8 ms·

Bernie Sanders to unveil plan to cancel all $1.6T of student loan debt

50 points by xivzgrev 7y ago

xivzgrev 7y ago
“Sanders will also release a detailed roadmap -- centered on new taxes on Wall Street -- to raise the $2.2 trillion dollars necessary to pay for this program and his other college funding plans. It will include a 0.5% tax on stock trades (or 50 cents for every $100 worth of stock), a 0.1% fee on bonds, and a 0.005% fee on derivatives. Sanders believes that could raise more than $2.4 trillion dollars over the next ten years.” Sure hope “stock trades” doesn’t include retirement contributions or rollovers. I just rolled over 90k - that would’ve cost me $900 (sell, then buy).
- zajd 7y ago
  God forbid you have to contribute $900 for the future of the country. You realize 50%+ of Americans don't even have $1000 in savings, right?
- solotronics 7y ago
  Today we have hyper globalized financial systems and if a country implements taxes like this the big players just move their money elsewhere. This only ends up hurting middle class folks who are playing by the books. I think it would make much more sense to have a very simple tax system (a few percent on every capital gain or income, wether corporate or personal) and get rid of every other complexity and loophole. If America had one of the lowest corporate tax rates many companies would locate headquarters here and bring that few percent of billions of dollar we wouldn't have otherwise. I also think we could create a special administrative and economic zone (without minimum wage) in the first 50 miles of southern border and allow anyone to come work there from all over the world. This would create a pathway for people to come here legally and have civic and language classes to help integrate. We could pick the best and brightest from this zone for citizenship which I think is a more fair system. Before you dismiss this idea as colonial consider that this area would have the same human rights and laws as the rest of the US just with low wages, this would be better working conditions than most places on earth with similar wages while also providing a defined channel to gain US citizenship.
  - dmos62 7y ago
    I like your ideas. However, I don't fully follow the the low corporate taxes one though. Is the idea to compete in a race-to-the-bottom with corporate taxes and profit from trickle-down economics? I think the popular critique of trickle-down is fair.
    - buboard 7y ago
      Corporation tax does not tax (rich) individuals
    - solotronics 7y ago
      It's not a race to the bottom, for a number of reasons America is a good place already for international corporations to have headquarters. We have a strong and mostly fair legal system, and rule of law that many countries do not have. We have a world class workforce. But by having high corporate income tax you are driving away companies that would otherwise HQ here and bring money and taxes. I see benefits and no downsides to making the environment here even more appealing to corportations.
      - dmos62 7y ago
        Race to the bottom was not a clear expression of what I meant. I meant that US would compete with other tax environments for lowest corporate taxes, which would drive down corporate taxes globally. The obvious implication is that the corporations then contribute even less to the governmental budgets. In terms of foreign policy, this has the problem of breaking solidarity with other countries. Actually, it seems that the whole idea is based on competition instead of cooperation, but given US policies today, that would be normal. What I'm wondering is would this pay off to the winner that would attract many corporations, but derive minimal taxes from them. What's the mechanism to profit from their operating within your administrative unit in that case?
        solotronics 7y ago
        Corporations don't exist in a vacuum, they are organizations of people working and recieving salaries. I would argue that by having corporate headquarters located somewhere you are bringing massive net benefit if you only look at salary. The corporate income tax is just extra that the government can squeeze out of them and its become apparent that the biggest corporations can get out of most of that anyways in the US by careful gaming of the tax code. Thus my proposal to lower the rate to a more realistic amount and simplify the tax code. Amazon paid $0 corporate income tax last year on $11 billion in income, they structure the company around reinvesting all the profit for the exact reason of not paying taxes. 2% flat rate for everyone is much better than 0% for the most cunning.
- mrep 7y ago
  It's amazing how politicians like this propose these types of things and never look to see if anyone else has tried it because we have the perfect example, Sweden: "In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Hence, a round trip (purchase and sale) transaction resulted in a 1% tax. The tax applied to all equity security trades in Sweden using local brokerage services as well as to stock options." As for the results: "revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988" [0]. [0]: https://en.wikipedia.org/wiki/Swedish_financial_transaction_tax https://en.wikipedia.org/wiki/Swedish_financial_transaction_...
  - r00fus 7y ago
    You know that the London Stock Exchange currently implements transaction taxes and that it generates billions (€3.8bn per year) yearly in revenue? [1] How about all these other countries that have implemented or are currently implementing them? [2] Looks like this clause is why the UK was successful while Sweden may not have been: "The tax is charged whether the transaction takes place in the UK or overseas, and whether either party is resident of the UK or not." Clearly the UK being a much larger securities market is a much better parallel to the US than Sweden. It all probably comes down to the implementation. [1] https://en.wikipedia.org/wiki/Financial_transaction_tax#United_Kingdom https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit... [2] https://en.wikipedia.org/wiki/Financial_transaction_tax#United_States https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit...
grzm 7y ago
Main discussion (over 200 comments): https://news.ycombinator.com/item?id=20260014 https://news.ycombinator.com/item?id=20260014
rayiner 7y ago
This is welfare for upper middle class people. https://www.nytimes.com/2018/11/18/opinion/student-debt-forgiveness-college-democrats.html?action=click&module=Opinion&pgtype=Homepage https://www.nytimes.com/2018/11/18/opinion/student-debt-forg... > “Education debt,” as Sandy Baum and Victoria Lee of the Urban Institute have written, “is disproportionately concentrated among the well-off.” The highest-earning quarter of the population holds more than a third of all student debt, while the lowest-earning quarter holds only 12 percent, according to Baum and Lee. Less than 40% of those 18-29 have student loan debt: https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-abo.... Almost by definition, these are disproportionately the folks who were privileged enough to go to college to begin with. Moreover, the total debt is skewed towards the people with the highest income potential. The median debt for someone who doesn't attain a college degree is $10,000. Versus $45,000 for someone who attains a post-graduate degree. The existing system we have is fine. Obama's PAY-E caps student loan payments at 10% of income. That means the people who end up with good jobs end up subsidizing everyone else. (The government kicks some money in too, but PAYE will only cost $180 billion over 10 years, instead of more than then times that in one shot.) If we need to fix the loopholes in that, let's do it. But under the current system, I as a private practice lawyer pay thousands of dollars a month to the government. Under Bernie's plan, I'd get a small mortgage worth of a windfall. If we're going to raise taxes $2.2 trillion, it's criminal to not spend it on the people who need that money the most.
- kasey_junk 7y ago
  We could just rollback the recent tax cuts and have a much more progressive tax policy than a student loan forgiveness program for all. That said one of the arguments for universal forgiveness is that it’s the only way to get major reform in the space. That seems like a crazy expensive premium to pay to me but maybe I’m naive about the appetite for improving others lives.
  - rayiner 7y ago
    The recent tax cuts are a side show. The main effect was to bring U.S. corporate tax rates in line with Randian hell-holes like... Sweden: https://tradingeconomics.com/sweden/corporate-tax-rate; https://tradingeconomics.com/sweden/corporate-tax-rate; https://www.oecd.org/tax/revenue-statistics-sweden.pdf https://www.oecd.org/tax/revenue-statistics-sweden.pdf (Sweden - 6% of revenue from corporate taxes); https://www.oecd.org/tax/revenue-statistics-united-states.pdf https://www.oecd.org/tax/revenue-statistics-united-states.pd... (US - 8% of revenue from corporate taxes). If we want to help people, we need to raise taxes on the middle and upper middle class and spend it on safety net services, like everyone else in the developed world: https://taxfoundation.org/how-scandinavian-countries-pay-their-government-spending; https://taxfoundation.org/how-scandinavian-countries-pay-the... https://www.oecd.org/tax/revenue-statistics-sweden.pdf https://www.oecd.org/tax/revenue-statistics-sweden.pdf (Sweden - 61 % of revenue from from middle class taxes: payroll, social insurance, and goods and services); https://www.oecd.org/tax/revenue-statistics-united-states.pdf https://www.oecd.org/tax/revenue-statistics-united-states.pd... (USA - 41% of revenue from same sources).
totaldude87 7y ago
Just too many questions at this point. what about the ones who have already paid the entirety of its loan? How about a federal loan structure? with very minimal interest? Isn't this problem a derivative of problem (insert costly higher education) here. Shouldn't this also mean that education loan will become one of the easy way to get into college even if you dont want to? What about the future generation? Its good to have free education in first place rather than giving out loans and taking it back. India took a similar stance on Farmer's loan waivers and it neither fixed the issue nor corrected it. Time to learn lessons.
- its_the_future 7y ago
  The plan is part of a more comprehensive "college for all" program that Sanders has already released in pieces and includes free tuition at all four-year public colleges and universities, as well as community colleges. The broader proposal also includes subsidies to reduce the cost of tuition and fees for low income students at private colleges that historically serve underrepresented communities. "We will make a full and complete education a human right in America, to which all of our people are entitled," Sanders said on Monday. "This means making public colleges, universities and HBCUs tuition-free and debt-free by tripling the work study program, expanding Pell grants and other financial incentives."
buboard 7y ago
How is this not another $1.6T bank bailout?
deleted 7y ago
[deleted]
anm89 7y ago
I can't find this mentioned, is this only federal loans held by the government or would this involve forgiving privately held debts. The first seems reasonable. The second seems terrifying.
- kasey_junk 7y ago
  The full plan isn’t out but they’ve implied it would be public & private debt as well as making community & public colleges tuition free going forward.
- AnimalMuppet 7y ago
  "Forgiving privately held debts" sounds an awful lot like "taking (stealing) from the lender". That probably would not pass a Supreme Court review. (No taking without just compensation.)
  - jcriddle4 7y ago
    No major or even minor political party is talking about just "canceling" the debt without paying the lenders. The lenders are still going to get paid so this isn't a "taking". The debt is just transferred to the the US balance sheet instead of being held by the student.
  - anm89 7y ago
    I would entirely agree but I'm not sure the average Bernie, Cortez, or Warren supporter would. I have definitely heard people advocate for a total jubilee on student loan debt. I do agree that the current Supreme Court probably wouldn't let it happen.
    - AnimalMuppet 7y ago
      Well, in fairness, Bernie is not responsible for everything every one of his supporters say. (He is responsible for making it clear when what he means is different from what his supporters think.)
tictoc 7y ago
What about the people who dodged paying student loans? What about the people who didn't have the opportunity to go to college because of growing up in abject poverty? These people had a choice to not do the research and take on massive loans.
collidge 7y ago
I get helping those who are legitimately low income. But this is much broader than that. Please explain how this is not rewarding those who chose to spend their money on luxuries instead of paying their debt. What about those of us who paid off our debt by living frugally? As someone in favor of universal health care, subsidizing college, etc, I'm still against this particular policy decision. It's badly-thought-out populist candy.
- overthemoon 7y ago
  What ABOUT you? Is your objection that something good is happening to someone suffering under student loan debt? What is the disconnect? "I suffered so they should suffer, too" is not a meaningful objection. Freedom that only affects some and doesn't somehow compensate people who are already free is still freedom. Moreover the insinuation that the only people in student loan debt are irresponsible is nonsense. It doesn't make right everyone who lost lifetime income to student loans. It doesn't bring people to life who died in car accidents, and it doesn't give me money back that I spent on a comparatively slow computer 10 years ago. It's still good.
  - collidge 7y ago
    "Moreover the insinuation that the only people in student loan debt are irresponsible is nonsense." This isn't what I said. If you want to twist other people's words, I can do that too: "There are unfair things in life therefore we should not put any effort into trying to make our own policies fair".
ykevinator 7y ago
Finally, a clear idiot proof, transparent policy proposal. I love it.
lostmymind66 7y ago
This will not fix the problem with colleges pumping out useless degrees. They got their money up-front, don't have any consequences, and the taxpayers get to foot the bill. Why not fix the root of the problem? This solution will only serve to enrich the universities and not get them to change their behavior.
- yifanl 7y ago
  What policy change that could be implemented would do anything about the societal belief of college = job? Even something as extreme as outlawing job listings from listing college degrees as a requirement probably wouldn't do it. It'd just become a "soft" requirement.
  - lostmymind66 7y ago
    "What policy change that could be implemented would do anything about the societal belief of college = job?" We stop federally subsidizing student loans. This will reduce the overall cost of universities, because they won't be relying on instant government money and the universities will be responsible if the student defaults. It will be in their best interest to push out students that actually succeed and have a chance at paying the money back.
aristophenes 7y ago
Just imagine if that amount of money was spent on updated infrastructure. Effective country wide mass transit, better ports and airports. And the money spent would flow right into the economy and circulate over and over, would push construction companies and techniques forward. Or towards clean energy generation, storage, and use. How fast would oil and coal be completely replaced? And again, money pumped into the economy to do so. Or scientific research, space projects, could make large leaps, and again, that money flows back into the economy and multiplies. Instead we want to make it so the people who hustled through college, picked a cheaper school, worked on the side, paid down their debt if they got any as soon as possible, that those people get the same outcome as someone who got a huge loan and played video games and got drunk every weekend, and spent $200,000 on a degree that only gets you a $50,000/year job?
- joshypants 7y ago
  All those things you mentioned are worthwhile investments. Erasing student debt is also a good investment. It's a bubble waiting to burst and wreak havoc on the economy. We should do both.
- toomuchtodo 7y ago
  Please show your work that infrastructure spending would generate more growth than forgiving over a trillion dollars of student loan debt. I don't discount it might be possible, but I am asking you to prove it if you're stating it as fact. No imagining.
- groobongithub 7y ago
  I "hustled" like you said. I have no debt and better paying job than my partner, who has a masters degree in education and is a primary school teacher. As we're starting a family, we are considering that our savings will pay that debt. This is a good proposal for everyone overall, even if you don't think it impacts you personally since you don't have a student loan yourself.
- overthemoon 7y ago
  Incredible how people like you consistently think high student loan debt is exclusively due to immoral choices.
benj111 7y ago
So what about the moral hazard in this. This doesn't seem to solve anything for prospective students, except to suggest they too may get their debt cleared, so load em up? Surely you should be looking at future rules, then retroactively applying them if appropriate, rather than bailing out a cohort.
- jcriddle4 7y ago
  Yes college is like crack cocaine. The lives I have seen wrecked by it is amazing. Just the other day a good friend of mine was talking about getting his hundredth PHD. He was looking into possibly Quantum Mechanics next. Such a powerfully addiction. We need to make sure education is incredibly expensive if we want to keep our young kids safe from it. /S/S/S
  - benj111 7y ago
    How does that relate to my comment?
gopher2 7y ago
How about everyone gets free money, and the student loan holders can use it to pay off their degrees?
- deleted 7y ago
  [deleted]
exabrial 7y ago
So, in summary, incentivize colleges to create even more worthles or overpriced degrees and education programs to vacuum free money from the federal government up.
- october_sky 7y ago
  This is the real issue. They should regulate college tuition and force them to decrease costs. And they should have done is 10-15 years ago.
joshypants 7y ago
Any time there's a proposal like this, it's disappointing to see the conversation gravitate towards tit-for-tat zero-sum appeals to fairness, instead of asking: how can we spend money in ways that will create wealth and other less tangible benefits for society? Making education accessible to everyone is one of the best things we can do.
seneca 7y ago
This is a slap in the face to anyone who made prudent financial decisions to get themselves through college without debt, and even more so to those who recognized they couldn't afford it and didn't go. Now they get to fund a bail out for the managerial class they couldn't afford to join and spend the rest of their life working for. Let's see a plan to fix the system for everyone, not populist handouts for people who are already ahead. This is also fixing the wrong problem. It removes the pain that generates pressure for real reform. Without addressing the ridiculous costs, this just props up the problem.
pickle-wizard 7y ago
I personally am not a fan of canceling student loan debt. However what I am a fan of is lowering the interest rate to nearly 0. I still have some of my student loans left and most of them at at 1.8%. However I have some friends who went to college after me and theirs are at nearly 7%. That just doesn't seem fair.
- Areading314 7y ago
  This is spot on. The interest paid to the government can be thought of as a tax whereas the principal is what was spent on the education.
GhostVII 7y ago
This seems like it would only make the student loan situation worse over time. Tuition is inflated because student loans are easy to get, so students are not very price-sensitive and are willing to go to expensive schools over much cheaper options. Forgiving student loan debt helps current students, but just encourages future students to accept even more debt with the hope that it will be forgiven. We should be encouraging students to go to cheaper schools (state schools are far cheaper that out of state, and out of state schools are still cheaper than private schools), and bringing in legislation which reduces tuition. The US could bring in legislation to lower tuition at public schools (they are doing this in Ontario right now, which has a similar system), although this might have to be a per-state issue rather than national issue.
- its_the_future 7y ago
  The plan is part of a more comprehensive "college for all" program that Sanders has already released in pieces and includes free tuition at all four-year public colleges and universities, as well as community colleges. The broader proposal also includes subsidies to reduce the cost of tuition and fees for low income students at private colleges that historically serve underrepresented communities. "We will make a full and complete education a human right in America, to which all of our people are entitled," Sanders said on Monday. "This means making public colleges, universities and HBCUs tuition-free and debt-free by tripling the work study program, expanding Pell grants and other financial incentives."
deleted 7y ago
[deleted]
RickJWagner 7y ago
"It's a regressive giveaway that primarily benefits upper middle class people who attended elite four year colleges" Seems about right. For those that don't get accepted to the expensive colleges, it's a lifetime of higher taxes to fund their upwardly mobile peer's lifestyle.

50 points by xivzgrev 7y ago

“Sanders will also release a detailed roadmap -- centered on new taxes on Wall Street -- to raise the $2.2 trillion dollars necessary to pay for this program and his other college funding plans. It will include a 0.5% tax on stock trades (or 50 cents for every $100 worth of stock), a 0.1% fee on bonds, and a 0.005% fee on derivatives. Sanders believes that could raise more than $2.4 trillion dollars over the next ten years.” Sure hope “stock trades” doesn’t include retirement contributions or rollovers. I just rolled over 90k - that would’ve cost me $900 (sell, then buy).

zajd 7y ago
God forbid you have to contribute $900 for the future of the country. You realize 50%+ of Americans don't even have $1000 in savings, right?
solotronics 7y ago
Today we have hyper globalized financial systems and if a country implements taxes like this the big players just move their money elsewhere. This only ends up hurting middle class folks who are playing by the books. I think it would make much more sense to have a very simple tax system (a few percent on every capital gain or income, wether corporate or personal) and get rid of every other complexity and loophole. If America had one of the lowest corporate tax rates many companies would locate headquarters here and bring that few percent of billions of dollar we wouldn't have otherwise. I also think we could create a special administrative and economic zone (without minimum wage) in the first 50 miles of southern border and allow anyone to come work there from all over the world. This would create a pathway for people to come here legally and have civic and language classes to help integrate. We could pick the best and brightest from this zone for citizenship which I think is a more fair system. Before you dismiss this idea as colonial consider that this area would have the same human rights and laws as the rest of the US just with low wages, this would be better working conditions than most places on earth with similar wages while also providing a defined channel to gain US citizenship.
- dmos62 7y ago
  I like your ideas. However, I don't fully follow the the low corporate taxes one though. Is the idea to compete in a race-to-the-bottom with corporate taxes and profit from trickle-down economics? I think the popular critique of trickle-down is fair.
  - buboard 7y ago
    Corporation tax does not tax (rich) individuals
  - solotronics 7y ago
    It's not a race to the bottom, for a number of reasons America is a good place already for international corporations to have headquarters. We have a strong and mostly fair legal system, and rule of law that many countries do not have. We have a world class workforce. But by having high corporate income tax you are driving away companies that would otherwise HQ here and bring money and taxes. I see benefits and no downsides to making the environment here even more appealing to corportations.
    - dmos62 7y ago
      Race to the bottom was not a clear expression of what I meant. I meant that US would compete with other tax environments for lowest corporate taxes, which would drive down corporate taxes globally. The obvious implication is that the corporations then contribute even less to the governmental budgets. In terms of foreign policy, this has the problem of breaking solidarity with other countries. Actually, it seems that the whole idea is based on competition instead of cooperation, but given US policies today, that would be normal. What I'm wondering is would this pay off to the winner that would attract many corporations, but derive minimal taxes from them. What's the mechanism to profit from their operating within your administrative unit in that case?
      - solotronics 7y ago
        Corporations don't exist in a vacuum, they are organizations of people working and recieving salaries. I would argue that by having corporate headquarters located somewhere you are bringing massive net benefit if you only look at salary. The corporate income tax is just extra that the government can squeeze out of them and its become apparent that the biggest corporations can get out of most of that anyways in the US by careful gaming of the tax code. Thus my proposal to lower the rate to a more realistic amount and simplify the tax code. Amazon paid $0 corporate income tax last year on $11 billion in income, they structure the company around reinvesting all the profit for the exact reason of not paying taxes. 2% flat rate for everyone is much better than 0% for the most cunning.
mrep 7y ago
It's amazing how politicians like this propose these types of things and never look to see if anyone else has tried it because we have the perfect example, Sweden: "In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Hence, a round trip (purchase and sale) transaction resulted in a 1% tax. The tax applied to all equity security trades in Sweden using local brokerage services as well as to stock options." As for the results: "revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988" [0]. [0]: https://en.wikipedia.org/wiki/Swedish_financial_transaction_tax https://en.wikipedia.org/wiki/Swedish_financial_transaction_...
- r00fus 7y ago
  You know that the London Stock Exchange currently implements transaction taxes and that it generates billions (€3.8bn per year) yearly in revenue? [1] How about all these other countries that have implemented or are currently implementing them? [2] Looks like this clause is why the UK was successful while Sweden may not have been: "The tax is charged whether the transaction takes place in the UK or overseas, and whether either party is resident of the UK or not." Clearly the UK being a much larger securities market is a much better parallel to the US than Sweden. It all probably comes down to the implementation. [1] https://en.wikipedia.org/wiki/Financial_transaction_tax#United_Kingdom https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit... [2] https://en.wikipedia.org/wiki/Financial_transaction_tax#United_States https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit...

grzm 7y ago

Main discussion (over 200 comments): https://news.ycombinator.com/item?id=20260014 https://news.ycombinator.com/item?id=20260014

rayiner 7y ago

This is welfare for upper middle class people. https://www.nytimes.com/2018/11/18/opinion/student-debt-forgiveness-college-democrats.html?action=click&module=Opinion&pgtype=Homepage https://www.nytimes.com/2018/11/18/opinion/student-debt-forg... > “Education debt,” as Sandy Baum and Victoria Lee of the Urban Institute have written, “is disproportionately concentrated among the well-off.” The highest-earning quarter of the population holds more than a third of all student debt, while the lowest-earning quarter holds only 12 percent, according to Baum and Lee. Less than 40% of those 18-29 have student loan debt: https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-abo.... Almost by definition, these are disproportionately the folks who were privileged enough to go to college to begin with. Moreover, the total debt is skewed towards the people with the highest income potential. The median debt for someone who doesn't attain a college degree is $10,000. Versus $45,000 for someone who attains a post-graduate degree. The existing system we have is fine. Obama's PAY-E caps student loan payments at 10% of income. That means the people who end up with good jobs end up subsidizing everyone else. (The government kicks some money in too, but PAYE will only cost $180 billion over 10 years, instead of more than then times that in one shot.) If we need to fix the loopholes in that, let's do it. But under the current system, I as a private practice lawyer pay thousands of dollars a month to the government. Under Bernie's plan, I'd get a small mortgage worth of a windfall. If we're going to raise taxes $2.2 trillion, it's criminal to not spend it on the people who need that money the most.

kasey_junk 7y ago
We could just rollback the recent tax cuts and have a much more progressive tax policy than a student loan forgiveness program for all. That said one of the arguments for universal forgiveness is that it’s the only way to get major reform in the space. That seems like a crazy expensive premium to pay to me but maybe I’m naive about the appetite for improving others lives.
- rayiner 7y ago
  The recent tax cuts are a side show. The main effect was to bring U.S. corporate tax rates in line with Randian hell-holes like... Sweden: https://tradingeconomics.com/sweden/corporate-tax-rate; https://tradingeconomics.com/sweden/corporate-tax-rate; https://www.oecd.org/tax/revenue-statistics-sweden.pdf https://www.oecd.org/tax/revenue-statistics-sweden.pdf (Sweden - 6% of revenue from corporate taxes); https://www.oecd.org/tax/revenue-statistics-united-states.pdf https://www.oecd.org/tax/revenue-statistics-united-states.pd... (US - 8% of revenue from corporate taxes). If we want to help people, we need to raise taxes on the middle and upper middle class and spend it on safety net services, like everyone else in the developed world: https://taxfoundation.org/how-scandinavian-countries-pay-their-government-spending; https://taxfoundation.org/how-scandinavian-countries-pay-the... https://www.oecd.org/tax/revenue-statistics-sweden.pdf https://www.oecd.org/tax/revenue-statistics-sweden.pdf (Sweden - 61 % of revenue from from middle class taxes: payroll, social insurance, and goods and services); https://www.oecd.org/tax/revenue-statistics-united-states.pdf https://www.oecd.org/tax/revenue-statistics-united-states.pd... (USA - 41% of revenue from same sources).

totaldude87 7y ago

Just too many questions at this point. what about the ones who have already paid the entirety of its loan? How about a federal loan structure? with very minimal interest? Isn't this problem a derivative of problem (insert costly higher education) here. Shouldn't this also mean that education loan will become one of the easy way to get into college even if you dont want to? What about the future generation? Its good to have free education in first place rather than giving out loans and taking it back. India took a similar stance on Farmer's loan waivers and it neither fixed the issue nor corrected it. Time to learn lessons.

its_the_future 7y ago
The plan is part of a more comprehensive "college for all" program that Sanders has already released in pieces and includes free tuition at all four-year public colleges and universities, as well as community colleges. The broader proposal also includes subsidies to reduce the cost of tuition and fees for low income students at private colleges that historically serve underrepresented communities. "We will make a full and complete education a human right in America, to which all of our people are entitled," Sanders said on Monday. "This means making public colleges, universities and HBCUs tuition-free and debt-free by tripling the work study program, expanding Pell grants and other financial incentives."

buboard 7y ago

How is this not another $1.6T bank bailout?

deleted 7y ago

[deleted]

anm89 7y ago

I can't find this mentioned, is this only federal loans held by the government or would this involve forgiving privately held debts. The first seems reasonable. The second seems terrifying.

kasey_junk 7y ago
The full plan isn’t out but they’ve implied it would be public & private debt as well as making community & public colleges tuition free going forward.
AnimalMuppet 7y ago
"Forgiving privately held debts" sounds an awful lot like "taking (stealing) from the lender". That probably would not pass a Supreme Court review. (No taking without just compensation.)
- jcriddle4 7y ago
  No major or even minor political party is talking about just "canceling" the debt without paying the lenders. The lenders are still going to get paid so this isn't a "taking". The debt is just transferred to the the US balance sheet instead of being held by the student.
- anm89 7y ago
  I would entirely agree but I'm not sure the average Bernie, Cortez, or Warren supporter would. I have definitely heard people advocate for a total jubilee on student loan debt. I do agree that the current Supreme Court probably wouldn't let it happen.
  - AnimalMuppet 7y ago
    Well, in fairness, Bernie is not responsible for everything every one of his supporters say. (He is responsible for making it clear when what he means is different from what his supporters think.)

tictoc 7y ago

What about the people who dodged paying student loans? What about the people who didn't have the opportunity to go to college because of growing up in abject poverty? These people had a choice to not do the research and take on massive loans.

collidge 7y ago

I get helping those who are legitimately low income. But this is much broader than that. Please explain how this is not rewarding those who chose to spend their money on luxuries instead of paying their debt. What about those of us who paid off our debt by living frugally? As someone in favor of universal health care, subsidizing college, etc, I'm still against this particular policy decision. It's badly-thought-out populist candy.

overthemoon 7y ago
What ABOUT you? Is your objection that something good is happening to someone suffering under student loan debt? What is the disconnect? "I suffered so they should suffer, too" is not a meaningful objection. Freedom that only affects some and doesn't somehow compensate people who are already free is still freedom. Moreover the insinuation that the only people in student loan debt are irresponsible is nonsense. It doesn't make right everyone who lost lifetime income to student loans. It doesn't bring people to life who died in car accidents, and it doesn't give me money back that I spent on a comparatively slow computer 10 years ago. It's still good.
- collidge 7y ago
  "Moreover the insinuation that the only people in student loan debt are irresponsible is nonsense." This isn't what I said. If you want to twist other people's words, I can do that too: "There are unfair things in life therefore we should not put any effort into trying to make our own policies fair".

ykevinator 7y ago

Finally, a clear idiot proof, transparent policy proposal. I love it.

lostmymind66 7y ago

This will not fix the problem with colleges pumping out useless degrees. They got their money up-front, don't have any consequences, and the taxpayers get to foot the bill. Why not fix the root of the problem? This solution will only serve to enrich the universities and not get them to change their behavior.

yifanl 7y ago
What policy change that could be implemented would do anything about the societal belief of college = job? Even something as extreme as outlawing job listings from listing college degrees as a requirement probably wouldn't do it. It'd just become a "soft" requirement.
- lostmymind66 7y ago
  "What policy change that could be implemented would do anything about the societal belief of college = job?" We stop federally subsidizing student loans. This will reduce the overall cost of universities, because they won't be relying on instant government money and the universities will be responsible if the student defaults. It will be in their best interest to push out students that actually succeed and have a chance at paying the money back.

aristophenes 7y ago

Just imagine if that amount of money was spent on updated infrastructure. Effective country wide mass transit, better ports and airports. And the money spent would flow right into the economy and circulate over and over, would push construction companies and techniques forward. Or towards clean energy generation, storage, and use. How fast would oil and coal be completely replaced? And again, money pumped into the economy to do so. Or scientific research, space projects, could make large leaps, and again, that money flows back into the economy and multiplies. Instead we want to make it so the people who hustled through college, picked a cheaper school, worked on the side, paid down their debt if they got any as soon as possible, that those people get the same outcome as someone who got a huge loan and played video games and got drunk every weekend, and spent $200,000 on a degree that only gets you a $50,000/year job?

joshypants 7y ago
All those things you mentioned are worthwhile investments. Erasing student debt is also a good investment. It's a bubble waiting to burst and wreak havoc on the economy. We should do both.
toomuchtodo 7y ago
Please show your work that infrastructure spending would generate more growth than forgiving over a trillion dollars of student loan debt. I don't discount it might be possible, but I am asking you to prove it if you're stating it as fact. No imagining.
groobongithub 7y ago
I "hustled" like you said. I have no debt and better paying job than my partner, who has a masters degree in education and is a primary school teacher. As we're starting a family, we are considering that our savings will pay that debt. This is a good proposal for everyone overall, even if you don't think it impacts you personally since you don't have a student loan yourself.
overthemoon 7y ago
Incredible how people like you consistently think high student loan debt is exclusively due to immoral choices.

benj111 7y ago

So what about the moral hazard in this. This doesn't seem to solve anything for prospective students, except to suggest they too may get their debt cleared, so load em up? Surely you should be looking at future rules, then retroactively applying them if appropriate, rather than bailing out a cohort.

jcriddle4 7y ago
Yes college is like crack cocaine. The lives I have seen wrecked by it is amazing. Just the other day a good friend of mine was talking about getting his hundredth PHD. He was looking into possibly Quantum Mechanics next. Such a powerfully addiction. We need to make sure education is incredibly expensive if we want to keep our young kids safe from it. /S/S/S
- benj111 7y ago
  How does that relate to my comment?

gopher2 7y ago

How about everyone gets free money, and the student loan holders can use it to pay off their degrees?

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exabrial 7y ago

So, in summary, incentivize colleges to create even more worthles or overpriced degrees and education programs to vacuum free money from the federal government up.

october_sky 7y ago
This is the real issue. They should regulate college tuition and force them to decrease costs. And they should have done is 10-15 years ago.

joshypants 7y ago

Any time there's a proposal like this, it's disappointing to see the conversation gravitate towards tit-for-tat zero-sum appeals to fairness, instead of asking: how can we spend money in ways that will create wealth and other less tangible benefits for society? Making education accessible to everyone is one of the best things we can do.

seneca 7y ago

This is a slap in the face to anyone who made prudent financial decisions to get themselves through college without debt, and even more so to those who recognized they couldn't afford it and didn't go. Now they get to fund a bail out for the managerial class they couldn't afford to join and spend the rest of their life working for. Let's see a plan to fix the system for everyone, not populist handouts for people who are already ahead. This is also fixing the wrong problem. It removes the pain that generates pressure for real reform. Without addressing the ridiculous costs, this just props up the problem.

pickle-wizard 7y ago

I personally am not a fan of canceling student loan debt. However what I am a fan of is lowering the interest rate to nearly 0. I still have some of my student loans left and most of them at at 1.8%. However I have some friends who went to college after me and theirs are at nearly 7%. That just doesn't seem fair.

Areading314 7y ago
This is spot on. The interest paid to the government can be thought of as a tax whereas the principal is what was spent on the education.

GhostVII 7y ago

This seems like it would only make the student loan situation worse over time. Tuition is inflated because student loans are easy to get, so students are not very price-sensitive and are willing to go to expensive schools over much cheaper options. Forgiving student loan debt helps current students, but just encourages future students to accept even more debt with the hope that it will be forgiven. We should be encouraging students to go to cheaper schools (state schools are far cheaper that out of state, and out of state schools are still cheaper than private schools), and bringing in legislation which reduces tuition. The US could bring in legislation to lower tuition at public schools (they are doing this in Ontario right now, which has a similar system), although this might have to be a per-state issue rather than national issue.

its_the_future 7y ago
The plan is part of a more comprehensive "college for all" program that Sanders has already released in pieces and includes free tuition at all four-year public colleges and universities, as well as community colleges. The broader proposal also includes subsidies to reduce the cost of tuition and fees for low income students at private colleges that historically serve underrepresented communities. "We will make a full and complete education a human right in America, to which all of our people are entitled," Sanders said on Monday. "This means making public colleges, universities and HBCUs tuition-free and debt-free by tripling the work study program, expanding Pell grants and other financial incentives."

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RickJWagner 7y ago

"It's a regressive giveaway that primarily benefits upper middle class people who attended elite four year colleges" Seems about right. For those that don't get accepted to the expensive colleges, it's a lifetime of higher taxes to fund their upwardly mobile peer's lifestyle.