Should Student Loans Be Forgiven or Enforced?

[LineSkiCat14]

I respect your right to not agree with Biden’s decision, but how are you sticking it to the government by charging her a higher rent?

It's not so much sticking it to them, as it is to say "I'm not paying for this". Also she gets 2/3rds rent covered by local government.. so they, the liberal leaning city I live in, can pay more for her rent.

I will make sure that the people getting bailed out, and the government (state and federal) pay for this before I do.

 

[funKYcat75]

Also she gets 2/3rds rent covered by local government.. so they, the liberal leaning city I live in, can pay more for her rent.

Gotcha. Didn’t know that part. I can understand that.

 

[LineSkiCat14]

It's also out of principal. I paid off my loans. I went through 2 recessions (now 3) before I hit 36. People my age who got absolutely boned coming out of college in the late 2010's AND who were fiscally responsible have been royally boned. It's enough for me. I'm taking what's mines any means necessary.

 

[roguemocha]

The only people that would possibly support this are those who made poor choices and want to be rewarded for some reason for it. It makes ZERO sense unless you give back 10K or whatever to everyone that went to college in a given era.

 

[Dore95]

The major problems I have with this are: (1) it implies that student loan borrowers are “victims”, duped by a a corrupt and predatory system. This is no different from the claims that those who took out mortgages 15 years ago were victims and justified in going into foreclosure. (2) this will create an expectation that this is only the beginning. People will get used to the idea and there will be more forgiveness in the future at higher amounts. People will expect that they do not have to pay back loans.

 

[ukcatz12]

If we're doing student loan forgiveness and NOT doing anything to change the system, we'll be right back here in just a few years. It's still broke. Kids are still borrowing way too much money to get a degree.

There is part of this proposal that makes a change to the system. If you're on the income based repayment plan it makes it so your loan balance can't keep growing as you make minimum payments if those payments aren't covering the interest. No more stories of people taking out $30,000, paying $10,000 over the course of a decade, and then having the loan balance swell to $50,000.

 

[ukcatz12]

It implies that student loan borrowers are “victims”, duped by a a corrupt and predatory system.

Not everyone is, but there are tons of people who are. You had an entire generation of people told the only option was college. You don't understand the reality of student loans when you're 18 and many don't have parents that are financially literate enough to teach them.

Then you had rules where you were told what your monthly payments would be when taking out the loans, but that disclosure only applied to federal loans. So a naive kid is told his monthly payment after gradation was going to be $200 per month when in reality it was going to be $800 because that meeting in the office of the guidance counselor didn't need to disclose how much the private loan would cost.

Or people who have been paying their loan payment on time every month for a decade but still owe more than their initial loan balance.

I'm pretty much neutral on this and probably lean more towards disagreeing with it, but it will help millions of people who legitimately were taken advantage of when they were just kids trying to do what they thought was the right thing with their future.

 

[Ron Mehico]

I don’t know enough about it to form an opinion. If it’s something that causes the government to lose some money, therefore forces a systematic change in how loans are being handed out, and therefore causing the universities to justify tuition and stupid majors, then I think it’s wonderful. If it’s just a handout, the government will simply pay the difference by increasing taxes, and it changes nothing with regards to how student loans are given then WHAT.THE.F*CK.

 

[HagginHall1999]

I don’t know enough about it to form an opinion. If it’s something that causes the government to lose some money, therefore forces a systematic change in how loans are being handed out, and therefore causing the universities to justify tuition and stupid majors, then I think it’s wonderful. If it’s just a handout, the government will simply pay the difference by increasing taxes, and it changes nothing with regards to how student loans are given then WHAT.THE.F*CK.

A real mess tbh.

This isn't forgiving loans, it is transferring loans.

Another laughable decision by the money printing administration in office.

Complete sham and slap in the face to countless American's.

 

[LordEggForgotHisPassword]

And here I was thinking no one would have an opinion on this

 

[Hank Camacho]

We elected Pudd'nhead Wilson as president. What do we expect?

Let the nanny state proceed.

 

[Dore95]

Not everyone is, but there are tons of people who are. You had an entire generation of people told the only option was college. You don't understand the reality of student loans when you're 18 and many don't have parents that are financially literate enough to teach them.

Then you had rules where you were told what your monthly payments would be when taking out the loans, but that disclosure only applied to federal loans. So a naive kid is told his monthly payment after gradation was going to be $200 per month when in reality it was going to be $800 because that meeting in the office of the guidance counselor didn't need to disclose how much the private loan would cost.

Or people who have been paying their loan payment on time every month for a decade but still owe more than their initial loan balance.

I'm pretty much neutral on this and probably lean more towards disagreeing with it, but it will help millions of people who legitimately were taken advantage of when they were just kids trying to do what they thought was the right thing with their future.

But you could say the same thing about people with high credit card debt - “it was so easy to fill out the application and no one explained interest.” However, I think the viewpoint that somehow the colleges are to blame for loan debt is taking hold. People prefer to see themselves as victims than as ignorant and foolish.

 

[Hank Camacho]

I don’t know enough about it to form an opinion.

Nor does Biden.

 

[Ron Mehico]

“As of the end of last year, fewer than 1.2% of borrowers continued making payments on their student loans, Mr. Kantrowitz said. But some of the borrowers took advantage of the two-plus years of optional, interest-free payments to wipe out their debt entirely.


This measure won’t apply to balances that have already been paid off.”

From a WSJ article I just read. Doesn’t that just say it all? Me and my wife refinanced our student loans with SoFi a couple of years ago to go to 4.4% interest instead of 6.75% with federal (which is asinine) so we’ve of course been diligent with paying ours, hopefully I’ll be done at the end of this year with mine after 8-ish years. Pretty big accomplishment if you knew what our vomit inducing debt was, but am excited to fork over some of my taxes to the people that went to school for worse jobs.

 

[Ron Mehico]

A real mess tbh.

This isn't forgiving loans, it is transferring loans.

Another laughable decision by the money printing administration in office.

Complete sham and slap in the face to countless American's.

Kinda seems that way sadly, hope we’re wrong.

 

[catlanta33]

Would be behind some measures to mitigate the fallout of the student loan bubble. But, this isn't it. This doesn't address the root cause which is out-of-control tuitions. I'm a broken record here but the universities are paying off politicians for pennies on the dollar and are going to come away from this with an opportunity to make more money and continue to not have skin in the game.

And overall, it's teaching people that you don't have to repay loans. Just terrible and doesn't solve anything but buying up votes.

 

[cricket3]

All they really needed to do was fix the interest rates. The remainder of my debt is getting wiped out but considering the thousands I've paid in interest to the government I figure we're all square on the amount I originally borrowed.

 

[BravesRule]

“As of the end of last year, fewer than 1.2% of borrowers continued making payments on their student loans, Mr. Kantrowitz said. But some of the borrowers took advantage of the two-plus years of optional, interest-free payments to wipe out their debt entirely.


This measure won’t apply to balances that have already been paid off.”

From a WSJ article I just read. Doesn’t that just say it all? Me and my wife refinanced our student loans with SoFi a couple of years ago to go to 4.4% interest instead of 6.75% with federal (which is asinine) so we’ve of course been diligent with paying ours, hopefully I’ll be done at the end of this year with mine after 8-ish years. Pretty big accomplishment if you knew what our vomit inducing debt was, but am excited to fork over some of my taxes to the people that went to school for worse jobs.

The smart move during this interest forbearance period was to invest the money you would typically pay for your student loans each month. Even if it was only in a high-yield savings account, which is what my wife and I did.

We could’ve paid off our remaining balance at any point, but I might as well earn some extra money on that amount.

No chance I was paying off the loans while the interest rate was at 0%, especially with the possibility of loan cancellation happening. While I’m 100% against it, I’m sure as hell going to take advantage of it.

The set-up is honestly perfect for us. We should just barely qualify and my wife received pell grants in undergrad as well, so I think we’ll get $20K. There’s ZERO reason we should get any money, but oh well.

Even better, we’re currently on a beach in the Mediterranean: “Monsieur, one more bottle of wine s'il vous plait.”

 

[DSmith21]

The loan forgiveness is $300 Billion more in stimulus fuel being poured on the inflation fire. It's going to make chairman Powell's job to engineer a soft landing harder.

 

[Deeeefense]

I'm against this plan for many of the same reasons others have mentioned, as well as the fact that putting that kind of money into the economy will further exacerbate inflation.

However what really annoys me is policy makers in Washington don't think like businessmen. The businessman in me says you never give something away without getting something in return. They could offer people in this student debt crunch a couple of options. Get their debt reduced by X in return for performing Y hours of community, or national service. Or require recipients of the debt reduction to either repay the debt later if their net worth exceeds a certain amount, or leave a bequest to the government for the principal of the loan that was reduced plus accrued interest. That would be something more closer to what I would call "fair".

 

[bigblueinsanity]

But you could say the same thing about people with high credit card debt - “it was so easy to fill out the application and no one explained interest.” However, I think the viewpoint that somehow the colleges are to blame for loan debt is taking hold. People prefer to see themselves as victims than as ignorant and foolish.

The difference with credit cards is they are subject to bankruptcy, therefore credit risk is considered when deciding if credit is issued to an individual. So not just anyone can get a card and many people are limited to tiny limits due to said credit risk.

However with student loans there is no bankruptcy or credit risk. So the art major can get a massive loan to attend their private liberal arts school just as easily as the computer science student attending MIT. Obviously one has a way better chance of paying off a loan, but with bankruptcy insulation it doesn't matter.

So the real villain is the government, as usual. Colleges though are a close second because they took advantage of a broken system to greatly enrich themselves.

While I don't consider most students a victim; there are definitely some exceptions. For a long time, every piece of media and the entire primary and secondary education experience virtually demands kids attend college or be declared a loser . Many of those kids had no business going to college, but noone cared. Pretty tough to overcome 12 years of propaganda. The system definitely failed them.

The loan forgiveness is $300 Billion more in stimulus fuel being poured on the inflation fire. It's going to make chairman Powell's job to engineer a soft landing harder.

Meh. I think it's bad policy and a bad decision. It definitely does nothing to address skyrocketing costs, it penalizes responsible behavior, and as the other poster mentioned it creates a reward for irresponsible behavior. That's a bad combo.

However....none of these payments were being made the last two years with no real inflationary impact. Plus I'd love to see their internal projections as to how much money they thought these debts would actually recover. It couldn't be over 10 cents on the dollar.

So ultimately imo this was money they were never going to see anyway; even after the pause lifted

 

[rick64]

I know lots of people who went to college and graduated with no student loans. They busted their @$$ to do it. Big time kudos to them. Some working full time or two jobs, taking evening/weekend classes and even summer classes. Some took them longer than 4 years, but they did it. So it can be done. Nothing wrong with hard work folks.

 

[DSmith21]

The difference with credit cards is they are subject to bankruptcy, therefore credit risk is considered when deciding if credit is issued to an individual. So not just anyone can get a card and many people are limited to tiny limits due to said credit risk.

However with student loans there is no bankruptcy or credit risk. So the art major can get a massive loan to attend their private liberal arts school just as easily as the computer science student attending MIT. Obviously one has a way better chance of paying off a loan, but with bankruptcy insulation it doesn't matter.

So the real villain is the government, as usual. Colleges though are a close second because they took advantage of a broken system to greatly enrich themselves.

While I don't consider most students a victim; there are definitely some exceptions. For a long time, every piece of media and the entire primary and secondary education experience virtually demands kids attend college or be declared a loser . Many of those kids had no business going to college, but noone cared. Pretty tough to overcome 12 years of propaganda. The system definitely failed them.



Meh. I think it's bad policy and a bad decision. It definitely does nothing to address skyrocketing costs, it penalizes responsible behavior, and as the other poster mentioned it creates a reward for irresponsible behavior. That's a bad combo.

However....none of these payments were being made the last two years with no real inflationary impact. Plus I'd love to see their internal projections as to how much money they thought these debts would actually recover. It couldn't be over 10 cents on the dollar.

So ultimately imo this was money they were never going to see anyway; even after the pause lifted

Disagree. Debt forgiveness is considered income. Also the primary beneficiaries of this forgiveness are above average earners who could afford to repay the debt in time. By not having to make these payments, the beneficiaries have more disposable income to spend.

 

[Ron Mehico]

The smart move during this interest forbearance period was to invest the money you would typically pay for your student loans each month. Even if it was only in a high-yield savings account, which is what my wife and I did.

We could’ve paid off our remaining balance at any point, but I might as well earn some extra money on that amount.

No chance I was paying off the loans while the interest rate was at 0%, especially with the possibility of loan cancellation happening. While I’m 100% against it, I’m sure as hell going to take advantage of it.

The set-up is honestly perfect for us. We should just barely qualify and my wife received pell grants in undergrad as well, so I think we’ll get $20K. There’s ZERO reason we should get any money, but oh well.

Even better, we’re currently on a beach in the Mediterranean: “Monsieur, one more bottle of wine s'il vous plait.”

The smart move for 80% of the people was to pay off interest free debt so they could get out of the massive debt they were in, especially for people in their mid 20s, as it usually is. The fact that 1.2% took advantage of that (with the vast majority I would bet not investing instead) shows the financial incompetence and irresponsibility of lots of these people.

 

[rudd1]

-the problem is cost of attendance to attend university. It's obscene.

-the fix is to make student loans dischargeable in bankruptcy. Proper underwriting will ensue...fewer people get loans, colleges have to then compete for students...maybe then they'll price their services at a justifiable rate.

-this is a craven act of vote buying. Nothing more.

 

[DSmith21]

-the problem is cost of attendance to attend university. It's obscene.

-the fix is to make student loans dischargeable in bankruptcy. Proper underwriting will ensue...fewer people get loans, colleges have to then compete for students...maybe then they'll price their services at a justifiable rate.

-this is a craven act of vote buying. Nothing more.

I don't think your idea will work since the federal government took over almost all new student loans in 2010 under an Obama plan to squeeze out banks as lenders. The government is not going refuse loans to poor (bad risk) people even if it makes good business sense.

 

[bigblueinsanity]

Disagree. Debt forgiveness is considered income. Also the primary beneficiaries of this forgiveness are above average earners who could afford to repay the debt in time. By not having to make these payments, the beneficiaries have more disposable income to spend.

They had all that extra income the last two years yet Inflation only took off with much more recent runaway government spending.

The only thing that really impacts inflation is currency. If we make more, it causes inflation. If we make alot more, it causes alot of inflation.

On paper this seems like a major financial loss but it isn't. Dirty secret was barely anyone paid their student loans even before the pause. Almost everyone under 30 was in default to some degree and they probably have the vast majority of the loan debt. So there was very little projected revenue on the books anyway.

 

[P19978]

How many programs do Dems have to eff up before folks stop voting for them?

 

[rudd1]

-it's less about being poor and more about financing non marketable degrees(super bad risk).

 

[_Mav_]

-it's less about being poor and more about financing non marketable degrees(super bad risk).

Sure, a bachelor's degree in The Gender Fluidity Effects Of Cis-White-Male Dominated Populations On Predominantly African Midget Trans-Lesbian Cultures from Bryn Mawr is a niche, but asserting that it's non-marketable reeks of dead white European hetero male privilege.

 

[jlynn323]

The difference with credit cards is they are subject to bankruptcy, therefore credit risk is considered when deciding if credit is issued to an individual. So not just anyone can get a card and many people are limited to tiny limits due to said credit risk.

However with student loans there is no bankruptcy or credit risk. So the art major can get a massive loan to attend their private liberal arts school just as easily as the computer science student attending MIT. Obviously one has a way better chance of paying off a loan, but with bankruptcy insulation it doesn't matter.

So the real villain is the government, as usual. Colleges though are a close second because they took advantage of a broken system to greatly enrich themselves.

While I don't consider most students a victim; there are definitely some exceptions. For a long time, every piece of media and the entire primary and secondary education experience virtually demands kids attend college or be declared a loser . Many of those kids had no business going to college, but noone cared. Pretty tough to overcome 12 years of propaganda. The system definitely failed them.



Meh. I think it's bad policy and a bad decision. It definitely does nothing to address skyrocketing costs, it penalizes responsible behavior, and as the other poster mentioned it creates a reward for irresponsible behavior. That's a bad combo.

However....none of these payments were being made the last two years with no real inflationary impact. Plus I'd love to see their internal projections as to how much money they thought these debts would actually recover. It couldn't be over 10 cents on the dollar.

So ultimately imo this was money they were never going to see anyway; even after the pause lifted

Teachers/guidance counselors are villain number 3. Their incessant "chase your dreams and the money will follow" bs has ruined countless lives. If you are advising high school students to major in anything other than STEM or go to school for trades you should be tarred and feathered.

 

[catlanta33]

Teachers/guidance counselors are villain number 3. Their incessant "chase your dreams and the money will follow" bs has ruined countless lives. If you are advising high school students to major in anything other than STEM or go to school for trades you should be tarred and feathered.

No idea how it is today in public school but during my time, many teachers looked down on trade work and would suggest you do your schoolwork to not become a plumber or electrician.

We just have to accept not every kid is cut out for school and may be more gifted using their hands or solving problems in the field. We should be past the stigma of people that don't have college degrees aren't as valuable to the workforce. I don't even look at education on resumes anymore because I don't care about that. I want someone that wants to work, will do the job and if they have experience already in the field then that's more valuable to our company than where they got drunk for 4 years and crammed for exams.

 

[Ron Mehico]

We moved from a 3rd word country when I was 5, but my sister was 14 and my brother 11. Anyway we ended up in West Virginia and my sister graduated as salutatorian but we all despised WV and my sister wanted to live in the big city and got accepted to NYU and wanted to be a French major with a minor in music. At the time (1993) NYU was like 40k a year just for tuition and my sister would have a full ride to WVU which my parents forced her to apply to. My parents basically told my sister to f*ck off she was going to WVU and majoring in the sciences and they would have the most massive fights and arguments over it until my parents finally said fine. So the day my sister thought she was going to NYU my parents dropped her off at WVU on the way and left.

It really is a crazy story and my sister always told it with anger and regret until she was about 25. She’s now high up in the NIH living in DC and now when she tells the story we laugh about what a dipshit she was and how she would’ve ruined her life being a French major in 300k debt in NYC.

Moral of the story: parents need to grow a bigger sack and actually wisely advise their kids and be assholes sometimes.

 

[gobigbluebell]

. So the day my sister thought she was going to NYU my parents dropped her off at WVU on the way and left.

lmaooo

Moral of the story: American parents need to grow a bigger sack and actually wisely advise their kids.

That's the truth.

 

[DSmith21]

They had all that extra income the last two years yet Inflation only took off with much more recent runaway government spending.

The only thing that really impacts inflation is currency. If we make more, it causes inflation. If we make alot more, it causes alot of inflation.

On paper this seems like a major financial loss but it isn't. Dirty secret was barely anyone paid their student loans even before the pause. Almost everyone under 30 was in default to some degree and they probably have the vast majority of the loan debt. So there was very little projected revenue on the books anyway.

I agree with the first part.

I don't agree that most student loans were destined to be written off. Borrowers that went to decent schools (State U or better) and got good jobs would have eventually paid off their loans. I know a lot of friends from grad school at UK who had sizable loans and all paid them off. These are people across many disciplines (business, law, medical, engineering, etc.). 56% of student loans belong to households with graduate degrees.

Certainly, there were a lot of bad loans related to "Colleges" that gave out virtually worthless degrees. A lot of those loans had already been forgiven though through court settlements and previous rounds of Biden administration forgiveness.

The average student loan debt

The average student loan debt balance is $28,400, but it depends on several factors, including household income, student race, and type of school.

www.businessinsider.com

 

[catlanta33]

We moved from a 3rd word country when I was 5, but my sister was 14 and my brother 11. Anyway we ended up in West Virginia and my sister graduated as salutatorian but we all despised WV and my sister wanted to live in the big city and got accepted to NYU and wanted to be a French major with a minor in music. At the time (1993) NYU was like 40k a year just for tuition and my sister would have a full ride to WVU which my parents forced her to apply to. My parents basically told my sister to f*ck off she was going to WVU and majoring in the sciences and they would have the most massive fights and arguments over it until my parents finally said fine. So the day my sister thought she was going to NYU my parents dropped her off at WVU on the way and left.

It really is a crazy story and my sister always told it with anger and regret until she was about 25. She’s now high up in the NIH living in DC and now when she tells the story we laugh about what a dipshit she was and how she would’ve ruined her life being a French major in 300k debt in NYC.

Moral of the story: parents need to grow a bigger sack and actually wisely advise their kids and be assholes sometimes.

I don't know your parents but they're awesome!

 

[LineSkiCat14]

Oh shit, just realized my wife still has like 20k in federal student loans.

Alright, I kinda like this idea now.

 

[jlynn323]

We moved from a 3rd word country when I was 5, but my sister was 14 and my brother 11. Anyway we ended up in West Virginia and my sister graduated as salutatorian but we all despised WV and my sister wanted to live in the big city and got accepted to NYU and wanted to be a French major with a minor in music. At the time (1993) NYU was like 40k a year just for tuition and my sister would have a full ride to WVU which my parents forced her to apply to. My parents basically told my sister to f*ck off she was going to WVU and majoring in the sciences and they would have the most massive fights and arguments over it until my parents finally said fine. So the day my sister thought she was going to NYU my parents dropped her off at WVU on the way and left.

It really is a crazy story and my sister always told it with anger and regret until she was about 25. She’s now high up in the NIH living in DC and now when she tells the story we laugh about what a dipshit she was and how she would’ve ruined her life being a French major in 300k debt in NYC.

Moral of the story: parents need to grow a bigger sack and actually wisely advise their kids and be assholes sometimes.

Outstanding! My oldest talked about majoring in "Sports Management" and I steered him into "Technology and Applied Design". He still thanks me.

 

[rupp876]

As a college graduate with a hefty student loan balance, I'm all for forgiveness. Expecting an 18-year old kid to know what they want to do for the rest of their lives straight out of high school is a setup for failure. It took me 10 years to figure it out. A lot of changes in majors and different coursework occurred during that time.

So those who did have sense enough to avoid this debt or actually paid their loans off as agreed should now share in paying for your defaulted loans. In reality the cost to the benefactors of this bailout will be much greater in the end as well.

 

[ukalumni00]

No idea how it is today in public school but during my time, many teachers looked down on trade work and would suggest you do your schoolwork to not become a plumber or electrician.

We just have to accept not every kid is cut out for school and may be more gifted using their hands or solving problems in the field. We should be past the stigma of people that don't have college degrees aren't as valuable to the workforce. I don't even look at education on resumes anymore because I don't care about that. I want someone that wants to work, will do the job and if they have experience already in the field then that's more valuable to our company than where they got drunk for 4 years and crammed for exams.

My cousin is barely literate but is a freak of nature when it comes to plumbing. Does basic to complex plumbing work, owns his company and employees 4 other people. Did not want the headaches of a larger company and is living a very comfortable life. Guys like him had/have no business in college but there is a world of opportunities out there for them to fill trades that are desperately needed. Guarantee he is doing much better than some know it all Masters student who is 6 figures in debt to be a professional student or gender studies professor.