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> Every student debtor is 7.5% less in debt in real terms than they were last year. Because Federal Student Loan payments were deferred last year, interest fre

> Every student debtor is 7.5% less in debt in real terms than they were last year. Because Federal Student Loan payments were deferred last year, interest free. Such loans can also be forgiven -- canceled and considered paid in full -- for borrowers which qualify for certain programs. One of the most widespread are programs for Public Service job holders, Teachers, and National Guard members. These borrowers are credited as paid in full after holding a qualifying job and making payments for ten years. The student loan payment deferral due to COVID-19 relief did not extend the terms of such borrowers; they are credited with the year of service, even though payments were not required. Then there are a constellation of programs to have student loan debt reorganized and in some cases reduced. You can settle on monthly payments of no more than 15% of your current income, and if you can make every payment without fail for some time (is it also 10 years? I think longer) then the remaining balance can be forgiven. Global, blanket cancellation of a student loan debts is not yet a thing, and may never be. All this is Federal debt. Private debt is another world... but private debt can be reorganized, renegotiated, or discharged (canceled) via bankruptcy.

Spooky23 5y ago
The point is, instead of giving investors risk free returns, inflation is effectively a tax on the people and entities hoarding wealth with no productive purpose, and it benefits debtors. We’ve had a carnival ride of cheap debt forever, which has powered and established many really dumb businesses. IMO, we’d benefit from a few years of 5-10% inflation.
- merpnderp 5y ago
  You only have to look at how the US faired in high inflation periods in the past to realize how awful this is for normal working people. I'm amazed at how many people are so flippant about something with hard data showing how destructive it is.
  - Spooky23 5y ago
    Look at how we are fairing with 30 years of no inflation, fueled by collusive bank consolidation, creating “too big to fail” institutions and unlimited capital. How much of our economy is dominated by direct government spending, explicit or implicit support? IMO, the longer this status quo continues, the worse the outcome will be.
- watersb 5y ago
  -- Just an update, too late to edit my reply -- I responded to the assertion "Every student debtor is 7.5% less in debt in real terms than they were last year." because I found it intriguing. It's a cool writing prompt. I found that I don't disagree with this assertion, if I'm getting it right. But it's interesting... In our household of four people, both kids and spouse are attending college. So far, we are holding no student debt, but that could change dramatically next year if kid changes school. And there has been a lot of talk about addressing huge burden of student debt, with politicians crowing about debt forgiveness that they can bring home to constituents. But as with any matter of publicly-funded policy, the money only exists if you know how to ask for it. There are usually complicated procedures in place, and of those who would otherwise be qualified, many will lack the ability to follow through to actually discharging their debt via one of these programs. So I decided to look it up: how do I get this free money? It was worth looking into, but it's complicated. The most straightforward free money from debt relief has been, indeed, a 14(?) month interest-free deferment of student loan payments during this COVID crisis.

Spooky23 5y ago

The point is, instead of giving investors risk free returns, inflation is effectively a tax on the people and entities hoarding wealth with no productive purpose, and it benefits debtors. We’ve had a carnival ride of cheap debt forever, which has powered and established many really dumb businesses. IMO, we’d benefit from a few years of 5-10% inflation.

merpnderp 5y ago
You only have to look at how the US faired in high inflation periods in the past to realize how awful this is for normal working people. I'm amazed at how many people are so flippant about something with hard data showing how destructive it is.
- Spooky23 5y ago
  Look at how we are fairing with 30 years of no inflation, fueled by collusive bank consolidation, creating “too big to fail” institutions and unlimited capital. How much of our economy is dominated by direct government spending, explicit or implicit support? IMO, the longer this status quo continues, the worse the outcome will be.
watersb 5y ago
-- Just an update, too late to edit my reply -- I responded to the assertion "Every student debtor is 7.5% less in debt in real terms than they were last year." because I found it intriguing. It's a cool writing prompt. I found that I don't disagree with this assertion, if I'm getting it right. But it's interesting... In our household of four people, both kids and spouse are attending college. So far, we are holding no student debt, but that could change dramatically next year if kid changes school. And there has been a lot of talk about addressing huge burden of student debt, with politicians crowing about debt forgiveness that they can bring home to constituents. But as with any matter of publicly-funded policy, the money only exists if you know how to ask for it. There are usually complicated procedures in place, and of those who would otherwise be qualified, many will lack the ability to follow through to actually discharging their debt via one of these programs. So I decided to look it up: how do I get this free money? It was worth looking into, but it's complicated. The most straightforward free money from debt relief has been, indeed, a 14(?) month interest-free deferment of student loan payments during this COVID crisis.