4 ms·

Cancelling all student debt – giant welfare program for the upper middle class

12 points by SQL2219 8y ago

skh 8y ago
From my experience of teaching at a community college for 18 years it will not be a giant welfare program for the upper middle class. It will benefit the upper middle class but the ones who really suffer from student loan debt are the poor students going to college who have no realistic chance of ever getting a degree. They get saddled with unforgivable debt and it becomes a lifelong burden to them. We need a new system. College should be free or nearly so for those who are qualified to go.
dragonwriter 8y ago
This analyzes the benefit by a flawed mechanism; yes, per capita, the upper middle class has a higher load of student debt than lower economic classes. But the real drag of student loans on quality of life and opportunity is revealed by ratios like student loan debt to net worth it student loan debt to income; the people who would have the most weight lifted off of them aren't the upper middle class. OTOH, I don't think any of those pushing simple universal student debt cancellation would be mind limiting any windfall for the rich that would result (not exempting the debt forgiveness from income tax for borrowers above a set income level would be a dirt simple way to do that.)
isoskeles 8y ago
I don’t understand why there isn’t something more of a middle path discussed. Limit the amount of interest that can earned by creditors maybe. I do find it unethical and strange that we allow 18-year-olds to take out crippling debts, and I find it predatory that anyone can profit off of this. However, canceling all the debt messages a big “screw you” to anyone who made the sober decision of not going to a more expensive school (or not going at all). Sorry to say, I think it’s unfair given this is the system we have and we can’t go back in time and undo poor decisions.
- maps 8y ago
  There is a middle ground, it is rolling back the bankruptcy exceptions. If the burden is too high, let these people bankrupt out of them with the cost of having your credit/name tainted for years. Bankruptcy seems to be a 4 letter word no one dares speak anymore but it is the root of the issue here.
  - blake_himself 8y ago
    Right - it should be harder to get money for less-productive specialty degrees in the humanities. Creditors would have to decide whether to risk their money, and become gatekeepers.
anoncoward111 8y ago
Can I get a partial rebate for the loans I've paid? I feel like a chump for paying back $35,000 in under 2 years. Perhaps a tax rebate instead of cold hard cash in my hand? Doesn't make sense to punish those who made honest attempts to pay. Also, I completely support the forgiveness for people who went to scam schools like ITT Tech and Everest.
- sharemywin 8y ago
  I've been paying my loans for 15 years. And why where at it let's bump up the social security and medicare ages. So, I can get f'ed coming and going. And let's do s't about healthcare costs for families because that is something that's spiraling out of control.
- lscore720 8y ago
  This is pretty unrelated, but your post reminded me of the frustration I experienced during the housing crash. I bought my condo in 2006, essentially at the peak of the market - then was out of work for long time during the recession and had to go through foreclosure. During that time, I watched as the government sprung into action with those sweet incentives to stimulate people to buy real estate (e.g. the $8,000 Homebuyer Tax Credit!). I understand it, but it just rankled me to be on the losing end of time!
greggeter 8y ago
The government needs to get out of the student loan business and the problem goes away for future generations. Costs nothing.
slowhand09 8y ago
https://outline.com/nLwL5D https://outline.com/nLwL5D
slowhand09 8y ago
Three significant paragraphs from the article-> ------------- Most people struggling to pay off their debts are not graduates of four-year colleges. They are instead non-graduates — people who attended college (often a for-profit college) but never received a degree. They have the worst of both worlds: debt and no degree. [...] The average four-year college graduate who takes out loans ends up with less than $30,000 in debt. That typically translates into monthly payments of about $300 — or about 7 percent of the starting salary of a brand new college graduate (which is more than $50,000 a year). Over time, this percentage declines, as the graduate receives raises. No wonder the overwhelming majority of college graduates repay their loans on time. [...] A recent Brookings Institution study by Judith Scott-Clayton found that the loan-default rate for borrowers with a bachelor’s degree was less than 8 percent. The default rate for borrowers without any degree was a miserable 40 percent.
- ID1452319 8y ago
  How do people attend and not receive a degree? Are they implying people have dropped out or is there some kind of course which doesn't result in a degree certificate?
nickthemagicman 8y ago
This article is so...wrong. >"The average college grad makes 50k every year." He's defining 50k as upper middle income? That's not upper middle income by any measurement or common sense. And that's the average. Many college graduates or non-grads with loans make LESS that that. That's millions of people. Student loan forgiveness would help them alot. Not to mention stimulate the economy. Also, the designation between upper middle income and upper middle class is important. You may have upper middle income but still be middle class. In some third world countries upper middle income is 500 bucks a year. That's not middle class. >"For one thing, college graduates come disproportionately from higher-income families. Most of these families don’t make enough to pay for college outright, so their children take out some loans." Higher income. Can't afford public school tuition. Pick one. Also, citation needed. 'Higher income' and 'Disproportionately' are qualitative words. Without citations and a point of reference they are useless. Is it 1% higher or 90% higher? >"Most graduates of four-year colleges, by contrast, are doing just fine. I know you’ve probably read stories about liberal-arts college graduates who ran up enormous debts and now can’t find decent work. But they are the rare exceptions." Wheres the citation? This article is solidly in the OPINION piece category. It's kind of distressing to see that this person went to Yale.and considers themselves a real journalist but provides no citations to base his arguement. Instead he seems to rely on qualitative measurements to base his reasoning. It's scary how rich parents can help incompetent kids reach positions of power in America.

12 points by SQL2219 8y ago

skh 8y ago

From my experience of teaching at a community college for 18 years it will not be a giant welfare program for the upper middle class. It will benefit the upper middle class but the ones who really suffer from student loan debt are the poor students going to college who have no realistic chance of ever getting a degree. They get saddled with unforgivable debt and it becomes a lifelong burden to them. We need a new system. College should be free or nearly so for those who are qualified to go.

dragonwriter 8y ago

This analyzes the benefit by a flawed mechanism; yes, per capita, the upper middle class has a higher load of student debt than lower economic classes. But the real drag of student loans on quality of life and opportunity is revealed by ratios like student loan debt to net worth it student loan debt to income; the people who would have the most weight lifted off of them aren't the upper middle class. OTOH, I don't think any of those pushing simple universal student debt cancellation would be mind limiting any windfall for the rich that would result (not exempting the debt forgiveness from income tax for borrowers above a set income level would be a dirt simple way to do that.)

isoskeles 8y ago

I don’t understand why there isn’t something more of a middle path discussed. Limit the amount of interest that can earned by creditors maybe. I do find it unethical and strange that we allow 18-year-olds to take out crippling debts, and I find it predatory that anyone can profit off of this. However, canceling all the debt messages a big “screw you” to anyone who made the sober decision of not going to a more expensive school (or not going at all). Sorry to say, I think it’s unfair given this is the system we have and we can’t go back in time and undo poor decisions.

maps 8y ago
There is a middle ground, it is rolling back the bankruptcy exceptions. If the burden is too high, let these people bankrupt out of them with the cost of having your credit/name tainted for years. Bankruptcy seems to be a 4 letter word no one dares speak anymore but it is the root of the issue here.
- blake_himself 8y ago
  Right - it should be harder to get money for less-productive specialty degrees in the humanities. Creditors would have to decide whether to risk their money, and become gatekeepers.

anoncoward111 8y ago

Can I get a partial rebate for the loans I've paid? I feel like a chump for paying back $35,000 in under 2 years. Perhaps a tax rebate instead of cold hard cash in my hand? Doesn't make sense to punish those who made honest attempts to pay. Also, I completely support the forgiveness for people who went to scam schools like ITT Tech and Everest.

sharemywin 8y ago
I've been paying my loans for 15 years. And why where at it let's bump up the social security and medicare ages. So, I can get f'ed coming and going. And let's do s't about healthcare costs for families because that is something that's spiraling out of control.
lscore720 8y ago
This is pretty unrelated, but your post reminded me of the frustration I experienced during the housing crash. I bought my condo in 2006, essentially at the peak of the market - then was out of work for long time during the recession and had to go through foreclosure. During that time, I watched as the government sprung into action with those sweet incentives to stimulate people to buy real estate (e.g. the $8,000 Homebuyer Tax Credit!). I understand it, but it just rankled me to be on the losing end of time!

greggeter 8y ago

The government needs to get out of the student loan business and the problem goes away for future generations. Costs nothing.

slowhand09 8y ago

https://outline.com/nLwL5D https://outline.com/nLwL5D

slowhand09 8y ago

Three significant paragraphs from the article-> ------------- Most people struggling to pay off their debts are not graduates of four-year colleges. They are instead non-graduates — people who attended college (often a for-profit college) but never received a degree. They have the worst of both worlds: debt and no degree. [...] The average four-year college graduate who takes out loans ends up with less than $30,000 in debt. That typically translates into monthly payments of about $300 — or about 7 percent of the starting salary of a brand new college graduate (which is more than $50,000 a year). Over time, this percentage declines, as the graduate receives raises. No wonder the overwhelming majority of college graduates repay their loans on time. [...] A recent Brookings Institution study by Judith Scott-Clayton found that the loan-default rate for borrowers with a bachelor’s degree was less than 8 percent. The default rate for borrowers without any degree was a miserable 40 percent.

ID1452319 8y ago
How do people attend and not receive a degree? Are they implying people have dropped out or is there some kind of course which doesn't result in a degree certificate?

nickthemagicman 8y ago

This article is so...wrong. >"The average college grad makes 50k every year." He's defining 50k as upper middle income? That's not upper middle income by any measurement or common sense. And that's the average. Many college graduates or non-grads with loans make LESS that that. That's millions of people. Student loan forgiveness would help them alot. Not to mention stimulate the economy. Also, the designation between upper middle income and upper middle class is important. You may have upper middle income but still be middle class. In some third world countries upper middle income is 500 bucks a year. That's not middle class. >"For one thing, college graduates come disproportionately from higher-income families. Most of these families don’t make enough to pay for college outright, so their children take out some loans." Higher income. Can't afford public school tuition. Pick one. Also, citation needed. 'Higher income' and 'Disproportionately' are qualitative words. Without citations and a point of reference they are useless. Is it 1% higher or 90% higher? >"Most graduates of four-year colleges, by contrast, are doing just fine. I know you’ve probably read stories about liberal-arts college graduates who ran up enormous debts and now can’t find decent work. But they are the rare exceptions." Wheres the citation? This article is solidly in the OPINION piece category. It's kind of distressing to see that this person went to Yale.and considers themselves a real journalist but provides no citations to base his arguement. Instead he seems to rely on qualitative measurements to base his reasoning. It's scary how rich parents can help incompetent kids reach positions of power in America.