11 ms·

Biden Announces $7.4B in Student Debt Cancellation for 277,000 Americans

28 points by robertn702 2y ago

rhelz 2y ago
I remember my Father, working 80 hours a week, to put his 4 kids through college. We all also worked at least 20 hours a week while going to college. And I remember my mother squeezing every nickel until 6 cents dripped out of it. JUST so we wouldn't be burdened with debt after we graduated. I know that some people weren't as "lucky" as we were, and couldn't pay for college without debt. I don't begrudge them getting their subsidized loans. Or their ability to actually put full effort into learning, instead of hitting the books after an 8-hour shift on your feet. But...taking my taxes, and giving them a government handout--because they mismanaged their previous government handout.... Not gunna lie, that's pretty hard to take. Where's my Dad's $20,000 compensation? Make that $80,000 compensation, because he put 4 kids through? Where's my compensation for getting B's in some classes instead of A's, because I just couldn't study enough after working all week? I know that some might find it "hard" or "inconvenient" to pay back these student loans....but guys, you already got your government subsidy. You are supposed to be putting money back in to help the next generation, not just soaking us all for another round of money, because you blew it. This kind of taking money from people who managed their finances well, and giving it to those who didn't, is what gives liberalism a bad name....
- elmerfud 2y ago
  Exactly where is my reimbursement. I was not super wealthy but I prioritized my kids college education and made sure to pay for it to avoid them having to go into debt over it. This produced a, not insignificant hardship, to the family but it was worth it. How do I apply for some of this money? Is this more of the lazy people get free stuff and responsible people who contribute to society gets screwed again? People wonder why there's such a political divide and I'm telling you that political divide is largely around whose hand is in your wallet. We need to cut this entire welfare state off at the knees. If you wanted a free education you could have scraped together a few thousand dollars and gone to Germany and got your free education. Don't expect the average taxpayer to pay for it.
  - Rinzler89 2y ago
    >you could have scraped together a few thousand dollars and gone to Germany Perfect solution, US citizens should burden the German taxpayer to pay for their education, instead of their own country. /s
    - deleted 2y ago
      [deleted]
  - influx 2y ago
    Just be glad the President can grant free money so that he can be reelected. You wouldn't want the other guy to be in office would you? It's a small price to pay...
    - rhelz 2y ago
      sigh it would pain me. But let's face it: if the survival of our democracy depends on the votes of people whose votes can be bought and sold, it's already gone.
- moralestapia 2y ago
  Agree with the sentiment as I was also raised on a household where both my parents worked and (while we were not frugal) we took care of every $, and I learned at a young age not to get myself into deals that I could not honor, including, of course, not asking for money you can't or don't know how you'll pay back. I don't think this is constitutional, in the sense that it really is unfair to some people who made the extra effort to fulfill their financial obligations, they should also get something back. Also, the elephant in the room is dropping this a few months before the election definitely looks like a political move, but let's not devolve the conversation into that ... I think this is sending the absolute worst message you can to both sides of people involved here: * To the ones who paid their debt, it tells them "sorry, sucker, thanks for the $$$"; not explicitly, but that's definitely how I would feel about it. * To the ones who didn't pay, it could create the impression that debt is forgivable. You do not want this message to spread, particularly in a country like the US where debt is so fundamental for pretty much everything. You do not want more people taking on debt with a more careless approach. You also definitely do not want to do that in this particular moment where there's a lot of uncertainty about the US hegemony over the rest of the world. $7B is nothing for a country like the US; but this will create a sentiment that could cripple the economy for years on end. There's a third group of people as well, what about those who decided not to study, or to attend some small community college, because they couldn't afford a more expensive alternative? Now it turns out it was free all the time? Dang.
- rokkamokka 2y ago
  "I didn't have it good so the next generation shouldn't either." Student loans in the US are very predatory. This is a good step towards student loan reform, hopefully, and definitely a welcome boom for many struggling americans. Much better than tax cuts for people who have high incomes, for sure!
  - willcipriano 2y ago
    > This is a good step towards student loan reform I'd argue quite the opposite. By "fixing" the problem with half measures like this ensures the problem will continue.
    - brewdad 2y ago
      Right. Until the schools start losing money, there is zero incentive for them to reign in costs. That doesn't mean I want to see people suffer under the burden of their loans but this program isn't solving the right problem.
      - willcipriano 2y ago
        My solution? Investigate the schools. What claims were made in the advertising? What did they know about the economic realities of graduates and when? Some of this was probably fraud. If you are telling kids "come have a bright future at my college" and statistically, that isn't happening, you probably should have to give the money back.
  - rhelz 2y ago
    > Student loans in the US are very predatory. Do you mean the loans are predatory, or the people who sell them? Like any financial product, they have at times been sold fraudulently--but this is already illegal and you can get remedy through the courts. I've heard the loans being called predatory because they are interest-only loans. But, if you have the discipline, interest-only loans are an excellent tool for managing risk. For example, I got an interest-only mortgage on my house when I moved to the valley. I felt better about joining a startup, because I knew I could ratchet down my monthly spend if I had to do an extended job search. Of course, this means that you have to have the discipline to pay more than the minimum each month when you are getting a paycheck. Ideally, you should pay until it hurts, because the faster you pay down the principle the sooner you are free. Yes, this means you'll have to buy fewer SUV's, or no SUVs at all and take the bus. Yes, you won't be able to eat out every meal--or perhaps any meal. I feel for you, I've been there, but that's life. Welcome to the wonderful world of being an adult. If, after graduating from high school, you can't do enough math to compare the monthly student loan payments with the monthly income of your chosen major, well, that's on you. You should have payed more attention in school. If, after graduating from college, you don't have the critical thinking skills to know that you need to pay down the principle on your loan--or it will eventually explode, well, that's on you too. In either case, if you don't have the self-discipline to manage your money effectively, it doesn't matter how much money the government gives you.
rayiner 2y ago
At least this loan forgiveness seems to be targeted at low-income people. That’s much better than the government’s blanket pause on student loan payments for almost two years, which saved many rich people tens of thousands of dollars in interest.
- tryptophan 2y ago
  That is a bad thing. Making intelligent decisions about career choices is now punished because you have to pay for people who didn't? Yay equity.
  - mostlysimilar 2y ago
    Your intelligent career decisions won't insulate you from the under-educated voters putting a despot and charlatan into power. An educated populace is better for everyone.
    - tryptophan 2y ago
      Strongly disagree. Russia has 54% of people with higher education, compared to us at 44%. In fact, it's the most "educated" country in the world. Bet you didn't know that... Look at how that worked out for them. The value of education is greatly overstated. (and on the other hand people who claim education is soooo important for a good society conveniently pretend things like culture, religion, morals, etc don't exist).
      - Rinzler89 2y ago
        You need quality education not just quantity. Degrees from some universities in some countries might not be worth anything because anyone can get them and many do just because they've been conditioned that having that piece of paper changes your life for the best, and so No-Name universities appear to cater to that market creating a "degree inflation" where too many people have degrees but they're worthless.
        2y ago
baggy_trough 2y ago
It's hard to imagine a worse policy. It penalizes responsible behavior while doing nothing at all to address the root causes. Are we stopping making more of these loans? Of course not!
- malicka 2y ago
  Of course root causes should be addressed (chiefly, I believe that tuition should be gratis for public universities), but in the meantime I think this is a perfectly fine policy. It achieves three goals: • Gets people talking about higher education payments. • Eases the financial burden of higher education for some. It should be all, but this is still objectively better than none, provisionally. • Provides good publicity for the political party more inclined to do anything about the root causes (Democrats).
  - moralestapia 2y ago
    >Provides good publicity for the political party more inclined to do anything about the root causes (Democrats). This is not only illegal but morally wrong, though.
    - malicka 2y ago
      I disagree — enacting a policy people like and find useful is inherently good publicity. If your city mayors’ initiatives improve your local library, this will make people who visit the library like the mayor more. This doesn’t make improving the library immoral or unethical.
      - moralestapia 2y ago
        No problem with having good publicity as a consequence of, but as a root cause is what makes it morally incorrect since the political party per se shouldn't be an end in itself. Your words, not mine.
  - unholythree 2y ago
    I think this will go over poorly in some parts of the democratic coalition. I don’t know that blue collar workers including blacks and hispanics will care for this much, or that centrist suburbanites will like it either. Continuing to loose support in the first group or slowing/receding support in the second could be a serious problem.
eachro 2y ago
Is student debt dischargeable in bankruptcy?
- froboz 2y ago
  Not in the US. As far as I know it is one of the very few forms of debt that cannot be discharged due to bankruptcy. If you're rich, you can run business after business into the ground and use bankruptcy to avoid paying your debts. Just want an education? Sorry, chum, you're on the hook forever.
  - pixl97 2y ago
    You'll quickly get responses like "That was their moral failing for majoring in _____ which got replaced by _____, but if we made it dischargeable then banks would never give out money" Of course if you really want to get the HN crowd up in arms fill in the blanks with "programming" and "AI".
  - ndgold 2y ago
    I think that George W Bush approved this policy shift on debt policy for student loans.
- howard941 2y ago
  Yes but it is very difficult to prove all of the elements you have to prove to get it discharged. For most people the answer is no
  - unholythree 2y ago
    The public service loan discharge “used” to be broken and people were always rejected, but they made significant overhauls a few years back. My father for example, had his loans forgiven for working at a public library for a decade or so.
    - howard941 2y ago
      I took the question to ask whether or not the debt was susceptible to discharge under the Bankruptcy Code. Public service forgiveness is a different beast that doesn't flow through the bankruptcy system.
robertn702 2y ago
My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans. Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year. As soon as you let borrowers default, the math starts to make sense again. Lenders will have to evaluate how much they are willing to lend a student based on their expected earnings post-graduation. Universities won't be able to increase tuition at such an inflated rate since there wouldn't be infinite money being pumped into the system. College may actually become affordable again over time. It's not a mystery what the actual problem is here. edit: corrected "lenders" to "borrowers"
- Manuel_D 2y ago
  The issue is that universities are a huge block of democratic support. If you allow people to default on student loans, then banks are going to be much more hesitant to issue them. That, in turn, will reduce universities' revenues. Furthermore, the entire premise of federal student loans is that they're not technically spending. Of course if they allow these loads to be defaulted, then this is ultimately a spending program.
  - miohtama 2y ago
    The easiest solution here is to compare data to countries that allow student loan defaults. AFAIK this is most of countries. There should be good data if the issue is real, or hypothetical, or political lobby based.
    - hansvm 2y ago
      Cross-country comparisons like that tend to be hard. It's hard to isolate whether the metrics you're analyzing are because student loan defaults aren't allowed, because of the student selection pressure from an oversized military, because of a culture which views responsibilities and cohesiveness differently, because of secondary funding options, .... There are many such factors, all of which plausibly matter as much as loan defaults, and since the vast majority of the country you'd like to compare to will tend to be homogeneous with respect to those confounders you often can't find many (if any) actual alternatives to compare to. Statistical approaches to appropriately tease out signal from noise in the larger data set are easy to get wrong, even if you get lucky and actually have comparable data in the first place (e.g., including trade schools or not in the metrics, similarly with associate degrees, counting "in-progress" loans with different payment timelines (treating a truncation bias differently), ...).
ProblemExplorer 2y ago
Schools are not getting the feedback they need to be useful and political tricks like this further distorts the feedback loop. We should really take a few minutes to consider what this means for not just our future but our future generations. I think arguments that go along the lines of "I worked extremely hard to minimize my loans and now I felt betrayed" is missing the bigger evil lurking in the shadows: schools in the U.S. don't teach what really needs to be taught and political tricks like this further distort the feedback loop. Schools should teach logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?" "Follow your passion" worked when the U.S. was enjoying extreme wealth growth right off WWII - at that time you could shine shoes and own a single bedroom house away from the city. Weaving baskets and selling them could be the only thing you did and rent half a home for the rest of your life. This is a cheap political trick that makes things worse. This is a perfect example of why a government shouldn't be trusted to allocate resources efficiently. I am also concerned that this now opens an expectation that this current party will periodically forgive loans in the future - so, as long as you keep voting them into power, it doesn't matter what decisions you make, you won't have to suffer too terribly for them. The right call would have been to invest these dollars in reworking education and schooling so that our future generations don't repeat the same mistakes we did and end up looking for handouts because we failed to learn how to make the right decisions. While the intentions for this might not be evil, the effect is terribly so and disempowering for future generations. To those who got some relief from this subsidy - I hope this helps you feel a bit better but hold those who put you in this situation accountable. Don't let politicians take advantage of you like this. Take a few minutes to write a letter to your school and college and tell them how they failed you and what you wish they had done instead. The future of our country depends on your feedback
- pixl97 2y ago
  > "out of all the things I can do, what should I be doing right now?" I mean aren't you really asking "What should I be doing X years from now"? If you're looking at your feet you're only going to notice you've walked up to the edge of a cliff moments before you get there. I mean, even with re-education you're taking long term training now in hopes it will work out in the future. So, pretty much you've said nothing interesting here other than survival of the fittest, which didn't work out great in the past when the unfit were destitute but still alive to cause problems like crime and vagrancy. Is part of your great plan in making things better just unaliving these people?
exabrial 2y ago
Nice. Since I paid mine back 100%, where do I get my $33k refund + 21 years interest ?
- proc0 2y ago
  Not only you won't get it back, you're helping pay the cancellation.
  - pixl97 2y ago
    Good. More smart people leads to better outcomes for everyone. Unless of course you're saying you demand an underclass?
    - proc0 2y ago
      Taking out a bad loan is not smart. Not being able to pay it back is not smart. We can argue whether this is good or not, but certainly these people are not smart or they would have solved the problem or avoided it in the first place.
      - pixl97 2y ago
        See, the problem with successful people is they confuse intelligence for luck. And I'm sure you're a very lucky person yourself. If you were smart, you would have seen the financial crash of year 2XXX. If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow. If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half. And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are... But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?
GenerWork 2y ago
Some thoughts: 1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election. 2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.
- avn2109 2y ago
  The blatant vote-buying will continue until the polls improve.
- pixl97 2y ago
  2) I'm pretty sure that would be in the hands of congress, in which, is completely broken at this moment.
- Cody-99 2y ago
  >1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election. What do you mean? This has been an ongoing thing throughout this term so it is weird to try and link it to poll numbers or the election. >2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy. You are right that it doesn't fix the main problem but it addresses a very real problem that millions of Americans are facing. We shouldn't put off addressing the latter because the former is still a problem.
madsmith 2y ago
There’s a sentiment which isn’t really being expressed here so far. I don’t begrudge people who are less fortunate and need help. I don’t enjoy my food any less because someone who is hungry can get free food from a food bank. There are so many ways that the government has helped the more successful. I for one was a beneficiary of PPP loan forgiveness (not by my choice but an election of my managing partner). This attempts to balance the scales of what type of support people get who are going through different situations and at different times with different needs isn’t particularly productive. It might feel good in some self centered bitter way, but it doesn’t speak to whether this is a policy measure that has a positive effect on many people and is a net benefit to the economy as a whole.
- dadjoker 2y ago
  Especially since a) college didn't start getting so expensive until the government got involved in loans and grants, and 2) none of these people were forced at gunpoint to take these loans. By law, every little detail had to be disclosed to them prior to signing of docs and disbursement.
dadjoker 2y ago
Buying votes in defiance of SCOTUS, and just shifting the $$ burden to responsible taxpayers. How ver (D)emocratic of him.
wcunning 2y ago
Two things on this one that I don't see elsewhere in the comments. 1) This is both a grab bag of many different forms of debt cancellation (automatically applying it to people who would qualify for programs that have complicated requirements otherwise, like public service which requires a lot of documentation to prove all the necessary years that may have been overly burdensome in some cases, largely worthwhile in my opinion since I support that underlying program anyway and support simplifying its formerly crazy complicated requirements vs for instance cancelling interest on loans that people didn't put a lot of effort into repaying, since most educational loans are at much lower interest rates than other loans to begin with). Not all of these can be discussed in the same terms and part of the "messaging" of the program is that they got to large numbers through many programs and many different avenues. 2) Notice that most of the wording of this press release is "if implemented", "if implemented" because this isn't a program that _has already happened_, it's a bunch of programs that have to individually go through Administrative Procedures Act notice-and-comment rulemaking. Interestingly, notice and comment has a lot of trivial pitfalls that block implementation, lead to litigation, etc, so on average for programs that do get implemented it takes something like 1000 days to implement (most of a presidential term). Further, there's a special period at the end of a legislative term where APA rules can be summarily overturned or cancelled mid-process by the incoming new Congress, and routinely are, particularly when there's a change of party either by Congress or in the Whitehouse. Which is all to say, this is a fun press release amounting to vaporware until 2027, assuming Biden gets re-elected and doesn't have a much stronger Republican majority in one or both chambers of Congress. I approve of parts, I disapprove of parts, it's all very complicated, but I expect a very small part of this to actually happen, and that to mostly be the easier parts that I like more. shrug Bureaucracy delenda est.
ggernov 2y ago
[flagged]
searealist 2y ago
Misleading headline. A more truthful one would be: Biden pays off 7.4B in student loans using taxpayer money. Banks are the winners here.
- ProblemExplorer 2y ago
  > Banks are the winners here Not really - banks would have made money on something else instead. The real problem is that universities are making money off selling trash to children not old enough to drink yet. Before loans were guaranteed, there were some checks and balances for how much trash universities could sell and at what price, but now that politicians have figured out there's nothing stopping them from taking money that's not theirs and paying it off to universities, the only losers are those who consume the trash and destroy their lives and their descendants.
  - searealist 2y ago
    > The real problem is that universities are making money off selling trash to children not old enough to drink yet. Agreed.
nikolay 2y ago
[flagged]
- latchkey 2y ago
  ...helping people seems like a good thing?
  - nikolay 2y ago
    Helping some people who took loans we all paid for.
    - latchkey 2y ago
      That is ok. Those same people will now have more money to spend on the businesses you are building. Your comment goes against your original point. You went from saying that it is politicians trying to benefit, to saying that you are upset that you have to support your fellow humans. Which is it?
      - nikolay 2y ago
        [flagged]
        latchkey 2y ago
        So your answer is both. That's cool, thanks for clarifying that.

28 points by robertn702 2y ago

I remember my Father, working 80 hours a week, to put his 4 kids through college. We all also worked at least 20 hours a week while going to college. And I remember my mother squeezing every nickel until 6 cents dripped out of it. JUST so we wouldn't be burdened with debt after we graduated. I know that some people weren't as "lucky" as we were, and couldn't pay for college without debt. I don't begrudge them getting their subsidized loans. Or their ability to actually put full effort into learning, instead of hitting the books after an 8-hour shift on your feet. But...taking my taxes, and giving them a government handout--because they mismanaged their previous government handout.... Not gunna lie, that's pretty hard to take. Where's my Dad's $20,000 compensation? Make that $80,000 compensation, because he put 4 kids through? Where's my compensation for getting B's in some classes instead of A's, because I just couldn't study enough after working all week? I know that some might find it "hard" or "inconvenient" to pay back these student loans....but guys, you already got your government subsidy. You are supposed to be putting money back in to help the next generation, not just soaking us all for another round of money, because you blew it. This kind of taking money from people who managed their finances well, and giving it to those who didn't, is what gives liberalism a bad name....

elmerfud 2y ago
Exactly where is my reimbursement. I was not super wealthy but I prioritized my kids college education and made sure to pay for it to avoid them having to go into debt over it. This produced a, not insignificant hardship, to the family but it was worth it. How do I apply for some of this money? Is this more of the lazy people get free stuff and responsible people who contribute to society gets screwed again? People wonder why there's such a political divide and I'm telling you that political divide is largely around whose hand is in your wallet. We need to cut this entire welfare state off at the knees. If you wanted a free education you could have scraped together a few thousand dollars and gone to Germany and got your free education. Don't expect the average taxpayer to pay for it.
- Rinzler89 2y ago
  >you could have scraped together a few thousand dollars and gone to Germany Perfect solution, US citizens should burden the German taxpayer to pay for their education, instead of their own country. /s
  - deleted 2y ago
    [deleted]
- influx 2y ago
  Just be glad the President can grant free money so that he can be reelected. You wouldn't want the other guy to be in office would you? It's a small price to pay...
  - rhelz 2y ago
    sigh it would pain me. But let's face it: if the survival of our democracy depends on the votes of people whose votes can be bought and sold, it's already gone.
moralestapia 2y ago
Agree with the sentiment as I was also raised on a household where both my parents worked and (while we were not frugal) we took care of every $, and I learned at a young age not to get myself into deals that I could not honor, including, of course, not asking for money you can't or don't know how you'll pay back. I don't think this is constitutional, in the sense that it really is unfair to some people who made the extra effort to fulfill their financial obligations, they should also get something back. Also, the elephant in the room is dropping this a few months before the election definitely looks like a political move, but let's not devolve the conversation into that ... I think this is sending the absolute worst message you can to both sides of people involved here: * To the ones who paid their debt, it tells them "sorry, sucker, thanks for the $$$"; not explicitly, but that's definitely how I would feel about it. * To the ones who didn't pay, it could create the impression that debt is forgivable. You do not want this message to spread, particularly in a country like the US where debt is so fundamental for pretty much everything. You do not want more people taking on debt with a more careless approach. You also definitely do not want to do that in this particular moment where there's a lot of uncertainty about the US hegemony over the rest of the world. $7B is nothing for a country like the US; but this will create a sentiment that could cripple the economy for years on end. There's a third group of people as well, what about those who decided not to study, or to attend some small community college, because they couldn't afford a more expensive alternative? Now it turns out it was free all the time? Dang.
rokkamokka 2y ago
"I didn't have it good so the next generation shouldn't either." Student loans in the US are very predatory. This is a good step towards student loan reform, hopefully, and definitely a welcome boom for many struggling americans. Much better than tax cuts for people who have high incomes, for sure!
- willcipriano 2y ago
  > This is a good step towards student loan reform I'd argue quite the opposite. By "fixing" the problem with half measures like this ensures the problem will continue.
  - brewdad 2y ago
    Right. Until the schools start losing money, there is zero incentive for them to reign in costs. That doesn't mean I want to see people suffer under the burden of their loans but this program isn't solving the right problem.
    - willcipriano 2y ago
      My solution? Investigate the schools. What claims were made in the advertising? What did they know about the economic realities of graduates and when? Some of this was probably fraud. If you are telling kids "come have a bright future at my college" and statistically, that isn't happening, you probably should have to give the money back.
- rhelz 2y ago
  > Student loans in the US are very predatory. Do you mean the loans are predatory, or the people who sell them? Like any financial product, they have at times been sold fraudulently--but this is already illegal and you can get remedy through the courts. I've heard the loans being called predatory because they are interest-only loans. But, if you have the discipline, interest-only loans are an excellent tool for managing risk. For example, I got an interest-only mortgage on my house when I moved to the valley. I felt better about joining a startup, because I knew I could ratchet down my monthly spend if I had to do an extended job search. Of course, this means that you have to have the discipline to pay more than the minimum each month when you are getting a paycheck. Ideally, you should pay until it hurts, because the faster you pay down the principle the sooner you are free. Yes, this means you'll have to buy fewer SUV's, or no SUVs at all and take the bus. Yes, you won't be able to eat out every meal--or perhaps any meal. I feel for you, I've been there, but that's life. Welcome to the wonderful world of being an adult. If, after graduating from high school, you can't do enough math to compare the monthly student loan payments with the monthly income of your chosen major, well, that's on you. You should have payed more attention in school. If, after graduating from college, you don't have the critical thinking skills to know that you need to pay down the principle on your loan--or it will eventually explode, well, that's on you too. In either case, if you don't have the self-discipline to manage your money effectively, it doesn't matter how much money the government gives you.

rayiner 2y ago

At least this loan forgiveness seems to be targeted at low-income people. That’s much better than the government’s blanket pause on student loan payments for almost two years, which saved many rich people tens of thousands of dollars in interest.

tryptophan 2y ago
That is a bad thing. Making intelligent decisions about career choices is now punished because you have to pay for people who didn't? Yay equity.
- mostlysimilar 2y ago
  Your intelligent career decisions won't insulate you from the under-educated voters putting a despot and charlatan into power. An educated populace is better for everyone.
  - tryptophan 2y ago
    Strongly disagree. Russia has 54% of people with higher education, compared to us at 44%. In fact, it's the most "educated" country in the world. Bet you didn't know that... Look at how that worked out for them. The value of education is greatly overstated. (and on the other hand people who claim education is soooo important for a good society conveniently pretend things like culture, religion, morals, etc don't exist).
    - Rinzler89 2y ago
      You need quality education not just quantity. Degrees from some universities in some countries might not be worth anything because anyone can get them and many do just because they've been conditioned that having that piece of paper changes your life for the best, and so No-Name universities appear to cater to that market creating a "degree inflation" where too many people have degrees but they're worthless.
      - 2y ago

baggy_trough 2y ago

It's hard to imagine a worse policy. It penalizes responsible behavior while doing nothing at all to address the root causes. Are we stopping making more of these loans? Of course not!

malicka 2y ago
Of course root causes should be addressed (chiefly, I believe that tuition should be gratis for public universities), but in the meantime I think this is a perfectly fine policy. It achieves three goals: • Gets people talking about higher education payments. • Eases the financial burden of higher education for some. It should be all, but this is still objectively better than none, provisionally. • Provides good publicity for the political party more inclined to do anything about the root causes (Democrats).
- moralestapia 2y ago
  >Provides good publicity for the political party more inclined to do anything about the root causes (Democrats). This is not only illegal but morally wrong, though.
  - malicka 2y ago
    I disagree — enacting a policy people like and find useful is inherently good publicity. If your city mayors’ initiatives improve your local library, this will make people who visit the library like the mayor more. This doesn’t make improving the library immoral or unethical.
    - moralestapia 2y ago
      No problem with having good publicity as a consequence of, but as a root cause is what makes it morally incorrect since the political party per se shouldn't be an end in itself. Your words, not mine.
- unholythree 2y ago
  I think this will go over poorly in some parts of the democratic coalition. I don’t know that blue collar workers including blacks and hispanics will care for this much, or that centrist suburbanites will like it either. Continuing to loose support in the first group or slowing/receding support in the second could be a serious problem.

eachro 2y ago

Is student debt dischargeable in bankruptcy?

froboz 2y ago
Not in the US. As far as I know it is one of the very few forms of debt that cannot be discharged due to bankruptcy. If you're rich, you can run business after business into the ground and use bankruptcy to avoid paying your debts. Just want an education? Sorry, chum, you're on the hook forever.
- pixl97 2y ago
  You'll quickly get responses like "That was their moral failing for majoring in _____ which got replaced by _____, but if we made it dischargeable then banks would never give out money" Of course if you really want to get the HN crowd up in arms fill in the blanks with "programming" and "AI".
- ndgold 2y ago
  I think that George W Bush approved this policy shift on debt policy for student loans.
howard941 2y ago
Yes but it is very difficult to prove all of the elements you have to prove to get it discharged. For most people the answer is no
- unholythree 2y ago
  The public service loan discharge “used” to be broken and people were always rejected, but they made significant overhauls a few years back. My father for example, had his loans forgiven for working at a public library for a decade or so.
  - howard941 2y ago
    I took the question to ask whether or not the debt was susceptible to discharge under the Bankruptcy Code. Public service forgiveness is a different beast that doesn't flow through the bankruptcy system.

robertn702 2y ago

My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans. Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year. As soon as you let borrowers default, the math starts to make sense again. Lenders will have to evaluate how much they are willing to lend a student based on their expected earnings post-graduation. Universities won't be able to increase tuition at such an inflated rate since there wouldn't be infinite money being pumped into the system. College may actually become affordable again over time. It's not a mystery what the actual problem is here. edit: corrected "lenders" to "borrowers"

Manuel_D 2y ago
The issue is that universities are a huge block of democratic support. If you allow people to default on student loans, then banks are going to be much more hesitant to issue them. That, in turn, will reduce universities' revenues. Furthermore, the entire premise of federal student loans is that they're not technically spending. Of course if they allow these loads to be defaulted, then this is ultimately a spending program.
- miohtama 2y ago
  The easiest solution here is to compare data to countries that allow student loan defaults. AFAIK this is most of countries. There should be good data if the issue is real, or hypothetical, or political lobby based.
  - hansvm 2y ago
    Cross-country comparisons like that tend to be hard. It's hard to isolate whether the metrics you're analyzing are because student loan defaults aren't allowed, because of the student selection pressure from an oversized military, because of a culture which views responsibilities and cohesiveness differently, because of secondary funding options, .... There are many such factors, all of which plausibly matter as much as loan defaults, and since the vast majority of the country you'd like to compare to will tend to be homogeneous with respect to those confounders you often can't find many (if any) actual alternatives to compare to. Statistical approaches to appropriately tease out signal from noise in the larger data set are easy to get wrong, even if you get lucky and actually have comparable data in the first place (e.g., including trade schools or not in the metrics, similarly with associate degrees, counting "in-progress" loans with different payment timelines (treating a truncation bias differently), ...).

ProblemExplorer 2y ago

Schools are not getting the feedback they need to be useful and political tricks like this further distorts the feedback loop. We should really take a few minutes to consider what this means for not just our future but our future generations. I think arguments that go along the lines of "I worked extremely hard to minimize my loans and now I felt betrayed" is missing the bigger evil lurking in the shadows: schools in the U.S. don't teach what really needs to be taught and political tricks like this further distort the feedback loop. Schools should teach logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?" "Follow your passion" worked when the U.S. was enjoying extreme wealth growth right off WWII - at that time you could shine shoes and own a single bedroom house away from the city. Weaving baskets and selling them could be the only thing you did and rent half a home for the rest of your life. This is a cheap political trick that makes things worse. This is a perfect example of why a government shouldn't be trusted to allocate resources efficiently. I am also concerned that this now opens an expectation that this current party will periodically forgive loans in the future - so, as long as you keep voting them into power, it doesn't matter what decisions you make, you won't have to suffer too terribly for them. The right call would have been to invest these dollars in reworking education and schooling so that our future generations don't repeat the same mistakes we did and end up looking for handouts because we failed to learn how to make the right decisions. While the intentions for this might not be evil, the effect is terribly so and disempowering for future generations. To those who got some relief from this subsidy - I hope this helps you feel a bit better but hold those who put you in this situation accountable. Don't let politicians take advantage of you like this. Take a few minutes to write a letter to your school and college and tell them how they failed you and what you wish they had done instead. The future of our country depends on your feedback

pixl97 2y ago
> "out of all the things I can do, what should I be doing right now?" I mean aren't you really asking "What should I be doing X years from now"? If you're looking at your feet you're only going to notice you've walked up to the edge of a cliff moments before you get there. I mean, even with re-education you're taking long term training now in hopes it will work out in the future. So, pretty much you've said nothing interesting here other than survival of the fittest, which didn't work out great in the past when the unfit were destitute but still alive to cause problems like crime and vagrancy. Is part of your great plan in making things better just unaliving these people?

exabrial 2y ago

Nice. Since I paid mine back 100%, where do I get my $33k refund + 21 years interest ?

proc0 2y ago
Not only you won't get it back, you're helping pay the cancellation.
- pixl97 2y ago
  Good. More smart people leads to better outcomes for everyone. Unless of course you're saying you demand an underclass?
  - proc0 2y ago
    Taking out a bad loan is not smart. Not being able to pay it back is not smart. We can argue whether this is good or not, but certainly these people are not smart or they would have solved the problem or avoided it in the first place.
    - pixl97 2y ago
      See, the problem with successful people is they confuse intelligence for luck. And I'm sure you're a very lucky person yourself. If you were smart, you would have seen the financial crash of year 2XXX. If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow. If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half. And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are... But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?

GenerWork 2y ago

Some thoughts: 1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election. 2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.

avn2109 2y ago
The blatant vote-buying will continue until the polls improve.
pixl97 2y ago
2) I'm pretty sure that would be in the hands of congress, in which, is completely broken at this moment.
Cody-99 2y ago
>1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election. What do you mean? This has been an ongoing thing throughout this term so it is weird to try and link it to poll numbers or the election. >2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy. You are right that it doesn't fix the main problem but it addresses a very real problem that millions of Americans are facing. We shouldn't put off addressing the latter because the former is still a problem.

madsmith 2y ago

There’s a sentiment which isn’t really being expressed here so far. I don’t begrudge people who are less fortunate and need help. I don’t enjoy my food any less because someone who is hungry can get free food from a food bank. There are so many ways that the government has helped the more successful. I for one was a beneficiary of PPP loan forgiveness (not by my choice but an election of my managing partner). This attempts to balance the scales of what type of support people get who are going through different situations and at different times with different needs isn’t particularly productive. It might feel good in some self centered bitter way, but it doesn’t speak to whether this is a policy measure that has a positive effect on many people and is a net benefit to the economy as a whole.

dadjoker 2y ago
Especially since a) college didn't start getting so expensive until the government got involved in loans and grants, and 2) none of these people were forced at gunpoint to take these loans. By law, every little detail had to be disclosed to them prior to signing of docs and disbursement.

dadjoker 2y ago

Buying votes in defiance of SCOTUS, and just shifting the $$ burden to responsible taxpayers. How ver (D)emocratic of him.

wcunning 2y ago

Two things on this one that I don't see elsewhere in the comments. 1) This is both a grab bag of many different forms of debt cancellation (automatically applying it to people who would qualify for programs that have complicated requirements otherwise, like public service which requires a lot of documentation to prove all the necessary years that may have been overly burdensome in some cases, largely worthwhile in my opinion since I support that underlying program anyway and support simplifying its formerly crazy complicated requirements vs for instance cancelling interest on loans that people didn't put a lot of effort into repaying, since most educational loans are at much lower interest rates than other loans to begin with). Not all of these can be discussed in the same terms and part of the "messaging" of the program is that they got to large numbers through many programs and many different avenues. 2) Notice that most of the wording of this press release is "if implemented", "if implemented" because this isn't a program that _has already happened_, it's a bunch of programs that have to individually go through Administrative Procedures Act notice-and-comment rulemaking. Interestingly, notice and comment has a lot of trivial pitfalls that block implementation, lead to litigation, etc, so on average for programs that do get implemented it takes something like 1000 days to implement (most of a presidential term). Further, there's a special period at the end of a legislative term where APA rules can be summarily overturned or cancelled mid-process by the incoming new Congress, and routinely are, particularly when there's a change of party either by Congress or in the Whitehouse. Which is all to say, this is a fun press release amounting to vaporware until 2027, assuming Biden gets re-elected and doesn't have a much stronger Republican majority in one or both chambers of Congress. I approve of parts, I disapprove of parts, it's all very complicated, but I expect a very small part of this to actually happen, and that to mostly be the easier parts that I like more. shrug Bureaucracy delenda est.

ggernov 2y ago

[flagged]

searealist 2y ago

Misleading headline. A more truthful one would be: Biden pays off 7.4B in student loans using taxpayer money. Banks are the winners here.

ProblemExplorer 2y ago
> Banks are the winners here Not really - banks would have made money on something else instead. The real problem is that universities are making money off selling trash to children not old enough to drink yet. Before loans were guaranteed, there were some checks and balances for how much trash universities could sell and at what price, but now that politicians have figured out there's nothing stopping them from taking money that's not theirs and paying it off to universities, the only losers are those who consume the trash and destroy their lives and their descendants.
- searealist 2y ago
  > The real problem is that universities are making money off selling trash to children not old enough to drink yet. Agreed.

nikolay 2y ago

[flagged]

latchkey 2y ago
...helping people seems like a good thing?
- nikolay 2y ago
  Helping some people who took loans we all paid for.
  - latchkey 2y ago
    That is ok. Those same people will now have more money to spend on the businesses you are building. Your comment goes against your original point. You went from saying that it is politicians trying to benefit, to saying that you are upset that you have to support your fellow humans. Which is it?
    - nikolay 2y ago
      [flagged]
      - latchkey 2y ago
        So your answer is both. That's cool, thanks for clarifying that.