The idea that everyone saddled with student loan debt made a bad financial decision is asinine. Graduate school is often a perfectly viable path to financial solvency even if it requires taking on debt.
Is it really the “average person”? Or is it “some people - skewing heavily toward the upper third of the economic ladder.” There’s a part of this, that to me, has the same feel as the standard Republican tax cut that may do tiny things for people on the lower end of the scale, but is a nice gift to the millionaires and multi-millionaires.
As only about 1/3rd of American adults has a college degree, this feels like a really nice gift to a lot of people who don’t really need it, but doesn’t do so much for the many, many many people who really need something. It also does nothing for people who will need to take on massive college debt next year, or the year after.
To the extent that there is a problem*, this feels like the wrong solution.
*that 1/3rd statistic just keeps jumping out at me. Is it that this is a problem that people media/political access tend to have, so it’s more overblown than it should be? Is this framed wrong and college costs are the real problem, not college debt? I don’t know.
OK, but overwhelmingly, people with student loan debt are people who don’t need the help and did make a bad financial decision (to go to grad school, to go to a “prestigious” school they couldn’t afford when the closest state college would have been perfectly fine, etc.) That’s what the numbers show. Again, you WANT it to be a different way where we’re talking about truly poor people who got scammed by fly-by-night for-profit schools, but in fact the data shows that the holders of student debt are overwhelmingly exactly who we think they are. The fact that “overwhelmingly” is not “everyone” is a pointless triviality here.
Could you show me these numbers?
One of the reasons I used the word “feel” so many times is that I haven’t seen the numbers yet. If there is a nice breakdown somewhere of household student loan debt to household income, I’d like to see that. That could significantly influence my thought.
It’s not just current household income, though, but potential household income. I don’t think I need to post a cite that people with college degrees make more money.
It should not be the only thing done, but, if it is the only thing doable, then that doesn’t mean that it shouldn’t be.
I’ve only got 2 years left on my student loans. I wouldn’t really mind shaving that off, it would give me a few hundred dollars more a month to spend in the economy or invest in my business. But I don’t really need it.
Some have said that you should only get it paid off if you didn’t complete your degree, as one of those, once again, I don’t really object, but I also don’t really need it. I do think that that policy could create an incentive to not worry as much about completing the degree that you started. I’ve a mixed minds on that. I stuck out a degree I didn’t think I would be able to finish specifically because I was worried about having a whole bunch of debt with nothing to show for it, but, that meant that I ended up throwing more good money after bad, going into more debt than I would have had I thrown in the towel earlier.
@iiandyiiii, I think brought up the point that many people barely pay anything if they are below a certain income threshold. Having been under that threshold, I can say that it’s not really that great a thing. As I found ways of making more money, I found that my payments went up faster than my income. There was a decent range in there that I actually had less disposable income the more I made. So, having student debts on forbearance can act as a disincentive to find lucrative areas of employment.
Also, having that debt affects your credit. You may not be paying much if anything on it, but its still there. It makes it much harder to run any other aspect of your life, as you pay much higher interest on car loans or other credit instruments.
It means that they also stick around forever. Keeping you in that situation where you have a much harder time breaking out of poverty, and making it a more or less permanent fixture over your head is a bad thing, IMHO.
My personal suggestion would be to have student loans paid off, but you pay a higher tax bracket for 10 years. That would be how it would work going forward, for those who are currently paying on them, it would be prorated based on how much you have paid on them so far.
That way, those who get the better jobs because of student loans are paying for them, as well as paying for the next generation of students. But people are not stuck with loans that they are not able to pay.
I say this knowing that, where I am now financially, I would probably end up paying more in the extra taxes than I would have left to pay on my loans. But also that, had that been the case, I would have been able to get to where I am now much more rapidly.
I agree with the sentiment that college loan forgiveness does nothing toward addressing the core problem - college is too damn expensive. Just giving people money that they just in-turn give to colleges and universities only encourages higher tuition costs. Same as with health care costs - giving people money to pay for something does not address the core problem there, either - health care is too damn expensive.
I do not know what the answer is, however, since we live in a free market economy. If someone is willing to take the risk of a college loan to attain the education they desire, there will always be a lender available. Schools charge what the market can bear.
I know, right? It’s like, if we get rid of asbestos, then all of those people who died from mesothelioma did it for nothing.
Ironically, the creation of the student loan program created more problems than it solved. Once colleges and universities saw that students had access to almost unlimited government funds, tuition costs skyrocketed. Before student loans, it was possible for a lot of people to work their way through college. Now, if you had a job that paid enough for you to work your way through college, you wouldn’t need to go in the first place. You’d be all set.
This from Google search:
In 1975 the average cost was $7,833 (in 2015 dollars ) including tuition, fees, and living expenses.
In looking just at schools ranked in the National Universities category, for example, the average cost of tuition and fees for the 2020 –2021 school year was $41,411 at private colleges , $11,171 for state residents at public colleges and $26,809 for out-of-state students at state schools
On average, yes. I mean, not the richest of the rich. The 0.1% doesn’t take out loans for college, they just pay for it outright. But largely, people who have gone to college are doing better on average than others, and many of them have student loans.
Yes, they’re doing better on average. They’re not rich people. Everyone – one might say the overwhelming number – under discussion here is a working person. A disproportionate number of them, in terms of dollars of debt per capita, are upper middle class and affluent working people, compared to low income working people, because there is a correlation between education and income.
But that doesn’t make them the rich. And while it means it’s a very inefficient way to directly provide a stimulus during the pandemic, it does not mean that it’s a “trickle down” policy.
I think that the answer is to treat it the same way we treat k-12 currently. A basic level that will get you a degree that makes you able to join the modern workforce. If you want to go to a private school, then you can pay or take out loans to do so, but a public education should be available to everyone.
As I’ve stated in this thread, I am opposed to universal student loan forgiveness. I believe student loan forgiveness would benefit the professional class who are currently able to make their loan payments way more than it would benefit the poor. I would support loan forgiveness for the poor, however as I stated upthread, it probably wouldn’t make any difference in their cash flow.
I also believe that college is generally a good choice. Conversations about student debt usually devolve into these assumptions that college is a bad investment, and for most people, it really isn’t, even if they’re studying humanities or whatever else conservatives believe is not worthwhile. Even elite schools confer a benefit, especially if you plan to stay local, in terms of what opportunities are opened up after you graduate. When you go to college or graduate school, you have to do a mental calculus that includes not only income and debt burden but employability and reputation. No matter what decision you make, there is always the possibility that unforseen events will throw a wrench in things. That happened to my husband when a four year program became six years, and is part of the reason we have so much debt.
The analogy isn’t coherent. Do you not see the difference between using government programs to guarantee a minimum standard for quality of life (e.g. “people should be housed, not starve to death, and not get cancer from the ordinary course of their employment”) and a voluntary stimulus that is designed specifically to benefit “upper middle class professionals who made the exact kinds of bad financial decisions that Brooklyn podcasters with Elizabeth Warren bumper stickers tend to make”?
I don’t think there should be a blanket forgiveness of student loan debt. Many people who have high debt did so because they made choices like going to an expensive school, not taking advanced/AP classes in HS, not trying for scholarships, not working while in school, loose spending while a student, and other things like that. The student who studied hard, scrimped and saved, went to a state school, etc. made many sacrifices to have a lower debt load. I think it would be massively unfair to have a blanket forgiveness of debt for the students who got a more luxury education through loans.
One thing that I think could work is to have some partial loan forgiveness as part of bankruptcy proceedings. If someone’s loan is totally unmanageable, they can go through bankruptcy and get some of it forgiven (which is not normally the case). This way there is a significant penalty to getting loan forgiveness and people would only do so after careful consideration of the downsides.
I mean, I did all of these things and still ended up with tens of thousands of dollars in loans. I went to a local state college (not prestigious), I took all the available honors courses at my high school, I applied for scholarships (and even got a couple), I worked part-time during school and full-time during Summer. The money I saved up paid for books and the tuition remainder not covered by loans/scholarships.
You can do everything right and school is still not cheap. I could’ve gone to community college for even less money but the one nearby didn’t offer 4-year degrees.
I don’t know if blanket loan forgiveness is the right answer, but I don’t know where the line should be drawn if we’re going to set criteria for who qualifies.
ETA: This was meant to be a reply to @filmore above.
Definitely college is expensive and most people will graduate with debt, but the key is to make it a manageable amount of debt. A debt of $50k is much more manageable than a $150k debt is.
Student loan forgiveness administered in uniform fashion, of course, would not be the chief and foremost example of unfairness affecting the material conditions of the lives of Americans. Every other policy decision is not a straightforward binary decision, where we say: might this be unfair to someone who worked hard? It might?! Well, it’s right out.
I am not sure if discharging student debt, which requires a large government expense item, is something that can be done without Congressional approval.
I remember the resistance to Medicare back in the 60s. It sounded much the same. Some people planned their lives better, and those grasshoppers shouldn’t be rewarded for pissing away their substance.
You know, I went to college debt free. It took me a full decade to get a bachelor’s degree; taking one course here and two courses there, once in a while three if it was an easy class all the while working full time paying my mortgage and raising two children, and you know how I feel about having to pay taxes to pay off the student loans of a bunch of young people? Pretty darned grateful to be able to. I’m glad to do it.
My life has been easier because of the contributions of the people who came before me, and I expect to contribute to the people who will be here after I’m gone.