It’s just wild to me seeing how cancelling student debt, a proposal which is effectively targeted towards the middle class and helps the poorest Americans who don’t go to college not an inch, has become seen as a key social justice issue in the same vein as medical debt or criminal justice reform. I understand the incentives, but come on, you’d expect a bit more self awareness.
Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
61–70 of 136 posts
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#62Earlier quoted context omitted.
The terms and conditions of the debt obligation are known up-front. If the terms of the loan were onerous the borrowers shouldn't have accepted them and declined the loan. Why is poor financial literacy and wishful thinking about future job prospects on borrowers' parts my problem to be left holding the bag for?
I remember being 18 and being the 1 kid in class saying 'Going away to college and spending 30k/yr on a music degree is a bad idea' I was right. They didn't listen. I'm bailing them out today.
Perhaps. The meager amount they are currently paying on loans (if any, given deferrment options) is much offset by public and tax subsidies for low earners.
OTOH, I agree. If they are earning income and repaying, then I don't see a reason to nullify any loans of theirs. ( or mine )
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#63Earlier quoted context omitted.
I think you are misunderstanding what people mean by "cancelling debt". They don't mean they will force lenders to suffer a loss, they mean that government will cover the debt.
If the gov actually decided that the current situation is not sustainable and it's better for everyone to cut the losses and cover everything... why would it guarantee another loan like that the next day? The companies themselves could be interested in that loans of course, but without the previous guarantee the risk would be too high.
I don't trust that the government would be smart enough to do that.
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#64Right now we have around 1.5T in outstanding student debt. If all of this debt were to be cancelled, who would be left holding the bag? What would that do to the economy? IMO if we cancel all student debt, this would seriously rock our economy because we suddenly decided to take 1.5T in debt assets out of the economy.
Would it though? The government paid for my college then wrote down I own them. They want me to give them that money back eventually. Are they using my promise to borrow money somewhere else? Or is it just an expense for a budget year that gets added as income years later? Also how much interest have we paid collectively on that 1.5 trillion? If we've paid that much already then what? Can't we just consider it an inv…
If you went to school before 2011 this likely isn't how it worked. Instead you actually got a loan from a private lender which was guaranteed by the federal government. The ACA changed this so that the federal government now actually originates and owns the loan.
> Prior to the Affordable Care Act, a majority of student loans originated with a private lender but were guaranteed by the government, meaning taxpayers foot the bill if student borrowers default. In 2010, the Congressional Budget Office (CBO) estimated 55% of loans fell into this category. Between 2011 and 2016, the share of privately originated student loans fell by nearly 90%.
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#65The kind of moralizing about making the right decisions stigmatizes people who couldn't make it through college for financial reasons and weren't able to find a job afterward and pay off their debt. It stigmatizes grad students who started off with good intentions but couldn't make it through the meat grinder. It stigmatizes first generation college students who had to return home after a year or two. All of these people now face student debts that can't be discharged by bankruptcy.
If we agree as a society to invest in war, but we can't invest in our people, then we will reap what we sow.
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#66Earlier quoted context omitted.
That's a lot of supposition. Who has to pick up the tab? Unless you're a large loan conglomerate, I'm not sure you're picking up any tab. In a rational economic system those arguments should hold water. We have nothing like that now. Paying attention to the last 20 years of egregious hoarding of wealth should make that clear. Ignoring the strawmen, the systems at issue (school debt, medical debt and government debt)…
My retirement is invested into a large collection of companies, some of which own these loans. I fully expect that this will cost me. If I had instead not invested for my future and just partied hard I'd be better off.
Yep, your 401k will be indirectly affected by this.
The real fun starts 20-ish years down the line when our elected officials decide to directly seize 401k assets in the name of "equity."
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#67I re-watched Adam Curtis's All Watched Over By Machines of Loving Grace documentary again recently. It was a strong reminder that the global financier class has never, ever, ever allowed their investments to fail. The IMF or others have stepped in country after country, time after time, the whole world monetary order has been about putting countries deeply into debt to bail out very large investors when their investments when things start to go wrong. Financial stability has always meant saddling the people of a nation with the responsibility to keep the very wealthy in good positions.
The first example is of the Asian Financial Crisis, and the documentary goes on to show how the 2007 US Financial Crisis showed the same playbook in action, of incredibly poorly planned monetary investments going awry & all effort being given to shield the financiers who made these bad decisions from harm.
So, like... yeah. We have made investing in markets have no penalty, for some. Deciding to invest in the welfare & improvement of our nation seems only logical, like only a modicum of parity, given the radical ways the world has continued to spend money to protect the vast fortunes of the giant investor class.
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#68Earlier quoted context omitted.
> There is no "cancelling" debt. There's only forcing other people to pay. Not really, given that in the US, the central bank could just take over those public loans, not collect on them, and likely not much would happen. They’ve already proven that during Covid with corporate bonds. The real issue with cancelling student loans is that it doesn’t fix the tuition cost for the next generation. We need a 20-year tuition…
>Not really, given that in the US, the central bank could just take over those public loans, not collect on them, and likely not much would happen. Isn't that just helicopter money with extra steps?
This is not really helicopter money in that sense, you’re not giving out unallocated free money, you’re just doing cash flow relief.
I think there is a good argument to make that cancelling that debt, and fixing the US college system, would likely result in more innovation: folks who come from (lower) middle class backgrounds could finally take more risk and try new jobs / start startups that they can’t today because of the money they need to put into debt service.
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#69Earlier quoted context omitted.
The terms and conditions of the debt obligation are known up-front. If the terms of the loan were onerous the borrowers shouldn't have accepted them and declined the loan. Why is poor financial literacy and wishful thinking about future job prospects on borrowers' parts my problem to be left holding the bag for?
As if students have a choice. Don't like the terms? Sorry, no education for you.
I'm leaning more towards: "Sorry, no private out-of-state liberal arts college for you..." than "Sorry, no education for you."
The free-flowing student loan money has created the same kind of bubble that "stated income" and "0% down" loans created in housing in 2008.
Re: Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
#70Student debt is the epitome of rent-seeking. You can't even discharge it with bankruptcy. Cancel it.
I think student dept should be discharged in bankruptcy - but along with it you need to also discharge the education you got. I can't think of any way to do that (outside of science fiction).