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The student loan forgiveness program encourages people to take out loans they can't afford, discourages them from finding higher-paying employment opportunities
by seibelj 9y ago
The student loan forgiveness program encourages people to take out loans they can't afford, discourages them from finding higher-paying employment opportunities in the private sector, and discourages switching jobs whatsoever because of worries about whether the new job will qualify. Once locked into a job, the employer can use this to their advantage by underpaying the employee, knowing they are less likely to hop during the income forgiveness years.
As with all market-warping programs, the inevitable result is a total mess that hurts more than it helps while creating a bureaucracy to manage the situation, which costs taxpayers while providing no useful output for society.
Although I disagree philosophically with rewarding some types of jobs over others with free money, if society were to do this, a much better way would be providing some sort of general income tax cut (like raising the standard deduction for people employed in certain industries) rather than saying "Hey, work for this job and in 10 years we will forgive all your student loans (maybe)," which is a very weird solution when you think about it.
- empath75 9y agoYeah my wife was planning on doing this with her student loan for her social work degree and I just refinanced it all to a five year loan so we could get rid of it. I don’t know how people manage to spend $50k getting a degree in social work. Something is wrong with the system that that is allowed to happen.
- scaryspooky 9y agoWhy blame 'the system' instead of your wife, though? It was her choice to pursue a degree at such costs.
- AdmiralAsshat 9y agoThis is alot like blaming the patient for getting addicted to opioids. This nation indoctrinates the youth into believing that they are worthless bums if they don't go to college. So when they walk into the door, barely an "adult" by any stretch of the word, we put a piece of paper in front of them and say, "Sign this, or you will never get the degree you need, never get the job you need, and die cold and lonely." So they sign that paper, unaware that the loan they incurred at the beginning of their adult life will follow them for the rest of their lives. And if the degree fails to bring in the job they were promised, tough luck. And if the Department of Education decides not to forgive their student loans after years of service to a government job or non profit, them's the brakes.
- empath75 9y agoShe was basically a kid, and took the advise of adults telling her what she should do.
- noja 9y agoSo why was the program introduced, if everything was running so well?
- seibelj 9y agoIt is one of many band-aids attempted to solve the root problem, which is that education is unaffordable in America for most people. The true solution in my opinion would be to allow people to discard their student loans with bankruptcy. Suddenly the government wouldn’t be offering $200k loans for humanities degrees, and universities would be forced to reduce prices or accept lower enrollments.
- rayiner 9y agoLoans that are issued without regard to your credit and also are dischargeable in bankruptcy wouldn’t be workable. New graduates usually have no assets. They could declare bankruptcy immediately, and usually are young enough where they would have plenty of time to clear up their credit before needing to buy a house, etc.
- seibelj 9y agoThen maybe there should be no student loans. The idea of a debt that can't be discharged in any circumstance sounds like a form of slavery to me. Schools could charge a rate that a part-time minimum wage employee can pay.