Student Loan Forgiveness

[summit]

So you’re saying this buy-off of the electorate is making them unfavorable to the electorate?

They may find they have miscalculated.

[J. Barron DeJong]

That is how JBDJ put it... seems a little insane even for this EO?

To address these concerns and follow through on Congress’ original vision for income-driven repayment, the Department of Education is proposing a rule to do the following:

• For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
• Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
• Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department of Education estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.

[SumJongGuy]

Might as well also argue about where the potential beneficiaries live. 150K/person goes a lot farther here than it does in Seattle, NYC. Boston, San Jose, etc.. . People choose where to live, go to school. and work. Should the benefits be based on local cost of living somehow too or not?

[Danno]

Always the other guy....not my guy. This should answer your question Danno.

yeah, it does. Because you're the only one making it "my guy" vs "the other guy", his post didn't nor did mine. He was just pointing out the difference in the type of govt spending and why being up in arms over one is not the same as being up in arms over the other.

[NWFlow]

That is how JBDJ put it... seems a little insane even for this EO?

Forgive my ignorance, but prior to this one had to pay 20 years and it was forgiven, and now that number is 10?

I dont see anything in the NYT about that

[summit]

Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less.

OK that is reasonable vs your originally stated unclear summary of "forgive after 10 years with 5% income payments."

[oldnew_guy]

To address these concerns and follow through on Congress’ original vision for income-driven repayment, the Department of Education is proposing a rule to do the following:

• For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
• Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
• Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department of Education estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.

Yeah, but what about summits edge case?

[Danno]

Attachment 424629

Summit (and others) who keep arguing that most of the benefits of this go to middle and upper class folks, you're saying this graphic is totally false? Or are you just using your example of how this benefits the wrong people and extrapolating that based on reasons to mean that it must be mostly benefiting the wrong people? Or am I missing something?

[NWFlow]

OK that is reasonable vs your originally stated unclear summary of "forgive after 10 years with 5% income payments."

Lol! You almost had me getting fucking hot and bothered there too.

[Danno]

If this is purely pandering, it is dumb pandering, and not for the reason Summit thinks (ie they miscalculated politically). It's too close to the election, especially with early voting. Some people will be voting in less than 2 months. If this was pure pandering, it should have been implemented a few months ago, so voters would see the money in their pockets before they go vote.

[summit]

Summit (and others) who keep arguing that most of the benefits of this go to middle and upper class folks, you're saying this graphic is totally false? Or are you just using your example of how this benefits the wrong people and extrapolating that based on reasons to mean that it must be mostly benefiting the wrong people? Or am I missing something?

You are asking about the Biden graphic and is it false? No. It is just intentionally obfuscating who is getting the money. Even if you want to ignore the fact that you can still get debt cancellation at 400% of median income, 31K...

That graphic tells me than 87% of the benefit goes to individual borrowers making up to 242% of the median individual income...

... it obfuscates that very little is going to those making LESS than the median income.

This was exactly SEN Bennet's (D-CO) point on failure to direct public monies to the neediest people while also failing to address the causes of the whole issue.

[oldnew_guy]

I am telling you that median individual income is 31K for the US for 2019.

So if that graphic tells me than 87% of the benefit goes to people making up to 242% of the median income, what I'm taking away is they don't really want me to know that almost none of it is going to those making less than the median income.

People making less than 31k don’t really pay taxes anyways.

[NWFlow]

And probably don't have student loans or a college degree.

[Conundrum]

Those deadbeats need to stay out of beach communities.

[NWFlow]

You had your revolution! Condolences!

[Mazderati]

Barron DeJong is literally copying and pasting from the linked WH statement. Maybe check it out before spinning yourself in a huff speculating over information that is already covered.

[Danno]

You are asking about the Biden graphic and is it false? No. It is just intentionally obfuscating who is getting the money, even if you want to ignore the fact that you can still get debt cancellation at 400% of median income:.

Median individual income is 31K for the US for 2019.

So if that graphic tells me than 87% of the benefit goes to individual borrowers making up to 242% of the median individual income, which is exactly what it says...

... it obfuscates that very little is going to those making LESS than the median income.

This was exactly SEN Bennet's (D-CO) point on failure to direct public monies to the neediest people while also failing to address the causes of the whole issue.

Yeah, you're not really convincing me with that. So you're upset that people who objectively speaking do not make a lot of money and have significant student loan debt may be getting some help, because other people with student loan debt -- who also will be getting help -- need it more?

ETA: we all get that this is not perfect, and a lot more could be done. Not one person here is arguing otherwise.

People making less than 31k don’t really pay taxes anyways.

this.

And probably don't have student loans or a college degree.

and possibly this. But to the extent they do have student loan debt (a degree is irrelevant) they will also get the help.

Those deadbeats need to stay out of beach communities.

and this too!

[summit]

People making less than 31k don’t really pay taxes anyways.

And probably don't have student loans or a college degree.

Exactly.

Thus my point that this is a huge amount of public money benefitting a certain subset of the the middle and upper classes with unfair distribution.

[Conundrum]

I think this would be a lot more palatable for everyone disagreeing with the concept if there was a defined funding mechanism other than general fund attached. I rarely feel bad for a lender when the loan goes to default. The lender had an opportunity to make interest and they didn't have to loan the money. But because it's just tax dollars paid for by most of us, it just doesn't feel right to many. Sure play some whataboutism with other government programs. I'm sure there are threads for those too.

Why didn't they start with writing off the accrued interest and leave the principal of the loan and see how that goes? How about going back to the educational institutions and taking it out of the coaches' paychecks or the large endowments? Maybe throw a bone to SBA defaults for those trying to start small businesses that didn't make it? Reduce the high side of earnings for the write off...$125k seems like the education worked and those should be thankful and pay back. Maybe not?

Helping people isn't a bad thing but this one with the timing and the partisan issues present, seems a little funky.

[J. Barron DeJong]

You are asking about the Biden graphic and is it false? No. It is just intentionally obfuscating who is getting the money. Even if you want to ignore the fact that you can still get debt cancellation at 400% of median income, 31K...

That graphic tells me than 87% of the benefit goes to individual borrowers making up to 242% of the median individual income...

... it obfuscates that very little is going to those making LESS than the median income.

This was exactly SEN Bennet's (D-CO) point on failure to direct public monies to the neediest people while also failing to address the causes of the whole issue.

I think that while you can argue about what the cut off limit should be, and whether the one that was decided upon is too high, the past generation of students didn’t develop the system that did this:



It’s the system that they were handed, and it sucks compared to how it used to be. Was it unfair for blue collar workers back in the day when college was affordable, even though the salary benefits were still large, and an even smaller percentage of the population was taking advantage of it?

Help the the students out, fix the system.

This is not a policy to help the least fortunate, and that’s OK; there are others intended to do just that.

[J. Barron DeJong]

I think this would be a lot more palatable for everyone disagreeing with the concept if there was a defined funding mechanism other than general fund attached. I rarely feel bad for a lender when the loan goes to default. The lender had an opportunity to make interest and they didn't have to loan the money. But because it's just tax dollars paid for by most of us, it just doesn't feel right to many. Sure play some whataboutism with other government programs. I'm sure there are threads for those too.

Why didn't they start with writing off the accrued interest and leave the principal of the loan and see how that goes? How about going back to the educational institutions and taking it out of the coaches' paychecks or the large endowments? Maybe throw a bone to SBA defaults for those trying to start small businesses that didn't make it? Reduce the high side of earnings for the write off...$125k seems like the education worked and those should be thankful and pay back. Maybe not?

Helping people isn't a bad thing but this one with the timing and the partisan issues present, seems a little funky.

It makes more sense if you consider that all the policy options here sucked, and most people were going to be pissed off regardless of which one they chose to implement.

[summit]

Help the the students out, fix the system.

On this we agree.

A one time handout to a poorly targeted group of current loan holders does nothing to fix the system.

[Danno]

Exactly.

Thus my point that this is a huge amount of public money benefitting a certain subset of the the middle and upper classes with unfair distribution.

So, because the poorest people are less likely to have student loans, we shouldn't address student loan problems? That's weird. And as someone who worked in welfare programs, let me tell you, nobody wants to give money to the poorest people. Sure, it sucks, but I don't see what poor people who don't have student loans has to do with this, and I still think your argument here is weird. Households making under $75k are not rolling in money, middle class might even overstate it depending on where they live. But you're acting like because they're not dirt poor, they shouldn't get this benefit. Even though the benefit that is also available to the dirt poor if they have student loans.

This is not a policy to help the least fortunate, and that’s OK; there are others intended to do just that.

To the extent the least fortunate have student loans, it is. But in Summit's view, the program sucks because the least fortunate don't often have student loans, I guess.

[Danno]

On this we agree.

A one time handout to a poorly targeted group of current loan holders does nothing to fix the system.

I do agree that we need to fix the system. But that's far more complicated and clearly requires legislation, as I understand the issues, and we all know how well the legislative process is working these days.

[Conundrum]

It makes more sense if you consider that all the policy options here sucked, and most people were going to be pissed off regardless of which one they chose to implement.

That's where my timing comments were going...mid-terms coming up and going to be a presidential cage match in a couple years. The dems really haven't spit out much legislation to get their more central base going and certainly haven't done anything to gain the further left support. Danno mentioned if it were votes, they would have done it so people would have the money in hand by the time they vote. I disagree-there's no money going into anybody's hands and the payments were already deferred and have been. This will probably get tied up in some lawsuits and they'll flop the roll-out. They needed something in the news cycle. Might do them more harm than good...we'll see how calculated both sides are.

I'll state my stance is their should be no debt forgiveness until the higher education system get's their houses in order. Sure, continue deferring until that happens. And the gov should probably tighten up their lending practices. If the students don't have the same access to loans, will the schools charge the same? Or how about the schools hold the notes? Maybe those could be backed by the Gov to a certain limit similar to FDIC. I bet there are any number of levers to pull to hold schools accountable.

I have no problems helping people but I do have a problem with helping to fix the same problems over and over every 10-20 years. What is happening now could potentially exacerbate tuition inflation. The Biden Admin plan doesn't seem to have much teeth to hold the colleges in check.