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If student loan forgiveness is to be done, they should also do something to prevent universities from charging ridiculous prices in the first place. The only re

If student loan forgiveness is to be done, they should also do something to prevent universities from charging ridiculous prices in the first place. The only reason they started doing so is because they know the government is willing to issue loans to pay for crazy high tuition costs. If loans are to be forgiven, steps have to be taken to prevent us from reaching this point again, or else history will just repeat itself in the future.

legitster 3y ago
Part of the reason this attempt to forgive student loan forgiveness was pretty far fetched to begin with (among many!) Is that their own Department of Education is still issuing student loans! At much higher interest rates than the ones being forgiven!
- wustangdan 3y ago
  Yah. If students loans are so evil that they must all be forgiven, shouldn't we stop the creation of new student loans first? Plus its not like admission prices will just stay in place with such a massive demand shock.
  - twiceaday 3y ago
    Compare loan forgiveness vs fixing new loans on how much voting power directly benefits.
ZoomerCretin 3y ago
High tuition rates are caused by the collapse in state funding for higher education. There is no correlation with loan availability. This has been debunked countless times. https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students https://www.cbpp.org/research/state-budget-and-tax/state-hig... Historically, funding was tied to tuition caps. These had to be removed when states cut funding to have balanced budgets.
- expensive_news 3y ago
  The source you linked to states that funding has fallen around $1220 per year per student, after adjusting for inflation. But it goes on to state that tuition costs have increased $2708 per year. So what are universities doing with that extra $1500 per year per student? I agree that schools should be better funded, but ballooning tuition costs are more than just a lack of funding.
- bitshiftfaced 3y ago
  (All non-inflation adjusted): 2008 to 2021, 4 year public school tuition $7280 to $9375 = +28.8% 2008 to 2021, state support per full time equivalent student: $6552 to $7896 = +20.5% It looks like cbpp "debunked" it by picking a year that was particularly favorable to that point of view (2018). Looks to me like the two variables have been trending together just fine as per recent data.
  - ZoomerCretin 3y ago
    Looks like you debunked it by picking a year particularly favorable to your point of view. There was a temporary influx of funding from the massive COVID relief/stimulus packages. The article was written in 2019. There was no cherry picking. That was the most recent data available to them.
    - bitshiftfaced 3y ago
      And yet tuition didn't go down as cbpp would've predicted. We at least agree that we ought to use the most recent data when determining whether something has actually been debunked, correct? They used the most recent data at the time, but it's no longer 2018.
      - ZoomerCretin 3y ago
        That's not what they predicted. Why would you expect it to go down? It was a one year boost in funding and the states didn't condition the funding on tuition prices. Universities _will not_ reduce tuition without being forced to do so. Universities _cannot_ reduce tuition without more funding.
WalterBright 3y ago
Price controls never work.
- enterprise_cog 3y ago
  Why is that?
  - WalterBright 3y ago
    Because the Law of Supply and Demand cannot be repealed. All attempts always result in "unanticipated" deleterious side effects, such as shortages.
CWuestefeld 3y ago
A universal truth in economics is that if you subsidize something, you get more of it. If you tax something, you get less of it. The government uses this to good ends all the time. It's why we have very heavy taxes on gasoline and cigarettes: we want people to burn less gas and to smoke less. And we offer tax rebates for upgrading your house with better windows, and so forth. Forgiveness of student loans is just a subsidy of student loans. Subsidies give you more of it, which means that the more student loans we subsidize, the more student loans we'll have. Notice the exact words just above. I didn't say that if we subsidize student loans, we'll necessarily get more education, or that we'll get better educated people - because that's not what's being subsidized here! If we're subsidizing loans, we can expect people to take on more debt! But this doesn't necessarily lead to more actual education being done, because that's not what's being subsidized here. Of course, that doesn't prove the converse. It doesn't prove that education doesn't increase; just that we have no real reason to expect that it will.
NoMoreNicksLeft 3y ago
There is a principal of loan forgiveness that is old, nearly universal, and so well-known that it already has its own name: bankruptcy. At some point in the recent past, at least during my lifetime, this was forbidden. It is one of the few classes of debt where it is forbidden. I do not know why we would try to force through some weird one-off amnesty, rather than re-implementing bankruptcy for student loan debt which would fix the problem with permanence. Bankruptcy includes many of the factors that opponents of forgiveness complain about... it's not exactly free. Those who avail themselves of it must make an uncomfortable tradeoff. They're limited in how often they can use it. It invites scrutiny to make certain they aren't using it except when they actually need it. Scrutiny from judges and arbiters who have experience sniffing out such fraud. In the 3 or 4 years this has made the news in mainstream media, I've not once heard anyone mentioning this, or offering it as an alternative. It's quite bizarre.
- bentley 3y ago
  If someone takes out a mortgage and goes bankrupt, the lender will get the house. If someone takes out a car loan and goes bankrupt, the lender will get the car. For loans with no collateral, like credit cards, the lenders use credit scores and other heuristics to determine the likelihood of making their money back, and deny applicants who don’t meet their standards. I believe the intended effect of making student loans immune to bankruptcy was to make education more accessible by incentivizing lenders to provide loans to subprime borrowers. I share your belief that (new) student loans should be dischargeable in bankruptcy. I expect that lenders will become more choosy in what students they lend money to, and this reduction in money available to students will in turn incentivize schools for once to start lowering prices. But that idea means fewer students will be able to receive student loans, and it will be attacked (wrongly) from an egalitarian perspective.
  - NoMoreNicksLeft 3y ago
    > For loans with no collateral, like credit cards, the lenders use credit scores and other heuristics to determine the likelihood of making their money back, and deny applicants who don’t meet their standards. But you can still file for bankruptcy. Why? It's not because "hey, lenders have remedies available"... it's because without bankruptcy, things go to shit really fast. Like with student loans. Lenders should be allowed to loan money, and to attempt to profit from it. But society isn't obligated to protect their interests at all costs. And if they don't like that, they can just choose not to loan. Lenders that make bad loans put society in danger (if too many lenders make too many bad loans). Society actually has the right and the proper power to tell them to fuck off. > I believe the intended effect of making student loans immune to bankruptcy was to make education more accessible The perverse incentive though was delivering this loan accessibility in such a way as if it were financial aid. Young kids, barely legal adults at that point, didn't know any better. And colleges and universities chase that money (why wouldn't they... the money can only be spent on them) by turning their institutions into resort spas. Any increase in cost that came with that was turned around and passed right back to the students who "paid" for it in tuition and fees, but since "someone else" was doing the actual job of paying for it they weren't cost conscious. Granted, young people aren't usually cost conscious to begin with, but this just made it worse. And the people "paying for it" just hang that bill back around the college kid's neck with ruinous interest like a boat anchor. Were the colleges and universities at least decent enough to make sure these kids could get a good job that might make it all worthwhile in the long run? Hell no. Instead, they scream bloody murder about how it's more important that they not be turned into vocational schools, and they're teaching people something far more important than job skills... they're "teaching them how to think". What a load of horseshit. Even the law schools are a joke. Ever look into how they cook those books to make it seem like 80% or more of law school graduates have a job lined up within 12 months after graduating? All in all, I don't know what the intended effect of this was. Maybe it really was wholesome. But I really wish we had legislators who were smart enough to not resort to the "but we meant well" excuses when it all goes to shit, or better yet wise enough to not fuck things up so badly in the first place. > I expect that lenders will become more choosy in what students they lend money to, Isn't that the way it should be though? If you're not a good investment, why waste $60,000 or more sending you to school for a degree that amounts to little more than bragging rights? In the meantime, we've spent 30 years training an entire industry (higher education) that they don't have to be careful and control costs. Even if we made things right, they'll go on doing what they've done for decades because they know no other way. So even those who should go to college will get reamed for it unnecessarily. But educators would be screwed too, because suddenly we'd need 1/3 or even 1/5 of what we needed before that reform. Fucking good intentions. Road to hell, yadda yadda. > I share your belief that (new) student loans should be dischargeable in bankruptcy. Old loans too. Lenders aren't innocent in this. Where were their objections at the time? They could have complained, could have said "don't give us this power, we can't use it without risking abuse". Burn that slice of the financial industry to the fucking ground and let its former employees wander the earth as disgraced panhandlers.

legitster 3y ago

Part of the reason this attempt to forgive student loan forgiveness was pretty far fetched to begin with (among many!) Is that their own Department of Education is still issuing student loans! At much higher interest rates than the ones being forgiven!

wustangdan 3y ago
Yah. If students loans are so evil that they must all be forgiven, shouldn't we stop the creation of new student loans first? Plus its not like admission prices will just stay in place with such a massive demand shock.
- twiceaday 3y ago
  Compare loan forgiveness vs fixing new loans on how much voting power directly benefits.

ZoomerCretin 3y ago

High tuition rates are caused by the collapse in state funding for higher education. There is no correlation with loan availability. This has been debunked countless times. https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students https://www.cbpp.org/research/state-budget-and-tax/state-hig... Historically, funding was tied to tuition caps. These had to be removed when states cut funding to have balanced budgets.

expensive_news 3y ago
The source you linked to states that funding has fallen around $1220 per year per student, after adjusting for inflation. But it goes on to state that tuition costs have increased $2708 per year. So what are universities doing with that extra $1500 per year per student? I agree that schools should be better funded, but ballooning tuition costs are more than just a lack of funding.
bitshiftfaced 3y ago
(All non-inflation adjusted): 2008 to 2021, 4 year public school tuition $7280 to $9375 = +28.8% 2008 to 2021, state support per full time equivalent student: $6552 to $7896 = +20.5% It looks like cbpp "debunked" it by picking a year that was particularly favorable to that point of view (2018). Looks to me like the two variables have been trending together just fine as per recent data.
- ZoomerCretin 3y ago
  Looks like you debunked it by picking a year particularly favorable to your point of view. There was a temporary influx of funding from the massive COVID relief/stimulus packages. The article was written in 2019. There was no cherry picking. That was the most recent data available to them.
  - bitshiftfaced 3y ago
    And yet tuition didn't go down as cbpp would've predicted. We at least agree that we ought to use the most recent data when determining whether something has actually been debunked, correct? They used the most recent data at the time, but it's no longer 2018.
    - ZoomerCretin 3y ago
      That's not what they predicted. Why would you expect it to go down? It was a one year boost in funding and the states didn't condition the funding on tuition prices. Universities _will not_ reduce tuition without being forced to do so. Universities _cannot_ reduce tuition without more funding.

WalterBright 3y ago

Price controls never work.

enterprise_cog 3y ago
Why is that?
- WalterBright 3y ago
  Because the Law of Supply and Demand cannot be repealed. All attempts always result in "unanticipated" deleterious side effects, such as shortages.

CWuestefeld 3y ago

A universal truth in economics is that if you subsidize something, you get more of it. If you tax something, you get less of it. The government uses this to good ends all the time. It's why we have very heavy taxes on gasoline and cigarettes: we want people to burn less gas and to smoke less. And we offer tax rebates for upgrading your house with better windows, and so forth. Forgiveness of student loans is just a subsidy of student loans. Subsidies give you more of it, which means that the more student loans we subsidize, the more student loans we'll have. Notice the exact words just above. I didn't say that if we subsidize student loans, we'll necessarily get more education, or that we'll get better educated people - because that's not what's being subsidized here! If we're subsidizing loans, we can expect people to take on more debt! But this doesn't necessarily lead to more actual education being done, because that's not what's being subsidized here. Of course, that doesn't prove the converse. It doesn't prove that education doesn't increase; just that we have no real reason to expect that it will.

NoMoreNicksLeft 3y ago

There is a principal of loan forgiveness that is old, nearly universal, and so well-known that it already has its own name: bankruptcy. At some point in the recent past, at least during my lifetime, this was forbidden. It is one of the few classes of debt where it is forbidden. I do not know why we would try to force through some weird one-off amnesty, rather than re-implementing bankruptcy for student loan debt which would fix the problem with permanence. Bankruptcy includes many of the factors that opponents of forgiveness complain about... it's not exactly free. Those who avail themselves of it must make an uncomfortable tradeoff. They're limited in how often they can use it. It invites scrutiny to make certain they aren't using it except when they actually need it. Scrutiny from judges and arbiters who have experience sniffing out such fraud. In the 3 or 4 years this has made the news in mainstream media, I've not once heard anyone mentioning this, or offering it as an alternative. It's quite bizarre.

bentley 3y ago
If someone takes out a mortgage and goes bankrupt, the lender will get the house. If someone takes out a car loan and goes bankrupt, the lender will get the car. For loans with no collateral, like credit cards, the lenders use credit scores and other heuristics to determine the likelihood of making their money back, and deny applicants who don’t meet their standards. I believe the intended effect of making student loans immune to bankruptcy was to make education more accessible by incentivizing lenders to provide loans to subprime borrowers. I share your belief that (new) student loans should be dischargeable in bankruptcy. I expect that lenders will become more choosy in what students they lend money to, and this reduction in money available to students will in turn incentivize schools for once to start lowering prices. But that idea means fewer students will be able to receive student loans, and it will be attacked (wrongly) from an egalitarian perspective.
- NoMoreNicksLeft 3y ago
  > For loans with no collateral, like credit cards, the lenders use credit scores and other heuristics to determine the likelihood of making their money back, and deny applicants who don’t meet their standards. But you can still file for bankruptcy. Why? It's not because "hey, lenders have remedies available"... it's because without bankruptcy, things go to shit really fast. Like with student loans. Lenders should be allowed to loan money, and to attempt to profit from it. But society isn't obligated to protect their interests at all costs. And if they don't like that, they can just choose not to loan. Lenders that make bad loans put society in danger (if too many lenders make too many bad loans). Society actually has the right and the proper power to tell them to fuck off. > I believe the intended effect of making student loans immune to bankruptcy was to make education more accessible The perverse incentive though was delivering this loan accessibility in such a way as if it were financial aid. Young kids, barely legal adults at that point, didn't know any better. And colleges and universities chase that money (why wouldn't they... the money can only be spent on them) by turning their institutions into resort spas. Any increase in cost that came with that was turned around and passed right back to the students who "paid" for it in tuition and fees, but since "someone else" was doing the actual job of paying for it they weren't cost conscious. Granted, young people aren't usually cost conscious to begin with, but this just made it worse. And the people "paying for it" just hang that bill back around the college kid's neck with ruinous interest like a boat anchor. Were the colleges and universities at least decent enough to make sure these kids could get a good job that might make it all worthwhile in the long run? Hell no. Instead, they scream bloody murder about how it's more important that they not be turned into vocational schools, and they're teaching people something far more important than job skills... they're "teaching them how to think". What a load of horseshit. Even the law schools are a joke. Ever look into how they cook those books to make it seem like 80% or more of law school graduates have a job lined up within 12 months after graduating? All in all, I don't know what the intended effect of this was. Maybe it really was wholesome. But I really wish we had legislators who were smart enough to not resort to the "but we meant well" excuses when it all goes to shit, or better yet wise enough to not fuck things up so badly in the first place. > I expect that lenders will become more choosy in what students they lend money to, Isn't that the way it should be though? If you're not a good investment, why waste $60,000 or more sending you to school for a degree that amounts to little more than bragging rights? In the meantime, we've spent 30 years training an entire industry (higher education) that they don't have to be careful and control costs. Even if we made things right, they'll go on doing what they've done for decades because they know no other way. So even those who should go to college will get reamed for it unnecessarily. But educators would be screwed too, because suddenly we'd need 1/3 or even 1/5 of what we needed before that reform. Fucking good intentions. Road to hell, yadda yadda. > I share your belief that (new) student loans should be dischargeable in bankruptcy. Old loans too. Lenders aren't innocent in this. Where were their objections at the time? They could have complained, could have said "don't give us this power, we can't use it without risking abuse". Burn that slice of the financial industry to the fucking ground and let its former employees wander the earth as disgraced panhandlers.