = Tuition paid for by our taxes.
| dudul wrote:
| How is loan forgiveness doing anything for the next
| generation?
|
| Fixing the current shit show that is college tuition/loan
| is a completely different problem from the forgiving of
| existing loans. AFAIK the 1st one has quasi-unanimous
| support, while the 2nd one is clearly very debatable.
|
| Conflating the two is unproductive.
| throwaway894345 wrote:
| Student loan forgiveness and universal education are
| distinct issues. I oppose the former (even though I would
| benefit from it to the tune of $30K) but not the latter.
|
| I oppose student loan forgiveness because it punishes
| people who were responsible and rewards people who were
| irresponsible. Moreover, it disproportionately rewards the
| upper classes who are more likely to have more debt--it's
| _regressive_. If we decide we want to help people who are
| burdened, let 's mail checks based on need (whether their
| need is a result of student loan debt or not) and those of
| us who are doing fine can pay those checks with our taxes.
| Student loan forgiveness is just welfare for the upper
| classes (me included!).
| PragmaticPulp wrote:
| > And also reimburse the people who sacrificed to pay theirs
| off or avoid them in the first place.
|
| Most of the loans in this specific program were forgiven in
| exchange for at least 10 years of specific public sector
| jobs. Those jobs usually come with a reduced compensation in
| exchange for the loan forgiveness.
|
| I have a few friends who went this route as lawyers because
| they prefer helping out in the public sector instead of doing
| corporate lawyering stuff or the other options.
|
| They definitely did not come out financially ahead by going
| this route, even with the massive loan forgiveness.
| InitialBP wrote:
| Demanding "even-stevens" all the time doesn't help the
| situation at all. The people that were able to pay off their
| loan debt were people who chose a degree that would be able
| to make significant money, were talented enough to land a
| great job in a field without a lot, or had the circumstances
| that let them finish a degree where others were unable to.
|
| Do some people make bad decisions about degree choice? - Yes
|
| Do some people drop out of school because it's too hard or
| because of other circumstances (unexpected baby, financial
| hardship, etc) - Yes
|
| Do those people who either have made bad decisions, had less
| fortunate circumstances than others, or a combination of both
| deserve to live under a mountain of debt for the rest of
| their life? - No
|
| One other thing people don't consider is that Most 18 year
| olds don't have a good grasp on money or what they want to do
| in general and in my hometown (poor county in WV) there was a
| TON of pressure to go to college if you didn't know what you
| want to do. Kids don't know better to not get into debt for a
| degree because everyone tells them not to worry about it.
| There is a serious problem with financial education in the
| US.
|
| You can help out people who made a bad decision or had bad
| luck without being so uptight about how everything has to be
| complete "fair". The world isn't fair from the time we're
| born till the time we die.
| commandlinefan wrote:
| > people who either have made bad decisions, had less
| fortunate circumstances than others, or a combination of
| both deserve to live under a mountain of debt for the rest
| of their life? - No
|
| Why does this logic only apply to people who made bad
| decisions and had less fortunate circumstances or a
| combination of both only apply to people who did so in the
| context of taking out student loans? If making bad
| decisions and having less fortunate circumstances is
| grounds for student loan forgiveness, why isn't it grounds
| for credit card debt forgiveness? Or home or auto loan
| forgiveness?
| krageon wrote:
| Maybe it is, but it has to start somewhere. This is where
| it starts, what's the problem with that?
| throwaway894345 wrote:
| The problem is that the people it benefits the most are
| disproportionately in the upper classes (they took out
| the most debt). Student loan forgiveness doesn't do what
| most people think it will do.
| https://knowledge.wharton.upenn.edu/article/how-student-
| loan...
| jatone wrote:
| or you know we could just make student loan eligible for
| bankruptcy.... then just let the courts deal with it as
| usual.
| throwaway894345 wrote:
| I'm not inherently opposed to allowing for bankruptcy on
| student loans, but it will probably have a similar effect
| --banks won't want to lend to people with no credit or
| income and college will mostly only be affordable for the
| kids whose parents can pay for it. It's probably not much
| worse than the status quo, but my instinct is that we
| need to account for employability in the financing
| equation. A teenager shouldn't be able to take out $100K
| in debt to finance a Master's of Theater. If that's by
| allowing bankruptcy such that banks have skin in the game
| to avoid these kinds of debts, then that's probably fine
| with me (although banks had this same kind of skin in the
| game leading up to the subprime mortgage crisis and they
| still fucked over the whole country, so careful
| regulation is probably needed if we go this route).
| ncallaway wrote:
| Credit card debt, home loans, and auto loans are all far
| more dischargeable through bankruptcy than student loans.
|
| Bad credit card debt won't be an anchor around your neck
| financially until you die. Neither will a bad home loan.
| Neither will a bad auto loan.
|
| But bad student will likely be with you until death.
| throwaway894345 wrote:
| If people could default on these loans, what incentive is
| there for lenders to agree to the loans in the first
| place? If you're a lender, why would you agree to a $50K
| loan to a teenager with no credit who can just default?
| amf12 wrote:
| > If people could default on these loans, what incentive
| is there for lenders to agree to the loans in the first
| place?
|
| One thing I can think of is that the schools should be
| the lenders themselves. The interest rate should be
| capped off and the debt should be dischargeable in
| bankruptcies. This will lead them to deny loans for
| unemployable degrees.
| lesuorac wrote:
| The same reason a bank offers a home mortgage? They
| expect to get a return on their investment.
|
| Sure some student loans are going to get discharged and
| the lender will take a loss (just like with mortgages).
| But lenders with good enough actuaries are going to price
| their loans so that they make more than they lose and
| ideally the worse lenders will go out of business.
| kapp_in_life wrote:
| >They expect to get a return on their investment
|
| They only give it to you if you have a downpayment, proof
| of income, and they can reclaim the asset if you default
| on payments.
|
| None of those aspects apply to student loans. What's
| going to happen is loans will require cosigners and
| poorer students will be cut off from access to higher
| education unless they can get scholarships.
| lesuorac wrote:
| You can get mortgages without a downpayment. You'll often
| end up with higher interest payments though (IIRC PIM
| goes away once you have ~20% equity). That said you could
| ask students to take a gap year to have money for a
| downpayment (not everybody in my class was in my
| generation).
|
| Proof of income would require them to have a job which I
| think a lot of students do (albeit work-study pays less
| than tuition costs). But is it really too much to ask a
| loan issuer to do the math on if a student can reliable
| pay the loan back?
|
| Reclaiming an asset is harder though but its an unsecured
| loan so by definition there isn't any asset to reclaim.
|
| -- > What's going to happen is loans will require
| cosigners and poorer students will be cut off from access
| to higher education unless they can get scholarships.
|
| If the goal is for everybody (or more people) to get an
| education then it should just be subsidized in a normal
| fashion. No need to trap people in decades+ of debt. That
| said, I would suspect you'd see more people getting
| bachelor degrees subsidized by their jobs instead of just
| the masters. Which is what the article is really about, a
| bunch of government employees are having their DOE loans
| forgiven as the former students have met their end of the
| agreement.
| amf12 wrote:
| > poorer students will be cut off from access to higher
| education unless they can get scholarships.
|
| (trying to understand) How is it any different right now?
| Students likely to default right now are poor, and may
| not even be in a position to pay the debt. But the debt
| still stays active.
| Damogran6 wrote:
| The lenders would be more choosy as to who they give
| money to. (Kinda like the mortgage crisis)
|
| There should be a situation where a lender refuses to
| give a prospective student $125k towards an education
| that would never result in repayment due to the available
| jobs from that type of education.
| Sohcahtoa82 wrote:
| Because our public school system is a propaganda machine
| for getting students to go to college.
|
| They tell high school students...people who are legally
| still _children_ that the most important thing is to go
| to college. They tell them if they can 't afford it, they
| can just get loans.
|
| And now people are surprised and blame the kids when they
| do as their teachers told them and rack up 5 or sometimes
| even 6 figures of student loan debt before they're even
| old enough to drink.
|
| Fucking stop and pause for a moment and really consider
| that. Counselors, teachers, and all other high school
| staff pushing kids to go to college, and then when they
| do, people come along and tell them it was a bad
| decision? What?
| throwaway894345 wrote:
| I don't think it's as malicious as you're implying.
| Educators went to school at a time when people who went
| to college earned dramatically more than those who didn't
| and they were pretty much guaranteed job placements.
| That's still true today in aggregate, although probably
| to a lesser extent. They also didn't anticipate that
| universities would become predatory with respect to
| ballooning costs and stagnating or declining educational
| quality. Moreover, they didn't realize that the kids they
| were referring to college were part of a flood of
| students who would saturate the job market with degree-
| holders (lowering the value of a degree with respect to
| job placement). Further still, they didn't know that the
| subprime mortgage bubble existed much less that it would
| burst in '07-'08.
| brewdad wrote:
| Because student loans are one of the few types of debt
| that cannot be discharged in bankruptcy. There is an
| avenue, through our current legal system, to get out from
| under credit card debt or a mortgage one cannot afford.
| That avenue is unavailable to student loan borrowers.
| sergiosgc wrote:
| Student loans should be discharged on personal
| bankruptcy. All of the other examples you give can be
| written off like that. Student loans, however, are rarely
| discharged by judges on those processes.
| dionidium wrote:
| I'm strongly against student loan forgiveness, but I
| support this measure. Society offers a life vest in the
| form of bankruptcy to people who are financially
| drowning. That's as it should be. No need for new, ad hoc
| solutions to this problem.
| throwaway894345 wrote:
| It's pretty hard to repo an education.
| sgjohnson wrote:
| Irrelevant. Bankruptcy wipes all of the unsecured debt.
|
| Student loans are unsecured.
| commandlinefan wrote:
| I agree with you on this, but this is completely
| unrelated to student loan forgiveness.
| [deleted]
| twblalock wrote:
| Don't reward people who made bad decisions and punish
| people who made good decisions. That is the opposite of how
| the world ought to work.
| rootusrootus wrote:
| > You can help out people who made a bad decision or had
| bad luck
|
| Yes. Make loans dischargeable in bankruptcy. I support
| that. Or make repayment based on income, which is already
| is, so the burden is bearable. But just forgiving bad
| decisions? That's not a precedent I think we need to set,
| especially not until we do something to fix the underlying
| problem. Otherwise the next bailout will be 10x as big.
| adamdusty wrote:
| I paid my student loans off recently, as I didn't expect
| the pause to get pushed back again, so I acknowledge I am
| biased here.
|
| What other loans should the government be forgiving for
| people's poor decisions? Should the government have paid
| off all mortgages in 2008? I'd say people that bought in
| the years or months leading up to the housing crash didn't
| make particularly bad decisions either, yet I personally
| know a few different families that never recovered.
|
| Some people drop out, and I agree that those people should
| have a way to lessen the burden of student debt, but I
| don't know that people who choose degrees with low
| financial value should get a free pass more so than people
| that take on any other particular debt.
| throwaway894345 wrote:
| Moreover, what happens when a generation learns to depend
| on government bailouts? Why do we want to incentivize
| irresponsibility?
| Damogran6 wrote:
| Bankruptcy and Restructuring are in place for people that
| make tremendously bad financial decisions...
|
| ...Except for College loans, which are expressly excluded.
| sgjohnson wrote:
| They don't even have to be tremendously bad financial bad
| decisions.
|
| Tremendously bad change in circumstances is also enough
| to push someone into bankruptcy.
| leach wrote:
| That's all fine and dandy until you realize the people who
| where smart and careful have to foot the bill for those who
| weren't.
|
| I was smart and sacrificed a little by going to community
| college so I wouldn't have debt. I was also smart enough to
| get a degree in stem where jobs are actually available and
| in demand.
|
| Why should I have to foot the bill for someone who just
| partied and got a useless degree? I did everything in my
| power to avoid student loans because I knew they where
| insane, I shouldn't have to pay for others student loans
| because they didn't think about any of this.
| nfRfqX5n wrote:
| How much do you really think this is taking out of your
| pocket? You are paying for others all the time with your
| taxes, which can't be selective for the system to
| function
| throwaway894345 wrote:
| The system is already selective. It doesn't pay for my
| neighbor's boat, why should it pay for his student loans?
| jaywalk wrote:
| It would be taking more than the already high amount
| that's being taken out currently. So I'm against it.
| brnaftr361 wrote:
| You can't practically quantify this. If we forgive
| current loans, you could assess a dollar value - but what
| you can't do is project what those individuals will do
| once that debt is forgiven. Buy a new car? Take out new
| loans? Shopping spree? Or what precedent it sets for the
| public contemporaneously. Or what precedent it sets for
| the future. What we're not doing is working in a vacuum.
| twblalock wrote:
| It's the principle that matters. A society that rewards
| bad decisions and punishes (or ignores) good decisions is
| bad and we should not allow our society to be like that.
| HeyImAlex wrote:
| If the 1.6 trillion in debt was divided evenly among
| every human in the US it would be 4k. If we're ball-
| parking and say that the top 20% of earners would foot
| the bill it'd be about 64k per household.
| sgjohnson wrote:
| Why should the top 20% pay for it?
| krageon wrote:
| > until you realize the people who where smart and
| careful have to foot the bill for those who weren't.
|
| > Why should I have to foot the bill for someone who just
| partied and got a useless degree?
|
| Because you're a human being and recognise that while
| here you made no mistakes and had no bad luck, perhaps
| someone could have done that or had that. It's called
| decency, and you have it not because it benefits you. You
| have it because it benefits everyone.
| rootusrootus wrote:
| I have had plenty of bad luck, and made plenty of stupid
| decisions. Some of them financial. Nobody bailed them
| out. I'd be in a better place today if someone had.
| That's for sure. But do I think that makes for sound
| macroeconomic policy? No.
| throwaway894345 wrote:
| Forgiving student loans doesn't benefit everyone, it
| benefits the people in proportion to their student loan
| debt, which is to say it disproportionately benefits the
| upper classes including a lot of people (like me) who
| could pay off their debt but instead they invest it in
| the stock market where the returns outpace the interest.
|
| Student loan forgiveness is both unfair _and_ regressive.
| throwaway894345 wrote:
| Fine, then let's use a needs-based mechanism so that we
| don't exclude needy people who just didn't have the means
| to go to school in the first place or reward people like me
| who are doing fine but didn't pay off our loans because
| it's more lucrative to invest the money in the stock
| market. Student loan forgiveness isn't merely unjust, it's
| ineffective for antipoverty. Moreover, "tough luck, life
| ain't fair" is a great rationale for ignoring poverty and
| injustice altogether.
|
| > One other thing people don't consider is that Most 18
| year olds don't have a good grasp on money or what they
| want to do in general and in my hometown (poor county in
| WV) there was a TON of pressure to go to college if you
| didn't know what you want to do. Kids don't know better to
| not get into debt for a degree because everyone tells them
| not to worry about it. There is a serious problem with
| financial education in the US.
|
| Agreed. I grew up working class in the midwest. The working
| class kids who went to college generally did fine because
| we worked and didn't live like we were earning 6 figures.
| The upper- and upper-middle-class kids were the ones who
| were getting Starbucks every day, living in dorms, paying
| for meal plans, going out to eat every other night, working
| fewer than 8 hours/week, skipping class, majoring in fine
| arts, etc and financing it all on debt (my wife is in the
| latter group and she has considerable loan debt that we're
| currently investing).
|
| Student loan forgiveness will surely help some lower-class
| people, but by and large it's welfare for the middle and
| upper classes. It's regressive.
| https://knowledge.wharton.upenn.edu/article/how-student-
| loan...
| brnaftr361 wrote:
| A pretty substantial portion of this "civilization" thing
| is ensuring social stability. I won't say that this is
| going to be _the_ hair that broke the camel 's back. And I
| would agree with you entirely on the idea that kids
| shouldn't be assuming $40k of debt liability as children.
| But there's a lot of potential destabilizing effects
| downstream from this in many domains. What won't
| destabilize society is indicating it was volitional to
| accept the loan terms and to pursue a degree of nebulous
| worth.
|
| I wouldn't agree that having a "worthless" degree is some
| sisyphian burden, my SO went into college and has two trash
| degrees, but also had all of the prerequisite credits to
| trivially segue into a meaningful career and a masters. Her
| loans are paid.
|
| I, on the other hand, am in the middle of my post-secondary
| after toiling 5 prime years away to avoid debt. The
| proposition that I could've foregone that sacrifice and
| been toting around a degree _and_ work experience without
| full time work _throughout_ school, free of charge - is
| infuriating.
|
| And this is discounting a thousandfold other paths. What
| about the blue collar parents that clawed their way up to
| the middle class, ultimately paying their kid's way through
| school at a _relatively_ great expense? Or the single
| father who took out a second mortgage to put his daughter
| through school? Or an infinity of other possibilities that
| can 't be written into a survey?
|
| The system needs fixed first.
| pxmpxm wrote:
| If the entire point of this public policy is to create votes
| for whoever is implementing it, this is exactly the dynamic
| you'd expect to see.
|
| To a politican about the only thing better than a vote buying
| scheme is perpetual vote buying scheme.
| phkahler wrote:
| >> It's crazy to cancel student loans and still keep issuing
| the exact same loans. If we believe the loans are unjust then
| the government should stop handing them out as the very first
| step.
|
| A wise man once told me "The first thing you should do when you
| find yourself in a hole is stop digging". This is my standard
| response to the student loan crisis and many others.
| pcthrowaway wrote:
| You should put him in touch with the guy who won't stop
| digging a tunnel from the other front page thread
| elpool2 wrote:
| I see this as basically just making amends for the failures of
| the PSLF program. This is for the folks who made years of
| payments expecting to get loan forgiveness after 10 years as
| promised, only to then be told none of the payments counted
| because they didn't read the fine print or simply because of
| the loan servicer's incompetence.
| tejohnso wrote:
| I'm curious to know how these loans became such a political
| issue. It's unusual to take out a loan and then complain about
| having to repay it. That's how it is _supposed_ to work. We don
| 't typically reward people for digging themselves into a hole
| by bailing them out. Unless they're large corporations. We bail
| _them_ out in certain cases. But I don 't think that's a
| popular idea either.
| folkhack wrote:
| 100% in good faith:
|
| > I'm curious to know how these loans became such a political
| issue. It's unusual to take out a loan and then complain
| about having to repay it.
|
| Saddling _teenagers_ with such debt is problematic in many
| ways. For many of my peers they were not ready/cut out for
| college but still had the debt + schooling jammed down their
| throats because "it's what you're suppose to do."
|
| Then, there's the cost to quality situation... I got nailed
| with this one - accredited private college with little
| oversight with a _horrible_ program for my area of study.
| We're talking two professors for the entire subject, and most
| of the courses they had advertised in their catalog hadn't
| been offered in over _seven_ years. Lots of people's time at
| school was just jumping through hoops for an "education" with
| very little value to their eventual career.
|
| Cost has gone through the roof - administrative costs for
| colleges have skyrocketed. I've worked in marketing for
| schools - they're businesses before they're educational
| facilities. They're profit seeking through tuition, grants,
| donations, etc. Don't even get me started on sports...
|
| > We don't typically reward people for digging themselves
| into a hole by bailing them out.
|
| They were put through an incredibly profit-seeking system
| that operates in it's own self interest to get as much
| tuition as possible. Just like the healthcare industry, we've
| let administrative costs and middlemen drive the price of an
| education up while whittling the quality of it down.
|
| 100% they were not the only ones digging the hole that they
| find themselves in. Additionally, I have a hard time nailing
| 17-18 year olds to the cross for poor decisions in regards to
| their "digging" activities.
|
| > Unless they're large corporations. We bail them out in
| certain cases. But I don't think that's a popular idea
| either.
|
| And, just saying - yes this happens!! We consistently cut
| breaks to the interests of capital (large corporations, the
| rich w/taxes). Regardless of how any of us feel about it,
| this will continue to happen. So if our corporate benefactors
| are getting help, why can't a citizen with/seeking an
| education get some help too?
| rootusrootus wrote:
| > Saddling _teenagers_ with such debt is problematic in
| many ways.
|
| So perhaps the solution involves some combination of 1)
| raising the age at which someone is considered an adult
| until it does not end with "teen", and 2) not giving loans
| to people with no plausible way to repay it, and/or 3)
| requiring a cosigner who is both older and better funded.
|
| Maybe we take away blanket guarantees for student loans,
| make them dischargeable in bankruptcy, make the interest
| rate and borrowing limit based on plausible future income,
| things like that.
| folkhack wrote:
| I agree with these things in practice, but I feel they
| ignores the root of the problem:
|
| Cost.
|
| ---
|
| The joke of a school I went to now costs upward of
| $38k/yr base (not sure what room/food on top of that is).
| Hell state schools are upwards of $20k a year even with
| financial aid...
|
| Maybe higher education shouldn't be this expensive across
| the board so people wouldn't be saddled with crippling
| high-risk debt while they're arguably still children.
|
| I can tell you whatever the %#%$ I got was NOT worth
| anywhere near that in tuition... gen-eds were effectively
| highschool 2.0, and I was learning more in-industry than
| I was in the classroom at the time for my main area of
| study.
|
| To think people are getting charged $38k+/yr for _that_
| just pisses me off. Even if it was an objectively good
| education + program - it 's still too expensive.
|
| ---
|
| Also one more thing I want to address in your response:
| what about economically disenfranchised peoples? If we
| implement the ideals you lay out I can easily see that
| being a _huge_ barrier. I personally believe these folks
| should have access to higher education too - which is why
| I strongly support things like financial aid, grants,
| scholarships, etc.
|
| If we make it into a more traditional loan I think it
| would potentially discriminate against students who come
| from less-than-ideal backgrounds.
| dionidium wrote:
| The way this works is that you just have to define something
| to be a "necessity" in the public consciousness, because
| there's a prevailing intuition that it's illegitimate to be
| asked to pay for anything that fits that description. Medical
| bills are a necessity, so it's illegitimate to be asked to
| pay them. You have to go to college to get a good job, so
| it's illegitimate to be asked to pay for an education. You
| need a place to live, so high rents are also illegitimate.
| And so on.
| timssopomo wrote:
| We do, actually, at least in the US. It's called bankruptcy.
| We generally recognize that sometimes despite best
| intentions, debts become unpayable and in these cases, the
| debts get restructured and creditors are frequently wiped out
| (which is fair, since both borrower and lender take risks).
|
| Student loans can't be discharged through bankruptcy unless
| the borrower is permanently disabled. It's entirely possible
| to end up in default on a loan for a degree you never
| obtained, paying a loan your entire life, without ever
| decreasing the principal. Unsurprisingly, this rubs people
| the wrong way.
| rootusrootus wrote:
| > It's called bankruptcy.
|
| Then why is the discussion around a debt jubilee rather
| than reforming the bankruptcy rules for student loans?
| LadyCailin wrote:
| It should be on the university and college, if you must
| have private higher education, and not just make it free.
| State that the institution and/or potential employers must
| give out a loan that will cover the entire cost of
| education, which can be paid back with x% of income for 120
| months of full time employment. If the student cannot find
| a job, or is not desirable for a given industry with the
| degree, and has to take a waiter job, they still owe x% of
| their wages, but the absolute value of that will be much
| lower.
|
| Now, the university will stop offering loans for worthless
| degrees, and they will only give you a loan for things they
| think you can actually succeed in, ensuring that there is
| huge incentive for everyone to ensure the student succeeds
| if they end up needing a loan.
|
| Private cash payments can still be made to take whatever
| underwater basket weaving major you like, but you can't go
| into debt for a degree that will bind you for the rest of
| your life.
| everforward wrote:
| I think it would need to be more nuanced than that if we
| want to escape second order effects.
|
| The first is that if the college bears risks for financed
| students, the first seats will always go to people who
| can afford to not use financing. It'd be like the legacy
| system, but out in the open and encouraged by regulation.
|
| The second is that it will likely make it harder to climb
| the social ladder. I'm too sleep-deprived today to find
| sources, but I would imagine that students that can
| afford to not work while in school tend to do better.
| Likewise, I would bet that wealthier students tend to do
| better by nature of connections. If your dad/mom is an
| engineer, and you want to be an engineer, you've already
| got connections.
|
| It also pushes people towards the military, if the GI
| Bill is the only way for normal people from poor families
| to afford college. It's a little dark that wealthy
| families can pay their children's way, but poor families
| have to risk them dying to do the same thing.
|
| I like the basis of the idea, I just think it needs a bit
| more nuance to prevent wealth inequality getting worse
| than it already is.
| dudul wrote:
| It's just something that can be presented in a very divisive
| way for each party to easily capture sizable market shares of
| the electorate. It became a "valuable" problematic to put
| forward when the group of people who struggle to pay off
| their loan became big enough to make it worth it politically.
| godelski wrote:
| So first off, remember that the people taking out the loans
| are typically between 17 and 20. I don't know about you, but
| when I was 18 I was a fucking idiot. I mean I still am, but
| more so back then. I would be surprised if you weren't (and
| you probably aren't even the median case!). Also consider
| that a lot can happen in 4 years, especially at that age.
| Your interests typically rapidly change, you learn more about
| who you are, and you may underestimate your future earnings
| (especially given that schools tell you that you'll earn so
| much because of your degree and their connections). But
| there's some other issues.
|
| - Interest rates have gone up
|
| - Cost of schools have risen
|
| - The government holds most student debt
|
| - It is still usually a good deal to get an education, but
| the deal is rapidly becoming less of one (the value of the
| deal is even changing for people in the middle of education
| or even graduated)
|
| - The clauses on the debt are getting stronger, being almost
| impossible to cancel the debt and leading to people never
| being able to pay off their loans.
|
| - The loans are predatory and becoming more so (when I took
| mine out a decade ago I had the option to pick "fixed rate"
| or "variable" but that wasn't actually fixed _interest_ rate)
|
| - Schools are promising scholarships and then not giving them
| (my school would constantly schedule me for meeting with the
| financial aid office, a requirement, the week after the
| deadline and wouldn't schedule me before)
|
| - We're better understanding the major impact on our economy
| when a generation that is in their prime earnings age is
| still not consuming and instead paying off debt.
|
| - An educated population results in a happy and effective
| civilization (especially if one of your main exports is
| technology)
|
| I think there's a lot of good reasons that people are pissed
| off. Our generations specifically was told "go to college and
| you'll get a good job and have a stress free life." But we
| quickly found that going to college doesn't lead to a good
| job and we can't get the same things our parents did. Jobs
| are harder to get, they don't pay as much, and housing is
| insanely priced. So basically people are pissed about a lot
| of stuff and a whole messed up system, and most young people
| are either: in college, avoided it because cost, or recently
| graduated. Considering that, it is unsurprising that it is a
| major focus.
|
| Also I should add, some bailouts work. Pretty much what
| people are saying here is "this has gotten out of hand. You
| need to bail us out so we can effectively participate in
| society."
| rootusrootus wrote:
| The age argument is an interesting one. Should we be
| redefining what the age of majority is? Because if 18 year
| olds aren't competent enough to make borrowing choices for
| college, it follows that there are plenty of other
| consequences they shouldn't face.
| nr2x wrote:
| Free community college was in build back better, 49 republicans
| and Joe Manchin killed it.
| smegsicle wrote:
| free community college is already a thing, it's called 'Pell
| Grants'
|
| republicans don't want to talk about it because it's free
| money that works, and democrats don't want to talk about it
| because there's no reason to expand it
| aksss wrote:
| There were a couple other things with a few more dollars
| allocated in Build Back Better, if I recall, perhaps worthy
| of more criticism than community college for everyone.
| Anyway, I wonder how much of the student loan debt is from
| community college, both as total dollar figure and per
| borrower. Something tells me that in-state tuition for
| community college isn't where all the underwater borrowers
| went to school.
| colpabar wrote:
| If democrats wanted that, they would write a bill to do so.
| Not everything has to be bundled up in a multi trillion
| dollar bill that involves a ton of other unrelated things.
| The reason they haven't done that is because they don't
| really want to.
| dogleash wrote:
| Exactly. If them democrats actually wanted any of the
| programs they talk about, they would deploy them in states
| they control.
|
| Obama's big policy success of 8 years was Romneycare. Who
| can explain with a straight face why California still
| doesn't have universal heathcare?
| jaywalk wrote:
| Whoa whoa, don't crap on politician's favorite do-nothing-
| but-promote-everything method of working! If enough people
| realized what was really going on, our politicians might
| actually have to start working for us!
| AnimalMuppet wrote:
| Side rant (though somewhat similar to colpabar's reply):
|
| The Democrats tried to govern like they had a large majority,
| when they had 5 (I think) seats in the House, and a 50/50
| Senate. _Of course_ it failed! If you need every single vote,
| you can only go as far as the least-willing member will let
| you go.
|
| The Democrats never should have tried to govern that way.
| They should have been coalition building, trying to find some
| common ground where they could do some things. Instead, they
| acted like they could dictate their agenda to Congress. Both
| Biden and Pelosi should have known better; they have decades
| of experience in Congress.
|
| Why did they do this? You could argue that they did it
| because they knew that no Republican would ever cooperate on
| anything. But if that was the reason, they still should have
| gone for what they could get through the members they had,
| not going for the moon.
|
| Or you could suspect that they wanted to blame the
| Republicans (and maybe the more conservative Democrats) for
| their lack of progress, as a tactic to win the next election.
| Well, from all the indications so far, that's not working out
| for them.
|
| So why did they take the approach they took?
| seanmcdirmid wrote:
| > The Democrats never should have tried to govern that way.
| They should have been coalition building, trying to find
| some common ground where they could do some things.
|
| > So why did they take the approach they took?
|
| The Republicans set that precedent (trying to govern like
| they had a large majority). I don't mean that as a "the
| other side does it too", just that each side has become
| increasingly vindictive of the other, making it much more
| difficult to work together when doing so is necessary to
| get anything done at all. We will continue to see power
| swaps with the winning side spinning its wheels while
| shutting the other side out.
| rootusrootus wrote:
| > each side has become increasingly vindictive of the
| other
|
| For a number of reasons, no doubt. But partly I blame the
| efforts to remove pork from legislation. We thought that
| was a good idea, without realizing that it was the basis
| of compromise. When each little piece of legislation
| comes through on its own, there is no incentive to
| compromise, but just play tribal politics instead.
| TrispusAttucks wrote:
| Yep. The BBB bill was just an offering to appease their big
| $$$ donors. It's political theater at best. Contempt for
| their constituents at worst.
| twblalock wrote:
| The really crazy thing would be to end the student loan system
| without providing an alternative. If you do that, only kids
| with rich parents get to go to college.
|
| The current system is far from perfect but it enables kids to
| attend college regardless of their parents' wealth. Any
| replacement system needs to enable that too.
| ben940830298432 wrote:
| The private market would just require people to be more
| responsible about taking out loans. If people that take out
| loans for basket weaving often don't pay them back nobody
| would give out a loan for basket weaving. If someone is on
| their 5th major or college without completing any credit they
| won't get any more loans without having some backing.
| brewdad wrote:
| Do we really want a world where the bankers get to decide
| what a person studies? Bankers have never gotten anything
| wrong before.
| twblalock wrote:
| The private market wouldn't issue loans at all.
|
| We are talking about 18-year-old kids with no assets and
| likely no income, who have potentially never had a job,
| asking to borrow thousands of dollars because they believe
| (but cannot prove) that they will graduate college several
| years from now and make enough money to pay it back. Any
| banker who would give them a loan on normal terms would be
| an idiot.
|
| The only reason this works is that student loan terms are
| uniquely different from the terms for other loans. That is
| what makes the risk acceptable to lenders. Change that, and
| guess what -- nobody gets loans.
| pmoriarty wrote:
| School should just be free in the US, as it is in other
| civilized countries.
| sgjohnson wrote:
| And make the already mostly worthless degrees even more
| worthless?
| SSilver2k2 wrote:
| Education is never worthless.
| whymauri wrote:
| I know we're currently in the Church of Paul Graham, where
| college is useless and it's all about the startup grind.
| But college is known to lead to better outcomes on average
| for people who go to college, and there is an intrinsic
| value, to both individuals and society, in receiving an
| education.
|
| High school is free, for example, and it's not worthless.
| sgjohnson wrote:
| > But college is known to lead to better outcomes on
| average for people who go to college
|
| That largely depends on the field you're studying. STEM?
| Sure. Perhaps not for software engineering, because that
| these days can be entirely self-taught,if you're a person
| capable of it.
|
| But everything else? Probably worthless. A gender studies
| or liberal arts degree is not going to make you money.
| whymauri wrote:
| STEM has the highest class mobility, but even just an
| associates degree is shown to have a net positive
| outcome. For example of societal benefits and savings,
| education (yes, even in topics you may not deem 'useful')
| reduces crime.
|
| And is everything else really 'worthless?' Do we not need
| lawyers? Social workers? Teachers? Tutors? Librarians?
| Student debt is a barrier to solving teacher shortages,
| and not everyone is teaching STEM.
| stjohnswarts wrote:
| Yes, I would rather see student loan reform rather than
| repayment with no other changes. It's a bandaid otherwise.
| fortran77 wrote:
| Yes! And if they stopped issuing these loans, tuitions will
| drop quickly. Im against loan forgiveness, but if they're going
| to do it that also need to stop backing these loans.
| mr_spothawk wrote:
| > the government should stop handing them out
|
| Minor nit: The gov't doesn't give the loans, they underwrite &
| insure the loans.
| outside1234 wrote:
| But there is a important point here too - these loans are
| issued with too low of an interest rate BECAUSE they are
| guaranteed by the government.
|
| Drop that guarantee and the interest rate is going to float
| to more of a credit card level, which will make them
| prohibitive for funding tuition, which will put an extreme
| downward pressure on tuition rates.
| mr_spothawk wrote:
| I believe you are absolutely correct.
| loourr wrote:
| Semantics, they should stop underwriting them.
| mywittyname wrote:
| I had plenty of loans from the DoE.
|
| Getting the DoE into the student loan market was intentional
| and is seen as the first step to reworking the entire system.
| Navient et al are keen to keep the gravy train rolling.
| rockinghigh wrote:
| This program is for people working in the public sector. It's
| not known at the time of issuing the loan whether the student
| will quality for loan forgiveness.
| buu700 wrote:
| Exactly. Plug the hole first (or concurrently), and then worry
| about bailing water. Additionally, as others have mentioned, it
| needs to be done in such a way that we aren't punishing those
| who have been responsible and made sacrifices to pay off their
| loans.
|
| I'm not opposed to student loan forgiveness, but I don't think
| it's _nearly_ as popular as many progressives would like to
| believe as a standalone proposal. Come up with some
| qualifications and limitations for reimbursing past loan
| payments, as well as a systemic fix for the future, and I 'd be
| all for it.
|
| All that being said, is it still wise to forgive student loans
| at this particular time? Originally, the pitch was that it
| would help act as a stimulus during the pandemic downturn. Now
| that we're dealing with the opposite situation, I don't see the
| rush. Maybe a bill could be passed that had a delayed or
| gradual effect.
| nebula8804 wrote:
| I am starting to think this is a sign of a big weakness in
| the American system. These half baked actions are evident in
| health care, security, and all other categories. I think it
| has to do with the fact that there are so many parties acting
| in bad faith that it is hard to get comprehensive legislation
| that addresses the problem as a whole vs just piecemeal bits
| and pieces because that is all that can be pushed through. I
| don't know what the solution to this is other than a complete
| reset of the system (which itself would require the existing
| system to produce and pass)
| throwaway0a5e wrote:
| Of course a spoon makes a crappy can opener if you try and
| use it for that job.
|
| Institutions get designed around their mandate. If you're
| trying to run a school system you wouldn't invent a court.
| If you were trying to deal with violations of law you
| wouldn't create a school board.
|
| The federal government's mandate was to manage issues that
| arise between states and each other, between states and
| other countries and to a lesser extent, to prevent the
| states from violating the rights of their inhabitants and
| its architecture reflects that mandate. Over the years the
| federal government has expanded in scope far beyond the
| types of issues it was designed with the intent of
| managing. Expecting that system to provide decisive action
| on issues that are outside of what the system was designed
| for is unrealistic.
| TrispusAttucks wrote:
| Agreed. Your comment reminds me of this great quote:
|
| "Simple, clear purpose and principles give rise to
| complex and intelligent behavior. Complex rules and
| regulations give rise to simple and stupid behavior."
|
| - Dee Hock
|
| The hubris of creating complex rules to outsmart a
| problem leads to the creation of yet more complex rules
| to solve its own shortcomings.
| pyronik19 wrote:
| The problem is that you can't ram down income
| redistribution schemes in places like New York without
| watching all the income earners move to another state. No
| rational person is going to subject themselves to being
| robbed like that, they will leave (like I did with NYC).
| The key is to do it at a national level so you can shove
| it down everyones throats concurrently and give them no
| way to escape your shitty systems. Then you can appeal to
| your larger base of voters who are benefiting from
| stealing from a smaller number of people who are
| providing all of the resources, or a least until the
| government runs out of other peoples money to use as
| bribes.
| AnIdiotOnTheNet wrote:
| I'm not convinced that's as true as you think it is.
| Sure, some people will move, but presumably people have
| reasons other than the tax rate that they want to live in
| a place like New York and so, presumably, they will stay
| as long as they value those things more than lower taxes.
| rootusrootus wrote:
| I always assume that people who make blanket statements
| like this imagine they're actually providing real value,
| and that they're one of the few doing so.
| kurupt213 wrote:
| Nobody in power is willing to make the necessary unpopular
| decisions because the voting system discourages this.
| lotsofpulp wrote:
| Yes, voters simultaneously want benefits and low taxes.
| And this is how you do it, give the benefit subject to
| numerous qualifying conditions, and make it a loan, so
| cash flow is not affected today and hence tax impact is
| low.
|
| See defined benefit pensions, higher education loans,
| military benefits, 401k/employer health plan tax
| benefits. All of these things could have middlemen
| removed, but they remain to obfuscate costs and who is
| getting how much of the benefit.
| yhoneycomb wrote:
| > which itself would require the existing system to produce
| and pass
|
| or a revolution
| janejeon wrote:
| Could it be possible that this is being done more as a way to
| garner votes for the midterms? Someone else commented that
| this affects like only a tiny fraction of people w/ student
| loan, but it _does_ make for a good headline, judging by the
| number of comments here.
| andrewfong wrote:
| Actual DOE press release here: https://www.ed.gov/news/press-
| releases/department-education-...
| pastor_bob wrote:
| Underlying problem just keeps getting worse though:
|
| USC cost of attendance for 2022/23: $85,648[0]
|
| [0]https://admission.usc.edu/learn/cost-financial-aid/
| bombcar wrote:
| Heh that's 1/3rd the cost of a median LA home in just four
| years.
| abnry wrote:
| Now universities can continue to raise tuition and pay the
| administrative class even more. Uncle Sam has shown they'll pay
| it on his dime.
| telomero22 wrote:
| However, is that so bad?
|
| This way, American universities have large amounts of funds
| available to provide the best education, best facilities, hire
| the best professors and that's why America simply has the best
| universities worldwide and it is paid by their students?
|
| It also mostly only paid by students who can afford it.
| Students from weaker social backgrounds only have to pay a
| small fraction of the normal tuition fees.
|
| As well, 77% of people with student loans have less than
| $40,000 in debt and 57% have below $20,000 in debt. $20,000 can
| be paid off within 2 years with a normal graduate job if one
| wants to pay them off early.
|
| Source from 2019: https://i2.wp.com/www.brookings.edu/wp-
| content/uploads/2019/...
| honksillet wrote:
| End federal involvement in student loan and allow student loan
| debt to be discharged in bankruptcy. Problem solved.
| outside1234 wrote:
| Amen - tuitions are skyrocketing because of the "free money".
|
| It is also awful public policy to train people to get into
| debt right out of the gate - this just has all sorts of bad
| long term consequences.
| nradov wrote:
| Debt isn't inherently evil, it's just a tool. But any tool
| whether it's a hammer or a gun or a student loan can be
| used for good or evil.
| aksss wrote:
| Predatory debt traps are evil. The student loan industry
| (the schools being the marketers and beneficiaries) seem
| like predatory debt traps to me.
| nradov wrote:
| The schools should also have some skin in the game. If a
| former student defaults on their loan then the school should
| have to eat part of the cost, and schools (or particular
| majors) with high default rates shouldn't be eligible for
| loans at all. This would fix the problem of irresponsible
| schools encouraging students to take on huge loans that leave
| them stuck in debt for decades.
| gedy wrote:
| Agreed but, if someone tried this you know the schools and
| media would blast this as "Party X Robbing from Education,
| hurting students, the next generation", etc. It's tiresome.
| bachmeier wrote:
| There's a reason the federal government is as involved as it
| is. When I started college, lots of students dropped out
| because they didn't have the money. My first semester, maybe
| five students I interacted with dropped out within a few
| weeks. "Going back home to work. The loan didn't come
| through." That was back in the old days, when tuition was
| cheap, before states decided to end support for university
| education.
|
| The better policy would have two parts:
|
| - A maximum (like 7%) of your after-tax income can go to
| student loan repayment. - Colleges have to partially repay
| loans they took for tuition if after five years the student
| isn't on track to pay the loan off. This would align the
| incentives of the college with those of the student. It would
| bring a fast end to students that borrow to pay $75,000 a
| year for worthless programs.
| nostromo wrote:
| Unfortunately no politician will have the guts to do this.
|
| This is why people are skeptical of the federal government
| getting involved in just about anything.
|
| They passed this program to help students afford school, and
| it's done the opposite. It was also passed as a revenue
| neutral program of loans that would be repaid, now they're
| increasingly being forgiven or put into forbearance.
|
| Now to fix it, someone will have to feel significant pain,
| most likely both the educators and low-income students.
| greedo wrote:
| People are skeptical of the federal government getting
| involved because of decades of propaganda and underfunding.
| Bad roads? Well, Congress and the states won't raise the
| fuel tax. Bad education? Congress lets loans go to shite
| diploma mills that have owners who make big campaign
| contributions. Just look at how underfunded (intentionally)
| the IRS is. How audits are primarily focused on the bottom
| 50% of earners, while the top 50% skate. The Federal
| government does a great job at many things, when given
| clear legislation, and funding. Unfortunately, Reagan did a
| great job with his BS about "I'm from the government and
| I'm here to help."
| ch4s3 wrote:
| > Bad roads? Well, Congress and the states won't raise
| the fuel tax.
|
| We overbuilt infrastructure based on Government
| accounting practices that don't adhere to Generally
| Accepted Accounting Principles (GAAP or US GAAP).
| Representatives get elected based on promises of new
| roads and highways, not on successful stewardship of what
| we have. People realize this misaligned incentive, that
| isn't propaganda.
|
| > Bad education? Congress lets loans go to shite diploma
| mills
|
| For profit schools account for 10% of students[1] and 15%
| of loans[2]. They're a problem in several ways but not
| the root cause.
|
| > Just look at how underfunded (intentionally) the IRS
| is. How audits are primarily focused on the bottom 50% of
| earners, while the top 50% skate.
|
| I agree that the IRS wrongly targets working class
| people, but the rest of this is wrong. The tax to GDP
| ratio in the US has been constant for decades, and we
| have the most progressive tax code in the OECD[3]. The US
| obtains more of its revenue from income taxes than any
| other OECD nation by a factor of 2 in percentage terms.
| We have no VAT which is regressive, and almost every
| other OECD nation has one.
|
| Americans distrust government for a lot of historical
| reasons. We are the 2nd largest democracy that was a
| former European colony, and our founders fought a
| revolution against a remote and disconnected government.
| Most large waves or immigrants to the US were fleeing
| some sort of government oppression. We also should
| remember that some 14% of the population was officially
| discriminated against by the government in living memory.
| The war on drugs also give people plenty of reasons to be
| suspicious about the government. We're an individualistic
| society that is multi-ethnic, multi-racial, multi-
| cultural and people practice a range of religions it
| should come as no surprise that people are wary of
| Washington.
|
| [1] https://www.brookings.edu/blog/how-we-
| rise/2021/01/12/the-fo...
|
| [2] https://www.newyorkfed.org/medialibrary/media/researc
| h/staff...
|
| [3] https://www.oecd.org/tax/revenue-statistics-united-
| states.pd...
| greedo wrote:
| 1. Govt Reps get elected for a lot of things. Maintaining
| our roads, bridges and infrastructure are always
| buzzwords during elections.
|
| 2. Your link to Brookings just reinforces the issue. For
| profit schools account for 10% of students, borrow more
| often compared to public school students, and borrow more
| money. The Fed link shows that these students default
| more; they also are higher in pure dollar terms when it
| comes to Pell grants and Stafford loans. There's no good
| defense for profit schools.
|
| 3. Our tax to GDP has been constant for decades. Wow. I
| guess that wouldn't coincide with the Republican and
| Grover Norquist's efforts to "drown the baby in the bath
| tub?" A tax code can be "progressive" in theory while in
| practice it's regressive since the wealthy can shelter so
| much of their income. By underfunding the IRS, we're
| leaving money on the table. That's what the rich want,
| and since they largely control Congress, that's what they
| get.
|
| 4. If you look at trust in government, it was in the mid
| 70% range up until 1960. So obviously all the people in
| 1950 were so scarred by how poorly the British Parliament
| treated us in the 1700s. The drop in trust dropped during
| the Vietnam War when both parties continually lied to the
| American people, and since then has hovered in the 30%
| range for 40 years. But it's pretty clear that one party
| has had a platform for over 40 years to diminish the
| accomplishments of the Federal Government (except the
| Military), to starve it of funds, to politicize it's
| agencies. The other party sees the Government as a
| solution to many problems that are simply too large for
| individuals to solve.
| ch4s3 wrote:
| > Govt Reps get elected for a lot of things. Maintaining
| our roads, bridges and infrastructure are always
| buzzwords during elections.
|
| You're arguing against conventional political wisdom wrt
| the US, so I think the onus is on you to provide a better
| argument than sometimes the conventional wisdom is wrong.
|
| > Your link to Brookings just reinforces the issue. For
| profit schools account for 10% of students, borrow more
| often compared to public school students, and borrow more
| money. The Fed link shows that these students default
| more; they also are higher in pure dollar terms when it
| comes to Pell grants and Stafford loans. There's no good
| defense for profit schools.
|
| Your original comment was that loans to for profit
| colleges were the cause of bad education. I'm pointing
| out that they account for a tiny fraction of all degrees.
| You aren't making an argument here that shows the margins
| driving overall outcomes. The loan amounts aren't really
| relevant to the quality, or at least you aren't making
| that argument. I actually don't think the federal
| government should be in the lending game for education.
| It's too indirect and creates perverse incentives.
|
| > Our tax to GDP has been constant for decades. Wow. I
| guess that wouldn't coincide with the Republican and
| Grover Norquist's efforts to "drown the baby in the bath
| tub?"
|
| Yes, federal receipts as a percentage of GDP have
| vacillated between 14% and 19% since 1944 averaging
| around 17%. Grover Norquist's Tax Reform Act in '85 was
| followed by a 5 year uptick in federal tax receipts.
| Countries that capture more tax as a percentage of GDP do
| so through VAT.
|
| > A tax code can be "progressive" in theory while in
| practice it's regressive since the wealthy can shelter so
| much of their income
|
| The top 50% of earners pay 97% of federal income taxes in
| the US, which is the vast majority of federal revenue.
| That is definitionally a progressive tax scheme, in fact
| the most progressive globally by any measure. To argue
| otherwise is to deny basic confirmable facts. If your
| argument is about the 400 wealthiest families in America,
| then that's something else entirely, but it doesn't make
| the tax regime regressive.
|
| > If you look at trust in government, it was in the mid
| 70% range up until 1960
|
| You're looking at a measure that only starts after WWII,
| and probably in those early years excluded racial
| minorities.
|
| > So obviously all the people in 1950 were so scarred by
| how poorly the British Parliament treated us in the
| 1700s.
|
| This isn't an argument, it's jus reductio ad absurdum and
| misrepresents my argument about the cultural and
| historical roots of skepticism of government.
|
| > The drop in trust dropped during the Vietnam War when
| both parties continually lied to the American people, and
| since then has hovered in the 30% range for 40 years
|
| Can you blame anyone for being upset about Vietnam,
| Watergate, and the Cuban Missile Crisis?
|
| > But it's pretty clear that one party has had a platform
| for over 40 years to diminish the accomplishments of the
| Federal Government (except the Military), to starve it of
| funds, to politicize it's agencies.
|
| I think it's pretty clear that both political parties
| have been behind some rotten shit since Vietnam. Both
| parties were in favor of the drug war, needless foreign
| adventurism, the bungling of trade liberalization, and a
| raft of other stupid things.
|
| I would argue that both parties see government as a
| cudgel to bludgeon their adversaries with, and not as a
| tool with witch to achieve social good. As far as I can
| tell they're both obsessed with fighting culture war
| battles and have very little interest in the practical
| concerns of governance.
| nostromo wrote:
| > That's what the rich want, and since they largely
| control Congress, that's what they get.
|
| Your argument isn't self-consistent. You're arguing both
| that:
|
| 1. the federal government is a competent force for good
| and should be strengthened.
|
| 2. the federal government is corrupt and controlled by
| the rich.
|
| The only way this is a consistent argument is if you're a
| plutocrat.
| JumpCrisscross wrote:
| > _no politician will have the guts to do this_
|
| There is a grand bargain to be made.
|
| For example: forgive the first $10k of every student loan
| and offer every taxpayer who paid off their loans a
| refundable tax credit for the same. In the same stroke,
| make 10% of loans granted in the year following enactment
| dischargeable in bankruptcy, limit federal guarantees to
| 90% of the loan value and reduce subsidies by 10%. That
| goes to 20% (80%) the next year, 30% (70%) the next, _et
| cetera_.
|
| You aren't changing the terms of an extant contract.
| Lenders and schools have time to adapt. The program pays
| for itself and then some.
| throwawayboise wrote:
| This is the answer. Lenders would then have to do proper
| qualification on borrowers, would be more limited in their
| lending, and this would put downward pressure on tuition.
| mrep wrote:
| So unsecured personal loans? Those depend on your credit
| which most students don't have much/any and your debt-to-
| income which is normally infinite for students because they
| don't work. You would massively screw over kids whose
| parents cannot pay/co-sign a normal loan as it would force
| them to work and study. Also, you normally cannot get very
| much with such low income and cherry on top, they have
| awful interest rates which range from about 6% to 36%. The
| APR on loans for borrowers with excellent credit is around
| 12%; it's about 29% for bad credit borrowers which students
| with no credit are likely to be.
|
| As an example: say you work at target for 2 8 hour days on
| the weekend making 15 an hour and with a 36% debt-to-income
| ratio limit, you could afford a payment of $374.4 a month.
| $15,000 punched in a 30 year repayment at 29% interest rate
| equals a $362.57 payment. So you might be able to do it but
| I would hate to be working every single day between weekend
| work and weekly school and that is assuming an entire 4
| year degree could be pushed to to $15,000.
| bombcar wrote:
| Or just work for a year _before_ college and pay the $15k
| in cash?
|
| Or cut out the middle-man entirely and have the
| government provide college education for free.
| mrep wrote:
| Fair point and I'm not against free public education, but
| $15k is also a magical fantasy number to get too if you
| include housing/food/utilities.
| bombcar wrote:
| To be fair, it's not like you don't have
| housing/food/utility costs if you choose to not go to
| college.
|
| Apparently the average community college costs about $10k
| to graduate from, less if you're on a 2 year degree.
|
| Cue "that's not real college" crowd, of course.
| kevinsundar wrote:
| Colleges already have a mechanism for determining chance
| of success in college, and degrees have data on the
| average income after graduation. It would be trivial for
| private lenders to take into account the school, factors
| in standard college applications, the degree, and
| expected income to make a loan decision instead of
| relying on credit, debt-to-income, etc.
| mrep wrote:
| And just hope students don't default right after they
| graduate? You realize how picky they'd have to get? 40%
| of undergrads drop out [0] who would probably all default
| alone which is completely unworkable to be profitable
| considering credit card default rates are between 1.5 and
| 7 percent [1] and look at the interest rates they charge.
|
| It would also create a massive false negative problem
| where kids whom could have succeeded never got to go to
| college because banks would get so picky if they even
| were too somehow make a loan like that work.
|
| [0]: https://educationdata.org/college-dropout-
| rates#:~:text=In%2....
|
| [1]: https://fred.stlouisfed.org/series/DRCCLACBS
| throwawayboise wrote:
| > ...it would force them to work and study
|
| This was very normal and possible when I went to college.
| I could work part time during the year, full time in the
| summer, and pay my tuition. It didn't leave much free
| time but it was possible and a lot of people did it.
|
| These days tuition is so high at most universities that
| it just isn't possible. Yet they are not actually
| _teaching_ anything more or any better than they were
| back then. It 's just way more expensive.
| snarf21 wrote:
| This is a bad plan. Why would any 21 year old ever pay? Just
| ignore this debt until it is discharged. So you have to wait
| 7 years to buy a house? That sounds like no big deal.
|
| What we should do is have the fed define a maximum allowable
| charge for the school loan that can be protected by the
| government. Pick some number, like $10K a year all in. Any
| other school loans can be discharged as they aren't protected
| or schools could try to force the parents to co-sign. But
| either way, the government stops propping up runaway tuition
| inflation.
|
| We have to also look at why some of the cost is through the
| roof. When I was in school, housing was block buildings with
| bunk beds and a bathroom for the whole floor. Cafeteria was 2
| choices and drinks. Now, everyone has a private bedroom and
| living room to hang out in and their own apartment bathroom.
| Cafeteria is like a commercial buffet with all you can eat
| Nutella. That money has to come from somewhere. People want
| it to feel like a 4 year cruise ship. That is _one_ reason
| that the costs are out of control.
|
| This is also _one_ factor in our healthcare. Everyone wants
| lower prices but they also want an Urgent Care on every
| corner so they can go when it is convenient to them. Someone
| has to pay for that building and staff to sit there all day
| waiting for customers to show up. Everyone seems to want it
| both ways and never stop to consider their complicity.
| bombcar wrote:
| Federal student loans went unbankruptable in 1976, private
| ones in 2005.
|
| Did everyone routinely go bankrupt before 1976? I didn't
| before 2005.
| sudosysgen wrote:
| Then poor people won't qualify for loans.
|
| The only solution is some form of price controls, presumably
| by nationalising some universities or competing against them
| at the federal level.
| yumindev wrote:
| middle class people are fucked
| swarnie wrote:
| I'm not tuned in to American politics so can someone more
| knowledgeable fill me in...
|
| How many more loans are likely to be forgiven?
|
| When will people be told to start repaying?
| bombcar wrote:
| This is mainly a policy called Public Service Loan Forgiveness
| which says that IF you make 120 payments on schedule and on
| time (ten years) AND you work during that time for a qualified
| 'public service' job (think government, teacher, non-profit)
| THEN after 10 years the government will pay the remainder of
| your loan.
|
| There's some other stuff but the majority of it is that, a
| policy that's been in place for many, many years, but has been
| a bureaucratic hell to correctly navigate (you need to check
| each year, perhaps each month, that your payment has been
| recorded correctly, and reported correctly, etc).
|
| This is not general loan forgiveness by a long shot.
| Miner49er wrote:
| Just to add, the program was a complete failure. 99% of
| applicants for it were rejected. This news is just that they
| are trying to fix it, from my understanding.
| exabrial wrote:
| When you say "cancelled", do you mean "told the creditors to eat
| shit" or "we paid the creditors off"? Because everyone thinks #1
| is happening, when usually it's #2.
| Invictus0 wrote:
| People know very well that #1 is happening, but they usually
| justify it with "but the military spends $XXX billion a year"
| or some other whataboutism.
| Miner49er wrote:
| Isn't the government the creditor?
| moralestapia wrote:
| I could imagine there's a lot of people who:
|
| 1. Are paying/had paid their mortgage properly. Usually implies
| being down to earth and choosing a home you can actually afford.
|
| 2. Paid their student loans.
|
| 3. File and pay their taxes properly.
|
| 4. Have never went unemployed, or better yet, they're self-
| employed.
|
| 5. Never played stock market bets, as they're more conservative
| and prefer to save money in a predictable way through the
| years/decades (yes, decades).
|
| 6. Didn't get bailed out for COVID as they were not eligible
| because of 4, or they didn't need it because of 5 and their own
| savings bailed them out.
|
| They should feel really pissed off right now, with just cause.
| jaclaz wrote:
| Essentially this is Aesop's fable:
|
| https://en.wikipedia.org/wiki/The_Ant_and_the_Grasshopper
| moralestapia wrote:
| Yup, only at the end the Animal Council decides that the ant
| has enough food for itself and should give its surplus to the
| grasshopper.
|
| The winter goes by, spring comes and the grasshopper starts
| dancing again ...
| dudul wrote:
| And next year, the ant decides to also spend her time
| dancing around and partying, and when winter comes
| everybody is f-ed.
| moralestapia wrote:
| Exactly. This is usually the end result.
|
| _(Also, the ant takes a leisure trip to the Cayman
| Islands)_
| bombcar wrote:
| I fit almost all of those (except dabbling in TSLA calls a few
| years ago) but I don't feel pissed off, just mildly amused by
| the whole thing.
| ramesh31 wrote:
| >They should feel really pissed off right now, with just cause.
|
| I watched my entire generation party, travel, and generally
| screw around on free debt for 4 years while I was working my
| ass off to build a career and barely surviving.
|
| Yeah, I'm pissed.
| IE6 wrote:
| If your post describes me can you explain to me in a way I
| would understand why I should feel really pissed off right now?
| vmception wrote:
| This is about a 15 year old program and nothing to do with
| current political sentiment. Those same people always had the
| choice of complying with this program as well.
| moralestapia wrote:
| It was a tangential comment and I never mentioned politics,
| at all. 15 year old program or not, what do citizens who meet
| all those things I mentioned get in return?
|
| Please don't tell me it is _" the satisfaction of knowing
| that their hard work and taxes benefit others who are less
| fortunate than them"_.
| vmception wrote:
| I don't view it as getting something in return. They made a
| choice. The people complying with this other program made a
| choice. Both choices result in less debt they have to worry
| about. This leads me to think we're having a different
| conversation than the one you want to have.
| moralestapia wrote:
| Sigh ...
|
| You are a teacher and have two kids, A and B.
|
| Kid A is the ideal student, never gets in trouble, always
| send assignments in time and comes out really well in all
| tests.
|
| Kid B is the complete opposite and is basically a mess
| (for whatever reason).
|
| At the end of the school year you decide to give both
| students the same grade. You (could) justify it by saying
| that this measure is going to motivate Kid B to behave
| more like Kid A.
|
| Nice, but, how do you think Kid A is going to feel? What
| if, instead, it makes Kid A behave more like Kid B
| onwards. You don't want this to happen.
|
| See,
| https://www.newscientist.com/article/dn12913-envious-
| monkeys...
| vmception wrote:
| You have to work for the government or a non-profit for
| this program. What you're imagining is not what this
| article is about.
| whymauri wrote:
| Not only that, but they worked in government or non-
| profit (under a specific definition of both of these)
| long-term while making 120 non delinquent loan payments
| (10 years) only if the loan is a specific type of loan.
| These people are by government definition not a 'mess.'
| macdaknife wrote:
| I paid off my student loans each month until I was 34. I did it,
| and it made me stronger. Making other citizens pay for your loans
| is selfish, and it will come back to bite the people who accept
| this largess.
| rc_mob wrote:
| things sucked for you and so you are determined to make it suck
| for others
| Jiro wrote:
| They should require _banks_ to forgive loans, rather than
| forgiving Federally-backed loans.
|
| If you require banks to forgive loans (or if you allow loans to
| be dischargeable in bankruptcy), you create an incentive for the
| banks to loan money only for college education that results in
| useful careers. The Federal government is immune to market
| forces, so forgiving Federal loans just means you encourage the
| type of college degrees that are not useful.
| lifeisstillgood wrote:
| Not convinced - a sensible bank will look at the likelihood of
| a person to get a good job after their education, and might
| conclude that while choosing Engineering over Art History is a
| factor, there are far stronger factors like
|
| - parents wealth and social position - wealth of parents of
| peer group at the university - skin colour, gender - propensity
| for drug alcohol abuse in the family - heart and other medical
| conditions that might result in early death
|
| We choose welfare insurance at the state level to avoid /
| correct these undesirable features of our current society, not
| to continues them into the next generation
| bombcar wrote:
| Then the government should handle the loans directly and not
| involve the banks at all.
|
| All other debt can be discharged in bankruptcy, so the banks
| have free reign to be racist on mortgages and credit cards,
| but somehow student loans is the problem?
|
| Also see who asked for student loans to be non-dischargeable
| hmmm.
| nonameiguess wrote:
| You're missing the point of the PSLF. It's intended to provide
| incentives for highly qualified people to choose public service
| _rather than_ go into lucrative careers. These are considered
| "useful" careers, but they don't pay well. For instance, I
| currently work as an individual contributor platform developer
| for the US Air Force and I make more than the 4-star chief of
| the entire Air Force, yet presumably he has more of an impact
| on the country at large than I do. I believe the president is
| the only federal employee with a higher salary than me. The
| purpose of programs like this is to make sure we still have
| people willing to work for the government at all, given
| everything else they need to give up to do it.
| SubiculumCode wrote:
| Personally, I think we should just raise government salaries
| to be competitive. I'm personally getting sick of being paid
| 60% of my worth to the private market by my job doing science
| at the university.
| lifeisstillgood wrote:
| I know _every_ European seems to ask this of every American but
| what is the resistance to a welfare state? if you look at a
| government as investing in its citizens like a VC fund, then
| providing education and medical care is sensible, and some will
| turn out fine and others will be Bezos and then you can get your
| investment back via tax.
|
| I am honestly trying to avoid the flame war here - but I do it
| know how else to frame the question?
| lallysingh wrote:
| We don't want others not like us to get benefits, especially if
| it's paid out of a common tax pool. Even if it's not, if we're
| not eligible for the same benefits. The US population has had
| decades (almost centuries) of us vs them politics within the
| country.
| outside1234 wrote:
| This is right on.
|
| There is an additional layer to this that some "blue collar"
| workers feel it is unfair to tax them for education benefits
| they don't utilize as a working class.
|
| Hopefully we can reframe the debate to include technical
| skills training like this in addition to university to be
| inclusive of all of the modern skills people are going to
| need and that we as a nation need to invest in.
| manuelabeledo wrote:
| There are "us vs them politics" everywhere.
|
| What the US has is more like "I'm fine with being screwed as
| long as the others are too" kind of mentality. Look at
| healthcare. There would be people rejecting Obamacare just
| because it has "Obama" in its unofficial name, then not be
| able to pay for treatments.
| dcolkitt wrote:
| The biggest misconception is that America could have a European
| welfare state if we just taxed the rich. The reality is the
| rich in America only pay slightly lower taxes than their
| European counterparts.
|
| In Germany top income tax rate is 50%. In the US, it's 37% if
| you live in Texas and 56% if you live in California. In Germany
| long-term capital gains is 25%. In the US, it's 24%. In the US
| the corporate tax rate is 21%. In Germany it's actually lower
| at 16%.
|
| The primary difference between Germany and the US is not taxes
| on the wealthy. It's that the German middle class pays
| _significantly_ more than the American middle class. A couple
| with two children, each earning $65k /year will pay 28% of
| their income in taxes. Then on top of that they'll pay 19% in
| VAT tax on nearly every purchase. Effectively for every Euro
| earned, they're left with post-tax purchasing power of 59
| cents.
|
| In contrast, the same family in America will only pay 11% of
| their income in taxes. Depending on state sales tax comes in at
| 7%, and unlike VAT at most applies to maybe half their budget.
| For every $1 of income, this American household is left with 85
| cents of post-tax purchasing power.
|
| And that's the main difference right there. European welfare
| states are powered by taxes on the middle and upper-middle that
| are simply unacceptable to the average American voter. Imagine
| a politician running on a policy of tripling middle class
| taxes. It doesn't matter how much single-payer healthcare, free
| university education, and expanded public transit they
| promised. Americans would simply never vote for that.
| edmcnulty101 wrote:
| I am fully on board with this idea. The government provides
| education for people who want it. They better themselves, they
| better the economy and taxes. A side benefit is that educated
| people also better the human race as a whole.
| 300bps wrote:
| _They better themselves, they better the economy and taxes_
|
| What if they want to get a PhD on how autumn leaf colors in
| New England impact the emotions of rattlesnakes from Texas?
| You want to pay for that?
| earthscienceman wrote:
| Sure. As someone with a PhD and a few masters in STEM
| fields, the holy grail of "useful" degrees a la HN here, I
| trust the academic institutions to vet what is a "valuable"
| PhD topic on a societal level. If you don't, we have bigger
| problems than your snarky attitude about the relatively
| benign amount of money spent on "useless" PhD topics. When
| in reality the large majority of waste on campuses is on
| buildings, administration, and other massive Uni programs
| being driven/subsidized by unfettered access to student
| loans to the undergraduate population, who will then never
| be free from those shackles.
|
| Why are people so focused on this straw man? The problem
| isn't bad humanities degrees or programs. At all. The
| problem is the cost of higher ed and the number of people
| going to get a degree that is effectively a certificate to
| work in the US economy. Then people needing to take out
| loans to pay these gate-keepers.
| 300bps wrote:
| _Why are people so focused on this straw man?_
|
| A strawman is an intentional misrepresentation of a
| proposition that is set up because it is easier to defeat
| than an opponent's real argument.
|
| So where's the strawman? People do get degrees that many
| people and the labor market itself finds useless. Lots of
| people get them! No strawman.
|
| _The problem is the cost of higher ed and the number of
| people going to get a degree that is effectively a
| certificate to work in the US economy_
|
| The cost of higher education has been driven by the
| misguided attempts by the government to make college
| affordable. As for a degree being necessary to work in
| the U.S. economy - I know first hand this is not the
| case. At all. But trying to convince someone with a PhD
| and "a few masters" of this fact is going to be as
| successful as trying to convince an 80 year old life-
| young devout follower of a religion that they're wrong
| about their religion on their deathbed.
| Zpalmtree wrote:
| people don't like spending all their money on taxes and being
| poor like the europeans
| chao- wrote:
| As many liberal policy wonks (not a pejorative) will point out:
| the American people love their welfare benefits! A common claim
| is that "A majority of Americans support $POLICY! It polls so
| well!", wherein $POLICY is broadly a sub-component of "welfare
| state". I sometimes hear it said with an undertone of
| exasperation: Why can't policies that are so self-evidently
| popular get enacted into law?
|
| The challenge isn't getting people to say "Yes" when you ask
| them "Hey do you want all of this great stuff?" That already
| happens, per the above popularity of individual benefits.
|
| The challenge is getting people to say "Yes" when you ask them
| "Hey do you want to pay for the government to give you all of
| this great stuff?" Those two details: higher taxes and
| government administration, are what erode support for these
| policies.
|
| The median US citizen believes that "government run" is a
| synonym for any of dozen negative adjectives: wasteful, won't
| work, abused by the rich, bureaucratic, untrustworthy, and so
| on. Are those true or false in any given instance? Would a
| private sector alternative would avoid those negatives? The
| specifics do not matter when people are acting on deeply-
| entrenched, life-long _perceptions_.
|
| As for why that perception came to be? That would be a
| historical thesis of its own, and might be tangential to your
| question.
| sevenf0ur wrote:
| > As for why that perception came to be?
|
| This article is about a government program managed so
| terribly, they did not keep track of payments. You had to
| call in and trigger a review to be forgiven. These 40k loans
| forgiven are essentially the lowest hanging fruit.
| 300bps wrote:
| _what is the resistance to a welfare state_
|
| America is a welfare state. If you truly can't afford to go to
| college, the government will pay for you to go. Look up FAFSA.
|
| If you can't afford medical care, the government will provide
| it for you. Look up Medicaid.
|
| People pay into Social Security for Retirement, Social Security
| Disability if you get disabled, Medicare is universal
| healthcare for anyone 65 or older. Affordable Care Act
| subsidizes healthcare for anyone else that can't afford it.
|
| I could go on and on and on. There is no black and white - we
| are just another shade of gray out there.
| commandlinefan wrote:
| > what is the resistance to a welfare state?
|
| I don't believe it's sustainable. I don't believe it's
| sustainable here, and I don't believe it's sustainable there
| either (in fact, as far as I can tell, we've starting to see
| the cracks in the European welfare state for a while now). We
| have some welfare state-like programs here - social security,
| for example, is supposed to provide guaranteed retirement
| income to the elderly. Both of my grandfathers lived on it for
| decades before they passed. My father collects it now, but it's
| not enough to survive, even at his meager standard of living,
| so he works as a security guard at 72 (and yes, I've offered to
| let him come live with me but he's too proud to accept). I
| don't believe that there will be anything left over when I try
| to collect it in 20 years. If it was actually free, there
| wouldn't be any reason to be upset, but my social security
| payments are _far_ higher than what I contribute to my actual
| 401(k) retirement plan that I _do_ expect to be able to live
| off of when I 'm ready to retire. The welfare state takes
| everything and eventually provides nothing.
| BeFlatXIII wrote:
| That's also because much of the funding was based on
| inherently unsustainable models of indefinitely continued
| population growth.
| Barrin92 wrote:
| This framing is on its head because America already has a very
| generous welfare state and hands out money much more liberally
| than many European states. Including in education which is why
| there's such an inflation in education cost. The US even has a
| more progressive taxation system than most European countries.
|
| In Europe education is largely public and thus its subject to
| budgetary concerns. It's why Germans go to vocational training
| and have half as many people in tertiary education, there's no
| degree or cost inflation.
|
| People in the US who aim for European policies need to
| understand that it consists not of liberal fiscal policy but of
| robust public services provided by and largely paid for by the
| middle and working class.
| vnchr wrote:
| Personally, I'm concerned about our government's track record
| of mismanagement and infighting that is detached from the needs
| of the people. Without that implicit trust, giving them more
| power is a general concern. Speaking geopolitically, the US
| military is the most powerful force in history including
| present day and our economy is the largest globally, which
| makes us coveted by those who seek to wield power for their own
| benefit, more so than your average Europe country. If the US
| were to fall to tyranny, that'd put everyone else at risk.
| Again, less of that risk with your average European country.
|
| If I lived somewhere like Sweden where there is heavy taxation
| with equally heavy social benefits, I'd probably be fine with
| the arrangement and wouldn't fight it. Sounds nice.
|
| I'm not trying to equate welfare with tyranny, of course. The
| use of bread and circuses has been associated with the downfall
| of empires to sway public opinion with a short term good at a
| long term cost. If you start disrupting our major economic
| systems like that, we're more likely to dissolve and those with
| power would use that weakening to their advantage.
| guhidalg wrote:
| > I'm not trying to equate welfare with tyranny, of course.
|
| But that's exactly what your first paragraph did, at least in
| the case of the US. Why do you think welfare "works" for
| Sweden and would not work for the US? Is Sweden tyrannical?
| throwaway894345 wrote:
| I don't have an inherent problem with universal higher
| education or state-sponsored welfare, but the US federal
| government manages to bungle things. In the case of the federal
| student loan program, tuition costs have tripled since the
| early 90s and students who otherwise wouldn't have gone to
| school are in many cases saddled with debts on which they can't
| default. For many Americans, this doesn't make for a compelling
| case for more government.
| newfriend wrote:
| Why does every European who wants to be successful move to the
| US? Why is almost every innovative and successful company from
| the US?
|
| Providing free stuff to layabouts isn't a recipe for success.
| These "investments" will never pay off. The way to incentivize
| economic success is via competition.
|
| Unfortunately the US is already far down the path of handouts
| and participation trophies, and has nurtured an utterly
| entitled generation who think everything should be handed to
| them.
| anonAndOn wrote:
| We're actually quite fond of corporate welfare but loathe
| individual welfare. States will try to out compete each other
| to offer subsidies and tax relief for a giant-corp's new
| facility but shun much less expensive assistance for poor
| families. Golden shovels win re-elections! [0]
|
| [0]https://goldenopenings.com/Gold-Chrome-Shovels_c_46.html
| matt321 wrote:
| I work hard and always have. I wont be happy if it leads to
| zero advantage over those who dont.
| gruez wrote:
| >if you look at a government as investing in its citizens like
| a VC fund, then providing education and medical care is
| sensible
|
| Be careful what you wish for. if the US was a VC fund, they'll
| have to not invest in every company they come across and
| perform due diligence, which probably means excluding
| disadvantaged people with poor academic records.
| [deleted]
| cwp wrote:
| The problem is that many US universities are private. So when
| the government puts money into loans and grants for students,
| the universities just raise tuition, rather than expanding to
| accept more students. In the end it's just a transfer from the
| public to university administrators. To really expand access to
| education we'd have to have many more public universities.
|
| And anyway, the problem with education isn't that it's not
| available to enough people. Smart, motivated kids can get a
| university education even if they're poor. We have enough
| academics and highly-educated workers for our economic needs.
| The problem is that it's become a class marker. Many, many
| people don't want more degrees out there, because it would make
| their own degree less valuable. Others are desperate to get a
| degree at any cost, not because it improves their career
| prospects, but because it confers high status. So taking on
| huge debt for a useless degree is fine, and in fact good,
| because it's conspicuous consumption. Of course, debt sucks, so
| once they have the degree, loan forgiveness is very much in
| their interest, but not publicly-funded university.
|
| On the larger question, I think it's a cultural thing. America
| was settled by people leaving stifling societies to go it
| alone: Europe at first, then the American establishment on the
| east coast. The frontier is gone, but that value system
| persists, and self-reliance and independence are hugely
| important to many people in the US. There's a pretty good
| argument to be made that American democracy arose because the
| wilderness was right there and if they didn't get a say in
| government, people would just move beyond its reach. That
| culture is has served us well, but we've run out of frontier,
| and we're starting to feel the social pressures that Europe has
| had for millennia. There's no escape from the state, so the way
| to get ahead is to work the system, get a larger share of the
| pie rather than growing it, and so on. The pushback to _that_
| is to demand more fairness from the system, ie, a welfare
| state.
| wskinner wrote:
| > The problem is that many US universities are private.
|
| This is false. The cost of tuition at public universities has
| grown faster over the last 20 years than at private
| universities, for both in-state and out-of-state students.
|
| The average tuition and fees at private National Universities
| have jumped 144%. Out-of-state tuition and fees at public
| National Universities have risen 171%. In-state tuition and
| fees at public National Universities have grown the most,
| increasing 211%.
|
| Source: https://www.usnews.com/education/best-
| colleges/paying-for-co...
| cwp wrote:
| I stand corrected. Clearly being private is not a factor if
| public universities are leeching off the public even more.
| That amounts to corruption in university governance. <sigh>
| lr4444lr wrote:
| We see ourselves as a nation of immigrants. Where you came
| from, perhaps you had a social contract passed down through
| generations of the history of your people/ tribe/ ethnic group.
| But you gave that up when you came here.
|
| Americans see themselves as the descendents of their own unique
| "first generation" ancestor who broke ties with his people of
| origin and came here to stand on his own two feet. We don't see
| ourselves as responsible for YOUR first generation ancestor's
| home country problems or failure to make it here. We may in our
| newly formed ethnic enclaves take care of each other, but
| that's opt in. Patriotism to us is about preserving that
| independence- not a shared lineage. I am generalizing here
| obviously, but you were asking a kind of zeitgeist question.
| Hope I help something click for you.
| ffggvv wrote:
| Extremely misleading title. i assumed 40k was the dollar amount
| cap for each loan. not the number of loans forgiven.
| spaetzleesser wrote:
| This is fine but I would really like to see an effort to get the
| rising costs under control. Otherwise colleges will just suck up
| more money the same way health care is happy to accept subsidies
| while raising costs.
| uoaei wrote:
| They're not forgiving student loans so much as forgiving
| themselves for not administering them correctly, and then taking
| steps to rectify the years-long errors.
| paulpauper wrote:
| a lot of borrowers, a lot of debt, that's for sure
| _moof wrote:
| Please, please, please take note before commenting: These are
| being forgiven under the Public Service Loan Forgiveness program,
| created in 2007 (fifteen years ago), which eliminates your
| remaining debt after you've made ten years of payments while
| working in the public sector (government or non-profit). This has
| nothing to do with current debates around loan forgiveness.
| jatone wrote:
| its 100% intentional on the administrations part. this is their
| 'creative' way of trying to not meet their campaign promise.
| highly annoying.
| MCllorf wrote:
| He still has time to do loan forgiveness "helicopter money"
| style. But even if all we got was an expansion of targeted
| relief programs I think it totally counts as fulfilling his
| talking point. The issue with student debt is that for some
| people there's no way out, but generally speaking college-
| educated people are more well-off and forgiving all debt
| would be a regressive stimulus that targets the wealthier
| side of the population. Targeted relief is a great way around
| that.
| jatone wrote:
| this isn't targetted relief. this is shit that was already
| suppose to be done.
|
| also regressive stimulus are not even a thing. maybe you're
| thinking of regressive taxes? which _still_ wouldn 't be
| right.
| LimaBearz wrote:
| No. The previous guy installed people in the DOE that made it
| virtually impossible to forgive the loans even after they
| jumped through all the hoops to qualify under the law.
|
| All Biden's administration is doing here is ungumming people
| who were eligible years ago. This is cleanup from the prior
| administration
| jatone wrote:
| I'm aware. and but these things are being trotted out by
| people as 'look hes (biden) done so much!!'
|
| when in reality: hes done jack shit except what already is
| suppose to happen!
|
| I promise you biden's PR group is the force behind these
| articles.
| 7speter wrote:
| As demonstrated by the last admin it doesnt _have_ to
| happen so feel free to complain about the current
| President doing "jack shit" until the last guy wins the
| next election...
|
| Sometimes keeping promises are important.
| endtime wrote:
| That's where the 40,000 in the headline comes from. But the
| article also says this:
|
| > Several thousand borrowers with older loans will also receive
| forgiveness through income-driven repayment (IDR) forgiveness,
| plus another 3.6 million borrowers will receive at least three
| years of additional credit toward IDR forgiveness, the
| Education Department said in a statement.
| colpabar wrote:
| I'll believe it when I see it. I vividly remember getting
| "credits" for _$1_ from fafsa, so if it 's anything like
| that, it will be meaningless.
| stonogo wrote:
| I think you might be misremembering, because the FAFSA is
| just the application you fill out to apply for student aid.
| Maybe the Department of Education issued the credits?
| marricks wrote:
| 45 million folks in the US have student loans so even some
| action for 3.6 million folks isn't a large percentage.
| hunterb123 wrote:
| So since it's only 8% it's fine?
|
| How many 8% increments can there be until we're allowed to
| be against this?
|
| I'm against any percentage of funneling taxpayer money to
| college administrators.
|
| Reduce tuition, don't rubber stamp federal loans while
| letting administrators increase costs.
| caseysoftware wrote:
| I think we already have a solution built into the legal
| system: Lemon Laws.
|
| From the Great Wiki in the Sky: _" Lemon laws are laws
| that provide a remedy for purchasers of cars and other
| consumer goods in order to compensate for products that
| repeatedly fail to meet standards of quality and
| performance."_
|
| Obviously, these degrees did not meet the standards of
| quality to make "productive members of society" so the
| universities should have to "buy them back", preferably
| using their own endowments.
|
| In the short term, it would hurt them immensely - which
| is deserved for selling a "product" that wasn't
| worthwhile but in the long term, it would mean that
| they're more likely to a) keep prices more reasonable and
| b) make a higher quality "product".
| dangerlibrary wrote:
| This is just the Education department doing what it is
| required to do under various federal programs that have
| (pretty much by definition) existed for over a decade.
|
| We can have a productive conversation about whether those
| programs were too generous or had unintended
| consequences, but millions of people have structured
| their finances around these programs and the rules in
| them - it's a rug-pull to suddenly have regrets and
| oppose the policies only now that the remaining balances
| are being wiped out.
| babypuncher wrote:
| Yeah it's like this with the people who want to kill
| Social Security as well. How are people who are supposed
| to retire in 10 years going to do so if you kill Social
| Security in 5? Retirement preparation starts when people
| are in their 20s, so any changes to SS that do not
| include an equivalent replacement need to be planned
| 50-60 years in advance.
| bombcar wrote:
| The common procedure is to freeze everything and let
| inflation slowly destroy it.
|
| Who cares if you can get a $20k student loan in 2122 when
| a hamburger costs $70?
| BitwiseFool wrote:
| Student debt is massive, yes, but why are so few people
| asking where that money actually went? A cursory search
| says student loan debt is roughly $1.6 trillion dollars
| and there are around 4,000 to 6,000
| colleges/universities. This is a rough number and the
| actual amount depends on your criteria, but the gist is
| that you have a ton of money flowing into a relatively
| small pool. Yes, I know not every dollar of loans goes
| _to_ the school, but I really have to beg the question on
| what these institutions have done with all this money.
|
| Seems like any discussion about forgiving debt should
| involve going after some of these universities
| themselves.
| sokoloff wrote:
| Just housing and feeding around 50 million borrowers
| while they attend school for 4-ish years ends up being a
| damn lot of money.
| remarkEon wrote:
| This is a great question that no one is really asking.
| Too much of the conversation revolves around what's fair
| for student borrowers and not enough on what in the world
| these universities have done with all of that money.
| spiffytech wrote:
| My alma mater needed to bring their student center into
| compliance on the last ~50 years of building code
| changes. The project was estimated to cost
| high-8-figures, for nothing but code compliance.
|
| Instead, they spent $120,000,000 renovating it to be
| shiny and modern and _also_ up to code. I don 't
| understand why it was so expensive, but I'll assume it's
| not an order of magnitude away from true cost.
|
| $1.6 trillion is "only" a few hundred million per school.
| If the cost of renovating _one_ building is any
| indication, it 's easy for a university to use up that
| much money.
| CSSer wrote:
| In the case of my alum, I think I can tell you: they
| spent it on housing and amenities to attract more
| students (quantity, not quality). I watched it happen
| while I attended. A university operates under the same
| principles as any other business in this case.
| Administrators are not innocent here, but they do have to
| live within the system and work with the incentives they
| are provided. Loans are made available to students and
| parents to shop around. This is a big part of what has
| created the upward pressure on tuition. We've revitalized
| a lot of state school campuses while letting their
| academics rot. Parents and students see fancy common
| areas, gyms, cafeterias and living spaces when they visit
| campuses then use that to decide where to go unless
| they're very focused on the education, which they're
| likely not because most very focused students require
| less financial help. If that money had been given to the
| administrators we are often so quick to villify, this
| picture may be a very different one.
| kevin_thibedeau wrote:
| One big name school I've been to had a new gym where the
| bathroom hand dryers all had custom graphics on them.
| This is where the money goes.
| colechristensen wrote:
| University administrative costs have blown up with all of
| the easy to acquire loan money.
|
| Just a few highly paid and many mildly paid bureaucrats
| doing things which don't need to be done... or in some
| cases doing very little at all (I've heard stories)
|
| Also lots of fundraising and shiny new buildings which
| are more advertisements than useful expansions.
| stetrain wrote:
| Why not do both?
|
| Forgiving past loans for graduated students does not put
| future money into the hands of college administrators
| unless you continue issuing and forgiving future loans.
|
| Fixing the grift and providing relief to those who were
| grifted should be two sides of the same coin.
| rootusrootus wrote:
| Sure, do both. But the relief, as it were, needs to come
| _after_ the fix.
|
| And frankly, rather than just give a relatively
| privileged subset of the population some money, we might
| as well crank up that printing press again and just got a
| $10K check to every last citizen, student loans or not.
| Might as well be equitable about it.
| stetrain wrote:
| The relief we are discussing being some partial credits
| given to a small percentage of loan holders under an
| existing income-based program?
| marricks wrote:
| If you're against wasting taxes spend your time typing
| about but defense boondoggles which actually waste tax
| payer money not a trillion owed to the government which
| it wasn't ever going to get back anyways.
| hunterb123 wrote:
| That's whataboutism. I'm also against that, but it's not
| the topic.
|
| Submit an article about it, I'll for sure post my
| opinions on the matter.
| saila wrote:
| I'm all for contributing to admin salaries. I'd even go
| so far as to say state-funded schools shouldn't charge
| tuition at all.
|
| That said, I have to agree that tuition definitely seems
| bloated and many admins make absurd salaries.
|
| Until that's fixed, which seems unlikely in the near
| future, how do we fix the issue of massive debt that
| hangs over people for their whole lives?
|
| The obvious solution would be to reduce tuition and other
| costs, but now we're in a loop. It seems like an
| intractable problem.
| branon wrote:
| Does this mean full-time public service workers with pre-PSLF
| loans, or are the feds debating broadening the scope of loan
| forgiveness to include persons in other careers as well?
| tedivm wrote:
| They aren't changing the scope at all- they're just fixing
| some problems that meant people who should have gotten
| their loans forgiven but didn't will finally get that
| problem corrected, and they're granting credits for people
| who are already in the system. This will now allow a single
| person outside of that program to benefit, and it won't add
| new people to the program.
|
| This may change with future actions, but quite frankly it's
| kind of embarrassing that they're claiming this is a win
| when all they did was follow through on a promise made
| years ago that was basically ignored.
| [deleted]
| nr2x wrote:
| Exactly, this is pure PR the headline should be "Government
| Fulfills Terms of Loans it Failed to Meet"
| lotsofpulp wrote:
| Alternative could also be "government obfuscates prices for
| education and certain types of labor by offering nebulous
| benefit, the cost of which can be subject to much
| manipulation for purposes of presenting it as a low cost
| benefit".
|
| It would be straight forward to simply pay for higher
| education expenses directly, with much less bureaucracy and
| more transparent pricing, allowing for better allocation of
| society's resources. But, as always, that would reduce the
| avenues for corruption, and so the politically viable option
| is the circuitous option.
| jeegsy wrote:
| What then is the point of the article? To tout something
| implemented by another administration? I haven't been employed
| by the taxpayers so who cares?
| [deleted]
| jasonlotito wrote:
| Comments like these boggle my mind. This is news. This is
| reporting. Literally taking what is done and sharing it with
| the masses: X did Y. That's it.
|
| Did you know this happened before this article? No. Does your
| caring change the fact that it's news? No.
|
| "What's the point of the article?" To inform. That this needs
| to be questioned is upsetting.
| jwarden wrote:
| Oh, but it is so much more than "X did Y". The choice of
| which facts to report, when, and how, has huge impact on
| what people come to believe.
|
| There are a thousand ways to deceive while uttering nothing
| but true statements. The question to ask is not "is the
| headline literally true?", but "what does the headline
| cause people to believe?"
| jeegsy wrote:
| It is news to me yes and yet, by any definition of news I
| understand, a measure taken in 2007 is continuing is not.
| To further make my point, the original commenter felt the
| need, correctly I think to clarify that the article is not
| discussing a new policy! "What's the point of the article?"
| is a short way of asking both what the author wishes to
| communicate, why and most importantly what the intention
| is. I had hoped my asking the question in the first place
| would be a clue that I dont buy that it is just "to inform"
| NelsonMinar wrote:
| The PSLF has been very badly administered to date. The Biden
| administration is finally applying it the way it was
| intended.
| mywittyname wrote:
| I believe a lot of this wave of forgiveness is due to
| correcting/removing the road blocks for this program put into
| place by Devos in previous years.
|
| The article refers to these as "historical failures" but I
| think that being very generous.
| InitialLastName wrote:
| It wasn't just the Trump administration; it was clear there
| were significant problems with the way the program was
| administered well before the first loans were supposed to
| start qualifying in 2017. Among other things, the Bush and
| Obama administrations that created and administrated the
| program provided no guidance and no oversight to the
| companies overseeing the loans, so the companies made it
| effectively impossible to qualify.
| mywittyname wrote:
| Hard disagree. The Obama administration _drastically_
| altered federal student loans worked, end-to-end. One of
| the largest changes was to get the DoE directly into the
| market of lending and holding student loan debt. Cutting
| out servicers like Navient, and costing them tons of money
| in lost subsidies and essentially nationalizing the
| industry.
|
| Policies such as Public Search Loan Forgiveness, Pay as You
| Earn (PAYE), Perkins Loan cancellation, and several others
| were part of the Student Aid Bill of Rights. Having the
| government hold student loan debt is foundational to making
| these policies work.
|
| This was a key policy platform of the Obama administration.
| It's less widely known about, compared to ACA, but still an
| important one. And this is probably the reason that it's
| been a day-one policy issue for the Biden administration.
| InitialLastName wrote:
| > And this is probably the reason that it's been a day-
| one policy issue for the Biden administration
|
| Here on day 455 of the Biden administration (who, by the
| way, was the _least_ interested in resolving the student
| loan issue among his Democratic Primary rivals), it sure
| doesn 't look like it was a "day one" issue.
| Fomite wrote:
| I know someone who is enrolled in this program -
| unfucking it has been an ongoing task since _very_ early
| in the administration. But like many things, it takes a
| bit to figure out how to untangle a program that was
| actively sabotaged for four years prior.
| cato_the_elder wrote:
| > Public Service Loan Forgiveness program
|
| Come work for the permanent undemocratic bureaucracy, and
| you'll even your student loans forgiven. But if you decide to
| go down the path of becoming a kulak, the student loans will be
| with you even if you go bankrupt.
|
| I'm curious where the sudden bump to 40k comes from. According
| to Wikipedia [1]:
|
| > The Department of Education reported that 2,215 borrowers had
| the remainder of their respective student loans forgiven under
| the program as of April 30, 2020. [1]:
| https://en.m.wikipedia.org/wiki/Public_Servic
| oldgregg wrote:
| FAANG has plenty of private XKeyscore wrong-think APIs that
| the bureaucracy utilizes under the auspices of "fraud
| prevention" to filter out "bad thinkers" from various
| activities. Welcome to fascism, folks.
| MR4D wrote:
| This is a good point. The Public Service Loan Forgiveness
| (PSLF) Program is like the GI Bill, but they pay off your
| college debt after service instead of paying your college after
| service.
| throwingrocks wrote:
| Seeing tons of comments about what people THINK an article says
| or about their opinion on something related is causing me to
| use this site less and less.
| [deleted]
| soheil wrote:
| Completely agree that some of the comments are off the wall.
| But in all fairness the Ruerters article doesn't highlight
| the public sector part enough. To learn more you'd have to do
| your own research to find that PSLF has stringent
| requirements.
|
| IMO this is more an example of how bad journalism can have
| damaging effect on even a well versed audience.
| bombcar wrote:
| Most of the people who "get" the article already knew what
| the PSLF was (I suspected it from the headline alone).
| commandlinefan wrote:
| > are being forgiven under the Public Service Loan Forgiveness
| program, created in 2007 ... nothing to do with current debates
| around loan forgiveness
|
| Well, FWIW, I'd never heard of that program before now, but I'm
| not super happy about it, either.
| halJordan wrote:
| Idk why you dont like the program but generally speaking this
| program is only needed because civil servants get paid
| absurdly low salaries.
| dangerlibrary wrote:
| There are a lot of different versions of these income-based
| repayment programs, dating back to the early 00s at least.
| They are all structured similarly but have differing
| eligibility cutoffs and rules. Typically they involved making
| payments on your loans for 20-25 years at some maximum % of
| your income before the remaining balance is forgiven. PSLF
| has a shorter forgiveness window (10 years) but you need to
| make 120 payments while working some job that is socially
| useful but not-market-optimal like public service or working
| for a nonprofit.
|
| FWIW, IBR systems they are a common policy suggestion from
| both conservatives and liberals (with differing priorities /
| rules).
| nimbius wrote:
| Its an interesting piece of legislation to see, and strongly
| implies former senator Joe Bidens initial student debt
| legislation was beginning to have seriously negative
| repercussions at the federal level for employee retention and
| hiring not even 5 years into its inception.
|
| Back in 2005 Biden supported and stumped for a bill that
| stripped students of bankruptcy protections and led the country
| into a 1.7 trillion dollar student debt crisis. Watching
| President Joe Biden offer token debt forgiveness in 2022 is a
| little bit infuriating to watch as he could easily have spent
| the last seventeen years working to reform his mistake. If i
| had to weigh in on the sudden rise of student debt forgiveness
| under the current administration id say its political.
| inflation, gas prices, housing shortages, and supply chain
| issues have made it all the more practical to take action now
| and shore up the old midterm voter appeal.
| gamblor956 wrote:
| If you had actually read the article, you would have seen
| that the loans were forgiven under a student loan forgiveness
| program introduced in 2007.
| nimbius wrote:
| i read the article.
|
| the point im making is that the federal government enacted
| forgiveness for its employees only 2 years after the 2005
| reform to make discharging student loans impossible.
|
| you can learn more about the 2005 bankruptcy reform act
| here: https://www.lawb.uscourts.gov/bankruptcy-reform-
| act-2005
| torbTurret wrote:
| Put myself through college with some very shiny work and living
| conditions only to be met with medical debt from a congenital
| issue later.
|
| Can never wrap my head around why America would forgive student
| debt and not medical debt, especially when the former is always a
| choice.
| sudosysgen wrote:
| Because only one of the two is dischargible through bankruptcy.
| rc_mob wrote:
| generally ... American policy is designed by the wealthy of the
| wealthy and for the wealthy. So unless a problem is effecting
| the wealthy is has a low chance of getting fixed.
| convexfunction wrote:
| You might wonder whether it's actually regressive for people who
| have college degrees (or who at least attempted to get one) --
| overwhelmingly not the neediest people in our society, even if I
| do sympathize with how terrible our student loan system is -- to
| be targeted for help from the government!
| matt321 wrote:
| I wont support any loan forgiveness. I worked my but off to work
| fulltime and pay tuition at the sate university. It took 6 years
| of hard work for a 4 year degree. I graduated with no debt. That
| my hard work might make me no better off than those who took the
| easy route, infuriates me.
| eric4smith wrote:
| Yup we live in a clown world now.
|
| What's next, forgiving all the student loans?
|
| Does no one think of the consequences of these kinds of actions?
| Proven wrote:
| fasteddie31003 wrote:
| And the student loan debt cycle continues. I'm all for canceling
| student debt if it is attached to a longterm plan to reduce the
| cost of higher education so that the next generation is not
| strapped with the same problem. My cynical side thinks the higher
| education lobby is deeply entrenched with the Federal Government
| and loves the never ending conveyer belt of young adults with
| large bankrolls provided by government backed debt.
| musicale wrote:
| It's an insane system that has enabled universities to
| drastically increase tuition and fees, outpacing inflation for
| more than half a century.
| bombcar wrote:
| US: We should use the power of our massive government to
| subsidize and guarantee 30 year fixed home mortgages.
|
| House prices: shoot up
|
| US: Surprised pichachu face
|
| US: We should use the power of our massive government to
| subsidize and guarantee loans for college education so people
| can afford houses!
|
| College prices: shoot up
|
| US: Surprised pichachu face
| Invictus0 wrote:
| Let's do healthcare now
| janejeon wrote:
| All of this seems like a problem of leverage: the
| government's fiscal policy encouraged people to be levered
| up, then the fed's monetary policy allowed people to be
| levered up.
|
| The "value" for any given thing (housing, college) remains
| similar, but more leverage for everybody means that same
| thing gets proportionally more expensive.
|
| I don't see any way out of this except for popping the debt
| bubble.
| gzer0 wrote:
| My master plan is to eventually have 13 graduate level Master's
| degrees under my belt. Why you may ask? If one is enrolled as a
| full time "student", the student loan monthly payments are
| paused. Since, at least for me, I can handle being a full time
| Master student and also my full time remote-only job, this isn't
| an issue.
|
| The reason I am doing this is because there is $1.6 trillion in
| student loan debt; the government is definitely not seeing most
| of that money. Someone will have to come in and save us all. And
| well, I am willing to bet 13 master's degrees on this.
|
| Currently at 3. ;)
| merpnderp wrote:
| Any of your masters programs cover the tragedy of the commons?
| musicale wrote:
| > the student loan monthly payments are paused
|
| And the interest is capitalized at the end. That's what the
| banks are counting on.
| bombcar wrote:
| He who dies with the most debt wins.
| __ryan__ wrote:
| I assume you're joking, but just in case: in-school deferment
| only automatically applies to federal loans. For private loans,
| you have to apply and they can reject you or put a cap on the
| deferment duration. For federal loans, your eligibility depends
| on income and has an aggregate maximum of $138,500 including
| your undergraduate federal loans.
|
| Source: https://studentaid.gov/understand-
| aid/types/loans/subsidized...
| alfor wrote:
| So tired of government meddling in people's affairs.
|
| So if you work for government you are eligible, in private
| business not!
|
| That money is going to come out of someone else pocket. In this
| case it's going to be more inflation and more taxes.
|
| Where I live (Canada) the system is so complicated that 95% of
| people don't even understand how it work. We have to run
| simulations of typical cases to trace graphs and make a decision.
| randyrand wrote:
| Loan forgiveness is a big FU to those that chose not to go to
| college to save money.
| Waterluvian wrote:
| I hope every single person who is vocal about cancelling student
| debt, but doesn't talk about fixing the underlying problems,
| recognizes that they're just another generation of unremarkable
| hypocrites.
|
| It's a real problem deserving a real solution. Well beyond people
| just sticking their hands out, saying "gimme!"
| rc_mob wrote:
| why not both?
| Waterluvian wrote:
| Absolutely both. But not just the one.
| emurillo510 wrote:
| what happened to the free market economy? the incentive structure
| is fucked. As a person who worked my ass off this decade, it is
| unfair :(
| nfRfqX5n wrote:
| this program has been available for 15 years, you could've used
| it
| bombcar wrote:
| Free market needs to be allowed to fail, so bring back student
| loan bankruptcies and watch the problem mostly fix itself.
|
| Anyway, you could get loans paid off if you worked public
| sector, but you usually come out ahead working private sector
| in the same field.
| Miner49er wrote:
| it died in '08.
| marricks wrote:
| The title can be read in an extremely misleading way. The US has
| forgiven forty thousand individuals loans. Not 40k per
| individual.
|
| It's how I first read it. Since there are millions of US citizens
| with student loans that's far less than 1% and doesn't seem...
| news worthy.
|
| Whatever broader relief the government is offering could be news
| but the details are extremely scant so far.
| weezin wrote:
| I wonder what the pause in student loans has done to contribute
| toward inflation? I would be paying 200 dollars a month right
| now, but no way I'm paying 0% interest loans that may get
| partially forgiven one day.
| temp8964 wrote:
| This is literally an attack on blue collar workers. What do they
| get from this?
| skizm wrote:
| Why is the government so afraid of allowing new student loans
| being issued to go into bankruptcy? Wouldn't this solve most
| issues going forward?
|
| Separate note: instead of loan forgiveness programs, just pay for
| people's school up front if they go into these public sector
| jobs. Then if they quit before the end of their contract, they're
| on the hook for whatever. Same as the military academies system.
| Free college, 5 years of service, and you're done. I'm guessing
| they don't because they can weasel their way out of paying the
| forgiveness later through technicalities / miring the candidates
| with red tape, and the program is actually in bad faith.
| mrep wrote:
| Because unsecured loans are awful:
| https://news.ycombinator.com/item?id=31099683
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