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U.S. forgives 40k student loans

reuters.com

261–270 of 483 posts

Re: U.S. forgives 40k student loans

#261
post #200

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 fra…

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 tha…

> 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...

Re: U.S. forgives 40k student loans

#262

Earlier quoted context omitted.

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.

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?

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.

Re: U.S. forgives 40k student loans

#263
post #6

How about giving back money to people who paid back their loans, possibly going through even greater difficulties to do that.

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.

Re: U.S. forgives 40k student loans

#264
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?

Re: U.S. forgives 40k student loans

#265
post #27

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.

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.

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Re: U.S. forgives 40k student loans

#266
post #68

Earlier quoted context omitted.

Free community college was in build back better, 49 republicans and Joe Manchin killed it.

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…

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.

Re: U.S. forgives 40k student loans

#267
post #75

Earlier quoted context omitted.

More people are punished for being born poor - lead paint, air pollution, and crumbling schools don’t exactly lend themselves to upward mobility.

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.

So you would rather your neighbors be poor?

Re: U.S. forgives 40k student loans

#268

Earlier quoted context omitted.

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.

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 g…

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.

Re: U.S. forgives 40k student loans

#269
post #27

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.

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.

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