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Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

whitehouse.gov

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Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#41

Post by unholythree »

tryptophan wrote: post #19
rayiner wrote: post #4

At least this loan forgiveness seems to be targeted at low-income people. That’s much better than the government’s blanket pause on student loan payments for almost two years, which saved many rich people tens of thousands of dollars in interest.

That is a bad thing. Making intelligent decisions about career choices is now punished because you have to pay for people who didn't? Yay equity.

The comparison was specifically to the last attempt which was just scattershot. Radiologist who just paid off you loans: no soup for you! Radiologist who still has loans but will soon also be rich: have a bunch of free money.

This new loan forgiveness (which as a loan-less dropout I’m not crazy about either) at least seems directed as a handout to poorer loan holders. If I’m going to be screwed, it’s slightly nicer knowing it’s not to a give-away to the tax brackets above me.

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#42

Post by ProblemExplorer »

pixl97 wrote: post #28
proc0 wrote: post #21

Earlier quoted context omitted.

Not only you won't get it back, you're helping pay the cancellation.

Good. More smart people leads to better outcomes for everyone. Unless of course you're saying you demand an underclass?

> More smart people leads to better outcomes for everyone

smart people don't typically land themselves in a situation where they cannot respect their financial commitments.

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#43

Post by pixl97 »

proc0 wrote: post #33
pixl97 wrote: post #28

Earlier quoted context omitted.

Good. More smart people leads to better outcomes for everyone. Unless of course you're saying you demand an underclass?

Taking out a bad loan is not smart. Not being able to pay it back is not smart. We can argue whether this is good or not, but certainly these people are not smart or they would have solved the problem or avoided it in the first place.

See, the problem with successful people is they confuse intelligence for luck. And I'm sure you're a very lucky person yourself.

If you were smart, you would have seen the financial crash of year 2XXX. If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow. If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half.

And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are...

But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#44

Post by Cody-99 »

baggy_trough wrote: post #7

It's hard to imagine a worse policy. It penalizes responsible behavior while doing nothing at all to address the root causes. Are we stopping making more of these loans? Of course not!

>It penalizes responsible behavior

No it doesn't. That is a ridiculous thing to say.

The people who received the cancellation have been paying on their loans for either 10, 20, or 25 years (depending on the degree type).

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#45

Post by specialist »

robertn702 wrote: post #16

My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans. Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year. As soon as you let borrowers default, the…

> don't seem to be fixing the underlying issue at all

Rollback higher-ed policy changes since the 70s. (h/t Gov Reagan, James Calhoun)

Restore govt subsidizes of higher ed, govt issues loans and financial aid, bankruptcy protections, etc.

I'd hope treating higher ed as a public hood, instead of business focused on wealth extraction and hoarding, would help address some of the other "greed is good" pathologies too. Grade inflation, credentialism, focus on STEM at expense of trades and liberal arts, anti labor strategies like reduction of tenture, etc.

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#46

Post by unholythree »

howard941 wrote: post #12
eachro wrote: post #8

Is student debt dischargeable in bankruptcy?

Yes but it is very difficult to prove all of the elements you have to prove to get it discharged. For most people the answer is no

The public service loan discharge “used” to be broken and people were always rejected, but they made significant overhauls a few years back. My father for example, had his loans forgiven for working at a public library for a decade or so.

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#47

Post by pixl97 »

ProblemExplorer wrote: post #42
pixl97 wrote: post #28

Earlier quoted context omitted.

Good. More smart people leads to better outcomes for everyone. Unless of course you're saying you demand an underclass?

> More smart people leads to better outcomes for everyone smart people don't typically land themselves in a situation where they cannot respect their financial commitments.

Says every smart person before they end up in a situation they cannot respect their financial commitments...

Of course, it's easy for you just to take anyone that does out of the smart pool and put them in the dumb pool. The problem is this is in no way a predictive measure. With the rules you have henceforth set you will be unable to classify that a person is smart before any trouble occurs.

This is how the rules you setup look like

You: This person is smart because they put X money in savings and have a backup fund.

[nothing interesting happens to this person]

You: See they were smart...

----

You: This person is smart because they put X money in savings and have a backup fund.

[person gets crashed into and injured, then a poorly timed market crash eliminates 70% of their savings driving them into bankruptcy]

You: This person was obviously dumb...

---

See, the thing is you, and the vast majority of US on HN are far closer to that second person then we'd like to admin (well short of some of the multi-millionaires that post here). We can just make ourselves feel better by saying we're smart instead of lucky.

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#48

Post by influx »

elmerfud wrote: post #3
rhelz wrote: post #2

I remember my Father, working 80 hours a week, to put his 4 kids through college. We all also worked at least 20 hours a week while going to college. And I remember my mother squeezing every nickel until 6 cents dripped out of it. JUST so we wouldn't be burdened with debt after we graduated. I know that some people weren't as "lucky" as we were, and couldn't pay for college without debt. I don't begrudge them getting…

Exactly where is my reimbursement. I was not super wealthy but I prioritized my kids college education and made sure to pay for it to avoid them having to go into debt over it. This produced a, not insignificant hardship, to the family but it was worth it. How do I apply for some of this money? Is this more of the lazy people get free stuff and responsible people who contribute to society gets screwed again? People w…

Just be glad the President can grant free money so that he can be reelected. You wouldn't want the other guy to be in office would you? It's a small price to pay...

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#49

Post by unholythree »

malicka wrote: post #13
baggy_trough wrote: post #7

It's hard to imagine a worse policy. It penalizes responsible behavior while doing nothing at all to address the root causes. Are we stopping making more of these loans? Of course not!

Of course root causes should be addressed (chiefly, I believe that tuition should be gratis for public universities), but in the meantime I think this is a perfectly fine policy. It achieves three goals: • Gets people talking about higher education payments. • Eases the financial burden of higher education for some. It should be all , but this is still objectively better than none , provisionally. • Provides good pub…

I think this will go over poorly in some parts of the democratic coalition. I don’t know that blue collar workers including blacks and hispanics will care for this much, or that centrist suburbanites will like it either. Continuing to loose support in the first group or slowing/receding support in the second could be a serious problem.

Re: Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

#50

Post by drak0n1c »

robertn702 wrote: post #16

My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans. Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year. As soon as you let borrowers default, the…

To describe the subsidy policy fully, there's on-demand immediate guaranteed federal reimbursement of 97+% of the loan's entire projected value. The DOE brags at the top of its annual letter about the $120+ billion in new loans issued under the policy every year. It's no wonder after many decades of this that colleges are bloated with non-educational excess and tuitions have risen exponentially.

Prospective students are not shopping with real prices in mind - if there is a choice between a university with big names, shiny amenities, and attractive dorms the sticker price difference doesn't mean much. Gradually, all schools give up their frugality and delude themselves into mission drift. Arbitrarily cancelling loans now without scaling down new loans is multiplying the subsidy distortion effect, as new borrowers are increasingly convinced they too may not have to pay back the loans they're freely given.

In my opinion, subsidized loans need to stop entirely for a period of back-to-essentials relative austerity for university budgets before we bail out and calcify the current bloat with a new benefit. Then if we really need a new benefit it can look like a leaner amount-capped voucher and not a state inflated debt balance that may or may not go away. The voucher could scale on merit, a guaranteed partial scholarship as long as you meet certain standardized test/grade levels (without the need to apply and be chosen amongst a limited pool).

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