Student Loan Forgiveness

[Cisco Kid]

My sister, brother in law and my best friend come to mind. Both used forbearances and both continued getting masters degrees for years.

If they only worked in the public sector they would have been forgiven with 10 years of payment.

I talking about someone age 43 with a 20 year old BS degree and no more college. I called BS when I heard it from the persons friend but I've been wrong before.

[MultiVerse]

How is this going to cost money to people with no degree and less earning potential? Most of those people aren’t paying much or any income tax

There's opportunity costs, and higher deficits means state and federal governments have less to room to maneuver when it comes to recessions in the future.

It's also worth mentioning that even though lower income folks don't pay a lot of federal income tax, as a percentage of their income they pay roughly the same tax rate as everybody else if you take into account payroll taxes, state taxes, sales taxes, etc. So when it comes to budget shortfalls due to things like Social Security and Medicare/Medicaid as a percentage of income the burden will probably disproportionately fall on them in the form of higher payroll taxes.

[MagnificentUnicorn]

There's opportunity costs and higher deficits means state and federal governments have less to room to maneuver when it comes to recessions in the future.

So how does that cost average Joe money when he’s not paying income tax?

[XavierD]

How is this going to cost money to people with no degree and less earning potential? Most of those people aren’t paying much or any income tax

They aren’t the ones benefiting from it. Any spending or tax cut is paid for by those not benefiting from it. 60% of Americans don’t attend college, those working in trades represent a large chunk of the middle class tax base this lands on. Yes, some of it will be paid by those with degrees who don’t have any lingering debt on it, but the majority won’t be.

Additionally it means there is less money available to spend on programs that could actually help poor people who aren’t paying income tax get to a point where they or their offspring make enough money to pay income tax.

The stimulus money (a bunch of well off Americans now have an extra $10k or more to spend) will also push costs up making it harder on those lower income Americans to afford the housing/food/energy/childcare/transportation that helps them get further along in life.

[J. Barron DeJong]

If you consider the implications of his conclusion Matthew Yglesias is arguing against the proposed Biden plan without saying it outright "The lessons learned should focus less on college reform or higher education finance and more on the need for better recession-prevention tools. " He's smart enough to know this is bad policy while at the same time not taking an overt stance against it.

Uh, no. He’s saying this particular cohort was unduly burdened compared to those who came before, and likely those who will come after, due the combined circumstances of a larger than normal influx of college students, and a cut in state support due to the Great Recession.

And he’s also saying that arguments that this ‘bailout’ is just going to lead to more and bigger ones down the line are unjustified.

You may decide that this policy isn’t ‘economically efficient’ or something, but the goal of government is to improve citizens wellbeing. This helps do that.

[MultiVerse]

So how does that cost average Joe money when he’s not paying income tax?

The average Joe as well as the average college student is hurt much more during a recession than people with established careers. That's essentially Matthew Yglesias' thesis from the previous page. He's saying that responding to recessions is the top priority when it comes to helping college students and lower income folks in the future.

Uh, no. He’s saying this particular cohort was unduly burdened compared to those who came before, and likely those who will come after, due the combined circumstances of a larger than normal influx of college students, and a cut in state support due to the Great Recession.

And he’s also saying that arguments that this ‘bailout’ is just going to lead to more and bigger ones down the line are unjustified.

You may decide that this policy isn’t ‘economically efficient’ or something, but the goal of government is to improve citizens wellbeing. This helps do that.

Unless he says otherwise in the paywalled article, his summary spells it out quite clearly "focus less on college reform or higher education finance and more on the need for better recession-prevention tools."

He's reframing the argument because he thinks both sides are wrong, "The disagreement is mostly about the nature of the solution, with folks on the left broadly preferring more subsidy while folks on the right broadly preferring vague anti-education posturing."

He's not siding with either the left or the right on this one.

[::: :::]

They aren’t the ones benefiting from it. Any spending or tax cut is paid for by those not benefiting from it. 60% of Americans don’t attend college, those working in trades represent a large chunk of the middle class tax base this lands on. Yes, some of it will be paid by those with degrees who don’t have any lingering debt on it, but the majority won’t be.

Additionally it means there is less money available to spend on programs that could actually help poor people who aren’t paying income tax get to a point where they or their offspring make enough money to pay income tax.

but again, middle income taxpayers aren't shouldering the bulk of US tax revenue (top 10% taxpayers represent 70% of US tax revenue)
and it's a stretch (and more argumentative than fundamentally true) to promote the passive effect of non-benefit as a putative tax

[Supermoon]

Can someone who graduated 20 years ago still owe forgivable debt? Blows my mind.

Something like 15% of seniors have outstanding student debt. This isn’t just going to “young single people who will be making six figures in five years.”

It’s easy to just assume what you want about people getting help, or cherry pick edge cases to get pissed about, but the data says what it says. (Not directed at you Cisco, just **waves hand**)

[XavierD]

You may decide that this policy isn’t ‘economically efficient’ or something, but the goal of government is to improve citizens wellbeing. This helps do that.

So did the Trump, Bush, and Regan tax cuts. But like this, disproportionately the wealthy ones.

[XavierD]

Something like 15% of seniors have outstanding student debt. This isn’t just going to “young single people who will be making six figures in five years.”

It’s easy to just assume what you want about people getting help, or cherry pick edge cases to get pissed about, but the data says what it says. (Not directed at you Cisco, just **waves hand**)

The data says this benefits people with 60% higher expected lifetime income then most Americans.

[Supermoon]

The data says this benefits people with 60% higher expected lifetime income then most Americans.

So?

[XavierD]

So?

So it’s regressive inflationary spending. Aka, bad policy to buy votes for an administration who has managed to be less popular then the one under investigation for espionage and election tampering.

[Supermoon]

So it’s regressive inflationary spending. Aka, bad policy to buy votes for an administration who has managed to be less popular then the one under investigation for espionage and election tampering.

Doing policy that’s popular isn’t buying votes. It’s called governing in a democracy. Conservative policy is so unpopular it’s easy to forget you can do things people like.

[dunfree]

True. And not just in terms of the federal budget. When colleges and universities attract more revenue they increase spending to become more selective in order to achieve higher institutional rankings, but do not increase the size or diversity of their student bodies. As a result they serve relatively small undergraduate populations with lower fractions of minority and low-income students.

Why the treatment of tuition as the sole source of income for the school? You aren’t alone doing that, but it’s simply not true for many schools. For larger universities it’s a minority of income - Stanford gets 14% of their revenue from students. University of Minnesota 24%. Just like the CapEx budget isn’t necessarily the same pool of funds as the general budget - assholes want monuments to themselves, not students.

[MultiVerse]

but again, middle income taxpayers aren't shouldering the bulk of US tax revenue (top 10% taxpayers represent 70% of US tax revenue)
and it's a stretch (and more argumentative than fundamentally true) to promote the passive effect of non-benefit as a putative tax

Lower and middle income folks are shouldering roughly the same tax burden as a percentage of income. The reason the top 10% taxpayers represent 70% of US Federal income tax revenue is because they earn so much more as a percentage of national income.

Why the treatment of tuition as the sole source of income for the school? You aren’t alone doing that, but it’s simply not true for many schools. For larger universities it’s a minority of income - Stanford gets 14% of their revenue from students. University of Minnesota 24%. Just like the CapEx budget isn’t necessarily the same pool of funds as the general budget - assholes want monuments to themselves, not students.

If it wasn't clear, when I wrote revenue I meant all revenue including tuition, donations, and endowments. Donors want monuments and schools want higher rankings (instead of larger more diverse student bodies) in no small part to attract more donations.

[dunfree]

So it’s regressive inflationary spending. Aka, bad policy to buy votes for an administration who has managed to be less popular then the one under investigation for espionage and election tampering.

you buy votes from people who wouldn’t vote for you dumbass, and you are already convinced that the evil college kids that lived a better life than you on loans are already voting for Biden

[dunfree]

They are as percentage of income.

No, they aren’t. Top quintile pays the most as percent of income.

[XavierD]

I don’t buy this is that popular of an idea, it’s just very popular amongst the college educated millennial group that makes up an increasing share of the Democrats base, but we’re less and less enthusiastic about the current administration. It further pushes away the working people who used to make up the democrat base.

[Core Shot]

Stanford and Harvard could get zero percent of their funding from students.

But they don’t.

Why?

[::: :::]

They are as percentage of income.

please explain

[MagnificentUnicorn]

They aren’t the ones benefiting from it. Any spending or tax cut is paid for by those not benefiting from it. 60% of Americans don’t attend college, those working in trades represent a large chunk of the middle class tax base this lands on. Yes, some of it will be paid by those with degrees who don’t have any lingering debt on it, but the majority won’t be.

Additionally it means there is less money available to spend on programs that could actually help poor people who aren’t paying income tax get to a point where they or their offspring make enough money to pay income tax.

The stimulus money (a bunch of well off Americans now have an extra $10k or more to spend) will also push costs up making it harder on those lower income Americans to afford the housing/food/energy/childcare/transportation that helps them get further along in life.

Okay, so lower income people don’t benefit from this unless they have outstanding education debt. How is this costing them more?
You’re kind of dancing around the question.

[Cisco Kid]

Something like 15% of seniors have outstanding student debt. This isn’t just going to “young single people who will be making six figures in five years.”

It’s easy to just assume what you want about people getting help, or cherry pick edge cases to get pissed about, but the data says what it says. (Not directed at you Cisco, just **waves hand**)

I'm not casting shade. Don't care that 0.04% get a degree in Gender Studies. I worked for a buyer of plastics components at Xerox who had a Home Ec. degree. I'm just so old I can't fathom a college debt so big it takes a lifetime to pay down. System is definitely broke if we want a middle class. Maybe we don't.

[Supermoon]

I'm not casting shade. Don't care that 0.04% get a degree in Gender Studies I worked for a buyer of plastics components at Xerox who had a Home Ec. degree. I'm just so old I can't fathom a college debt so big it takes a lifetime to pay down. System is definitely broke if we want a middle class. Maybe we don't.

Yeah, wasn’t directed at you, just a surprising data point I heard. I would guess maybe some of it is from 2008 and late career people going back to school to become more competitive but that’s just speculation on my part.

[dunfree]

please explain

he’s wrong
https://taxfoundation.org/publicatio...come-tax-data/
if you are talking about income taxed.

[MultiVerse]

No, they aren’t. Top quintile pays the most as percent of income.

I'm not wrong, not if you include payroll taxes, state taxes, sales taxes, and so on. It makes sense if you think about it and I'm not sure it makes sense to say federal income tax is the only tax that matters.