# US Government may forgive up to $3.5 Billion in student loans **URL:** \ **Category:** Great Debates\ **Created:** [June 9, 2015, 3:43pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067 "2015-06-09T15:43:41Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [June 10, 2015, 7:42pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/41 "2015-06-10T19:42:47Z")
> [@Really\_Not\_All\_That\_Bright](#): > > What do you mean, “legalizing the use of intelligence tests”? The SAT I is essentially an IQ test and it’s not illegal to use it in college admissions. I meant for job interviews. A college degree is a signal to employers that you are smart and conscientious. If IQ tests were legalized for job interviews then a few companies would use them instead of college degree requirements to filter applicants. This would lead to a non-college route to a good job for some people and provide downward pressure on the cost of tuition. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [June 10, 2015, 8:21pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/42 "2015-06-10T20:21:21Z")
The use of intelligence tests _is_ legal if it can be reasonably tied to the requirements of the job. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [June 11, 2015, 4:24pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/43 "2015-06-11T16:24:29Z")
> [@Really\_Not\_All\_That\_Bright](#): > > The use of intelligence tests _is_ legal if it can be reasonably tied to the requirements of the job. It has to be more than just intelligent people do better in this job, the contents of the actual test have to be related to the job being done. For example a fire company can not give a written test on firefighting because that does not measure exactly how well a person can put out fires. So unless job skills can be directly tested using a written test, these types of test are effectively banned. ---
**Author:** ![Diceman](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Diceman](https://boards.straightdope.com/u/Diceman)\ **Post date:** [June 11, 2015, 4:38pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/44 "2015-06-11T16:38:44Z")
> [@Bone](#): > > I actually think student loans/tuition will be the next bubble that impacts the overall US economy. I don’t know that it will be the _next_ bubble, but it’s pretty much unavoidable that a student loan bubble is coming. The cost of higher education has been rising much faster than inflation for years, and college students are coming out with ever-higher debt loads. Plus, wage growth has been pretty stagnent in recent years. Shit, even doctors are starting to have trouble paying off their loans. That’s why there’s a shortage of general practitioners: they don’t earn enough money! ---
**Author:** ![Ibn\_Warraq](https://avatars.discourse-cdn.com/v4/letter/i/e19b73/32.png) [@Ibn\_Warraq](https://boards.straightdope.com/u/Ibn_Warraq)\ **Post date:** [June 11, 2015, 6:22pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/45 "2015-06-11T18:22:24Z")
I’ll confess in my cynical moments I think of student loans as the solution to a problem it created. The purpose of student loans was to make college more affordable but what it really did was be the main spur for tuition inflation. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [June 11, 2015, 6:49pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/46 "2015-06-11T18:49:31Z")
> [@Ibn\_Warraq](#): > > I’ll confess in my cynical moments I think of student loans as the solution to a problem it created. > > The purpose of student loans was to make college more affordable but what it really did was be the main spur for tuition inflation. This isn’t really in dispute. Essentially the ease of access to student loans is inflationary to the price of tuition just like increasing the money supply can be inflationary. The magnitudes are different of course. If people clamored for increasing the money supply with the same fervor as increasing student loans I think people would decry it as having the potential for hyper inflation. Instead, students get saddled with more and more debt and the degrees become less valuable. I just hope it collapses and re-adjusts itself before I have to send my kids through college. This will not happen as long as the government props up student loans. Maybe all the student loans can be securitized, and then sold in traunches next. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [June 11, 2015, 7:10pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/47 "2015-06-11T19:10:46Z")
That doesn’t really follow, though. If the supply of degrees was limited, you would expect to see this type of tuition inflation, but it isn’t. There are about a zillion colleges and unversities, most of which are not selective. ---
**Author:** ![Lance\_Turbo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lance_turbo/32/6156_2.png) [@Lance\_Turbo](https://boards.straightdope.com/u/Lance_Turbo)\ **Post date:** [June 11, 2015, 7:23pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/48 "2015-06-11T19:23:32Z")
> [@puddleglum](#): > > It has to be more than just intelligent people do better in this job, the contents of the actual test have to be related to the job being done. For example a fire company can not give a written test on firefighting because that does not measure exactly how well a person can put out fires. So unless job skills can be directly tested using a written test, these types of test are effectively banned. I’m sure I’m just misunderstanding what you’re trying to say, but [firefighter exams exist](http://www.nyc.gov/html/dcas/downloads/pdf/noes/201202000000.pdf). ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [June 11, 2015, 7:29pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/49 "2015-06-11T19:29:05Z")
> [@Really\_Not\_All\_That\_Bright](#): > > That doesn’t really follow, though. If the supply of degrees was limited, you would expect to see this type of tuition inflation, but it isn’t. There are about a zillion colleges and unversities, most of which are not selective. Inflation drives the top ranked schools. 2nd tier schools try to keep their costs close to the top, as buyers often mistake price for quality. The for-profit schools jump in and just charge as much as the market will bear, helping people borrow the maximum. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [June 11, 2015, 7:31pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/50 "2015-06-11T19:31:18Z")
The 1st- and 2nd-tier schools are a relatively small part of the pie. How do you explain inflation at all the _other_ schools? ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [June 11, 2015, 7:42pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/51 "2015-06-11T19:42:41Z")
> [@Really\_Not\_All\_That\_Bright](#): > > The 1st- and 2nd-tier schools are a relatively small part of the pie. How do you explain inflation at all the _other_ schools? Schools will raise tuition to what the market will bear. Increased availability of student loans increase the price that the market will bear. Just like raising minimum wage has down stream impact to those that are making above minimum wage. I’m not sure if you’re disputing this. Availability of student loans historically has been overall positive I think. Some folks who wouldn’t otherwise be able to attend higher education were able to do so. But it has always been a tradeoff - increased attendence at higher education for the cost of increasing the overall price. When the price increases, at some point those that could previously afford tuition without loans will no longer be able to do so. Then nearly everyone has loans and what have we bought? The people on the fringe previously, who could afford tuition without loans but just barely, the middle to upper middle class folks, those are the ones that get squeezed by the inflation caused by student loans. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [June 11, 2015, 8:14pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/52 "2015-06-11T20:14:42Z")
> [@Lance\_Turbo](#): > > I’m sure I’m just misunderstanding what you’re trying to say, but [firefighter exams exist](http://www.nyc.gov/html/dcas/downloads/pdf/noes/201202000000.pdf). The firefighter exam used by NYC was ruled intentionally discriminatory and NYC settled the lawsuit for[98 million dollars.](http://www.nydailynews.com/new-york/city-pay-98-million-fdny-discrimination-case-article-1.1725702) ---
**Author:** ![Lance\_Turbo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lance_turbo/32/6156_2.png) [@Lance\_Turbo](https://boards.straightdope.com/u/Lance_Turbo)\ **Post date:** [June 11, 2015, 10:22pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/53 "2015-06-11T22:22:55Z")
I don’t see anything that says they’re not going to give an exam in the future, only that an exam they have given in the past was discriminatory. ---
**Author:** ![Lance\_Turbo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lance_turbo/32/6156_2.png) [@Lance\_Turbo](https://boards.straightdope.com/u/Lance_Turbo)\ **Post date:** [June 11, 2015, 10:32pm UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/54 "2015-06-11T22:32:55Z")
That’s beside the point. [Firefighter exams exist](http://www.joinlafd.org/writtentestprep.html). Besides, who cares. What I’m really trying to understand is why you think giving tests is effectively banned. Two personal anecdotes. Apply to Dish and they will give you the [Wonderlic test](http://en.wikipedia.org/wiki/Wonderlic_test). And I was involved in some hiring at my old job. The position required knowledge of probability, statistics, and combinatorics. We gave candidates a written test on probability, statistics, and combinatorics. What exactly do you think is effectively banned and how would you fix it? ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [June 12, 2015, 12:23am UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/55 "2015-06-12T00:23:23Z")
I believe it is written in to the language of student loan contracts that loans will be forgiven in certain circumstances, including if the college closes suddenly. I wouldn’t be surprised if a loss of accreditation is accounted for as well. The government makes a profit overall from student loans (not to mention the increased tax dollars a more qualified population can produce), so I don’t see a problem with the specifics of loan contract. For-profit “universities” are a scam designed to funnel money from the federal government directly into the owner’s pockets, screwing over ordinary people in the process. They would have been held accountable long ago, but members of a certain political party have fought against this. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [June 12, 2015, 3:18am UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/56 "2015-06-12T03:18:33Z")
> [@DrCube](#): > > Let me put it this way: If bankruptcy exists _at all_, it should be an option for student loans. The fact that it currently exists for everything _except_ student loans seems completely ass backwards to me. > > EDIT: In other words, I can think of a few reasons not to, but those reasons apply to non-student loan related debt as well. I can’t think of any reason to single out student loans except to encourage banks to give bad loans to people who can’t pay them back. In case it hasn’t been repeatedly pointed out: 1. Student loans were dischargeable under bankruptcy until recently. Then one too many student grabbed their diplomas and dropped off their Chap 7 petitions on the way home. 2. Taxes, largely, cannot be discharged 3. Mortgages secured by real estate cannot be discharged without the property being seized. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [June 12, 2015, 3:31am UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/57 "2015-06-12T03:31:58Z")
Ever wonder what college would cost if the US wasn’t handing out unlimited loans? I did 4 years of top-tier state university for about $10K tuition, fees, books. As long as US would loan the amount of the tuition, who cares what the number is? In 1961, the family moved into a house which cost $12,000. In 1986, I paid twice that for a car That same car now costs $50,000. Not everything can absorb that kind of inflation - and shiny new BS/BA holders are among those getting squeezed. This country is good a “quick fix” - too many fresh grads declaring bankruptcy? Exclude Student Loans from Bankruptcy Petitions! NOT - ummm… how much are these loan amounts? Who is getting paid? Can we lower the cost of college? ---
**Author:** ![Dr.Drake](https://avatars.discourse-cdn.com/v4/letter/d/ad7895/32.png) [@Dr.Drake](https://boards.straightdope.com/u/Dr.Drake)\ **Post date:** [June 12, 2015, 3:42am UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/58 "2015-06-12T03:42:06Z")
> [@usedtobe](#): > > Can we lower the cost of college? One of the reasons for the increased costs is administrative bloat. That could probably be covered. Another reason is that government funding has all but dried up, so users are paying more at the point of service rather that having it subsidized by the government. Socialism bad, y’know. I think that will be less easy to undo. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [June 12, 2015, 5:26am UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/59 "2015-06-12T05:26:02Z")
So the big research Universities don’t do so much research now? I remember that the computer system was subject to immediate and unplanned down time because TVA was paying for immediate access to run their modelling programs. That is probably now done on a server i n a janitorial closet somewhere. ---
**Author:** ![KarlGrenze](https://avatars.discourse-cdn.com/v4/letter/k/dbc845/32.png) [@KarlGrenze](https://boards.straightdope.com/u/KarlGrenze)\ **Post date:** [June 12, 2015, 9:54am UTC](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067/60 "2015-06-12T09:54:09Z")
They do a lot of research, or as much research as they can, but that money still mostly comes from the government, has not increased in tune with the times (or else has decreased), so now the colleges are competing for more limited funding. There are other external sources of research grants, but those also are limited. Also, research money is not to be used willy-nilly, it’s use is earmarked. You can’t use that money to teach undergraduates about general biology, for example. But it can be used to maybe partially fund the salary of a research assistant who will only work on the project. [Previous page](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067.md?page=2) [Next page](https://boards.straightdope.com/t/us-government-may-forgive-up-to-3-5-billion-in-student-loans/722067.md?page=4)