U.S. forgives 40k student loans • Hacker News Board

Re: U.S. forgives 40k student loans

#371

Post by twblalock » Wed, Apr 20, 2022, 6:41 PM UTC

ben940830298432 wrote: post #348

twblalock wrote: post #321

Earlier quoted context omitted.

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.

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.

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.

Re: U.S. forgives 40k student loans

#372

Post by Zpalmtree » Wed, Apr 20, 2022, 6:42 PM UTC

31098347 wrote: post #323

gr33nq wrote: post #260

Earlier quoted context omitted.

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 b…

>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.…

Why do you want to encourage people to make bad financial decisions

Re: U.S. forgives 40k student loans

#373

Post by AnIdiotOnTheNet » Wed, Apr 20, 2022, 6:43 PM UTC

pyronik19 wrote: post #277

throwaway0a5e wrote: post #201

Earlier quoted context omitted.

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…

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.…

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.

Re: U.S. forgives 40k student loans

#374

Post by Waterluvian » Wed, Apr 20, 2022, 6:46 PM UTC

rc_mob wrote: post #346

Waterluvian wrote: post #39

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!”

why not both?

Absolutely both. But not just the one.

Re: U.S. forgives 40k student loans

#375

Post by earthscienceman » Wed, Apr 20, 2022, 6:46 PM UTC

300bps wrote: post #121

edmcnulty101 wrote: post #65

Earlier quoted context omitted.

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.

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?

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.

Re: U.S. forgives 40k student loans

#376

Post by Zpalmtree » Wed, Apr 20, 2022, 6:48 PM UTC

lifeisstillgood wrote: post #26

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…

people don't like spending all their money on taxes and being poor like the europeans

Re: U.S. forgives 40k student loans

#377

Post by seanmcdirmid » Wed, Apr 20, 2022, 6:49 PM UTC

AnimalMuppet wrote: post #224

nr2x wrote: 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…

> 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.

Re: U.S. forgives 40k student loans

#378

Post by throwaway894345 » Wed, Apr 20, 2022, 6:49 PM UTC

adamdusty wrote: post #173

InitialBP wrote: post #94

Earlier quoted context omitted.

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 so…

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…

Moreover, what happens when a generation learns to depend on government bailouts? Why do we want to incentivize irresponsibility?

Re: U.S. forgives 40k student loans

#379

Post by lesuorac » Wed, Apr 20, 2022, 6:52 PM UTC

kapp_in_life wrote: post #287

lesuorac wrote: post #262

Earlier quoted context omitted.

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.

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.

Re: U.S. forgives 40k student loans

#380

Post by dcolkitt » Wed, Apr 20, 2022, 6:53 PM UTC

SamuelAdams wrote: post #213

loeg wrote: post #107

Earlier quoted context omitted.

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!

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 an…

> 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.