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The Student Loan Giveaway Is Much Bigger Than You Think

56 points by Bostonian 4y ago

LewisVerstappen 4y ago
Great points. I’m honestly fine with the 10k-20k forgiveness if there were any effort whatsoever to stop this absurd price gouging by colleges. Colleges have put millions of Americans in indentured servitude and the US government has responded by giving then an even bigger subsidy.
- onlyrealcuzzo 4y ago
  I disagree. The US Government is the problem - by creating loans 18-year olds can't default on - when hardly any of them understand the consequences. If colleges don't offer ever juicier amenities, the students will take their debt elsewhere to get a better offering. Colleges are simply competing for students. The amount of debt they can get - and therefore the amount of school they can "afford" is the problem.
  - dudul 4y ago
    It is, but proceeding with this free money giveaway without fixing the underlying problem is distasteful. It's literally trying to buy votes, it's not trying to make things better for the next generations.
  - sieabahlpark 4y ago
    You know, they wouldn't have that problem if the loans could have the threat of default. You trim what you don't need and highly focus on what ensures the loan doesn't default. It is literally risk free money so they're going to inflate the price so that they get the most for least investment and least risk.
  - googlryas 4y ago
    It's a good thing that student loans cannot be defaulted on. That makes lenders more likely to give out loans, which helps marginalized people many of whom might be the first to ever attend college in their family. Will a bank normally give a loan to an 18 year old with no credit score, with no cosigners, whose parents either have awful or no credit?
    - Turing_Machine 4y ago
      There aren't any banks or other lenders involved (other than the government) and haven't been since way back in the Obama administration.
    - cpursley 4y ago
      How are degrees without job prospects (which are actually capable of paying off the non-defaultable loans) helpful to marginalized people? It seems like just the opposite effect.
      - googlryas 4y ago
        Why would a college graduate have no job prospects? I think you'll find people coming from marginalized backgrounds are much more likely to enter a field of study with plentiful job prospects.
        onlyrealcuzzo 4y ago
        Why do poor people disproportionately attend for-profit college and get non-STEM degrees then?
        googlryas 4y ago
        They attend for profit colleges because they are commonly duped by promises of a certain salary or job placement. And commonly not sophisticated enough to understand that not all debts are created equal and accreditation matters in education.
    - GenerocUsername 4y ago
      Should a bank give out a loan that cannot be escaped to someone incapable of returning it?
      - googlryas 4y ago
        The idea is that they will be able to return it after going to college.
  - LewisVerstappen 4y ago
    Uhh I think we're making the same point here. > The amount of debt they can get - and therefore the amount of school they can "afford" is the problem. Yeah like, this is another form of a subsidy to colleges. Imagine if the US government would let you easily get a $200k loan to buy a car.
    - onlyrealcuzzo 4y ago
      > Imagine if the US government would let you easily get a $200k loan to buy a car. Or have Fannie and Feddie artificially lower interest rates with a government bailout guarantee so you can get the same house... but pay 50% more for it (total, not monthly payment).
  - wdr1 4y ago
    > by creating loans 18-year olds can't default on But you can default on them. https://www.consumerfinance.gov/about-us/blog/busting-myths-about-bankruptcy-and-private-student-loans/ https://www.consumerfinance.gov/about-us/blog/busting-myths-... "For too long, a myth has persisted that student loans are not dischargeable in bankruptcy. The myth is not true because, in fact, student loans can be discharged bankruptcy. We have seen the Department of Education take important steps to ensure that bankruptcy relief is available to federal student loan borrowers. "
- tomohawk 4y ago
  - enraged_camel 4y ago
    This is genuinely one of the funniest comments I’ve read on HN.
  - metadat 4y ago
    So much judgement against kids who sought an education. I'm curious, how do you feel about politicians such as Marjorie Taylor Greene getting her $183,504 USD PPP loan forgiven? She also happens to be vehemently and vocally opposed to student loan debt forgiveness. Another one mentioned in the link below, Vern Buchanan, took $2.3 million in PPP covid loan forgiveness. He's also opposed to student loan forgiveness. https://www.nbcnews.com/politics/white-house/white-house-shines-light-republicans-are-criticizing-student-debt-canc-rcna44904 https://www.nbcnews.com/politics/white-house/white-house-shi... How does any of this make sense? Are we, in the USA, collectively just a bunch of selfish jerks who can't see past our own noses? The lack of empathy may not be surprising at this point, but it is embarrassing and arguably immoral and inexcusable.
    - dudul 4y ago
      Where is the empathy for the ones who worked hard and made sacrifices to pay off their loan? Where is the empathy for the ones who passed on a college education because they didn't think they would be able to pay off the loan? As for the politicians you bring up, ok it's infuriating now what? 2 wrongs don't make a right.
      - gurchik 4y ago
        > Where is the empathy for the ones who passed on a college education because they didn't think they would be able to pay off the loan? I don't understand. No matter what kind of reform is done (making college cheaper, or forgiving loans, or any other solution) it will still be the case that some people in the past couldn't go to college because it was too expensive back then. So we can never change anything?
- afiori 4y ago
  You might like this classic: https://slatestarcodex.com/2015/06/06/against-tulip-subsidies/ https://slatestarcodex.com/2015/06/06/against-tulip-subsidie...
faeriechangling 4y ago
jonstewart 4y ago
The thing that would be great for economists to figure out is effective reform legislation for higher education to avoid building up a student debt bubble again.
- akomtu 4y ago
  WH doesn't want a reform. It gives a one-time handout right before the elections. It's a bribe, basically.
  - sokoloff 4y ago
    This seems like it’s a handout to people already likely to vote D, though. It seems likely to push away more incremental blue collar workers than to attract new college debt holders.
    - BobbyJo 4y ago
      The people this helps were likely to vote D, if they were to vote. Which they mostly don't actually do. This will likely motivate some of them, at least.
      - Jcowell 4y ago
        It’s pretty damn smart honestly. I wonder, given this works and Dems no longer having to be beholden to two senators blocking bills that the majority of democratic voters want, we’ll see rapid legalization being passed that was not possible for the past two years.
    - bandyaboot 4y ago
      It’s less about changing minds than it is about driving turnout. The party in power typically has turnout problems in midterms.
    - jonstewart 4y ago
      The stereotype is to think of, say, a Yale Philosophy grad with an enormous amount of debt and a useless degree (NB: I don't think a Phil degree is useless). The reality is that a ton of people have education debt from community and vocational colleges, for degrees and certifications that allowed them to get higher paying jobs, but not necessarily _high_-paying jobs, i.e., they're still working class jobs. For example, a lot of daycares require staff to have a Child Development Associate degree. Forgiveness will be a tremendous boon to a huge swath of such workers.
newaccount2021 4y ago
Rebelgecko 4y ago
Will we start seeing all colleges offer LRAPs, or an equivalent to take advantage of income based repayment?
specialist 4y ago
From the OC: "Indeed, these programs are likely to be very expensive and the resulting increase in the price of tuition will lead to calls either to end the program or for price controls on education." (emphasis mine) Terrific! A good start! Next, unwind Reagan's privatization of higher education, end usury lending, and restore state investment in an educated populace. Aka rejecting the reactionary project to end public education initiated by James M Buchanan and financed by all the usual suspects. https://en.wikipedia.org/wiki/Democracy_in_Chains https://en.wikipedia.org/wiki/Democracy_in_Chains
VictorPath 4y ago
If the US can afford to send $40 billion in weapons to Ukraine, it can afford some help to people going to college. The government subsidizing a more educated US workforce is a "giveaway", but you don't hear that word applied to the tens of billions Lockheed Martin and Ukraine get from the US taxpayer.
- betwixthewires 4y ago
  Yes you do. You hear plenty of people calling for an end to the foreign aid and military spending.
daenz 4y ago
The student loan forgiveness debate is such a mess. Here's just a sampling of the arguments I've seen, and I'm inclined to think there's some validity to all of them: * Loan forgiveness creates perverse incentives * If we can afford to forgive/bail-out X, then we can do student loans * This punishes everyone who was responsible with their loans * This is a huge relief to everyone with student loans * Why should everyone else have to pay for your bad choices * College should be free anyways, this is that, with extra steps
- emerged 4y ago
- deleted 4y ago
  [deleted]
- readthenotes1 4y ago
  The college loan programs obviously already created perverse incentives. It should come as no surprise that the loan forgiveness does as well. It is almost as if there's some motivation other than to allow children of poor families to obtain a college education. As for the college should be free anyways like it is in Europe, then perhaps we should administer universities like they do in Europe. Only a few select students are allowed to go and they don't provide training leagues for professional sports teams.
  - yeuxardents 4y ago
    Good point about free college, most people don't realize that college is not the same in Europe as it is in America, there are reasons for it being able to be free.
    - 1659447091 4y ago
      Could you expand on the reasons for it being able to be free? I had no idea until just now that it was free. TIL
clcaev 4y ago
I've never heard of LARPs. I perhaps we should make student loans subject to bankruptcy again, but, make the university a cosigner if they accept public loans.
- MerelyMortal 4y ago
  > make the university a cosigner I like this idea. It seems that university degrees are a dime-a-dozen these days, and are not necessary for most jobs, just a weed-out requirement. If universities have to cosign, then they'll probably accept less students, be more stringent on kicking them out, and possibly reduce the bloat and rising tuition costs. If less people get accepted into college, more will probably look at trade schools. Universities will have to take a more active role in making sure their graduates get jobs, and that the loan payments (tuition cost) is low enough and an attractive enough option to be payable.
mandmandam 4y ago
College should be low cost, at the very least. Or free. Or you should even get paid to go, which Denmark showed is viable. Education is an investment in the future. It's a rising tide that lifts all boats - or it ought to be. Instead, we seem to have a networking event for the wealthy; a decades-long spirit-crushing grind for the middle-class, and a dark, dismal carrot for poor people to join the US military. Over 40 countries around the world offer free post-secondary education. But in the world's wealthiest country, we have the worlds most expensive education and the world's highest "college debt". It's a sign of how brainwashed we are that this is accepted as normal. Why aren't we moving towards free-as-standard college as a goal? Instead, we have shrieking hypocrites, apoplectic at the idea that anyone other than a bank or military contractor might get a bailout, mere months after collecting their PPP cheques.
- betwixthewires 4y ago
  Are you American? You say "we" and then you spell checks the British way. I'm just curious as to why that is.
  - mandmandam 4y ago
    In Ireland I'm American, in America I'm Irish.
nimbius 4y ago
I feel like there's a fantastic irony that Biden, the senator whos legislation was responsible for exempting student loans from bankruptcy almost entirely, has now come to recon with biden, the president who's forgiveness legislation is literally a lynchpin attempting to keep the entire student loan bubble from destroying the economy in the latest recession of capitalism. I certainly applaud the effort, however I feel like greater education and predatory lending reform could have prevented the need for this in the first place.
- krapp 4y ago
  >I certainly applaud the effort, however I feel like greater education and predatory lending reform could have prevented the need for this in the first place. Unfortunately, it will never happen. The same people who despise the premise of student loan forgiveness also despise the premise of government interfering with the student loan markets. The only reform they would accept is removing loans altogether, so that only people who can pay full cost out of pocket (the wealthy) can afford education. They certainly don't want education to be cheaper or, heaven forbid, nationalized. And if anything, populr backlash against this from the right is only going to harden the resolve of those people to resist further reforms.
  - colinsane 4y ago
    you’re drawing strict lines here and being pretty uncharitable against any hypothetical opposing view. here’s a (real) view which your comment claims is impossible: - gov should not forgive loans but should instead pressure universities to fund tuition via their endowments.
    - lapcat 4y ago
      > - gov should not forgive loans but should instead pressure universities to fund tuition via their endowments. Why not both? If it's admitted that tuition is too high — "pressure universities to fund tuition via their endowments" — then doesn't refusing to forgive loans entail refusing to help the students who suffered from tuition being too high?
bandyaboot 4y ago
Half measures and bandaids tend to create a mess. Publicly fund post secondary education. It will be worth it.
- metadat 4y ago
  This. Education should be subsidized anyway, it's in our best interest. Education is an investment in America's and the world's future. Education opens the door to dreams becoming reality, and is the backbone we rely on to make progress as a civilization. I'm not satisfied with the status quo that any of the politicians are pushing in the states. This is one area where Germany is leaps and bounds ahead of us - they subsidize it almost 100%. Chasing money for the sake of money is stupid and ultimately yields nothing of lasting value. Talk about "thinking of the children", this is one case where I'd hope we can all agree: the children of today all deserve access to a good education and should be able to ascend as far as they desire in academia. When the rest of us grow old and useless, it's in our own best interest to ensure the kids of today are as capable and intelligent as possible, so they have sufficient resources to care for us. Social security, as it stands, is a terrible and unsustainable plan.
  - rufus_foreman 4y ago
    >> Education should be subsidized anyway Education is subsidized. The question is whether 17 years of subsidized education are going to get you significantly better results than 13 years of subsidized education, as in enough to justify the costs.
    - metadat 4y ago
      Arguably, elementary, middle, and highschool are mostly about providing subsidized child care for the masses. The education part is somewhat secondary [unfortunately]. Higher education (college+) is where the big ROI can be obtained. It doesn't take much education to flip burgers or do other jobs that don't require an advanced degree.
- colinsane 4y ago
deleted 4y ago
[deleted]
immigrantheart 4y ago
I just don’t want to pay for someone else’s, strangers’ mistakes. If you want your tax money to be used to pay other people student loan, be my guest, while you are at it, pay their mortgage too. Don’t force others to do it. Biden is a tyrant puppet, no difference than president orange loompa. Both are criminals. But I’ll vote for oompa loompa rather than student loan forgiveness.
- GoodJokes 4y ago
- dns_snek 4y ago
  Let me preface this by saying that I don't live in the US so I have a somewhat limited understanding of the topic. If I'm completely off base, let me know. Your comment seems to come from a place of anger and envy rather than a genuine concern over government spending. In recent history, the US government has allocated hundreds of billions, if not trillions of dollars to bailing out various industry sectors. To me, as an outsider, it seems completely reasonable to take the load off of people who are trapped under the weight of their student loans. In my humble opinion, the deciding factor for this kind of intervention should simply be whether it has a good chance of having an overall net positive effect on the society overall - a complex combination of factors that should include 2nd and 3rd order effects such as positive impact on mental health. "I suffered so you should suffer too" seems like a generally unproductive and harmful approach when it comes to politics. Why draw the line here? What makes this different from every other government handout, apart from the fact that this time it's regular citizens receiving the benefits rather than corporations?
  - dudul 4y ago
    And it won't have a positive effect on society. It does nothing to prevent the student loan bubble in the future. Also let's avoid the whataboutism, it is disgusting when corporations are bailed out too.
- selimthegrim 4y ago
  Oompa Loompas turn people who like coups into blueberries or push them down the incinerator chute. Just saying.
zaroth 4y ago
I think a lot of people are debating the giveaway itself without reading the article about abusing the PSLF regime using LRAPs. So aside from the giveaway, Biden’s EO has also sweetened the deal on the public service loan forgiveness program by lowering the percent of income you pay, raising the income exclusion, lowering the interest rate, and increasing the type of loans that qualify. What schools have figured out is they can charge atrociously large amounts of tuition and it doesn’t matter anyway, because the student is only ever going to pay a percent of non-excluded income for a certain number of years and then the rest goes poof. There is apparently no limit to how large the “poof” can be at the end of the 10 year income-based repayment period. So they charge several hundred grand for tuition because YOLO (You Only Loan Once). But it’s even better.. schools will even make a side hustle agreement to pay your income-based payments for you if you let them charge even more. Apparently they do it so often there’s even a name and acronym for it! But it’s even better, because you can also tack on “living expenses” onto these loans so go big or go home! Actually the article suggests students go big by renting an expensive home and then subletting. So great that this toxic policy is even driving up rents! I mean it’s money-funnels like this that when VCs or negative-margin startups, or crypto-bros do it, everyone can see how market distorting and insane it is. Now it’s the Federal Government doing it, and you know they just print at much as they need of the “dollar” thingies… Maybe when milk is $10 a gallon and college tuition is $50k a semester and apartments in college towns rent for $8k/mo we will rethink it? In the meantime, the only way to reasonably go to college is to either not have any money so tuition is waived, or know that you won’t have to pay it back. Pitty the poor schmucks who have saved into their 509s for a decade to pay their way through. I have two kids who will soon be college age. I told my ex-wife, make sure as hell you don’t get a raise, ask for vacation time instead. If the kids can’t go for free, it’ll cost like half a million dollars to send them. So we have to be sure we don’t earn too much. This is an effective marginal tax rate well over 100% on the middle class. The only way to win the game is not to play, and people generally speaking when they figure this out are not stupid. Why the heck would anyone work their asses off to make a $150k household income just to walk face-first into a $100k/year college bill? A lot of the best colleges are free for undergrads as long as the parents don’t earn too much.
lapcat 4y ago
Modern universities are a bizarre amalgam of research, liberal arts education, and job training, with the result that each of those aspects tends to undermine the others. [EDIT: I forgot the most important part! Exclusive social and athletic clubs.] Unfortunately, employers have decided to favor degrees from research universities in their hiring decisions, which creates an enormous demand for such degrees. A lot of people want to blame government-backed student loans for the problem, but that's looking at it only from the supply side, not the demand side. If university degrees were no longer advantageous for employment, then the demand would drop off massively. There's still a general question of whether it's a good idea for the populace of a democracy to receive a university-level liberal arts education. (I would say yes, and it should therefore be subsidized by said democracy.) But I do feel that industry should take a lot more responsibility to subsidize job training. (For instance, [rhetorical question] how much are the big tech companies paying to fund the computer science degrees that they demand for engineers?) Everybody knows that college degrees are expensive. Especially degrees from prestigious schools. Employers know it. So when employers favor college degrees in hiring, especially degrees from expensive prestigious schools, then employers are effectively discriminating by personal or family wealth. (I suppose a lot of this is "works as designed".)
DougN7 4y ago
I still don’t understand why _student_ loans in particular are being forgiven (paid of by the government). What about home loans? Car loans? Credit card debt? What makes student loans worthy of forgiveness that others aren’t?
- NoahKAndrews 4y ago
  The government doesn't subsidize other loans like they do for student loans.
- lapcat 4y ago
  > What makes student loans worthy of forgiveness that others aren’t? It's not about worthiness per se. More than 90% of student loan debt is held by the federal government, and that's why the federal government has the ability to forgive student loan debt. The federal government doesn't have the authority to forgive other debt. This is being done by executive order because Congress is largely gridlocked, so executive action is pretty much the only action in town (Washington).
- rantingdemon 4y ago
  It is an investment in the future. Education is the silver bullet. I don't really understand why this is so hard to grasp for people. Perhaps its because the pay-off isn't in the next quarter, or year, or even 5 years. But over 5, to 10, 20 years - the payoff is immense.
  - DougN7 4y ago
    Education is obviously important. Making school less expensive for everyone would be great. I just don’t understand why of all those that have ever or will ever borrow, current borrowers get this pay off. Why are they special?

56 points by Bostonian 4y ago

Great points. I’m honestly fine with the 10k-20k forgiveness if there were any effort whatsoever to stop this absurd price gouging by colleges. Colleges have put millions of Americans in indentured servitude and the US government has responded by giving then an even bigger subsidy.

onlyrealcuzzo 4y ago
I disagree. The US Government is the problem - by creating loans 18-year olds can't default on - when hardly any of them understand the consequences. If colleges don't offer ever juicier amenities, the students will take their debt elsewhere to get a better offering. Colleges are simply competing for students. The amount of debt they can get - and therefore the amount of school they can "afford" is the problem.
- dudul 4y ago
  It is, but proceeding with this free money giveaway without fixing the underlying problem is distasteful. It's literally trying to buy votes, it's not trying to make things better for the next generations.
- sieabahlpark 4y ago
  You know, they wouldn't have that problem if the loans could have the threat of default. You trim what you don't need and highly focus on what ensures the loan doesn't default. It is literally risk free money so they're going to inflate the price so that they get the most for least investment and least risk.
- googlryas 4y ago
  It's a good thing that student loans cannot be defaulted on. That makes lenders more likely to give out loans, which helps marginalized people many of whom might be the first to ever attend college in their family. Will a bank normally give a loan to an 18 year old with no credit score, with no cosigners, whose parents either have awful or no credit?
  - Turing_Machine 4y ago
    There aren't any banks or other lenders involved (other than the government) and haven't been since way back in the Obama administration.
  - cpursley 4y ago
    How are degrees without job prospects (which are actually capable of paying off the non-defaultable loans) helpful to marginalized people? It seems like just the opposite effect.
    - googlryas 4y ago
      Why would a college graduate have no job prospects? I think you'll find people coming from marginalized backgrounds are much more likely to enter a field of study with plentiful job prospects.
      - onlyrealcuzzo 4y ago
        Why do poor people disproportionately attend for-profit college and get non-STEM degrees then?
        googlryas 4y ago
        They attend for profit colleges because they are commonly duped by promises of a certain salary or job placement. And commonly not sophisticated enough to understand that not all debts are created equal and accreditation matters in education.
  - GenerocUsername 4y ago
    Should a bank give out a loan that cannot be escaped to someone incapable of returning it?
    - googlryas 4y ago
      The idea is that they will be able to return it after going to college.
- LewisVerstappen 4y ago
  Uhh I think we're making the same point here. > The amount of debt they can get - and therefore the amount of school they can "afford" is the problem. Yeah like, this is another form of a subsidy to colleges. Imagine if the US government would let you easily get a $200k loan to buy a car.
  - onlyrealcuzzo 4y ago
    > Imagine if the US government would let you easily get a $200k loan to buy a car. Or have Fannie and Feddie artificially lower interest rates with a government bailout guarantee so you can get the same house... but pay 50% more for it (total, not monthly payment).
- wdr1 4y ago
  > by creating loans 18-year olds can't default on But you can default on them. https://www.consumerfinance.gov/about-us/blog/busting-myths-about-bankruptcy-and-private-student-loans/ https://www.consumerfinance.gov/about-us/blog/busting-myths-... "For too long, a myth has persisted that student loans are not dischargeable in bankruptcy. The myth is not true because, in fact, student loans can be discharged bankruptcy. We have seen the Department of Education take important steps to ensure that bankruptcy relief is available to federal student loan borrowers. "
tomohawk 4y ago
- enraged_camel 4y ago
  This is genuinely one of the funniest comments I’ve read on HN.
- metadat 4y ago
  So much judgement against kids who sought an education. I'm curious, how do you feel about politicians such as Marjorie Taylor Greene getting her $183,504 USD PPP loan forgiven? She also happens to be vehemently and vocally opposed to student loan debt forgiveness. Another one mentioned in the link below, Vern Buchanan, took $2.3 million in PPP covid loan forgiveness. He's also opposed to student loan forgiveness. https://www.nbcnews.com/politics/white-house/white-house-shines-light-republicans-are-criticizing-student-debt-canc-rcna44904 https://www.nbcnews.com/politics/white-house/white-house-shi... How does any of this make sense? Are we, in the USA, collectively just a bunch of selfish jerks who can't see past our own noses? The lack of empathy may not be surprising at this point, but it is embarrassing and arguably immoral and inexcusable.
  - dudul 4y ago
    Where is the empathy for the ones who worked hard and made sacrifices to pay off their loan? Where is the empathy for the ones who passed on a college education because they didn't think they would be able to pay off the loan? As for the politicians you bring up, ok it's infuriating now what? 2 wrongs don't make a right.
    - gurchik 4y ago
      > Where is the empathy for the ones who passed on a college education because they didn't think they would be able to pay off the loan? I don't understand. No matter what kind of reform is done (making college cheaper, or forgiving loans, or any other solution) it will still be the case that some people in the past couldn't go to college because it was too expensive back then. So we can never change anything?
afiori 4y ago
You might like this classic: https://slatestarcodex.com/2015/06/06/against-tulip-subsidies/ https://slatestarcodex.com/2015/06/06/against-tulip-subsidie...

faeriechangling 4y ago

jonstewart 4y ago

The thing that would be great for economists to figure out is effective reform legislation for higher education to avoid building up a student debt bubble again.

akomtu 4y ago
WH doesn't want a reform. It gives a one-time handout right before the elections. It's a bribe, basically.
- sokoloff 4y ago
  This seems like it’s a handout to people already likely to vote D, though. It seems likely to push away more incremental blue collar workers than to attract new college debt holders.
  - BobbyJo 4y ago
    The people this helps were likely to vote D, if they were to vote. Which they mostly don't actually do. This will likely motivate some of them, at least.
    - Jcowell 4y ago
      It’s pretty damn smart honestly. I wonder, given this works and Dems no longer having to be beholden to two senators blocking bills that the majority of democratic voters want, we’ll see rapid legalization being passed that was not possible for the past two years.
  - bandyaboot 4y ago
    It’s less about changing minds than it is about driving turnout. The party in power typically has turnout problems in midterms.
  - jonstewart 4y ago
    The stereotype is to think of, say, a Yale Philosophy grad with an enormous amount of debt and a useless degree (NB: I don't think a Phil degree is useless). The reality is that a ton of people have education debt from community and vocational colleges, for degrees and certifications that allowed them to get higher paying jobs, but not necessarily _high_-paying jobs, i.e., they're still working class jobs. For example, a lot of daycares require staff to have a Child Development Associate degree. Forgiveness will be a tremendous boon to a huge swath of such workers.

newaccount2021 4y ago

Rebelgecko 4y ago

Will we start seeing all colleges offer LRAPs, or an equivalent to take advantage of income based repayment?

specialist 4y ago

From the OC: "Indeed, these programs are likely to be very expensive and the resulting increase in the price of tuition will lead to calls either to end the program or for price controls on education." (emphasis mine) Terrific! A good start! Next, unwind Reagan's privatization of higher education, end usury lending, and restore state investment in an educated populace. Aka rejecting the reactionary project to end public education initiated by James M Buchanan and financed by all the usual suspects. https://en.wikipedia.org/wiki/Democracy_in_Chains https://en.wikipedia.org/wiki/Democracy_in_Chains

VictorPath 4y ago

If the US can afford to send $40 billion in weapons to Ukraine, it can afford some help to people going to college. The government subsidizing a more educated US workforce is a "giveaway", but you don't hear that word applied to the tens of billions Lockheed Martin and Ukraine get from the US taxpayer.

betwixthewires 4y ago
Yes you do. You hear plenty of people calling for an end to the foreign aid and military spending.

daenz 4y ago

The student loan forgiveness debate is such a mess. Here's just a sampling of the arguments I've seen, and I'm inclined to think there's some validity to all of them: * Loan forgiveness creates perverse incentives * If we can afford to forgive/bail-out X, then we can do student loans * This punishes everyone who was responsible with their loans * This is a huge relief to everyone with student loans * Why should everyone else have to pay for your bad choices * College should be free anyways, this is that, with extra steps

emerged 4y ago
deleted 4y ago
[deleted]
readthenotes1 4y ago
The college loan programs obviously already created perverse incentives. It should come as no surprise that the loan forgiveness does as well. It is almost as if there's some motivation other than to allow children of poor families to obtain a college education. As for the college should be free anyways like it is in Europe, then perhaps we should administer universities like they do in Europe. Only a few select students are allowed to go and they don't provide training leagues for professional sports teams.
- yeuxardents 4y ago
  Good point about free college, most people don't realize that college is not the same in Europe as it is in America, there are reasons for it being able to be free.
  - 1659447091 4y ago
    Could you expand on the reasons for it being able to be free? I had no idea until just now that it was free. TIL

clcaev 4y ago

I've never heard of LARPs. I perhaps we should make student loans subject to bankruptcy again, but, make the university a cosigner if they accept public loans.

MerelyMortal 4y ago
> make the university a cosigner I like this idea. It seems that university degrees are a dime-a-dozen these days, and are not necessary for most jobs, just a weed-out requirement. If universities have to cosign, then they'll probably accept less students, be more stringent on kicking them out, and possibly reduce the bloat and rising tuition costs. If less people get accepted into college, more will probably look at trade schools. Universities will have to take a more active role in making sure their graduates get jobs, and that the loan payments (tuition cost) is low enough and an attractive enough option to be payable.

mandmandam 4y ago

College should be low cost, at the very least. Or free. Or you should even get paid to go, which Denmark showed is viable. Education is an investment in the future. It's a rising tide that lifts all boats - or it ought to be. Instead, we seem to have a networking event for the wealthy; a decades-long spirit-crushing grind for the middle-class, and a dark, dismal carrot for poor people to join the US military. Over 40 countries around the world offer free post-secondary education. But in the world's wealthiest country, we have the worlds most expensive education and the world's highest "college debt". It's a sign of how brainwashed we are that this is accepted as normal. Why aren't we moving towards free-as-standard college as a goal? Instead, we have shrieking hypocrites, apoplectic at the idea that anyone other than a bank or military contractor might get a bailout, mere months after collecting their PPP cheques.

betwixthewires 4y ago
Are you American? You say "we" and then you spell checks the British way. I'm just curious as to why that is.
- mandmandam 4y ago
  In Ireland I'm American, in America I'm Irish.

nimbius 4y ago

I feel like there's a fantastic irony that Biden, the senator whos legislation was responsible for exempting student loans from bankruptcy almost entirely, has now come to recon with biden, the president who's forgiveness legislation is literally a lynchpin attempting to keep the entire student loan bubble from destroying the economy in the latest recession of capitalism. I certainly applaud the effort, however I feel like greater education and predatory lending reform could have prevented the need for this in the first place.

krapp 4y ago
>I certainly applaud the effort, however I feel like greater education and predatory lending reform could have prevented the need for this in the first place. Unfortunately, it will never happen. The same people who despise the premise of student loan forgiveness also despise the premise of government interfering with the student loan markets. The only reform they would accept is removing loans altogether, so that only people who can pay full cost out of pocket (the wealthy) can afford education. They certainly don't want education to be cheaper or, heaven forbid, nationalized. And if anything, populr backlash against this from the right is only going to harden the resolve of those people to resist further reforms.
- colinsane 4y ago
  you’re drawing strict lines here and being pretty uncharitable against any hypothetical opposing view. here’s a (real) view which your comment claims is impossible: - gov should not forgive loans but should instead pressure universities to fund tuition via their endowments.
  - lapcat 4y ago
    > - gov should not forgive loans but should instead pressure universities to fund tuition via their endowments. Why not both? If it's admitted that tuition is too high — "pressure universities to fund tuition via their endowments" — then doesn't refusing to forgive loans entail refusing to help the students who suffered from tuition being too high?

bandyaboot 4y ago

Half measures and bandaids tend to create a mess. Publicly fund post secondary education. It will be worth it.

metadat 4y ago
This. Education should be subsidized anyway, it's in our best interest. Education is an investment in America's and the world's future. Education opens the door to dreams becoming reality, and is the backbone we rely on to make progress as a civilization. I'm not satisfied with the status quo that any of the politicians are pushing in the states. This is one area where Germany is leaps and bounds ahead of us - they subsidize it almost 100%. Chasing money for the sake of money is stupid and ultimately yields nothing of lasting value. Talk about "thinking of the children", this is one case where I'd hope we can all agree: the children of today all deserve access to a good education and should be able to ascend as far as they desire in academia. When the rest of us grow old and useless, it's in our own best interest to ensure the kids of today are as capable and intelligent as possible, so they have sufficient resources to care for us. Social security, as it stands, is a terrible and unsustainable plan.
- rufus_foreman 4y ago
  >> Education should be subsidized anyway Education is subsidized. The question is whether 17 years of subsidized education are going to get you significantly better results than 13 years of subsidized education, as in enough to justify the costs.
  - metadat 4y ago
    Arguably, elementary, middle, and highschool are mostly about providing subsidized child care for the masses. The education part is somewhat secondary [unfortunately]. Higher education (college+) is where the big ROI can be obtained. It doesn't take much education to flip burgers or do other jobs that don't require an advanced degree.
colinsane 4y ago

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immigrantheart 4y ago

I just don’t want to pay for someone else’s, strangers’ mistakes. If you want your tax money to be used to pay other people student loan, be my guest, while you are at it, pay their mortgage too. Don’t force others to do it. Biden is a tyrant puppet, no difference than president orange loompa. Both are criminals. But I’ll vote for oompa loompa rather than student loan forgiveness.

GoodJokes 4y ago
dns_snek 4y ago
Let me preface this by saying that I don't live in the US so I have a somewhat limited understanding of the topic. If I'm completely off base, let me know. Your comment seems to come from a place of anger and envy rather than a genuine concern over government spending. In recent history, the US government has allocated hundreds of billions, if not trillions of dollars to bailing out various industry sectors. To me, as an outsider, it seems completely reasonable to take the load off of people who are trapped under the weight of their student loans. In my humble opinion, the deciding factor for this kind of intervention should simply be whether it has a good chance of having an overall net positive effect on the society overall - a complex combination of factors that should include 2nd and 3rd order effects such as positive impact on mental health. "I suffered so you should suffer too" seems like a generally unproductive and harmful approach when it comes to politics. Why draw the line here? What makes this different from every other government handout, apart from the fact that this time it's regular citizens receiving the benefits rather than corporations?
- dudul 4y ago
  And it won't have a positive effect on society. It does nothing to prevent the student loan bubble in the future. Also let's avoid the whataboutism, it is disgusting when corporations are bailed out too.
selimthegrim 4y ago
Oompa Loompas turn people who like coups into blueberries or push them down the incinerator chute. Just saying.

zaroth 4y ago

I think a lot of people are debating the giveaway itself without reading the article about abusing the PSLF regime using LRAPs. So aside from the giveaway, Biden’s EO has also sweetened the deal on the public service loan forgiveness program by lowering the percent of income you pay, raising the income exclusion, lowering the interest rate, and increasing the type of loans that qualify. What schools have figured out is they can charge atrociously large amounts of tuition and it doesn’t matter anyway, because the student is only ever going to pay a percent of non-excluded income for a certain number of years and then the rest goes poof. There is apparently no limit to how large the “poof” can be at the end of the 10 year income-based repayment period. So they charge several hundred grand for tuition because YOLO (You Only Loan Once). But it’s even better.. schools will even make a side hustle agreement to pay your income-based payments for you if you let them charge even more. Apparently they do it so often there’s even a name and acronym for it! But it’s even better, because you can also tack on “living expenses” onto these loans so go big or go home! Actually the article suggests students go big by renting an expensive home and then subletting. So great that this toxic policy is even driving up rents! I mean it’s money-funnels like this that when VCs or negative-margin startups, or crypto-bros do it, everyone can see how market distorting and insane it is. Now it’s the Federal Government doing it, and you know they just print at much as they need of the “dollar” thingies… Maybe when milk is $10 a gallon and college tuition is $50k a semester and apartments in college towns rent for $8k/mo we will rethink it? In the meantime, the only way to reasonably go to college is to either not have any money so tuition is waived, or know that you won’t have to pay it back. Pitty the poor schmucks who have saved into their 509s for a decade to pay their way through. I have two kids who will soon be college age. I told my ex-wife, make sure as hell you don’t get a raise, ask for vacation time instead. If the kids can’t go for free, it’ll cost like half a million dollars to send them. So we have to be sure we don’t earn too much. This is an effective marginal tax rate well over 100% on the middle class. The only way to win the game is not to play, and people generally speaking when they figure this out are not stupid. Why the heck would anyone work their asses off to make a $150k household income just to walk face-first into a $100k/year college bill? A lot of the best colleges are free for undergrads as long as the parents don’t earn too much.

lapcat 4y ago

Modern universities are a bizarre amalgam of research, liberal arts education, and job training, with the result that each of those aspects tends to undermine the others. [EDIT: I forgot the most important part! Exclusive social and athletic clubs.] Unfortunately, employers have decided to favor degrees from research universities in their hiring decisions, which creates an enormous demand for such degrees. A lot of people want to blame government-backed student loans for the problem, but that's looking at it only from the supply side, not the demand side. If university degrees were no longer advantageous for employment, then the demand would drop off massively. There's still a general question of whether it's a good idea for the populace of a democracy to receive a university-level liberal arts education. (I would say yes, and it should therefore be subsidized by said democracy.) But I do feel that industry should take a lot more responsibility to subsidize job training. (For instance, [rhetorical question] how much are the big tech companies paying to fund the computer science degrees that they demand for engineers?) Everybody knows that college degrees are expensive. Especially degrees from prestigious schools. Employers know it. So when employers favor college degrees in hiring, especially degrees from expensive prestigious schools, then employers are effectively discriminating by personal or family wealth. (I suppose a lot of this is "works as designed".)

DougN7 4y ago

I still don’t understand why _student_ loans in particular are being forgiven (paid of by the government). What about home loans? Car loans? Credit card debt? What makes student loans worthy of forgiveness that others aren’t?

NoahKAndrews 4y ago
The government doesn't subsidize other loans like they do for student loans.
lapcat 4y ago
> What makes student loans worthy of forgiveness that others aren’t? It's not about worthiness per se. More than 90% of student loan debt is held by the federal government, and that's why the federal government has the ability to forgive student loan debt. The federal government doesn't have the authority to forgive other debt. This is being done by executive order because Congress is largely gridlocked, so executive action is pretty much the only action in town (Washington).
rantingdemon 4y ago
It is an investment in the future. Education is the silver bullet. I don't really understand why this is so hard to grasp for people. Perhaps its because the pay-off isn't in the next quarter, or year, or even 5 years. But over 5, to 10, 20 years - the payoff is immense.
- DougN7 4y ago
  Education is obviously important. Making school less expensive for everyone would be great. I just don’t understand why of all those that have ever or will ever borrow, current borrowers get this pay off. Why are they special?