Student loan forgiveness is current hot topic in American politics. President Biden announced the suspension of student loan and interest payments until October 2021. I assume that borrowers can continue to make payments if they should so desire. Some in Congress, and elsewhere, would like to see a more aggressive loan forgiveness plan. President Biden campaigned on forgiving up to $10,000.
Senators Warren and Sanders are calling for an elimination of student debt up to $50,000.
The problem with loan forgiveness is that it makes everyone who dutifully paid off their student loan look like a sap. Don’t pay and just wait for the Government to forgive it sounds like rewarding bad behavior. If you borrow money, any money, you should feel obligated to pay it back. Not sure why students should be exempt from that. I think free higher education is a better solution than forgiving loans.
Wouldn’t enacting free education have the same effect on those that just graduated with huge amounts of loans? It seems to me that this way of thinking would prevent us from enacting any legislation that would make life better for anyone because someone, somewhere didn’t get to take advantage of the new law? Doesn’t this logic just lock us in to this exact status quo essentially forever?
Yeah, I pretty much agree with this, not that I feel like a sap for paying mine off or that someone’s a chump if they fall into arrears - things happen.
I wouldn’t have an issue with more flexibility for borrowers who are going through some sort of economic hardship, and I think all debts should be dischargeable through the bankruptcy code. But I don’t know if I’m down with just writing off debt – that’s creating moral hazard.
It would also have the effect of forcing some people who never went to college to subsidize the expenses of those who did.
It would essentially be raising taxes on some $8/hour fast food worker who only has a GED to pay for the loans of some wealthy Harvardite or Yalie who did go to college.
I generally sympathize with students and the high costs they face in the US. I like the idea of forgiveness, but not a specific amount. This is because:
it is better if students responsibly pay off loans, if fair and able
do not want to penalize responsibility or encourage game playing
institutions would likely raise fees, if general
better that more help goes to qualified people in most need of help
better to charge no interest and have generous but limited forgiveness
The problem isn’t that the debts can’t be rejiggered to help if someone has trouble paying. The problem is you can never, ever, ever escape this debt. It can literally follow you your whole life. You can actually thank our new president for that. In the late 70s and early 80s Biden rolled back bankruptcy protections for student debt.
Now we have a generation of kids living with mom and dad. They can’t afford to buy a home of their own and start families. Making school free in the future is fine and worth doing but it does not help kids saddled with massive debt right when they step out of school and have a hard time finding a job and getting going in life.
I’m thinking more about the people on the other end of this. What about the potential college students who looked at the huge financial burden they would be assuming by borrowing money to attend college and decided to forego college?
I certainly agree that college tuitions have risen far too high and it’s a problem we need to fix. But I’m not convinced that debt forgiveness is the best solution.
I’d rather see the money go forward to increase the amounts of grants available than go backwards. And I’d much rather see the money go into trade schools, community colleges, and getting more kids to graduate from high school with skills and a future, including increasing the amount of high school counseling available towards post high school education (i.e. the kids who didn’t get coaching and end up at a for profit school to learn video game design). If we do go backwards, I’d like to see loans only get repaid for non-profit accredited schools, and only the federally subsidized ones up to the amount you can take out over an undergrad degree. I really don’t want to see upper middle class families (like mine) benefit - if you couldn’t manage to save enough money for college for your kids, while buying new SUVs every few years, you are a bad parent and deserve to have your kids living with you for the rest of your lives, nor do I want to see for profit schools benefit.
I agree that’s applicable in many cases. But I feel the people who paid off their debts showed unusual foresight and responsibility. Those are traits we should be rewarding.
Forgiving the students who haven’t paid off their debt while ignoring those who have is sending a bad message about responsibility. We’re telling people that ignoring your problems and putting things off can work.
You seem to be implying that the only people with student loan debt are the people not paying them. There’s plenty of people out their burden by their student loans who pay them every month.
Then loosen the bankruptcy laws back to what they used to be before Biden fucked it up for students.
For those who made bad decisions they get to go to court and have their debts wiped and deal with the consequences of bankruptcy. That’s not great for them but they will “pay a price” as you seem to want and they can get out from under their debt and get back on their feet faster than they can in the current system.
The government is still the one left holding the bad debt too. Same as loan forgiveness.
The downside is you are still hobbling a generation from being able to buy homes and start families because their debt is fucked.
(Just an idea…I have not thought that one through yet.)
Wait. I went to an accredited state university, and got a student loan from a respected financial institution through a federal program. Who screwed me over? The university, the bank, or the government?
The government covered student loans which meant banks could loan willy-nilly with no risk and since money was cheap universities raised prices into the stratosphere since the kids could get huge loans.
You tell me.
EDIT: To me the mistake was the government not making the loans directly. Instead they let banks make the loans, let banks collect the profit and if the loan went bad the government would cover it. Colleges had every reason to goose prices and banks loved making those loans. Also, IIRC, debt collection was also privatized by the government so banks win there too.
I was contrasting the people who have paid off their debt with the people who have not. I understand that the fact that people haven’t paid off their debt doesn’t mean they aren’t making significant efforts to do so.
