> Imagine if the US government would let you easily get a $200k loan to buy a car.
Or have Fannie and Feddie artificially lower interest rates with a government bailout guarantee so you can get the same house... but pay 50% more for it (total, not monthly payment).
You know, they wouldn't have that problem if the loans could have the threat of default. You trim what you don't need and highly focus on what ensures the loan doesn't default.
It is literally risk free money so they're going to inflate the price so that they get the most for least investment and least risk.
"For too long, a myth has persisted that student loans are not dischargeable in bankruptcy. The myth is not true because, in fact, student loans can be discharged bankruptcy. We have seen the Department of Education take important steps to ensure that bankruptcy relief is available to federal student loan borrowers. "
It's a good thing that student loans cannot be defaulted on. That makes lenders more likely to give out loans, which helps marginalized people many of whom might be the first to ever attend college in their family. Will a bank normally give a loan to an 18 year old with no credit score, with no cosigners, whose parents either have awful or no credit?
How are degrees without job prospects (which are actually capable of paying off the non-defaultable loans) helpful to marginalized people? It seems like just the opposite effect.
Why would a college graduate have no job prospects? I think you'll find people coming from marginalized backgrounds are much more likely to enter a field of study with plentiful job prospects.
They attend for profit colleges because they are commonly duped by promises of a certain salary or job placement. And commonly not sophisticated enough to understand that not all debts are created equal and accreditation matters in education.
I don't understand how that link shows student loans are a driver of inequality. Black people on average have a higher student loan debt because on average black people are poorer than white people in America. If black families are poorer than white families, it generally means they will need to take out a bigger loan to afford college.
It's almost as if you shouldn't be able to take on near unlimited non-default-able debt for something that is nearly worthless.
These people were put into a debt trap at 18, not saved by the government.
It's also interesting that finance is left out of most high school curriculum right before people are signing up for the second (and increasingly the first) most expensive purchase of their lives.
That's the principle, yea. But we wouldn't be having a student debt crisis if they was all there was to it. Enough people can't.
We build bankruptcy into debt systems not just to give people relief, but also to take the risk off of people and put them on lenders with actuarial resources.
“Loan servicing” means the work of sending out statements, collecting payments, answering the help desk, tracking the accumulated interest, filing the tax forms, etc.
It is, but proceeding with this free money giveaway without fixing the underlying problem is distasteful. It's literally trying to buy votes, it's not trying to make things better for the next generations.
You can want loans forgiven and want the system fixed. Where are you getting an observation that, in general, people who want loans forgiven also do not want the system fixed?
Education is not a prime example. Many degrees ARE useless. Paying your own way is a massive incentive to pick a valuable and reasonably priced degree. Many people consider healthcare a human right. Getting to spend 4 years half assedly drawing supply and demand graphs or writing essays about proust is most definitely not!
So much judgement against kids who sought an education.
I'm curious, how do you feel about politicians such as Marjorie Taylor Greene getting her $183,504 USD PPP loan forgiven? She also happens to be vehemently and vocally opposed to student loan debt forgiveness. Another one mentioned in the link below, Vern Buchanan, took $2.3 million in PPP covid loan forgiveness. He's also opposed to student loan forgiveness.
How does any of this make sense? Are we, in the USA, collectively just a bunch of selfish jerks who can't see past our own noses? The lack of empathy may not be surprising at this point, but it is embarrassing and arguably immoral and inexcusable.
So much judgement against kids who sought an education they could afford and opted for a state university at home instead of taking a loan to go somewhere else.
Where is the empathy for the ones who worked hard and made sacrifices to pay off their loan? Where is the empathy for the ones who passed on a college education because they didn't think they would be able to pay off the loan?
As for the politicians you bring up, ok it's infuriating now what? 2 wrongs don't make a right.
I have immense empathy for those that work hard and have the fruits of that taken away, but there is a sickness in the US where all inevitable indirect motion caused by the simple reality of living in a zero-sum system (called civilization) is framed as something being "taken away", which implies much more injustice than the actual consequences in question. It's an adjacent mindset to the one that can not have a rational discussion about anything related to taxation because they think that the phrase "taxation is theft", aside from being true or not, is a perfectly complete opinion on all taxation-related topics. It's also adjacent to the mindset that obsesses over "personal responsibility", which is certainly a noble ideal, but from the mouths of these people is instead used as a rejection of reason and empathy. These hyper-reductions might have a seed of a legitimate idea in them, but they are ultimately destructive.
Based on this philosophy, there is no way to both realistically and "fairly" make things better for future generations.
Y'know, the idea of "I study war, so my sons can study business, so their sons can study philosophy", or whatever the John Adams quote was.
I think that most people, in general, agree on the idea that we want to make the future better than the present. If making sure that someone 20 years from now can go through life with fewer hardships is "unfair" to people now who have to endure them, and thus we must not make the improvements that lead to that future, then how can we ever, ever make things better?
This has been answered a dozen times. You're talking about changing things for future generations which everybody agrees on.
This loan forgiveness does not do that. It retroactively changes the rules that were in place when some people decided to go to college and others didn't. This move changes nothing for future students.
Because "the rules that were in place" then were unfair, and were not, in fact, decided on in any organized manner: they were simply the confluence of a number of factors.
This change does not take anything away from anyone. It does not hurt any of the people who (like me) are lucky enough to have paid off all their student debt.
How people react to it just shows who is a bitter, jealous person by nature, and who has actual compassion for other people.
> Where is the empathy for the ones who passed on a college education because they didn't think they would be able to pay off the loan?
I don't understand. No matter what kind of reform is done (making college cheaper, or forgiving loans, or any other solution) it will still be the case that some people in the past couldn't go to college because it was too expensive back then. So we can never change anything?
We can - and must - change the rules/system moving forward for sure, but I don't think it's fair when 2 individuals, who were faced with the decision to go or not to college at the same time, with the same rules, see the rules retroactively changed for one of them.
No one's changing what was. That's impossible, unless our physicists have come up with something really cool recently.
Canceling student debt is, in fact, changing what will be: many people now do not have to worry that, in the future, they will have to pay that extra money, or that their loans will continue to balloon in size due to the interest changes. That is all the future.
And why do you think that canceling some debt now for people actively struggling under its burden is more unfair to people who paid off their debts than letting future people go to college without ever having to take on that burden?
We can change things the question is can we allow people who are motivated by profit to dictate the change.
College is way more expensive than it was before the government started distorting the prices. The inflation rate for college education is similar to that of disease care and is unconscionable and driven by the free money hand out that Biden helped create.
Colleges have put millions of Americans in indentured servitude and the US government has responded by giving then an even bigger subsidy.