Canceling student loans

[Backintheday544]

4 minutes ago, PetermansRedemption said:

This seems like comparing apples and oranges to me. Eliminating all student debt right now hurts far more people than it helps. It isn’t like social security where there is a benefit now and in the future. A true comparison would be if the social security system gave money only to retirees retiring during that year it was enacted. That’s why student loan forgiveness is fine, but it has to accompany something that will actually fix the overall problem. Even if it were eliminate all student loan debt and make college free for everyone, that fixes the problem. Especially since the government could then control costs as the single payer. Not saying that’s the way it should go, but simply eliminating all student loan debt does absolutely nothing to abate the problem long term. 

Eliminating student loan debt right now doesn’t hurt anyone. It helps people who have debt not have it. It helps people who do not have debt by helping to create jobs. It helps the government by increasing GDP.

 

this is a two step process. Fix the current debt and fix the future debt. There’s no reason not to take the steps you can take for step 1 while working on step 2.

[Doc Brown]

7 hours ago, Backintheday544 said:

Eliminating student loan debt right now doesn’t hurt anyone. It helps people who have debt not have it. It helps people who do not have debt by helping to create jobs. It helps the government by increasing GDP.

 

this is a two step process. Fix the current debt and fix the future debt. There’s no reason not to take the steps you can take for step 1 while working on step 2.

Isn't it a slap in the face to those who paid down their debt early, attended cheaper schools to minimize the amount they needed to borrow, or worked full time during college?  Lowering the percentage of income driven repayment plans to maybe 5 to 10% of income seems like a more fair compromise.  Maybe reduce the student loan forgiveness to 10 years if they meet that standard.

Edited December 12, 2020 by Doc Brown

[Backintheday544]

1 hour ago, Doc Brown said:

Isn't it a slap in the face to those who paid down their debt early, attended cheaper schools to minimize the amount they needed to borrow, or worked full time during college?  Lowering the percentage of income driven repayment plans to maybe 5 to 10% of income seems like a more fair compromise.  Maybe reduce the student loan forgiveness to 10 years if they meet that standard.

Who cares if it’s a slap in the face? Where in the constitution does it say, all laws must be created so there is no slap in the faces. No matter what law is passed there are always winners and losers:

 

-  the example I gave before, when they passed social security, was that a slap in the face to the people who actually saved for retirement?

- when they passed TCJAs flat 21 percent corporate tax rate, was that a slap in the face for the smaller corporations that were at a lower tax bracket the year before?

- When they passed CARES act and only allowed PPP funds based on W-2s paid, was that a slap in the face of companies who only use 1099 contractors?

- When weed is finally legal and people in jail on weed convictions are let out, is that a slap in the face of the people who did their full time for their weed convictions?

 

and to the people who did pay things off early or make sacrifices, they benefit too as it will increase GDP and create jobs. So while they don’t get an immediate gratification of seeing a decreased loan balance, they get a better economy to live in.
 

Just think of this as a tax cut designed to help stimulate the economy.

[GaryPinC]

Good discussion on a great topic.  I'm 50 and beyond the student loans but my ex wife I think still pays at 50.  My daughter will start college next fall.

 

First, you cannot do blanket forgiveness, because it teaches irresponsibility to the former students and to the higher education schools.  The entire process of going to a place of higher education is them figuring out how much money they can drain from you legally and sometimes illegally.  Blanket forgiveness will boomerang into new problems.  Targeted forgiveness of terms and dollars is the way to go.

 

Second, in the current system, if you're not going to reform the tuition system significantly, the government needs to have a much more structured plan post-education administered by well paid and trained people who are going to empower former students.

 

Here are some of the main problems beyond the compounding cost of college education I see.  Drop-outs.  Degrees and communities with lower wages making repayment almost impossible.  For-profit colleges that exploit poorer students.  Over-emphasis on college education out of high school.  Lack of cohesive plan of post education repayment with helpful people.

 

My personal experiences:. Paid loans off in 9 years for my BS in biochemistry. 

Ex-wife defaulted on her loans and I spent the entirety of our marriage (12 years) paying on it to get it back down to the original principal. Calculated we already payed back original principal, interest +$1500 and default fees ($3200).  She had been paying for 4 when we met.

Ex-wife worked as instructor at for-profit college that recruited and targeted inner city kids knowing full well most would fail.  The goal was simply to milk them for as much federal money as possible until they quit or graduated.

 

Solutions:. 1. Emphasize viability of trade schools in HS.  Emphasize motivation and goals for college education.

2.  Drop-outs have to repay loans, but this group should get the most forgiveness contingent on volunteerism and career, personal and financial counseling.

3.  System of volunteerism for any post-college student in conjunction with businesses to work off college loans in spare time.  Including online tasks.

4.  Defaulted loans:. Legal summons to emphasize seriousness.  Waiver of penalty fees after demonstrated period of dependable payments.  Restructuring of loan terms.  Helpful, well-trained people.

5.  Caps on how much is owed once original principal + interest has been repayed.

 

Sorry for the length of this, too many opinions!😉

[SoCal Deek]

Or.....How about if you borrow money you have to pay it back? Are we really having this discussion in America? 

[GaryPinC]

38 minutes ago, SoCal Deek said:

Or.....How about if you borrow money you have to pay it back? Are we really having this discussion in America? 

How about you realize it isn't that simple?

How about you listen to some real stories and understand there's a big problem here for many?

 

It's a complex problem, where people who have every intention of paying their loans don't have the means when they finish.

 

Then there's the kids who have a high school diploma on paper but the school failed them and pushed them out.  They get hard-sold hope at a for-profit college and when they fail out now they have the government coming after them for a ton of money.

 

Myself, I'm saying get creative in repaying these loans and also fix the federal loan repayment system.

[ALF]

At the very least have 0% interest for those earning less then $50K a year.

[Tiberius]

4 hours ago, SoCal Deek said:

Or.....How about if you borrow money you have to pay it back? Are we really having this discussion in America? 

Are not we always? Limited Liability has been used for a real long time. Jim Kelly just blew off his debts he owed after his restaurant went belly up, like he can’t afford to pay those that supplied his restaurant back. Happens all the time in the business world. You think Trump was shy about using that? 

[Backintheday544]

5 hours ago, GaryPinC said:

Good discussion on a great topic.  I'm 50 and beyond the student loans but my ex wife I think still pays at 50.  My daughter will start college next fall.

 

First, you cannot do blanket forgiveness, because it teaches irresponsibility to the former students and to the higher education schools.  The entire process of going to a place of higher education is them figuring out how much money they can drain from you legally and sometimes illegally.  Blanket forgiveness will boomerang into new problems.  Targeted forgiveness of terms and dollars is the way to go.

 

Second, in the current system, if you're not going to reform the tuition system significantly, the government needs to have a much more structured plan post-education administered by well paid and trained people who are going to empower former students.

 

Here are some of the main problems beyond the compounding cost of college education I see.  Drop-outs.  Degrees and communities with lower wages making repayment almost impossible.  For-profit colleges that exploit poorer students.  Over-emphasis on college education out of high school.  Lack of cohesive plan of post education repayment with helpful people.

 

My personal experiences:. Paid loans off in 9 years for my BS in biochemistry. 

Ex-wife defaulted on her loans and I spent the entirety of our marriage (12 years) paying on it to get it back down to the original principal. Calculated we already payed back original principal, interest +$1500 and default fees ($3200).  She had been paying for 4 when we met.

Ex-wife worked as instructor at for-profit college that recruited and targeted inner city kids knowing full well most would fail.  The goal was simply to milk them for as much federal money as possible until they quit or graduated.

 

Solutions:. 1. Emphasize viability of trade schools in HS.  Emphasize motivation and goals for college education.

2.  Drop-outs have to repay loans, but this group should get the most forgiveness contingent on volunteerism and career, personal and financial counseling.

3.  System of volunteerism for any post-college student in conjunction with businesses to work off college loans in spare time.  Including online tasks.

4.  Defaulted loans:. Legal summons to emphasize seriousness.  Waiver of penalty fees after demonstrated period of dependable payments.  Restructuring of loan terms.  Helpful, well-trained people.

5.  Caps on how much is owed once original principal + interest has been repayed.

 

Sorry for the length of this, too many opinions!😉

How does it teach irresponsibility to the former students? They’re not going to go out and go back to school with more debt.

 

If anything the current system requires irresponsibility. For example in the 2008ish recession many people went back to school, taking out more loans after they were fired due to the recession just because that would freeze student loan companies from trying to collect.

 

The current generation really got the short end of the stick. The boomers had a time period when college was dirt cheap. When college costs started increasing they were able to use bankruptcy to discharge their student loans as well.

 

Blanket cancellation will help drive the economy. If anyone here is pro-tax cuts because it will help the economy should be pro-blanket forgiveness due to the greater economic impact at a similar price.

 

Colleges need reform on ballooning costs. Really, a Bernie plan of free higher education would be ideal across the board.

 

Your point 4 doesn’t work and is really a disguised attack on the poorer class. As of 2019 there’s 5.2 million defaulted federal loans. They’re typically defaulted because they can’t pay because they don’t make enough money to pay. Plus you’re needlessly clogging up the legal system.

 

My solution:

1. Program to consolidate private student loan debt into federal student loan debt

2. blanket forgiveness on Federal student loan debt

3. 100 percent excise tax on colleges salaries in excess of $500,000. Money goes to a fund to pay #2.

4. Federal tax credit of $100,000 a year, allowable for $25,000 a year over a 4 year period. Payable directly to the colleges.

5. Any college where tuition is more than $25,000 a year and gets non-for-profit status needs a justification of the higher tuition disclosed on a tax return or risk losing non-for-profit status

6. Program where if $25,000 tuition does not cover all operating costs for a college, the college can apply for a tax credit to cover remaining expenses on a justified need basis

7. Any non-for-profit college is capped at $200,000 max salary for all employees 

8. State programs similar to NY to offset any additional costs.

 

12 minutes ago, Tiberius said:

Are not we always? Limited Liability has been used for a real long time. Jim Kelly just blew off his debts he owed after his restaurant went belly up, like he can’t afford to pay those that supplied his restaurant back. Happens all the time in the business world. You think Trump was shy about using that? 

That’s really a funny part about this. The right are the people who are against this saying to pay back debts. Yet Trump had 6 bankruptcies and they call him a great business man.

 

Economic impact of Trumps bankruptcies? Nothing. Economic impact of this? Greater increase in GDP than Trumps signature Tax Cuts and Jobs Act tax cuts.

Edited December 12, 2020 by Backintheday544

[SoTier]

19 hours ago, TH3 said:

Forgive loans?..how about solving the problem?...Secondary education costs have gone up at 7 plus percent a year for the last thirty years....because the wealthy could afford it and the lesser off could borrow it. Now the entire cost structure of college is out of whack.

 

Hey let’s not solve problems! Just throw it on the credit card🤪

 

Secondary education is high school.  College and university education is post-secondary education.

 

The biggest reason that the cost of  post-secondary education has increased so dramatically in the last 40 years is because states that used to cover 90-100% of per student costs at public colleges and universities have shifted those costs to students and their parents via tuition and fees.  As tuition and fees at public institutions rose, it became easier for private colleges and universities to raise their tuition and fees also, even though many of the most prestigious schools with huge endowments could afford to offer free tuition for most students. 

 

The second biggest reason is the expansion of proprietary -- ie, for-profit -- post-secondary educational institutions from primarily trade and/or business skills schools into expensive competitors to 2 and 4 year college that lured with virtually no entrance requirements and promises of "financial aid" that was almost exclusively federal student loans rather than any scholarships or grants.   Many of these were out-and-out scams set up to take advantage of expanded federal student loan programs that defrauded tens of thousands of students, and even those that weren't scams often charged as much tuition and fees as the most prestigious private schools while providing community college quality education to unsuspecting students.

[Doc Brown]

6 hours ago, SoCal Deek said:

Or.....How about if you borrow money you have to pay it back? Are we really having this discussion in America? 

America is 21 trillion in debt.  LOL.  Of course we're having this discussion.

[RiotAct]

I’m cool with the idea, as long as I get a retroactive credit (had mine paid off my the end of 2012).

[mead107]

I am applying fora $10,000 student loan. Putting it the bank and waiting for president Biden to for give it.   
free money. Love it 

[TBBills]

15 minutes ago, mead107 said:

I am applying fora $10,000 student loan. Putting it the bank and waiting for president Biden to for give it.   
free money. Love it 

Trump would give this a thumbs up, corruption all the way.

[mead107]

9 hours ago, TBBills said:

Trump would give this a thumbs up, corruption all the way.

But , Biden is doing it. Corruption all the way. 
trump would be a thumbs down because it was Biden’s idea 😎😎😎

[SoCal Deek]

19 hours ago, Tiberius said:

Are not we always? Limited Liability has been used for a real long time. Jim Kelly just blew off his debts he owed after his restaurant went belly up, like he can’t afford to pay those that supplied his restaurant back. Happens all the time in the business world. You think Trump was shy about using that? 

You really have to be kidding me, right Tibs? We’re going to promote this behavior? You don’t even have to declare bankruptcy? What will be the purpose of a loan? Who will ever offer them? What about people like me who saved up and paid for my kids education?

So as a real solution...why not do the right thing...and simply have the government refinance the debt to lower payments over a longer period? Or require some sort of public service to pay off the debt? If you don’t have a good paying job, then work construction on an infrastructure project like back in the the WPA era. At least we’d get a new bridge out of it. And the young people would learn a skill.

[TBBills]

3 hours ago, mead107 said:

But , Biden is doing it. Corruption all the way. 
trump would be a thumbs down because it was Biden’s idea 😎😎😎

You are a Trump cult member thinking of doing corrupt things.... Typical

 

What's wrong with your other forum? Too many crazies?

 

 

Edited December 13, 2020 by TBBills

[SoCal Deek]

15 minutes ago, TBBills said:

You are a Trump cult member thinking of doing corrupt things.... Typical

 

What's wrong with your other forum? Too many crazies?

 

 

Zzzzzzz

[Backintheday544]

4 hours ago, SoCal Deek said:

You really have to be kidding me, right Tibs? We’re going to promote this behavior? You don’t even have to declare bankruptcy? What will be the purpose of a loan? Who will ever offer them? What about people like me who saved up and paid for my kids education?

So as a real solution...why not do the right thing...and simply have the government refinance the debt to lower payments over a longer period? Or require some sort of public service to pay off the debt? If you don’t have a good paying job, then work construction on an infrastructure project like back in the the WPA era. At least we’d get a new bridge out of it. And the young people would learn a skill.

People like you will get the benefit of a stronger economy. Think of this like you would for a tax cut to the rich. The rich get a tax cut and the poorer people are like what about people like me. The Republican answer is well you will be better off because the economy will be better and there will be more jobs.

 

Same here. People like you will be better off because the economy will be better and there will be more jobs.

 

Both of your proposals are things that are already available and have not helped the situation and would have minimal changes to the economy.

 

Also love that you’re answer is you’re poor so go work more.

[dpberr]

I wouldn't forgive it.    

 

However, the government should permit student debt to be treated like all other debt as it pertains to discharge in a bankruptcy.  Student debt is very difficult to discharge.  

 

The government could also cap the amount a student could borrow based on the subject the student pursues to minimize risk.  If you're going for that art degree, you're capped at a lower amount than say a STEM degree or a degree in the trades.  

 

Higher education, as an industry, needs to be burnt to the ground and completely rebuilt.