# Warren Student Loan Forgiveness Plan **URL:** \ **Category:** Great Debates\ **Created:** [April 23, 2019, 12:44pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931 "2019-04-23T12:44:42Z")\ **Posts on this page:** 20\ **Page:** 10
**Author:** ![UCBearcats](https://avatars.discourse-cdn.com/v4/letter/u/77aa72/32.png) [@UCBearcats](https://boards.straightdope.com/u/UCBearcats)\ **Post date:** [April 24, 2019, 11:41pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/181 "2019-04-24T23:41:47Z")
> [@Ruken](#): > > “The average middle class person has virtually stagnant pay over the last several decades” and “today’s average hourly wage has just about the same purchasing power it did in 1978” do not have the same meaning. **UCBearcats** may have meant one thing while typing something else, but we can only go by what was actually written. And the average person gets paid more over time – see any BLS CPS earning-by-age table. The average wage is masked by entrants and exits from the job market: [The Good News on Wage Growth - San Francisco Fed](https://www.frbsf.org/our-district/about/sf-fed-blog/wage-growth-good-news/) > That is, grandma retires, dad gets a raise, junior gets her first job. That decreases the average wage even though nobody is suffering. We have 10k boomers hitting 65 every day, so I expect this demographic masking to continue. I am referring to the purchasing power of dollars from 19xx to today. Yes because of inflation and COLA the raw dollar amount has increased. In some fields the actual salary has decreased for people, i.e. education. The middle class has not advanced over the last several decades compared to the 1%. ---
**Author:** ![Monty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/monty/32/47_2.png) [@Monty](https://boards.straightdope.com/u/Monty)\ **Post date:** [April 25, 2019, 2:43am UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/182 "2019-04-25T02:43:24Z")
> [@HurricaneDitka](#): > > The government accountants figured it would save them a fair bit of money. That’s why they did it: they were looking for ways to offset the cost of Obamacare and figured this would help some. And you have evidence for this? ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [April 25, 2019, 4:46am UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/183 "2019-04-25T04:46:50Z")
> [@Monty](#): > > And you have evidence for this? Sure. See [here (PDF - the relevant bits are on pages 6 & 7](https://www.cbo.gov/sites/default/files/111th-congress-2009-2010/costestimate/amendreconprop.pdf): > [@CBO](#): > > Education Provisions Contained in the Reconciliation Proposal > Subtitle A of title II of the reconciliation proposal would amend the Higher Education Act of 1965, which authorizes most federal postsecondary education programs. The reconciliation proposal would eliminate the federal program that provides guarantees for student loans and replace those loans with direct loans made by the Department of Education. It would also increase direct spending for the Pell Grant program and other education grant programs. CBO estimates that those provisions would reduce direct spending by $5 billion over the 2010–2014 period and $19 billion over the 2010–2019 period (see Table 7). > > Federal Student Loan Programs. On net, CBO estimates that the reconciliation proposal would reduce direct spending in the federal student loan programs by $28 billion over the 2010–2014 period and $58 billion over the 2010–2019 period. > > In the Federal Family Education Loan (FFEL) program, private lenders originate loans to postsecondary students; the federal government makes payments to those lenders, guarantees them against significant loss in the case of default, and provides funds to guaranty agencies to help administer those loans. In the direct loan program, eligible borrowers receive nearly identical loans that are administered by the Department of Education and funded through the U.S. Treasury. > > The reconciliation proposal would eliminate new loans in the FFEL program beginning in July 2010. Under the proposal, CBO expects that all of the guaranteed loans that would have been made under current law—estimated to be roughly $500 billion through 2019—would instead be made through the direct loan program. > > The Federal Credit Reform Act specifies that the cost of new federal loans and loan guarantees be recorded in the budget in the year that the loans are disbursed, and that the cost be calculated as the net present value of the government’s expected cash flows over the lifetime of a loan or guarantee, using interest rates on Treasury securities of comparable maturity to discount the estimated cash flows.5 > > Using this methodology, CBO estimates that eliminating new guaranteed loans and replacing them with direct loans would yield reductions in direct spending of $61 billion over the 2010–2019 period. CBO also estimates that the expanded program for direct loans would incur about $5 billion in additional administrative costs during that period. However, those additional costs are classified as discretionary spending and are subject to future appropriation; they are not incorporated in the estimates of changes in direct spending and revenues reported in this letter. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [April 25, 2019, 5:52am UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/184 "2019-04-25T05:52:35Z")
> [@UCBearcats](#): > > I am referring to the purchasing power of dollars from 19xx to today. Yes because of inflation and COLA the raw dollar amount has increased. > > In some fields the actual salary has decreased for people, i.e. education. The middle class has not advanced over the last several decades compared to the 1%. And yet college costs have greatly outpaced general inflation. Why? The obvious answer is, again, too much money for that particular expense. Isn’t it ironic that when the government distorts the market for political gain that the market responds in a way that actually is counter to the stated intent? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [April 25, 2019, 2:05pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/185 "2019-04-25T14:05:59Z")
> [@UCBearcats](#): > > I am referring to the purchasing power of dollars from 19xx to today. Yes because of inflation and COLA the raw dollar amount has increased. Here’s real median personal income: > **[Real Median Personal Income in the United States](https://fred.stlouisfed.org/series/MEPAINUSA672N)** > > Real Median Personal Income in the United States ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [April 25, 2019, 2:06pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/186 "2019-04-25T14:06:16Z")
> [@slash2k](#): > > One thing to keep in mind about public colleges/universities when comparing tuition then and now is that tuition =/= total cost of education. Most states poured vast sums of tax dollars into those schools, basically subsidizing education. In a series of retrenchments, beginning in the 80s and really gathering steam over the past decade or so, states are cutting back the amount of the subsidies, so in addition to tuition rising with inflation and in response to student loan availability, tuition is rising because students are expected to pay a greater share of the cost of educating them. > > See, for example, [this study](https://www.cbpp.org/research/state-budget-and-tax/a-lost-decade-in-higher-education-funding) from the Center on Budget and Policy Priorities: over the decade from 2008 to 2017, forty-four out of forty-nine states cut inflation-adjusted spending per student in the state’s publicly-funded higher-education institutions, by an average of 16 percent. In 1988, tuition covered about one-quarter of the cost of instruction at a state school; by 2016, it accounted for nearly half. That’s a good point as well. If the states have decided to cut their budgets by not funding their state schools so much, why should the feds essentially give them free money for doing so? And what is to stop this trend from accelerating if the feds now pay for everything? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [April 25, 2019, 2:07pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/187 "2019-04-25T14:07:27Z")
That is what I’ve been asking. There _are_ ways of preventing this, but I don’t see it in EW’s proposal. ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [April 25, 2019, 2:18pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/188 "2019-04-25T14:18:10Z")
> [@Urbanredneck](#): > > I wonder what the effect would be on athletic scholarships? > > Only a few people make it to be a professional so the big reason parents shell out the big bucks is for a scholarship to pay for college. But what if that need wasnt there? Why even work to play on a college team? Just for the glory of saying you played for State? Maybe. In some sports. But for most athletes the time commitment that they put in right now wouldnt be worth it without the fear of being cut from the team and losing your scholarship. I’m not following this at all. What “big bucks” are parents shelling out to get a scholarship? Also, are you saying that if student loans were forgiven then college would be free? I doubt most people get loans that cover as much as an athletic scholarship does. ---
**Author:** ![Grim\_Render](https://avatars.discourse-cdn.com/v4/letter/g/a87d85/32.png) [@Grim\_Render](https://boards.straightdope.com/u/Grim_Render)\ **Post date:** [April 25, 2019, 2:24pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/189 "2019-04-25T14:24:47Z")
> [@DrDeth](#): > > In general, they have higher taxes and a lower military budget. In general, a first world UHC system saves sufficient money compared to the US system to cover that nations military expenses and the total education costs from grade one through university. Those national also have numerous other benefits. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [April 25, 2019, 2:25pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/190 "2019-04-25T14:25:39Z")
> [@Procrustus](#): > > I’m not following this at all. What “big bucks” are parents shelling out to get a scholarship? (Some) parents spend big bucks on sports training, but I couldn’t tell you the scale. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [April 25, 2019, 2:35pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/191 "2019-04-25T14:35:09Z")
I don’t support loan forgiveness for federal loans unless the person receiving forgiveness is providing something of value in return to the taxpayer. If they’re working for the federal government (or on their behalf as a contractor) perhaps that could be an incentive: eliminate the red tape and in addition to salary, we could help that individual by eliminating a set dollar amount of the remaining student loan balance for as long as they remain employed. But I’m not a fan of just forgiving loans and free college, and this kind of gimmickry without talking seriously about how we’re going to get the 1% to pay for any of this first is nonsense, and frankly, it makes me take Warren and Sanders less seriously. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [April 25, 2019, 5:27pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/192 "2019-04-25T17:27:27Z")
> [@asahi](#): > > I don’t support loan forgiveness for federal loans unless the person receiving forgiveness is providing something of value in return to the taxpayer. If they’re working for the federal government (or on their behalf as a contractor) perhaps that could be an incentive: eliminate the red tape and in addition to salary, we could help that individual by eliminating a set dollar amount of the remaining student loan balance for as long as they remain employed. > > But I’m not a fan of just forgiving loans and free college, and this kind of gimmickry without talking seriously about how we’re going to get the 1% to pay for any of this first is nonsense, and frankly, it makes me take Warren and Sanders less seriously. The solution was mentioned early, any forgiveness or free tuition should be means tested. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [April 25, 2019, 5:52pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/193 "2019-04-25T17:52:49Z")
> [@Airbeck](#): > > … This is also why we can never actually improve things in this country because too many people would be bitter that _they_ didn’t get to take advantage. > > Reminds me of this: > > “The true meaning of life is to plant trees, under whose shade you do not expect to sit.” —Nelson Henderson. > [@Great\_Antibob](#): > > Seems to be people are judging on a moral instead of an economic basis. Judging the morality of economic proposals is a mug’s game. Normally I would strongly agree with these sentiments. The fact that, for example, some blacks died before they were given civil rights is no reason to deny rights to the living! BUT, in this case the unfairness would be tangible and immediate. A worker (Alan) sitting next to another worker (Bob) with identical job, competence and education, would see his fellow driving a flashy sports-car while Alan drives a clunker because Alan played by the rules and scrimped to repay his debt. I love Senator Warren but I would come to hate her if I were Alan and this policy were enacted. If the problem is that tuition should have been subsidized during the 2000’s then subsidize it retroactively. Reimburse 20% or $5000 per year (arbitrary example figures) whichever is smaller _ **whether student loans are outstanding or not.** _ Some would get their loans cut, others a cash rebate. Very expensive? Sure! _But don’t make the rebate unfair just to make it cheaper._ ---
**Author:** ![steronz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steronz/32/11765_2.png) [@steronz](https://boards.straightdope.com/u/steronz)\ **Post date:** [April 25, 2019, 6:02pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/194 "2019-04-25T18:02:39Z")
Presumably “whether loans are outstanding or not” would be extended to “whether the recipient went to college or not.” Because there are probably people who didn’t go to school who would have gone at the discounted price. So basically it’s a one time case payout to anyone between the ages of 22 and 35 or something ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [April 25, 2019, 6:10pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/195 "2019-04-25T18:10:14Z")
Tuitions should be subsidized or otherwise reduced _going forward_, so those who opted against an expensive education would have a second chance. Yes, it will be difficult to balance the program’s fairness with simplicity but, since hundreds of billions of dollars are at stake, an effort should be made. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [April 25, 2019, 6:14pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/196 "2019-04-25T18:14:54Z")
> [@Jonathan\_Chance](#): > > A quick though on an idea to deal with these? Start off two a few things. > > 1. Provide education with full rides to the top 10-20% of students at every high school. I believe GWB put this in place during his time as governor or Texas. > 2. Limit the amount that can be borrowed - even from private sources - for college. This applies downward pressure on rising college costs. > 3. Make students loans bankruptable. Give the lenders some skin in the game. Make them have to assume risk to make the loans. As it is it’s another example of ‘privatized profit/socialized risk’ that we see so often in the financial industry. I like points 1 and 3, but point 2 potentially makes it much harder for poorer kids to go to college. The rich already have huge advantages in getting higher education. If we add #3, I don’t think we need #2. The market will already quickly figure out what a good limit for loans is, since if they loan people too much money they won’t get paid back in the bankruptcy. I think you _probably_ need a whole different process for bankruptcy of school loans, though. Like, they shouldn’t be dischargeable immediately or fully, or there’s a huge incentive to get your valuable education, immediately declare bankruptcy, then go on to have your higher-paid professional career. But after, say, a decade, yeah. ---
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [April 25, 2019, 7:36pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/197 "2019-04-25T19:36:21Z")
> [@Procrustus](#): > > I’m not following this at all. What “big bucks” are parents shelling out to get a scholarship? > > Also, are you saying that if student loans were forgiven then college would be free? I doubt most people get loans that cover as much as an athletic scholarship does. Most kids who aspire for a college scholarship need training and to play in competitive leagues way higher than high school. Easily $10,000 a year for several years for sports like baseball, hockey, swimming, and even higher for others like gymnastics. So its easily in the $100,000 range over the years. ---
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [April 25, 2019, 7:40pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/198 "2019-04-25T19:40:09Z")
What then would be the point of working hard for ANY scholarships if college was going to be free? I dont think you all realize all the details and work parents and kids put into getting scholarships. Its practically a full time job seeing all the paperwork one must send in to get even $500 from this place or $1,000 from another. Finally, once your in college, whats the point of working hard and striving to get thru in say 3 years taking 18 credits a semester instead of 14? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [April 25, 2019, 7:49pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/199 "2019-04-25T19:49:12Z")
> [@Procrustus](#): > > I’m not following this at all. What “big bucks” are parents shelling out to get a scholarship? > > Also, are you saying that if student loans were forgiven then college would be free? I doubt most people get loans that cover as much as an athletic scholarship does. I think the idea is that if you are a Division I football prospect with a chance to make the NFL, then great, this will not affect you. But if you are a women’s volleyball player, for example, whose talent level was barely good enough to get a scholarship and have no designs on taking your volleyball career any further, then why, first, as a parent dedicate thousands of dollars to these volleyball camps and travel teams starting when the child is in the womb, and second, once you start school, why devote countless hours to practicing volleyball and travelling, and playing on the team, when the government is going to pay your way anyways. It’s not just sports, but also academics. I remember my senior year filling out applications and writing essays to different scholarship boards explaining what experiences I could share by growing up in a small town, what I would do to educate people on the evils of drunk driving, or how I felt the Lions Club was a positive influence that could help the community. Also, more importantly, was putting my nose to the grindstone to get good grades and studying for the ACT to get good test scores to get into school. Engaging in extracurricular activities was also considered (at least we were told) important. If it is all free anyways, why should a high school student do anything but make the bare minimum to pass if he or she has no designs on an elite school? ---
**Author:** ![Chisquirrel](https://avatars.discourse-cdn.com/v4/letter/c/6bbea6/32.png) [@Chisquirrel](https://boards.straightdope.com/u/Chisquirrel)\ **Post date:** [April 25, 2019, 7:54pm UTC](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931/200 "2019-04-25T19:54:23Z")
> [@UltraVires](#): > > If it is all free anyways, why should a high school student do anything but make the bare minimum to pass if he or she has no designs on an elite school? Snipping mine. Because they want to? Heaven forbid we let our children do things because they enjoy them instead of because it will look good to a scholarship committee. [Previous page](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931.md?page=9) [Next page](https://boards.straightdope.com/t/warren-student-loan-forgiveness-plan/832931.md?page=11)