4 ms·

There are better ways to counteract that. Off the top of my head - if you declare bankruptcy to evict student loans, you are ineligible for retirement account c

by tw04 9y ago

There are better ways to counteract that. Off the top of my head - if you declare bankruptcy to evict student loans, you are ineligible for retirement account contributions like IRA and 401ks for the 7-10 year window. Additionally you take a 5% tax increase for the duration of that window.

woolvalley 9y ago
Not allowing people to put money in retirement accounts just means the govt has to support those people that much more when they get to old age, instead of them supporting themselves and getting tax revenue from the withdrawal. And a %5 tax increase sounds like a pretty good deal. For most people it's going to be $25-$50k total, and you have no bill due when your unemployed.
- lovich 9y ago
  I don't know if it wouldn't work out better for everyone but the lender. People paying student onerous student loans, like myself, already aren't putting money into retirement accounts because the banks are taking it all. If I could just cut out student loan payments the money would go towards paying down any outstanding debt or towards buying a house/condo which would help me not need support in retirement. The tax advantaged retirement funds are nice but many people with student loan debt it's like telling them they have won't have to pay taxes on any yachts they buy. Technically nice, but practically useless
- scythe 9y ago
  Being on the government dole in the US is not an outcome anyone would plan for. You're lucky if you can heat your apartment (if you even have your own) and eat processed cheese on what you'd be getting. Also, many (most?) student debts are less than $25k, and unpayable huge debts should never have been approved in the first place. The latter clause is the whole point of this anyway.
deleted 9y ago
[deleted]
romwell 9y ago
>Off the top of my head - if you declare bankruptcy to evict student loans, you are ineligible for retirement account contributions like IRA and 401ks for the 7-10 year window. Additionally you take a 5% tax increase for the duration of that window. Why don't we just do that for everyone, and make higher education free. This works for the absolute majority of students. Provide an opt-out for the few that can pony up the cash up front.
- charlesdm 9y ago
  You could probably turn education free by reducing the defence budget by a few percentage points. One of the reasons I'm happy to be European. Education is free in most countries. It makes no sense to burden young people with a load of debt when starting out.
  - rdtsc 9y ago
    It's a double whammy as they say in US because, students that can't find a job are both liable for student debt and also have to pay for health insurance.
  - beamatronic 9y ago
    Your ideas are intriguing and I wish to subscribe to your newsletter.
  - eadmund 9y ago
    > You could probably turn education free by reducing the defence budget by a few percentage points. According to https://nces.ed.gov/fastfacts/display.asp?id=75 https://nces.ed.gov/fastfacts/display.asp?id=75, in the 2014–2015 school year U.S. colleges & universities spent $536 billion; the 2014 defense budget was $526.6 billion[0]. We could spend our entire defense budget and still not cover our higher education bill. [0] http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2014/FY2014_Budget_Request_Overview_Book.pdf http://comptroller.defense.gov/Portals/45/Documents/defbudge...
    - zolthrowaway 9y ago
gdix 9y ago
> if you declare bankruptcy to evict student loans, you are ineligible for retirement account contributions like IRA and 401ks for the 7-10 year window. That's something that a large percentage of people do anyway. What a strange and poorly-thought-out suggestion.
- lightbyte 9y ago
  It's also a sure fire way for the public to have to spend even MORE on social programs since you'll be even more likely to reach retirement with zero money. What good could possibly come from intentionally banning someone from saving for retirement?
kirykl 9y ago
This is somewhat the case in a chapter 13 bankruptcy. You generally can’t contribute to a retirement savings during the 5 years of the bankruptcy

by tw04 9y ago

woolvalley 9y ago

Not allowing people to put money in retirement accounts just means the govt has to support those people that much more when they get to old age, instead of them supporting themselves and getting tax revenue from the withdrawal. And a %5 tax increase sounds like a pretty good deal. For most people it's going to be $25-$50k total, and you have no bill due when your unemployed.

lovich 9y ago
I don't know if it wouldn't work out better for everyone but the lender. People paying student onerous student loans, like myself, already aren't putting money into retirement accounts because the banks are taking it all. If I could just cut out student loan payments the money would go towards paying down any outstanding debt or towards buying a house/condo which would help me not need support in retirement. The tax advantaged retirement funds are nice but many people with student loan debt it's like telling them they have won't have to pay taxes on any yachts they buy. Technically nice, but practically useless
scythe 9y ago
Being on the government dole in the US is not an outcome anyone would plan for. You're lucky if you can heat your apartment (if you even have your own) and eat processed cheese on what you'd be getting. Also, many (most?) student debts are less than $25k, and unpayable huge debts should never have been approved in the first place. The latter clause is the whole point of this anyway.

deleted 9y ago

[deleted]

romwell 9y ago

>Off the top of my head - if you declare bankruptcy to evict student loans, you are ineligible for retirement account contributions like IRA and 401ks for the 7-10 year window. Additionally you take a 5% tax increase for the duration of that window. Why don't we just do that for everyone, and make higher education free. This works for the absolute majority of students. Provide an opt-out for the few that can pony up the cash up front.

charlesdm 9y ago
You could probably turn education free by reducing the defence budget by a few percentage points. One of the reasons I'm happy to be European. Education is free in most countries. It makes no sense to burden young people with a load of debt when starting out.
- rdtsc 9y ago
  It's a double whammy as they say in US because, students that can't find a job are both liable for student debt and also have to pay for health insurance.
- beamatronic 9y ago
  Your ideas are intriguing and I wish to subscribe to your newsletter.
- eadmund 9y ago
  > You could probably turn education free by reducing the defence budget by a few percentage points. According to https://nces.ed.gov/fastfacts/display.asp?id=75 https://nces.ed.gov/fastfacts/display.asp?id=75, in the 2014–2015 school year U.S. colleges & universities spent $536 billion; the 2014 defense budget was $526.6 billion[0]. We could spend our entire defense budget and still not cover our higher education bill. [0] http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2014/FY2014_Budget_Request_Overview_Book.pdf http://comptroller.defense.gov/Portals/45/Documents/defbudge...
  - zolthrowaway 9y ago

gdix 9y ago

> if you declare bankruptcy to evict student loans, you are ineligible for retirement account contributions like IRA and 401ks for the 7-10 year window. That's something that a large percentage of people do anyway. What a strange and poorly-thought-out suggestion.

lightbyte 9y ago
It's also a sure fire way for the public to have to spend even MORE on social programs since you'll be even more likely to reach retirement with zero money. What good could possibly come from intentionally banning someone from saving for retirement?

kirykl 9y ago

This is somewhat the case in a chapter 13 bankruptcy. You generally can’t contribute to a retirement savings during the 5 years of the bankruptcy