6 ms·

I anticipate there will be a lot of comments about how these folks should not have gone to an expensive private uni, could have made choices to avoid debt, the

I anticipate there will be a lot of comments about how these folks should not have gone to an expensive private uni, could have made choices to avoid debt, the burden is on the borrower and it is their responsibility, etc - all true and valid points. However, the US is approaching a situation where the student loan problem will be an "everyone" problem, not just a borrower - I believe a ~$1.6 Trillion debt burden is a significant enough drag on the economy to be felt by everyone, and will be more painful not only for borrowers who can not pay but also non-borrowers who are indirectly affected. The money that could have been used to pay for housing, services, etc, will instead go to student loans. If I was a local business owner, I would think about that. If you are homeowner, imagine what the price of you home could be if buyers did not have student loans. I hope people realize this soon.

jjcon 5y ago
So bail them out cause it will trickle down to those less fortunate? I've heard that somewhere before. Only about 12 percent of Americans have student loans and the largest burden is among those with advanced degrees.
- random314 5y ago
  Well, don't bail out the advanced degree holders. I like your rhetoric of the liberal POV as actually conservative - "trickle down". But it's not working.
  - jjcon 5y ago
    Just because a position is held by some progressives in the US to appeal to their young student base does not make it a 'liberal position'. Those with just Bachelors degrees still make almost twice as much as those without (average 38k vs 64k). And their median net worth is more than 2x those with just HS diplomas (74k vs 198k). Arguing that the poor should help bail out those more wealthy than them is extremely regressive any way you slice it. EDIT: To those saying 'why not just tax the rich more': That comes at the cost of (again) more equal and broad uses for that money - that doesn't make a regressive policy less regressive it just pushes the can down the road. We're talking about a 1.7T bailout for just 12% of Americans with far higher than average earning potential.
    - OnlineGladiator 5y ago
      Well, if it's specifically about taxing the poor - we could levy a higher tax on the ultra-rich and earmark how that funding is used. FWIW I actually think you make a good point, but it's ignoring the fact that the ultra-rich are grossly (I'd argue an order of magnitude) undertaxed right now.
      - jjcon 5y ago
        > ultra-rich are grossly (I'd argue an order of magnitude) undertaxed right now Couldn't agree more on that point. I don't however think earmarking 1.7T for a very select 12% of Americans that have a far higher than average earning potential fixes the problem with the policy though. That 1.7T could be used in far broader more equal ways.
      - meatsauce 5y ago
    - random314 5y ago
      It's an old rhetorical tactic to pitt one class of poor vs the other while ignoring the elephant in the room. For eg - Pitting rural white Americans against Mexican immigrants. You could just raise the minimum wage - a solution that would be "class warfare". You can have the rich pay for undergraduate degrees instead of the poor - as you have conveniently assumed. A rather hilarious assumption given that tax slabs for the poor are the lowest. Pitting one class of poor/middle class against the other is a fairly well known conservative tactic. Intraclass "warfare" is what conservatives want to focus on, instead of the big elephant- interclass "warfare".
    - dragonwriter 5y ago
      > Just because a position is held by some progressives in the US to appeal to their young student base does not make it a 'liberal position'. Well, yeah, liberal and progressive positions are generally opposed.
      - jjcon 5y ago
- rootusrootus 5y ago
  > Only about 12 percent IIRC the fed puts it at more like 30%. But your point stands.
  - jjcon 5y ago
    Its 12.9% as of May 2021 https://www.nerdwallet.com/article/loans/student-loans/how-many-americans-have-student-loan-debt https://www.nerdwallet.com/article/loans/student-loans/how-m... I think you are thinking about the percent of Americans with a bachelor's degree (32.1%).
    - rootusrootus 5y ago
      You're right (though the estimate seems to vary depending on who is reporting it, for some reason). What I saw was 30% of attendees take on student loans to pay for their education, according to the fed [0]. I misinterpreted that to mean that 30% had student loans right now. [0] https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007 https://www.investopedia.com/student-loan-debt-2019-statisti...
Aunche 5y ago
> I believe a ~$1.6 Trillion debt burden is a significant enough drag on the economy to be felt by everyone If you're implying that this debt should be cancelled, note that it doesn't go away if the President decides to cancel it. It just gets passed on to the broader tax base in the form of more national debt. The reason student loans are a problem for the US is that the government keeps on pumping money into higher education but has no incentives for them to control costs. Universities have fairly inelastic supply, so they can swallow up most the money the government pumps in. Cancelling student loans would just exacerbate this.
- game_the0ry 5y ago
  > If you're implying that this debt should be cancelled, note that it doesn't go away if the President decides to cancel it. It just gets passed on to the broader tax base in the form of more national debt. Student loans end up in the same place whether they are cancelled or the borrower can't pay back - unpaid and eventually written off.
- mindslight 5y ago
  Why does the massive regulatory giveaway to student loan lenders continue to be a given? Why does everything have to be some sort of top-down bailout? The straightforward approach is to extend bankruptcy protection to student loans, and let the courts sort out the mess based on need. Some bondholders will end up losing, but the risk of the regulatory giveaway disappearing should have been priced in to begin with.
  - game_the0ry 5y ago
    > The straightforward approach is to extend bankruptcy protection to student loans, and let the courts sort out the mess out based on need. Agreed.
- TheOtherHobbes 5y ago
  Actually it does go away. A sovereign country can only go bankrupt when its currency stops being respected. Unless/until that happens, it can spend whatever it wants on its own people. A country that can afford trillions in tax cuts for the very rich, financial stimulus, and defence spending can easily afford a one-off loan jubilee. The real reasons this won't happen are political. Loans are a slaver's whip, and financial freedom is a horror that can't be tolerated for those who live below decks and need to be available to work on demand.
bushbaba 5y ago
Allow students loans to be forgiven 10 years after graduation through bankruptcy. Then expensive programs that don’t have a career path to support them will have trouble getting students needing financial aid.
- tdfx 5y ago
  This is a much more palatable option than just wholesale debt forgiveness. I think there could be a lot of bipartisan support for a policy like this. It doesn't fix the problem entirely, but it finally frees people from the life sentence of their student loans. I would imagine the collection rates would be almost zero for any borrowers in this situation, anyway.
xuki 5y ago
> If you are homeowner, imagine what the price of you home could be if buyers did not have student loans. Are you saying student loan reduces house price? Sound like a win.
- chasd00 5y ago
  Imagine what the price of your house could be if a mortgage loan was guaranteed by the US government. You could set a price wherever you want, the buyers could get a loan from a lender for any amount.

jjcon 5y ago

So bail them out cause it will trickle down to those less fortunate? I've heard that somewhere before. Only about 12 percent of Americans have student loans and the largest burden is among those with advanced degrees.

random314 5y ago
Well, don't bail out the advanced degree holders. I like your rhetoric of the liberal POV as actually conservative - "trickle down". But it's not working.
- jjcon 5y ago
  Just because a position is held by some progressives in the US to appeal to their young student base does not make it a 'liberal position'. Those with just Bachelors degrees still make almost twice as much as those without (average 38k vs 64k). And their median net worth is more than 2x those with just HS diplomas (74k vs 198k). Arguing that the poor should help bail out those more wealthy than them is extremely regressive any way you slice it. EDIT: To those saying 'why not just tax the rich more': That comes at the cost of (again) more equal and broad uses for that money - that doesn't make a regressive policy less regressive it just pushes the can down the road. We're talking about a 1.7T bailout for just 12% of Americans with far higher than average earning potential.
  - OnlineGladiator 5y ago
    Well, if it's specifically about taxing the poor - we could levy a higher tax on the ultra-rich and earmark how that funding is used. FWIW I actually think you make a good point, but it's ignoring the fact that the ultra-rich are grossly (I'd argue an order of magnitude) undertaxed right now.
    - jjcon 5y ago
      > ultra-rich are grossly (I'd argue an order of magnitude) undertaxed right now Couldn't agree more on that point. I don't however think earmarking 1.7T for a very select 12% of Americans that have a far higher than average earning potential fixes the problem with the policy though. That 1.7T could be used in far broader more equal ways.
    - meatsauce 5y ago
  - random314 5y ago
    It's an old rhetorical tactic to pitt one class of poor vs the other while ignoring the elephant in the room. For eg - Pitting rural white Americans against Mexican immigrants. You could just raise the minimum wage - a solution that would be "class warfare". You can have the rich pay for undergraduate degrees instead of the poor - as you have conveniently assumed. A rather hilarious assumption given that tax slabs for the poor are the lowest. Pitting one class of poor/middle class against the other is a fairly well known conservative tactic. Intraclass "warfare" is what conservatives want to focus on, instead of the big elephant- interclass "warfare".
  - dragonwriter 5y ago
    > Just because a position is held by some progressives in the US to appeal to their young student base does not make it a 'liberal position'. Well, yeah, liberal and progressive positions are generally opposed.
    - jjcon 5y ago
rootusrootus 5y ago
> Only about 12 percent IIRC the fed puts it at more like 30%. But your point stands.
- jjcon 5y ago
  Its 12.9% as of May 2021 https://www.nerdwallet.com/article/loans/student-loans/how-many-americans-have-student-loan-debt https://www.nerdwallet.com/article/loans/student-loans/how-m... I think you are thinking about the percent of Americans with a bachelor's degree (32.1%).
  - rootusrootus 5y ago
    You're right (though the estimate seems to vary depending on who is reporting it, for some reason). What I saw was 30% of attendees take on student loans to pay for their education, according to the fed [0]. I misinterpreted that to mean that 30% had student loans right now. [0] https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007 https://www.investopedia.com/student-loan-debt-2019-statisti...

Aunche 5y ago

> I believe a ~$1.6 Trillion debt burden is a significant enough drag on the economy to be felt by everyone If you're implying that this debt should be cancelled, note that it doesn't go away if the President decides to cancel it. It just gets passed on to the broader tax base in the form of more national debt. The reason student loans are a problem for the US is that the government keeps on pumping money into higher education but has no incentives for them to control costs. Universities have fairly inelastic supply, so they can swallow up most the money the government pumps in. Cancelling student loans would just exacerbate this.

game_the0ry 5y ago
> If you're implying that this debt should be cancelled, note that it doesn't go away if the President decides to cancel it. It just gets passed on to the broader tax base in the form of more national debt. Student loans end up in the same place whether they are cancelled or the borrower can't pay back - unpaid and eventually written off.
mindslight 5y ago
Why does the massive regulatory giveaway to student loan lenders continue to be a given? Why does everything have to be some sort of top-down bailout? The straightforward approach is to extend bankruptcy protection to student loans, and let the courts sort out the mess based on need. Some bondholders will end up losing, but the risk of the regulatory giveaway disappearing should have been priced in to begin with.
- game_the0ry 5y ago
  > The straightforward approach is to extend bankruptcy protection to student loans, and let the courts sort out the mess out based on need. Agreed.
TheOtherHobbes 5y ago
Actually it does go away. A sovereign country can only go bankrupt when its currency stops being respected. Unless/until that happens, it can spend whatever it wants on its own people. A country that can afford trillions in tax cuts for the very rich, financial stimulus, and defence spending can easily afford a one-off loan jubilee. The real reasons this won't happen are political. Loans are a slaver's whip, and financial freedom is a horror that can't be tolerated for those who live below decks and need to be available to work on demand.

bushbaba 5y ago

Allow students loans to be forgiven 10 years after graduation through bankruptcy. Then expensive programs that don’t have a career path to support them will have trouble getting students needing financial aid.

tdfx 5y ago
This is a much more palatable option than just wholesale debt forgiveness. I think there could be a lot of bipartisan support for a policy like this. It doesn't fix the problem entirely, but it finally frees people from the life sentence of their student loans. I would imagine the collection rates would be almost zero for any borrowers in this situation, anyway.

xuki 5y ago

> If you are homeowner, imagine what the price of you home could be if buyers did not have student loans. Are you saying student loan reduces house price? Sound like a win.

chasd00 5y ago
Imagine what the price of your house could be if a mortgage loan was guaranteed by the US government. You could set a price wherever you want, the buyers could get a loan from a lender for any amount.