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U.S. forgives 40k student loans

reuters.com

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Re: U.S. forgives 40k student loans

#321

Post by twblalock »

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.

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.

Re: U.S. forgives 40k student loans

#322

Post by ramesh31 »

moralestapia wrote: post #130

I could imagine there's a lot of people who: 1. Are paying/had paid their mortgage properly. Usually implies being down to earth and choosing a home you can actually afford. 2. Paid their student loans. 3. File and pay their taxes properly. 4. Have never went unemployed, or better yet, they're self-employed. 5. Never played stock market bets, as they're more conservative and prefer to save money in a predictable way…

>They should feel really pissed off right now, with just cause.

I watched my entire generation party, travel, and generally screw around on free debt for 4 years while I was working my ass off to build a career and barely surviving.

Yeah, I'm pissed.

Re: U.S. forgives 40k student loans

#323

Post by 31098347 »

gr33nq wrote: post #260
31098347 wrote: post #84

Earlier quoted context omitted.

People who have paid their student loan debt are in exactly the same situation they were after this forgiveness than they were before: that is, they have no student loan debt. People in the US are not punished for being financially responsible. They are rewarded for taking risks, but not punished for being responsible. Very different.

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.

There's an ugly, underlying impression I get from this discussion that is oddly reminiscent of the "welfare queen" stereotype.

Re: U.S. forgives 40k student loans

#324

Post by bachmeier »

honksillet wrote: post #46
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.

End federal involvement in student loan and allow student loan debt to be discharged in bankruptcy. Problem solved.

There's a reason the federal government is as involved as it is. When I started college, lots of students dropped out because they didn't have the money. My first semester, maybe five students I interacted with dropped out within a few weeks. "Going back home to work. The loan didn't come through." That was back in the old days, when tuition was cheap, before states decided to end support for university education.

The better policy would have two parts:

- A maximum (like 7%) of your after-tax income can go to student loan repayment. - Colleges have to partially repay loans they took for tuition if after five years the student isn't on track to pay the loan off. This would align the incentives of the college with those of the student. It would bring a fast end to students that borrow to pay $75,000 a year for worthless programs.

Re: U.S. forgives 40k student loans

#325

Post by greedo »

fortran77 wrote: post #132
wonderbore wrote: post #119

Earlier quoted context omitted.

> are in exactly the same situation I don’t know you could possibly reach that conclusion. I paid off my loan and lost 1000 hours of work. You didn’t have to work 1000 hours to pay off your loan. We’re not in exactly the same situation . I don’t know how else I can put this without ELI5’ing

More than that! They won’t have to pay income tax on that forgiven debt. You were taxed on the income you spent for college.

And you get tax breaks for tuition and college expenses...

Re: U.S. forgives 40k student loans

#326

Post by bombcar »

babypuncher wrote: post #281
dangerlibrary wrote: post #211

Earlier quoted context omitted.

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.

The common procedure is to freeze everything and let inflation slowly destroy it.

Who cares if you can get a $20k student loan in 2122 when a hamburger costs $70?

Re: U.S. forgives 40k student loans

#327

Post by dudul »

tejohnso wrote: post #289
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.

It's just something that can be presented in a very divisive way for each party to easily capture sizable market shares of the electorate. It became a "valuable" problematic to put forward when the group of people who struggle to pay off their loan became big enough to make it worth it politically.

Re: U.S. forgives 40k student loans

#328

Post by SubiculumCode »

nonameiguess wrote: post #174
Jiro wrote: post #20

They should require banks to forgive loans, rather than forgiving Federally-backed loans. If you require banks to forgive loans (or if you allow loans to be dischargeable in bankruptcy), you create an incentive for the banks to loan money only for college education that results in useful careers. The Federal government is immune to market forces, so forgiving Federal loans just means you encourage the type of college…

You're missing the point of the PSLF. It's intended to provide incentives for highly qualified people to choose public service rather than go into lucrative careers. These are considered "useful" careers, but they don't pay well. For instance, I currently work as an individual contributor platform developer for the US Air Force and I make more than the 4-star chief of the entire Air Force, yet presumably he has more…

Personally, I think we should just raise government salaries to be competitive. I'm personally getting sick of being paid 60% of my worth to the private market by my job doing science at the university.

Re: U.S. forgives 40k student loans

#329

Post by bombcar »

soheil wrote: post #143
throwingrocks wrote: post #90

Earlier quoted context omitted.

Seeing tons of comments about what people THINK an article says or about their opinion on something related is causing me to use this site less and less.

Completely agree that some of the comments are off the wall. But in all fairness the Ruerters article doesn't highlight the public sector part enough. To learn more you'd have to do your own research to find that PSLF has stringent requirements. IMO this is more an example of how bad journalism can have damaging effect on even a well versed audience.

Most of the people who "get" the article already knew what the PSLF was (I suspected it from the headline alone).

Re: U.S. forgives 40k student loans

#330

Post by InitialLastName »

mywittyname wrote: post #223
InitialLastName wrote: post #134

Earlier quoted context omitted.

It wasn't just the Trump administration; it was clear there were significant problems with the way the program was administered well before the first loans were supposed to start qualifying in 2017. Among other things, the Bush and Obama administrations that created and administrated the program provided no guidance and no oversight to the companies overseeing the loans, so the companies made it effectively impossibl…

Hard disagree. The Obama administration drastically altered federal student loans worked, end-to-end. One of the largest changes was to get the DoE directly into the market of lending and holding student loan debt. Cutting out servicers like Navient, and costing them tons of money in lost subsidies and essentially nationalizing the industry. Policies such as Public Search Loan Forgiveness, Pay as You Earn (PAYE), Per…

> And this is probably the reason that it's been a day-one policy issue for the Biden administration

Here on day 455 of the Biden administration (who, by the way, was the least interested in resolving the student loan issue among his Democratic Primary rivals), it sure doesn't look like it was a "day one" issue.

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