"They often borrowed to go to professional schools for degrees in law, medicine and business. They don’t have much trouble handling their payments, and their default rates are low.
By contrast, a majority of
people holding student debt have moderate incomes and low balances. Many have no degree, having dropped out of a public college or for-profit vocational school after a few semesters. They carry little debt, but they also do not get the benefit of a college degree to help them pay off that debt.
Defaults and financial distress are concentrated among the millions of students who drop out without a degree.... A full 30 percent of first-generation freshmen drop out of four-year colleges within three years.... Delinquency and default leave a longstanding blot on credit records, keeping borrowers from buying homes and cars, renting apartments and getting jobs. By allowing borrowers to once again get access to credit, housing and job markets, forgiving loans can therefore have a real effect on lives and the economy.... I once thought forgiveness to be an expensive Band-Aid, a distraction from fundamental reform. But I have seen so little progress on these issues that I now think we must make amends to those we have harmed...."
ADDED: Dynarski fleshes out something
I said 5 days ago when someone questioned me for saying, seemingly flippantly, "It's only $10,000":
My point is that the individual borrower only gets $10,000 in relief. It's just a gesture at the problem. It's like when they put $2000 in our bank accounts. Okay. Nice. You appreciate it, but you're basically in the same position.
There are some people for whom $10,000 is the whole thing and they are struggling to pay. For them, isn't it more trouble to try to collect than to just say forget it, go and borrow no more?
पोस्ट्स
१६१ टिप्पण्या:
Plumbers, paralegals, and project managers bailing out doctors, diversity post-grads, and lawyers.
Democrats. Party of the 'little guy'.
What I find hilarious is the some of same people who think Bernie Sanders is an A+ Socialist - also think that forcing tax payers to pay for SOME student loan forgiveness is nuts.
So question to Harvard econprof Susan Dynarski:
Would you support Harvard taking the haircut? They were the recipients of the dollars.
Or do you want the taxpayer to take the haircut?
Or put differently, do you support the taxpayer giving their dollars to the $50+ billion endowed Harvard?
Fuck these people. They were conned fair and square out of High School that they needed college and loans to pay for it. Personally, I enjoy the soul crushing result of their youthful folly. I'm sure we all feel the same delicious Schadenfreude for the greedy lazy stupid family farmers drowning in debt forced to sell out to Bill Gates for dimes on the dollar.
All the New Soviet Democratical staffers at the White House, Senate, House and Fed Govt saw all the money the Biden's/Pelosi's/GOPe-ers etc made from selling influence and money laundering US tax dollars thru foreign actors (russkis, ChiCom's, Iranians, Ukrainians) that they thought, hey, why don't we get into that action?
Hey, that's the only reason Washington DC really exists anymore.
"those we have harmed...."
How did you harm them? And why?
But I have seen so little progress on these issues that I now think we must make amends to those we have harmed...."
From "Why I Changed My Mind on Student Debt Forgiveness" by Harvard econprof Susan Dynarski.
Seize the entire Harvard endowment.
Seize the retirements of all professors and administrators of Harvard.
Seize all property and investments held by Harvard.
Sell all of this property and liquidate the assets.
Pay off The student loans.
If we are going to do this, we need to stop telling everyone they need to go to college. I'm going to guess a good 90% of these people who dropped out knew before they went that college was not for them.
By allowing borrowers to once again get access to credit, housing and job markets, forgiving loans can therefore have a real effect on lives and the economy.
If understand this Harvard economist correctly, we should forgive the loans for dropouts with small levels of debt, because they lack a degree to obtain a job that would allow them to service that small (< $10,000) debt. The forgiveness would then free them to obtain credit (new debt) for housing and other things. I agree, thus continuing trust in people with a track record of failing to payback loans will have a real effect on lives and the economy.
Ride Space Mountain...Indeed.
Also - normals bailing out useless green haired girl Social Justice degrees.
"targeted debt cancellation is the best way to undo the damage done to millions of borrowers by a persistently dysfunctional system of college funding and student loan repayment"
Even by prog standards, this is such BS.
Not a hint of of the basis for executive action to simply cancel debt, in a way Congress did not fund or authorize.
Note the passive voice: the "damage done." Actually we are talking about adults consciously taking on obligations. Not that it matters in progland.
The "dysfunctional" system has long been promoted by progs. It was supposed to be more fair and save taxpayers money--claims that were ludicrous from the outset, of course. In fact, the dysfunctionality consists of the leeway to corrupt education financing and tun it into giveaways to favored groups. A feature, not a bug.
Since the system is so dysfunctional and unfair, obviously progs will now support doing away with it--right? I mean, no more lending to unsuspecting hapless saps of the kind that now need to be bailed out with other people's money--right?
So “most” of the forgiveness recipients are deadbeat dropouts and NOT graduates holding worthless Chicano Studies degrees? And that fact changed an Econ professor’s mind on this still unspecified huge bailout?
I’m not convinced. But I am impressed how no matter the stupidity of Big Government the NYT is there to carry water for Democrats. I mean they have the Nobel winning economist on staff. Do you really need this random illiterate Econ chick to sell this poorly thought through policy of Sleepy Joe. One HE RAN AGAINST strongly. What a bait and switch.
And when these same debtors get in trouble with their car and home loans, do we bail then out again?
OT: Pennsylvania radial left antifa democrat insults Blacks.
I would support a true needs based debt forgiveness maybe similar to bankruptcy that considered current and potential family income, but they aren't interest in that because that won't benefit the politically active who could pay if required.
Decades ago, I taught the standard Freshman rhetoric courses at a state school.
My students were almost entirely AA kids from the NYC public school system. I learned quickly that most were illiterate or close to illiterate. My job devolved into teaching elementary school reading and writing.
They disappeared from class one by one over the course of a semester until only half the class was left, but I’m certain the school hooked them up with a student loan.
These kids simply had no business being in college.
Shared responsibility and rationalization in the woke... wake of diversity [dogma]. Bidencares is a forward-looking ethical solution a la Obamacares for sustainable progressive prices and availability.
OT cont..
The White left look down on blacks
One of the features that doesn't make the headline is the stealth forgiveness built into the rest of the plan. For repayment purposes, the definition of disposable income is decreased. ie, more expenses are considered manditory.
At the same time, repayments are reduced from 10% of monthly disposable income to 5%. This is a huge giveaway, when combined with the forgiveness of all loan balance after 10 years if you work for an NGO or the goverment. Any guess how NGO or Gov employees vote?
Further, this bailout sets up an expectation of the next bailout in 5 years without any fundamental fixes. both students and colleges will surely borrow more and raise fees
So question to Harvard econprof Susan Dynarski:
Would you support Harvard taking the haircut? They were the recipients of the dollars.
Progressive prices and returns with equity and inclusion of a minority. An ethical conundrum, indeed.
"These kids simply had no business being in college."
And now, with the elimination of standardized testing as an entrance requirement, more illiterates will be joining. To what purpose? It's hard to imagine how this will work, other than perhaps by eliminating grading altogether. YOU get a college degree, and YOU get a college degree, and YOU...
The 'students' don't have a loan now... you do folks. Between MORE inflation and taxes rising, YOU will pay for their folly.
F*ck Biden and ...
Miss Trump Yet?
Open up the bankruptcy courts to people with student loan debt.
It's farcical (and evil) to allow every other debtor a path to forgiveness...
While you close off the bankruptcy courts to students.
Biden is simply trying to bribe people to vote for him. His "solution" will just make the problem worse, as universities will increase tuition costs yet again. Universities pretend like they are in the public interest. And yet they are massive profit machines. Instead of blessing them with yet more federal dollars, we should try to help the kids who have been scammed by "educators" who charge obscene amounts to indoctrinate kids with a useless ideology that won't help you get a job.
‘Seize the entire Harvard endowment.
Seize the retirements of all professors and administrators of Harvard.
Seize all property and investments held by Harvard.
Sell all of this property and liquidate the assets.’
And then start the RICO prosecutions for fraud.
No notion of where the money is coming from.
The chump factor.
Republican ad: "You pay your debts? Biden making you feel like a chump? Just stop voting for Democrats."
Hunter Biden's tax payer funded Hooker: "OT: Pennsylvania radial left antifa democrat insults Blacks."
Howard, were you in Pennsylvania?
What does she mean by "we?" I've always been opposed to government guaranteed college loans for all the obvious reasons. Spiraling college costs, taking advantage of naïve kids, declining quality of a college education as it degrades into a racket, etc. That said, there is something to be said about the effects such debt has on the rest of the economy. My wife is a Realtor(c) and has worked with young couples who have issues buying a house because of the amount of college loan debt they have. Not that that matters because by 2030 we will own nothing and be happy.
I’m with Quayle and Achilles, seize all of the Ivy leagues assets and use that to pay off the student loan debt. If President Biden can unilaterally forgive student debt, than he can seize any property or asset to do as he wills.
I now think we must make amends to those we have harmed...."
What's this "we" shit? Speak for yourself, if you held a gun to someone's head to sign the loan papers.
Colleges admitting students who can't or won't graduate with a useful degree - how did this ever happen? Who is to blame? How can we fix it? First step might be forcing a private lender to have skin in the game, like every other lender . . . Thanks, Obama!
Paul Begala told Howard it was okay to publicly oppose the idea of using tax dollars to pay off students college debt.
Not to worry lefties. If Begala and company change their minds on this policy tomorrow then Howard will as well.
"Actually we are talking about adults consciously taking on obligations."
If they're not adults consciously taking on obligations, we maybe have to start rethinking the legal voting age.
If carrying student loan debt is that big of a problem, the .gov shouldn’t be issuing / guaranteeing them. End all new loans.
This opinion appears to be ignoring the additional changes being made to the repayment program beyond simply forgiving a portion of each borrower's debt.
Biden also announced an extension of the student loan repayment moratorium for even those loans he didn’t write off. That will cost billions of dollars more, because the suspension of student loan repayments costs taxpayers over $52 billion per year.
Moreover, Biden did something far more momentous today than just a one-time write-off of $300 billion in student loans. He announced the Education Department’s intent to revise income-driven repayment plans in a way that would allow students who foolishly attend expensive colleges to largely avoid repaying their loans, by cutting their payments by well over half. As a result, many borrowers will pay only a trivial amount each month, and can stop paying anything at all after 10 or 20 years, no matter how much of their student loan balance remains. The remaining student loan balance will be written off, at taxpayer expense.
Minding The Campus
I'm advocating a tax credit for all those who paid off student debt if we decide we want to forgive the debts of those who are in trouble. First of all, as this article shows, the majority of those who paid what they owed were in modest circumstances similar to those who did not pay their debts. It was difficult for those who paid to make payments and they should be given a financial boost, too. Second, it would unify all behind the debt forgiveness/ tax credit since all would benefit. Third, it would remove the obvious unfairness of making those who paid their own debts now responsible for those who did not pay. There'd be single large debt owed by the US and whatever the US is going to do about that would happen to everyone equally. That's fair.
I am sure that progressives’ immolation of college entrance standards has little to do with the problem.
It's another story off the seemingly limitless pile of fact-free spin stories to justify bad policy by the Democrats. It seems rather pointless to point out the destructive moral hazards- the inequity of forgiving loans of the indebted and under/unemployed in a full employment economy at the expense of the families that worked two shifts and drained their savings. Hey we bail out airlines, and banks so let's give the little guy his turn, they say...
Ultimately, despite what MMT says, the burden falls to the taxpayers. It will end $1 Trillion or $10 Trillion or $20 Trillion in bailouts later, when flaky Harvard economists will ask 'How could this happen?' You should have walked down the hall and knocked on Mankiw's door...
In an unrelated story, every building trade in Beaufort County and Douglas County is willing to hire any warm body willing to show up- take your pick of trades. Your instructors will be tradesman with three or four years of experience and you'll recognize them by the brand new trucks they are driving, tricked out with lots of options and paid for with cash...
I also see this morning a watchmaker school in Miami is willing to offer you a stipend to attend their school, which is also free. A high paying job in Geneva or anywhere else awaits upon completion...
Susan’s thesis is, because we have not done the right thing yet, we must immediately do the wrong thing. This is modern “ pen and phone” policy making that rots out our government.
Long periods of inaction followed by a short flurry of dubious pseudo legislation. The pseudo legislation containing hidden Easter eggs for the chosen.
Who's "we"?
Who controls public education in this nation?
Why are so many public schools failing minority children and poorer children?
shhh - don't ask. Just obey.
Remember when the banks gave Hunter Biden a position as a vice president right out of college and Joe Biden ramrodded the bill that made student loans non dischargeable in bankruptcy?
Oh, that’s right, yesterday never happened if you are a liberal.
Nowhere mentioned in the Professors discussion: fixing the current student loan system to prevent ongoing harm. The spigot stays open, apparently. But “we” (who?) caused harm so “we” (i.e. taxpayers) get stuck with the bill while “we” (everyone making money off of inflated tuition driven by easy credit) get to continue on with nothing changed until the next bailout.
"make amends to those we have harmed"
We? We?? If you as a Harvard econ professor have harmed a bunch of kids then you should definitely make amends--good for you. How does that involve taking my tax money, though? Why am I a part of your "we?"
those we have harmed...."
THEY took out the loans. THEY signed them. THEY must pay their own debt. If not, why not pay for mortgages. There are a lot of people who were forced to stay home that couldn't pay their mortgages. WHY leave them out?? What about the car loans?? People need their cars to go to work. WHY leave them out?? Veterans. They served us. They deserve a payout from taxpayers before the lazy college kids who hate America do. So sick and tired of the left dividing us.
Well, she has clarified the problem. I taught at a poor community college in central Florida. I made about $6 an hour with a Ph.D., and the department "head" told me just to not assign reading or writing assignments and show lots of media instead of working so hard. Or, at all. His finals were glue stick projects using rap music idols and stuff like that. I'm not kidding.
Nearly all the teachers were adjuncts like me. More than 60% of the students could not perform at remedial levels of reading, writing, or math. I'd say 20% of my students could not read. In any language.
About 35% of the students belonged there: they were adults becoming pharmacists and young people racking up college credits cheaply while waiting to move on to four year schools. They were motivated and bright, and I'm sure they are doing well and are financially sound. Some just had kids or family obligations which made community college the right choice. But the unteachable students were being bribed with Pell Grant cash to register for classes they could and would not succeed in.
Some hung around for six years, partying, racking up loan debt, and blowing the Pell cash given directly to them. I advised several promising but not academic students to quit, go work for a fast food place that offered a management track, or go into the trades. All they were doing there was being babysat while all their loan money was going to the duplicative deans, diversity dirtbags, and other sheer nonsense, most of it special events for racial and sexual minorities.
The problem is that there is huge pressure on all these kids to go to college, and community and state colleges are cash cows for all politicians (cough, lil' Rubio), and behind that, the trades have been decimated by illegal immigration, so many are no longer even training up legal workers: they just hire a bunch of guys off the street every morning. Should we forgive the debt or fix these problems? I say the latter, but that's a pipe dream. Make student loans forgivable in bankruptcy courts and start fining or defunding schools with large numbers of bankrupt former students. That's less of a pipe dream, at least. Oh, and former elected officials may not be hired for any position at public institutions in their state.
Like so many sensationalized political stories, this isn't gonna be settled until the courts are done with it. See you this time next year at the soonest.
gilbar's simple solution IF we Actually wanted to fix the "problem"
just make student loan debt included in bankruptcy debt
that's IT, problem solved
IF you're in over your head, and you can't pay your bills.. Declare bankruptcy
If you DON't want to declare bankruptcy, keep paying your bills
A class action lawsuit... politiplay with empathetic appeal. Pay it forward without the irony.
I wonder if Jeff Bezos have any student debt?
If they do, will they be able to get some forgiveness?
Both have incomes less than $125m most years.
John LGBTQ+ Henry
"These kids simply had no business being in college."
We'll just give them more Pell Grant money instead. No worries!
Under current legal theory a co defendant who was responsible for a small part of the damage can be forced to pay all the damages. This is the deep pocket idea used in environmental claims. I bet the schools were responsible for 5% of the problem.
The only way to make schools pay is for republicans to control government, academia is a democrat interest group.
If student loans were dischargable in bankruptcy it would become a ritual for all students to go bankrupt at the end of their last semester. This would normalize the stigma and it would not even affect credit ratings much as it would not be predictive of future consumer compliance to payment.
The proper solution would have been to make student loan debt dischargable in bankruptcy court. Then the people who really needed to get rid of or restructure this debt would get relief.
This is never mentioned.
Dynarski's claim that student-debt default is driven mostly by community colleges and for-profits is so wrong that it seems duplicitous. The figures given at the NYT site show that the default rates are much higher for those schools, but that ignores the fact that total enrollments in those schools are much lower (currently about ¼ of what they are at 4-year colleges). It turns out that each type of school is contributing similar numbers of total defaults. It is not the case that a vast proportion of defaulters attended community or for-profit schools.
Also, the argument that "it's only 10 grand, so why worry?" is just as easily the argument for raising the maximum loan balance forgiven in the next round--so not persuasive to me at all.
"Would you support Harvard taking the haircut? They were the recipients of the dollars." I've felt from the beginning that colleges should fund this program. They caused it. Loan forgiveness doesn't solve the problem of rising college costs--five times the rate of inflation in the US. I think the other mistake here is to extend the program to families with a combined income of 250K. 150 maybe.
And now, with the elimination of standardized testing as an entrance requirement, more illiterates will be joining. To what purpose? It's hard to imagine how this will work, other than perhaps by eliminating grading altogether. YOU get a college degree, and YOU get a college degree, and YOU...
When Willie Brown (Kamala's sugar daddy)was Speaker of the CA Assembly, he tried to get a law passed that black students at UC must be graduated regardless of grades. That was back when CA was still sane so it didn't pass.
My guess is that the bulk of those people with "moderate incomes" and "low balances" are teachers, and that this is basically a purely political payout to Randi Weingarten's clientele.
Otherwise, if the intent were really to target those hapless victims of for-profit colleges the income cap could be set at 35K.
I question the 30% dropout rate. Sounds very low to me. It has been a while since I had looked into it but I remember it as being closer to 50% of all students fail to complete a 4 year degree within 5 years.
In large part, college is a racket. Far too many students graduate no more qualified to earn a living than they did when they went in.
There is no benefit to them or to society to their degree.
One might even argue that they are less qualified to earn a living when they come out. College changes their attitudes and they may feel above most useful work. "If I can't find work in the gender grievance field, I won't work at all."
John LGBTQ+ Henry
Plumbers, paralegals, and project managers bailing out doctors, diversity post-grads, and lawyers.
The plumber who deducted his $80,000 pickup truck off his taxes doesn't really have the moral high ground here.
Oh, I see. A "majority of people" NEED to have their loans forgiven thinks the Harvard prof who "changed her mind" on the issue in the pages of the NYT.
What was the likelihood ever that a Harvard prof could be found who didn't believe the debts should be forgiven? What was the likelihood ever that the NYT wouldn't print something to justify QuidProJoe and Company's latest bribery?
Seize the entire Harvard endowment.
Seize the retirements of all professors and administrators of Harvard.
Seize all property and investments held by Harvard.
Sell all of this property and liquidate the assets.
Pay off The student loans.
There is an even simpler solution: make educational debt dischargeable in bankruptcy and make the schools eat the bad debt instead of the taxpayers. On a going-forward basis at least, we have no more problems here.
I believe this is the main reason a lot of young doctors sold their soul pushing the mRNA COVID shots as “safe and effective”. They also hopped on board with the false vilification of HCQ and Ivermectin.
By the time they finish school and an internship, start a practice, or work for a hospital group they are what, $300K in debt? If they get cancelled by liberals, or fired by the hospital group, they are fucked.
Such a shame that early on in their careers, the medical industry became fully politicized. Imagine being a 35-year-old doctor, and in 2020-2021 you were forced to violate the Hippocratic Oath and the Nuremberg Code for self-preservation.
The debt relief isn’t about the debt owed by any individual.
It is about continuing the current liberal College grift and the unlimited amount of money that flows into the system to support the arrogant Ivory Towers.
Colleges more that any institution pump out radicalized, programmed liberal graduates that we’re taught to “see the light” during their time on campus.
For them, isn't it more trouble to try to collect than to just say forget it, go and borrow no more?
We aren't saying go "borrow no more". There is no feedback loop. The economic costs of this program will be hidden in inflation numbers which will be blamed on everything from Climate Change to Russia. The moral costs of this program will just be ignored as "we had to do something!"
If it truly is about getting people out of debt they can't pay then why $125k a year income? And why only a single year? And I can't see anything in the program details where the debt has to have been unpaid for a certain time period. In fact there was a story today that the White House is recommending people go back to their lenders for refunds of the money they've already paid in over the Covid "payment pause" to get their 10k back.
In the article, she says that she supports "targeted" forgiveness, but that's not what this is. Student loan forgiveness will also become a permanent part of the Democrat platform. Meanwhile, college costs will continue to rise, with the expectation of future forgiveness.
For them, isn't it more trouble to try to collect than to just say forget it, go and borrow no more?
And what do you say to the kid who graduates in 2023 with $10k in debt and can't find a job because the dementia patient in the Oval Office has run the economy into the ground? Tough luck, shoulda been born sooner?
"I now think we must make amends to those we have harmed...."
Why does "we" always mean "me"
Someone please correct me if I'm wrong, but discharge of student loans in bankruptcy is no different in effect from Biden's magic-wand "forgiveness."
Student loans have no collateral to repossess and recoup some of the loan obligations.
And, as someone mentioned above, discharge proposals fail to recognize the moral hazard of students borrowing the maximum amounts permitted and immediately filing post-graduation bankruptcy. Bankruptcy as practiced today has lost the much of the stigma of being a "loser," a "failure," and a future "credit risk" (esp. if "everyone" is doing it), so there would be little-to-no individual downside of following the BR immediate-filing plan.
Finally, and also as someone mentioned above, it should all be about "skin in the game." Put the schools on the hook for a substantial portion of the loan, and just watch them snap to attention about who gets enrolled, grade minimums to continue matriculation, and grant of financially supportive degree awards. It could change the whole higher ed environment to one of actual higher learning adequate to a student's financially productive future.
Howard said...I enjoy the soul crushing result of their youthful folly
That's pretty sick dude. The colleges and the education establishment have bullshitted these kids for their own self-preservation. The debt relief is unfair, but the focus should not be on the victim of the predatory lending and the grift.
The focus should be on the pimps.
Beasts of England at 9:20am above has the correct moral approach:
Seize the entire Harvard endowment.
Seize the retirements of all professors and administrators of Harvard.
Seize all property and investments held by Harvard.
Sell all of this property and liquidate the assets.
And then start the RICO prosecutions for fraud.
Takimag is a bit of a questionable source for some people, but this week they did come out with an interesting article on "The Theater of Democracy"
The point of this drama is to place left-wing values on the moral high ground, enshrining them in the public consciousness as unassailable principles. In the case of school debt, this means the state has a moral obligation to manage the education of young people well into adulthood. The financial swindle we run on college students is patently immoral, so people are inclined to agree with doing something about it.
The role of the right is to shift the focus from the moral claims made by the left onto meaningless factual arguments. In this case, they will chatter on about the economic consequences and the precedent it will set. They are not factually incorrect, but they end up defending what amounts to predatory lending. A debt jubilee is bad economics, but it beats condemning young people to poverty.
The way the drama is supposed to go is the conservatives make their arguments, which vexes the audience. The left encourages them to boo and hiss at the conservatives, who become visibly nervous. At some point, the Mitt Romney character stabs a bunch of conservatives in the back and races over to the left. Other conservatives follow, some flee the stage, and those left behind absorb the fury of the crowd.
I wouldn't agree that the practical arguments are "meaningless." But the drama seems to involve turning up the moral outrage, so that anybody who raises practical objections is accused of wanting to crush the student loan debtors, to see them driven into debt slavery, and to hear the lamentation of the women. Ultimately, opponents either feel guilty and slink away, or they turn up the rhetoric to make up for it, which doesn't win them support.
Havard prof who profits from keep the student loan scam going. To many were wising up that the cost of college wasn't worth the risk and the cuts into the professor and administrator profits. What is unsaid, is the proposal expands a program that law schools currently benefit from. One that caps monthly payments then forgives the balance after 10 years for being a federal employee.
=========
"Under the Public Service Loan Forgiveness (PSLF) program, law graduates that go on to work in the public sector, which is a lot of them as the public sector employs many lawyers, only have to pay 10 percent of their discretionary income for 10 years in order to have their debt forgiven.
"Law schools figured out many years ago that, for a student who is planning to enroll in PSLF upon graduation, prices and debt loads don’t matter. Ten percent of your discretionary income is ten percent of your discretionary income regardless of what the law school charges you and how much debt you nominally have to take on."
https://marginalrevolution.com/marginalrevolution/2022/08/the-student-loan-giveaway-its-much-bigger-than-you-think.html
More people with useless degrees dependent upon their "faithful" service to the Party as government employees.
And while the median loan for Gen Z is only 12k (12% higher than Millennials) so $10K isn't peanuts, that giveaway is likely unconstitutional so won't materialize in reality but will be a cudgel to hammer the next, likely Republican controlled, House where spending bills must originate.
St Louis Fed post on comparing Gen Z and Millennial debt
https://www.stlouisfed.org/on-the-economy/2022/aug/how-does-gen-z-student-debt-compare-millennials
I was in Limerick PA last week and the McDonalds there, as was virtually every business, had big help wanted posters all over.
Starting pay was $15. One of the benefits was $2,500-10,000 per year in tuition assistance.
Tuition assistance has long been a common benefit with more than half of all American companies offering it. It will vary by company but typically it will cover all tuition if the employee maintains a certain grade level. Back in the 80s, when I worked at Alcon, I think it was 100% for A, 75% for B and 50% for C average.
I taught for 22 years on a Naval Station satellite campus (SNHU). Many of my students were active duty military and the Navy paid much of the tuition. Many of the others were civilian employees and employers offered assistance. My daughter had her masters degree (Engineering Mgt) paid by GSK where she worked at the time.
(Cont)
There's no "we" here. "We" didn't harm anyone. College loan debt forgiveness should not fall on taxpayers.
I seldom see this promoted. How many HS seniors know that they can go get a job working in a factory, warehouse, store, office or even a McDonalds and get some, most or all of their tuition paid for? While earning $15-20/hr ($30-40m/yr).
I worked the entire time I was studying. Navy, Alcon, Sales, Consulting. I doubt I ever worked less than 50 hours a week. Grad school was in San Juan and from home to work to school and home was about 100 miles, 2 or 4 nights a week.
It is not easy but there is no reason anyone who wants an education can't get one without taking on huge amounts of debt.
John LGBTQ+ Henry
I seldom see this promoted. How many HS seniors know that they can go get a job working in a factory, warehouse, store, office or even a McDonalds and get some, most or all of their tuition paid for? While earning $15-20/hr ($30-40m/yr).
I worked the entire time I was studying. Navy, Alcon, Sales, Consulting. I doubt I ever worked less than 50 hours a week. Grad school was in San Juan and from home to work to school and home was about 100 miles, 2 or 4 nights a week.
It is not easy but there is no reason anyone who wants an education can't get one without taking on huge amounts of debt.
John LGBTQ+ Henry
Let's put aside whether this is legally available to the executive branch to do, or where they are going to get the funds for this enormous, absolutely massive give away.
I have yet to see any analysis that indicates this will keep college debt levels down for more than a single year. This forgiveness is the equivalent of, to my understanding, perhaps 1 years worth of college debt burden to an average indebted student. Since the forgiveness does absolutely nothing to address the underlying root causes, and in fact strengthens those root causes, as far as I can tell this is a bonkers level of spend for something will revert to it's exact same state in....12 months or so.
What's the analysis on that, exactly? How is this one-time thing going to actually help anyone other than a narrow band of existing people while penalizing all others - including future student loan debtors?
Let's put aside whether this is legally available to the executive branch to do, or where they are going to get the funds for this enormous, absolutely massive give away.
I have yet to see any analysis that indicates this will keep college debt levels down for more than a single year. This forgiveness is the equivalent of, to my understanding, perhaps 1 years worth of college debt burden to an average indebted student. Since the forgiveness does absolutely nothing to address the underlying root causes, and in fact strengthens those root causes, as far as I can tell this is a bonkers level of spend for something will revert to it's exact same state in....12 months or so.
What's the analysis on that, exactly? How is this one-time thing going to actually help anyone other than a narrow band of existing people while penalizing all others - including future student loan debtors?
Recent conversation with my 14-year-old son: "Dad why are you guys making us(i.e., future taxpayers) pay for your school?" I don't know if I have ever been prouder as a father. I know he isn't learning those values at school.
In 1983, at the age of fifty-two, Betty Ann enrolled in New York University’s law school. As a middle-aged Black woman, she wasn’t exactly the typical N.Y.U. law student. Her white male classmates would slyly elbow her books off the long library tables, and once, while standing at her locker, a classmate waved a ten-thousand-dollar tuition check, signed by his father, in her face. Betty Ann had borrowed twenty-nine thousand dollars in federal loans. Today, she owes $329,309.69 in student debt. She is ninety-one years old.
https://abovethelaw.com/2022/08/91-year-old-elite-law-school-grad-took-out-29000-in-student-loans-owes-329309/
It does not say if she passed the bar exam or ever worked as a lawyer. But if she had, even as a cheapo strip mall shyster I don't see why $29m would have been so hard to pay back.
It sounds like she didn't even try. And at 91, I assume she is just saying FU to the bill collectors.
John LGBTQ+ Henry
If we are going to do student loan forgiveness by executive fiat, why not do this at the expense of the originators.
With bad mortgages, the fault was "predatory lenders" - and yet with student loan debt, the bogeyman is the debt itself. Why? It's colleges combined with ready access to subsidization. Stop subsidizing and take the damn money from the universities.
Or, ya know, just stop subsidizing and let the market figure this out.
I do think teachers should have part of their student loan debt forgiven. School districts require a very specific degree, and encourage post-grad education, and teachers make a good living but they are only ever going to make so much.
And we need good teachers.
This would be a better argument for a loan-forgiveness program with MUCH lower income limits than the $125K individual / $250K family in the order. And she completely sidesteps that this program (which may cost the government as much as a trillion dollars!) is being done with no legislative authorization at all, but solely by executive order.
What we need is a "Lemon" law for college "education"
Blogger wendybar said...
Veterans. They served us. They deserve a payout from taxpayers before the lazy college kids
The deal now is not as sweet as it was up to the mid-70s but veterans do get college paid for. It is not a payout, if you are using that in the same sense as govt grants or other gimmes. It is an EARNED BENEFIT. It is part of the total compensation that we all signed up for when we enlisted.
It is not welfare.
In addition to veterans benefits, there are lots of educational benefits for active duty military that do not cut into the veterans.
I got my first 2 years of college while on active duty paid for by tuition assistance. I think the Navy paid 80% or so. The satellite campus was also subsidized and tuition was $25/credit or so
I finished my BA and MBA on the GI Bill.
I paid for my MS out of pocket.
John LGBTQ+ Henry
Bring manufacturing home and fix education. There should be no need for most folks to go to college, especially when college has become an overpriced fixup shop for crappy high school education.
Blogger wendybar said...
Veterans. They served us. They deserve a payout from taxpayers before the lazy college kids
The deal now is not as sweet as it was up to the mid-70s but veterans do get college paid for. It is not a payout, if you are using that in the same sense as govt grants or other gimmes. It is an EARNED BENEFIT. It is part of the total compensation that we all signed up for when we enlisted.
It is not welfare.
In addition to veterans benefits, there are lots of educational benefits for active duty military that do not cut into the veterans.
I got my first 2 years of college while on active duty paid for by tuition assistance. I think the Navy paid 80% or so. The satellite campus was also subsidized and tuition was $25/credit or so
I finished my BA and MBA on the GI Bill.
I paid for my MS out of pocket.
John LGBTQ+ Henry
The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books. The lender has some responsibility. And the lender gets some advantage from forgiveness. Some people who can pay and did get a useful education are included, but is that really so terrible?
She acts like this is a one-off thing. It isn't- it will be repeated in the Summer of 2024, the Summer of 2026, the Summer of 2028, the Summer of 2030......
And this part is especially galling to me:
"I now think we must make amends to those we have harmed...."
Who exactly is the "we", you dumb bitch. If Dynarski wants to make amends for the people she has harmed, let her and her university do it with their own fucking money. Same goes for dumb fucks like Howard above.
Math is hard
Free money. What will tuition cost in 5 years? There really is no limit. They know.
The seals will still clap.
In large part, college is a racket. Far too many students graduate no more qualified to earn a living than they did when they went in.
There is no benefit to them or to society to their degree.
I will quibble with this just a little. If we are a wealthy society set on wasting money, wasting it teaching young people about literature and mathematics (that they "will never use") and history is far superior to than forking over money to defense contractors for an aircraft carrier that the Navy doesn't need. The problem that I have is that is not what college is about anymore. It's not about teaching young people how to be critical thinkers, but about indoctrination into a bunch of progressive bullshit.
If college were what it was supposed to be, young people would exit well-read and with a finely honed bullshit detector. How much better would society be if average people understood very basic economics? Society would benefit immensely from that. But, you can't help students hone their bullshit detectors while you shovel bullshit into their bellies.
"It seems that Biden’s plan is aimed at wiping these bad loans off the books."
This is just horseshit. If this were the aim, then the program would have been structured in a completely different manner, and much narrower in scope.
Blogger Dave Begley said...
The proper solution would have been to make student loan debt dischargeable in bankruptcy court. Then the people who really needed to get rid of or restructure this debt would get relief.
The bankruptcy clams would be huge. Remember during the 2008-2009 housing crisis people just walked away from their houses, or a stopped paying the mortgage if they were underwater. Why pay on a $400K loan on a house now worth $250K. Let the bank own it. Same with cars.
Problem with college loans is there is no asset to possess or repossess. What does the lender do? Confiscate a worthless Women's Studies degree? Because money is being borrowed for "education", an intangible asset, the only collateral available is your life, and future labor. It's a soul selling contract.
The government and Universities want it that way. Otherwise, the Universities would be forced to controls costs which is something the are too arrogant to even consider.
Ann Althouse said...
The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books. The lender has some responsibility. And the lender gets some advantage from forgiveness. Some people who can pay and did get a useful education are included, but is that really so terrible?
===========
dear Professora : how does your cruel neutrality factor into what you said?
are you being merciful here? to the non-victims and against the victims?
student loan >>> money borrowed from party A and paid to party B to learn lesson
did student learn any lesson
did party A and party B work a !con!
who was teaching student
who design lesson
will lesson help student achieve anything in life
Maybe there needs to be occupational licensing reform so that people don't need as much schooling to get a job. Also, maybe some of these students should be guided to community colleges, which in CA at least, are very inexpensive.
"My point is that the individual borrower only gets $10,000 in relief. It's just a gesture at the problem.
You are missing the point of the exercise.
The point of the exercise is to see if they can get away with this theft of taxpayer dollars. This misappropriation of funds that the Congress, our representatives, never chose to spend and has no apparent say in the spending of OUR MONEY by Democrats, for Democrats.
The amount is irrelevant to the exercise.
They want to see if they can get away with it. They'll deal with who gets what later on, assuming they aren't put in jail. Which they won't be. Because we live in a corrupt country and the criminals are in charge of it.
The next Republican president, assuming we ever have an election again, had better put every single Goddamn one of these thieves in prison. And that includes anybody who receives these stolen goods (the borrowers.)
"My point is that the individual borrower only gets $10,000 in relief. It's just a gesture at the problem.
You are missing the point of the exercise.
The point of the exercise is to see if they can get away with this theft of taxpayer dollars. This misappropriation of funds that the Congress, our representatives, never chose to spend and has no apparent say in the spending of OUR MONEY by Democrats, for Democrats.
The amount is irrelevant to the exercise.
They want to see if they can get away with it. They'll deal with who gets what later on, assuming they aren't put in jail. Which they won't be. Because we live in a corrupt country and the criminals are in charge of it.
The next Republican president, assuming we ever have an election again, had better put every single Goddamn one of these thieves in prison. And that includes anybody who receives these stolen goods (the borrowers.)
"My point is that the individual borrower only gets $10,000 in relief. It's just a gesture at the problem.
You are missing the point of the exercise.
The point of the exercise is to see if they can get away with this theft of taxpayer dollars. This misappropriation of funds that the Congress, our representatives, never chose to spend and has no apparent say in the spending of OUR MONEY by Democrats, for Democrats.
The amount is irrelevant to the exercise.
They want to see if they can get away with it. They'll deal with who gets what later on, assuming they aren't put in jail. Which they won't be. Because we live in a corrupt country and the criminals are in charge of it.
The next Republican president, assuming we ever have an election again, had better put every single Goddamn one of these thieves in prison. And that includes anybody who receives these stolen goods (the borrowers.)
The plumber who deducted his $80,000 pickup truck off his taxes doesn't really have the moral high ground here.
Anyone who is self-employed can take all or part of the auto expenses off their taxes as a business expense. It is not comparable to student debt.
Note that some tuition can be taken off your taxes if you are self employed and getting extra training for your job. People who do this are typically older and established in their field.
Ann Althouse said...
The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books. The lender has some responsibility. And the lender gets some advantage from forgiveness. Some people who can pay and did get a useful education are included, but is that really so terrible?
The problem is that Universities are sucking up huge amounts of taxpayer dollars that they do not deserve.
The students that need loans to afford college are not the bad actors here.
The bad actors are the colleges that are bloated with worse than useless administrators and overpaid intellectuals/professors who are basically leaches on society.
We are paying too many professors and too many administrators to teach too many students.
The students that go to college unprepared and drop out should not have gone in the first place and the marginal instructors that took their money and saddled them with loans should have had to get a real job.
This is what government subsidies always do.
The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid.
Shall we apply this argument to the theft of goods worth less than the cost of prosecuting the crime?
Freeman Hunt said...
There's no "we" here. "We" didn't harm anyone. College loan debt forgiveness should not fall on taxpayers.
Correct.
This should fall on universities, their current employees, and the people who built retirements and wealth on the back of these students.
Seize the endowments of all universities and the retirements of all administrators, professors, and other university employees over 100k.
Pay back the loans with these ill gotten gains.
Beasts of England said...
‘Seize the entire Harvard endowment.
Seize the retirements of all professors and administrators of Harvard.
Seize all property and investments held by Harvard.
Sell all of this property and liquidate the assets.’
And then start the RICO prosecutions for fraud.
I do like that last addition.
Bernie and Ted's Student Loan Adventure
The issue is not debt forgiveness, which is a conservative policy in principle; but, rather redistributive change in what amounts to yet another progressive tax scheme that obfuscates (e.g. progressive prices) and sustains (e.g. diversity, inequity, and exclusion) the causal relationship.
Ann Althouse said....
The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books. The lender has some responsibility. And the lender gets some advantage from forgiveness. Some people who can pay and did get a useful education are included, but is that really so terrible?
Althouse... you don't see the colleges or universities being responsible for any of this volume of debt? Aren't the employees of these institutions the main benefactor of the borrowed money? The student debt is the main revenue stream that supports the business model. Without it, colleges are bankrupt, and Phds are digging ditches with the rest of the world. No more six figure pensions.
Who benefits from a kid who drops out after sophomore year with $30K to $50K in debt? The employees of the university the kids helped support, that's who. Obviously. That doesn't seem like predatory lending to you?
To say this is simply a borrower and lender problem is rather short sighted.
"t seems that Biden’s plan is aimed at wiping these bad loans off the books."
How is that if an individual who makes $124,000 and a married person who makes $249,000 and has a stay-at-home spouse are included?
Discharge student loans in bankruptcy?
That might have worked when loans were made by private lenders, that is banks. They would have strongly objected, maybe loudly enough to bring about other changes.
But with the Federal government having taking over the student loan business a decade ago, discharge-in-bankruptcy would be like this "forgiveness" program which is to say the we, the taxpayers, get stuck with the balance.
Yes, yes! I know. Bankruptcy vs the "Forgiveness" scheme that Brandon has put on the table is more complicated than that but the answer to the question, "who's left holding the bag" is the same . . . you and me.
Anyway, that's what I think.
I suspect Ann won't bother to read this but for anyone else struggling to see the consequences of this mechanism of bad government, read this by John Cochrane: Financial Pandemic. Keep in mind, although Cochrane's post is over two years old, the Biden administration is justifying loan forgiveness as part of the pandemic emergency...
"Defaults and financial distress are concentrated among the millions of students who drop out without a degree ..."
So the problem is that higher education's marketers sold their "product" to people who could not make use of it. And the solution is to let them keep the money and continue their abusive process while shifting the damage to third parties.
The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid.
Isn't that the case with any unpaid or delinquent debt? Why are student loans any different? And once you establish the precedent of forgiving such loans what motivation exists for debtors to continue making payments?
It seems that Biden’s plan is aimed at wiping these bad loans off the books.
To what purpose? And to whose benefit? Certainly not mine. I worked my way through school and chose a nearby state college for my education precisely because I didn't want to start my working life buried in debt. Why are our tax dollars being used to bail others out from their own poor decisions?
Some people who can pay and did get a useful education are included, but is that really so terrible?
It's so much fun to spend other people's money and feel wonderful about it, isn't it?
"It seems that Biden’s plan is aimed at wiping these bad loans off the books."
The plan does a lot more, as several commenters have already explained.
"The lender has some responsibility."
The lender was aways going to turn the loans into gifts, bribing voters with other people's money.
"Some people who can pay and did get a useful education are included, but is that really so terrible?"
Yes. On top of the lack of authority, and the utter corruption of the system itself, and the FU symbolism, and the additional forgiveness built in, and the lack of actual reform, and the absence of any accountability for the colleges that took the money, yes, the manifest injustice is also terrible. That a mostly rational person like Althouse might not find it "so terrible" just illustrates what we have come to in public policy.
"The lender has some responsibility. And the lender gets some advantage from forgiveness."
"The lender" is a bunch of irresponsible billionaires. And the advantage they get from "forgiveness" is they get to keep all the money they stole and go right on stealing more. This is not about bailing out a bunch of flakey young people. This is about letting a collection of abusive institutions off the hook. They tricked gullible children into borrowing huge sums to purchase a handful of magic beans. They knew exactly what they were doing, and they paid themselves handsomely to do it.
“College loan debt forgiveness should not fall on taxpayers.”
We could put it on the bondholders who provided the funds for these loans but we don’t want to discuss doing that.
There are some people for whom $10,000 is the whole thing and they are struggling to pay. For them, isn't it more trouble to try to collect than to just say forget it, go and borrow no more?
I haven’t read through to see comments to this statement, but I expect they are jut as negative as before. I think most people haven’t been in this situation. They haven’t run a business. They haven’t had an amount of money like that to collect or forgive. So they wouldn’t be able to comprehend this occurs daily, and not only daily but it is the reason our society collects interest at variable levels to reduce risk of failure to repay.
With that caveat, I fully agree, for those that $10,000 cannot be repaid, it will likely always be that case and the lender ought just move on and learn their lesson. That’s not condoning wholesale forgiveness. It is recognizing the reality of a specific case and acting accordingly. I guess the same goes for collecting in the debt of wisdom to understand the statement.
"The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books."
Not to be argumentative, but here the lender is the government, not a bank. What a bank would do is sell the non performing loans to a collection agency for 25 cents on the dollar, and the agency would hound them to the gates of hell to try to get 30 cents on the dollar.
The government does not get a tax writeoff for bad loans, so the fiduciary responsibility to the taxpayer would be to keep the loans active and apply reasonable pressure to repay according to the law that created the authority to loan the money in the first place.
The government can declare a debt jubilee at any point for charity or any other purpose whenever it wishes as long as it conforms to the constitution and legislation, particularly the taking of the property of creditors.
"The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books."
Not to be argumentative, but here the lender is the government, not a bank. What a bank would do is sell the non performing loans to a collection agency for 25 cents on the dollar, and the agency would hound them to the gates of hell to try to get 30 cents on the dollar.
The government does not get a tax writeoff for bad loans, so the fiduciary responsibility to the taxpayer would be to keep the loans active and apply reasonable pressure to repay according to the law that created the authority to loan the money in the first place.
The government can declare a debt jubilee at any point for charity or any other purpose whenever it wishes as long as it conforms to the constitution and legislation, particularly the taking of the property of creditors.
"The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books."
Not to be argumentative, but here the lender is the government, not a bank. What a bank would do is sell the non performing loans to a collection agency for 25 cents on the dollar, and the agency would hound them to the gates of hell to try to get 30 cents on the dollar.
The government does not get a tax writeoff for bad loans, so the fiduciary responsibility to the taxpayer would be to keep the loans active and apply reasonable pressure to repay according to the law that created the authority to loan the money in the first place.
The government can declare a debt jubilee at any point for charity or any other purpose whenever it wishes as long as it conforms to the constitution and legislation, particularly the taking of the property of creditors.
"The cost of the loan forgiveness must take into account the cost of pursuing those who are in arrears and the fact that these loans may never be repaid. It seems that Biden’s plan is aimed at wiping these bad loans off the books."
Not to be argumentative, but here the lender is the government, not a bank. What a bank would do is sell the non performing loans to a collection agency for 25 cents on the dollar, and the agency would hound them to the gates of hell to try to get 30 cents on the dollar.
The government does not get a tax writeoff for bad loans, so the fiduciary responsibility to the taxpayer would be to keep the loans active and apply reasonable pressure to repay according to the law that created the authority to loan the money in the first place.
The government can declare a debt jubilee at any point for charity or any other purpose whenever it wishes as long as it conforms to the constitution and legislation, particularly the taking of the property of creditors.
“ "t seems that Biden’s plan is aimed at wiping these bad loans off the books." How is that if an individual who makes $124,000 and a married person who makes $249,000 and has a stay-at-home spouse are included?”
Bad aim.
Obviously, it’s overinclusive
…. with respect to the purpose that strikes me as valid
All this gnashing of teeth and braying and baying about a small tax forgiveness for people of modest (or low) income who are tied to loan debt they may never be able to pay in full, while there are no complaints about the much larger loans forgiven as ordinary procedure to wealthy individuals and corporate entities. It's all for show, all to discredit the idea that people with no power or influence should ever ask or expect to be granted debt a relief that the rich enjoy all the time as a matter of course.
Crying "my tax money must pay for this!" Boo hoo hoo! As if you (or I) will even notice it. We will continue to pay our taxes as per normal. The only difference may be that some of our taxes may be applied to the federal student loan debt rather than to some other government program. Hey! Lets take a chunk of the obscenely bloated War Department budget and pay off the loan debts for all! Just transfer the payment for one useless, wasteful and harmful purpose (the War Department) to a purpose that will actually benefit citizens.
It’s also only a gesture with respect to people with large debt and useful degrees.
I would fine tune the program and combine it with major reform of higher education.
If there is such a high rate of default, why is this still a thing? Are the feds blindly lending to anyone, for whatever degree, at whatever school? Private banks would be out of business and/or become much more discerning about the lending situation. If this debt ownership switch happens, god forbid, we need to shut down this whole enterprise. Move the student loan business back to private banks. These schools aren’t worth these tuition fees and need to work to bring costs down or they’ll not get enough students enrolled. They certainly shouldn’t be counting on Uncle Sam for payment.
It’s thoroughly immoral for taxpayers to assume this debt that others agreed to take on. Is it not a form of treating people as children, denying them their own agency, forcing or enticing them to “owe” something in return? The whole thing disgusts me. No matter how much sympathy I have for the lendees, and I do have sympathy, this not the way to help them.
Its only $10,000....this time.
Also, its not $10k. Its $20k for some people.
And its 5% of your disposable income x ten years. Guess how much that is?
Well, if $10k is calculated at $300 billion, and 5% x 10 years is $1 Trillion....
Sounds like its actually $33K- don't think the $10k number was chosen except to make it sound small. the real amount will be that 5% of "disposable" income (How is that cacluated?)
Retired professors have directly benefited from this sham. I’m OK with them paying for any “forgiveness” deemed necessary due to the problems they’ve caused.
Blogger Buckwheathikes said...
The point of the exercise is to see if they can get away with this theft of taxpayer dollars.
As I've turned this over in my head today, I think the loan forgiveness is a McGuffin. Some stray voltage to get people worked up. Might have some usefulness for the coming midterms but really doesn't mean much.
The more consequential change is to the repayment program. If the Democrats can get a precedent for *that* then it's just a stroke of the Secretary of Education's pen to drop all repayments to trivial amounts and, bingo!, practically free college for anybody willing to take government loans. There will still be a few chumps who actually pony up their own money, and a few schools like Hillsdale that will stand on principle, but all the other four-year indoctrination factories will never have to worry about funding again.
Some people who can pay and did get a useful education are included, but is that really so terrible?
Yes, it's terrible. The government is stealing money it doesn't have to give to people for votes.
The $1.6 trillion dollars in student loan debt is an asset on the federal books. Simply "wishing it away" is the same as stealing it from the treasury. The government doesn't have any money. We are broke.
I'm reminded of the Seinfeld episode where Kramer commits insurance fraud to replace Jerry's stereo. Ann, you are Kramer in this situation. What's the harm? What's so terrible? Jerry gets a new stereo!
Should student loan debt be subject to forgiveness is only part of the question. And before people say that borrowers should pay just like debtors do for every other loan, it needs to be pointed out that other loans are in fact forgiveable in bankruptcy. Student loan debt is NOT dischargable in bankruptcy. You will owe it forever.
But the MAJOR issue here is the utter lawlessness by which Biden is attempting to defraud the American people by not collecting debts that are owed to the government. Biden lacks the legal authority. Now, if Congress wants to get involved and, perhaps, make student loans once again covered by bankruptcy, then that is another matter.
I would fine tune the program and combine it with major reform of higher education.
But Biden isn't doing that. So you are personally, against this program then, right?
"Susan Marie Dynarski is an American economist who is currently professor of education at the Harvard Graduate School of Education."
Mistakenly identified as an economics professor.
Are the feds blindly lending to anyone, for whatever degree, at whatever school?
Direct Unsubsidized: Unlike Subsidized loans, these federal loans do not require students to demonstrate financial need and they are responsible for paying interest on the loan during all periods. If the student chooses not to pay the interest while in school, the interest will accumulate and be added to the principal.[12]
I've read that these types of loans are the majority of the federal governments outstanding student loan balance.
Because there is no financial need, nor any discussion about marketability it means that loan recipients don't have to make hard choices for alternatives such as work-study. It's the literal definition of "easy money".
And since the pandemic you don't even need to make the payments! But the interest is still accruing.
The minute they forgive the debt, even $10k of it, people will look at college debt differently - as something they expect **not** to have to pay. It will create moral hazard, and encourage people to make more foolish choices. And the politicians will regularly transfer the obligation from the shoulders of the feckless risk takers to the shoulders of other 3rd party taxpayers.
Tina Trent: "I advised several promising but not academic students to quit, go work for a fast food place that offered a management track, or go into the trades. "
Did any of them that you know of take your advice?
Professora Constitutionalis Extraordinairia
Q: is this a Taking under whatever clause applies?
I am allowing that all taxes are Taking
If helping those unfortunate people was really the goal of this program, then the income cap would be set somewhere around $60,000 per annum. Or $80,000 for a family.
Instead they made sure to pick up all the junior White House and other political staffers, and all the over-credentialed strivers working at various NGOs and do-gooder groups. People who deliberately chose to make a bit less than their former classmates so that they could “save the world“ and by that I mean remake the world as they wish.
Heck they are also picking up all but the most well paid junior lawyers. They are even picking up some junior investment bankers.
"From "Why I Changed My Mind on Student Debt Forgiveness" by Harvard econprof Susan Dynarski.(NYT)."
A bit of motivated reasoning perhaps. the Ivies are often criticized for not spending more tax free endowment income to support poor students. Student loan forgiveness relieves this pressure and makes more money available for walnut paneling in the faculty lounge.
"combine it with major reform of higher education."
Yes, but the only way to do this is a drastic reduction in labor costs.
The first step would be to take the universities into bankruptcy (some legal/financial manipulation may be necessary here, Mitt could offer advice).
Terminate all employees and bring back only the most needed with new hires at 25% of current cost. Many classes should use remote teaching with online instructors from low wage countries, administration/management must be reduced to no more than 10% of total labor, all pension plans, including those fully vested, should be converted an amount equal to the federal minimum, health care will need to be the responsibility of the employees, and a federal cap on tuition, room and board must be put into effect by the federal government.
We can do this!
It worked for the company I worked for so it can work for higher ed.
could this be research topic data fact check
anecdotal evidence
Seriously, all. Why don't we just overturn Griggs?
The entire reason for the expectation that anyone who wants to earn a decent living must go to college (not exactly true, but ubiquitous anyway) is that employers can't use standardized tests in assessing applicants. Over the past several decades, a system has evolved wherein employers instead require a college degree for more and more jobs. They are basically sloughing off the responsibility for evaluating candidates on to the nominally independent colleges and universities, who are supposed to do the dirty work of winnowing sheep from goats. IOW, the whole college system is an exceedingly cumbersome and inefficient IQ test.
I think the polity would be better served by bring back the "real thing," honestly. It would stop the tremendous time-wasting involved in millions of kids heaving themselves off to college when they transparently have neither the inclination nor the perseverance to actually get a degree.
Gateway to the socialist baby crib. So even those who didn't attend have a College loan. Fact is only about %50 of Americans pay taxes. What ever happened to the singularly American virtue
of self reliance? As Handsome Dick Manitoba said, "Don't forget to wipe your ass"!
A friend just notified me of an impending stripper shortage because the gals won't have to pay their way through college any more.
D.D. Driver said...
Plumbers, paralegals, and project managers bailing out doctors, diversity post-grads, and lawyers.
The plumber who deducted his $80,000 pickup truck off his taxes doesn't really have the moral high ground here."
So you are against a plumber expensing his truck but are ok with private jets being a deductible business expense?
I would go for the forgiveness if in return the person forgiven gets no tax deductions, tax credits or federal aid for ten years.
Forgotten is why student loans were made non-dischargeable in the first place. The bankruptcy discharge was being abused to the point Congress ending the dischargeability of the loans.
The Federal student loan program should be abolished entirely and let the universities offer the loans and take the hits. Let them be the judge of who is qualified and who is not.
Since everyone is picking on Harvard I thought I would bring a little light to the table. If an undergraduate's family has an income of less than $65,000 in 2022 ($75,000 in 2023) the family "contributes nothing to the child's education". Full tuition, room and board is in the neighborhood of $75,000 (which I find indefensible) but there is an offset for those who fall into the category where most student loans are made. In addition as we know Harvard has a massive endowment of which a great deal ($597 million in 2021) goes to student financial aid. 70% of the total endowment of $53 billion is "restricted" in that it was given for a specific purpose and can not be used for any other purpose. I know on one example ( and i am sure there are many more) where an endowment was given for students whose family name was ELLIS. The money can be be used for no other purpose. Some strange restrictions on a good part of the huge endowment.
Taking the loan decision out of the hands of the colleges and banks and placing it with the government was, as we see, a disaster. The colleges/universities should always have skin in the game of underwriting student loans. ( remember a lot of these loans are for graduate studies as well as undergraduates)
"we must make amends to those we have harmed" So....who is the 'we' in both parts of this sentence?
If we are the taxpayers, how exactly did WE harm those that WE must make amends with?
If the problems haven't been solved and that's why this person thinks debt forgiveness is the way to go, WHY is THIS the solution? How will this make things better going forward? Please name one single example of a product or service that had massive government or 3rd party subsidies that became...cheaper? If the 'problem' is the cost of college and the debt that comes with it, and the solution is to lower the cost to people who attend college, please explain how subsidizing the costs of attending college will lead to a solution to that problem (e.g. lowering costs)?
When you subsidize a thing, the cost of that thing will go up. Always. As in: always.
"we must make amends to those we have harmed" So....who is the 'we' in both parts of this sentence?
If we are the taxpayers, how exactly did WE harm those that WE must make amends with?
If the problems haven't been solved and that's why this person thinks debt forgiveness is the way to go, WHY is THIS the solution? How will this make things better going forward? Please name one single example of a product or service that had massive government or 3rd party subsidies that became...cheaper? If the 'problem' is the cost of college and the debt that comes with it, and the solution is to lower the cost to people who attend college, please explain how subsidizing the costs of attending college will lead to a solution to that problem (e.g. lowering costs)?
When you subsidize a thing, the cost of that thing will go up. Always. As in: always.
The plumber who deducted his $80,000 pickup truck off his taxes doesn't really have the moral high ground here."
So you are against a plumber expensing his truck but are ok with private jets being a deductible business expense?
If the plumber uses the truck for work and only de minimis other use, I have no problem with it. But that's not what's going on.
I don't think anyone should pay for my education but I'm also sick of paying for some asshole's Escalade.
If too many people are taking on debt they cannot repay then the lender should not make those loans. And the institutions should also cut their overhead and lower their rates per credit hour.
Honestly, I feel for the folks who attended some rip off barber school with a federal loan. Loan forgiveness should be narrowly targeted to those who did not graduate or who only have an Associate Degree or certificate instead of including graduate school debt and who are in the lower two quintiles of income.
President Godfather's announcement regarding student loan forgiveness: You screwed up. You borrowed money from us to go to college, to get a high-paying career, and it didn't work. Now you have a big debt, and you don't have the high-paying job to pay off your debt. BUT WE SCREWED UP WORSE. "We" being the federal government. We threw the money at you so you and your parents would vote for us, and we didn't care whether the education money would really increase your income enough to cover the debt. Our bad.
So, we (the federal government) are ending the whole student loan project, and in ending it, we mean END. Do you still owe money to us for student loans? No, you don't. The program is over. It's all gone. No more student loans from the Government, EVER!
Did you pay back your student loan, and think it's unfair that other people don't have to pay their loans? Well, if you have the money to pay back your student loan, perhaps by good luck or accident (certainly not because of any government decisions), you actually benefitted from your higher education. Enjoy your life.
[Of course if you're a crook and shyster like Biden, you could never admit that the whole student loan program was a scam from the berginning.]
I don't think anyone should pay for my education but I'm also sick of paying for some asshole's Escalade.
Have you ever met a plumber? Maybe that's why you sound like an idiot.
"There are some people for whom $10,000 is the whole thing and they are struggling to pay. For them, isn't it more trouble to try to collect than to just say forget it, go and borrow no more?"
But the author is arguing the exact opposite: "By allowing borrowers to once again get access to credit, housing and job markets, forgiving loans can therefore have a real effect on lives and the economy"
Hi Gravel: I left pretty soon. I could make more at a taco bell. I went back to writing and renovating.
So I guess I took my advice.
टिप्पणी पोस्ट करा