Student loan forgiveness: A poll

Politics & Elections
61

Then tax the businesses that are demanding these degrees.

Ultimately, the entire point of an education system is to produce workers with the qualifications for the jobs that are needed.

If a company demands that you have a degree, then make them pay for it. Tax them based on the requirements that they ask for to get a job with them.

Then, either companies stop demanding inflated degrees to get your foot in the door, or they pay for the education that they say that they require.

The current system puts the burden of qualifying for employment entirely on the student/prospective employee. The burden should be either on society in general, or on the businesses that benefit.

62

To be fair I should be more clear…

IIRC the company would match 100% of your contribution to their own stock, up to 20% of your 401(k) and a 50% match for the other 80% into some funds they offered.

It’s been a while but that’s how I remember it.

63

This is a great idea but I’d bet companies would just incorporate in some off-shore haven and give the finger to the US.

64

They can do that anyway.

But if they want to employ US workers, then they would have to pay it.

Not saying that this is the best solution, but it does seem as though in this case, the businesses are the customers, and they are forcing the product to pay for itself. That seems a rather unfair arrangement, IMHO.

65

Anyone who bothered punching

percentage of companies that offer their own stick in 401k

into Google (and you don’t even have to spell it right!) is in no need of anecdotes, because they already know that only a minority (albeit a significant one) of companies offer their own stock. And that’s across both 401ks and ESPPs.

One more minute of poking around shows it’s 19% for 401ks:

Carry on

66

We do need marine biologists, as evidenced by the job even existing, and by newly minted ones getting jobs in the field. The current low compensation for marine biologists signals how strong that need is relative to the supply. Subsidizing the path to low-paying careers will exacerbate that imbalance.

And more people chasing high-paying careers can depress wages in those fields. My friend, a chemical engineering professor, was complaining that the (nominal) starting wages for his students hadn’t budged in a decade. I pointed out that the number of ChemEs that schools were pumping out had massively increased relative to population growth. So this was hardly a surprise.

Although I will gently remind readers that the purpose of a degree in X is not necessarily a career in X. As I’ve pointed out elsewhere, nobody (AFAIK) gets a degree in consulting, yet here I am.

67

I think that there are some significant market distortions in that, as many of the jobs available are for the government, and the taxpayers do not always approve of paying an appropriate wage. In the private sector, if there are not enough people willing to do a job at a particular salary, the wage goes up until there are. In the government sector, if there are not enough people willing to do a job at a particular salary, that job goes unfilled.

Most of the world is covered in ocean, we are facing collapse of fishing, destruction of natural habitats, ocean warming and acidification, and a host of other issues that will need trained people to deal with.

And this is very true as well. I know people that went to college to get a degree in a high paying field, and by the time they graduated, there were not many positions left that paid well. This is another reason why the market cannot be counted on to provide the proper incentives to fill the jobs that are needed.

I mentioned that as well in the post that you replied to.

68

I am evidence that this is not true. Options include competitive grants or contracting out work to organizations that pay market rates. I have collected more than a few paychecks via both.

This is a perfect example of the market signaling a change in demand.

69

Or supply, obviously. Since pretty much zero detail was supplied about this supposed anecdote, it’s hard to say.

70

I’m not sure that I entirely follow. Your explanation as to how to fill underpaying government jobs is to contract them out privately?

I know of several county and municipal positions locally that have been open for years, as there is no one who is qualified for them who is willing to do them for the offered pay.

Except that there is a 4-8+ year lag time between when the market signals a change in demand, and the time that the product is ready for that market.

Which means that you have demand skyrocket, as there are not nearly enough people qualified for a job, then lots and lots of people go to school to qualify for that job since it pays so well, and by the time they get out, demand has plummeted and there is a glut in the supply, diminishing wages substantially from what they were when the student began preparing themself for the jobs that were in demand.

71

I haven’t read the whole thread, but to answer the poll, Other: No general forgiveness, but student loans should be removable by bankruptcy.

The whole school and loan-industry complex needs to feel more consequences for unreasonable pricing. Let students get loan relief through bankruptcy; that’s our society’s mechanism for fairly forgiving debts. Let the loan industry feel pain for only getting pennies on the dollar from too-large loans to students; the goal is banks will actually face risks and evaluate them. Let the schools feel pain when fewer students apply because there’s limits on the loans they can get; state schools should be getting most of their revenue from the state rather than students anyway.

72

That’s not my explanation of “how to”, that’s my explanation of what the federal government does, right now, to pay for many scientists and engineers. And it’s my explanation for why you are incorrect to claim that “that job goes unfilled”; that specific position may go unfilled, but there are plenty of other ways for the job to get done.

Assuming you can actually back this up as something that actually happens, so what? It’s not like some third party is going to have a better idea of what careers we “need”. Although if you have some proposal for centralized planning of college majors or careers, I’m always up for a good chuckle. But as we both acknowledged, the purpose of a degree in X is not necessarily preparation for a career in X. Do something else.

73

I’m not sure that we are on the same page here. I am talking about jobs that need to be done, since the work is important, but that taxpayers are not willing to pay for, since they don’t think that the work is important. If someone doesn’t have student loans to pay for, then they are more able to take a job that doesn’t pay as well as it should, for how important it actually is.

And yes, I do have some acquaintances that live from grant to grant, and they absolutely love the lack of job security and the spending a significant amount of their time filling out grant applications.

I did not say anything about such an idea. I just pointed out that your idea of a perfect market has some flaws. You even pointed out your chemical engineering professor anecdote that is entirely in line with what I have said here.

You are welcome to chuckle all you want, but that is not even close to anything I have proposed. It is other posters, who I am disagreeing with, in this thread that think that only STEM fields should be subsidized. Kindly direct your chuckles at them, thankyouverymuch.

My point is that removing the cost of education from the equation actually makes for a much more perfect market. People can do what they think they will be good at, what they will enjoy, what they think it important, and what they think will support and compensate them for their time and skills without having to factor in the cost of paying back student loans.

I agree with this. However, that something else may not pay as well as what they were originally taking loans out for. If I think that I can get a really good paying job with a degree, then I am justified in taking out substantial loans to make myself qualified for it. If it turns out that I have to take a job that pays significantly less, then those loans may not be something that end up being a good deal for me.

It is true that I am basing this almost entirely on the anecdotes told to me by friends and acquaintances who do hold college degrees, and so have little to cite for it(even though you apparently have heard the exact same anecdotes), but I’m not sure I appreciate the implications that you have made here, so as long as that tone continues, I think I am done with this particular back and forth.

74

I share some of the long-term concerns people have with student loan forgiveness, but in the current crisis we’re in I think unless we massively step up the UBI payments, we’re going to need other means to try to get a lot of people out of a debt trap and student loan forgiveness is one of the politically easiest things to do. At the end of the day, there are bigger long-term concerns if enough Americans are permanently stuck in debt than if student debt forgiveness has negative consequences for people in the future, or nonborrowers now.

I realize it seems unfair to people who don’t have student debt, but the quantitative easing going on right now could be construed as unfair to people who don’t directly benefit from bank liquidity and a strong stock market. I also think it seems unfair more than it is in this case. I have no student debt, but I don’t think it helps me at this point to keep tons of people stuck in a debt trap. I don’t think student loan forgiveness is actually going to be me subsidizing student debt - I’m already doing that now because a large percentage of that debt isn’t getting paid back one way or another. The most significant effect student debt forgiveness would have on me is that more people around me in our society would be able to buy homes and raise the value of my home, start businesses that find ways to improve my life and reinvest in my community and keep systems like health insurance afloat.

75

I haven’t read up on why it was that student loans were exempted from bankruptcy, but I would imagine that it was a problem that a student could get an education by acquiring lots of debt, then as soon as they get out of college and have no money, just declare bankruptcy and start fresh. The consequence would be that no one would want to loan students money in that kind of a situation.

How do we address that?

76

I know this is off-topic but I’ve read about and heard about companies that have their own portfolio, which seems foreign to me. Every 401K program I’ve had allowed me to invest in your own portfolio.

77

And maybe that’s not such a bad thing. It would mean that the market would shift away from the subsidized growth of the higher education cartel. Schools would invest more in students who had a higher chance of succeeding.

78

If it’s a good thing that fewer people get the chance to go to college, sure.

Upper middle class and up wouldn’t be affected, so it’s good for those who are already well off. The student isn’t always the one that takes on debt, the parents often do, and they actually have assets, so they wouldn’t be so cavalier about discharging their debts.

So, it’s likely that we would be able to fill most of the jobs that we need filled. We just would have decreased upward mobility. Depends on what your priorities are.

79

Part of the reason I’m against blanket loan forgiveness is that it reduces the need for students to consider costs for their education. Lots of students get a pricey college education not for the education, but because they choose their dream college, the campus is beautiful, the dorms are renovated, the sport programs, etc. The cost is inflated because of these luxury attributes rather than being necessary for the degree. It’s like the difference between needing a car and getting a $50k new car versus a $10k used one. If serious cost consideration was a primary part of the college selection process, students would be more budget minded and graduate with a more manageable amount of debt.

I still think the debt should be dischargeable in bankruptcy, but the bar should be high and it should be some of the last debt discharged. There needs to be some negative consequences to taking on excessive debt to motivate students to seriously consider budgetary concerns when picking a school and their ability to repay the debt after they graduate.

80

Note that bankruptcy doesn’t generally wipe debts down to zero. Instead, the court reduces the debt by some percentage and sets up a payment plan. The court looks not just at current income, but also potential future income. It’s a tough process on the person going bankrupt. (I’ll also note that the bankruptcy process was made more strict a few years and that’s something that should probably be looked at again.)

The banks should then take the risks into account when they give the loans. That means the banks will have to consider the educational program they’re lending for and the student’s potential to repay the loan after completing their education. Loan amounts will go down and interest rates will go up, because right now banks face almost no risks, even if they loan huge amounts with little potential to repay.