Standalone student debt forgiveness is a terrible policy

Standalone student debt forgiveness is a terrible policy, and I can’t get my head around why intelligent people are supporting it.

For reference, Chuck Schumer suggests Biden could eliminate student debt via executive order. Note that this is NOT part of a comprehensive plan to make college more affordable, so after this executive order prospective college students would still need to take on enormous amounts of debt. It would do nothing to solve the problem.

Proponents talk about the boost to the economy, but of course borrowing money from future taxpayers and handing it out to Americans to spend will boost the economy. The question nobody seems to be asking is, Why should the money we borrow from future taxpayers be given directly to people with college degrees, and therefore a higher earning potential than their less educated peers? Why is a handout to the middle class a better way to boost the economy than, say, giving $50k to everyone living below the poverty line? Especially during a pandemic where people without degrees are more likely to be unemployed?

It’s a solution in search of a problem, and will leave many actual problems unsolved.

It also means that those who did not borrow, but rather, saved and scrimped and worked to pay through college, now bore those sacrifices needlessly. They could have had a much easier time if they’d known debt forgiveness was coming.

It is entirely because the president can do it by executive order. The best defense of this I read was “Sure, forgiving student debt is not the best use of money, but will not forgiving student debt bring McConnell to the table for a better use of money? If not, then it doesn’t matter.”

Just giving everyone $x (or giving it to everyone with income below a threshold, or wealth below a threshold, or whatever other means-testing you might want) is 100% better in many ways. But it’s not on the table.

Why does anything need to be on the table? If it’s a bad policy why not just do nothing and not go deeper in debt? Then if/when Democrats have power they won’t have this additional debt hampering their efforts.

I think you answered that here.

I’m not middle class but I’m also not below the poverty line. I’m working class with student loans, like a lot of people. So, the student debt thing would help me, but the cash to the poverty wouldn’t. Why help out those below the poverty line and not the working poor who make “too much” to really benefit from most programs for helping the poor. I guess the short answer is none of these policies are really “fair.” maybe the closest thing to being fair is just giving everyone a certain amount of money, like the “stimulus checks.” Even those have a cutoff point but at least it’s a fairly high income.

Ahh, the debt matters again, must be a Democrat President.

Well someone has to deal with it and Democrats seem to be the only adults in the room.

My husband and I between us started with $175,000 in student loan debt. We’ve got it down to about $125,000 now. Since we’ve been focusing on his debt (higher interest rates) my debt has gone into negative amortization. The idea that we could have “scrimped and saved” through grad school is laughable. My husband was in a Ph.D program and my masters program forbade anyone from working on top of coursework and internship. The only real argument you could make is that I should have gone to a less expensive school, but the greatest burden upon us was not tuition but cost of living. New Jersey ain’t cheap.

This is all to demonstrate that we would benefit a lot from student loan forgiveness.

We both agree it’s a terrible idea that solves nothing. I wouldn’t cry if $100,000 of our debt was suddenly wiped away, but we aren’t the people who need the most help right now. We manage. If all loans are suddenly forgiven, what does that mean for young kids taking out future loans? Will they assume their debt will also be forgiven? I’m a Democrat but it gets on my nerves how often Democrats are like, “Let’s do this hugely expensive and unrealistic thing! We’ll find the money somehow!”

I would support debt forgiveness for people who didn’t complete their degree or who lived in poverty. Some limited plan to make it easier for certain people to move on. But universal debt forgiveness? No. How about, I dunno, making school more affordable?

I also think it poor policy. But it is one of the few things Biden can do without McConnell’s agreement.

Billionaire Robert E. Smith paid off the student debt for every graduating senior at Morehouse U (a historically black school) last spring. That was great for the class of 2020, but didn’t do a thing for those of 2021 or 2019 or any other. The student debt problem is serious, but a one-time gesture doesn’t do a thing for it. It is more a gesture than a policy.

Also, for many people, due to the student loan repayment options for federal loans, having debt is almost meaningless at this point. If you make below a certain income you can get on a plan that enables you to pay a pittance or nothing. (We’re in the REPAYE plan which calculates the payment as a proportion of income.) You go into negative amortization and you have debt for life (or it’s forgiven after 20 years according to current law), but it doesn’t affect your monthly expenses in any meaningful way. A lot of people take on debt with no intention of repaying it. For a solidly middle class family it might make a lot more sense to prioritize investments over repaying loans.

I’m not saying that’s a good thing, it’s just the way things are. We’ve given it the old college try, repaying $50, 000 in five years, but at this point, with a baby and childcare expenses, it’s either debt or retirement (and right now, due to COVID it’s either debt or rent. Loan payment suspension ends in January.)

The people loan forgiveness will help the most in terms of cash flow are middle class professionals like us who are shelling out a significant amount every month and who can afford to do so. For many low-income people, they will go from paying nothing every month to paying… nothing every month. This is not a policy that helps the poor.

Exactly this. Anything that gets money to people is good right now, when the economy is barely moving. This might be a crappy way to do it, but still better than nothing if that’s the alternative.

I think the argument that the democrats lack the power of the purse (re McConnel) is probably the thread winner here, but if they did somehow have the ability to actually pass a bill, why not simply apply a $50,000 or so grant to all US citizens that can be used to pay off student debt, pay for future debt accrued in pursuit of a degree, or operate as a refund against a paid for degree? You could index it to (college-tuition) inflation.

Look, it’s faaaar less important to keep Billy-Silver-Spoon from receiving benefits than it is to help the struggling middle/lower class right now. So, yeah, Billy-Silver-Spoon gets 50 big ones to throw on his pile of big ones from daddy, whatever, but Timmy-No-Chance will at least have some darn boots to lift himself up with.

And, doing it this way MASSIVELY discourages people from becoming permanent students living off the government’s teet, pursuing Underwater Basket Weaving degrees for $500,000, or doing anything that qualifies under the other piles of right wing criticisms of the current college system. You still get all the “personal responsibility” of choosing a degree worth having and getting it in a reasonable time without the need to indenture yourself to some fatcat at Wells Fargo…

Personally, back in the day I saved, scrimped, worked and borrowed to pay through the part of my college expenses that was not covered by what my parents saved, scrimped and worked to contribute. And then I paid off my own student debt after graduation by saving, scrimping and working some more.

And I don’t mind in the least if the student-debt-holders of today get some debt relief that I didn’t get. I’m all for it, actually, although I agree that it’s fundamentally unsatisfactory as a solution to the structural problems of spiraling higher education costs.

But if it’s a form of economic stimulus that we can actually implement in these pinching days of crisis, that sounds to me like a good argument in its favor.

It just shoudl be forgivable in Bankruptcy, with proper limitations, like at least ten years old.

Of if fraud occured in the lending.

Need to fund needless wars across the world at the cost of trillions? No problem. Trillions in tax cuts for the rich and corporations? No problems. Trillions for bailouts of failing corporations? Of course.

Money to actually make life better for the average person in the US? Where will we get the money?! That’s absurd! We’re broke!

My wife and I were both very fortunate, in that our families either paid for our undergrad education, or we happened to get a decently sized inheritence to cover the bill.

We’ve always managed to pay for higher education beyond that either up front each year, or by taking a loan and repaying it in full that year.

We recognize that not everyone is nearly as fortunate as we have been, and that just a few small changes in circumstance could have made things much, much harder for us. We probably wouldn’t be homeowners today if we had been saddled with that much debt.

I’m still for student debt forgiveness, despite the fact that it would do nothing for me or my family.

These are the problems I know of that should be fixed. Not sure if there are refinancing issues but those should be taken care of also. I don’t see any reason to forgive the loans for people who obtained the good paying jobs that the loans were intended to provide.

I’ve always been fascinated by this reasoning. It is a great hindrance to any hope of making progress. Yes, it is unfortunate that such programs were not put into place earlier (people should stop voting Republican, since they’re the main reason why society cannot have nice things), but why not remedy the situation as best as possible in the here and now? In other words, why not make progress?

This same thing happened in World of Warcraft when they lowered the mount cost from 1000 gold (I think?) to 40 gold (I think). People howled! I fought hard to save up 1000 gold! I want a 960 gold refund! Outrage! Outrage!

The whole thought process is mystifying to me. I got screwed by the system; therefore, the system should be screwing people in perpetuity!

2+2=4. I think you’ve identified a cause and effect here.