June 25, 2019

"Will those later [student loan] debts be forgiven, too? If not, the plan would create a generation of student loan lottery winners..."

"... with losers on either side. People who had already paid back their loans would get nothing. People with future loans would get nothing. People with debt on the day the legislation was enacted would be rewarded. If, on the other hand, the legislation creates an implicit promise that all kinds of future student debt will also be forgiven, it could have unintended consequences. The Sanders and Warren plans control the cost of public undergraduate education by setting tuition to zero and keeping it there. So financing public higher education would become a matter of the federal government and states deciding how much they want to spend on higher learning. The universities would have no pricing power, because there would be no prices."

From "Canceling Student Loan Debt Doesn’t Make Problems Disappear/Plans from Bernie Sanders and Elizabeth Warren could have unintended consequences" (NYT).

117 comments:

Michael K said...

Fake News. No chance that will happen.

Unknown said...

Sounds like immigration. How does NYT feel about that?

Lincolntf said...

In some ways it's appropriate, as many college degrees are virtually worthless, might as well make them literally worthless, but obviously it's a horrible idea, dreamt up by wooly brained Academics who don't realize they'd be cutting their own throats.

tcrosse said...

Never mind the unintended consequences. The intended consequence is to buy votes. Period.

Achilles said...

Lets give rich people more money.

Standard leftist plan. Funny how almost everyone ends up dirt poor everywhere leftists take over.

Everyone but them.

n.n said...

Same problem as medical. Progressive price, not cost. Immigration reform. Shared responsibility. Then there are the socially appealing, practically unproductive, degrees.

n.n said...

Lets give rich people more money.

Redistributive change. Perhaps not in theory, but in practice, every time.

Yancey Ward said...

Free everything seems to be what young people want, and they will likely get it good and hard.

mccullough said...

Like reparations, this is just A Chicken In Every Pot bullshit campaign promise.

Much more plausible to cap the salaries and benefits of all staff at any university that receives federal funding or accepts federal student loans. Of course, Liz and Bernie’s wife made a lot of money off Big Academy.

So this will never happen. But it’s a solid proposal. Just like taking Tom Steyer’s wealth. Let them live under their own rules first before imposing their bullshit on others and exempting themselves from it.


mccullough said...

Anyone who falsely claimed Cherokee heritage must turn over all their assets to the Cherokee Nation.

Propose that bill.

tcrosse said...

To paraphrase PJ O'Rourke, if you thing college is expensive now, wait 'til it's free.

AlbertAnonymous said...

Everyone knows, or should know, that these plans don’t work. Unless the “plan” is to nationalize it as a starting point to the socialism slide.

Of course it’s a vote buying scheme. Just like K Harris’ scheme to “give all teachers raises”. That’s NOT in any way a function of the federal government, nor should it be, unless (again) the plan is the slide into socialism.

Fortunately I’m old enough that, should we stupidly go that route, I won’t live to see much of it. My adult kids on the other hand... God help them.

Pianoman said...

Gee, you mean when the Federal Government creates a new gravy train, there's Unintended Consequences?

Gosh!

I'm looking forward to my doctoral program at USC being funded by the taxpayers. I wasn't planning to go, but if there's debt cancellation on the horizon, I'm gonna enroll.

When you tax something, you get less of it. When you subsidize something, you get more of it.

cubanbob said...

3/4 of the country hasn't gone to college and never will but they are supposed to absorb this hit for something that never benefited them. Marvelous. The counter should be get your debt forgiven and in exchange you never get a tax deduction or credit of any kind for the rest of your life.

Pianoman said...

Speaking of vote-buying, looks like Hiawatha Warren is proposing "gay reparations". If you think the number of gay people in the country is high now, wait until that legislation is passed. The number of gays in the country will increase tenfold.

Shane said...

So....of say i have a student loan of 100,000.00.
They forgave it. I would know owe the irs 25000.00 dollars in taxes.
Now!!!!
They would cpme after my bank, house, ect.....no free lunch here , move along now just democrat cow patties again.

walter said...

What else? Mortgages?
Or is not housing a "right"?

Mike (MJB Wolf) said...

It isn't going to happen. Ever. It's a dumb play to boot. Once the public hears that Bernie wants YOU to pay for rich Harvard lawyers to get a degree or for the modern myth-makers at the Columbia Journ-o-lism School to get their tuition paid by YOU then this idea will die faster than the Roseanne remake without Roseanne.

Kevin said...

Free tuition. Unlimited immigration.

I’m sure people are going to be surprised when free college is found to be unavailable.

BleachBit-and-Hammers said...

Pandering to the taker class.

stevew said...

Things that are free don't exist, and if they are made so do not last. Great idea for eliminating college education. Harvard is the most notable of higher learning institutions that could afford, by way of its endowment, to charge $0 for tuition. Maybe one of the economics professors there could explain to Warren and Sanders why that is so.

Humperdink said...

Drain the endowment funds first to pay for this new and improved entitlement.

KheSanh 0802 said...

The really great thing about this plan is that the students that got good jobs and paid off their loans will now be taxed to pay for the schlubs who never paid back anything. What a wonderful deal!

BleachBit-and-Hammers said...
This comment has been removed by the author.
KheSanh 0802 said...

@ Mike Wolf: what ever did happen to that Roseanne remake? Is it still extant?

Bitter Clinger said...

Student loan debt can be forgiven. What's another $1.5 trillion? The real issue is how to make sure it doesn't happen again. An 18 year old seeking help financing an education is like a startup company. An upfront investment is required to secure an expected future cash flow stream and there are no assets to use as collateral. How are start-ups funded? Not with debt but equity. Equity investors will offer attractive terms to potential students who are likely to have significant future earnings and unattractive terms to those who aren't. If we have to forgive existing student debt, it should be coupled with outlawing student debt and mandating equity financing. If we can't get that passed, then require the educational institution to back the debt (co-sign the loan or put up collateral).

Pianoman said...

If nothing else, you can see which groups the Democrats think they need to pander to:

* Blacks : Reparations!
* College Students : Loan Forgiveness!
* LGBTQ : Reparations!
* Hispanics : Open Borders!

If the Dems can't keep these four groups on the reservation, they're in trouble.

Funny how Jews don't make the cut. No reparations for anti-Semitism?

chuck said...

We have too many going to college. Rather then sending everyone to college, we should send fewer and improve high school education instead.

Michael K said...

Much more plausible to cap the salaries and benefits of all staff at any university that receives federal funding or accepts federal student loans. Of course, Liz and Bernie’s wife made a lot of money off Big Academy.

Lay off 10,000 administrators.

PM said...

I'm for it if it's retroactive to what I spent on two kids.
Nothing sells me out like free money.

tim maguire said...

A poorly thought out liberal program?

Unpossible!

loudogblog said...

"The Sanders and Warren plans control the cost of public undergraduate education by setting tuition to zero and keeping it there. So financing public higher education would become a matter of the federal government and states deciding how much they want to spend on higher learning. The universities would have no pricing power, because there would be no prices."

That's not exactly how it works unless they're officially planning on nationalizing all public undergraduate education. The universities will still be setting prices and the Federal government will be setting a reimbursement limit. What exactly will happen when the two numbers don't match up? (BTW, I can't actually read the entire article because it's behind the NYT's paywall.)

Hagar said...

I believe there already are a good many exceptions in the existing law such that students entering 'socially desirable' vocations will have all or a part of their student loans 'forgiven.'

Perhaps might as well, since they may not have any intention of repaying their 'loans' anyway.

Gahrie said...

I'm getting pretty fucking tired of being responsible and doing the right thing while the government rewards those who act irresponsibly.

Tommy Duncan said...

This has the potential to create a massive backfire. Our family struggled to put 6 kids through college without creating debt. Deferred gratification was the name of the game. Now, in addition, my family will be forced to pay the college bills of today's college kids. Seems like double financial jeopardy to me.

BleachBit-and-Hammers said...

Why not get a handle on tuition costs?
Why not get a handle on the entire top-heavy unnecessary administrative structure of the university system?

All sorts of administrative busy-bodies clutter the system, from top to bottom.
From the over-paid University president to the dean of which-hunt - we are talking incredible salary structures. Why not start with Universal Bureaucratic University Whore reform?

*fixed

wholelottasplainin' said...

@Bitter Clinger:

It's a batshit crazy idea.

If we "forgive" all student debt, who is going to make up that trillion dollar hole in the budget? You know, to replay all the banks and government lenders that ponied up that money?

Why...the taxpayers! So, people who pay taxes will pay MORE so that students too stupid to understand what they were getting to---and urged to get into debt by the gummint and universities---will pay LESS.

Yeah...THAT's the ticket. THAT's "fair".

Kevin said...

Lay off 10,000 administrators.

Government-paid education is a bailout for the administrators.

It keeps the money flowing into the system that otherwise would have to adapt.

traditionalguy said...

This is EDU Joke 2.0. If they wanted better colleges they would fire all of the Administrators and let faculty run the place. This "plan" is another way to move the loot around the table to enable hiring 10 times the Administrators at 3 times the salary level.

Hagar said...

I started to read an article about health insurance and got down to a sentence that read something like, "if an MRI costs $3,500 at a hospital and $550 at a doctor's office, many patients will try to get theirs at their doctor's office ..." where I stopped reading.

BleachBit-and-Hammers said...

Why can't 18 billionaires simply write some checks and leave the rest of us alone?

The benefit for Bernie and Warren is that with enough power, they can fool the rest of us with their Marxist utopian economic illiterate promises and tax the middle class and upper middle class sweet spot, while leaving the ultra mega wealthy, alone. As usual.

Mike (MJB Wolf) said...

KheSan it died quickly.

Roseanne is now touring with Andrew Dice Clay in "The Mr. and Mrs. America Tour" comedy show.

Bay Area Guy said...

They should have all those Leftwing colleges dip into their healthy endowments to pack all these student loans.

Mike (MJB Wolf) said...

North Dakota is doing the right thing now. The state is asking why there are so many diversity programs yet the Sioux are unrepresented on campus. That is, the largest group of minorities in ND is completely unrepresented by any "diversity" scheme at state colleges, and the State wants to know what all this $$$ is being spent on in the name of diversity.

Known Unknown said...

I still think you need a "No Shit" tag, but it's your blog.

rehajm said...

implicit promise that all kinds of future student debt will also be forgiven, it could have unintended consequences

Could have?

Dave Begley said...

A much better idea is to make student loans dischargeable in bankruptcy. Eric Salwell has a bill for that.

Kevin said...

We have too many going to college. Rather then sending everyone to college, we should send fewer and improve high school education instead.

Why fix high school when everyone can just go to college?

Once it's free, they can learn to read and write there.

After all, tuition-free college will become "a right to an education".

At that point, who can tell you you're not prepared to go?

Not an oldster. said...

Social security
Immigration
Reparations
Student debt forgiveness


Some will hit the timing jackpot, some will not. Think of those crushed at the gates at that WHO concert riot...

Tommy Duncan said...

Let me add that the plumbers, cops and carpenters in my extended family would not be happy paying for the college education of a bunch of elitists majoring in gender studies.

This proposal is pure Harvard elitism. Joe Lunchbox is not impressed.

rehajm said...

I'm more cynical about this than most. Yes, it's buying votes with other people's money but I suspect a fair fraction of the motive is the strong undercurrent of the contempt and envy academics have for the economic success of the productive economy. It's appropriate redistribution for the service from their brilliant minds, in their minds.

WK said...

Maybe it could be like Medicare. Or single-payer. They could call it CollegeCare. If you like your college, you can keep your college. Government negotiates the rates they pay for credit hours. Reasonable and customary. What could go wrong?

rehajm said...

Of course, professors can suffer from contract envy as easily as any professional sportsball player. Lots more Porsche 911s darting around Hanover now that Dartmouth equalized salaries with their peers in Boston and New York. Never mind the cost of living is lower in New Hampshire. Rotten thinking like that is no way to earn yourself a tenured position...

Tommy Duncan said...

This proposal is also racist. We all know there are three paths through high school: College prep, Trades and Prison. What does college debt forgiveness do for you if you are working at the car wash after 10 years in cell block "D"? This proposal is aimed at whitey and the wanna-be-whites.

WK said...

The follow on program could be called CareerCare. After you pick a (free) major that has no possible career prospects, the govt will create and pay you a living wage in the field of your choice. By that time it will likely be an agricultural field. Kind of like Khmer Rouge. We could even reset the year to 0.

Rick said...

This is a pretty big mistake since the left needs to hide its true beliefs to win elections.

Pianoman said...

@Rich: They've stopped hiding, and have come out in the open. Youtube deplatforming was when they decided to take off the masks.

The question is whether the DNC can rein it in. Right now, it doesn't look like they can.

Sanders / Warren 2020 : Everything Is Free!

phantommut said...

"Why has college gotten more expensive?"

"With no real incentive to control costs (the consumers of the services provided have access to easy credit, and colleges face no consequences when consumers default) Higher Education now spends money like a drunken sailor on shore leave."

"So how do we fix this?"

"Let's throw more money at the problem!"

stlcdr said...

People should see this as a 'unicorn in every pot'. Unfortunately they lack the education to see the flaw in the proposition.

ALP said...

Having paid off not one but TWO student loans - I probably shouldn't even TYPE how I'll feel about this. Wait, our household has paid off three loans total if you count my SO.

This is aimed at getting more 18 year old voters (or their parents). Can't imagine voters that, like me, scraped by for years paying diligently every month would go for this.

What about foreign students or J-1s? Will they pay no tuition either?

Michael K said...

Our family struggled to put 6 kids through college without creating debt. Deferred gratification was the name of the game. Now, in addition, my family will be forced to pay the college bills of today's college kids.

I did the same for my first four kids but, by the time the last one was ready, tuition had increased by 300%. I had to take out a Parent loan that I'm still paying for. I had promised all kids that they would get a bachelors. Those that went on to grad school were on their own. The changes were amazing. The first two, tuition and living costs (dorms), were less than half the tuition for the last one.

rehajm said...

They've stopped hiding, and have come out in the open. Youtube deplatforming was when they decided to take off the masks.

In case you missed the widespread reporting of this...

Paul said...

No good deed goes unpunished.

Pay back your loans, pay your taxes, obey the speed limits, etc... are just for suckers... at least that is what Bernie and AOC feel.

Ken B said...

Aside from the stupidity and consequences, what does proposal say about who is valuable and who is not. The Gentry class, the university educated, are the valuable people, and the ONLY valuable people in fact, since we will pay to “upgrade” the others.

Bitter Clinger said...

@ wholelottasplainin'

What can't happen won't. Many those young people will not ever be able to pay back their loans. Even among those who can, they will put off marrying, children, homeownership, etc. That's a whole nuther dicussion if you think these things don't matter.

Regardless, let's say that student loan debt forgiveness is "bad" and "unfair." I'm not happy about the idea either. My wife and I went to state schools to minimize our education costs and paid off our considerable student loans. Now we'll be taxed to pay off the loans of other people too. I'm willing to eat that cr*p sandwich if it comes with a fix to the problem. The cost of higher education has increased more rapidly than real-estate, health care, or any other key sector of the economy. It did so in part because of government subsidy. The banks and colleges get their money regardless of whether the student had any chance of realizing a good career as a result of their education.

Fix the system and I'll back loan forgiveness. No fix, no forgiveness.

Dust Bunny Queen said...

This sounds like another Tea Party tipping over event. The Dem's better watch out :-D

Remember what started the Tea Party? It was the idea that people who took out stupid mortgages that they could NOT afford or for which they were NOT qualified would be given a free pass. This pass was at the expense of those who were frugal, who saved, who struggled to live withing their means.

Obama's mortgage bail out plan angered people and was the impetus for the Tea Party."How many of you want to pay for your neighbor's mortgage!!!

Rick Santinelli summed up the feelings of ire and frustration.. EPIC RANT!!!

gspencer said...

"it could have unintended consequences"

Good one.

Bitter Clinger said...

@ everyone who writes "they took the debt, now they can pay it back." Society has decided that 18 year-olds are too young and stupid to drink or vote. But they're wise enough to decide whether they should take on major debt that is not dischargeable in bankruptcy? And they're supposed to be mature enough to go against the culture that pushes them toward college? Riiiiggghhht!

Hagar said...

Why has a college education become so expensive?
Because the colleges can get away with scamming the government.

The big advantage of a capitalist system is that it is self-correcting.

Bitter Clinger said...

@ Dust Bunny Queen: Yeah it was pretty awesome how the Tea Party elected President Romney!

jaydub said...

"Free" European public colleges have little in common with the US higher education model, and converting the US public higher education system essentially to a similar tuition free model will be very disruptive. I am most familiar with the Spanish model for higher education, but similar situations apply in other countries. Specifically, in Spain only the top 17% or so of high school students are given the educational foundation (essentially junior and senior years of high school) required to go on to a university while the rest are primarily channeled into trade schools, apprenticeships or directly into the work force at age 16, or after 10th grade in the US model. If you are a late bloomer, hence not in the top 17%, then your chances of ever attending college are negligible because you are not going to get the basic qualifications, at least not on the state's dime. Public colleges charge minimal fees (around 500 euros per year) to attend, but everything they offer is also minimalist as compared to US colleges, including very large classes, little personal interaction with professors, no athletics, no gymnasiums, no student centers, no cafeterias, no dorms, no fraternities/sororities, no campus other than educational buildings, no parking and no coddling. Housing and meals are the student's responsibility and are obtained on the economy. All majors are not necessarily available at all schools, and entrance examinations are used to help sort out who gets their first choice of school and major and who doesn't. Student's who do not maintain their academic standing are sent home.

This type of model offers considerable infrastructure savings to the state as compared to US public universities, i.e. more on the order of US community colleges than public universities, and that is one reason the European countries can offer “free” tuition and fees. For example, The University of Seville, a well regarded school, occupies a single square block in the middle of the city. Students who think the taxpayers are going to pay for the current college infrastructure and experience are almost certainly in for a surprise. And, just as the case with European medical care, huge adjustments in expectations will be required. Specifically, it ain't going to be pretty when Bama cancels it's football program. I think the term is “be careful what you ask for.”

Drago said...

DBQ: "Obama's mortgage bail out plan angered people and was the impetus for the Tea Party....
...Rick Santinelli summed up the feelings of ire and frustration.. EPIC RANT!!!"

LLR Chuck despised the Tea Party and Rick Santinelli.

In fact, he also despises their communities and their families.

All it takes to get on LLR Chuck's potentially bad side is opposition to any obama/dem policy.

And vocal opposition to dems is the absolute worse from Chuck's point of view.

Rick said...

stlcdr said...
People should see this as a 'unicorn in every pot'.


Saying this at the debate could win the election for Trump.

BleachBit-and-Hammers said...

Bitter Clinger -
Are you forgetting the House and the Senate?

Epic take-down of Obama power. Sadly, the D-whores have the cheap machine installed deeply deeply in CA.

Rick said...

The question is whether the DNC can rein it in. Right now, it doesn't look like they can.

Maybe. The Dem conflict is between those who believe their institutional and cultural power is now strong enough to overwhelm any opposition so anything they can think of should be demanded [AOC, Sanders, Warren, etc] vs those who think incrementalism can keep opponents from fighting back effectively leading to larger gains [Biden, DiFi, www].

Biden is leading at the polls and Pelosi is openly criticizing AOC, so there's still a fair amount of conflict about which tactic is likely to prove more effective. Pelosi is an interesting study. She used to be in one group but is now in the other. That shows how extreme the Dems sprint left has been even over this relatively short period.

Rumpletweezer said...

I'd pay money to have them explain their plan to a group of people who were responsible for their own educational expenses, like those who paid back their loans or worked their way through college. I just finished paying for my daughter's degree in IT. I'd like to be in the audience.

Molly said...

Pianoman and others: What's in the Democratic platform for the soccer moms? May I propose: forgiveness of credit card debt?

Bitter Clinger said...

@bleachbit Hiw much of that impact was Tea Pary response to the mortgage bailout and how much was a response to Obamacare? Unfortunately the TP’s impact was much less than they or I hoped.

I truly believe higher ed is a bubble. The longer we wait to deal with it the worse it will be. Someone gets screwed at the end of every bubble. Will it be me or will my kids get it even worse?

Dust Bunny Queen said...

@ Dust Bunny Queen: Yeah it was pretty awesome how the Tea Party elected President Romney

@ Bitter Clinger. I don't suppose you noticed that Romney (Mr. Plastic Man) was not elected? Why do you suppose that was?

Given a choice between shit sandwich #1 and shit sandwich #2 many of the Tea Party types just decided to skip lunch altogether and concentrate on local and state elections where they could make a big impact.

You think people aren't noticing the similarities to the free goodies for slackers in Obama's mortgage "forgiveness" plan and the proposed everyone gets out of jail free for college loans? And that the people have figured out who are the chumps in both scenarios.

Hint: Not those who foolishly got themselves into debt for things that they didn't need, useless degrees, super expensive universities instead of junior college and so on and so on. Nope the people who will be paying for other peoples foolishness...it is those who scrimp, save, live responsibly within their means.

Perhaps we should wear Yellow Vests in solidarity with those pissed off French people and all just have a nice cuppa tea.

BJM said...

I'm all out of fucks to give about any of this. No matter who wins, the outcome will be chaos as systemic failure is already baked in.

daskol said...

Here are some circumstances under which I could imagine supporting student loan forgiveness:

1. must be accompanied by explicit statement that the increase in debt, and tuition costs, have arisen as a result of previous govt attempts to make college more accessible. Sorry about that, folks--we meant well, but we take responsibility for distorting the costs of higher education.

2. make colleges/universities accountable for current and future debt accrued by its students. Colleges/universities, not just taxpayers, have to participate in the loan repayment. If colleges/universities are unable to share in the loan forgiveness burden, their students lose some or all access to future student loans. Going forward, loan agreements with students name the college/university as the first accountable party should students default on loans. Maybe other loan types exist, where there is no accountability for the college or university, but the most favorable loan terms would require such accountability.

As to the folks who've already paid their debt, well, to some extent thrift is its own reward. Congratulations, you take care of your bills. You'll probably continue to do so, and you won't be a drag on our society. Nothing like the above is likely to transpire, but it must be acknowledged that a couple of generations of youthful people burdened by nondischargeable student debt, not buying houses or starting families, is a major drag on our society. It will hasten our decline, as will the 4-6 year immersion in nonsense that is so much of college education these days. A program like this will not only alleviate the debt burden, it will alleviate the burden on our society represented by so many of these institutions that we'd be better off without.

Bitter Clinger said...

@DBQ So you’re saying the TP was so ineffectual it couldn’t even get a fiscally responsible candidate the nomination of the nominally fiscally responsible party?

Dust Bunny Queen said...

@DBQ So you’re saying the TP was so ineffectual it couldn’t even get a fiscally responsible candidate the nomination of the nominally fiscally responsible party?

@ Bitter Clinger

I guess you have some severe reading comprehension issues...But to be fair...I could have been clearer.

Romney was shit sandwich #2. Besides being unpalatable, there is the fact that he is a weenie whining pushover who let the debate moderators shove him around. If you can't stand up to Candy Crowley (or whatever fat chick that was then), how the Hell can you stand up for the United States in the foreign arena.

Romney's recent prima donna in a snit performance makes me even more glad that he lost.

In addition, the US needed to suffer 4 more years of Obama to finally "get it". And we did! Good and hard.

Hence, Trump

alanc709 said...

I repaid my student loans, so I think I'll demand reimbursement, plus interest.

gilbar said...

presumably this will mean k-20 school. Better hope you live in a good district!

alanc709 said...

I'll agree to student loan forgiveness if the program includes confiscation of all college endowment funds to finance the program.

MayBee said...

I say sure, forgive student debt. If you also give us back the money we paid for our kids to go to college, so we can put the money in our retirement savings.

Fen said...

If Sanders wins, the wife and I are going to max out student loan debt and go back to college. Art History or something equally fun and frivolous.

Because this will be just like the Mortgage Crisis - we're going to get shafted with the bailout so we might as well pile on.

And I'll haunt and terrorize the Poli Sci dept.

Fen said...

I see a lot of good ideas, but they don't matter. This is how it's going to go down:

They will "compromise", throwing your Point #4 and #5 right out. The GOPe will then pretend to cave and will let them water down your Point #3 into nothing. Your Point #2 will he turned into a dark money laundering operation to deplatform conservatives. Point #1 they will concede to but never enforce.

Remember not to bargain with Marxists. I can't give you cautionary examples because those poor sobs were all airbrushed out of history.

Don't try to negotiate deals with the people who want you enslaved to their Socialist State.

If you really insist, I can get you a sitdown with the Devil and cut out the middlemen. You may offer your soul for a promise of future negotiations about it's status. Pinky swears.

policraticus said...

Cancel all subsidies for Universities.
Cancel all subsidies for Student Loans.
Allow banks to charge normal interest on loans taken out to attend college according to the risk of the loan.
Allow people who take these loans and then fail to declare bankruptcy and discharge the debt in a normal and orderly manner.

No more free lunches.

Michael K said...

Because this will be just like the Mortgage Crisis - we're going to get shafted with the bailout so we might as well pile on.

Have you seen the Steve Bannon Oxford Union speech ?

I hope he returns to the administration.

Michael said...

I worked very hard to put my children through private schools and colleges. They are all degreed with no debt. While I drove 15 year old cars my neighbors sent their kids to public schools and bought Mercedes and beach homes. Their kids borrowed for college. Meanwhile many investors thought it wise to lend to promising young people who would contribute to society and pay them back from the earnings that were the fruit of their educations.

On the other hand I may cobble together fake loan documents with me as the lender.

eric said...

If my mortgage debt is cancelled they take my house.

If my vehicle debt is cancelled, they take my car.

If your diploma debt is cancelled, you need to give up your diploma.

It shall be as though you never attended a college or university. Your credential shall be expunged from the record.

And if your job you've been working at for 5 years requires the credential? Then you shall be fired and replaced by someone who opted to maintain their credential and pay their debt.

lgv said...

So, 15 million college students at $30k per year is $450 billion per year. That is roughly the amount of the new Wall Street transaction tax, which means it will only take care of the new "free" college, not the existing student debt.

That doesn't take into consideration that another 30 million will want to go to college now that it is free and they will stay longer. Nor does it take into account the revenue will be lower than projected because the moment you tax transactions, you will see a reduction in transactions.

So, once the government is paying for it all and it becomes unaffordable, then comes the rationing. We will be right back to the 15 million students, some of whom get theirs paid for and others who don't. I'm about to retire, but I sure as hell will head back to grad school if it's free.

Can't wait. I have no Wall Street transaction taxes to pay for.


I'm Full of Soup said...

Unintended consequences? You think?

So yes, I would like to recoup all my college tuition money in today's value.

Temple University tuition only was $450 per year when I went there in the early 70's and now it's about $20,000.

I went to Villanova in 1970-71 for just one year and the annual tuition only was $1,800 and now it's probably $45,000.

So I will get a nice big check! Vote Bernie.

I'm Full of Soup said...

1st thing is to get the fed govt out of the education business. Except maybe give every citizen a big fat check maybe $50K when they graduate from high school and let them use it anyway they want: for drugs, or new car,or trade school or college tuition, buy a business, round the world trip, etc. Think of the great comedy movie ideas that will come of giving a big check to 18 year old kids!

DavidUW97 said...

Give students the choice. Repay your debt with cash or if repaid by the taxpayer, a taxpayer will be Joane randomly for you to be indentured to until your debt is repaid.

DavidUW97 said...

Chosen. Not Joane although Joane could be the taxpayer.

wholelottasplainin' said...

Hagar said...
I started to read an article about health insurance and got down to a sentence that read something like, "if an MRI costs $3,500 at a hospital and $550 at a doctor's office, many patients will try to get theirs at their doctor's office ..." where I stopped reading.
************

You might be surprised to learn how often stuff like that actually happens. (not with an MRI, but for simpler procedures.)

In the Lahey Clinic system outside Boston, there's "hospital facilities charge" added to anything a doctor actually does to you. I had a cortisone shot in my knee at the Burlington Lahey Hospital, and found an extra $500 tacked onto the fee---and that's the extra I would have to pay myself, not my insurance.

I raised bloody hell, and got it reduced, but not not totally.

But now I'm forearmed: when I later had to get another such injection I made sure I got it at a local Lahey facility, and NOT at the hospital, in order to avoid that surcharge.

Bandits!

Francisco D said...

What's in the Democratic platform for the soccer moms? May I propose: forgiveness of credit card debt?

It looks like I am screwed with any debt forgiveness plan.

I paid my way through undergraduate, waiting tables and selling shoes. I earned a competitive academic scholarship to a university doctoral program and worked as a research assistant.

I always pay off my credit cards to avoid the usurious fees for carrying a balance.

Every house I bought was for less than the bank would mortgage. Every car I bought was less expensive than I could truly afford.

I lived a responsible, fiscally conservative life and saved for retirement. I did almost all the right things.

What will the government do for me?

Birkel said...

If you just pay the Danegeld just the one time...

"Some ass hole is always trying to ice skate uphill."
--Wesley Snipes in a movie role

DanTheMan said...

>>What will the government do for me?

Tax you. Since you have money. The irresponsible have nothing to take.

Michael K said...

So yes, I would like to recoup all my college tuition money in today's value.

Temple University tuition only was $450 per year when I went there in the early 70's and now it's about $20,000.


Absolutely ! I had a full scholarship to medical school when tuition was $1200 a year. It's now $57,000.

I used to ask my students if they were using student loans for tuition. All would raise their hands.

I would ask if any had considered the military, which will pay tuition plus a salary ? Nope.

Unknown said...

The only way the Warren and Sanders plans could work with zero cost college is rationing. It would not be free for everyone because there would not be enough $. This is how it works in Germany. Most people do not go or go to a trade school. You can call it free but you will be lying.

Unknown said...

It is also telling that Bernie's wife literally bankrupted the college she was running. A warning for anyone paying attention.

cyrus83 said...

Forgiveness would do nothing to address the reason why student debt has become such a problem. Arguably Sanders and the Democrats don't want to solve those problems because higher education is filled with their supporters and they don't want to end the financial gravy train.

Rather than outright forgiveness, simply allow students to again discharge this debt in bankruptcy after a waiting period of 5 to 10 years. Bankruptcy isn't consequences-free but it can and should be available to those who dug themselves too deep a hole.

On a go-forward, federally-backed student loans should go away, as that would force colleges to figure out how to be affordable if they wanted to survive and would make banks consider their risks more carefully. I doubt that's happening, but if federal loans continue, schools should have to be a co-signer on those and make good on the debt if the student either can't pay or discharges the debt in bankruptcy. Loans also need to be limited to 10 years, none of this extended repayment nonsense until people are ready to retire.

Gahrie said...

Rather than outright forgiveness, simply allow students to again discharge this debt in bankruptcy after a waiting period of 5 to 10 years. Bankruptcy isn't consequences-free but it can and should be available to those who dug themselves too deep a hole.

The problem now is that people are borrowing more money than they can afford to repay and often for worthless degrees. How would your suggestion make things better and not worse? I know several people right now who continue to borrow money and enroll in courses they don't need, simply to keep the repayment period from starting. Many of them would jump at a chance to declare bankruptcy and get rid of the debt.

We need to:

A) Get the federal government out of the student loan business.
B) Tie the amount you can borrow to the real world earning potential of the degree you are pursuing.
C) Force colleges and universities to slash costs and administration.
D) Stop promoting the idea to students and parents that you are a failure if you don't go to college.
E) Provide resources for an apprenticeship program to encourage kids to go into needed jobs, and employers to take the time and resources to train them.

I'm Full of Soup said...

If you read between the lines, the Warren plan,I believe, is for free community and state college. That would effectively disembowel and devalue private colleges which is what the Dems want - they want to funnel all Americans from day care thru college into the public school liberal indoctrination system.

All employees of private schools and colleges: Beware because they are coming for your employers and your jobs.

PackerBronco said...

Free college tuition is a very indirect way of dealing with the crying need of our country for more Lesbian Dance Theory majors.

PackerBronco said...

If this ever becomes law, I demand reparations for all of the years I spent paying for my college tuition.

Henry said...

Unknown said...
The only way the Warren and Sanders plans could work with zero cost college is rationing. It would not be free for everyone because there would not be enough $. This is how it works in Germany. Most people do not go or go to a trade school. You can call it free but you will be lying.

Germany also has regressive taxation.

Henry said...

It seems to me that the moral hazard of "what about the frugal people" is easily solved, or at least, particularized. You do some means testing, you do some kind of payback to those who've already paid, you increment the program slowly, etc. etc.

It was actually rather depressing how many readers at The New York Times responded with that "I gave at the office" response. Not because it isn't valid, but because it simply begs a tactical question. But those people have to speak up if the year of jubilee isn't a crock.

The strategic issue is how higher education can actually be made tuition free. The commenters here have already identified the problems, from administrative costs to free-ridership.

The article at the link points out other issues, including the loans associated with private colleges, and the fact that the largest amount of student debt is associated with graduate school. Let those alone, they are not the problem.

One affordable approach would be to expand low-cost, commuter-school, night-class, two-year colleges. Make those affordable schools even more affordable, with more degree or certificate programs, and you're helping a much broader range of people. Give more businesses more reason to hire candidates with those two year degrees and you've got a paradigm shift.

Henry said...

To put it another way, if a politician objects to student loan debt, they should also object to businesses -- and government -- using a 4 or 6 year degree as an employment requirement. I want to hear Warren attack businesses for that practice as vociferously as she attacks on other points.

Jon Burack said...

What is amazing is how Bernie, of all people, can be in favor of such a horribly regressive social policy. All taxpayers will bear the burden of relieving college students of debt, and relieving the better off students at the best schools of the most debt. I guess this does favor the true constituency of the Democratic Party, but soak the rich it exactly is not.

Michael The Magnificent said...

If students had to apply for a student loan at a bank, and the loan was not government backed, students would have to justify the loan the way businesses, home buyers, and auto buyers do, with the possibility of having to back them up with collateral.

That would be the end of worthless degrees with no earning potential. No more taxpayer-backed quarter-of-a-million-dollar student loan debts for useless masters degrees in puppetry.

Henry said...

Serendipity: I just came across the article in The Atlantic that makes my point:

By privileging existing workers, licensure rules increase income inequality, and they do so specifically by shifting income toward older workers. When licensure standards exclude felons, they also disproportionately affect minorities. Young people, and especially minorities, are increasingly being legally prohibited from work....

But even for workers who don’t need a formal license, barriers to work have grown over time. Jobs that once required a high-school degree now require a college degree. This escalation of credential requirements has created a kind of educational arms race. The rise in collegiate attainment, again, did not begin with Boomers. Rather, the GI Bill, and the explosion in new university chartering that it underwrote, created a new norm of college education for many jobs. With the rising availability of higher education, employers, who tend to be older than their employees, often demand degrees as licenses.

Henry said...

The Boomers Ruined Everything by Lyman Stone.