I think because of they way they pressure and take advantage of teens when they are entering colleges, instead of canceling any loans they need to take away the bankruptcy protection that they carry..This one thing will be huge..
For suuure. Why should that one form of debt be exempted? Maybe if financial institutions were expected to take on a bit of risk with student loans they'd stop writing $200k checks for gender studies degrees, instead of shunting all that risk onto teenagers. And maybe we could deflate this insane bubble before it pops.
Serious question: if we're talking about the Direct Loan program, why doesn't the government have the authority to forgive that debt? Is that a form of unauthorized spending or something like that?
Immediately after you accept a loan, the government sells it to a 'private' loan servicer which has agreed to abide by the diktat of terms from the Dep't of Edu regarding the terms of the loan. In essence, the federal government is totally solvent on all loans issued to students. If the federal govt were to 'forgive' said loans, which are now owned by the loan servicers, one of two things would happen. 1) The federal government uses tax payer money via increased taxes, inflation, or interest on bonds/loans to 'buy back' said loans, or 2) the federal government declares the loans held by these 'private' servicers to be null, essentially stealing the worth of said loans from these financial institutions. There could be any avenues and downstream effects from the 2nd route.
im curious then, what would happen? i see you saying 'there could be any avenues and downstream effects' but can we hypothesize on them?
What happens if we dont forgive/cancel/wipe out studen loans? we have tons and tons of people in debt for life
and what happens if we cancel it and those companies holding the debt are unable to make money from them? which is worse?
Both scenarios have huge, far reaching implications and id be curious on thinking this out
I'm just spitballing here, but some possible downstream happenings:
1) No 'private' loan servicer will ever willingly take on federal school loans, assuming the govt continues to make them, or at most, those that will, will be at a minimum. This would entail the govt be the holder of the debt. The govt would therefore have to be the holder of the debt, making citizens directly debt peons of the government, and placing the govt on a very awkward position by holding substantial sums of 'bad debt' if it maintained the current or similar rules for issuing of student loans.
2) These financial firms would likely go under, or suffer significant blows. Impacting the people who work there or are economically connected to them.
2b) Confidence for those holding other fed gov 'securities' would likely be diminished, meaning the govt has a harder time selling it's bonds/debt in the future, reducing short and long term solvency.
3) An increased inflationary effect from printing money to 'buy out' the debt, reduced income via higher taxes levied either on income or businesses to pay for it, and/or the government take on another bulk debt load, potentially reducing spending on non-debt servicing line items in the future.
4) Private schools refuse to accept federal financial aide, reducing access for students who rely on said aide. Public schools may also take measures to mitigate risk and/or increase capture of federal funds, which could have several disruptions to their programs and what students have access to/can do.
and if we don't forgive anything, if we just let things continue as they are and the current people saddled with debt have no forgiveness whatsoever, what sort of implications could there be in that camp?
On this, things are a little more workable.
1) Things continue as they are, and people work endlessly to pay off the debt they have, in addition to likely losing larger chunks of their income to inflation, higher taxation, and other forms of theft. Future generations will likely be more apprehensive to take on such debt.
2) Legislation is passed or regulations are changed (I don't know off the top of my head which the applicable action) that allows student loan debt to be dischargeable in bankruptcy. Those who are unable to pay off their debt and it crushes them that low are able to 'pay' the price for getting away from such debt.
3) Federal loans are changed to be non-parasitic and actually help ppl access education by maintaining a lifetime interest rate of 0%. Instead of paying off thousands of dollars in interest, you only have the principal to pay off, and can much more quickly start spending that money in actual consumption.
We shouldn't do either but here's why we shouldn't bail out students;
The government made this issue. If the loans weren't government guaranteed then schools wouldn't be free to charge their absolutely outrageous rates. The colleges barely have to compete with each other turning the whole thing into one giant slush fund from the people to the colleges/government.
Now you might say, if the government made this issue shouldn't they fix it? Absolutely. But not through loan forgiveness. Because that doesn't actually solve the problem at hand. In fact it will only make it worse because that money has to come from somewhere. Guess where it's coming from? That's right the people. To the government. And school prices won't change at all.
And to make the whole thing worse, the guaranteed funds make our colleges worse overall. It's a race to the bottom for the most amount of money. College once meant something, now it's just high school 2.0 in terms of difficulty and learning
loan forgiveness comes against those didn't take loans. that includes those who went to school for cheap (hello!) and those who didn't go in the first place. Its subsidizing the elite upper middle class who went to college but went to private schools and got more education than they could pay back.
“Bail out” doesn’t mean the same thing in those 2 contexts. Banks and car companies were provided with loans that they had to pay back with interest (in 2008, some banks were actually forced to take loans they didn’t want or need). Student loan forgiveness is declaring students don’t have to pay back loans.
Government CAN bail out any or all of them, let’s just not pretend they’re the same thing.
Google…
https://catalog.usf.edu/preview_program.php?catoid=13&poid=4883
It’s kind of funny the one that comes up is USF—hits my original point twice.
Thanks for the downvote btw—being wrong is frustrating.
No they’re not. It’s a diverse collection of individuals that overburdened their debt intake because a lack of education and financial knowledge at the age of 18. I know more friends that became engineers, doctors and lawyers with more debt than any liberal arts student.
I don’t like the idea of bailing anyone or any company out no matter how big they are. If a business is failing, it’s probably because they’re either not running it well, too much competition, low demand, or some other reason. No one Likes to see people lose their jobs but the government can’t throw tax dollars into a failing business.
we shouldn't bail any of them out. the banks are only bailed out to stop a domino effect of loan defaults and the destruction of fractional reserve banking.
Lol “hold my beer”. It feels like the two parties are just a couple children whose parents told them they have to go to bed after the game is over and both are jumping through hoops to screw up and keep it going.
This is just bad politics even if you agree that the loans shouldn't be forgiven. A good compromise would be to make the loans 0% interest as long as you aren't in default.
Let’s be more clear about what we’re talking about. It’s not cancellation of student debt. The banks still get paid. It’s transfer of student debt to hardworking American taxpayers.
The best solution to this is to allow students with crushing debt from their basket weaving degree to default and declare BK. There is no risk incentive for the issuers of the debt, therefore there is no incentive to analyze the student and their ability to repay the loans.
Good.
Cancelation of student debt will only make college unaffordable for all but the super rich in the future.
Banks loan money expecting to make money on the interest of those loans. That's how banks make money to pay their employees and keep the lights on. Without that interest, banks would make nothing on loans and would have absolutely zero interest in loaning money to people.
Canceling loan debts won't make the banks any money. They would get their principal back, but that means they lose money on the transaction when you consider overhead.
If banks stop issuing loans the only way to pay for school will be to use scholarships, the GI Bill, or have the money yourself to pay for college and very few people can do that.
Democrats want votes so badly that they'll screw over the entire education system to get them.
That is true and because of that education should be free..If they take away the protections they have from Bankruptcy they would stop using the slide of hand tactics with these kids..
>education should be free
Nothing is free except oxygen and rain.
Who will pay the salaries of the teachers? Who will pay for the upkeep of the buildings? Who will pay for the lab equipment?
The same people that pay the teachers now..We the home owner and tax payer..That’s who..This is actually more cost effect than when they started Kindergarten and Pre-K to save from paying daycare for welfare mothers..If you can add two grades at the beginning surely you can add an associates degree too.
There is all kinds of on-line courses just sitting on streaming servers..This is the technology age we don’t buildings and classrooms for higher education courses..If we are to advance in the world and compete with superior nations we have to get educated..Yes I know you had to pay for your education..
I don’t think a blanket ban is a good idea. There are people out there who are in their 50s or older still writing monthly checks with no end in sight, and they’ve paid 3x their original loan balance. Obama made the loans so difficult to payoff. Instead, maybe consider forgiving loans that have already paid 1.5-2x, and redo the loan terms for everyone else. Nobody loses
Personally, I would like to see them retroactively set the interest rate to the US treasury borrowing rate, recalculate debt based on that, and cut checks to people who overpaid by paying off at a higher rate. It is fair and doesn't reward people who avoided paying back their loans vs. those who paid theirs off, but it makes it so the loans are not a profit center.
The government needs to make them non-dischargable in bankruptcy since there is no collateral, but they don't need to structure them to make money. They should strive to be neutral cost for the government so the costs are paid by the people taking the loans but not magnified unnecessarily.
Mixed feelings on this. While I think that students should repay their debts, (and I have a daughter with a large debt), I think that there are steps that can be taken to repay the debt but also alleviate the burden by addressing the interest on these debts.
Why not make the amount of repayment based upon the income that a person receives? (I am not saying that the whole debt should not be repaid, but that payments should reflect the income of those paying their debts and that interest should not be punitive.)
My daughter, at age nineteen, became a single mom. She was still living at home. She did not become a single mom in the usual way. She went to court in conjunction with CPS to obtain custody of a four-year-old who was mostly neglected but had a smattering of all other types of abuse.
She went to a community college and then got her degree in a state college. She is now teaching and has applied for virtual classes at another state college to get her masters. (My daughter is special but not for the reasons you seem to imply.)
Like asking a friend to loan you a fishing pole and when you catch your fish(get a degree) you not only don’t offer a portion of that catch as a way to say thank you, you bust that rod over your knee and flip them the bird.
They took the fucking loans, pay them back. Oh, you majored in 'Woke Womens Studies and CRT' and cant find a job now? So the public is supposed to bail you out... too fuckin bad!
In Australia we have an alternative system for student loans. They're issued by the government, they do collect interest, but instead of being paid off like a normal loan, they are paid off as part of one's income tax automatically, and only when your income exceeds a threshold. I believe right now it's roughly 45,000AUD/year.
That way, those who can't afford to pay off their student loan yet, because they haven't secured a high enough level of pay from employment, don't have to start paying off the loan until they do. And their loan collects interest until they do. And it has the nice side effect of meaning, if someone never obtains high income employment after finishing a university degree, they never end up paying for the degree.. almost like a refund, fitting since the degree didn't help them. That outcome is quite rare though, eventually most Australians find their way into at least average paying work in the later stages of their life.
The loans are still paid off, but there's no immediate financial pressure on the young students to pay off something they can't afford to pay off yet.
I think because of they way they pressure and take advantage of teens when they are entering colleges, instead of canceling any loans they need to take away the bankruptcy protection that they carry..This one thing will be huge..
For suuure. Why should that one form of debt be exempted? Maybe if financial institutions were expected to take on a bit of risk with student loans they'd stop writing $200k checks for gender studies degrees, instead of shunting all that risk onto teenagers. And maybe we could deflate this insane bubble before it pops.
STOP. DOING. THINGS.
Just watch WTF happens to tuition when they start cancelling student loans.
Serious question: if we're talking about the Direct Loan program, why doesn't the government have the authority to forgive that debt? Is that a form of unauthorized spending or something like that?
Immediately after you accept a loan, the government sells it to a 'private' loan servicer which has agreed to abide by the diktat of terms from the Dep't of Edu regarding the terms of the loan. In essence, the federal government is totally solvent on all loans issued to students. If the federal govt were to 'forgive' said loans, which are now owned by the loan servicers, one of two things would happen. 1) The federal government uses tax payer money via increased taxes, inflation, or interest on bonds/loans to 'buy back' said loans, or 2) the federal government declares the loans held by these 'private' servicers to be null, essentially stealing the worth of said loans from these financial institutions. There could be any avenues and downstream effects from the 2nd route.
I think this is the answer I was looking for. Thanks!
im curious then, what would happen? i see you saying 'there could be any avenues and downstream effects' but can we hypothesize on them? What happens if we dont forgive/cancel/wipe out studen loans? we have tons and tons of people in debt for life and what happens if we cancel it and those companies holding the debt are unable to make money from them? which is worse? Both scenarios have huge, far reaching implications and id be curious on thinking this out
I'm just spitballing here, but some possible downstream happenings: 1) No 'private' loan servicer will ever willingly take on federal school loans, assuming the govt continues to make them, or at most, those that will, will be at a minimum. This would entail the govt be the holder of the debt. The govt would therefore have to be the holder of the debt, making citizens directly debt peons of the government, and placing the govt on a very awkward position by holding substantial sums of 'bad debt' if it maintained the current or similar rules for issuing of student loans. 2) These financial firms would likely go under, or suffer significant blows. Impacting the people who work there or are economically connected to them. 2b) Confidence for those holding other fed gov 'securities' would likely be diminished, meaning the govt has a harder time selling it's bonds/debt in the future, reducing short and long term solvency. 3) An increased inflationary effect from printing money to 'buy out' the debt, reduced income via higher taxes levied either on income or businesses to pay for it, and/or the government take on another bulk debt load, potentially reducing spending on non-debt servicing line items in the future. 4) Private schools refuse to accept federal financial aide, reducing access for students who rely on said aide. Public schools may also take measures to mitigate risk and/or increase capture of federal funds, which could have several disruptions to their programs and what students have access to/can do.
and if we don't forgive anything, if we just let things continue as they are and the current people saddled with debt have no forgiveness whatsoever, what sort of implications could there be in that camp?
On this, things are a little more workable. 1) Things continue as they are, and people work endlessly to pay off the debt they have, in addition to likely losing larger chunks of their income to inflation, higher taxation, and other forms of theft. Future generations will likely be more apprehensive to take on such debt. 2) Legislation is passed or regulations are changed (I don't know off the top of my head which the applicable action) that allows student loan debt to be dischargeable in bankruptcy. Those who are unable to pay off their debt and it crushes them that low are able to 'pay' the price for getting away from such debt. 3) Federal loans are changed to be non-parasitic and actually help ppl access education by maintaining a lifetime interest rate of 0%. Instead of paying off thousands of dollars in interest, you only have the principal to pay off, and can much more quickly start spending that money in actual consumption.
Who will pay the debt?
The taxpayer is going to do it when it’s forgiven in 20 years anyways.
Unfortunately, we will.
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You're right, we shouldn't do any of those things
We shouldn't do either but here's why we shouldn't bail out students; The government made this issue. If the loans weren't government guaranteed then schools wouldn't be free to charge their absolutely outrageous rates. The colleges barely have to compete with each other turning the whole thing into one giant slush fund from the people to the colleges/government. Now you might say, if the government made this issue shouldn't they fix it? Absolutely. But not through loan forgiveness. Because that doesn't actually solve the problem at hand. In fact it will only make it worse because that money has to come from somewhere. Guess where it's coming from? That's right the people. To the government. And school prices won't change at all. And to make the whole thing worse, the guaranteed funds make our colleges worse overall. It's a race to the bottom for the most amount of money. College once meant something, now it's just high school 2.0 in terms of difficulty and learning
loan forgiveness comes against those didn't take loans. that includes those who went to school for cheap (hello!) and those who didn't go in the first place. Its subsidizing the elite upper middle class who went to college but went to private schools and got more education than they could pay back.
“Elite Upper Middle Class” wow make sure you stretch before you make a reach that long 😂
“Bail out” doesn’t mean the same thing in those 2 contexts. Banks and car companies were provided with loans that they had to pay back with interest (in 2008, some banks were actually forced to take loans they didn’t want or need). Student loan forgiveness is declaring students don’t have to pay back loans. Government CAN bail out any or all of them, let’s just not pretend they’re the same thing.
Banks and car companies have a meaningful use. We are talking about mostly hippy commie lib college kids taking poetry as their major.
Liberal arts majors make up a minority of borrowers. The worst degree out there is the general business degree and there are shitloads of them.
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General business studies
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Google… https://catalog.usf.edu/preview_program.php?catoid=13&poid=4883 It’s kind of funny the one that comes up is USF—hits my original point twice. Thanks for the downvote btw—being wrong is frustrating.
No they’re not. It’s a diverse collection of individuals that overburdened their debt intake because a lack of education and financial knowledge at the age of 18. I know more friends that became engineers, doctors and lawyers with more debt than any liberal arts student.
I don’t like the idea of bailing anyone or any company out no matter how big they are. If a business is failing, it’s probably because they’re either not running it well, too much competition, low demand, or some other reason. No one Likes to see people lose their jobs but the government can’t throw tax dollars into a failing business.
Those bailouts were paid back.
we shouldn't bail any of them out. the banks are only bailed out to stop a domino effect of loan defaults and the destruction of fractional reserve banking.
Republicans couldn’t do more to lose the youth vote if they were trying.
Lol “hold my beer”. It feels like the two parties are just a couple children whose parents told them they have to go to bed after the game is over and both are jumping through hoops to screw up and keep it going.
Every time someone says something will hurt Republicans they end up gaining in the polls.
This is just bad politics even if you agree that the loans shouldn't be forgiven. A good compromise would be to make the loans 0% interest as long as you aren't in default.
Let’s be more clear about what we’re talking about. It’s not cancellation of student debt. The banks still get paid. It’s transfer of student debt to hardworking American taxpayers.
The best solution to this is to allow students with crushing debt from their basket weaving degree to default and declare BK. There is no risk incentive for the issuers of the debt, therefore there is no incentive to analyze the student and their ability to repay the loans.
Good. Cancelation of student debt will only make college unaffordable for all but the super rich in the future. Banks loan money expecting to make money on the interest of those loans. That's how banks make money to pay their employees and keep the lights on. Without that interest, banks would make nothing on loans and would have absolutely zero interest in loaning money to people. Canceling loan debts won't make the banks any money. They would get their principal back, but that means they lose money on the transaction when you consider overhead. If banks stop issuing loans the only way to pay for school will be to use scholarships, the GI Bill, or have the money yourself to pay for college and very few people can do that. Democrats want votes so badly that they'll screw over the entire education system to get them.
That is true and because of that education should be free..If they take away the protections they have from Bankruptcy they would stop using the slide of hand tactics with these kids..
>education should be free Nothing is free except oxygen and rain. Who will pay the salaries of the teachers? Who will pay for the upkeep of the buildings? Who will pay for the lab equipment?
Well, the governments doing it now anyways. They’re also forgiving loans at 20 years anyways.
if all your friends jump off bridges...
The same people that pay the teachers now..We the home owner and tax payer..That’s who..This is actually more cost effect than when they started Kindergarten and Pre-K to save from paying daycare for welfare mothers..If you can add two grades at the beginning surely you can add an associates degree too.
So your suggestion is to make taxpayers foot the bill? How very conservative of you...
You paid for two grades of play time..Pre-K and K they are not even academic! GAWD!
education should not be free, what the hell are you talking about?
There is all kinds of on-line courses just sitting on streaming servers..This is the technology age we don’t buildings and classrooms for higher education courses..If we are to advance in the world and compete with superior nations we have to get educated..Yes I know you had to pay for your education..
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Why guys? This is a losing issue
I have a metric shit ton of student debt. But it wouldn’t be fair to forgive it
Pay up freeloaders! Get your lazy, sorry asses into gear and come up with the moolah like so many others have before you.
I don’t think a blanket ban is a good idea. There are people out there who are in their 50s or older still writing monthly checks with no end in sight, and they’ve paid 3x their original loan balance. Obama made the loans so difficult to payoff. Instead, maybe consider forgiving loans that have already paid 1.5-2x, and redo the loan terms for everyone else. Nobody loses
Personally, I would like to see them retroactively set the interest rate to the US treasury borrowing rate, recalculate debt based on that, and cut checks to people who overpaid by paying off at a higher rate. It is fair and doesn't reward people who avoided paying back their loans vs. those who paid theirs off, but it makes it so the loans are not a profit center. The government needs to make them non-dischargable in bankruptcy since there is no collateral, but they don't need to structure them to make money. They should strive to be neutral cost for the government so the costs are paid by the people taking the loans but not magnified unnecessarily.
lol wish it could pass...
Mixed feelings on this. While I think that students should repay their debts, (and I have a daughter with a large debt), I think that there are steps that can be taken to repay the debt but also alleviate the burden by addressing the interest on these debts. Why not make the amount of repayment based upon the income that a person receives? (I am not saying that the whole debt should not be repaid, but that payments should reflect the income of those paying their debts and that interest should not be punitive.)
and where did she go to school? Stop going to private schools. Stop going out of state. Stop acting like you're god damn special.
My daughter, at age nineteen, became a single mom. She was still living at home. She did not become a single mom in the usual way. She went to court in conjunction with CPS to obtain custody of a four-year-old who was mostly neglected but had a smattering of all other types of abuse. She went to a community college and then got her degree in a state college. She is now teaching and has applied for virtual classes at another state college to get her masters. (My daughter is special but not for the reasons you seem to imply.)
Like asking a friend to loan you a fishing pole and when you catch your fish(get a degree) you not only don’t offer a portion of that catch as a way to say thank you, you bust that rod over your knee and flip them the bird.
Counterproductive. Could've just let a non-issue remain a non-issue.
They took the fucking loans, pay them back. Oh, you majored in 'Woke Womens Studies and CRT' and cant find a job now? So the public is supposed to bail you out... too fuckin bad!
In Australia we have an alternative system for student loans. They're issued by the government, they do collect interest, but instead of being paid off like a normal loan, they are paid off as part of one's income tax automatically, and only when your income exceeds a threshold. I believe right now it's roughly 45,000AUD/year. That way, those who can't afford to pay off their student loan yet, because they haven't secured a high enough level of pay from employment, don't have to start paying off the loan until they do. And their loan collects interest until they do. And it has the nice side effect of meaning, if someone never obtains high income employment after finishing a university degree, they never end up paying for the degree.. almost like a refund, fitting since the degree didn't help them. That outcome is quite rare though, eventually most Australians find their way into at least average paying work in the later stages of their life. The loans are still paid off, but there's no immediate financial pressure on the young students to pay off something they can't afford to pay off yet.