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>The problem with Student Loan forgiveness is it would typically help the highest paid Americans. Most people with 100k plus in loans also make very good money.

>The problem with Student Loan forgiveness is it would typically help the highest paid Americans. Most people with 100k plus in loans also make very good money. Why would that be a problem? First, your "typically" needs a citation. The average student loan is about $40K. Second, it's not a problem to help struggling people if a percentage of people who are not struggling benefits too. Nothing is 100% efficient, and the inefficiency of not checking tax forms at a soup kitchen to make sure only the Actually Poor™ get the soup is made up tenfold by the outcome of nobody needing to be hungry. >Adults have a right to make poor choices. Yeah, unless it's buying alcohol, tobacco, or marijuana. Somehow that doesn't apply to enlisting in armed forces or taking on a lifetime debt that, unlike anything else, won't be erased in a bankruptcy, and thus is nearly risk-free for the lender.

clairity 5y ago
while the parent poster indeed made an unsubstantiated assertion, it's not that hard to understand the perverseness of giving money to already well-off people. i personally think we should make federal loans highly progressive, both in amount and interest rate, and make them dischargeable via ordinary bankruptcy proceedings (also, revert the bankruptcy-tightening laws that were passed in the mid-oughts). that would be something like loans for 100% of tuition, room & board for those from families under median income (~$68K in recent years) smoothly varying (but not linear) down to 0% for those above 3× median household income (~$200K). same for interest rates: risk-free rate (~2.5%) for under median to market rate for unsecured personal loans (in the 10-20% range) at 3× median income. anyone above 3× median will likely have an established banking relationship somewhere to be able to get private loans. this would put downward pressure on tuition, while still meeting the objective of providing opportunity for the less privileged majority. same goes for loan forgiveness--make them highly progressive based on recent earnings/wealth (including unrealized gains).
- romwell 5y ago
  I agree with what you say. The idea for total loan forgiveness is that for a reasonable progressive scheme, the difference between that and total forgiveness may be marginal. We have plenty examples of how drug-testing for government benefits ends up costing more than simply giving those benefits to all who qualify even if they are drug users. Same applies here. It'd be interesting to see the actual numbers. But sure, I'd take a progressive scheme like the one you proposed. Hell, just your first sentence (re: bankruptcy) warms my heart and fills my soul with glee :)
  - clairity 5y ago
    yah, immunity from bankruptcy is the original sin of student loans. it’s literally what drove hyperinflation in higher ed.
    - romwell 5y ago
      I just like how it was passed in 1976 by the Nixon administration just as the proportion of Black students in universities was exploding (from 1960 and 1975, Black enrollment in higher education increased at a rate 3.5x of total enrollment growth; the legislation was introduced in 1975), and soon after, the number of Black students enrolled started dropping[1]. The proportion stayed low for about 20 years. The "original sin" in 1976 was just one of many acts of legislation that were "compensating" for the Civil Rights reforms by cutting down the funding available to Black students. It's amazing how little one has to peel in all things that suck in the US to find racism behind it. And now all of us are screwed. [1]https://journals.iupui.edu/index.php/muj/article/download/20252/19848/0 https://journals.iupui.edu/index.php/muj/article/download/20...
      - clairity 5y ago
        interesting, i didn't know about the racial angle, but it's thoroughly unsurprising to hear.
999900000999 5y ago
https://www.cnbc.com/2021/09/01/college-graduate-starting-salaries-are-at-an-all-time-high.html https://www.cnbc.com/2021/09/01/college-graduate-starting-sa... Those with college degrees make more. So if you forgive student loan debt, you're giving a ton of money to people who are largely doing very well. One can make a large variety of very stupid life-altering choices at 25, these people should have known better. I would say, again unless you're trying to be a doctor or a lawyer your student loans should be capped at 100k. That would eliminate most of the most outrageous behavior. I know for myself I took a modest 20,000 or so in loans and that changed my life forever. That allowed me to go to college, and escape my horrible family who like not paying bills and getting evicted. If you forgive the student loans, the counter argument becomes get rid of the student loans and then people who are responsible with them. Like myself, no longer have a ladder out of poverty. Honest to God, I have no sympathy for someone who with a college education decides it would be a good idea to take out another $200,000 in loans in order to get into a low paying field. Likewise if someone went and took their inheritance and bet it all on bitcoin, I wouldn't want a law passed reimbursing them.
- romwell 5y ago
  > you're giving a ton of money to people who are largely doing very well. Make more =/= "doing real well". Some are doing well, some aren't, many are struggling. And the ones who are just getting by aren't having kids, which is really going to bite this nation in the long run. >One can make a large variety of very stupid life-altering choices at 25 Where's that 25 coming from, eh? People apply to colleges when they're 17. That determines how big of a loan they'll end up with. >these people should have known better > I know for myself I took a modest 20,000 When? Did you bother to check tuition costs today? Better than what? Than not go to a university that aligns with > I would say, again unless you're trying to be a doctor or a lawyer your student loans should be capped at 100k. "Should" is a nice word. My double-major undergrad took me five years, and I ended up with over $20K in loans while my tuition was free, because neither dorms (or off-campus housing) nor food were free, and that $25K didn't even cover those expenses. And no, commute was not an option; and it was, indeed, a good choice of school (not to mention, free tuition). $100K over 5 years barely covers living expenses[1], but let's be conservative and say the living expenses are paid with $50K over 4 years (by sharing an off-campus room with someone and subsisting on ramen). Now, the fun part, tuition. Out-of-state tuition can be anywhere from $15K to $40K; it's about $38K in Texas A&M, for example, which is not what people would think is a prestigious school. $27K/year is just about average[2] So out-of-state school puts us over the $100K for a 4-year degree right away. Tough luck if your state doesn't have great schools for your major! Fine, let's settle for in-state tuition. Nationwide it's $10K/year on the average, but say, you were unfortunate enough to grow up in Pennsylvania or Illinois, where it's $15K/year[2][3]. Then again, having spent $60K on tuition and $50K on life over 4 years, we are $110K in the red. Bummer. On the average, living expenses + tuition for a 4 year degree (in-state) is $80K; throw in books, supplies, transportation, and it's $100K[4]. That's average, meaning quite a few people attending public schools in-state end up paying more. Any private college? Any college out of state? Any of the more expensive states? Or simply not getting into one of the cheaper public schools in your state? Or actually choosing a good program? That's $200K over 4 years very easily. > I have no sympathy for someone who with a college education decides it would be a good idea to take out another $200,000 in loans in order to get into a low paying field. Yeah, it's totally reasonable to expect 17-year-olds to estimate correctly how well paid they will be in 4 years in the field of their choice. We don't trust them with making any adult choices, except this one. >If you forgive the student loans, the counter argument becomes get rid of the student loans and then people who are responsible with them That's quite a leap of logic you have there, friend. The first thing is to make student loans dismissible in bankruptcy. That makes the student loan just like any other loan. Bankruptcy exists for a reason. Then, canceling the student debt just resets the game that was rigged in 1976 by making student loans different from the others. Education loans are lucrative, especially when given to responsible people like you. The banks won't pass on this opportunity (why would they?). Finally, see my other comment[5] about how the most likely outcome is that the tuition costs will go drastically down. Availability of these loans is the reason the education is not affordable! You wouldn't need the loans if we didn't allow them. Before the 1976 legislation, you could pay off your tuition working a part-time job on the weekends. In 1975, six weeks of work at minimum wage paid your tuition at a public school. Today, it's 33 weeks. Five times as much. If you're lucky. We can and must go back to where we were 50 years ago. And the banks have to pay for milking us for those 50 years. People like us won't be hurt when the banks pay up. [1]https://www.collegecovered.com/paying-for-college/real-college-budget/ https://www.collegecovered.com/paying-for-college/real-colle... [2]https://educationdata.org/average-cost-of-college https://educationdata.org/average-cost-of-college [3]https://www.businessinsider.com/personal-finance/average-college-tuition https://www.businessinsider.com/personal-finance/average-col... [4]https://www.valuepenguin.com/student-loans/average-cost-of-college https://www.valuepenguin.com/student-loans/average-cost-of-c... [5]https://news.ycombinator.com/item?id=29171278 https://news.ycombinator.com/item?id=29171278

clairity 5y ago

while the parent poster indeed made an unsubstantiated assertion, it's not that hard to understand the perverseness of giving money to already well-off people. i personally think we should make federal loans highly progressive, both in amount and interest rate, and make them dischargeable via ordinary bankruptcy proceedings (also, revert the bankruptcy-tightening laws that were passed in the mid-oughts). that would be something like loans for 100% of tuition, room & board for those from families under median income (~$68K in recent years) smoothly varying (but not linear) down to 0% for those above 3× median household income (~$200K). same for interest rates: risk-free rate (~2.5%) for under median to market rate for unsecured personal loans (in the 10-20% range) at 3× median income. anyone above 3× median will likely have an established banking relationship somewhere to be able to get private loans. this would put downward pressure on tuition, while still meeting the objective of providing opportunity for the less privileged majority. same goes for loan forgiveness--make them highly progressive based on recent earnings/wealth (including unrealized gains).

romwell 5y ago
I agree with what you say. The idea for total loan forgiveness is that for a reasonable progressive scheme, the difference between that and total forgiveness may be marginal. We have plenty examples of how drug-testing for government benefits ends up costing more than simply giving those benefits to all who qualify even if they are drug users. Same applies here. It'd be interesting to see the actual numbers. But sure, I'd take a progressive scheme like the one you proposed. Hell, just your first sentence (re: bankruptcy) warms my heart and fills my soul with glee :)
- clairity 5y ago
  yah, immunity from bankruptcy is the original sin of student loans. it’s literally what drove hyperinflation in higher ed.
  - romwell 5y ago
    I just like how it was passed in 1976 by the Nixon administration just as the proportion of Black students in universities was exploding (from 1960 and 1975, Black enrollment in higher education increased at a rate 3.5x of total enrollment growth; the legislation was introduced in 1975), and soon after, the number of Black students enrolled started dropping[1]. The proportion stayed low for about 20 years. The "original sin" in 1976 was just one of many acts of legislation that were "compensating" for the Civil Rights reforms by cutting down the funding available to Black students. It's amazing how little one has to peel in all things that suck in the US to find racism behind it. And now all of us are screwed. [1]https://journals.iupui.edu/index.php/muj/article/download/20252/19848/0 https://journals.iupui.edu/index.php/muj/article/download/20...
    - clairity 5y ago
      interesting, i didn't know about the racial angle, but it's thoroughly unsurprising to hear.

999900000999 5y ago

https://www.cnbc.com/2021/09/01/college-graduate-starting-salaries-are-at-an-all-time-high.html https://www.cnbc.com/2021/09/01/college-graduate-starting-sa... Those with college degrees make more. So if you forgive student loan debt, you're giving a ton of money to people who are largely doing very well. One can make a large variety of very stupid life-altering choices at 25, these people should have known better. I would say, again unless you're trying to be a doctor or a lawyer your student loans should be capped at 100k. That would eliminate most of the most outrageous behavior. I know for myself I took a modest 20,000 or so in loans and that changed my life forever. That allowed me to go to college, and escape my horrible family who like not paying bills and getting evicted. If you forgive the student loans, the counter argument becomes get rid of the student loans and then people who are responsible with them. Like myself, no longer have a ladder out of poverty. Honest to God, I have no sympathy for someone who with a college education decides it would be a good idea to take out another $200,000 in loans in order to get into a low paying field. Likewise if someone went and took their inheritance and bet it all on bitcoin, I wouldn't want a law passed reimbursing them.

romwell 5y ago
> you're giving a ton of money to people who are largely doing very well. Make more =/= "doing real well". Some are doing well, some aren't, many are struggling. And the ones who are just getting by aren't having kids, which is really going to bite this nation in the long run. >One can make a large variety of very stupid life-altering choices at 25 Where's that 25 coming from, eh? People apply to colleges when they're 17. That determines how big of a loan they'll end up with. >these people should have known better > I know for myself I took a modest 20,000 When? Did you bother to check tuition costs today? Better than what? Than not go to a university that aligns with > I would say, again unless you're trying to be a doctor or a lawyer your student loans should be capped at 100k. "Should" is a nice word. My double-major undergrad took me five years, and I ended up with over $20K in loans while my tuition was free, because neither dorms (or off-campus housing) nor food were free, and that $25K didn't even cover those expenses. And no, commute was not an option; and it was, indeed, a good choice of school (not to mention, free tuition). $100K over 5 years barely covers living expenses[1], but let's be conservative and say the living expenses are paid with $50K over 4 years (by sharing an off-campus room with someone and subsisting on ramen). Now, the fun part, tuition. Out-of-state tuition can be anywhere from $15K to $40K; it's about $38K in Texas A&M, for example, which is not what people would think is a prestigious school. $27K/year is just about average[2] So out-of-state school puts us over the $100K for a 4-year degree right away. Tough luck if your state doesn't have great schools for your major! Fine, let's settle for in-state tuition. Nationwide it's $10K/year on the average, but say, you were unfortunate enough to grow up in Pennsylvania or Illinois, where it's $15K/year[2][3]. Then again, having spent $60K on tuition and $50K on life over 4 years, we are $110K in the red. Bummer. On the average, living expenses + tuition for a 4 year degree (in-state) is $80K; throw in books, supplies, transportation, and it's $100K[4]. That's average, meaning quite a few people attending public schools in-state end up paying more. Any private college? Any college out of state? Any of the more expensive states? Or simply not getting into one of the cheaper public schools in your state? Or actually choosing a good program? That's $200K over 4 years very easily. > I have no sympathy for someone who with a college education decides it would be a good idea to take out another $200,000 in loans in order to get into a low paying field. Yeah, it's totally reasonable to expect 17-year-olds to estimate correctly how well paid they will be in 4 years in the field of their choice. We don't trust them with making any adult choices, except this one. >If you forgive the student loans, the counter argument becomes get rid of the student loans and then people who are responsible with them That's quite a leap of logic you have there, friend. The first thing is to make student loans dismissible in bankruptcy. That makes the student loan just like any other loan. Bankruptcy exists for a reason. Then, canceling the student debt just resets the game that was rigged in 1976 by making student loans different from the others. Education loans are lucrative, especially when given to responsible people like you. The banks won't pass on this opportunity (why would they?). Finally, see my other comment[5] about how the most likely outcome is that the tuition costs will go drastically down. Availability of these loans is the reason the education is not affordable! You wouldn't need the loans if we didn't allow them. Before the 1976 legislation, you could pay off your tuition working a part-time job on the weekends. In 1975, six weeks of work at minimum wage paid your tuition at a public school. Today, it's 33 weeks. Five times as much. If you're lucky. We can and must go back to where we were 50 years ago. And the banks have to pay for milking us for those 50 years. People like us won't be hurt when the banks pay up. [1]https://www.collegecovered.com/paying-for-college/real-college-budget/ https://www.collegecovered.com/paying-for-college/real-colle... [2]https://educationdata.org/average-cost-of-college https://educationdata.org/average-cost-of-college [3]https://www.businessinsider.com/personal-finance/average-college-tuition https://www.businessinsider.com/personal-finance/average-col... [4]https://www.valuepenguin.com/student-loans/average-cost-of-college https://www.valuepenguin.com/student-loans/average-cost-of-c... [5]https://news.ycombinator.com/item?id=29171278 https://news.ycombinator.com/item?id=29171278