They aren't just forgiving debt. They are changing the inherent problem with the interest rates. Currently, many borrowers have been paying on their loans for years to the tune of tens of thousands of dollars but owe more today than they did when they graduated because of the interest rates and predatory lending tactics. This process stops that and ensures that those who make the minimum payment each month will always see their loan balances drop even if they qualify for a $0 payment due to financial hardship and caps the loan payments at 15% of discretionary income. People focus on the loan forgiveness but fail to acknowledge that even more important aspect of this entire thing. It isn't a complete fix but at least it is a start.
Should Student Loans Be Forgiven or Enforced?
- Thread starter College#19
- Start date
There are certainly people out there, like catlanta, who borrowed money, got a great job, and paid it back as planned. The process worked out well for them. It worked out extremely well for me when I borrowed money to buy 3 different houses with variable rate mortgages, but that doesn't mean the housing/banking crisis didn't destroy the world economy and ruin many people's lives.
catlanta seems to be looking at the student loan ordeal way too matter of factly. Someone borrows money under X conditions, and they pay it back under Y terms. Very straightforward. But man, I just can't even imagine how blind and ignorant you'd have to be to the whole industry to actually think that way.
catlanta seems to be looking at the student loan ordeal way too matter of factly. Someone borrows money under X conditions, and they pay it back under Y terms. Very straightforward. But man, I just can't even imagine how blind and ignorant you'd have to be to the whole industry to actually think that way.
I think that's because some people really bought into the idea that the economy would fall apart if those bailouts weren't enacted. It doesn't mean a lot of those people aren't generally opposed to the government doing that kind of thing. I think some were duped into believing the end of the world was coming if the government didn't do something. In this case, the government doesn't even have that as an excuse. It's just a vote buying gift to people who borrowed too much money based on the degree they getting. Both my kids will benefit because of it since they had a small amount of student loans. In spite of that, I, and my kids, don't think it's the right thing for government to be doing.
What does PPP have to do with this at all? PPP was only a "loan" to the degree that it provided an incentive to businesses to use the funds to remain a going concern. From the onset, the agreement was that the funds would only need to be repaid to the government if those terms weren't met, otherwise it was sold from the beginning as a grant to help businesses survive COVID lockdowns.
It was basically a grant to businesses with a penalty in the event of misbehavior.
The fact that this is a talking point for people supporting student loan forgiveness is bizarre and disturbing.
It was basically a grant to businesses with a penalty in the event of misbehavior.
The fact that this is a talking point for people supporting student loan forgiveness is bizarre and disturbing.
Nobody is forced to borrow money. That’s the point.
That's part of it. I just have a tough time accepting all these "kids" are victims when I went through my own financial issues and had to figure them out on my own. But today, I just have to accept that someone else didn't and I should be grateful to help out? Why? I'm literally getting jackshit out of this except to pay more in taxes for someone that is taking the easiest path out of their mistake. And, I should expect every few election cycles, it happens again because this isn't actually solving the problem and instead just puts one of those little bandaids on it that only fit over a small paper cut.
I had student loans 40 years ago when I went to college. Both my kids took out modest amounts of student loans when they attended college. We filled out FAFSA and the school offered the loans as a part of the package of scholarships, etc. that they put together. We accepted or rejected those loans online when accepted the financial package they put together. Both of my kids had to read online disclosures of the interest rates and how and when the loans would be paid back. No one tried to sell us on taking out loans, no one enticed us in any way, it was left 100% up to us what we did. I'm not following the talking point that colleges or some lending official is talking students into loans they don't need. In fact, the amount of time talking to anyone about Federal loans is very minimal because the offer of government loans arises from FAFSA. You fill it out online, specify the schools you are interested in, and submit it. The school sends you a financial package that includes scholarships and the federal loans you qualify for. You can accept or reject any and all loans in the package. I just don't see anyone being manipulated, scammed, or conned. Can you provide an example of how that happens? I'm genuinely curious.
We’re literally talking about loaning huge sums of money to children. We can start there.
And please, for gods sake, don’t compare your experience 40 years ago to what students deal with today. My freshman year was 25 years ago, and in that short time the entire campus has been completely rebuilt from top to bottom.
If you don’t view the student loan industry as largely predatory, there’s absolutely no use in us even having this discussion. Clearly we will NEVER agree.
And please, for gods sake, don’t compare your experience 40 years ago to what students deal with today. My freshman year was 25 years ago, and in that short time the entire campus has been completely rebuilt from top to bottom.
If you don’t view the student loan industry as largely predatory, there’s absolutely no use in us even having this discussion. Clearly we will NEVER agree.
What about all those children that didn't ever take out a student loan or go to college having to pay for those that were preyed upon for student loans? F them, right? I mean, they aren't even victims.
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This is crazy. None of this is relevant to anything. There’s no “con” or “scam” when you freely write your name on a paper. It’s all in the fine print.
Caveat Emptor is a centuries old phrase. It was coined for a reason.
The problem originates with government. When you start making that kind of talk, you’ll have some listeners.
As for children…these same children sign up to take a bullet. At some point you have to stick with facts and not hyperbole.
Oh, are we going to act like PPP was not an extreme windfall for most of the businesses who received it? According to a study cited in this Marketwatch article, up to 75% of the $800 billion shelled out for PPP ended up in the owner's pocket rather than workers.
You want to justify student loan debt forgiveness, how about this: Our gov't effed up and did nothing as tuition increased by 5 times the rate of inflation over the last 50 years. Why? Because eff you students, that's why. So to compensate for our government doing nothing to stop colleges from taking advantage of students, they are getting a portion of their student loans forgiven.
But we are definitely comparing an unfair windfall to an unfair windfall, I'll agree with you on that, just don't act like PPP was not free money to a lot of business owners.
What about all those people who didn't have a business who are having to pay for that windfall to all those businesses that didn't need it? F them, right? I mean, they aren't the victims.
Why not throw this back on the universities for over charging students. The Endowments some of these Universities and Colleges have is obscene. Many are in the BILLIONS of dollars. Let them share the cost, why should tax payers be on the hook because some student can not find a job to pay back thousands of dollars. That is not my problem, nor any taxpayer.
Since when does a President of the United States have the authority to "forgive" any loan or any part of a loan? Student or not. Where is that written in his job description. He is not King and he shouldn't be a dictator. But it seems he being allowed to dictate a lot of things. We have a Congress and it is currently leaning left. Why not make this a matter of legislation with this liberal Congress.
The contention is that it falls under the Heroes Act. Also, Biden has already forgiven student debt for disabled borrowers and for borrowers that entered public service. No one batted an eye when those measures were enacted. I can't see why this should be viewed any differently.
If you read what I wrote, both my kids took out modest student loans, so I am talking about recent experiences. There was nothing predatory about it. As I said, we filled a FAFSA online and submitted it. The schools sent us a financial package that included scholarships and the loans we qualified for based on FAFSA. We were free to accept them or decline them. We never discussed what we should do with anyone. No one called us or tried to influence us in any way. My kids were required by law to watch a disclosure video if they accepted a loan explaining in detail the interest rates they would be paying and when and how the loan would be repaid. Please explain what was predatory about it?
Because liberals need authoritarian, top-down actions. Like with abortion, having some other entity that can do the dirty work is critical. Otherwise, they’d have to face the brunt of their constituents.
It was for many business owners but the terms of PPP from the onset was that was its intended purpose was that the funds would not be expected to be repaid so long as the terms of the agreement were followed by business owners. That is not the same terms that student loans were granted where the loan was explicitly expected to be repaid by the borrower to the point that the borrower cannot even bankrupt the loan.
Why is that distinction so hard?
First off, your criticism of colleges may be warranted in the case of for profit colleges. But, legitimate universities can't be responsible for students who don't pay back their loans. Should UK have to refund tuition if a student can't get a good job?
And, on a related note, I know you did not advance this notion, but the idea that the government should get involved in telling universities what degree programs to offer ("Harvard, we will no longer permit you to have an undergraduate sociology major") is highly offensive. At the end of the day, education is of value, and it is up to the consumer/student to decide what course of study they want to pursue.
Finally, I doubt that Biden has the legal authority to do this, but I am also skeptical that anyone has the legal standing to challenge it. A weird situation for sure, but a problem nonetheless.
Don't know your situation, just tired of seeing the absolute BS argument that those who received PPP are somehow more worthy and deserving than those who are receiving student loan forgiveness. Threw 3 times as much at businesses for PPP than Biden's student loan forgiveness is going to cost, and people are still pissed.
I never even remotely insinuated that. Just because PPP loans were abused and became more wasteful than intended (maybe), doesn't mean I can't separate them from student loans. They're not the same thing, they aren't the same discussion and using one to bolster the argument for the other isn't debating in good faith.
Damnit PTI, I should have made up a whataboutism for elderly people being scammed and not something that directly relates to your shitty take. My bad.
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Because you're arguing that PPP was somehow fair because the government set the parameters and the businesses accepted and met them. The result, no matter how you look at it, was a handout that businesses didn't need. We've been telling our kids for decades that if they graduate from college they will get a well-paying job. With which they can pay their student debts. That's not the case any more.
How about this distinction: PPP was unconscionable to the government (and our citizens) because our gov't got thoroughly taken advantage of by businesses (who have the resources to lobby and bend government to its will) that set very low bars for forgiveness to all those businesses that wanted that free money. Student debt, however, is unconscionable to students who have been taken advantage of through student loan programs by not only shady colleges, but by supposed prestigious public and private institutions of higher learning by unconscionably jacking up the cost because the government will hand students a loan to attend it without question.
Umm...trying to draw distinctions and failing to acknowledge the parallels between PPP and SLF (student loan forgiveness, tired of typing it out) is actually not debating in good faith.
You're too smart for this.
If I promise my kid that I will completely pay for his college (or business or whatever) IF s/he provides proof of a 4.0 GPA and earns a degree in four years but s/he is directly responsible for the entirety of the cost if those conditions aren't met, then I'm in PPP land. Kid has an enforceable contract if I renege on that (so help me God if you mention the statute of frauds, I will punch you in the FUPA).
If I promise my kid that s/he is on his own for college, s/he proceeds to rack up a bunch of debt and then 15 years later I decide to rob a bank to pay off the student loan, then I would have done exactly what Biden just did with student loan forgiveness -- namely by making unresponsible parties bear the cost of someone else's actions.
This is not that hard. PPP and student loan forgiveness are not equivalent BECAUSE of the terms that the agreement was entered into, not the subsequent effect of an idiotic government policy.
If I promise my kid that I will completely pay for his college (or business or whatever) IF s/he provides proof of a 4.0 GPA and earns a degree in four years but s/he is directly responsible for the entirety of the cost if those conditions aren't met, then I'm in PPP land. Kid has an enforceable contract if I renege on that (so help me God if you mention the statute of frauds, I will punch you in the FUPA).
If I promise my kid that s/he is on his own for college, s/he proceeds to rack up a bunch of debt and then 15 years later I decide to rob a bank to pay off the student loan, then I would have done exactly what Biden just did with student loan forgiveness -- namely by making unresponsible parties bear the cost of someone else's actions.
This is not that hard. PPP and student loan forgiveness are not equivalent BECAUSE of the terms that the agreement was entered into, not the subsequent effect of an idiotic government policy.
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Good points. How anyone can try to connect PPP as anything similar to a student loan is ludicrous. First of all PPP went through Congress. And second business were forced to close by the Government. They did not close voluntarily. The Government shut them down. They made it unlawful for them to operate.
Fortunately for business in my State the Governor did not shut them down and now we enjoy a 22 billion dollar surplus. But thousand and thousands of businesses were shut down across America. The PPP was designed to provide funds so they could keep employees on the payroll when they had to lock their doors. It was an attempt to keep them in business. Some went out of business in spite of the PPP.
A person who does not repay their student loan would be considered a dead beat in the past. Now they are coddled and protected by a man who wants their vote. Another example of a government gone to the dogs.
So is this a done deal, or what? I keep hearing conflicting things.
Sucks if you're the person making $126k, and you get nothing, but the person making $124k basically just got a 10k bonus. Why not, at the very least, do this in tiers?
Sucks if you're the person making $126k, and you get nothing, but the person making $124k basically just got a 10k bonus. Why not, at the very least, do this in tiers?
Guess what? Contracts can be revised. Biden just did it. Guess what else? Totally new contracts can be written between parties, which is what the PPP was. But you keep arguing one is fair, and the other is not, all while ignoring the power imbalances between businesses (who have a powerful lobby and were able to get very favorable contract terms for PPP) and college students (who have no one lobbying on their behalf and get taken advantage of by colleges and universities that charge whatever they want). JFC, I know you understand.
I've said enough for one day, so have a great day y'all, I'm gonna hang up and listen.
I don't think it is. PPP loans already happened. The fraud happened. It's done. It was shit but that was the government's solution to shuttering business. It was also nearly unanimous from both parties. It literally has nothing whatsoever to do with PPP. In fact, it was democrats that used the PPP loans to deflect attention away from the outcry of Joe Taxpayer being pissed off for getting the shaft, again.
It looks like 13 states have laws that would tax the $10,000 student loan forgiveness. Kentucky is one of them.
This should also be a taxable income event to every recipient; unless there are special provisions for it.
However my basic understanding of the practicality behind the income requirement is it's typically triggered with the deduction of the debt by the lender which could generate a potential 1099 to the borrower.
Short of the lender attempting a reduction, I am not sure there is any practical trigger for the borrower.
Someone much more versed than me on practical tax practice can chime in.
My god
A windfall is an undeserved financial award. Business owners were victim of unprecedented government intrusion on their rights. If anything, this money should've been paid as damage rather than being offered as a forgivable loan.
That said, the loan was forgivable from the start. That was the deciding factor before many even took the money at all. It wasnt an after the fact curve ball change to the terms.
Secondly the PPP loans were specifically intended for business investment with a focus on employee wages. So instead of having all those people unemployed and waiting on state unemployment, the PPP let them keep their job and kept payrolls moving.
Third for any company to qualify for PPP at all, they had to show some proof of profitability. Quite the opposite for student loans where no proof at all is required and often the loans are despite clear red flags about potent for repayment.
The two really have nothing in common at all.
So what gives Biden the right to revise any contract. Are liberals accepting him as their dictator now? Why do we have a Congress? Why do we have courts? Do we really need either if one man can tell a special group they do not have to honor the loan they agreed to.
What a country.
In this instance, the argument is the HEROES Act gives him the right just like it gave him the right to suspend any student loan payments during Covid.
My post stands. Working on the back end with the interest rates is the most important part of this order. Say My god all you want. It doesn't change the veracity of my comment. It isn't a total solution but at least its a start.
