4 ms·

Cancelling student debt won't solve the student debt problem, unless we stop giving out student loans.

newaccount2021 5y ago
Its worse than that, its a lottery. Those graduates who have already paid off their debt, lose. Those soon-to-be students who have to pay high tuition, also lose. Indeed, since colleges will see loan forgiveness as an option, tuitions will rise.
- viraptor 5y ago
  > Those soon-to-be students who have to pay high tuition, also lose. There's a significant number who would not afford tuition and not apply. Universities would lose a lot students unless they changed fees significantly. If it's a proper reset on the debts, we can't expect everything to continue working as before.
- rhino369 5y ago
  Right, I paid off a balance of 260k dollars in student loans. Former classmates, who make exactly the same amount of money, who instead used their salaries to buy a house get a windfall? How is that good policy? Our current system already allows for cancellation for low income individuals. This is subsidy for the upper half of the middle class.
  - D13Fd 5y ago
    I couldn't agree more. I'm in the same bucket. My wife and I worked hard, scrimped and saved, lived way below our means, and paid off our student debt ~15 years early. But now people want us to have to pay everyone else's debt too, through our taxes? The only way this could possibly be fair is if they offer some kind of credit for loans already paid.
    - AnimalMuppet 5y ago
      That's still not fair. Let's say I worked two jobs to put myself through college. I only could attend half time, so it took me eight years. I'm going to pay taxes to subsidize those who took out loans? How is that fair? Or, I never went to college. I just started working right after high school. I make less than those who went to college. I'm going to pay taxes for this? How is that fair?
      - D13Fd 5y ago
        Great points, I agree. I worked through undergrad and lived at home myself, so really I should have thought of that.
viraptor 5y ago
Cancelling student debt would pretty much immediately stop new loans. I don't see how another loan for the same amount could be granted afterwards.
- adamsvystun 5y ago
  I think you are misunderstanding what people mean by "cancelling debt". They don't mean they will force lenders to suffer a loss, they mean that government will cover the debt.
  - hpoe 5y ago
    You mean that the taxpayers will cover the debt
  - viraptor 5y ago
    If the gov actually decided that the current situation is not sustainable and it's better for everyone to cut the losses and cover everything... why would it guarantee another loan like that the next day? The companies themselves could be interested in that loans of course, but without the previous guarantee the risk would be too high.
    - theandrewbailey 5y ago
      I don't trust that the government would be smart enough to do that.
    - adamsvystun 5y ago
      What you say makes sense, but the people proposing student loan cancellation do not talk about rolling back government guarantees on student loans. If they did, that would be totally different discussion.
      - viraptor 5y ago
        Many do not, mainly concentrating on the post-covid impact. But at least two links from this article talk about limiting the ability for student debt collection, which would significantly limit the number and/or size of the student loans given.
jimbob45 5y ago
Yeah this is my issue with the idea too. In 20 years, you're going to have the same problem again with new borrowers unless you make some fundamental changes to college to stop predatory student loans from being given out. To be fair, I find this thread to be a bit misguided. Everyone here is talking about canceling 100% of student loan debt but I've only ever heard suggestions where the amount of loans above 100k or above 50k are forgiven. Conceivably, those loans were never really going to be paid off so money isn't really being lost.
- cudgy 5y ago
  Maybe it’s time to pursue that extra degree and borrow the money regardless of need if you already have borrowed the 50/100k limit … free money. I’m sure that the schools will love raking in the cash and raising tuitions due to the increased demand.

newaccount2021 5y ago

Its worse than that, its a lottery. Those graduates who have already paid off their debt, lose. Those soon-to-be students who have to pay high tuition, also lose. Indeed, since colleges will see loan forgiveness as an option, tuitions will rise.

viraptor 5y ago
> Those soon-to-be students who have to pay high tuition, also lose. There's a significant number who would not afford tuition and not apply. Universities would lose a lot students unless they changed fees significantly. If it's a proper reset on the debts, we can't expect everything to continue working as before.
rhino369 5y ago
Right, I paid off a balance of 260k dollars in student loans. Former classmates, who make exactly the same amount of money, who instead used their salaries to buy a house get a windfall? How is that good policy? Our current system already allows for cancellation for low income individuals. This is subsidy for the upper half of the middle class.
- D13Fd 5y ago
  I couldn't agree more. I'm in the same bucket. My wife and I worked hard, scrimped and saved, lived way below our means, and paid off our student debt ~15 years early. But now people want us to have to pay everyone else's debt too, through our taxes? The only way this could possibly be fair is if they offer some kind of credit for loans already paid.
  - AnimalMuppet 5y ago
    That's still not fair. Let's say I worked two jobs to put myself through college. I only could attend half time, so it took me eight years. I'm going to pay taxes to subsidize those who took out loans? How is that fair? Or, I never went to college. I just started working right after high school. I make less than those who went to college. I'm going to pay taxes for this? How is that fair?
    - D13Fd 5y ago
      Great points, I agree. I worked through undergrad and lived at home myself, so really I should have thought of that.

viraptor 5y ago

Cancelling student debt would pretty much immediately stop new loans. I don't see how another loan for the same amount could be granted afterwards.

adamsvystun 5y ago
I think you are misunderstanding what people mean by "cancelling debt". They don't mean they will force lenders to suffer a loss, they mean that government will cover the debt.
- hpoe 5y ago
  You mean that the taxpayers will cover the debt
- viraptor 5y ago
  If the gov actually decided that the current situation is not sustainable and it's better for everyone to cut the losses and cover everything... why would it guarantee another loan like that the next day? The companies themselves could be interested in that loans of course, but without the previous guarantee the risk would be too high.
  - theandrewbailey 5y ago
    I don't trust that the government would be smart enough to do that.
  - adamsvystun 5y ago
    What you say makes sense, but the people proposing student loan cancellation do not talk about rolling back government guarantees on student loans. If they did, that would be totally different discussion.
    - viraptor 5y ago
      Many do not, mainly concentrating on the post-covid impact. But at least two links from this article talk about limiting the ability for student debt collection, which would significantly limit the number and/or size of the student loans given.

jimbob45 5y ago

Yeah this is my issue with the idea too. In 20 years, you're going to have the same problem again with new borrowers unless you make some fundamental changes to college to stop predatory student loans from being given out. To be fair, I find this thread to be a bit misguided. Everyone here is talking about canceling 100% of student loan debt but I've only ever heard suggestions where the amount of loans above 100k or above 50k are forgiven. Conceivably, those loans were never really going to be paid off so money isn't really being lost.

cudgy 5y ago
Maybe it’s time to pursue that extra degree and borrow the money regardless of need if you already have borrowed the 50/100k limit … free money. I’m sure that the schools will love raking in the cash and raising tuitions due to the increased demand.