Student Loan Forgiveness

[::: :::]

Remember it is $240B-1/2 trillion over 10 years; no one has an accurate appraisal yet. The team that proposed the plan says the lower number; a university B-school came up with a larger number based on speculative indirect costs. Neither reflects an actual detailed plan yet.

FIFY

[SumJongGuy]

Because that requires Congress and shills will just fillibuster it.

As they will literally anything else that likely makes a lot of people happy while Biden and the democrats hold serve

[Mustonen]

Also, this will hopefully spur more economic activity as some of the debtors can now maybe pay for a mortgage or have children or seek deferred medical care or buy avocado toast, which they couldn't before because they couldn't even keep up with the interest on their student loans.

Well, while I’m generally supportive, that’s hyperbole. It helps. Let’s just let it help. It won’t magically pave the way for a mortgage tomorrow for anybody, much less avocado toast.

[californiagrown]

WWJD?

He would forgive.


Kinda ironic that a purported benefit of forgiving the student loans is more folks able to buy houses... with a loan. They should make 8 hours of community service a prerequisite for receiving the loan forgiveness.

[jackstraw]

Yeah, same.

https://subsidytracker.goodjobsfirst...op-100-parents

[total_immortal]

Well, while I’m generally supportive, that’s hyperbole. It helps. Let’s just let it help. It won’t magically pave the way for a mortgage tomorrow for anybody, much less avocado toast.

It might improve someone's debt/income ratio to a level they qualify for a mortgage. But I agree, the avocado toast is a bit of a stretch.

Kinda ironic that a purported benefit of forgiving the student loans is more folks able to buy houses... with a loan. They should make 8 hours of community service a prerequisite for receiving the loan forgiveness.

You're right, stable housing and a generally safe investment in the form of a mortgage is just as dumb as student loans

[Conundrum]

Just refi your mortgage into a student loan.

[J. Barron DeJong]

https://twitter.com/jstein_wapo/stat...ZCEDYulMbJ5JjA

[SumJongGuy]

Can't the creditors who now have to update their paperwork to adjust the balances challenge it? Worst PR move ever but possible???

[californiagrown]

You're right, stable housing and a generally safe investment in the form of a mortgage is just as dumb as student loans

Isnt a college degree or even some college a really good return on investment when looking at the average income differential over a lifetime between No College and Some/4 Year degree? I bet ROI for the average college loan is magnitudes higher than ROI on the average primary home mortgage.


Anyways, i was just chuckling at the wording of forgiving peoples loan debt, with the intention that they can then afford to go into debt on other loans with their freed up money (house, car, CC, etc). Loans, loans, loans!

[Mustonen]

Can't the creditors who now have to update their paperwork to adjust the balances challenge it? Worst PR move ever but possible???

These are federal loans. The gubmint is the creditor.

Banks aren’t really involved here.

The servicers might have a valid bitch, I think I mentioned that upthread. They’re gonna lose a nice chunk of revenue when all those loans are wiped out.

[doebedoe]

Can't the creditors who now have to update their paperwork to adjust the balances challenge it? Worst PR move ever but possible???

Isn't the Fed the creditor? The other folks are just servicers.

Watching the PR fall out of a Bank challenging this because they aren't going to earn fistfuls of profits guaranteed by the Feds would be hilarious.

[MultiVerse]

Isnt a college degree or even some college a really good return on investment when looking at the average income differential over a lifetime between No College and Some/4 Year degree? I bet ROI for the average college loan is magnitudes higher than ROI on the average primary home mortgage. !

The article linked in J. Barron DeJong's post on the previous page argues we should do targeted loan forgiveness because the return on investment is so bad for just under half of borrowers—the ones taking out loans but not finishing school. Those are the people getting screwed by the increasing cost of college education.

As an economist who studies education: "Decades of political paralysis around fixing that funding system. An unending increase in tuition prices and student borrowing. And a growing body of evidence showing harm to students who have borrowed to cover mounting college costs.

Defaults and financial distress are concentrated among the millions of students who drop out without a degree. The financial prospects for college dropouts are poor; they earn little more than do workers with no college education. Dropouts account for much of the increase in financial distress among student borrowers since the Great Recession.

Government policy did harm, and it is government policy that should work to reverse it."

This plan would be a lot better and a lot less expensive if instead of unilaterally frittering away $10k to folks with things like MBAs, Law or other professional degrees who borrowed & graduated and instead targeted folks who borrowed and are left without much to show for it.

[SumJongGuy]

These are federal loans. The gubmint is the creditor.

Banks aren’t really involved here.

The servicers might have a valid bitch, I think I mentioned that upthread. They’re gonna lose a nice chunk of revenue when all those loans are wiped out.

Thanks I was under the impression that some of the more predatory creditors were private subcontractors. I was also thinking that possibly some class action lawsuit from a bunch of crybabies who paid back their loans years ago might sue because they didn't get a cookie.... No?

[Cisco Kid]

Are we talking about forgiving what is now or what was then the popular consensus? I think the latter.

[Peruvian]

As we previously assumed, legal challenges in 3, 2, 1…

https://www.washingtonpost.com/us-po...-student-debt/

[J. Barron DeJong]

As we previously assumed, legal challenges in 3, 2, 1…

https://www.washingtonpost.com/us-po...-student-debt/

25 minutes too late. Try to keep up!

[californiagrown]

The article linked in J. Barron DeJong's post on the previous page argues we should do targeted loan forgiveness because the return on investment is so bad for what is now the majority of borrowers—the ones taking out loans but not finishing school. Those are the people getting screwed by the increasing cost of college education.

As an economist who studies education: "Decades of political paralysis around fixing that funding system. An unending increase in tuition prices and student borrowing. And a growing body of evidence showing harm to students who have borrowed to cover mounting college costs.

Defaults and financial distress are concentrated among the millions of students who drop out without a degree. The financial prospects for college dropouts are poor; they earn little more than do workers with no college education. Dropouts account for much of the increase in financial distress among student borrowers since the Great Recession.

Government policy did harm, and it is government policy that should work to reverse it."

This plan would be a lot better and a lot less expensive if instead of unilaterally frittering away $10k to folks with things like MBAs, Law or other professional degrees who borrowed & graduated and instead targeted folks who borrowed and are left without much to show for it.

I think thats a great way to do it.

Does this mean that all those stats and charts showing how much more "Some-College" folks earned over their lifetime compared to "No-college" comes down to older generations weighting the scales, and only recently have "some-college" folks started earning "no-college" money?

[MultiVerse]

I think so. Your theory might explain the otherwise small but still discernible steady decline on the returns for higher ed. On the other hand there's also a lot of research showing human capital investments have high economic returns throughout childhood into young adulthood. So maybe some of the problem lies with employers who see college degrees (the degree itself) as more of a signal instead of a sign of capability existing on a continuum.

[Mustonen]

Also, we’re assigning causation where we shouldn’t be.

Those who have “some college” also come from different backgrounds than those who never went at all. They also were smart enough and optimistic enough to think that college made sense, OR their family was comfortable enough that continuing school was a more attractive option than actually getting a real job.

[J. Barron DeJong]

They should just set up some sort of board and consider the merits of each case individually, to make sure only those who are deserving get any aid.

[MultiVerse]

Why talk about merit when you could just target the people who are severely burdened by their debt, the folks without degrees?

[Mustonen]

Why talk about merit when you could just target the people who are severely burdened by their debt, the folks without degrees?

Right, in debt but without any of the benefit. Makes sense.

- OR -

So you’re going to penalize those who actually finished what they started?!

None of it is clean. I think they took a reasonable middle ground. None of the solutions proposed solves the legal gauntlet being thrown.

[MultiVerse]

So you’re going to penalize those who actually finished what they started?!

Why would they be penalized? On average they're the ones who are going to earn at least a miilion dollars more over the course of their lifetimes.

I think there's a lot of bias or mood affiliation happening with this discussion. Because most of us here have degrees, we're ascribing merit or worth to people like ourselves.

[Supermoon]

I just saw a timeline of public funding of schools and how it starts to drop almost exactly the same time as Brown v. Board. As soon as people of color had access to the school systems the money started to dry up. Which is least shocking thing ever. (I'll try to find it again.)

As we previously assumed, legal challenges in 3, 2, 1…

https://www.washingtonpost.com/us-po...-student-debt/

If people want to argue that loan forgiveness is bad politics, can you imagine being the ones who want to go to court to overturn it? They've all lost their minds in the race to become the worst humans possible.