3 ms·

Am I crazy or did Biden just try to pay for a bunch of student loans? Legality still pending AFAIK. Just because Obama may have ended one policy doesn’t mean th

Am I crazy or did Biden just try to pay for a bunch of student loans? Legality still pending AFAIK. Just because Obama may have ended one policy doesn’t mean they aren’t backstopped by the government. Either way the point remains that the debt cannot be dispelled through bankruptcy which makes them less risky for banks.

lapcat 4y ago
> Am I crazy or did Biden just try to pay for a bunch of student loans? Forgive, not pay for. > Legality still pending AFAIK. Oral arguments were heard by the Supreme Court a few weeks ago. > the debt cannot be dispelled through bankruptcy It can, actually, though it's difficult.
- nonethewiser 4y ago
  Therefor still pending.
  - lapcat 4y ago
    Yes. I was just adding some detail. We don't know exactly when the court will decide, but the case has been heard.
- karmelapple 4y ago
  It’s forgiveness, but it will still cost federal money, correct? https://www.npr.org/2022/09/27/1125272287/student-loan-forgiveness-cost-billion https://www.npr.org/2022/09/27/1125272287/student-loan-forgi...
  - WoahNoun 4y ago
    There would be no payments from the treasury so no direct cost for the government. The "cost" would be an opportunity cost of collecting payments. Which from a government perspective is offset by the spending and savings in the broader economy for not collecting those payments.
  - lapcat 4y ago
    It would cost in the same sense that it costs to lower the tax rate: a lower amount of future payments to the federal government from that particular revenue source. Of course, a lot of student loan debt will never be paid anyway for various reasons, such as deferment, default, or death of the borrower. Loan forgiveness won't result in any immediate payments from the federal government, because these loans are held by the federal government rather than by banks, something that a lot of people seem to misunderstand. The payments were already made years ago when the loans were disbursed.
lotsofpulp 4y ago
>Just because Obama may have ended one policy doesn’t mean they aren’t backstopped by the government. Yes, it does. Since 2010, a lender will not be paid by the government if the borrower defaults. >the debt cannot be dispelled through bankruptcy Yes, they can. https://www.investopedia.com/how-to-file-student-loan-bankruptcy-4772237 https://www.investopedia.com/how-to-file-student-loan-bankru...
- judge2020 4y ago
  Aren't most student loans already loaned directly by Sally Mae / the government? Private loans aren't the issue afaik.
  - lotsofpulp 4y ago
    Yes, I wrote that in my original response above.

lapcat 4y ago

> Am I crazy or did Biden just try to pay for a bunch of student loans? Forgive, not pay for. > Legality still pending AFAIK. Oral arguments were heard by the Supreme Court a few weeks ago. > the debt cannot be dispelled through bankruptcy It can, actually, though it's difficult.

nonethewiser 4y ago
Therefor still pending.
- lapcat 4y ago
  Yes. I was just adding some detail. We don't know exactly when the court will decide, but the case has been heard.
karmelapple 4y ago
It’s forgiveness, but it will still cost federal money, correct? https://www.npr.org/2022/09/27/1125272287/student-loan-forgiveness-cost-billion https://www.npr.org/2022/09/27/1125272287/student-loan-forgi...
- WoahNoun 4y ago
  There would be no payments from the treasury so no direct cost for the government. The "cost" would be an opportunity cost of collecting payments. Which from a government perspective is offset by the spending and savings in the broader economy for not collecting those payments.
- lapcat 4y ago
  It would cost in the same sense that it costs to lower the tax rate: a lower amount of future payments to the federal government from that particular revenue source. Of course, a lot of student loan debt will never be paid anyway for various reasons, such as deferment, default, or death of the borrower. Loan forgiveness won't result in any immediate payments from the federal government, because these loans are held by the federal government rather than by banks, something that a lot of people seem to misunderstand. The payments were already made years ago when the loans were disbursed.

lotsofpulp 4y ago

>Just because Obama may have ended one policy doesn’t mean they aren’t backstopped by the government. Yes, it does. Since 2010, a lender will not be paid by the government if the borrower defaults. >the debt cannot be dispelled through bankruptcy Yes, they can. https://www.investopedia.com/how-to-file-student-loan-bankruptcy-4772237 https://www.investopedia.com/how-to-file-student-loan-bankru...

judge2020 4y ago
Aren't most student loans already loaned directly by Sally Mae / the government? Private loans aren't the issue afaik.
- lotsofpulp 4y ago
  Yes, I wrote that in my original response above.