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Student loan forgiveness is regressive measured by income, education, or wealth

brookings.edu

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Re: Student loan forgiveness is regressive measured by income, education, or wealth

#11

Post by twoodfin »

dv_dt wrote: post #8
twoodfin wrote: post #5

Earlier quoted context omitted.

Two points on that discussion: - AFAICT, the argument that a massive loan forgiveness would not be regressive rests entirely on excluding from the analysis low-income members of the 25-40yo cohort with no student debt. Sure, that fraction may be smaller than in the past, but it’s hard to see how discounting a bunch of poor folks who would see $0 benefit from this expenditure is intellectually honest. - It’s amusing t…

The situation is an entire generation of kids from one point forward were systematically misled about the sure thing security of the benefits of taking a student loan investment vehicle in order to secure their education. When the financial sector was misled about the same regarding "secure" mortgage backed securities in 2008 they were completely bailed out - despite being the sophisticated investors that should have…

None of that speaks to whether the proposed $50k forgiveness is a regressive policy relative to other potential uses of several hundred billion dollars.

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#13

Post by zarzavat »

twoodfin wrote: post #11
dv_dt wrote: post #8

Earlier quoted context omitted.

The situation is an entire generation of kids from one point forward were systematically misled about the sure thing security of the benefits of taking a student loan investment vehicle in order to secure their education. When the financial sector was misled about the same regarding "secure" mortgage backed securities in 2008 they were completely bailed out - despite being the sophisticated investors that should have…

None of that speaks to whether the proposed $50k forgiveness is a regressive policy relative to other potential uses of several hundred billion dollars.

You can say that about anything. Fixing streets is regressive, it only benefits people with cars. Therefore we should not fix streets.

It’s laughable to call student loan forgiveness “regressive”. The word “regressive” is supposed to be used for policies that benefit the wealthy people more than average people, not for policies that benefit average people more than low income people.

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#14

Post by anm89 »

brunellus wrote: post #4

There’s no need to measure anything. The problem with student loans is qualitative. Banks are allowed to make unsecured loans and the borrowers can’t usefully declare bankruptcy. Colleges have every reason to raise prices and lenders have no skin in the game. It isn’t any more complicated, and no amount of data analysis can possibly refute this.

so change the bankruptcy laws. that doesn't require forgiving the loans.

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#15

Post by syki »

tamaharbor wrote: post #12

I have always paid all of my debts, including student loans. I think it is quite unfair that some will get off scot-free. What lesson does that teach?

Mathew 20:13 “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’

For student loan forgiveness the government is in the role of the landowner in this parable.

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#16

Post by bzudo »

tamaharbor wrote: post #12

I have always paid all of my debts, including student loans. I think it is quite unfair that some will get off scot-free. What lesson does that teach?

So did I. I don't want others to have to go through with it. The lesson will be others will have money to spend on other things that will be more beneficial to me in the long run.

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#17

Post by nate_meurer »

zarzavat wrote: post #13
twoodfin wrote: post #11

Earlier quoted context omitted.

None of that speaks to whether the proposed $50k forgiveness is a regressive policy relative to other potential uses of several hundred billion dollars.

You can say that about anything. Fixing streets is regressive, it only benefits people with cars. Therefore we should not fix streets. It’s laughable to call student loan forgiveness “regressive”. The word “regressive” is supposed to be used for policies that benefit the wealthy people more than average people, not for policies that benefit average people more than low income people.

You have inadvertently undermined your own argument using a perfect example. One of the most effective arguments in favor of gas taxes and road tolls is to mitigate the regressive nature of universal taxation for road building and maintenance. Because yes, "fixing the streets" is indeed a regressive tax burden for people who can't afford a car.

> not for policies that benefit average people more than low income people.

According to whom? And are you really satisfied to merely debate semantics?

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#18

Post by nate_meurer »

syki wrote: post #15
tamaharbor wrote: post #12

I have always paid all of my debts, including student loans. I think it is quite unfair that some will get off scot-free. What lesson does that teach?

Mathew 20:13 “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’ For student loan forgiveness the government is in the role of the landowner in this parable.

Pay close attention to verse 15. Who's money are we talking about here?

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#19

Post by salawat »

zarzavat wrote: post #13
twoodfin wrote: post #11

Earlier quoted context omitted.

None of that speaks to whether the proposed $50k forgiveness is a regressive policy relative to other potential uses of several hundred billion dollars.

You can say that about anything. Fixing streets is regressive, it only benefits people with cars. Therefore we should not fix streets. It’s laughable to call student loan forgiveness “regressive”. The word “regressive” is supposed to be used for policies that benefit the wealthy people more than average people, not for policies that benefit average people more than low income people.

What is the "average person" to a "low income person" if not, relatively speaking, wealthier?

You really can't have that both ways. Unless your intent is to partition by +/- orders of magnitude of relative wealth.

In that case, we're starting to get into equal protection under the law violation territory.

Re: Student loan forgiveness is regressive measured by income, education, or wealth

#20

Post by syki »

nate_meurer wrote: post #18
syki wrote: post #15

Earlier quoted context omitted.

Mathew 20:13 “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’ For student loan forgiveness the government is in the role of the landowner in this parable.

Pay close attention to verse 15. Who's money are we talking about here?

As I said, the government plays the role of the landowner. Perhaps you have the mistaken belief that the money you pay in taxes is still your money and therefore you don’t believe the government can play the role of the landowner.
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