Student Loan Forgiveness

[Buster Highmen]

What's he definition of "direct" that is being used?

What's the definition of "loan"?

This is ridiculous sophistry when at the root, the point is that the loan structure may be part of the cause of tuition inflation and bureaucratic bloat.

[Buster Highmen]

A loan is never a directly way of money moving from consumer to product. A creditor, usually a bank in the context of student loans, is involved.

By definition, that is not direct and saying so is purely sophistry.

Anyway, back to the point, the loan structure is a likely candidate for a cause to tuition inflation and bureaucratic bloat.

[Mustonen]

What's he definition of "direct" that is being used?

What's the definition of "loan"?

This is ridiculous sophistry when at the root, the point is that the loan structure may be part of the cause of tuition inflation and bureaucratic bloat.

Holy shit. Really?

Direct loans are disbursed by the DOE directly to the school. This differs from the mortgage system because no lender ever holds the loan even on an intermediate basis.

A loan is a promise to pay. As an instrument, it’s an asset for the lender and a liability for the borrower.

[Mustonen]

A loan is never a directly way of money moving from consumer to product. A creditor, usually a bank in the context of student loans, is involved.

By definition, that is not direct and saying so is purely sophistry.

Anyway, back to the point, the loan structure is a likely candidate for a cause to tuition inflation and bureaucratic bloat.

The DOE is the creditor. In the context of student loans, it’s the government. By definition, it’s direct. They send the loan disbursal to the school. No “banker” touches any piece of it.

An indirect loan (like when you finance your car at the lot) is where somebody else draws up the paperwork for the lender and then disburses (gives them the car) on their behalf.

An indirect student loan would be one where a bank originates a loan to a borrower on behalf of the government. That’s a thing too, see Sallie Mae. But they’re underwritten according to the government’s rules and standards; just doing the paperwork for a bit of fee income. It’s not all that common outside of small specialized players in the marketplace. Nobody wants a piece of that business (see initial correction re: “bankers’ wet dream.”).

And agreed. These loans are originated without any actual expectation of profit or repayment. I’m more liberal than most and believe in socializing higher education, but the incentives are alllll fucked up here. And not to plug capitalism, but if these loans were actually originated and underwritten by bankers who were accountable for financial performance it would be a far different landscape. Which is why this is a point worth belaboring. Vilifying financial institutions, as appropriate as that often is, is a serious red herring in this discussion and neuters any meaningful discussion around the loan structure.

Also, this isn’t sophistry. You’re just laboring under some misapprehensions re: how this shit works. Don’t worry, no student loans need to be taken out for this particular education.

[mcski]

Here is a question that has probably been addressed but I’m feeling too lazy to search for it:

Why are student loans excluded from personal bankruptcy relief?

It seems like that change should be part of any student debt relief program/legislation

Maybe if banks knew that the loans could be part of bankruptcy filings that would reign them in at least a little?

[Adolf Allerbush]

The DOE is the creditor. In the context of student loans, it’s the government. By definition, it’s direct. They send the loan disbursal to the school. No “banker” touches any piece of it.

DOE is the "bank" in this case. I think that's the hang-up between you two.

[Mustonen]

That was done to loosen up the student loan market. It was sorta effective until the government said “fuckit” and made most of the loans direct. Since then, nobody can really write much of a loan that competes with a federal direct student loan, so most don’t really try. It just protects the government’s balance sheet.

But if they DID do that, it’s basically just an unsecured loan. Go get yourself a $50k unsecured loan without a job or a credit score and see how that works out. That market doesn’t work. Plus side, it turns off the money spigot for avaricious universities and free spending twenty year olds. So maybe that’s not an awful idea. Expect interest rates on student loans to double or triple, at least, though.

But in terms of providing access to education it’s a disaster unless something else happens too.

[Buster Highmen]

There's FAFSA and there's private student loans. And then there's escrows and other intermediaries. I'm familiar with the history and structure of student loans, so thanks for the summary

Despite the fact that the money goes from the creditor to the college, the overall process is not direct. Loans by definition are not a direct way of moving money from the consumer to the producer.

In the banking industry student loan nomenclature, sure it's direct from creditor to institution, but as I've rerereiterated, that's not the context in which I'm using the term. Did it sink in this time?

Now despite all that circuitous defensive obfuscation, I think lots of people agree that the current student loan construct is a disaster.

I'd probably support the forgiveness of student loans, except I'd rather not pay off the fees and interest to the banks. That's in part why I think the grant construct would be better and cut out the intermediaries.

[bodywhomper]

My entering freshman qualified for a fed loan that covers 25% of his tuition. 10% more is coming from a “middle class” grant. The 65% remaining….?

[Mustonen]

There's FAFSA and there's private student loans. And then there's escrows and other intermediaries. I'm familiar with the history and structure of student loans, so thanks for the summary

Despite the fact that the money goes from the creditor to the college, the overall process is not direct. Loans by definition are not a direct way of moving money from the consumer to the producer.

In the banking industry student loan nomenclature, sure it's direct from creditor to institution, but as I've rerereiterated, that's not the context in which I'm using the term. Did it sink in this time?

Now despite all that circuitous defensive obfuscation, I think lots of people agree that the current student loan construct is a disaster.

I'd probably support the forgiveness of student loans, except I'd rather not pay off the fees and interest to the banks. That's in part why I think the grant construct would be better and cut out the intermediaries.

You’re kind of a moran. And I say that with love. Also, you are still quite wrong. I’m perplexed. I wouldn’t consider arguing with you about the finer points of compiling code or the SDLC, but I might seek understanding from you. What’s broken here?

Go ahead and describe how any bank will benefit from forgiving debt held by the DOE? If anything, it hurts the private entities who are doing the servicing. Forgiving performing private loans held on their books isn’t great either; better to let those assets keep earning. Nobody likes an early payoff. Don’t you think that if private entities were involved in student debt forgiveness in a meaningful way that a consortium of those conservative republican institutions wouldn’t have headlined the opposition to Biden’s forgiveness gambit, even for wholly manufactured reasons?

And I mean, if you’re talking about a bank being the recipient of (and paying the nominal fees for) ACH transactions originated by the fed… I guess. Holding the deposit accounts of a major university is a money making venture. If that’s really your angle I’ll help you understand how that might benefit the financial institution, but that benefit is incidental to the discussion I think.

[Buster Highmen]

Clumsy insults aside, I don't know where you're pulling the idea that I'm remotely suggesting that banks would benefit from forgiving student loans. I never said that and by all inference, I would hope it would trash the banks and teach the DOE a lesson.

I'm not wrong about the common usage of the word "direct".
I'm not wrong about the current student loan structure likely having an impact on tuition inflation, which has been the point of my posts for those sufficiently aware to detect it.

What I am concerned about in the context of forgiving student loans is not the servicers of the guaranteed loans and their sticky fingers, but the pensions, the funds and other financial entities benefitting investors. At least I'm not surprised at that lack of perception.

[Mustonen]

Clumsy insults aside, I don't know where you're pulling the idea that I'm remotely suggesting that banks would benefit from forgiving student loans. I never said that and by all inference, I would hope it would trash the banks and teach the DOE a lesson.

I'm not wrong about the common usage of the word "direct".
I'm not wrong about the current student loan structure likely having an impact on tuition inflation, which has been the point of my posts for those sufficiently aware to detect it.

What I am concerned about in the context of forgiving student loans is not the servicers of the guaranteed loans and their sticky fingers, but the pensions, the funds and other financial entities benefitting investors. At least I'm not surprised at that lack of perception.

Sure, “clumsy insults aside.” But you’re being disingenuous and then thickening up your syntax to hide it. That’s predictable, though.

Ok, not benefit. Articulate the fee or interest paid to any bank via student loan forgiveness.

And you’re absolutely wrong when discussing the word “direct” in the context of lending, which happens to be this context.

And I think we established a few pages ago that we agree that easy money is definitely a contributor, if you can’t (and maybe you can) lay the entire thing at the easy money doorstep.

Care to elaborate on your last paragraph? I’m having a hard time unwinding it. ETA: actually, probably don’t bother. Gonna go chase down a bike trail or three.

[SumJongGuy]

Banks/lenders don't eat all of it.. It would be very similar to the current MO for bad debt, which a lot of this ends up being anyway.. It just takes longer to become official, sitting in the borrowers ledger longer, maybe until they off themselves at age 27... . or at age 47 with their spouse and kids? FACT.

It's a chronic and pervasive problem caused by predatory lending and institutions inflating their product prices to reap the theft/harvest.

IMHO the entities that hatched the scheme to prey on teenagers ought to be the ones who take the brunt of the losses.. But, since they have congress in their pockets... which is how we got here in the first place, it will be the people who aren't making or losing money as the result of this fiasco who end op paying for it. That's me and I'm actually OK with it just like I am with me and my kids fighting wars for "those" folks.. MERUKA!

[Buster Highmen]

I've already clarified my use of the word "direct" several times. You can continue to play sophist and industry shill, but it doesn't help the discussion if you continue to refuse the definition I've continued to explain. Can we move on from that?

I'll admit to baiting you and you're rising to the occasion. Bravo! But at least you've finally demonstrated the ability to follow my basic point over these last several posts.

To address the original issue, I don't think I support forgiving student loans due to the impact it will have on taxpayers and leaf holders (meaning the individuals, not corporations) of credit such as pensions, retirement accounts, and other investment vehicles. The forgiveness would not address the underlying problem, so I've tried to address that.

Instead, the main point of my posts is that the support for post secondary institutions come in the form of government grants instead of loans.

I hope that helps.

[Diamond Joe]

There's only way to resolve this. Ski-off!!

[EWG]

There's only way to resolve this. Ski-off!!

I haven’t read a single other post in this thread, but I’m here to say:

SKI OFF!!!

[Mustonen]

I’m down. Does he ski as pretentiously as he posts? [emoji2]

[Buster Highmen]

When the other party in a discussion is reduced to personal attacks, I know I've won. Thanks! The student loan structure in America is broken.

As far as the skiing goes, I think I have a few people that would vouch for my competence. There's no need to further embarrass the inept.

[Cisco Kid]

Don't you love it when the Law of Supple and Demand is working? Can't fool Mother Nature.

It'd be interesting to know if tuitions rose when the Gov't paid the tuition for a few million to attend college for free in 1946-50 and greatly increased the demand.

[Mustonen]

When the other party in a discussion is reduced to personal attacks, I know I've won. Thanks! The student loan structure in America is broken.

As far as the skiing goes, I think I have a few people that would vouch for my competence. There's no need to further embarrass the inept.

Hah. Like you haven’t been ad homineming the whole time. Keep pumping that narrative, champ. Like the Reverend Trump has established, truth is whatever you say it is.

If you give me $1k plus expenses I’ll come ski your death chute or whatever, though.

[Buster Highmen]

I have attacked your profession and your arguments, but haven't made personal attacks. There's a difference.

If you think that any of our interactions over the years encourage me to want to meet you in any context, let alone pay for it, you're just a little mistaken. Par for the course?

[Mustonen]

That isn’t true, but it seems you might actually believe your own bullshit. Don’t stop fucking that chicken.

[Buster Highmen]

Give me an example.
I'll admit I called you a banker, but that's what you are, even though it is a convenient pejorative.

Happy 4th!!!

[Mustonen]

Well, you also suggested that my profession invalidates my opinion since I’m obviously incapable of reflection and perspective. You called me a sophist and a shill. Etc etc. I’m not seriously going to go through it.

I called you a pretentious douche, which at least was direct. Also, true.

I hope you and your family has had a happy holiday as well. Cheers!

[Buster Highmen]

Arguing what "direct" means after I explained that I wasn't using in your standard industry manner several times over is sophistry on your part. Own it.

I never claimed you're incapable of reflection or perspective and I'd appreciate you not misconstruing my posts. It makes you look even worse.

But as a banker and a defensive one at that, I called it out. Look up the definition of shill, you defend your industry.

I agree I've insulted your industry and I guess I understand that's part of your identity. My apologies, but I hold distinctions between peoples professions and who they are while acknowledging their identity can skew their views. But I wouldn't call you a moran and despite your lectures on how student loans work, I won't call you a pompous or pretentious douche.

The funny thing is that at the heart of the discussion, I think we agree that the current loan system is a mess and likely accounts for a good deal of tuition inflation.