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This will be highly unpopular but it seems to me like a solution is to start doing some amount of payroll withholding for those with student loan debt similar t
by briandear 8y ago
This will be highly unpopular but it seems to me like a solution is to start doing some amount of payroll withholding for those with student loan debt similar to the way social security/Medicare is handled. It doesn’t have to be a huge amount, but enough to ensure repayment. Government forces us to “save for retirement” via social security, yet being debt-free is a far greater advantage in retirement than the retirement income supplement of social security. If people had no debt, they’d be better positioned to cover their own retirement. Paying off $100k student loan debt “now” is far more valuable to a person than social security later. Essentially what I would propose is this: your social security withholdings go towards student loans while you have student loans, once the loans are repaid, social security contributions resume. But, it’s a house of cards because those with excessive unpaid student loans are most likely the ones financially irresponsible enough to require social security for their retirement. There is also the other issue that your social security payments you make today are paying current benefits rather than your own benefits later. Social Security is a Ponzi scheme, so in practice my idea wouldn’t work as it might collapse the social security scheme; but adding federal student loan payments to payroll withholdings would potentially solve the problem. Also stricter caps on student loans sounds like good policy. There is no good reason anyone should have $100k+ in undergraduate student loans. Taking out loans to get an expensive degree from a school like NYU ought to not be allowed. Loans should be a means to assist someone in getting education — not as a means for someone to get the most expensive education possible. Practically bottomless student loans has absolutely contributed to the extraordinary inflation in higher education: college costs have risen faster than even healthcare costs, no small part of which can be blamed upon the availability of loans.
- BallinBige 8y agoI think an income garnishment does this?
- jogjayr 8y agoI rather like the idea of making student debt dischargeable in bankruptcy (not retroactively obviously). Why should borrowers alone face the consequences of their bad decisions? Aren't lenders equally complicit? I understand that educational loans are essentially unsecured loans. So fine, let them be treated like personal loans and let lenders evaluate their risk accordingly. It'll quickly put an end to letting an 18-year old go into $100k in debt for a liberal arts degree.
- Kephael 8y agoThe government backs the loans and this ends up being a massive subsidy for academia. If loans were priced accordingly, far fewer loans would be issued and there would be fewer students in college, and fewer colleges and universities.
- jogjayr 8y agoColleges and universities might start charging something more reasonable once they see that their students can't take out such large loans. Why exactly does it cost tens of thousands of dollars to deliver a liberal arts education anyway? Otherwise, community colleges prepare students to transfer into year 3 of a 4-year college, at a fraction of the cost. This is a viable option for students who can't afford the full 4-year experience.
- AngryData 8y agoWe already have something like that, when you don't pay on your loans they garnish your wages. They aren't not trying to collect this money, the problem is many people don't have the money to pay it off. Creditors will call you literally every single day if you owe money on student loans and aren't paying on them.