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Should student loans be forgiven?

Ginguy

By Ginguy
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Ginguy Freakin Mutant

Ginguy

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The first portion of the White House's plan to offer student debt relief,  with additional information forthcoming.

https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/

 

Should there be some kind of forgiveness?

What about the cost at a time of high inflation?

What about those who paid off their own student loans?

What about people who take out SBA/private loans to start businesses or expand existing ones?

 

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naraku360 Monster Mutant

naraku360

Posted
Posted
1 hour ago, Ginguy said:

Should there be some kind of forgiveness?

Yes.

1 hour ago, Ginguy said:

What about the cost at a time of high inflation?

How are people going to pay the loans with high inflation?

1 hour ago, Ginguy said:

What about those who paid off their own student loans?

Screenshot_20220906-151447_YouTube.jpg.1277b4839062435b0fb12219d216e28d.jpg

1 hour ago, Ginguy said:

What about people who take out SBA/private loans to start businesses or expand existing ones?

....what about them?

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scoobdog Monster Mutant

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Yes, there absolutely should be forgiveness for the simple reason that the system itself has teetering on collapse for quite some time.  That’s not to say it’s a solution, because it isn’t.  What it does do is buy some time for more meaningful reforms, including far more stringent rules and limitations on all student loans to stave off another financial collapse.

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cyberbully Monster Mutant

cyberbully

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9 hours ago, Ginguy said:

Sure, why not.

 

 

You know what....I did this wrong.  Let me start over instead of just taking other people's assertion of you into play instantly.

I paid my loans but I find no issue with loan forgiveness, especially for those who need it....Now I know it also helped those who didn't need it and were just dodging the bullet for as long as they could, but no matter, I feel it was a far better, and economically sound reason to spend our money other than wars and bailouts .

Hoping to one day see healthcare across the board for all in our country...because while it's called socialism, and that a curse word to some people....Those tax dollars can't possibly come from someone who evaded taxes.

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Master-Debater131 Hero

Master-Debater131

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No, no it should not.

You took the loan willingly to get a college degree. That degree will set you on a much better course in life for much higher earnings than people who dont have one. Well, provided its a useful degree and not a garbage one.

No one forced you to go to college. No one forced you to take a loan. No one made those decisions for you. You did it yourself, now pay back the loan. Its not my responsibility to repay your debt. Ive been paying down my student loans responsibly. If this happens its basically punishing me, and millions of other people, who have been doing the right thing and paying down a debt we all willingly accepted.

 

All this will do is move the debt from highly educated, higher earning, groups of people to the working class. Its a total gift to his political base. And thats assuming it even survives a court challenge. Im not so sure it will. If it does, it also sets one hell of a precedent for future presidents. Nothing would stop a future GOP president from say, issuing the same sort of refund for families with multiple kids? Or issuing a refund for gun purchases? "The right to personal defense is fundamental to our society, so everyone gets 10k to go buy an AR!"

Once you allow for a President to simply wipe away debt it opens up all sorts of doors for what they can do. And its eventually going to be used in a way you fundamentally disagree with but by then you cant do anything about it because its set precedent.

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stilgar Monster Mutant

stilgar

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6 minutes ago, Master-Debater131 said:

No one forced you to go to college. No one forced you to take a loan. No one made those decisions for you.

Yeah, because people weren't telling children all their lives if they don't go to college they were gonna be poor failures and their lives will be ruined. Yup, not at all. No one did that ever.

 

Go fuck yourself.

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Sawdy Luminary

Sawdy

Posted
Posted (edited)
4 minutes ago, stilgar said:

Yeah, because people weren't telling children all their lives if they don't go to college they were gonna be poor failures and their lives will be ruined. Yup, not at all. No one did that ever.

 

Go fuck yourself.

And btw, the way society (should) works… is we help each other to become better… that means education, affordable for all (free)…. 
 

with more educated people and level playing fields… I mean, you get smarter people, and the shit happening in the poorest of our areas, is improved.

do you agree that most of our worlds issues could be solved by better education, for all… without them worrying about their mortgage equivalent payment… right out of school.

Edited by Sawdy
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André Toulon Monster Mutant

André Toulon

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12 minutes ago, Master-Debater131 said:

No, no it should not.

You took the loan willingly to get a college degree. That degree will set you on a much better course in life for much higher earnings than people who dont have one. Well, provided its a useful degree and not a garbage one.

No one forced you to go to college. No one forced you to take a loan. No one made those decisions for you. You did it yourself, now pay back the loan. Its not my responsibility to repay your debt. Ive been paying down my student loans responsibly. If this happens its basically punishing me, and millions of other people, who have been doing the right thing and paying down a debt we all willingly accepted.

 

All this will do is move the debt from highly educated, higher earning, groups of people to the working class. Its a total gift to his political base. And thats assuming it even survives a court challenge. Im not so sure it will. If it does, it also sets one hell of a precedent for future presidents. Nothing would stop a future GOP president from say, issuing the same sort of refund for families with multiple kids? Or issuing a refund for gun purchases? "The right to personal defense is fundamental to our society, so everyone gets 10k to go buy an AR!"

Once you allow for a President to simply wipe away debt it opens up all sorts of doors for what they can do. And its eventually going to be used in a way you fundamentally disagree with but by then you cant do anything about it because its set precedent.

But my people were forced to be slaves....so if we take back the loan forgiveness, will you back reparations....of course you will, based on this post....good show, MD

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1pooh4u Monster Mutant

1pooh4u

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8 minutes ago, stilgar said:

Yeah, because people weren't telling children all their lives if they don't go to college they were gonna be poor failures and their lives will be ruined. Yup, not at all. No one did that ever.

 

Go fuck yourself.

Prior to the pandemic more than half of the jobs in this country required at least some college, or a ridiculous amount of experience (that’s impossible for an 18 yo to have) to make up the difference. I’m with you, the “no one forced you to go to college” crowd can go fuck themselves. Same mother fuckers that have no problem with the PPP loan forgiveness, bailouts for corporations, banks, oil companies, you name it, our government subsidized it, but forgive 10-20k in loans and it’s “buuut my inflllaaaation”

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1pooh4u Monster Mutant

1pooh4u

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This isn’t even a permanent thing. This is to help people paying off student loans during a pandemic. People graduating next year aren’t getting this deal. My brother has been paying off student loans for over 20 years.  This will probably help him a great deal as I’m sure he’s paid the loan twice over by now but student loan lenders make you pay interest only for the first few years. No wonder he never married had kids or bought a house

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Sieg67 Luminary

Sieg67

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1 hour ago, 1pooh4u said:

This isn’t even a permanent thing. This is to help people paying off student loans during a pandemic. People graduating next year aren’t getting this deal. My brother has been paying off student loans for over 20 years.  This will probably help him a great deal as I’m sure he’s paid the loan twice over by now but student loan lenders make you pay interest only for the first few years. No wonder he never married had kids or bought a house

But he needs to be in a huge amount of debt so those who paid theirs don't get their wittle feelings hurt.

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scoobdog Monster Mutant

scoobdog

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1 hour ago, Master-Debater131 said:

No, no it should not.

You took the loan willingly to get a college degree. That degree will set you on a much better course in life for much higher earnings than people who dont have one.

But does it, in fact, guarantee higher earnings?  Also, how do you account for relatively low paying jobs that require college degrees?

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Master-Debater131 Hero

Master-Debater131

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2 minutes ago, scoobdog said:

But does it, in fact, guarantee higher earnings?  Also, how do you account for relatively low paying jobs that require college degrees?

Depending on the degree, yes it does. But thats the catch, and one of my fundamental problems with higher education. If you get a STEM degree your lifetime earnings are drastically higher than virtually any other degree. Right now pricing for college degrees doesnt represent this, and neither does expectations for a degree. The reality of the world is that if you get an English degree your lifetime earnings are not the same as someone with a STEM degree, but the expectations that you will earn as much are there. Same for pricing. Schools charge the same for those two degrees when they really shouldnt. Engineers right out of school are being offered crazy pay these days because of the demand for them. Not quite the same for English majors.

 

As for the job market, that has more to do with the totally perverse market of today. You dont need a college degree for the majority of jobs, but the expectation is there.  Then they turn around and offer you garbage pay that doesnt cover the above stated debts. You dont need a college degree to be a manager at Panda Express, and yet thats part of the requirements. The pay is only $25 HR for a manager as well. So theres another debt-pay trap that is problematic. Theres a perverse distortion of the job market right now that you see all over the place. The requirements for a lot of jobs are hilariously detached from the actual job itself. I do think you are seeing a bit of a shift here simply due to the labor shortage, but its still a problem. There are absolutely unrealistic requirements for a ton of jobs out there.

As a side note, entry level does not mean 5 years experience.

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scoobdog Monster Mutant

scoobdog

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Just now, Master-Debater131 said:

Depending on the degree, yes it does. But thats the catch, and one of my fundamental problems with higher education. If you get a STEM degree your lifetime earnings are drastically higher than virtually any other degree. Right now pricing for college degrees doesnt represent this, and neither does expectations for a degree. The reality of the world is that if you get an English degree your lifetime earnings are not the same as someone with a STEM degree, but the expectations that you will earn as much are there. Same for pricing. Schools charge the same for those two degrees when they really shouldnt. Engineers right out of school are being offered crazy pay these days because of the demand for them. Not quite the same for English majors.

 

As for the job market, that has more to do with the totally perverse market of today. You dont need a college degree for the majority of jobs, but the expectation is there.  Then they turn around and offer you garbage pay that doesnt cover the above stated debts. You dont need a college degree to be a manager at Panda Express, and yet thats part of the requirements. The pay is only $25 HR for a manager as well. So theres another debt-pay trap that is problematic. Theres a perverse distortion of the job market right now that you see all over the place. The requirements for a lot of jobs are hilariously detached from the actual job itself. I do think you are seeing a bit of a shift here simply due to the labor shortage, but its still a problem. There are absolutely unrealistic requirements for a ton of jobs out there.

As a side note, entry level does not mean 5 years experience.

I'm going to correct you there.  It's not a STEM degree that has those benefits, it's a professional degree.  Specifically, engineers and architects tend to get that higher earning point because both of those degree types are explicit requirements for licensing. Mathematics, and sciences degrees can be valuable as launching points for lucrative careers but are not guaranteed.  Educational degrees are also a requirement for what amounts to an extremely low paying line of work.  In fact, most STEM degrees are not much different than an English degree, because the English degree is the most common springboard for one of the most lucrative careers out there.... law.

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Master-Debater131 Hero

Master-Debater131

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2 minutes ago, scoobdog said:

I'm going to correct you there.  It's not a STEM degree that has those benefits, it's a professional degree.  Specifically, engineers and architects tend to get that higher earning point because both of those degree types are explicit requirements for licensing. Mathematics, and sciences degrees can be valuable as launching points for lucrative careers but are not guaranteed.  Educational degrees are also a requirement for what amounts to an extremely low paying line of work.  In fact, most STEM degrees are not much different than an English degree, because the English degree is the most common springboard for one of the most lucrative careers out there.... law.

I picked English rather than the meme of Womens Studies or Art. If were going down this route then go ahead and take what I posted and substitute English for Womens Studies or Art then try and make the argument that they are as valuable as STEM degrees. They arent.  And neither are a huge swath of degrees that people pay insane amounts of money to get even though they provide virtually no benefit or increase in lifetime earnings on their own. Its fine that you have an interest in that subject, but dont expect to be able to use it to increase your lifetime earning potential.

And as for a Law degree, that reinforces my point that an English degree isnt that useful. If you have to go to graduate school to make an undergrad degree worth anything, then that undergrad degree on its own isnt very good.  And I say that as someone who had to go down this exact path.

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scoobdog Monster Mutant

scoobdog

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8 minutes ago, Master-Debater131 said:

I picked English rather than the meme of Womens Studies or Art. If were going down this route then go ahead and take what I posted and substitute English for Womens Studies or Art then try and make the argument that they are as valuable as STEM degrees. They arent.  And neither are a huge swath of degrees that people pay insane amounts of money to get even though they provide virtually no benefit or increase in lifetime earnings on their own. Its fine that you have an interest in that subject, but dont expect to be able to use it to increase your lifetime earning potential.

And as for a Law degree, that reinforces my point that an English degree isnt that useful. If you have to go to graduate school to make an undergrad degree worth anything, then that undergrad degree on its own isnt very good.  And I say that as someone who had to go down this exact path.

Well, you're missing the point.  Any degree you get in a Tier 1 university generally follows two tracks... they're either springboards to a higher degree that is itself valuable, or they're springboard to a professional track.  One does not go to USC to get an English Degree just to become an English professor.  In fact, most students in those tracks tend to be there because they're either on scholarship or they're angling to get in a professional degree track of some type.  People don't spend tens of thousands of dollars to get a degree in women's studies (if your school even has that) because most people that knowingly take on that loan are fully aware of what their job prospects are.  That's why the whole worthless degree discussion tends to be a red herring when discussing the college loan crisis.

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naraku360 Monster Mutant

naraku360

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Posted (edited)
2 hours ago, Master-Debater131 said:

No, no it should not.

You took the loan willingly to get a college degree. That degree will set you on a much better course in life for much higher earnings than people who dont have one. Well, provided its a useful degree and not a garbage one.

No one forced you to go to college. No one forced you to take a loan. No one made those decisions for you. You did it yourself, now pay back the loan. Its not my responsibility to repay your debt. Ive been paying down my student loans responsibly. If this happens its basically punishing me, and millions of other people, who have been doing the right thing and paying down a debt we all willingly accepted.

 

All this will do is move the debt from highly educated, higher earning, groups of people to the working class. Its a total gift to his political base. And thats assuming it even survives a court challenge. Im not so sure it will. If it does, it also sets one hell of a precedent for future presidents. Nothing would stop a future GOP president from say, issuing the same sort of refund for families with multiple kids? Or issuing a refund for gun purchases? "The right to personal defense is fundamental to our society, so everyone gets 10k to go buy an AR!"

Once you allow for a President to simply wipe away debt it opens up all sorts of doors for what they can do. And its eventually going to be used in a way you fundamentally disagree with but by then you cant do anything about it because its set precedent.

"Nobody forced you into doing a thing required by effectively every employer for any job paying more than minimum wage with no benefits. It was your choice to have a job market that demands nothing short of a Bachelors."

Lets also ignore the highly deceptive practices used to lure people in, yeah?

Edited by naraku360
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scoobdog Monster Mutant

scoobdog

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41 minutes ago, Master-Debater131 said:

I picked English rather than the meme of Womens Studies or Art. If were going down this route then go ahead and take what I posted and substitute English for Womens Studies or Art then try and make the argument that they are as valuable as STEM degrees. They arent.  And neither are a huge swath of degrees that people pay insane amounts of money to get even though they provide virtually no benefit or increase in lifetime earnings on their own. Its fine that you have an interest in that subject, but dont expect to be able to use it to increase your lifetime earning potential.

And as for a Law degree, that reinforces my point that an English degree isnt that useful. If you have to go to graduate school to make an undergrad degree worth anything, then that undergrad degree on its own isnt very good.  And I say that as someone who had to go down this exact path.

And, most of this is irrelevant.  We’re not in a crisis because of students paying $100k plus to go to an Ivy League school no matter the degree,  we’re in this crisis because of loans that paid for education at for-profit technical and vocational schools.

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matrixman124 Icon

matrixman124

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Posted (edited)
10 minutes ago, scoobdog said:

And, most of this is irrelevant.  We’re not in a crisis because of students paying $100k plus to go to an Ivy League school no matter the degree,  we’re in this crisis because of loans that paid for education at for-profit technical and vocational schools.

I thought it was across the board. Is it that much worse for technical and vocational schools?

Because one of the problems seems to be that not enough people are going to such schools because our generation was taught to look down on the trade jobs they prepare for. A bachelor's degree at most was treated as the thing to aim for to start your career or springboard into higher education.

Edited by matrixman124
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scoobdog Monster Mutant

scoobdog

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2 minutes ago, matrixman124 said:

I thought it was across the board. Is it that much worse for technical and vocational schools?

Because one of the problems seems to be that not enough people are going to such schools because our generation was taught to look down on the trade jobs they prepare for. A bachelor's degree at most was treated as the thing to aim for to start your career or springboard into higher education.

Yes it was across the board, but the limitations on who could get it based on wages and loan type meant that the people that benefitted most were from that group.

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Sawdy Luminary

Sawdy

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7 minutes ago, GuyBeardmane said:

The $10K doesn't go far enough.  Every student loan should be completely cancelled.  This is how banks can pay back their "too big to fail" loans they got years ago.

💯 

guess what? We’d find the money… the lie that was sold is, we can’t print money.

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scoobdog Monster Mutant

scoobdog

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2 hours ago, Sawdy said:

God I hate Tom Brady

Feels really good to say that, doesn't it?

And totally agree with the loan forgiveness not going far enough.  Still forgiveness doesn't fix the problem of what amounts to the next version of the sub-prime loan.  You can't keep forgiving and then allow banks to turn around and fund new bad loans.  Furthermore, all higher education needs to be more affordable.

 

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Sawdy Luminary

Sawdy

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8 minutes ago, scoobdog said:

Feels really good to say that, doesn't it?

And totally agree with the loan forgiveness not going far enough.  Still forgiveness doesn't fix the problem of what amounts to the next version of the sub-prime loan.  You can't keep forgiving and then allow banks to turn around and fund new bad loans.  Furthermore, all higher education needs to be more affordable.

 

Yeah I agree forgiveness doesn’t go far enough…. Sadly the next President is going scorched earth.

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1pooh4u Monster Mutant

1pooh4u

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How the rich used ppp loans and got them forgiven…. they already had or made corporations and paid themselves and their families the payroll percentage they needed to get the loan forgiven  so they took a loan and paid mostly themselves and the government said “oh we love you guys for keeping 5 people employed during the shut downs” you don’t have to pay us back.  
 

and people are totally ok with that 

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Raptorpat Monster Mutant

Raptorpat

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It's a reflection that the entire system is broken. It's not the entire fix, it's just simply the most splashy component because it's the most tangible. 

For the sake of this conversation, I'ma focus on the tangible impacts on those who received loans (setting aside all the other issues, like the lifetime of societal pressure to go to school and promise of class mobility, the lack of financial literacy education in high schools, or the impacts of widely accessible loans on the growth in education costs). Pre-COVID, half of America all had to make our monthly payments like any other loan because we're charged interest (in the range of 5-8%), which is all a normal loan thing. But there are a number non-normal things, or normal things that combine to create a non-normal outcome:

  • Here's the key thing - paying anything less than the amount of interest that accrues for the month means your interest continues to accumulate, and you can't touch your principal until you've paid off all your accrued interest. It seems kind of basic but let's see how it adds up.
  • Unpaid interest that accrued during the schooling period capitalizes and increases the size of the principal, which increases the amount of interest that accumulates.
  • Loans were deferred for people who didn't land a "real" job right out of school, or they payed a minimum-to-zero amount via the basic IBR repayment (obligating you to pay an income-derived amount rather than the default 10-year repayment plan) while they ramped up their career, all while the excess interest accrues.
  • As a person's income increased, the minimum IBR payments increased, however even if the person ever reached the earning capacity anticipated to adhere to the default 10-year payment plan, that doesn't account for all the excess interest that accrued during the deferments or IBR periods. 
  • If someone completely fell under water, student loans could not be discharged in bankruptcy.
  • Outside of the specific public sector program (which we all know had its bureaucratic issues), basic IBR loans are forgivable after 25 years' (it might be 20, not sure off the top of my head) worth of on-time monthly payments. For those who think making IBR payments for 25 years is a sufficient way out, the tax code treats the entire forgiven amount as taxable income and the person then owes the IRS - basically starting the entire process over.
  • And just to top it off, the student loan interest tax deduction is capped out at $2,500, but that amount adjusts downward and phases out at certain income thresholds.

So given all that, the focus of student loan forgiveness is not the people who aren't making their payments or otherwise cheating the system. The focus of student loan forgiveness is the people who have been dutifully making monthly payments to the best of their income capacity and aren't appreciably touching their principal. People who have paid thousands or tens of thousands of dollars back but their loan balance hasn't changed, or is only getting bigger. Then after scraping by for 25 years, the whole process restarts but with the IRS instead of DOE, and the IRS likes to wear leather.

To the extent that student loans obligations ballooned exponentially for an entire generation, that is a societal problem regardless of whether some people have succeeded in paying theirs off through sacrifice or luck, or whether others never needed them in the first place. It affects the macro economy. We've all heard (or lived through) more than enough stories about millennials deferring home ownership, marriage, kids, or whatever consumer demands because of student loan debt. That is a massive social and economic problem. It's no coincidence that home sales and consumer demand skyrocketed with the student loan freeze. (As an aside, to the extent that this pent up demand factors into inflation [when factoring out fuel and food prices due to global instability], it's probably more accurate to say the consumer economy experienced artificially deflated demand for years prior.)

 

So all that said, we turn to solutions to address the structural failures:

  • Blanket forgiveness for existing loan holders under income threshold. To grease the skids, Chuck Schumer and Elizabeth Warren slipped a five-year exemption for student loan forgiveness from the income tax. (Ideally this provision is extended or made permanent so that future IBR payors don't have to worry about the 25-year "tax bomb".) Everyone's head about and has an opinion on forgiveness, so there's not much to say here.
  • Structural reforms for the future of the program. The DOE will promulgate a regulatory reform that allegedly does the following (from press release):
    • For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
    • Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
    • Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department of Education estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.
    • Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
  • Not typing it all out, but this and the various other reforms are here: https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/

 

Based on the above, I highlighted the bullet that I think will make the most systemic difference to the student loan system. I am 100% biased, and obviously the blanket forgiveness part is in the news due to its extreme tangibility, but I think it's absolutely crazy that the fourth bullet has not trickled into the public discourse.

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