Student Loan Forgiveness

[jono]

Oh boy. They're going to publish a watchlist. That'll help.

How much higher is tuition going to be next year than this year? I'd bet it'll be perfectly correlated to how much more the max federal student loan limit per student is in 2023 vs 2022, just like it has been for the past 40+ years.

Attachment 424624

There's a connection, obviously, but you do see how those lines cross each other and don't have the same average slope, right?

[J. Barron DeJong]

More description of the plan and it’s goals here:

https://www.whitehouse.gov/briefing-...-need-it-most/

[summit]

Saying "I paid my loans so why should we forgive them," or, "I don't have any loans so we shouldn't forgive them," is like saying "I survived cancer so why should we make better treatments."

You actually think that is a valid comparison?

[jono]

OK I'm not an economics genius but how the fuck does servicing trillions of dollars of debt only decrease household spending by $5/mo?

Without checking his work I'm going with: more households than borrowers and cutting the principle by some finite number less than $20k only brings down borrowers' monthly payments by whatever the monthly payment was on that. If 10% of households save $50/month....

[Supermoon]

You actually think that is a valid comparison?

It’s not apples to apples, but in the same vein

[Danno]

loan forgiveness is no more a gift than any other government aid/stimulus program: Ukraine aid, SNAP benefits, fossil fuel subsidies, farm subsidies, etc

don't fall for the partisanship; stop making it a class war

this.

Most inflationary pressure is already baked in because of the payment pause, anyway.

Saying "I paid my loans so why should we forgive them," or, "I don't have any loans so we shouldn't forgive them," is like saying "I survived cancer so why should we make better treatments."

Looks like I will get my last couple of Ks of loans forgiven. I was lucky and didn't have to take many loans out, and was able to pay mine down fairly quickly (10 years, lol), but I am not mad about that. I think they should go even further.

I think the bigger issues can't be addressed through an EO and would have to be legislative, so hopefully this will start a process of overhauling secondary ed.

and this.

And if you don't like the cancer analogy, how about "I have never needed welfare and never will because I made good choices, so we shouldn't have a welfare system."

[summit]

It’s not apples to apples, but in the same vein

No it fucking isn't. Tell that to my 33 year old friend and his wife who is dying of cancer right now.

You don't choose cancer.

You do choose student loans.

Fuck your comparison.

[summit]

And if you don't like the cancer analogy, how about "I have never needed welfare and never will because I made good choices, so we shouldn't have a welfare system."

That's far less offensive, but still a poor analogy.

This is like "if you happen to be on welfare this week, you get an extra $2000. But if you were on welfare last week, or next week, too bad, because no reason, and who care about what is causing people to be on welfare."

People on welfare didn't usually choose to be on welfare.

People paying student debt are likely to have a degree and thus they tend to make more than, and be on welfare less than, people who didn't go to college.

Welfare is progressive. This is regressive without actually solving the underlying problem.

[BC.]

Just curious?…..

-is a Pell Grant the same as a Stafford Loan?….or Stafford would only be $10,000?/ or nothing at all.

-Are students currently in college that have current Stafford loans eligible for this plan? Or is this plan only for people who already have graduated?

-The Forgiveness is if the “family” (combined) income is less than 125,000?….or is it that the individual student is earning less than $125,000?

Sorry….Lots of questions….

[J. Barron DeJong]

Im not an economic genius either, but that guy is, and he runs the most comprehensive private economic modeling around, so I trust his analysis.

Another economic genius weighing in:



https://twitter.com/paulkrugman/stat...rF0dpR8XLOD2Yg

[summit]

Another economic genius weighing in:



https://twitter.com/paulkrugman/stat...rF0dpR8XLOD2Yg

"Don't worry: if it causes inflation the Fed can just raise interest rates even more because it is like totally under control right now with no consequences from the interest rates!"

Remind me who inflation fucks first? Right. The poorest take it the hardest.

[J. Barron DeJong]

That's far less offensive, but still a poor analogy.

This is like "if you happen to be on welfare this week, you get an extra $2000. But if you were on welfare last week, or next week, too bad, because no reason, and who care about what is causing people to be on welfare."

People on welfare didn't usually choose to be on welfare.

People paying student debt are likely to have a degree and thus they tend to make more than, and be on welfare less than, people who didn't go to college.

Welfare is progressive. This is regressive without actually solving the underlying problem.

[Kevo]

There's a connection, obviously, but you do see how those lines cross each other and don't have the same average slope, right?

I should have said "strongly correlated", but you got the idea.

RE: The cancer analogy- if the entity with the press release about the new treatment for cancer is also one of the primary entities causing cancer, celebrating said new treatment is a bit short sighted, no?

I have no problem with debt forgiveness for people who were taken advantage of. I have a major concern with where the funding for said forgiveness comes from and how the responsible parties will be held accountable to change their practices going forward.

[J. Barron DeJong]

"Don't worry: if it causes inflation the Fed can just raise interest rates even more because it is like totally under control right now with no consequences from the interest rates!"

Remind me who inflation fucks first? Right. The poorest take it the hardest.

Inflation is flat right now.

The primary point is that $200B over several years just isn’t that much compared to the size of the US economy.

[oldnew_guy]

Life isn’t fair summit.

There is no perfect solution.

[J. Barron DeJong]

FWIW, I don’t have dog in this fight. I went to college in Canada, where/when it was affordable and didn’t take out loans.

I do have kids that will most likely go to college, but not for a decade, so getting costs under control going forward is much more relevant for me.

[summit]

Inflation is flat right now.

The primary point is that $200B over several years just isn’t that much compared to the size of the US economy.

200B is his preferred number.

Reuters said $321B at least.

That is all public money. Is that where it should be spent?

Inflation is flat? "Don't piss on me and tell me it's rain." Inflation is high as fuck. Yea last glance it wasn't getting even worse, yay! Let's celebrate by spending $321B of taxpayer money to benefit a certain subset of the middle and upper class (but not too upper class)!" Free money! Vote in November!

For clarity, I'm getting $10k of debt cancelled, maybe $20k if my undergrad pell grants qualify me for 20k fed grad loans cancellation, and my employer pays the rest tax free. So this isn't a jealousy thing. I just don't think it is right.

[J. Barron DeJong]

Just curious?…..

-is a Pell Grant the same as a Stafford Loan?….or Stafford would only be $10,000?/ or nothing at all.

-Are students currently in college that have current Stafford loans eligible for this plan? Or is this plan only for people who already have graduated?

-The Forgiveness is if the “family” (combined) income is less than 125,000?….or is it that the individual student is earning less than $125,000?

Sorry….Lots of questions….

Pell Grant is not the same as Stanford loan. Sounds like Stafford loan would be subject to the $10k limit.

Income limit is $125k for an individual, or $250k for married couple. Should apply to the student borrower, not the family of the student, I believe.

No idea if current students are eligible.

[hatchgreenchile]

In June, Colorado Senator Bennet summed it up nicely.
We can think bigger.

[Danno]

In June, Colorado Senator Bennet summed it up nicely.
We can think bigger.

total agreement

I would add though that don't let the perfect be the enemy of the good. We give away so much goddam money to corporations, to banks, to factory farms, etc, yet THIS is what gets people up in arms.

[J. Barron DeJong]

200B is his preferred number.

Reuters said $321B at least.

That is all public money. Is that where it should be spent?

Inflation is flat? "Don't piss on me and tell me it's rain." Inflation is high as fuck. Yea last glance it wasn't getting even worse, yay! Let's celebrate by spending $321B of taxpayer money to benefit a certain subset of the middle and upper class (but not too upper class)!" Free money! Vote in November!

For clarity, I'm getting $10k of debt cancelled, maybe $20k if my undergrad pell grants qualify me for 20k fed grad loans cancellation, and my employer pays the rest tax free. So this isn't a jealousy thing. I just don't think it is right.

Last month inflation was 0%. ‘NowCast’ estimate for August inflation is 0.09%. So yeah, inflation is currently flat.

Going forward, market expects average inflation of 2.77% over the next 5 years.

US GDP is 21 Trillion. Even $321B is a very small percentage when spread out over multiple years.

[summit]

In June, Colorado Senator Bennet summed it up nicely.
We can think bigger.

I like what he said:

"If you’re gonna spend $200 or $230 billion to cancel student loan debt, we need to do it in a way that reaches those who need it most and reforms the underlying system that got us here in the first place…otherwise, we’re simply passing along this injustice to another generation of college students." In his remarks, Bennet proposes efforts to help low- and middle-income borrowers, such as forgiving $10,000 of debt for households earning the state median income or less.

In CO that would be $40K, not $125K.

[J. Barron DeJong]

I like what he said:

"If you’re gonna spend $200 or $230 billion to cancel student loan debt, we need to do it in a way that reaches those who need it most and reforms the underlying system that got us here in the first place…otherwise, we’re simply passing along this injustice to another generation of college students." In his remarks, Bennet proposes efforts to help low- and middle-income borrowers, such as forgiving $10,000 of debt for households earning the state median income or less.

In CO that would be $40K, not $125K.

Median -household- income in CO is about $75k.

[oldnew_guy]

Median -household- income in CO is about $75k.

National median is like 70k right?

[J. Barron DeJong]

National median is like 70k right?

yeah, right around there.