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U.S. forgives 40k student loans

reuters.com

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Re: U.S. forgives 40k student loans

#281

Post by babypuncher »

dangerlibrary wrote: post #211
hunterb123 wrote: post #139

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.

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 regr…

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.

Re: U.S. forgives 40k student loans

#282

Post by telomero22 »

abnry wrote: post #17

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.

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/...

Re: U.S. forgives 40k student loans

#283

Post by smegsicle »

nr2x wrote: post #68
loourr wrote: post #12

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.

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

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

Re: U.S. forgives 40k student loans

#284

Post by lotsofpulp »

kurupt213 wrote: post #253
nebula8804 wrote: post #151

Earlier quoted context omitted.

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 throu…

Nobody in power is willing to make the necessary unpopular decisions because the voting system discourages this.

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.

Re: U.S. forgives 40k student loans

#285

Post by moralestapia »

dudul wrote: post #280
moralestapia wrote: post #276

Earlier quoted context omitted.

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 ...

And next year, the ant decides to also spend her time dancing around and partying, and when winter comes everybody is f-ed.

Exactly. This is usually the end result.

(Also, the ant takes a leisure trip to the Cayman Islands)

Re: U.S. forgives 40k student loans

#286

Post by sgjohnson »

whymauri wrote: post #254
sgjohnson wrote: post #205

Earlier quoted context omitted.

And make the already mostly worthless degrees even more worthless?

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.

> 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.

Re: U.S. forgives 40k student loans

#287

Post by kapp_in_life »

lesuorac wrote: post #262
throwaway894345 wrote: post #212

Earlier quoted context omitted.

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.

>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.

Re: U.S. forgives 40k student loans

#288

Post by remarkEon »

BitwiseFool wrote: post #182
hunterb123 wrote: post #139

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…

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.

Re: U.S. forgives 40k student loans

#289

Post by tejohnso »

loourr wrote: post #12

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.

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.

Re: U.S. forgives 40k student loans

#290

Post by throw_m239339 »

sharker8 wrote: post #61
mc32 wrote: post #13

Earlier quoted context omitted.

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.

This create market driven dynamics in which degrees basically are tailor made for industry. This approach disincentivizes pure research for scientific purposes.

> 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.

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