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

cnbc.com

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

#41

Post by Dma54rhs »

jollyllama wrote: post #13
lapcat wrote: post #4

Earlier quoted context omitted.

> screw over the banks by writing off the debt The banks don't hold this debt, the federal government does. That's why the federal government can forgive it. That's why the federal government has been able to suspend payments for 2 years. The government can't forgive debt held by someone else.

"Most lenders are huge institutions, such as international banks or the government. After a loan is originated, however, it represents an asset that can be bought and sold on the market." Source: https://www.investopedia.com/articles/personal-finance/08121...

I believe your federal good government has fully guaranteed these loans so it doesn't really matter. The lenders still get paid as the write off would mean government taking the hit.

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

#42

Post by treis »

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 forgiveness now people will continue/increase taking out student loans in the hopes they might be forgiven. Also, just because someone has a lot of student loan debt doesn't mean they're in need. Early career doctors, as an example, will have a ton of debt but are going to be a top earner for the next 20-30 years.

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

#43

Post by suggestion »

chii wrote: post #24
washbrain wrote: post #20

Earlier quoted context omitted.

Right, they change the who from "former student" to "no one".

Do they? Or are they (the gov't) just paying the loan using taxpayer money?

Hence the changing who's paying for it. Spending and revenue will be unaffected, which is the problem.

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

#44

Post by gapplebees »

washbrain wrote: post #34
Overtonwindow wrote: post #18

I’m not an economist, but it would seem reasonable that the printing of money would cause inflation, yes?

It's more complicated than that. Inflation is a combination of supply and demand. Too few goods for an extended period of time? Inflation. Excess money allowing people to bid up for the goods they want? Inflation. A sudden reduction of debt might contribute to people spending more for the same goods they already buy, or it might lead to more savings and investment as people are able to escape living paycheck to paych…

No post body was provided.

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

#45

Post by immigrantheart »

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 debt with abandon in expensive universities, expensive cities, and intentionally took out loans more than they can afford, you are giving these people who made bad decisions advantage over people who didn't.

America is about personal responsibility, at least that's my view as an immigrant, that's why I came here.

If you want to make things fair, then just give everyone $80k. Went to college or not. Of course that would destroy the economy.

I care less about being called names like deplorable or NIMBY. It's not like it would change my mind.

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

#47

Post by wallawe »

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"

very bad take. inflation hurts the lower class the most, and these are likely to be people who don't even have student loan debt because they never went to college. so you're advocating for giving the middle and upper class a break at the expense of the poorest demo in America.

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

#48

Post by buscoquadnary »

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…

I guess it seems to me that there are way more questions about those with > 80k. I am going to assume they ended up that way because they made poor decisions, like taking out massive loans to do things like not work, to attend over priced schools, to slack on school work and have to repeat school.

I mean I worked full-time through school, raised a family and still managed to finish my BS in 18 months and MS in 12 more a few years later, mostly because I didn't want to end up in debt.

It seems pretty messed up that I've been strenuously paying back student loans to avoid debt, and then the people that partied hearty during school get their loans forgiven because they make piss poor decisions.

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

#49

Post by andyfleming »

scottLobster wrote: post #40

Well, it would/will. It would be no different than if the government wrote everyone massive stimulus checks and those with student loans used said checks to pay them down. You'd see a huge spike in demand for various things as people would have more money to spend. That said I know a lot of people who were railroaded into college as 17 year old children before they even knew how credit cards worked, got a useless deg…

I’m not sure if it would be that significant in the short-term. Required student loans payments are still deferred, so cancelling them wouldn’t increase cash flow (at least today).

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

#50

Post by dbingham »

ProjectArcturis wrote: post #25

I don't know how you can have a blanket forgiveness of student loans without also addressing college costs. Otherwise consumers become even less price-sensitive, expecting another round of forgiveness in a decade or so.

College isn't a consumer good.

We need to stop thinking of it as such. It's a prerequisite for the vast majority of jobs. Which makes it a vital public good that should be run as a utility. We should be running a public university system with the goal and assumption that everyone has a seat at their local university - covered by their tax dollars.

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