Student loan forgiveness makes my grandson a chump(wsj.com)
wsj.com
Student loan forgiveness makes my grandson a chump
https://www.wsj.com/articles/student-debt-forgiveness-makes-my-grandson-a-chump-summer-jobs-pay-loans-11654698177
49 comments
I don't think many people have the mindset of being against student loans because "they've already paid off theirs." I'm sure some people feel that way, and it is an understandable emotional reaction, but you are giving the strawman version of the argument.
The more measured position against student loan forgiveness is:
-People in the trades who did not go to college should not be paying for people who did. College degree holders already have high earning power.
-There is a moral hazard that comes from not holding people accountable to their own decisions. People will assume (perhaps logically) that there will always be a bail out. This same thing happened in the stock market for rich people via the "fed put."
-We have inflation at generational highs with extremely low employment - this will exacerbate the issue.
-Forgiveness that is decoupled from fixing the underlying system doesn't actually solve the problem. Will we do forgiveness every X years without making college more affordable? (you correctly made this point)
-Forgiveness is a misnomer - in reality it is a tax we all have to pay and is much more akin to a transfer payment.
-What values are we trying to teach our children about decision making and accountability? Victim mentality is becoming more common.
The more measured position against student loan forgiveness is:
-People in the trades who did not go to college should not be paying for people who did. College degree holders already have high earning power.
-There is a moral hazard that comes from not holding people accountable to their own decisions. People will assume (perhaps logically) that there will always be a bail out. This same thing happened in the stock market for rich people via the "fed put."
-We have inflation at generational highs with extremely low employment - this will exacerbate the issue.
-Forgiveness that is decoupled from fixing the underlying system doesn't actually solve the problem. Will we do forgiveness every X years without making college more affordable? (you correctly made this point)
-Forgiveness is a misnomer - in reality it is a tax we all have to pay and is much more akin to a transfer payment.
-What values are we trying to teach our children about decision making and accountability? Victim mentality is becoming more common.
1. My taxes go to a lot of stuff I don’t care about but that is a cost of living in a society that I enjoy living in. If something improves society that leads to a reduction in the societal problems that do affect me, by all means.
2. Perhaps then don’t make it entirely free. It doesn’t have to be black and white.
3. We printed money for banks in 2008 and it didn’t result in inflation. As long as people have places to spend their money or the money doesn’t end up sitting in an account, inflation shouldn’t be a problem. Right now, the supply chain is still borked and people like me have been waiting for stuff on back-order for months, which means money that I already ear-marked to spend is instead just sitting in my bank account and collectively causing inflation.
4. This one I agree with. Either it’s free/cheap college education or nothing. Loan forgiveness is a lazy way to say that we want free/cheap education without committing to anything.
5. Don’t care about transfer payments. Many people are already born with insane talent or great circumstances and have life much easier so why do I suddenly care that some people have it harder or easier?
6. Victim mentality happens when someone loses hope and feels like they are in a deep hole. If your student loans are too large to pay off reasonably soon (which any normal young person with hopes and dreams can get themselves into), you talk to your friends who are in the same pickle and this mentality develops.
Now I don’t know if making college free is necessarily the option or feasible but both sides have a point. Nothing that is contentious has one side that is simply right — it wouldn’t be a contentious issue.
2. Perhaps then don’t make it entirely free. It doesn’t have to be black and white.
3. We printed money for banks in 2008 and it didn’t result in inflation. As long as people have places to spend their money or the money doesn’t end up sitting in an account, inflation shouldn’t be a problem. Right now, the supply chain is still borked and people like me have been waiting for stuff on back-order for months, which means money that I already ear-marked to spend is instead just sitting in my bank account and collectively causing inflation.
4. This one I agree with. Either it’s free/cheap college education or nothing. Loan forgiveness is a lazy way to say that we want free/cheap education without committing to anything.
5. Don’t care about transfer payments. Many people are already born with insane talent or great circumstances and have life much easier so why do I suddenly care that some people have it harder or easier?
6. Victim mentality happens when someone loses hope and feels like they are in a deep hole. If your student loans are too large to pay off reasonably soon (which any normal young person with hopes and dreams can get themselves into), you talk to your friends who are in the same pickle and this mentality develops.
Now I don’t know if making college free is necessarily the option or feasible but both sides have a point. Nothing that is contentious has one side that is simply right — it wouldn’t be a contentious issue.
-How much are people in the trades "paying" for student loans? Taxes don't work like this.
-Our society relentlessly holds people "accountable" for all kinds of things in all manner of unfair ways. Legally, economically, medically -- people are constantly held accountable. "Morals" will not change because student loans are forgiven. Also comparing rich people bailouts to student loan forgiveness is laughable.
-I'm not sure what the point is here? Also unemployment rate is very very low in the latest jobs report.
-Let's not let perfect be the enemy of good. We'll never solve any problems if every solution needs to fix the underlying system.
-How much taxes do you pay for others' student loans? This is not how taxes work. I'd be interested in your sources here.
-Is "victim" mentality becoming more common or are the injustices of our society becoming more obvious with better communication technologies? Again, our society relentlessly moralizes everything. Forgiving student loans isn't going to change anything but the borrowers economic participation and quality of life.
-Our society relentlessly holds people "accountable" for all kinds of things in all manner of unfair ways. Legally, economically, medically -- people are constantly held accountable. "Morals" will not change because student loans are forgiven. Also comparing rich people bailouts to student loan forgiveness is laughable.
-I'm not sure what the point is here? Also unemployment rate is very very low in the latest jobs report.
-Let's not let perfect be the enemy of good. We'll never solve any problems if every solution needs to fix the underlying system.
-How much taxes do you pay for others' student loans? This is not how taxes work. I'd be interested in your sources here.
-Is "victim" mentality becoming more common or are the injustices of our society becoming more obvious with better communication technologies? Again, our society relentlessly moralizes everything. Forgiving student loans isn't going to change anything but the borrowers economic participation and quality of life.
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> It's such a selfish mentality
What kind of man would want their money taken from them to provide a gift to others?
There is a big difference between selfishness and self-respect.
What kind of man would want their money taken from them to provide a gift to others?
There is a big difference between selfishness and self-respect.
waves I don't hold the extreme position here of giving everything away and there's still a thing about how any such funds are spent... But with that out of the way - Where my money improves the society, I'm happy to give it. I donate, and with some exceptions I'm very happy to pay taxes. (then again I'm not in the US) If people both helped the current students and prevented the issue from raising again, then that sounds great to me. (i.e. if we don't just funnel the money to the companies that will continue and expect another bailout)
I guess I'm a kind of a man that wants everyone to succeed, and not be artificially held back by a bad system.
I guess I'm a kind of a man that wants everyone to succeed, and not be artificially held back by a bad system.
How much money will be taken from an individual tax payer for student loan forgiveness?
46 million Americans have student debt, 148 million are tax payers. if you want to forgive 10k for each borrower, that is 3.1K from each taxpayer, assuming zero overhead (LOL), if you want to forgive 50k/debtor, 15.5k per taxpayer, again assuming zero overhead (still LOL)
Surprisingly taxes don't work this way. The federal government can simply write this debt off by paying itself. It doesn't have to literally collect the dollars from tax payers.
If loan forgiveness becomes a common trend it will be used as justification to raise taxes. Personally, as a tax-payer. The money I provide is not well spent and there's plenty of bloat. I'd prefer to not pay more in taxes and for the government to cost optimize its budget.
Yeah, imagine that, if only this became like an annual thing where taxes pay for universities, US could remove the middle man of the loan companies and join many other countries with a reasonable cost higher education!
Not all loans can be forgiven like federal student loans. So I don't understand how this would become "a common trend"?
How much would your individual taxes increase if student loans are forgiven?
How much would your individual taxes increase if student loans are forgiven?
It doesn't matter. How can you think so little of yourself?
Corruption, and that's what this is, a money transfer to Democrats' constituency, should be opposed even if it's a small amount.
Corruption, and that's what this is, a money transfer to Democrats' constituency, should be opposed even if it's a small amount.
The entire government runs off subsidizing various parts of society that it deems important. Is that all corruption?
The author's consternation at some people getting things for free that others work hard for is certainly justifiable. But I also think it ignores the same dynamic in other places in the system.
What about the university administrators with made-up jobs? Student Success Coordinators and Wellness Promotion Managers are getting salaries for doing almost nothing of import, and it's all on the backs of students, mostly student loan borrowers.
And even the categories of university administration growth that aren't whimsical odes to self-licking ice cream cones are due to unfunded mandates from state and federal government. It certainly seems fair to ask taxpayers to pay for costs imposed by their representatives.
I don't know what the right answer is. But here's a proposal:
- Drastically reduce governmental administrative burden. There doesn't need to be a parallel system of criminal justice, for example. If a student accuses another of a sexual assault, it should be investigated by professional law enforcement and, if there's merit to it, prosecuted by a professional ADA. It shouldn't be the subject of a chimerical Title IX kangaroo court.
- Cap administration costs at 20% of the total budget as a requirement for federal funding for student aid (but not research grants).
- Federal student loans should either be made at the Fed rate or dischargeable in bankruptcy. The idea that non-dischargeable debt is as high as 8.5% is absurd.
- Student loan repayment payroll tax. Payments come out of payroll, before income taxes.
- Universal IDR. Everyone is on IDR by default. Every tax filing, your new IDR amount is automatically calculated and transmitted to your employer for appropriate payroll tax.
- Tiered Public Service Loan Forgiveness. 7 years for teachers, military, firefighters, national rangers in receipt of hazard pay, etc. (public servants with significant sacrifice). 10 years for other public employment. 10 years for private employment of particularly high social value (doctors, nurses, family law, farming, safety workers, electricians and other infrastructure folks, etc. etc.). 15 years for all others.
What about the university administrators with made-up jobs? Student Success Coordinators and Wellness Promotion Managers are getting salaries for doing almost nothing of import, and it's all on the backs of students, mostly student loan borrowers.
And even the categories of university administration growth that aren't whimsical odes to self-licking ice cream cones are due to unfunded mandates from state and federal government. It certainly seems fair to ask taxpayers to pay for costs imposed by their representatives.
I don't know what the right answer is. But here's a proposal:
- Drastically reduce governmental administrative burden. There doesn't need to be a parallel system of criminal justice, for example. If a student accuses another of a sexual assault, it should be investigated by professional law enforcement and, if there's merit to it, prosecuted by a professional ADA. It shouldn't be the subject of a chimerical Title IX kangaroo court.
- Cap administration costs at 20% of the total budget as a requirement for federal funding for student aid (but not research grants).
- Federal student loans should either be made at the Fed rate or dischargeable in bankruptcy. The idea that non-dischargeable debt is as high as 8.5% is absurd.
- Student loan repayment payroll tax. Payments come out of payroll, before income taxes.
- Universal IDR. Everyone is on IDR by default. Every tax filing, your new IDR amount is automatically calculated and transmitted to your employer for appropriate payroll tax.
- Tiered Public Service Loan Forgiveness. 7 years for teachers, military, firefighters, national rangers in receipt of hazard pay, etc. (public servants with significant sacrifice). 10 years for other public employment. 10 years for private employment of particularly high social value (doctors, nurses, family law, farming, safety workers, electricians and other infrastructure folks, etc. etc.). 15 years for all others.
>> dischargeable in bankruptcy.
This would quickly fix college cost bloat. Non-discharge of college debt was put into place in 1998. https://thehill.com/blogs/congress-blog/economy-budget/28362...
I believe Clinton signed it into law as a perk to the banksters. Imagine having a loan book which can be repaid by seizing a parent co-signer's social security.
This would quickly fix college cost bloat. Non-discharge of college debt was put into place in 1998. https://thehill.com/blogs/congress-blog/economy-budget/28362...
I believe Clinton signed it into law as a perk to the banksters. Imagine having a loan book which can be repaid by seizing a parent co-signer's social security.
Well, if the loan is still held/backed by the Federal government, then the taxpayers are still on the hook…
In modern day America, working hard for things is a poor life choice. You're signing yourself up for a life of having to work hard to support everyone else who doesn't want to work.
You're much better off just taking it easy an mooching off the idiots who work all day.
You're much better off just taking it easy an mooching off the idiots who work all day.
Of course, that’s not how it works in real life.
If mooching is so pleasurable why isn’t everyone doing it?
Because being poor in the US is really hard. Getting government benefits in the US is really hard. And the way a lot of government benefits are structured, with a whole bunch of cliffs because of ridiculous means testing, it’s extremely difficult to get out of a cycle of dependence on govt benefits.
It’s hilarious seeing people, whose college education was almost entirely covered by the government (you could pay your college education working part time at your local burger place because it was so heavily subsidized, and that’s not even including the massive percentage of people who got free education from the govt because they were enlisted in a variety of wars), complaining about the fact that the govt may forgive student loans that students take decades to pay despite being in the top 10-20% of income brackets.
And frankly, if these people were really concerned about those who worked hard and paid off loans being chumps, as opposed to opposing any help for anyone who is not in the top 0.1% (remember that multi trillion tax cut passed not even half a decade ago?), maybe they would propose something else that compensated for the massive decrease in educational support, massive increase in college prices, and the massive increase in the need for a college degree to get a job, by proposing something like tax credits for whatever tuition you paid over the last several years. So, for example, you get tax credits worth 10-(2022-tuition year)0.8tuition, so tax credits for the last 10’years of tuition, at 80% last year, and then reducing linearly till it drops to 0 for tuition paid more than 10 years ago.
Or adjust it some other way that makes sense.
If mooching is so pleasurable why isn’t everyone doing it?
Because being poor in the US is really hard. Getting government benefits in the US is really hard. And the way a lot of government benefits are structured, with a whole bunch of cliffs because of ridiculous means testing, it’s extremely difficult to get out of a cycle of dependence on govt benefits.
It’s hilarious seeing people, whose college education was almost entirely covered by the government (you could pay your college education working part time at your local burger place because it was so heavily subsidized, and that’s not even including the massive percentage of people who got free education from the govt because they were enlisted in a variety of wars), complaining about the fact that the govt may forgive student loans that students take decades to pay despite being in the top 10-20% of income brackets.
And frankly, if these people were really concerned about those who worked hard and paid off loans being chumps, as opposed to opposing any help for anyone who is not in the top 0.1% (remember that multi trillion tax cut passed not even half a decade ago?), maybe they would propose something else that compensated for the massive decrease in educational support, massive increase in college prices, and the massive increase in the need for a college degree to get a job, by proposing something like tax credits for whatever tuition you paid over the last several years. So, for example, you get tax credits worth 10-(2022-tuition year)0.8tuition, so tax credits for the last 10’years of tuition, at 80% last year, and then reducing linearly till it drops to 0 for tuition paid more than 10 years ago.
Or adjust it some other way that makes sense.
Archive with full text of article: https://archive.ph/3LqoY
Better not tell the chump what I paid back in the early 80's for my engineering degree. That said pursuing the internet it would seem that Mr Hurst is a man of means. Perhaps he should use some to put his grandchumpson through school.
Why not claw the money back from colleges? They clearly didn't give people a good education, because they can't afford to pay off their loans. There might even be room for a class-action lawsuit for false advertising.
> Sen. Elizabeth Warren and Majority Leader Chuck Schumer support a plan to forgive as much as $50,000 in student loans per borrower, and according to the Washington Post, the Biden administration is preparing to announce a plan that would forgive $10,000 in loans, phasing out that gift at $150,000 in income for a taxpayer filing individually and $300,000 for a couple filing jointly.
The "easy" solution is to give everyone $150,000 with a string attached, requiring the money to go to your student loans first. Trump showed us that the government can give "free" money to all citizens. This will just be 50x more. Let the citizens decide if their money should be used to go to college, avoid working night shifts, or even go on a year long cruise. This will be a much fairer solution then giving money just to college educated people who haven't yet pay what they promise they would.
Regarding inflation and deinsensitiving working, well if you make a bad law, expect a bad outcome.
The "easy" solution is to give everyone $150,000 with a string attached, requiring the money to go to your student loans first. Trump showed us that the government can give "free" money to all citizens. This will just be 50x more. Let the citizens decide if their money should be used to go to college, avoid working night shifts, or even go on a year long cruise. This will be a much fairer solution then giving money just to college educated people who haven't yet pay what they promise they would.
Regarding inflation and deinsensitiving working, well if you make a bad law, expect a bad outcome.
Inflation should be fun .... https://www.youtube.com/watch?v=9x-wQWZuQho
Screw it. Why not give every American 1 million in USD. People can work if they want to.
The government owns the debt and can pay itself off. It doesn't need to "give" money to anyone.
If the loan forgiveness goes through, then you're just fucking over everyone who actually paid their debt off.
By giving them peers that can afford homes and families?
How are you fucking them over?
Because the person who paid their own debt is paying double - for their own and then for everyone who got forgiveness. Forgiveness is a misnomer as it is really a transfer of tax dollars from one person to another. There is no free lunch.
I paid college for myself. I don’t feel fucked over if other people get a benefit. Why? It’s better to spend tax dollars on helping people than blowing them up.
People say stuff like this, but the corporate handouts dwarf the shit we do for regular people.
Obviously the money is there, let's just stop moralizing every individual while letting this corrupt corporatist system run off with trillions.
Obviously the money is there, let's just stop moralizing every individual while letting this corrupt corporatist system run off with trillions.
Both of you are right. Which doesn't mean that everyone should be let off the hook.
So, why should the rest of us care that the author's kid made poor life choices? Working two jobs to pay for college might have been smart in the 1960s, but today? Yeah, that does make him a chump.
I dropped out of college after my scholarship ran out instead of taking out loans because I knew I had terrible debt habits (credit cards at the time proved it) and didn't want to have any debt. I eventually did three more semesters at a half-load while paying each one while working full time (I couldn't afford more than that, and I was living with my parents to keep costs down).
I dropped out again, then eventually decided to go back full time on student loans several years later. Tuition was meanwhile shooting up like crazy the entire time and more than doubled when I went back.
I ended up taking out more than twice as much in student loans than I would have if I had just done it in the first place right after my scholarship ran out eight years prior.
I would agree I was a chump for trying to stay debt free to get my degree, although I'm also glad I didn't go nuts with my loans like some people did, even the amount I had was a quarter as much as some people I know that also chose less lucrative majors (but more expensive schools, or out of state).
That being said, I have since paid off my student loans, but would still approve some fairly generous student loan forgiveness. I don't have a "well I struggled so you should to" attitude.
These people were convinced by their parents, teachers, counselors, family, etc that they could do whatever they want, take whatever loans out, and not have to worry about it, and ended up making a poor decision with lifelong consequences based on bad information.
Some of these people have been paying their student loans for 5-10 years and their loans have only gotten bigger because of how large they are and how much interest accrues. I know a couple people that have just given up on paying their loans off ever, and are only going to pay the minimum required the rest of their lives.
Those loans are going to effectively be "forgiven" whenever they end up dying, at a much higher amount than what forgiveness now would amount to.
Yes, the root of the problem should be addressed, but attacking only the root doesn't help the people who have been screwed over by the system.
I dropped out again, then eventually decided to go back full time on student loans several years later. Tuition was meanwhile shooting up like crazy the entire time and more than doubled when I went back.
I ended up taking out more than twice as much in student loans than I would have if I had just done it in the first place right after my scholarship ran out eight years prior.
I would agree I was a chump for trying to stay debt free to get my degree, although I'm also glad I didn't go nuts with my loans like some people did, even the amount I had was a quarter as much as some people I know that also chose less lucrative majors (but more expensive schools, or out of state).
That being said, I have since paid off my student loans, but would still approve some fairly generous student loan forgiveness. I don't have a "well I struggled so you should to" attitude.
These people were convinced by their parents, teachers, counselors, family, etc that they could do whatever they want, take whatever loans out, and not have to worry about it, and ended up making a poor decision with lifelong consequences based on bad information.
Some of these people have been paying their student loans for 5-10 years and their loans have only gotten bigger because of how large they are and how much interest accrues. I know a couple people that have just given up on paying their loans off ever, and are only going to pay the minimum required the rest of their lives.
Those loans are going to effectively be "forgiven" whenever they end up dying, at a much higher amount than what forgiveness now would amount to.
Yes, the root of the problem should be addressed, but attacking only the root doesn't help the people who have been screwed over by the system.
By saying working hard and not getting in debt is a poor life choice you are proving the author’s point. There is extreme moral hazard in a blanket loan forgiveness.
There’s extreme moral hazard in allowing institutions to lend money on this scale while protecting them from the risk of a borrower’s default as well.
There's extreme moral hazard, on that note, in an education system which requires those seeking better opportunities to pay out of pocket - and thus necessitates such predatory loans in the first place.
What's the hazard?
For the worthless schools that took loan money and didn't deliver education (for-profit scam schools), those could be forgiven. For all the expensive degrees that have led to jobs that can't pay the loans back, this all shows how inadequately prepared the students were to do basic arithmetic and cost/benefit analysis. That's on their parents.
For the worthless schools that took loan money and didn't deliver education (for-profit scam schools), those could be forgiven. For all the expensive degrees that have led to jobs that can't pay the loans back, this all shows how inadequately prepared the students were to do basic arithmetic and cost/benefit analysis. That's on their parents.
Yes, for sure. If we do forgive loans it is pointless if we don’t fix the underlying issue.
What about the moral hazard of making the loans in the first place? These banks take all these risks, and well, you know what happened in 2008 right? They got bailed out by the government. But the minute people start talking about bailing out people? Woah, that’s way too far!
It’s going into debt is such a bad thing then why do we have it at all?
It’s going into debt is such a bad thing then why do we have it at all?
The banks don't take any risk since taxpayers are underwriting the loans for free.
This is all really about ending the banks risk free gravy train.
This is all really about ending the banks risk free gravy train.
However, I don't think this will really solve anything. It's will empty our collective cup of debt, but the faucet is still on. Loans will still be made and college will still be stupidly expensive unless we make more structural changes to our education system. How many times will we "forgive" the debt? It doesn't really even make sense to do it until we have a plan in place to make sure we won't have to again.