6 ms·

The only way to "forgive" loans without causing inflation would be to screw over the banks by writing off the debt, forcing a credit crunch.

Turing_Machine 4y ago
Banks haven't held any standard student loans since way back in the Obama administration.
- Turing_Machine 4y ago
  That actually happened, yo. Obama did a federal takeover of all standard student loans, way back in 2010. I mean, you can look it up. Over 90% of student loan debt is now held directly by the federal government (rather than merely being guaranteed by it, as was the case in the past).
lapcat 4y ago
> screw over the banks by writing off the debt The banks don't hold this debt, the federal government does. That's why the federal government can forgive it. That's why the federal government has been able to suspend payments for 2 years. The government can't forgive debt held by someone else.
- jollyllama 4y ago
  "Most lenders are huge institutions, such as international banks or the government. After a loan is originated, however, it represents an asset that can be bought and sold on the market." Source: https://www.investopedia.com/articles/personal-finance/081216/who-actually-owns-student-loan-debt.asp https://www.investopedia.com/articles/personal-finance/08121...
  - lapcat 4y ago
    Look at the source of investopedia's stats: "The outstanding federal loan balance is $1.620 trillion and accounts for 92.7% of all student loan debt." https://educationdata.org/student-loan-debt-statistics https://educationdata.org/student-loan-debt-statistics So yes, banks do hold some student loan debt, but most of it is held by the federal government.
  - Dma54rhs 4y ago
    I believe your federal good government has fully guaranteed these loans so it doesn't really matter. The lenders still get paid as the write off would mean government taking the hit.
- suggestion 4y ago
  The federal government doesn't forgive debt, it just changes who's paying for it
  - washbrain 4y ago
    Right, they change the who from "former student" to "no one".
    - chii 4y ago
      Do they? Or are they (the gov't) just paying the loan using taxpayer money?
      - suggestion 4y ago
        Hence the changing who's paying for it. Spending and revenue will be unaffected, which is the problem.
    - suggestion 4y ago
      No, if the federal government "forgives" student debt, neither spending nor budget receipts will decrease to compensate. If any other institution ventured to forgive such massive amounts owed, they would be forced to compensate with their budgets, but they don't have monopolies on violence.

Turing_Machine 4y ago

Banks haven't held any standard student loans since way back in the Obama administration.

Turing_Machine 4y ago
That actually happened, yo. Obama did a federal takeover of all standard student loans, way back in 2010. I mean, you can look it up. Over 90% of student loan debt is now held directly by the federal government (rather than merely being guaranteed by it, as was the case in the past).

lapcat 4y ago

> screw over the banks by writing off the debt The banks don't hold this debt, the federal government does. That's why the federal government can forgive it. That's why the federal government has been able to suspend payments for 2 years. The government can't forgive debt held by someone else.

jollyllama 4y ago
"Most lenders are huge institutions, such as international banks or the government. After a loan is originated, however, it represents an asset that can be bought and sold on the market." Source: https://www.investopedia.com/articles/personal-finance/081216/who-actually-owns-student-loan-debt.asp https://www.investopedia.com/articles/personal-finance/08121...
- lapcat 4y ago
  Look at the source of investopedia's stats: "The outstanding federal loan balance is $1.620 trillion and accounts for 92.7% of all student loan debt." https://educationdata.org/student-loan-debt-statistics https://educationdata.org/student-loan-debt-statistics So yes, banks do hold some student loan debt, but most of it is held by the federal government.
- Dma54rhs 4y ago
  I believe your federal good government has fully guaranteed these loans so it doesn't really matter. The lenders still get paid as the write off would mean government taking the hit.
suggestion 4y ago
The federal government doesn't forgive debt, it just changes who's paying for it
- washbrain 4y ago
  Right, they change the who from "former student" to "no one".
  - chii 4y ago
    Do they? Or are they (the gov't) just paying the loan using taxpayer money?
    - suggestion 4y ago
      Hence the changing who's paying for it. Spending and revenue will be unaffected, which is the problem.
  - suggestion 4y ago
    No, if the federal government "forgives" student debt, neither spending nor budget receipts will decrease to compensate. If any other institution ventured to forgive such massive amounts owed, they would be forced to compensate with their budgets, but they don't have monopolies on violence.