59% of Americans worry student loan forgiveness will make inflation worse • Hacker News Board

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#61

Post by l30n4da5 » Mon, Aug 22, 2022, 2:44 PM UTC

immigrantheart wrote: post #45

whoomp12342 wrote: post #11

wow, what an abstract and deplorable example of NIMBY. i.e. "we want people to suffer crippling debt because we are worried about bananas costing 10 cents more"

Student debt is a personal responsibility. It is a personal choice. There are people who knowingly decided not to take higher education because they knew it would make them go into debt and instead went to work instead, providing for their family. These are real tangible opportunity cost for these people who decided that they couldn't afford college debt. If you forgive student loans, then those people who went on de…

> Student debt is a personal responsibility. It is a personal choice.

While I agree with you, to an extent, you cannot ignore than many young people were pressured into going to college, and going to a 'good school' by the authority figures in their life at the time (be it parents or school counselors).

they were sold the lie that college would pay for itself, and for many it has not.

I got lucky, personally, and don't have much in the way of college debt due to scholarships and such, but my degree is still just a very expensive piece of paper since I have done absolutely nothing with it.

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#62

Post by dktokyo » Mon, Aug 22, 2022, 2:45 PM UTC

treis wrote: post #42

lapcat wrote: post #7

The entire student loan debt issue has been framed badly, because hardly anyone understands the real problem: "As of March 2021, 54% of borrowers with outstanding education debt owed less than $20,000; 45% of the outstanding federal education loan debt was held by the 10% of borrowers owing $80,000 or more." https://research.collegeboard.org/media/pdf/trends-college-p... Forgiving $10K across the board is dumb and mi…

Pay As You Earn more or less solved this. Your repayment is capped to a percentage of your discretionary income and then after 20 years any remaining balance is forgiven. You can quibble about how long until the payment is forgiven or the percentage or how discretionary income is calculated, but the general idea is spot on, IMHO. The problem with blanket forgiveness is "moral hazard". Meaning if you do a blanket forg…

IIRC, PAYE requires you to pay taxes on the amount forgiven. Depending on how large that is, this just repeats the cycle outside of this "student loan" bucket.

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#63

Post by cogman10 » Mon, Aug 22, 2022, 2:46 PM UTC

lapcat wrote: post #7

The entire student loan debt issue has been framed badly, because hardly anyone understands the real problem: "As of March 2021, 54% of borrowers with outstanding education debt owed less than $20,000; 45% of the outstanding federal education loan debt was held by the 10% of borrowers owing $80,000 or more." https://research.collegeboard.org/media/pdf/trends-college-p... Forgiving $10K across the board is dumb and mi…

> In my opinion we should be talking more about years of debt held rather than amount of debt held. In theory, college is supposed to "pay for itself", but if some people are continuing to hold student loan debt 10 years, 20 years, 30 years after college, then college obviously did not pay for itself in those cases.

We should also be talking about the federal government's pullback in funding higher education. Public universities used to be the primary route for people to get a higher education.

We need to be talking about WHY college is so expensive.

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#64

Post by spywaregorilla » Mon, Aug 22, 2022, 2:46 PM UTC

lapcat wrote: post #54

spywaregorilla wrote: post #51

Earlier quoted context omitted.

What kind of grad students? Excluding PhDs because people don't typically take on debts for those we've got med school, and masters programs. The former should be cheaper but it seems very inappropriate to bucket them in with the general population. The latter could vary wildly in terms of ROI.

> Excluding PhDs because people don't typically take on debts for those I can tell you from personal experience that you're very wrong about this.

Well... that's dumb. TIL STEM phd programs with teaching requirements and piss poor stipends are not the bottom of the barrel

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#65

Post by dktokyo » Mon, Aug 22, 2022, 2:46 PM UTC

Yahivin wrote: post #15

Just make student loans easier to eliminate in bankruptcy. Problem solved.

Though result would just be a lot less people able to go to college.

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#66

Post by pc86 » Mon, Aug 22, 2022, 2:47 PM UTC

lapcat wrote: post #7

The entire student loan debt issue has been framed badly, because hardly anyone understands the real problem: "As of March 2021, 54% of borrowers with outstanding education debt owed less than $20,000; 45% of the outstanding federal education loan debt was held by the 10% of borrowers owing $80,000 or more." https://research.collegeboard.org/media/pdf/trends-college-p... Forgiving $10K across the board is dumb and mi…

Even the length of time won't tell you much. I owe about $15k, but I graduated in 2008. For the longest time I was making basically interest-only payments because I didn't make enough. Then I was making interest-only payments because I was trying to catch up on my retirement contributions. Then I was making interest-only payments because I was making more money in the market. Then COVID. Now if payments are re-instated I'll continue making interest-only payments because my interest rate is less than inflation, and there's a chance that most of my balance could disappear.

I'm not struggling at all, but I have zero incentive to make any payments as long as inflation stays where it is and there are no penalties. But then you look at stories like the person mentioned in the article - six figures of student debt, probably at 2-3x my interest rate, with a master's degree working as a secretary probably making $40k/yr.

I'm so conflicted because on the one hand I'm not going to intentionally make a decision that puts me or my family worse off financially; it'd be silly to expect anyone to do that. But at the same time as someone who had a job in school, did work study, didn't go to grad school, all to keep my loan balance as low as possible at graduation, I struggle not to roll my eyes a bit when I read articles like this about someone getting a master's degree from a private liberal arts college that charges $2k/credit then getting a job as a secretary and complaining they can't make student loan payments. I mean.. that seems obvious.

I don't have a problem with liberal arts education - I went to a small private liberal arts college - and I don't think there's necessarily a problem with getting a degree in something that doesn't have a direct track to industry and a six figure job. But it's hard to square all that with even the slightest bit of "maybe think about what jobs you can get after school with whatever you want to study, and change your plans for what school you go to, whether you do work study, etc. accordingly."

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#67

Post by lapcat » Mon, Aug 22, 2022, 2:47 PM UTC

ProjectArcturis wrote: post #33

lapcat wrote: post #7

The entire student loan debt issue has been framed badly, because hardly anyone understands the real problem: "As of March 2021, 54% of borrowers with outstanding education debt owed less than $20,000; 45% of the outstanding federal education loan debt was held by the 10% of borrowers owing $80,000 or more." https://research.collegeboard.org/media/pdf/trends-college-p... Forgiving $10K across the board is dumb and mi…

What's the moral or economic case for forgiving debt of people who borrowed to go to undergrad and then borrowed further to get a fairly useless grad degree like an MFA?

What's the moral or economic case for charging every major the same tuition regardless of potential earning power?

The other side of the question is, what's the case for having the arts or academia in our society? Would you rather just abolish any human activity that isn't financially lucrative?

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#68

Post by PaulHoule » Mon, Aug 22, 2022, 2:47 PM UTC

codegeek wrote: post #12

lapcat wrote: post #7

The entire student loan debt issue has been framed badly, because hardly anyone understands the real problem: "As of March 2021, 54% of borrowers with outstanding education debt owed less than $20,000; 45% of the outstanding federal education loan debt was held by the 10% of borrowers owing $80,000 or more." https://research.collegeboard.org/media/pdf/trends-college-p... Forgiving $10K across the board is dumb and mi…

In America, we stopped being objective a while ago and everything is "The other side is out to get us. Other side BAD". One side there are people who are pissed because they had to pay off loans and why should kids get it for free now while the other side is crying about the uncontrollable rising costs of education where a History Major costs $80K for 4 years. No one is looking at this problem objectively which is to…

'Affordable housing' is a euphemism for "unaffordable housing that is subsidized".

Democrats refuse to see the problem (if the residents can't afford it, can the rest of us?) and Republicans just hope that if they don't build "affordable housing" the residents will go to some other town.

One angle is that adding more money makes things more expensive. If the money isn't there then people will do with less or do without. People have long been concerned that student loans contribute to increasing tuition and the evidence is accumulating for that

https://www.newyorkfed.org/medialibrary/media/research/staff...

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#69

Post by rory » Mon, Aug 22, 2022, 2:49 PM UTC

edmcnulty101 wrote: post #8

Didn't they forgive a massive amount of bank debt during the 2008 financial crisis? And that didn't cause any worrisome inflation. Forgive these kids loans, who were just trying to go to college to learn and gain job skills to compete in the world and are now debt slaves.

2008 was on the verge of a massive deflationary spiral. Bank debt forgiveness likely did cause inflation, but we needed it then! We are now in a period of high inflation already, so we would very much not like more.

Re: 59% of Americans worry student loan forgiveness will make inflation worse

#70

Post by dktokyo » Mon, Aug 22, 2022, 2:50 PM UTC

immigrantheart wrote: post #45

whoomp12342 wrote: post #11

wow, what an abstract and deplorable example of NIMBY. i.e. "we want people to suffer crippling debt because we are worried about bananas costing 10 cents more"

Student debt is a personal responsibility. It is a personal choice. There are people who knowingly decided not to take higher education because they knew it would make them go into debt and instead went to work instead, providing for their family. These are real tangible opportunity cost for these people who decided that they couldn't afford college debt. If you forgive student loans, then those people who went on de…

Many of these students lay at the generational divide between college guaranteeing a great job (during the generation when most people went to high school and then trade) and college being a prerequisite for any job (today). And those universities only became so expensive because the federal govt guaranteed loans in the first place. University is radically more expensive than it was a few decades ago.

It's not as simple as you lay it out to be.