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On forgiving student loan debt
Brought to you straight from the Medicare for All thread, by Frumious’ request, it’s the “forgiving student loan debt” thread…
First, a brief survey of the issue. There is approximately $1.6 trillion dollars in student loan debt in the United States. A large proportion of that is owed by people who took out loans for both undergraduate and graduate degrees.
The average student loan debt is about $37,000, and takes anywhere from 10-30 years to pay off. For graduate degrees, a med school degree will put you $200,000 in debt, dental school nearly $300,000.
There are a variety of programs out there designed to help manage student loan debt under a variety of conditions, from the Public Service Loan Forgiveness program to income based repayment programs.
Workers with a high school degree make about $30,000 a year. Those with undergrad, about $50,000. Those with some sort of professional degree, about $60,000. Specific numbers will vary depending on career field, locale and such. Generally, the more education one gets, the higher a wage one commands.
Now for the argument. Here’s the video that was the kill-shot to Warren’s (and likely eventually Bernie’s) campaign.
[link=https://thehill.com/homenews/campaign/479608-warren-confronted-by-man-at-campaign-event-over-tuition-reimbursement]https://thehill.com/homenews/campaign/479608-warren-confronted-by-man-at-campaign-event-over-tuition-reimbursement[/link]
In it, the Iowa voter questions Warren about forgiving student loan debt. The man worked double shifts and saved his money to fund his daughters’ tuition. He compares this to his buddy who messed around and did not. The man asks Warren if, after forgiving his buddy’s debt, will he get back the money that he scrimped and saved for his daughters’ education? Warren laughs and says no. The man angrily berates her, noting that he did the right thing by working hard for his family, but now he is getting screwed; he could have spent all that money on something else or not worked all those double shifts. Then he storms off.
The Warren/Sanders student loan forgiveness plan is predicated on taking from the poor and giving to the wealthy. As noted above, those without college degrees earn less. When a person without a college degree is working a job, that person’s wages are taxed by the government.
When a person who is taking out a government loan to pay for tuition, that government loan is funded by taxpayer money. The understanding is that the student will pay off that loan (with interest) after graduating. As noted above, the degree enables the graduate to acquire a higher-paying job, and a portion of that salary will go towards paying off the student loan debt. So far, so good.
If the student loan debt is forgiven however, the government never receives the agreed-upon money from the graduate. The graduate, in effect, took money from the taxpayer who didn’t have a college degree and used that money to fund the graduate’s tuition and acquire a higher-paying job. The graduate will now be wealthier going forward without having to pay back the student loans.
Forgiving student loan debt is therefore a $1.6 trillion dollar transfer of wealth from those without college degrees (and who are generally in lower paid positions) to those with college or graduate degrees and who are generally wealthier and come from more affluent situations.
It is also, as the Iowa man noted, an act that seems deeply immoral. It makes a mockery of those who worked hard to save money for themselves and their family’s advancement.
It also calls into question why someone should bother to pay any debt, whether it be a student loan, car loan, home loan or whatever when it could simply be one day erased by a particular political candidate. That seems a dangerous precedent, and one inclined towards economic instability.
Furthermore, with this as precedent, why not stay at university forever, acquiring every degree in the curriculum over the years? It doesn’t matter to the student if the tuition rolls well into the millions. The debt will be erased eventually; it would seem foolish not to remain perpetually adolescent at the expense of all those poor fools working the 8-5 to fund one’s doctorate in Interpretive Dance. This is the moral hazard argument.
My personal preference would be for the government to uncouple from the student loan business as much as possible over the next few years. The fact that student loans are backed by the government has been the major impetus behind the skyrocketing cost of tuition over time; the universities have the sole ability to print degrees (aka, tickets to higher paying jobs), and they have access to the near unlimited coffers of the government. Students are allowed to take out however much money they wish to pay for whatever degree they wish, regardless of the cost or actual likely earning power of that degree.
Whereas if a student were to present their request for a $90,000 loan to acquire a graduate degree in interpretive dance theory, a private lender or bank would look at the loan, assess the likelihood of acquiring a job with a sufficient salary to pay off the loan in that particular field, and tell the student “no”. The student would likely be disappointed but would get over it soon enough, or would at least be better off than if they had gotten the loan and were trying to pay off $90,000 in debt off a $35,000 dance teacher’s salary.
Even better, the university would quickly realize that the demand for $90,000 degrees in interpretive dance is not brisk, and (gasp) lower tuition to a level commiserate with what a bank would be willing to loan/the degree’s eventual salary expectations.
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323 Replies
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Those plans are really popular with those of my friends who learned trades or joined the military right out of high school.
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I don’t find a lot to like with student loan forgiveness.
1- It’s an inefficient use of federal dollars
2 – It’s essentially a wealth transfer from non-college Americans to the college educated
3- It brings a moral hazard for taking on debt.
4- It’s generally blatant pandering
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I’m fine with looking at how we make college more affordable, particular for people of low income.
But even then, if we’re going to spend federal money on education I think we’d be better off improving childhood public education, bolstering technical trades education, and developing lifelong learning. re-training skills programs.-
I definitely agree with the sentiment that it gives universities the insentive to raise tuition
Much like in the 1980s when Ronald Reagan decimated the Pell Grant program and outsourced student loans to his banker friends
Universities saw this as an incentive to increase their tuition yearly above the inflation rate and thats why we are in the predicament we are today
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In general I don’t disagree. However, student loans have something of a sordid history of abuse, & I don’t mean by students. We have been down this road before & I remember the arguments about how “students” were abusing the system, especially by using bankruptcy as an “illegitimate” means to discharge the loans. In addition there have been “forgiveness” programs that have been abused by the administrators & not by students. Specifically teachers as an example.
In other words, it’s a lot more complicated than people “stupidly” getting themselves in deep debt & then attempting to renege on their responsibilities by dumping the debt onto taxpayers. It is a lot more complicated than examples of a degree in Dance Interpretation & then walking – or “dancing” away from deep debt. A whole thing about not allowing student debtors to discharge their loans through bankruptcy was to prevent students who go to law school and medical school from “abusing” their loans by walking away.
From below:
[b][u][i][/i][/u][u][i]Of particular concern to these critics was the notion that medical and law students graduating with significant debt might attempt to discharge it despite the earning potential that would allow them to pay it down with relative ease.[/i][/u] No evidence of actual abuse was ever presented.
[/b]
So forgiveness of all loans is one swell-foop way of addressing the problem. It is not the best, granted, but there have been decades of abuse by lenders that must be addressed. All this talk about “affluent” people getting free education ignores the vast majority of people who are anything but affluent & then cheating. Teachers for example are not living lavish lifestyles, nothing close to what physicians earn at any rate, even those who “only” get paid by Medicare rates.
We have a YUGE bubble of debt in student loans, totaling $1.5 Trillion or more.
[link=https://www.nytimes.com/2018/10/03/business/student-loan-forgiveness-lawsuit.html]https://www.nytimes.com/2…rgiveness-lawsuit.html[/link]
Backed by one of the nations biggest unions, nine teachers filed a lawsuit on Wednesday accusing the student loan servicer Navient of negligently blocking their access to a troubled federal loan forgiveness program for public service workers, adding thousands of extra dollars to their debts.
Student loan debt now totals $1.5 trillion, more than Americans owe on credit cards or auto loans, and has [link=https://www.nytimes.com/2018/05/25/business/how-student-debt-can-ruin-home-buying-dreams.html]created economic ripple effects[/link], including lower home buying rates among people in their 20s and 30s. [b]For teachers, whose [link=https://www.nytimes.com/2018/05/31/us/politics/teachers-campaign.html]low salaries have become a political issue[/link] this year, the strain can be especially acute.[/b]
[link=https://www.cnbc.com/2018/01/12/student-loan-forgiveness-isnt-often-a-forgiving-process.html]https://www.cnbc.com/2018…forgiving-process.html[/link]
To get there, he racked up more than $80,000 in student debt.
So Rizzutti, 28, was relieved to find out that he qualifies for [link=https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#qualifying-employment]Public Service Loan Forgiveness[/link]. That program, signed into law by President George W. Bush in 2007, allows certain members of the [link=https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201604_cfpb_servicemember-student-loan-guide.pdf]military[/link], classroom [link=https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_guide-for-teachers-with-student-debt.pdf]teachers[/link] and social workers, as well as not-for-profit and government employees, to have certain[b] [/b]loans eliminated after 10 years of on-time payments.
Each year, more than 30 percent of people who file a so-called Employee Certification Form, which is supposed to confirm ones public service loan forgiveness status, are denied, according to the Department of Education. And this form is not mandatory for public service loan forgiveness, and so the total number of people denied is probably greater.
These problems are so common that the Consumer Financial Protection Bureau issued a [link=http://files.consumerfinance.gov/f/documents/201706_cfpb_PSLF-midyear-report.pdf]report[/link] in June on the failures of the student loan industry to properly inform people about forgiveness requirements and rights.
[b]Borrowers have identified a range of student loan industry practices that delay, defer, or deny access to expected debt relief, according to the report.[/b]
[size=”0″][/size]
[link=https://www.savingforcollege.com/article/history-of-student-loans-bankruptcy-discharge]https://www.savingforcoll…s-bankruptcy-discharge[/link]
[b][/b][b]Beginning in the 1970s, journalists and legislators began raising concerns about the possibility that student debtors might abuse the bankruptcy system as a means of wriggling out from under their loan debt following graduation. [u][i]Of particular concern to these critics was the notion that medical and law students graduating with significant debt might attempt to discharge it despite the earning potential that would allow them to pay it down with relative ease.[/i][/u] No evidence of actual abuse was ever presented. [/b]
The Congressional Commission on the Bankruptcy Laws of the United States, formed in 1970, issued its findings in a [link=https://babel.hathitrust.org/cgi/pt?id=uc1.d0003039724;view=1up;seq=9]1973 report[/link]. This report contained recommendations that were intended to assuage those concerns, notably suggesting that student loan debt be barred from discharge for five years following the commencement of repayment and that a standard of undue hardship be established.
Three years later, Congress commissioned a [link=https://www.gao.gov/assets/120/118247.pdf]study on the subject[/link] by the Government Accountability Office. It found that a relatively high percentage (18%) of educational loans were in default, but also that less than 1% were discharged in bankruptcy.
Despite these negligible findings, the [link=https://www.govinfo.gov/content/pkg/STATUTE-90/pdf/STATUTE-90-Pg2081.pdf]Education Amendments of 1976[/link] (page 61) adopted the Bankruptcy Commissions recommendation, stipulating that student loans could not be discharged in bankruptcy until five years after commencement of the repayment period, barring any undue hardship.
In 1984, the [link=https://www.govinfo.gov/content/pkg/STATUTE-98/pdf/STATUTE-98-Pg333.pdf]Bankruptcy Amendments and Federal Judgeship Act of 1984[/link] further tightened the rules on bankruptcy discharge by dropping of higher education from the wording of the legislation. This broadened the restrictions on discharge to include private loans backed by non-profit institutions as well as government loans.
In 1991, the six-year statute of limitations on collection of defaulted loans, which had been established in 1985, was completely eliminated by the [link=https://www.congress.gov/bill/102nd-congress/house-bill/1285/text]Higher Education Technical Amendments[/link].
Further legislation was even less generous toward student debtors. By 1998, the seven-year period after which student loan debt could potentially be eliminated through bankruptcy proceedings was also eliminated with the passage of another set of [link=https://www.congress.gov/bill/105th-congress/house-bill/6/text]Higher Education Amendments[/link]. Thus, the nebulously defined undue hardship was the only remaining provision under which student debt could be discharged in bankruptcy.
[b]Critics have claimed that the lack of recourse to bankruptcy has all but ensured that lenders will continue to extend credit to student borrowers with abandon. Under the current legislation, lenders have little motivation to assess the creditworthiness of the people to whom they lend.[/b]
The alternatives to bankruptcy discharge have mostly occurred in the form of income-driven repayment plans, of which there are currently four.
Student borrowers going into certain professions may be eligible for [link=https://www.savingforcollege.com/article/checklist-for-public-service-loan-forgiveness]Public Service Loan Forgiveness[/link](PSLF), under which the remaining debt for some types of federal loans will be forgiven after 10 years of payments if the borrower works in a public service position.
[link=https://www.consumerfinancemonitor.com/2020/01/21/bankruptcy-court-discharges-student-loan-debt/]https://www.consumerfinan…ges-student-loan-debt/[/link]
On January 7, 2020, Chief United States Bankruptcy Judge Cecilia G. Morris of the United States Bankruptcy Court for the Southern District of New York issued a notable opinion in the case of [link=https://images.law.com/contrib/content/uploads/documents/292/59748/RosenbergBankruptcy.pdf]Rosenberg v. N.Y. State Higher Education Services Corp.[/link], granting summary judgment in favor of a U.S. Navy veteran who was seeking to discharge $221,385.49 in federal student loan debt.
The debtor first borrowed money to fund his undergraduate studies at the University of Arizona between 1993 and 1996, where he obtained a Bachelor of Arts degree in History. After serving five years in the Navy, he attended Cardozo Law School at Yeshiva University, borrowing additional sums for the cost of that tuition between 2001 and 2004. After graduating from law school, he consolidated his student loan debt on April 22, 2005 in the principal amount of $116,464.75.
The loan was then in deferment or forbearance for 10 years. In April 2015, the loan went into an income-based repayment plan for one year, over which time the debtor made six payments. The loan went into forbearance again for six months in 2016, and the debtor made three payments of varying amounts, although none were due. The loan went into a standard repayment plan in October 2016, and the debtor made one more payment in 2017. In January 2018, the loan entered default and was accelerated. In total, the debtor made 10 payments and missed 16 over the 26 months that he was responsible for making payments. As of November 19, 2019, when the debtor filed for bankruptcy, with accrued interest and penalties, the total balance of the student loan had grown to $221,385.49.
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T be student loan debacle is republicans doing
That was a Ronald Reagan
Gift to his banker friends -
tuition is probably too high. I paid my loans off by working while I was in school and making it a priority to get it paid off. So I dont feel bad for people that have college debt.
It makes sense to get kids started on a good track early. Investing in education. Smaller class sizes. Vocational options.
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How long ago was that?
Yes, I worked while attending school & took out loans which I paid off afterwards. But I had a job that paid living wage so I had my own apartment & car, etc while also being able to pay for school. That’s a tough load for very many out-of-school jobs nowadays.
Consider the simple math for today. Median household income is around $60k. That translates into $1,154/week BEFORE taxes & healthcare insurance deduction, etc. So assume 25% for taxes & insurance leaving about $3,700/month for rent & food & living expenses, transportation for a household. What’s ‘average” rent fo a household earning median income? 1/2 of income? Maybe $1,400/mo? And start paying down school loans. So now “average” school loan is $30k. What’s the term to pay off? 10 years? Interest rate? 7.5% after consolidation? That means ~$360/month. So $2k/month for household.
But $60k jobs aren’t available for every college graduate. And while some areas have lower rent they also often pay less income for jobs. Rents are often in the $2k or higher range in NJ/NY area & pay.
Times are different, definitely since I was in college.-
The most compelling arguments are radgrinder’s
“It also calls into question why someone should bother to pay any debt, whether it be a student loan, car loan, home loan or whatever when it could simply be one day erased by a particular political candidate. ”
And dergon’s 3, which is also the above, the moral hazard part.
I’ve mentioned something that could smooth some of it over, which is allowing EVERYONE who had a student loan (last 30 years?) to write off entirely what they [i][b]have paid[/b][/i] vs. income. That at least allows everyone to benefit from the gov’t BS, and yes it is their fault. The real bad actors here that are amazingly never mentioned are the universities and that’s because there has been such an unholy alliance between them and the gov’t, typically due to the generalized leftist indoctrination and political similarities of bureaucracies (gov/unis). Add a dash of RINO go with the flow for 30+ years, just like with giving loans out to ALL for homes, etc and you get more gov’t bubbles. But if you believe in sound money and policies in your country, and not bubble formation, ultimately you will be called a racist because of your policy, not because of particular groups aptitudes or faults. That’s “democracy” for you. Yay.
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By the way, it won’t happen, here’s why:
There will be a much MORE hotly debated topic coming, within a decade certainly, about monetizing PENSION debts, which are even larger. There is no way you would be able to ever do both, boomers have way larger voting power and influence, and even just the pension could sink the dollar depending on what the final decision is.
So, it doesn’t matter. Sanders will be sabotaged again, Warren is toast, and even if these anti american fools got elected, the congress and deep state would ironically act out against them like they do Trump, what a world.-
Frumious,
That last story grabbed my interest. How did a veteran rack up that much undergrad and graduate debt when there is the GI bill? He could have used that to pay for either his undergrad or law degree, plus could have received a stipend during that time for books and living expenses.
It’s a generous and worthy program created specifically to serve the educational needs of veterans, it’s highly publicized and remarked upon to those both entering and leaving the military as well as marketed to active duty members who wish to receive a degree while on active duty. It would have been nearly impossible for this guy to be unaware of it.
My brief googling did not turn up an explanation for this, but it’s so doggone strange and glaring that something must be up.
I would be interested in hearing more about how discharging student loans via bankruptcy would be effective. As you say, there is a massive bubble and that bubble needs to be deflated before it pops. A central objective would be to reduce the incentive to keep pumping money into student loans with abandon. Taking away the certainty that a loan will be paid back no matter what would be an interesting approach.
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Quote from Intermittent Blasting
By the way, it won’t happen, here’s why:
There will be a much MORE hotly debated topic coming, within a decade certainly, about monetizing PENSION debts, which are even larger. There is no way you would be able to ever do both, boomers have way larger voting power and influence, and even just the pension could sink the dollar depending on what the final decision is.
So, it doesn’t matter. Sanders will be sabotaged again, Warren is toast, and even if these anti american fools got elected, the congress and deep state would ironically act out against them like they do Trump, what a world.
The conspiracy theorist in me wonders if Sanders will make it to the convention. He’s had one heart attack and he crossed the Clintons. It’s too easy to explain away an octogenarian having a health crisis during the course of a rigorous campaign schedule, particularly when it would seem so advantageous for him to depart from the race in a way that doesn’t alienate his base. I hope he hires some food tasters.-
[link=https://images.law.com/contrib/content/uploads/documents/292/59748/RosenbergBankruptcy.pdf]https://images.law.com/co…osenbergBankruptcy.pdf[/link]
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Quote from Frumious
Consider the simple math for today. Median household income is around $60k. That translates into $1,154/week BEFORE taxes & healthcare insurance deduction, etc. So assume 25% for taxes & insurance leaving about $3,700/month for rent & food & living expenses, transportation for a household. What’s ‘average” rent fo a household earning median income? 1/2 of income? Maybe $1,400/mo? And start paying down school loans. So now “average” school loan is $30k. What’s the term to pay off? 10 years? Interest rate? 7.5% after consolidation? That means ~$360/month. So $2k/month for household.
But $60k jobs aren’t available for every college graduate. And while some areas have lower rent they also often pay less income for jobs. Rents are often in the $2k or higher range in NJ/NY area & pay.
Times are different, definitely since I was in college.
That’s what we call ‘fun with numbers’. Just adjust the numbers, throw around ‘median’ and ‘average’ until you arrive at your conclusion that nobody could ever pay back their student loans on a 60k income. And no einstein, if the median income is 60k, there is not a 60k job available for every college graduate…… It’s the median, that means something. Look it up!
The current rate for regular undergrad loans is 4.53%. Unless you rack up private loans at 7.5, most if not all of your debt at that <50k level is going to be at the regular rate. If I plug those numbers into the ‘regular’ repayment scheme, I get a monthly payment of $363 for 10 years. Crushing, I tell you ! I mean its almost as much as a car payment, riiight ?
Paying back 35k from a 60k income isn’t the problem. Paying back 150k with a worthless graduate degree while working at some non-profit, that’s where things get difficult.
How much you spend on a college education is still to some extent a choice. I am just watching some foolishness being perpetrated in my extended family. Pretty sure I’ll hear some whining about the unfairness of student loans one of these days. Mind you, this is from someone who ‘needs’ a BMW and an off-campus apartment……
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“Fun with numbers?” For all of your complaints and math, I already came up with that $363/month figure of yours so what exactly are you complaining about??? In fact my # was ~$360/month.
As for saying paying $363/month on a $60K income being impossible – I never said that.
I did say that not everyone coming out of college gets a job that pays $60k per year. And you are correct, a higher loan means higher minimum payment required.
The people I know with school loans that they are paying off are not driving around in Beemers or anything close. But then they are not on Gen’l Radiology complaining about how new Medicare reimbursement rates will leave them indentured & unable to afford that Porsche either.
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“Fun with numbers?” For all of your complaints and math, I already came up with that $363/month figure of yours so what exactly are you complaining about??? In fact my # was ~$360/month.
As for saying paying $363/month on a $60K income being impossible – I never said that.
I did say that not everyone coming out of college gets a job that pays $60k per year. And you are correct, a higher loan means higher minimum payment required.
The people I know with school loans that they are paying off are not driving around in Beemers or anything close. But then they are not on Gen’l Radiology complaining about how new Medicare reimbursement rates will leave them indentured & unable to afford that Porsche either.-
As Ace Ventura would say to Frumious:
Fiction CAN be fun!!! -
Frumi despises doctors making an upper class wage.
But he has grabbed his upper class paycheck and ran
to the bank his whole life.-
^ Freedom (from accountability) for me, not for thee”
which is why we call him a woman
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Quote from Frumious
“Fun with numbers?” For all of your complaints and math, I already came up with that $363/month figure of yours so what exactly are you complaining about??? In fact my # was ~$360/month.
What are YOU complaining about ? 360/month on that 60k income is entirely doable and an acceptable payback in exchange that degree that allows you to earn a college graduate level of income. There is no crisis here.
The people I know with school loans that they are paying off are not driving around in Beemers or anything close.
Which is a claim I did not make.
But then they are not on Gen’l Radiology complaining about how new Medicare reimbursement rates will leave them indentured & unable to afford that Porsche either.
Which is a claim I did not make.-
I guess I was confused about your poor opinion about your extended family & that it was not a general complaint.
Quote from fw
[size=”0″]I am just watching some foolishness being perpetrated in my extended family. Pretty sure I’ll hear some whining about the unfairness of student loans one of these days. Mind you, this is from someone who ‘needs’ a BMW and an off-campus apartment……[/size]
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Read the articles. They explain. He went to court for relief and the court ruled in his favor and the court states why.
And you can Google for more and different examples, they are numerous. -
Quote from Frumious
I guess I was confused about your poor opinion about your extended family & that it was not a general complaint.
What’s new, you dont actually read stuff before you misrepresent it.
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Did not realize you held your extended family in less regard than your opinion about the public in general, which is pretty low to begin with.
You must be your own party at family dinners.-
Quote from Frumious
Did not realize you held your extended family in less regard than your opinion about the public in general, which is pretty low to begin with.
You must be your own party at family dinners.
I am lovely. Dont worry about that.
He is a very smart kid, got a full-ride scholarship to his state school and admission into a number of name brand top 25 private colleges. But his state school doesn’t have a good football program (a sport he neither plays nor watches) and all his buddies went to a particular private school. So rather than graduating top of his class from his state university with zero debt and a 529 for grad-school, he will graduate from a middle of the road private school with debt. His dad explained it to him, I explained it to him, he made his decisions fully knowing how all those things fit together. So if I ever hear one peep about student debt from him, I’ll have to remind him of those facts.-
You wan free education and have everyone pay for it with Taxes? Ok. I agree to that. But not at the current College cost and charges. First, negotiate the prices, like the proposed Drug pricing. A degree is a fee schedule just like Medicare / Medicaid. Secondly, drop the qualifications to get into the most highest qualifications. Thirdly, no more sports revenue for the colleges. That must go back to keeping their costs down.
Wouldn’t that be a wonderful usage of our tax dollars. Not allowing all the High Level, Pro-liberal, High cost, schools to follow the Socialists agenda. And, they don’t get paid until you graduate.
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what is the Socialist agenda you mention in higher education?
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Free public education. Nothing more Socialist than that! Except Social(ist) Security, Medicare, the VA, the Post Office, The Fed, etc.
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We have free public education now, right? It’s not really free as we pay taxes but it’s not like we’re charging kids at the door to learn until they graduate high school. Overall I think the whole education system could use a re-think and there’s people that know more about it than I (not Betsy F’ing DeVos). I think getting kids equal opportunity is 1 thing. There’s places where kids are reading text books that say one day a man will land on the moon. Making sure kids can get on a track to a career. That might be a trade, going to medical school, or somewhere in between. These are the people that are going to be paying for the social programs that you mention as our generations age into retirement. It’s important that they can be as successful as possible. It will only make our country stronger.
The VA is a takes care of veterans. Sign up for the armed forces and get VA.
The Post Office cost money last time I checked.
The Fed isn’t even a government entity.
If you’re worried about socialism worry about corporate handouts. All those Amazon trucks you see delivering are driving on streets they don’t pay a dime for.-
Quote from DICOM_Dan
Making sure kids can get on a track to a career. That might be a trade, going to medical school, or somewhere in between. These are the people that are going to be paying for the social programs that you mention as our generations age into retirement. It’s important that they can be as successful as possible. It will only make our country stronger.
The VA is a takes care of veterans. Sign up for the armed forces and get VA.
I deal a fair amount with teenagers who are planning to go into goverment service and trades. If you talk to a recruiter, it is remarkable how many of todays high-schoolers are not eligible to join any of the branches of the military. They are either too fat, have already picked up a drug record or they are unable to score enough points on even a basic aptitude test.
If you’re worried about socialism worry about corporate handouts. All those Amazon trucks you see delivering are driving on streets they don’t pay a dime for.
They pay motor fuel taxes through IFTA, HVUT and others. Some of those taxes go to the state, some to the feds who parcel them out through the highway trust fund. You can argue that motor carriers dont pay enough, but that statement is simply incorrect.-
I know someone who was fat in high school and joined the USMC. They will get you in shape. The whole drug thing falls into the equal opportunity thing. Theres more socioeconomics at work. The government hands out money differently. So if youre from a poor area you might be in one of those schools with 0 hope to do anything. If youre in a wealthy area you might have a school thats palatial.
Check out this book by Adam Cohen. Its sheds a lot of light on inequalities in schools.
Supreme Inequality: The Supreme Court’s Fifty-Year Battle for a More Unjust America
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Diversity, yeah!
And if it doesn’t work out, it’s white people’s fault.
You know, the ones that had the aptitude, scored well on tests, and weren’t fat in the military before the immigration act of 1965. Like blacks at that time, destroyed also by the government “patriarchy” that very year. LOL, ask Lyndon Johnson, or study history.
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Quote from DICOM_Dan
what is the Socialist agenda you mention in higher education?
I believe the Majority of all profit taking colleges are left leaning and are the ones that are creating their own mess by charging so much in the first place. They already go their money from past clients. I just curious on what would happen if tax payer higher education becomes law. Would it be required for them to reduce their rates or take a fee schedule per degree. I’m just blasting out ideas or thoughts here. Nothing more. How will Yale / Harvard / UCLA get paid and how much?
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[link=https://www.cnbc.com/2020/10/23/biden-proposes-forgiving-10000-in-student-debt-for-public-service.html?__source=twitter%7Cmain]https://www.cnbc.com/2020…_source=twitter%7Cmain[/link]
[h1]Biden proposes to forgive [b]$10,000 in student debt in exchange for public service[/b][/h1]
Democratic presidential nominee Joe Biden has proposed creating a program that offers $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years.
According to [link=https://joebiden.com/beyondhs/]the proposal[/link], Individuals working in schools, government and other non-profit settings will be automatically enrolled in this forgiveness program; up to five years of prior national or community service will also qualify.
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Not a bad idea depending on what qualifies as public service.
The better idea is to fix the loans on the front end though. Everyone keeps talking about forgiveness on the back end.
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Cubsfan showing again why he is one of the few really intelligent posters on the board.
Biden proposes a lot of stuff. Who cares, he’s a loser and will be forgotten soon, then in jail a little later than that.
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[link=https://thehill.com/policy/finance/535786-financial-firms-brace-for-bidens-consumer-agency-chief]Financial firms brace for Biden’s consumer agency chief
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The ideological pendulum is now set to swing sharply to the left if Bidens top choice, [link=https://thehill.com/people/rohit-chopra]Rohit Chopra[/link], takes over the agency.
Chopra, a member of the Federal Trade Commission (FTC) since 2018, was among the CFPBs first senior officials and has pushed the envelope on how far the government should go to punish consumer abuse.
As the CFPBs first student loan ombudsman, Chopra was a fierce critic of how servicers handled struggling borrowers. He later made headlines at the FTC for his condemnation of Facebook.
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should also crack down on predatory lending post haste
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Quote from dergon
[link=https://thehill.com/policy/finance/535786-financial-firms-brace-for-bidens-consumer-agency-chief]Financial firms brace for Biden’s consumer agency chief
[/link]
The ideological pendulum is now set to swing sharply to the left if Bidens top choice, [link=https://thehill.com/people/rohit-chopra]Rohit Chopra[/link], takes over the agency.
Chopra, a member of the Federal Trade Commission (FTC) since 2018, was among the CFPBs first senior officials and has pushed the envelope on how far the government should go to punish consumer abuse.
As the CFPBs first student loan ombudsman, Chopra was a fierce critic of how servicers handled struggling borrowers. He later made headlines at the FTC for his condemnation of Facebook.
[/QUOTE]OMG! Socialist Biden is anti-Capitalist & will crack down on the Wells Fargos and such.
It is the right of American business to gouge profits off the “marks,” you know, what everyone else calls “customers.”-
Biden weighing plan to forgive $10k-$50k student debt per person via Exec Order.
[link=https://www.wsj.com/articles/biden-administration-weighs-forgiving-student-debt-by-executive-action-11612476685]https://www.wsj.com/articles/biden-a…on-11612476685[/link]
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How can you exec order debt away?
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Quote from DICOM_Dan
How can you exec order debt away?
[link=https://www.forbes.com/sites/robertfarrington/2020/12/17/can-biden-really-forgive-student-loans-by-executive-order/?sh=39b92d811eed]https://www.forbes.com/si…order/?sh=39b92d811eed[/link]
[b]Can Biden Really Forgive Student Loan Debt by Executive Action?[/b]
The question of the legality of [link=https://www.forbes.com/sites/robertfarrington/2019/06/25/the-moral-hazard-of-student-loan-forgiveness/?sh=1bb13a54364c]sweeping student loan forgiveness[/link] by executive action isn’t cut and dry. Warren and her colleagues argue that we should recognize “the Secretary of Education’s broad administrative authority to cancel Federal student loan debt under the existing authorities of section 432(a) of the Higher Education Act of 1965 (20 U.S.C. 1082(a)).”
Financial planner Ryan D. Brown of [link=https://quaxel5.net/v1/t/c/bba60e4a-6ab9-bc81-b156-e52fa31716f7/outlk:7c132fe7-bd78-4fe2-9595-33e792159eb4/Multiple%20Recipients/https%3A%2F%2Fwww.crmyersassociates.com%2F]CR Myers & Associates[/link] says that, if the President were to unilaterally forgive some level of student loan debt among student loan debtors, the legality of the Presidents power to do this would likely make its way up to the Supreme Court to be adjudicated.
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[link=https://www.forbes.com/sites/sarahhansen/2021/01/13/report-trump-lawyers-argue-that-forgiving-student-loans-via-executive-action-is-illegal/?sh=38bc99242fc5]https://www.forbes.com/si…legal/?sh=38bc99242fc5[/link]
[b]Trump Lawyers Argue That Forgiving Student Loans Via Executive Action Is Illegal[/b]We believe the Secretary does not have the statutory authority to cancel, compromise, discharge, or forgive, on a blanket or mass basis, principal balances of student loans, and/or to materially modify the repayment amounts or terms thereof, Education Department principal deputy general counsel Reed Rubinstein wrote in the memo.
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Quote from DICOM_Dan
How can you exec order debt away?
It’s good to be king. Student loans are underwritten by the government. The servicing is at times contracted out, but the underlying note is held by the US Treasury. So yes, a sufficiently corrupt president could make that debt disappear with the stroke of a pen. -
[link=https://twitter.com/GregStohr/status/1582793186480529409/photo/2]https://twitter.com/GregS…93186480529409/photo/2[/link]
Brown County asks SCOTUS to emergently intervene to stop Biden student loan debt forgiveness from going into effect.
(Judge recently refused to allow the suit –
[h3][link=https://fox11online.com/news/local/federal-appeals-court-chicago-brown-county-taxpayers-association-halt-student-loan-forgiveness-plan-joe-biden-bcta-lawsuit-constitution]Court rejects Brown County Taxpayers Association request to hat student loan forgiveness ..[/link])[/h3] -
Supreme Court Justice Amy Coney Barrett has rejected the latest bid to block President Biden’s student loan-relief plan.
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It feels performative. They have to do a few of these so they dont look totally bought and paid for.
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hopefully it’s ruled unconstitutional after the midterms.
(a) It will have served whatever purpose it can for the current elections. People would have forgotten about it by 2024, so maybe the Dem’s can re-use it then. Honestly, I think that’s the best option for the Democrats– hey we tried, the SC threw it out b/c they’re partisan, we need you in 2024 so we can get this through!
(b) I’m no constitutional expert, but obviously there are concerns on that front which is why Biden admin trying to shape it so no one has standing to bring an actual suit.
(c) I definitely hope it’s not constitutional. This should have to be done by Congress. Saying “this is part of President’s pandemic emergency powers, b/c we’re trying to make student loan recipients whole” is so obviously ridiculous that I can’t believe they even hope it passes muster.
So, it’s a political stunt. As I said, now that it made it to the midterms better for Democrats if it gets tossed out. Guessing they know that too.-
Unconstitutional maybe. But student loans are fundamentally defective in repeating past government sins. Instead of taking full responsibility the government tries to have it both ways, Pontius Pilate for administering the loans by farming out administration as well as profits to the private market but fully responsible for guaranteeing the banks the government will pay for default and make it virtually impossible for the person taking the loan to default regardless of everything, creating prime hunting grounds for predatory lending and predatory schools.
Regulate the sh1te out of federal loans making it difficult for predatory loaners & schools to profit & take the interest on the loans for the government.
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Quote from Frumious
Unconstitutional maybe. But student loans are fundamentally defective in repeating past government sins. Instead of taking full responsibility the government tries to have it both ways, Pontius Pilate for administering the loans by farming out administration as well as profits to the private market but fully responsible for guaranteeing the banks the government will pay for default and make it virtually impossible for the person taking the loan to default regardless of everything, creating prime hunting grounds for predatory lending and predatory schools.
Regulate the sh1te out of federal loans making it difficult for predatory loaners & schools to profit & take the interest on the loans for the government.
pretty much agree with this
student loans are a massive problem that needs to be addressed; the Biden thing doesn’t fix it at all. Hope the SC throws it out and we get something better.-
If the SC throws it out you will be guaranteed nothing better will come regardless. Conservatives and REpublicans are opposed to making it better as they do not believe government has any role in any of these things. The worse things happen the better for a couple of reasons starting with Biden’s look at not being able to fix it down to the core problem, why fix a problem giving Democrats headaches?, “giving away” $ to stupid people – they all have to be stupid, yes?, it’s part of the definition that only stupid people get into financial trouble. Whether it is Wall Street, banks or investors in 2008 selling and buying derivatives of no value as 1 small example or people taking out school loans they can’t repay later.
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Yes. Fundamentals defective.
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Quote from dergon
Biden weighing plan to forgive $10k-$50k student debt per person via Exec Order.
[link=https://www.wsj.com/articles/biden-administration-weighs-forgiving-student-debt-by-executive-action-11612476685]https://www.wsj.com/articles/biden-a…on-11612476685[/link]
Feeding the student loan racket rather than fixing it. Nice.
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I personally would prefer a generous loan forgiveness plan tied to participation in a national service corps or similar.
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First stop the bleeding, then go after the cause.
The racket has existed for over 40 years now. Not something that will easily be solved by Executive Order only. another example of socialism for the rich & Darwin capitalism for the rest of us. We tax payers, including those holding loans take all the risks while the banks collect the profits.
I agree, I’d prefer to have some sort of national service linked to forgiveness but again, that takes time & Congressional participation to set up and administer. Linked to this should be the government going after predatory lending as well as predatory and no value schooling that encourage students take out these loans and then provide poor education in return. Caveat emptor yes, but blaming only the victims of scams solves nothing but provides legal protection to the scammers. See Trump University as an example.
Trump did a lot to create chaos and a big mess and siphon more of people’s money up to the already affluent but the problem existed and developed decades before Trump. It’s not going to magically disappear by clicking our magical ruby slippers together, it’s going to take work. Especially against the vested rich interests who like the present system that allows grifting.
Gee, someone should set up a Consumer Protection Department to go after this sort of legal corruption victimizing so many (see Wells Fargo as 1 example). Wonder why no one thought of this before.-
Also why is college so expensive? Your getting education back for your dollars but how much should it really cost.
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Yes, but should government get involved in setting cost of private colleges?
How?
State universities are already much cheaper than private. There are quite a few who are very competitive with the best Ivy League universities. And for the first 2 years, community college is a good way to acquire the core for a lot less $. Again, some very good ones.
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Quote from DICOM_Dan
Also why is college so expensive? Your getting education back for your dollars but how much should it really cost.
Because the government puts no effective cap on how much students can borrow. If government student loans were capped at 1.2x of the average of the main public universities in the subject state and neighboring states, the private colleges would make do with that.
Wholesale forgiveness of student loans just feeds the beast.
While old Joe is in a forgiving mood, I suggest he knock 50k off every 7a SBA loan given to a young enterpreneur.
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No disagreement with fw’s suggestion and I am not sure if wholesale forgiveness is appropriate and logical and it begs the questions, do these limits apply only to undergrad degrees? And since this is a board that includes many physicians, why not apply a limit to medical school loans? And other post-grad school loans?
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Quote from Frumious
No disagreement with fw’s suggestion and I am not sure if wholesale forgiveness is appropriate and logical and it begs the questions, do these limits apply only to undergrad degrees? And since this is a board that includes many physicians, why not apply a limit to medical school loans? And other post-grad school loans?
Medschool and lawschool are the biggest scam in education.
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Quote from fw
Quote from Frumious
No disagreement with fw’s suggestion and I am not sure if wholesale forgiveness is appropriate and logical and it begs the questions, do these limits apply only to undergrad degrees? And since this is a board that includes many physicians, why not apply a limit to medical school loans? And other post-grad school loans?
Medschool and lawschool are the biggest scam in education.
True but at least med school usually guarantees one employment in the form of residency/fellowsip[:D]
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So an interesting thing. I posted about this on Facebook, and this topic has provided literally the first bipartisan open, articulate, substantive, non-hostile debate on a political topic in many years. It makes me a bit more hopeful that we might turn a corner.
Student loans are a tough nut to crack. I don’t know the answer. If you subsidize at the federal level you are going to encourage institutions to jack up prices and compete on things that attract students, not necessarily improve education.
If you take the federal government out, then most lenders would see very little value providing loans to 19 years completely lacking collateral… unless, of course, you prevent the ability to discharge that debt in bankruptcy.
If you allow discharge by bankruptcy the interest rates would have to be as high as a pay-day lender to make it worth the while of a bank to give the loan.
One of the interesting ideas a friend of mine tossed out is the idea of a federal student loan program akin to Medicaid. The government reimburses directly to the institution at a set rate. If they decide to participate in the loan program then they must accept that rate for any admitted student using the program. -
[b]Senate Bill Clears Hurdle to Forgive Student Loans[/b][/h1]
[link=https://www.wsj.com/articles/senate-bill-would-clear-hurdle-for-student-debt-forgiveness-11614974747]Wall Street Journal[/link]: The provision, added by Senate Democrats this week, would remove any tax consequences for households whose student debt is forgiven through 2025, saving them thousands of dollars. Federal law typically treats any forgiven debt as taxable income.
The provision would make it easier for President Biden to forgive student debt through executive action, as congressional Democrats have pressed him to do.-
How about they just let us write off the debt we’ve paid, for those of us who have paid in full?
Oh yeah, that would make the fake debt even worse. Haha,
HODL away! -
Quote from dergon
[b]Senate Bill Clears Hurdle to Forgive Student Loans[/b]
[link=https://www.wsj.com/articles/senate-bill-would-clear-hurdle-for-student-debt-forgiveness-11614974747]Wall Street Journal[/link]: The provision, added by Senate Democrats this week, would remove any tax consequences for households whose student debt is forgiven through 2025, saving them thousands of dollars. Federal law typically treats any forgiven debt as taxable income.
The provision would make it easier for President Biden to forgive student debt through executive action, as congressional Democrats have pressed him to do.
The problem is still not at the back end (loan forgiveness) but at the front end – easy/extreme loan lending leading to higher and higher tuition costs.
This is a bipartisan F up and I’ve yet to see anyone provide a good solution.
Loan forgiveness is a rich person bailout and will give colleges even more reason to raise their tuition and hire admin staff they don’t need.
I owe a lot of money but I knew what I signed up for and I’m happy to pay it. The wealthy don’t need a bailout.-
I have not seen the proposal for any actual forgiveness plan yet.
Is it going to be just wiping the debt clear and the lenders have to eat it? Or will the federal government structure payment to the lenders? Or some number of cents on the dollar in between?
But yes, it does seem like appeasement to the Bernie/Warren college base.
If the lenders eat the whole thing that migth destabilize the future lending market by forcing some to get out and others to raise rates… which then forces the federal government to become the primary lender.
But… up side … you might see lots of people suddenly buying homes, cars etc as they get out from the loan burden… so could be more GDP pop.
And, while if I was a kid who joined the military and served because I couldn’t afford college I might be angry, overall it’s probably good Democratic politics.
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There’s a good article on it. It’s 1.6 trillion total and it would only produce 90 billion in cash to be spent out in the economy. That’s a total wipe, of course, but it’s not much of a boon to the economy unfortunately.
[link=https://www.forbes.com/sites/zackfriedman/2020/11/24/student-loan-forgiveness-wont-provide-economic-stimulus/?sh=47a6c66873a8]https://www.forbes.com/si…mulus/?sh=47a6c66873a8[/link]
I would LOVE to see a 10k forgiveness + an interest rate cap and/or lowering + some skin in the game for universities + some reduced federal loan amounts/guarantees.
10k forgiveness is the most I would do. It actually helps the most people in the most equitable way given the spread of the debt out there. Anything more than that is a wealthy person bailout. That being said, the 12 months or so we have had of no interest/payments has equaled a lot of money for people.
Right now it’s a bad crony cycle of government lending anything needed, colleges asking for more tuition, colleges wasting the money, government giving more money, colleges asking for more tuition, etc. A large number of students are held captive by these universities with broken dreams and promises.
Is there some self responsibility in there for choosing that 200k gender studies degree? Of course. But right now there is no accountability on the universities at all to actually provide what people are buying which in essence is a a productive spot in our society. Heck, they aren’t even required to spend any of their own endowments back into tuition (which they should as non-profits) AND they even have the balls to ask for donations!-
With student loans , there are no private lenders. There are processors, but ultimately the feds hold the note.
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[b]Biden Will Forgive Debts for Students Defrauded[/b][/h1]
[link=https://www.rollingstone.com/politics/politics-news/for-profit-college-loan-fraud-1144167/]Rolling Stone[/link]: The Biden administration announced it is rescinding a Trump administration rule that only gave partial relief to borrowers defrauded by for-profit institutions. The decision could affect 72,000 borrowers who received less than complete relief under the Trump-era formula and grant them a combined $1 billion in canceled loans.
While the Obama administration made it possible for students defrauded by for-profit colleges to secure complete loan relief starting in 2015, Trumps education secretary, Betsy DeVos a [link=https://www.brookings.edu/research/betsy-devos-for-profit-colleges-education-america/]friend[/link] of the for-profit education industry who [link=https://www.washingtonpost.com/news/grade-point/wp/2017/01/17/dems-raise-concern-about-possible-links-between-devos-and-student-debt-collection-agency/]had investments[/link] in a student-debt collection agency changed the rules to make it harder for borrowers to get that relief. And even if they were approved for relief, it was only partial. -
Biden Will Cancel $1 Billion In Student Debt[/h1]
The Biden administration has reversed a controversial Trump-era policy that will lead to the cancellation of roughly $1 billion in student debt for borrowers who were defrauded by their colleges, [link=https://edition.cnn.com/2021/03/23/politics/student-loan-forgiveness-biden-administration/index.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fcnn_allpolitics+%28RSS%3A+CNN+-+Politics%29]CNN[/link] reports.
The change will deliver full loan forgiveness to 73,000 people who were deemed eligible for the relief under former Education Secretary Betsy Devos but received only partial loan forgiveness after she changed the cancellation calculation. -
[link=https://thehill.com/homenews/administration/556071-biden-administration-reverses-trump-era-policy-that-hampered-probes]Biden administration reverses Trump-era policy that hampered probes of student loan companies
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The move essentially rescinds a policy implemented under former Education Secretary [link=https://thehill.com/people/elizabeth-betsy-devos-0]Betsy DeVos[/link] that pressed loan companies affiliated with the department to avoid responding to requests for information from outside parties, including state attorneys general.
Instead of finding reasons to deny these requests, we should be spending our time partnering with state agencies to effectively oversee our loan servicers and debt collectors. Effective today, were getting rid of the Bradfield Memo and replacing it with a new memo setting out a different approach. Now, when we receive these requests, our staff will be ready to work with our state partners to review them quickly and approve them whenever it is possible to do so, Cordray [link=https://blog.ed.gov/2021/05/stronger-partnerships-with-state-allies-to-protect-student-borrowers/]announced[/link].
A memo Cordray released outlines the new policy and calls for a streamlined and expedited process for officials to request information as part of investigations into student loan companies.[/QUOTE]
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[h3][link=https://www.forbes.com/sites/zackfriedman/2021/07/14/biden-cancelled-40-billion-of-student-loans-this-way/]Biden Has Now Cancelled $40 Billion Of Student Loans Since January [/link] —[/h3]
[h3][link=https://www.forbes.com/sites/zackfriedman/2021/06/02/biden-will-review-student-loan-forgiveness-here-are-5-potential-changes/]Biden Will Review Student Loan Forgiveness[/link] –Specifically, he wants to change income-driven repayment plans so that student loan payments are based on 5% of monthly discretionary income[/h3]
[b][link=https://www.nytimes.com/2021/07/16/upshot/student-loans-biden.html]Possible Winners and Losers in a Student Loan Proposal[/link] – [/b]
Who would be helped by a 5 percent income cap suggested by the Biden campaign? High earners could wind up reaping the biggest benefits.
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Supposeyour child just decided they, at this time, [do] not want to go to college but youre paying taxes to forgive somebody elses obligations. You may not be happy about that.” ~ Nancy Pelosi questioning the wisdom of student loan debt forgiveness.
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Infrastructure bill reportedly contains [link=https://www.judiciary.senate.gov/imo/media/doc/FRESH%20Start%20Act%20of%202021%20One%20Pager.pdf]The FRESH START Through Bankruptcy Act of 2021[/link][color=”#222222″],[/color]
[color=”#222222″]would make federal student loan debt dischargeable in bankruptcy after 10 years[/color]
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Biden now thought to be considering $10k of student loan debt forgiveness. Tied to some max income cut-off, maybe $75k/yr
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That will be funny. So a resident or fellow will get forgiveness. But a first year attending or someone that moonlighted in residency will get shut down. If it ends up being 50k, I could see some people doing a second fellowship. 50k tax free is like an extra 100k in income if you factor in the taxes on 100k of income at the top marginal rate. Heck if I was a fellow now, I would add a mams felllowship to my CV and collect my 50k.
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We should just make it cheap to free for people who have skill sets to become doctors, nurses or fields we need. Charge double for weird liberal arts.
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Quote from dergon
Infrastructure bill reportedly contains [link=https://www.judiciary.senate.gov/imo/media/doc/FRESH%20Start%20Act%20of%202021%20One%20Pager.pdf]The FRESH START Through Bankruptcy Act of 2021[/link][color=”#222222″],[/color]
[color=”#222222″]would make federal student loan debt dischargeable in bankruptcy after 10 years[/color]
3/4 of that debt will be law school debt.
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I have about $10k left on my mortgage – I want the government to pay it off since I was good about paying for my kids schooling. I think that’s a fair trade.
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