Education Department Forgives $415M of For-Profit College Debt(wsj.com)
wsj.com
Education Department Forgives $415M of For-Profit College Debt
https://www.wsj.com/articles/education-department-forgives-415-million-in-debt-for-for-profit-college-students-11645050691
177 コメント
> If you pay $250,000 to become a chef/cook - that is insane.
I'm sorry, what are you referencing here? That number doesn't appear in the linked article.
I mean, I'm sure there's an anecdote somewhere that matches, but that's hardly a representative description of the program. The debts in question are things like $40k loans for tech-related degrees from degree factory places like DeVry and ITT which are known to not have the value claimed at enrollment.
Now, there's a really good argument that, indeed, the Federal government shouldn't be subsidizing DeVry to issue junk degrees! But that's not well argued by talking about hypothetical sous chefs with quarter million dollar balances.
I'm sorry, what are you referencing here? That number doesn't appear in the linked article.
I mean, I'm sure there's an anecdote somewhere that matches, but that's hardly a representative description of the program. The debts in question are things like $40k loans for tech-related degrees from degree factory places like DeVry and ITT which are known to not have the value claimed at enrollment.
Now, there's a really good argument that, indeed, the Federal government shouldn't be subsidizing DeVry to issue junk degrees! But that's not well argued by talking about hypothetical sous chefs with quarter million dollar balances.
CIA is 24K++ per semester. 12-18 credits.
I would expect 8-9 semesters needed to get the 129 credits needed.
9 * 24K = $216K.
So that's $200K+ for a culinary arts degree.
If you study ethnomusicology and get a PhD I could run some numbers that would make your eyes pop :)
I would expect 8-9 semesters needed to get the 129 credits needed.
9 * 24K = $216K.
So that's $200K+ for a culinary arts degree.
If you study ethnomusicology and get a PhD I could run some numbers that would make your eyes pop :)
https://www.collegefactual.com/colleges/culinary-institute-o...
I liked the part where you made up the numbers you could've looked up. Average loan for CIA is 7k/yr = 28k per 4 years.
Yes, you can absolutely pick numbers that are unrepresentative to make a point. But as long as you're arguing in the real world, it would be cool if your argument was based in the real world.
I liked the part where you made up the numbers you could've looked up. Average loan for CIA is 7k/yr = 28k per 4 years.
Yes, you can absolutely pick numbers that are unrepresentative to make a point. But as long as you're arguing in the real world, it would be cool if your argument was based in the real world.
> That is ONLY possible with federal funding, no private lender would fund that.
Is this not a double edge sword tho?
Prior to student loans you more or less had to fund it yourself, which people did with a part time job or summer job. When they decided they wanted education more accessible and introduced student loans, all of a sudden more people could afford school and schools increased their prices 10 fold over time.
Is this not a double edge sword tho?
Prior to student loans you more or less had to fund it yourself, which people did with a part time job or summer job. When they decided they wanted education more accessible and introduced student loans, all of a sudden more people could afford school and schools increased their prices 10 fold over time.
I don't know if I'd say that people can afford schools when the debt mounds are so high for many people who are unable to pay. Strictly a hypothesis, but I would say that while more people are going to and completing school than before, the affordability is actually worse than it was previously because schools no longer have to compete for tuition.
Well from the schools perspective is that they can afford it. I was thinking of it from the schools perspective rather than the student.
That's the problem with this entire article. The Department of education, of course, is "forgiving" uncollectible debt, and attempting to pass it off as a bailout for students.
When, of course, it's a bailout for private lenders the government needs to keep lending. If some students are helped, that's at best a side effect.
When, of course, it's a bailout for private lenders the government needs to keep lending. If some students are helped, that's at best a side effect.
So then... The correct way to do this would be to say legally the people who borrowed from you owe you nothing now.
Debt gets erased, lenders get nothing. Everybody wins except the irresponsible lenders.
I'm fine with this. But uhh, feels like people would complain about gov't overstepping it's bounds or picking winners/losers...
Debt gets erased, lenders get nothing. Everybody wins except the irresponsible lenders.
I'm fine with this. But uhh, feels like people would complain about gov't overstepping it's bounds or picking winners/losers...
Except the lenders do get something. A massive tax write off.
"The Producers" aside, not paying taxes on money you gave away but didn't get back is not exactly a compelling business case.
Alright, you give me 70k. I can give you back 70k, or you can take the tax write-off for the loss... which one would you rather have?
And if the answer is that you'd rather have the tax write-off I would love to take out a personal loan from you. And I don't imagine you'll be in the lending business for very long.
And if the answer is that you'd rather have the tax write-off I would love to take out a personal loan from you. And I don't imagine you'll be in the lending business for very long.
People still get private student loans. In fact, private student loans pick off the best credit risk (Harvard MBA, Yale Law, etc) and offer rates lower than the government rate. So you could still finance your education through loans, just not any education
This isn't really true, because up until relatively recently most university funding came from the state and not tuition. The decline in state support led to higher tuition costs; federal student loans turned it into a bonanza, but the steep price tags are more because tuition was never the main revenue driver for universities.
When did the funding from state dry up? In the 60's the cost of univerity was like ~$1500 which is ~$11,000 today, yet today people are in debt for up to 100's of 1000's. The higher education act was introduced in the 60's, and its been downhill from there.
>yet today people are in debt for up to 100's of 1000's
That's extremely atypical. AFAIK the average student debt at graduation is around $35k.
That's extremely atypical. AFAIK the average student debt at graduation is around $35k.
> Prior to student loans you more or less had to fund it yourself,
Or become a citizen of a country that is not hostile to its population.
In many countries you can get decent education for free.
As it should be. Because educated population that is drowning in debt is probably going to lead to better outcomes in the future.
You can have poor parents, not be particularly bright, work hard to get your education and start your life with no debt at all.
Or become a citizen of a country that is not hostile to its population.
In many countries you can get decent education for free.
As it should be. Because educated population that is drowning in debt is probably going to lead to better outcomes in the future.
You can have poor parents, not be particularly bright, work hard to get your education and start your life with no debt at all.
> Or become a citizen of a country that is not hostile to its population.
The U.S. spends 1% of GDP on public support for tertiary education: https://www.oecd.org/els/soc/PF1_2_Public_expenditure_educat... (page 2, panel B). That's right in the middle of the G7: less than Canada, France, and Germany, but more than the U.K., Japan, and Italy.
What's extraordinary about the U.S. is how expensive tertiary education is overall: 2.5% of GDP, the highest in the world. American universities spend a lot more money per student on administrators, student services, facilities, etc.
The U.S. spends 1% of GDP on public support for tertiary education: https://www.oecd.org/els/soc/PF1_2_Public_expenditure_educat... (page 2, panel B). That's right in the middle of the G7: less than Canada, France, and Germany, but more than the U.K., Japan, and Italy.
What's extraordinary about the U.S. is how expensive tertiary education is overall: 2.5% of GDP, the highest in the world. American universities spend a lot more money per student on administrators, student services, facilities, etc.
While it is a fair comment , just how realistic is it for a n 18 year old to drop their birth citizenship and pick the citizenship of another country?
You don't need to drop your citizenship. The US has so so many international students and every college student in the US can point to one that they know.
People in developing countries like Vietnam study German in high school so that they can study in a German university for extremely cheap.
"Emigration for thee but not for me"
Meanwhile the smart ones who got stuck with college loans and worthless degrees figured out it's better to teach English abroad for 6x a local's salary and substantially less hours.
People in developing countries like Vietnam study German in high school so that they can study in a German university for extremely cheap.
"Emigration for thee but not for me"
Meanwhile the smart ones who got stuck with college loans and worthless degrees figured out it's better to teach English abroad for 6x a local's salary and substantially less hours.
The only language (other than English) taught in my local school district is Spanish. How do you expect US students to learn a language to emigrate somewhere else?
Online courses? You can find language learning correspondents too, like pen pals but with video chat.
Plus most US universities have resources for students whose first language is not English, probably most countries have something similar. Picking it up by immersion is hard but it’s supposed to be the best way to learn
Plus most US universities have resources for students whose first language is not English, probably most countries have something similar. Picking it up by immersion is hard but it’s supposed to be the best way to learn
How do you expect Vietnamese students to learn? They have a dramatically lower GDP and their focus is on English education (although it's not great).
Textbooks and parents pressuring kids to focus on their education can do it. There's also a million free online resources for learning a language in English, not so many for people who speak a less infernationally-utilized language.
Textbooks and parents pressuring kids to focus on their education can do it. There's also a million free online resources for learning a language in English, not so many for people who speak a less infernationally-utilized language.
> you pay $250,000 to become a chef/cook - that is insane.
Seems like those sorts of situations are well into the territory of "if you owe the bank $1,000,000,000 then the bank has a problem"
Seems like those sorts of situations are well into the territory of "if you owe the bank $1,000,000,000 then the bank has a problem"
Nope, guaranteed by the government and not dischargable in bankruptcy!
I think "the bank with a problem" is the government, in this case.
Exactly, in a market where the government doesn't guarantee these loans, students would have to negotiate loans with banks who would be very invested in the ability to pay back the loan after graduation. A cook (in this example) would be very unlikely to pay back a $250,000 loan, and no bank would fund that.
> That is ONLY possible with federal funding, no private lender would fund that.
Isn't this about private loans? Seems like it according to the title and the non-paywalled portion of the article.
Isn't this about private loans? Seems like it according to the title and the non-paywalled portion of the article.
"for profit college" =/= "private lender"
Although government is interfering with these loans by taking away much of the risk. Green lighting no bankruptcy.
250k for life long wage garnishments could be a good deal.
250k for life long wage garnishments could be a good deal.
Are they going to at least take some preventative actions? Curbing for profit colleges? Cutting down on predatory market tactics? Screening people for unreasonable loans (i.e. 60,000/yr for art school)?
Or is the plan just to forgive the loans, throw the money on the govt. balance sheet and let the for profit college owners sail away on their yachts.
Or is the plan just to forgive the loans, throw the money on the govt. balance sheet and let the for profit college owners sail away on their yachts.
These loans are being forgiven for people who attended for profit schools being investigated for fraud, and in fact claiming you were a victim of fraud is a requirement to get the loan forgiven. It's a continuation of an Obama program that saw some for profit schools shut down.
PBS Frontline investigated this in 2010: https://www.pbs.org/video/frontline-college-inc/
If I recall correctly, these schools were not sufficiently held accountable for borrowers who couldn't repay loans. They only tracked students' ability to repay for something like two years. I think policies were adjusted so that such predatory lending for a poor education is no longer possible. It's probably a game of cat, mouse, businessmen and politics. I doubt anything was done 2016-2020 since that president once ran his own for-profit U, but I think some changes were made before that.
If I recall correctly, these schools were not sufficiently held accountable for borrowers who couldn't repay loans. They only tracked students' ability to repay for something like two years. I think policies were adjusted so that such predatory lending for a poor education is no longer possible. It's probably a game of cat, mouse, businessmen and politics. I doubt anything was done 2016-2020 since that president once ran his own for-profit U, but I think some changes were made before that.
> not sufficiently held accountable for borrowers who couldn't repay loans
What is the gold standard for accountability here? Does a large state university track repayment ability for longer periods?
What is the gold standard for accountability here? Does a large state university track repayment ability for longer periods?
I'm not defending the current system, but the predatory tactics of a decade+ ago changed dramatically under Obama and there are other steps currently being taken to prevent overly aggressive marketing tactics. University of Phoenix, for example, completely changed their marketing habits (among others afraid of getting sued/losing accreditation).
Yes, this is a tiny tiny fraction of outstanding student loan debt, in this case nearly all likely issued under fraudulent pretenses. Since Biden has taken over, similar specific, targeted actions have been taken on small portions of this enormous space.
Debt forgiveness for student loans is a horrible idea.
It perpetuates choosing degrees that will in 90% of cases never have enough of a return to pay for the loan itself.
Look, I’m not against choosing whatever degree you want. But fiduciary responsibility is doing even a tiny bit of research to see the LTV of that degree.
Unless there is out and out fraud, very little of student loans should be forgiven.
It perpetuates choosing degrees that will in 90% of cases never have enough of a return to pay for the loan itself.
Look, I’m not against choosing whatever degree you want. But fiduciary responsibility is doing even a tiny bit of research to see the LTV of that degree.
Unless there is out and out fraud, very little of student loans should be forgiven.
I grew up in the 80's, and was told by everyone "don't worry about money, do what you love." It was ingrained by parents, educators, media.
Around 2000 when my friends and I went to school a few picked expensive private school art degrees, English lit etc. Thank goodness I'm a nerd and chose CS, because I did it with absolutely no regard to earning potential.
What I'm getting at is that with all the fallout of the loan crisis, I think there's a lot more awareness of what higher education is for the 99%. Let the uber-rich learn extinct languages and medieval cooking, the rest of us need jobs.
Around 2000 when my friends and I went to school a few picked expensive private school art degrees, English lit etc. Thank goodness I'm a nerd and chose CS, because I did it with absolutely no regard to earning potential.
What I'm getting at is that with all the fallout of the loan crisis, I think there's a lot more awareness of what higher education is for the 99%. Let the uber-rich learn extinct languages and medieval cooking, the rest of us need jobs.
Very few undergrads are majoring in the liberal arts and humanities today compared to even 10 years ago in the United States. Post the Great Recession the focus on getting a well paying job has become the ultimate goal of parents and their children when entering college and so the sciences, business, and the social sciences are all in vogue.
Many colleges, to their credit, are shifting their focus more and more to outcomes and average salary potential.
Many colleges, to their credit, are shifting their focus more and more to outcomes and average salary potential.
> I grew up in the 80's, and was told by everyone "don't worry about money, do what you love." It was ingrained by parents, educators, media.
The Boomers fucked up American culture in so many different ways.
The Boomers fucked up American culture in so many different ways.
> Debt forgiveness for student loans is a horrible idea.
This comment reeks of privilege. It ignores the fact that vulnerable people, poor people may have made a decision to to try to improve their future at a young age, say 17 or 18, and are forced to live in debt when their situation isn’t improved or worsens over time.
Loan forgiveness should be a tool that can be used to relieve suffering and/or stagnation in some circumstances. Hardly a horrible idea.
This comment reeks of privilege. It ignores the fact that vulnerable people, poor people may have made a decision to to try to improve their future at a young age, say 17 or 18, and are forced to live in debt when their situation isn’t improved or worsens over time.
Loan forgiveness should be a tool that can be used to relieve suffering and/or stagnation in some circumstances. Hardly a horrible idea.
I'm pretty sure that a very high number of the people who would get general college loan forgiveness are privileged people who made poor choices.
It’s important to note that the age at which one accepts the massive financial burden of university is around 17 years old or even younger. So you aren’t even legally considered an adult. At the same time, you likely have most people in authority positions in your life trying to get you to go to college.
So whether or not it’s a poor choice doesn’t really matter. The impact of that choice is really too difficult to understand until later in life, at which point it’s too late.
The end result, and really the only thing that matters, is that young people in America are royally fucked, and many aspects of that are outside of their control. Bad societal things tend to happen when a certain class/generation gets completely screwed over (many examples throughout history, including the French Revolution and World War II.) Which is why it’s important to solve the issue instead of blaming people.
With student loan forgiveness specifically, there are more options than just forgive everyone. We need to change how federal loans work moving forward to avoid more problems. At the same time, you could forgive loans if the total dollar amount you’ve paid matches the principle of the loan. (Lots of people are on repayment plans where they only chip away at interest.)
But the real question is why would it be a bad thing to allow young people to have an extra several hundred to thousand dollars per month? Obviously there would be a huge economic impact. Ok the one hand, people could spend more on local businesses, which would almost definitely be good. More spending in general is good for the economy. On the other hand, more people start being able to afford “expensive things” like houses, which are very scarce. In those markets, competition would increase, highlighting the scarcity we already have.
But the root problem isn’t that people can suddenly afford a better life, but that we’re putting up with scarcity in several parts of the economy. If we also made economic or policy changes to promote abundance (e.g. an abundance of new housing above and beyond population growth), that problem also goes away.
We all want to live in a better world, I’d hope. Public student loan repayments are regressive and have no place in this better world unless they’re changed drastically.
So whether or not it’s a poor choice doesn’t really matter. The impact of that choice is really too difficult to understand until later in life, at which point it’s too late.
The end result, and really the only thing that matters, is that young people in America are royally fucked, and many aspects of that are outside of their control. Bad societal things tend to happen when a certain class/generation gets completely screwed over (many examples throughout history, including the French Revolution and World War II.) Which is why it’s important to solve the issue instead of blaming people.
With student loan forgiveness specifically, there are more options than just forgive everyone. We need to change how federal loans work moving forward to avoid more problems. At the same time, you could forgive loans if the total dollar amount you’ve paid matches the principle of the loan. (Lots of people are on repayment plans where they only chip away at interest.)
But the real question is why would it be a bad thing to allow young people to have an extra several hundred to thousand dollars per month? Obviously there would be a huge economic impact. Ok the one hand, people could spend more on local businesses, which would almost definitely be good. More spending in general is good for the economy. On the other hand, more people start being able to afford “expensive things” like houses, which are very scarce. In those markets, competition would increase, highlighting the scarcity we already have.
But the root problem isn’t that people can suddenly afford a better life, but that we’re putting up with scarcity in several parts of the economy. If we also made economic or policy changes to promote abundance (e.g. an abundance of new housing above and beyond population growth), that problem also goes away.
We all want to live in a better world, I’d hope. Public student loan repayments are regressive and have no place in this better world unless they’re changed drastically.
Anyone in a privileged position is not going to be incurring tens to hundreds of thousands of student loan debt because they don't have to. The people disproportionately affected by student loans and are borrowing huge chunks of money to pay for school, don't have it. How do you see that as privilege?
That sounds like a very narrow definition of privilege, if it only includes people who can afford to drop tens to hundreds of thousands of dollars on college without loans.
This is a design choice and not inherent in college loan forgiveness.
For example, one could easily imagine a loan forgiveness program where only people making less than $50,000 a year have their loans forgiven. Or a program where the loans are not forgiven all at once, but the regular payments are taken over by the government, and the person becomes responsible for the payments themselves if they begin to make more than some inflation-adjusted amount.
For example, one could easily imagine a loan forgiveness program where only people making less than $50,000 a year have their loans forgiven. Or a program where the loans are not forgiven all at once, but the regular payments are taken over by the government, and the person becomes responsible for the payments themselves if they begin to make more than some inflation-adjusted amount.
Student debt forgiveness would disproportionately favor the higher educated (obviously).
People with higher education tend to make more.
It’s a regressive policy. Not necessarily a bad policy. But one that favors the better off.
People with higher education tend to make more.
It’s a regressive policy. Not necessarily a bad policy. But one that favors the better off.
Student loans are a horrible idea then, because plenty of students choose degrees with very crappy earning potential anyway. Most of them manage to deal with their debt burden one way or the other, but the for-profit college population has a harder time doing that.
Netherland used to give students a small monthly stipend instead of a loan. In the 1990s, they changed it to a loan, but now talks are that that was a bad move, and it should go back to being a stipend.
Free or cheap education seems to be a far better idea than enormous loans to pay for overpriced for-profit colleges. Education is not just about earnings potential; it's also an investment in society as a whole. A society with a well-educated population is better off than one without. Although expensive education that doesn't provide any job prospects is kinda pointless, and those definitely do exist.
Free or cheap education seems to be a far better idea than enormous loans to pay for overpriced for-profit colleges. Education is not just about earnings potential; it's also an investment in society as a whole. A society with a well-educated population is better off than one without. Although expensive education that doesn't provide any job prospects is kinda pointless, and those definitely do exist.
> Education is not just about earnings potential; it's also an investment in society as a whole. A society with a well-educated population is better off than one without.
Citation needed. The prosperous America you live in was built by generations where the vast majority of people hadn't gone to college. When Intel was founded in 1968, only about 10% of the population had four or more years of post-high school education. When Apple was founded in 1976, that number was still under 15%.
Since then it seems we've hit diminishing returns. 35% of the population has a college degree, but that just means your receptionist has a college degree, where previously they would have been a high school graduate. Waiters and bartenders are more likely to have a bachelors degree today (about 15%) than the general population was back when Intel was founded. Does that make us better off?
Citation needed. The prosperous America you live in was built by generations where the vast majority of people hadn't gone to college. When Intel was founded in 1968, only about 10% of the population had four or more years of post-high school education. When Apple was founded in 1976, that number was still under 15%.
Since then it seems we've hit diminishing returns. 35% of the population has a college degree, but that just means your receptionist has a college degree, where previously they would have been a high school graduate. Waiters and bartenders are more likely to have a bachelors degree today (about 15%) than the general population was back when Intel was founded. Does that make us better off?
We’ve also not become a nation of manufacturing. What’s your point, dude?
The jobs of the future never materialized. Receptionists are doing the same thing they always did. People use more computers now, but literally children can use computers. I’d even argue that our service-oriented economy requires even less education and intellectual horsepower than the manufacturing and construction oriented economy of the past.
I strongly suspect our economy would continue to run fine if half the people who go to college now never went (and we banned the practice of requiring college degrees as a threshold filter for people who have their shit minimally together).
I strongly suspect our economy would continue to run fine if half the people who go to college now never went (and we banned the practice of requiring college degrees as a threshold filter for people who have their shit minimally together).
Most For-Profit schools in the US are relatively cheap. They are also just complete crap and lure people in with false promises and are often unaccredited.
People quickly learn they are complete crap and perception is reality so the degree becomes worthless when looking for a job.
The actual price paid of four year colleges has been dropping even as the sticker price has going up in the US. The discount rate is at an all time high. Almost every student gets some kind of tuition discount.
If you want to save money going to college in the United States either get a scholarship (if you can) or go to two years of community college in-state, get good grades, and then transfer to the best in-state school with the program you want to major in. You will earn a four year degree for a reasonable price.
People quickly learn they are complete crap and perception is reality so the degree becomes worthless when looking for a job.
The actual price paid of four year colleges has been dropping even as the sticker price has going up in the US. The discount rate is at an all time high. Almost every student gets some kind of tuition discount.
If you want to save money going to college in the United States either get a scholarship (if you can) or go to two years of community college in-state, get good grades, and then transfer to the best in-state school with the program you want to major in. You will earn a four year degree for a reasonable price.
Loans (interest bearing ones) have been a known parasitic and immoral practice for thousands of years as they're prohibited in the three major religions (Islam Judaism, and Christianity). The sooner we get rid of for profit loans the better.
Not all loans are parasitic - and i dont care for morality arguments since different cultures and belief systems produces different moral systems, and hence not a very objective method of measurement.
Loans that produce higher profit than the interest payment is a good (aka, non-parasitic) loan. The student loans _could_ be good, or could be parasitic - it depends on the degree. Unfortunately, because of gov't guarantees and backing, the risk of the loans is offloaded to the taxpayers, but the profits taken by the private institutes. This is what makes it parasitic in most cases.
If a private entity is not willing to make the loan, then the gov't shouldn't either. Then naturally, only the non-parasitic loans would be given.
Loans that produce higher profit than the interest payment is a good (aka, non-parasitic) loan. The student loans _could_ be good, or could be parasitic - it depends on the degree. Unfortunately, because of gov't guarantees and backing, the risk of the loans is offloaded to the taxpayers, but the profits taken by the private institutes. This is what makes it parasitic in most cases.
If a private entity is not willing to make the loan, then the gov't shouldn't either. Then naturally, only the non-parasitic loans would be given.
The only non-parasitic loans are those given at 0% interest, which is inline with the three religions. Of course the follow up question is how would you run a bank or business that profits from loans? The answer is: you don't. Society is strictly better off without such parasites.
There are other ways for true risk sharing such as paying someone with a business idea cash in exchange for a portion of his business. If it succeeds, both parties benefit, if it doesn't, both parties lose.
> and hence not a very objective method of measurement.
It is very possible to measure the outcome of such system. Look at our current financial system today how corrupt it is, and compare it to the financial laws that Islam defines and the financial health of the resulting societies in each. Wall St would have to be shut down because of the immoral and parasitic practices it engages in (shorting, selling what you don't own, options, selling debt for debt, loans and mortgages, money printing (we know who's in bed with the fed) etc. etc.). The problem is that people keep believing they can patch the system to make it work out, but in actuality, the system only benefits a select few at the top, while everyone else suffers. The end is not going to be pretty when it all comes crashing down.
There are other ways for true risk sharing such as paying someone with a business idea cash in exchange for a portion of his business. If it succeeds, both parties benefit, if it doesn't, both parties lose.
> and hence not a very objective method of measurement.
It is very possible to measure the outcome of such system. Look at our current financial system today how corrupt it is, and compare it to the financial laws that Islam defines and the financial health of the resulting societies in each. Wall St would have to be shut down because of the immoral and parasitic practices it engages in (shorting, selling what you don't own, options, selling debt for debt, loans and mortgages, money printing (we know who's in bed with the fed) etc. etc.). The problem is that people keep believing they can patch the system to make it work out, but in actuality, the system only benefits a select few at the top, while everyone else suffers. The end is not going to be pretty when it all comes crashing down.
Ancient egypt had grain banks. Grains tend to spoil at a rate of 2-4%. A loan with 0% interest is actually profitable because you get fresh grain with no loss at the end. You don't have to worry how to store your physical wealth.
Money lets us pretend that society must pay the cost of spoiled grains by replacing them with fresh grains free of charge. So people must constantly raise prices or stop working.
Money lets us pretend that society must pay the cost of spoiled grains by replacing them with fresh grains free of charge. So people must constantly raise prices or stop working.
In principle there is nothing wrong with loans. The problem is that people can simply hold cash for free. They demand +x% (liquidity preference) on top of the guaranteed 0% so the market interest rate never actually falls to zero. Central banks have to simulate negative interest rates via quantitative easing it is completely backwards.
> In principle there is nothing wrong with loans.
Interest free loans, yes. Interest bearing loans? They're immoral and parasitic.
> The problem is that people can simply hold cash for free.
Islam solved this with Zakat.
Interest free loans, yes. Interest bearing loans? They're immoral and parasitic.
> The problem is that people can simply hold cash for free.
Islam solved this with Zakat.
That would require a demurrage currency to eliminate liquidity preference.
Yes, you're hitting the core of the problem. Loan issuance should be based on ability to provide a career with a return that can reasonably pay the loan. No bank would issue a loan for a major with crappy earning potential, so why does the government?
There's a bit of selection bias. For profit colleges often target people who are not able to go to public schools for whatever reason. Might be convenience or specialty. For instance those N month training courses to be a paralegal or whatever are pretty good on face value. The alternative isn't a 4 year college degree. I also remember looking into basic college courses around 10 years back (I already have a degree) and found literally no options that weren't in the middle of the day. Zero. This was in the entire City University of New York (CUNY) system too, not some small school. So public school courses isn't really an option if you're working full time.
The article itself states that forgiveness is coming because these institutions defrauded their students
> It perpetuates choosing degrees that will in 90% of cases never have enough of a return to pay for the loan itself.
Alternatively, it's fairly winding down the adverse effects of government-sanctioned programs that saddled people with debt for the promise of degrees that will in 90% of cases never have enough of a return to pay for the loan itself.
No one argues that these were bad loans and bad degrees. We all agree they shouldn't have been written and that we shouldn't be doing that going forward.
But there are still a bunch of young adults out there with unsustainable debt. Isn't that a problem worth doing, well, something about?
Alternatively, it's fairly winding down the adverse effects of government-sanctioned programs that saddled people with debt for the promise of degrees that will in 90% of cases never have enough of a return to pay for the loan itself.
No one argues that these were bad loans and bad degrees. We all agree they shouldn't have been written and that we shouldn't be doing that going forward.
But there are still a bunch of young adults out there with unsustainable debt. Isn't that a problem worth doing, well, something about?
>Unless there is out and out fraud, very little of student loans should be forgiven.
We should only be subsidizing loans for degrees that have a decent chance on being able to pay the loan back. A lot of these degrees are fraudulent in that regard. I know higher education is supposed to be more than a trade school, but when student loans are concerned, viability in the workforce needs to be taken into consideration.
Of course, companies used to prioritize and hire people with degrees regardless of what the degree was in because it proved they were teachable. I'm not sure why that isn't the case any longer.
We should only be subsidizing loans for degrees that have a decent chance on being able to pay the loan back. A lot of these degrees are fraudulent in that regard. I know higher education is supposed to be more than a trade school, but when student loans are concerned, viability in the workforce needs to be taken into consideration.
Of course, companies used to prioritize and hire people with degrees regardless of what the degree was in because it proved they were teachable. I'm not sure why that isn't the case any longer.
> But fiduciary responsibility is doing even a tiny bit of research to see the LTV of that degree.
How are you going to measure it? Philosophy majors tend to have good life outcomes. Is that because they were trained in philosophy? Why would training as a chef be less valuable than training as a philosopher?
How are you going to measure it? Philosophy majors tend to have good life outcomes. Is that because they were trained in philosophy? Why would training as a chef be less valuable than training as a philosopher?
Presumably if the average earnings of "people who obtained a philosophy degree" is higher than those who trained as a chef, then lenders would be willing to pay more for that education. That seems like a trivial thing for lenders to track and learn over time.
We're not talking about the lenders investigating the value of making a loan. We're talking about the student investigating the value of obtaining a degree.
>>> Look, I’m not against choosing whatever degree you want. But fiduciary responsibility is doing even a tiny bit of research to see the LTV of that degree.
>>> Look, I’m not against choosing whatever degree you want. But fiduciary responsibility is doing even a tiny bit of research to see the LTV of that degree.
> talking about the student investigating the value of obtaining a degree
Under a system where there was no gov't guarantee, the students won't be the bottlenecks - the lending institutions would be. And any loans that a student _could_ obtain under that scheme would necessarily be profitable to the lender, and thus the lender gets to do the research. The students could too - but whatever the students find, if that doesn't match up with the lender's own research/analysis, the loan won't happen.
Under a system where there was no gov't guarantee, the students won't be the bottlenecks - the lending institutions would be. And any loans that a student _could_ obtain under that scheme would necessarily be profitable to the lender, and thus the lender gets to do the research. The students could too - but whatever the students find, if that doesn't match up with the lender's own research/analysis, the loan won't happen.
So what? We're talking about bad behavior by the students. The question is how the students would avoid this bad behavior. Where do lenders come into it?
> The question is how the students would avoid this bad behavior.
they would avoid bad behaviour by the lenders not enabling it. The lender's incentive must align with the student's incentive - getting a paying job that a degree would enable.
they would avoid bad behaviour by the lenders not enabling it. The lender's incentive must align with the student's incentive - getting a paying job that a degree would enable.
But lenders aren't interested in this question at all. We've already covered this:
- A philosophy major -- the degree -- is a poor investment on the part of the student.
- A philosophy major -- the student -- is a good investment on the part of the lender.
The incentives of the lender and the student are not aligned. It doesn't matter what the philosophy student wants to spend his borrowed money on -- he's creditworthy! If you loaned him money for gambling he'd still pay you back.
So how does the creditworthy prospective student determine which degrees are valuable and which aren't?
- A philosophy major -- the degree -- is a poor investment on the part of the student.
- A philosophy major -- the student -- is a good investment on the part of the lender.
The incentives of the lender and the student are not aligned. It doesn't matter what the philosophy student wants to spend his borrowed money on -- he's creditworthy! If you loaned him money for gambling he'd still pay you back.
So how does the creditworthy prospective student determine which degrees are valuable and which aren't?
> So how does the creditworthy prospective student determine which degrees are valuable and which aren't?
valueable to who? If the student is credit worthy, then they can pay back the loan, which means they aren't making a bad decision to study something they want to.
The current status quo with the gov't backed loans is that uncredit-worthy students still gets loans, which results in the situation you tried to describe - someone borrowing to get an education with which they cannot repay the loans. If that student wasn't backed by the gov't guarantee, noone would have lent, or would've only lent some small amount that is likely to be repaid.
valueable to who? If the student is credit worthy, then they can pay back the loan, which means they aren't making a bad decision to study something they want to.
The current status quo with the gov't backed loans is that uncredit-worthy students still gets loans, which results in the situation you tried to describe - someone borrowing to get an education with which they cannot repay the loans. If that student wasn't backed by the gov't guarantee, noone would have lent, or would've only lent some small amount that is likely to be repaid.
I've now spent many, many comments asking the same question:
(1) eric4smith suggested students should put in some amount of effort to determine the value of obtaining a degree. How are they supposed to do that?
So far I've gotten four responses completely ignoring the question, even though I restate it every time.
Why are you commenting in my thread, if you have so little interest in listening to anything I'm saying, or even in discussing the only topic I've ever brought up?
(1) eric4smith suggested students should put in some amount of effort to determine the value of obtaining a degree. How are they supposed to do that?
So far I've gotten four responses completely ignoring the question, even though I restate it every time.
Why are you commenting in my thread, if you have so little interest in listening to anything I'm saying, or even in discussing the only topic I've ever brought up?
> students should put in some amount of effort to determine the value of obtaining a degree. How are they supposed to do that?
Fine, i will answer that, even though it is irrelevant. Because no matter what the value that is determined by the student, the linchpin is the lenders' willingness to bet on the repayment.
A student can value the degree financially, by looking at the post-graduation salary, and potential career progression, discounted by some probability of not making it. Salary information is readily available for common professions.
A student can also value in part their interest and passion - a degree in history might not bring money in a career, but gives the student personal satisfaction. Therefore, the student would value the degree higher than the same degree being valued by a financial lender.
Fine, i will answer that, even though it is irrelevant. Because no matter what the value that is determined by the student, the linchpin is the lenders' willingness to bet on the repayment.
A student can value the degree financially, by looking at the post-graduation salary, and potential career progression, discounted by some probability of not making it. Salary information is readily available for common professions.
A student can also value in part their interest and passion - a degree in history might not bring money in a career, but gives the student personal satisfaction. Therefore, the student would value the degree higher than the same degree being valued by a financial lender.
Nearly all of these forgiven loans were likely issued under fraudulent pretenses.
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For reference, this amount is less than 0.03% of the total ~$1.6 trillion in student debt.
It's highly targeted to the fraction of student debt
that's actually highly problematic according to reliable scholarly research (that is, the debt that's actually 'trapping' largely non-traditional students with an unsustainable burden). Though debt incurred for professional graduate degrees (think MBA and what not) is not far behind.
I will pocket that 0.03% if anyone wants. That's still nontrivial clams.
This is truly terrible. It penalizes people who paid off their own loans, it rewards people who made poor choices, and it drives up the cost of school for everyone.
From the article:
"The loans of nearly 16,000 former students are being forgiven under a legal provision known as borrower defense to repayment, which allows students to have their debts erased if they prove that their schools defrauded them."
I paid off my student loans for the state university I attended. How does a student who can prove they were defrauded being forgiven penalize me?
"The loans of nearly 16,000 former students are being forgiven under a legal provision known as borrower defense to repayment, which allows students to have their debts erased if they prove that their schools defrauded them."
I paid off my student loans for the state university I attended. How does a student who can prove they were defrauded being forgiven penalize me?
Lowering the risk of student loans drives more people to take them out, putting more money in the system. More money in the system increases the cost of schools for everyone. Assuming you are in the US, then you, I, and everyone else here is paying for this debt forgiveness via taxes.
Prove the causal link that lowering the risk of student loans (by forgiving student loan debt) drives more people to take them out.
You're also missing the illegal behavior on the part of the for-profit institutions. That's what we, as tax-payers, are on the hook for. And we would be on the hook for it regardless. You want to complain, complain about the for-profit institutions that defrauded these people illegally for us to have to clean up.
You're also missing the illegal behavior on the part of the for-profit institutions. That's what we, as tax-payers, are on the hook for. And we would be on the hook for it regardless. You want to complain, complain about the for-profit institutions that defrauded these people illegally for us to have to clean up.
While I generally agree with you, this forgiveness seems to target victims of fraud rather than student loans in general. It could be argued that the government should have never allowed a loan to be taken out for a fraudulent school (if they had done due diligence)
How exactly does it penalize people who paid off their loans? I'm not following that line of reasoning. If you could pay off your loans, then that's great. You should feel good about that accomplishment.
> How exactly does it penalize people who paid off their loans?
those who took a sacrifice to pay off their loans would not have had to make the sacrifices had their loans been forgiven like the article claims.
Not receiving a grant that is paid for by taxpayers is a form of "penalty".
those who took a sacrifice to pay off their loans would not have had to make the sacrifices had their loans been forgiven like the article claims.
Not receiving a grant that is paid for by taxpayers is a form of "penalty".
Blanket funding of education is terrible. Loans should be negotiated on an individual basis based on the degree and that degree's ability to provide a salary high enough to pay back the original loan. This government loan enables colleges to charge more because students will simply take a higher loan out with no calculation of return on investment.
Every person with a bullshit degree that I know had their parents pay their entire way in college.
There are plenty of necessary degrees that don't provide enough compensation to pay off the loans of people who take them. We don't pay money in this society for people who provide necessary services. If you think that we do, then please, by all means, explain to me why Software Engineers (a profession invented in the last 50 years), get paid more than farmers (a profession that defines how humans have come so far).
There are plenty of necessary degrees that don't provide enough compensation to pay off the loans of people who take them. We don't pay money in this society for people who provide necessary services. If you think that we do, then please, by all means, explain to me why Software Engineers (a profession invented in the last 50 years), get paid more than farmers (a profession that defines how humans have come so far).
Because farmers depend heavily on software engineers to create and maintain highly complex software for their automated GPS navigated tractors.
Plus supply and demand, farm labor can come from Mexico for cheap, but firmware software engineers in agriculture aint coming for the same price
Plus supply and demand, farm labor can come from Mexico for cheap, but firmware software engineers in agriculture aint coming for the same price
> Because farmers depend heavily on software engineers to create and maintain highly complex software for their automated GPS navigated tractors.
Yes, farmers need Software engineers to make complex GPS software, which is why we didn't have farmers until after software engineers became a profession. Before software engineers made gps for tractors we were all hunter-gatherers.
The first part of your comment is so absurd I legitimately can't tell if you're serious.
Yes, farmers need Software engineers to make complex GPS software, which is why we didn't have farmers until after software engineers became a profession. Before software engineers made gps for tractors we were all hunter-gatherers.
The first part of your comment is so absurd I legitimately can't tell if you're serious.
By farmers I was referring to modern farmers. You can certainly do farming in early 19/20th century style with horses instead of tractors, but let me know how that would work for farmer’s profit&loss
In spite of stating my point, you're still missing it.
Nothing Software Engineers are selling to farmers is necessary to do farming. I don't even have to go back that far to make this case. You don't need tractors with GPS on them to farm, because people in the 1960s had tractors without GPS. GPS might make things slightly easier, but it's not changing enough to justify the difference in salary between someone who does work that literally feeds the entire population of a country, and someone who tracks your location.
One of those things is absolutely critical to survival, and the other might occasionally be helpful. It's the difference between a 'need' and a 'want'. I need food to survive, I want an app that can give me directions to an address.
Nothing Software Engineers are selling to farmers is necessary to do farming. I don't even have to go back that far to make this case. You don't need tractors with GPS on them to farm, because people in the 1960s had tractors without GPS. GPS might make things slightly easier, but it's not changing enough to justify the difference in salary between someone who does work that literally feeds the entire population of a country, and someone who tracks your location.
One of those things is absolutely critical to survival, and the other might occasionally be helpful. It's the difference between a 'need' and a 'want'. I need food to survive, I want an app that can give me directions to an address.
You are mistaken, market forces such as supply and demand already account for things like need and want. Thats why there is global demand for food and farmers can raise prices if fuel cost increase and still sell their crop.
And not everyone needs farmers believe me, especially overpaid american farmers. Food can be imported dirt cheap from other countries.
The short explanation is supply&demand dictates wage, big supply of farmer labor in an increasingly automated agriculture + low supply of IT labor doing that automation dictates pricing.
And not everyone needs farmers believe me, especially overpaid american farmers. Food can be imported dirt cheap from other countries.
The short explanation is supply&demand dictates wage, big supply of farmer labor in an increasingly automated agriculture + low supply of IT labor doing that automation dictates pricing.
"When the last tree has been cut down, the last fish caught, the last river poisoned, only then will we realize that one cannot eat money." - Attributed as Cree Indian Proverb.
If there was a farmer strike or the number of farmers dropped dangerously low, the profits for the field would go up and there would be more incentive for people to specialize in farming.
Are farmers really that important? We import a lot of food and heavily subsidize farmers already.
Are farmers really that important? We import a lot of food and heavily subsidize farmers already.
>Are farmers really that important?
Only if you think eating is important.
>We import a lot of food
> In 2019, the United States ag exports account for $128.718 billion with soybeans, beef, veal, pork, poultry and fresh and processed fruits and veggies topping the list. United States agriculture imports total $127.6 billion with coffee and cocoa, fresh and processed vegetables, and grains and feeds accounting for the majority.
We're a net exporter. We import a lot of speciality foods (coffee/cocoa) grains and livestock feed. Doesn't sound too appetizing.
>heavily subsidize farmers already.
I believe we mostly subsidize farmers to not produce things as to not flood the market (see agriculture during Great Depression). Ethanol is an exception though.
Only if you think eating is important.
>We import a lot of food
> In 2019, the United States ag exports account for $128.718 billion with soybeans, beef, veal, pork, poultry and fresh and processed fruits and veggies topping the list. United States agriculture imports total $127.6 billion with coffee and cocoa, fresh and processed vegetables, and grains and feeds accounting for the majority.
We're a net exporter. We import a lot of speciality foods (coffee/cocoa) grains and livestock feed. Doesn't sound too appetizing.
>heavily subsidize farmers already.
I believe we mostly subsidize farmers to not produce things as to not flood the market (see agriculture during Great Depression). Ethanol is an exception though.
16000 borrowers who were targets of fraud benefit. A drop on the hot stone, as they say. It's not at all the change in policy that the current administration promised us.
Did they actually promise a policy change around student loans?
It’s here:
https://joebiden.com/beyondhs/
Thanks. This is definitely not the same “wave a pen and forgive all debt” demands I see from the very progressive left, but it’s certainly a lot more progressive on loan forgiveness than the current policies.
Ok, now do all of it.
Effort and money needs to go into solving the problem at the source (expensive education, easy loans for low-ROI degrees). Throwing money at people who already received degrees does absolutely nothing for the next generation of students. Might even make it worse, because now they're competing with slightly older peers who were lucky enough to get their debt paid off.
Paying off people's college debt is also highly regressive. Why give $50-100K or more to people with college degrees, but nothing at all to people who didn't go to college? Doesn't make sense.
Paying off people's college debt is also highly regressive. Why give $50-100K or more to people with college degrees, but nothing at all to people who didn't go to college? Doesn't make sense.
What if we met in the middle? We can accept that the root cause needs to be fixed, but we could also halt interest accumulation and penalties on the outstanding balances due while payments are still made.
We can extend and pretend mortgage backed securities but not student loan debt?
We can extend and pretend mortgage backed securities but not student loan debt?
> but we could also halt interest accumulation and penalties on the outstanding balances due while payments are still made.
I'd be in favor of low interest rate consolidation programs.
But let's be clear: That's still far, far cheaper than just paying off everyone's student debt from taxpayer money.
I'd be in favor of low interest rate consolidation programs.
But let's be clear: That's still far, far cheaper than just paying off everyone's student debt from taxpayer money.
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So you knew going into college that tuition/books/boarding was $X and said yeah I am going to do that, you did the math and figured that after school it was going to be paid off in $Y years due to a college educated profession making a certain salary. Now that college is done you now want your financial obligation cleared because you have decided that college degree was too expensive.
So whats the difference between that and someone else who buys a house and realizes that they actually don't want to pay 40-50% of their income on housing payments and demands the Government/or bank give them the house for free due to it being unfairly priced?
Where I have a problem with this line of thinking is it totally throws personal responsibility out the window. You knew the costs and you signed up anyways. Do I think college costs are criminally high? absolutely. Do I think for profit diploma mills are predatory and should be shut down? yes.
I just have a huge issue with people who paid $200k-300k for a liberal arts degree where the jobs pay $30-$70k a year and then demand the government cancel their student loan debt due to it being too high. Its a slap in the face to the millions who never could go to college because they weighed the calculations and realized it does not make financial sense or came from background where they had no support for such an endeavor.
So whats the difference between that and someone else who buys a house and realizes that they actually don't want to pay 40-50% of their income on housing payments and demands the Government/or bank give them the house for free due to it being unfairly priced?
Where I have a problem with this line of thinking is it totally throws personal responsibility out the window. You knew the costs and you signed up anyways. Do I think college costs are criminally high? absolutely. Do I think for profit diploma mills are predatory and should be shut down? yes.
I just have a huge issue with people who paid $200k-300k for a liberal arts degree where the jobs pay $30-$70k a year and then demand the government cancel their student loan debt due to it being too high. Its a slap in the face to the millions who never could go to college because they weighed the calculations and realized it does not make financial sense or came from background where they had no support for such an endeavor.
I love this fake anecdote about someone who paid 2-300k for an underwater basketweaving degree, as if it's representative of most people who went to college.
Also, where's the responsibility to colleges for selling these degrees to people (children) who have no hopes of paying them back? That's predatory. This article covers just the righting of the harm done on the people who fell into that predatory lending trap.
Also, where's the responsibility to colleges for selling these degrees to people (children) who have no hopes of paying them back? That's predatory. This article covers just the righting of the harm done on the people who fell into that predatory lending trap.
the "fake ancedote" is actually my Wife's actual case. She did a semester at NYU that was $38k, her entire sociology degree was around $280k for books, school and boarding. She was smart and said forget that mountain of student debt, I'd rather do state school, and she did and it took us a few years to pay off that one semester of debt at NYU.
Her best friend went to Pace and ended up with $250k of tuition/books/boarding for her liberal arts degree, so yeah total fabrication on my part :)
Her best friend went to Pace and ended up with $250k of tuition/books/boarding for her liberal arts degree, so yeah total fabrication on my part :)
You didn't answer the question about the responsibility of colleges for selling this to children...
Also, you're presupposing that all liberal arts degrees are bad, and I would contest that as a person who went to a liberal arts college. Also, My takeaway from your 'anecdote' possible we should pay social workers more because the cost to get that degree isn't covered by the work that they would do afterwards...
Also, you're presupposing that all liberal arts degrees are bad, and I would contest that as a person who went to a liberal arts college. Also, My takeaway from your 'anecdote' possible we should pay social workers more because the cost to get that degree isn't covered by the work that they would do afterwards...
Like health care, the increasing price of education will not be solved by giving money to the institutions that are raising their prices. They'll continue to raise prices so long as people are still giving them what they ask for.
It seems absurd to me that people think the solution to high prices is to have someone else pay part or all of it for them.
It seems absurd to me that people think the solution to high prices is to have someone else pay part or all of it for them.
I don't think anyone has suggested this is a solution to the rising cost of education. That's a separate problem. I'd love to hear your proposal for fixing it.
This is a proposal to fix the mountain of debt that's preventing Millenials and Gen X from purchasing property and building wealth. It is only intended to fix that problem which will be a remaining symptom/problem of the increasing price of education, even if you propose a magic solution that stops education costs from increasing.
This is a proposal to fix the mountain of debt that's preventing Millenials and Gen X from purchasing property and building wealth. It is only intended to fix that problem which will be a remaining symptom/problem of the increasing price of education, even if you propose a magic solution that stops education costs from increasing.
I worked very hard to pay off my loans, I don’t think my tax dollars should go to bailing people out of debt they agreed to repay.
I'm very frustrated by this perspective.
I want to live in a world full of intellectually curious, creative people who build things. I think we can best do that by giving people access to education, health care, housing, food, and physical safety.
The positive externalities of an educated populace are massive.
I think the choice is between: (1) punish people because it's fair, and live an objectively worse life because everyone around us is miserable and dysfunctional (2) tune policy to support people, and live an objectively better life because everyone around us is healthy, productive and creative.
Immiserating debt destroys lives, and destroyed lives makes all of us worse off.
I want to live in a world full of intellectually curious, creative people who build things. I think we can best do that by giving people access to education, health care, housing, food, and physical safety.
The positive externalities of an educated populace are massive.
I think the choice is between: (1) punish people because it's fair, and live an objectively worse life because everyone around us is miserable and dysfunctional (2) tune policy to support people, and live an objectively better life because everyone around us is healthy, productive and creative.
Immiserating debt destroys lives, and destroyed lives makes all of us worse off.
Your position seems to lack guiding or limiting principles.
>"The positive externalities of an educated populace are massive."
Forgiving existing debt does not increase the level of education of the populace. Conditionally forgiving future debts could, though there would be collateral effects.
>"I think the choice is between: (1) punish people because it's fair, and live an objectively worse life because everyone around us is miserable and dysfunctional (2) tune policy to support people, and live an objectively better life because everyone around us is healthy, productive and creative."
Failing to forgive debt is not a punishment, it's just holding people to their obligations. It definitely does support them, but the question would be why only support people who took on debt? Why not support the people who made different decisions too?
>"Immiserating debt destroys lives, and destroyed lives makes all of us worse off."
If you just want to forgive debt, why limit it to student loans? Why not forgive healthcare debts? What about consumer debt after Christmas? How about gambling debt? All of those make people worse off.
>"The positive externalities of an educated populace are massive."
Forgiving existing debt does not increase the level of education of the populace. Conditionally forgiving future debts could, though there would be collateral effects.
>"I think the choice is between: (1) punish people because it's fair, and live an objectively worse life because everyone around us is miserable and dysfunctional (2) tune policy to support people, and live an objectively better life because everyone around us is healthy, productive and creative."
Failing to forgive debt is not a punishment, it's just holding people to their obligations. It definitely does support them, but the question would be why only support people who took on debt? Why not support the people who made different decisions too?
>"Immiserating debt destroys lives, and destroyed lives makes all of us worse off."
If you just want to forgive debt, why limit it to student loans? Why not forgive healthcare debts? What about consumer debt after Christmas? How about gambling debt? All of those make people worse off.
> If you just want to forgive debt, why limit it to student loans? Why not forgive healthcare debts?
Now we're on the same page! We should absolutely have universal healthcare.
> What about consumer debt after Christmas? How about gambling debt?
Religious holidays and gambling do not improve our society. An educated, healthy populace does.
Now we're on the same page! We should absolutely have universal healthcare.
> What about consumer debt after Christmas? How about gambling debt?
Religious holidays and gambling do not improve our society. An educated, healthy populace does.
Your points advocate forgiving prospective debts (ones taken on in the future), not existing ones (as was the case here). You also ignore the collateral effects of encouraging increased spending on education and healthcare.
> Immiserating debt destroys lives, and destroyed lives makes all of us worse off.
I agree, but it was the choice of the people who borrowed to risk destroying their own lives, and it is not remotely fair to ask the rest of us who worked hard, made hard choices, and sacrificed things we wanted to pay back the debt of those who didn't.
I worked my way through college and commuted from my parent's home so I could afford it. I also went to a much lower-tier state school where I could get a scholarship.
I would have loved to live at school and have that experience. I would have loved to go to a higher-end but more expensive school where I didn't have a merit scholarship, and to be able to go without also working. But I sacrificed those things so that I could graduate with as little debt as I could, and I worked hard to pay that debt off.
How is it fair to now tell me I have to pay off everyone else's school who chose not to give anything up?
I agree, but it was the choice of the people who borrowed to risk destroying their own lives, and it is not remotely fair to ask the rest of us who worked hard, made hard choices, and sacrificed things we wanted to pay back the debt of those who didn't.
I worked my way through college and commuted from my parent's home so I could afford it. I also went to a much lower-tier state school where I could get a scholarship.
I would have loved to live at school and have that experience. I would have loved to go to a higher-end but more expensive school where I didn't have a merit scholarship, and to be able to go without also working. But I sacrificed those things so that I could graduate with as little debt as I could, and I worked hard to pay that debt off.
How is it fair to now tell me I have to pay off everyone else's school who chose not to give anything up?
> I want to live in a world full of intellectually curious, creative people who build things. I think we can best do that by giving people access to education, health care, housing, food, and physical safety.
> The positive externalities of an educated populace are massive.
These people are already educated.
Debt payoff ideas send money to people with degrees, but they do nothing for people didn't go to college or who haven't yet graduated.
The problem needs to be solved at the source, not periodically bailed out after the fact. If you just pour more money into the system, tuition will skyrocket and people will become insensitive to the astronomical prices. Why even price compare if you just expect the government to pay it off for you later? Expenses would continue to spiral out of control at an accelerated rate.
> The positive externalities of an educated populace are massive.
These people are already educated.
Debt payoff ideas send money to people with degrees, but they do nothing for people didn't go to college or who haven't yet graduated.
The problem needs to be solved at the source, not periodically bailed out after the fact. If you just pour more money into the system, tuition will skyrocket and people will become insensitive to the astronomical prices. Why even price compare if you just expect the government to pay it off for you later? Expenses would continue to spiral out of control at an accelerated rate.
Exactly. The lower the risk to borrowing, and the easier it is to borrow, the higher tuition prices will go.
“I think we can best do that by giving people access to education, health care, housing, food, and physical safety.”
No one is “punishing” anyone. There are homeless people freezing to death who could use the money.
You are conflating life and death necessities like food and shelter with someone wanting to binge drink for 4 years while getting an underwater basketweaving degree.
Bernie did the same thing.
No one is “punishing” anyone. There are homeless people freezing to death who could use the money.
You are conflating life and death necessities like food and shelter with someone wanting to binge drink for 4 years while getting an underwater basketweaving degree.
Bernie did the same thing.
Here's the thing I love about these arguments, they choose the most BS degrees instead of arguing from a stronger case of actually societally helpful degrees that people get and still can't pay off loans with. If you want me to pretend like you have a strong case stop picking literally the stupidest degrees that no one is complaining about.
I know plenty of people who went to 4-year colleges to get Social Studies degrees, and then went on to do social work, and guess what? Social Work doesn't pay well enough to make up for that. In one case I know, literally helping the homeless people who are freezing to death. And the person had to stop doing that work cause they still couldn't pay off their loans.
I know plenty of people who went to 4-year colleges to get Social Studies degrees, and then went on to do social work, and guess what? Social Work doesn't pay well enough to make up for that. In one case I know, literally helping the homeless people who are freezing to death. And the person had to stop doing that work cause they still couldn't pay off their loans.
Hey, me too, man. That's why it costs me $1 million per student per year to teach them how to be like that. The right thing for the government to do is to pay for their high-quality education from me. All my friends have been to Université de Rene and they are very intellectually curious and creative. I'll tell them to apply to your new government policy to forgive the loan.
You could even simplify it and just give me the money. I have like 100 students this year. Will direct debit be okay?
You could even simplify it and just give me the money. I have like 100 students this year. Will direct debit be okay?
To achieve an educated population the core problem of wildly inflated cost of college education needs to be dealt with.
Otherwise you have to repeatedly forgive the debt. The message you are sending is to consume without regard for prices or temperance as that will be rewarded in the end.
This acts as a negative externality as it erodes trust in the rule of law (many countries do operate like this, and they are terrible places to live)
Otherwise you have to repeatedly forgive the debt. The message you are sending is to consume without regard for prices or temperance as that will be rewarded in the end.
This acts as a negative externality as it erodes trust in the rule of law (many countries do operate like this, and they are terrible places to live)
> The positive externalities of an educated populace are massive.
What are they?
What are they?
If you feel so compelled, you already are welcome to donate your money for these causes.
I encourage you to spend your money supporting the ideas in which you believe.
Let us know how it goes.
I encourage you to spend your money supporting the ideas in which you believe.
Let us know how it goes.
Fortunately, human beings have gathered into societies which allow them to act in concert and for the benefit of all members of said society.
If you'd prefer to not take part in these social structures, feel free to leave.
Let us know how it goes. Or don't.
If you'd prefer to not take part in these social structures, feel free to leave.
Let us know how it goes. Or don't.
I believe that personal accountability for making the best of one's lot is key to society being maximally beneficial.
I don't see why "acting in concert" implies forcing me to pay for things in direct opposition to my heartfelt belief via the coercive levers of government. Go find likeminded bleeding hearts and have a nongovernmental ball.
Why can't debt forgiveness take the Jerry Lewis/Shriners private donation route?
Then you'll do you. I'll do me. We'll all win.
I don't see why "acting in concert" implies forcing me to pay for things in direct opposition to my heartfelt belief via the coercive levers of government. Go find likeminded bleeding hearts and have a nongovernmental ball.
Why can't debt forgiveness take the Jerry Lewis/Shriners private donation route?
Then you'll do you. I'll do me. We'll all win.
I agree with you that student loan forgiveness is unfair and wrong, but this is not a helpful response, and you know that. Why even post it?
Because the GP suggests that the only options are (a) not caring or (b) taking other people's money. Clearly, that's a false dichotomy. I pointed out option (c).
They agreed because they had no choice. College is basically forced on every high schooler to the point that your guidance counselors ask you which one you choose and won’t take “none” as an answer. Ask me how I know. HR departments will also pass on your application unless it has a university listed.
With the rising costs of tuition year after year, it’s becoming unreasonable. And when they’re not dischargable during bankruptcy, it’s giving a middle finger to the poor. Saying, “F you, I got mine” doesn’t solve anything. Something needs to be done about it.
With the rising costs of tuition year after year, it’s becoming unreasonable. And when they’re not dischargable during bankruptcy, it’s giving a middle finger to the poor. Saying, “F you, I got mine” doesn’t solve anything. Something needs to be done about it.
> With the rising costs of tuition year after year, it’s becoming unreasonable. And when they’re not dischargable during bankruptcy, it’s giving a middle finger to the poor. Saying, “F you, I got mine” doesn’t solve anything. Something needs to be done about it.
I completely agree. But loan forgiveness, more student loans, or lowering the risk/cost/burden of student loans will only put more money in the system and drive up prices.
Tuition costs are a horrible situation that really needs to be fixed somehow. But loan forgiveness will only make things worse.
I completely agree. But loan forgiveness, more student loans, or lowering the risk/cost/burden of student loans will only put more money in the system and drive up prices.
Tuition costs are a horrible situation that really needs to be fixed somehow. But loan forgiveness will only make things worse.
Okay, then propose something better that will fix tuition costs. It's really easy to say "that'll never work", and really difficult to actually fix problems. If you want to make a contribution to internet forums, propose an alternative. Otherwise you're just an asshole on the internet.
If it's the bigger problem, propose a better solution. And actively prove to me that not doing this is better than doing nothing. Because what you're proposing is the status quo, and we can both agree that's really shitty at the moment.
Also, even if you fix tuition costs, it won't change the fact that there is a mountain of student loan debt that isn't going to get paid back. What should we do when people can't pay it back?
If it's the bigger problem, propose a better solution. And actively prove to me that not doing this is better than doing nothing. Because what you're proposing is the status quo, and we can both agree that's really shitty at the moment.
Also, even if you fix tuition costs, it won't change the fact that there is a mountain of student loan debt that isn't going to get paid back. What should we do when people can't pay it back?
Here are some proposals:
1. Fix the college accreditation process. Currently it involves colleges wining and dining accreditors for a week. Change the standards to be more practical and open up the possibility for more colleges. We could even change the accreditation so that it allows for things like trade school and apprenticeships. I think that would certainly fix tuition costs.
2. Push for making budgeting a required high school course in more high schools.
1. Fix the college accreditation process. Currently it involves colleges wining and dining accreditors for a week. Change the standards to be more practical and open up the possibility for more colleges. We could even change the accreditation so that it allows for things like trade school and apprenticeships. I think that would certainly fix tuition costs.
2. Push for making budgeting a required high school course in more high schools.
OR Get rid of superfluous school administration jobs. There's a lot of useless or superfluous middle management in colleges. But you're not going to get rid of them because they make the hiring decisions.
1. I don't know anything about the accreditation process, but sure, if there's excess spending there then not allowing people to bribe accreditors definitely seems like a positive decision. I can't imagine that fixes millions of dollars worth of tuition cost... But ultimately not opposed to it.
2. Famously high schools teaching people classes means they use it later on in life. Not saying we shouldn't teach people budgeting, just that I doubt that it will fix the number of kids that go to college when high schools also want people to go to college.
1. I don't know anything about the accreditation process, but sure, if there's excess spending there then not allowing people to bribe accreditors definitely seems like a positive decision. I can't imagine that fixes millions of dollars worth of tuition cost... But ultimately not opposed to it.
2. Famously high schools teaching people classes means they use it later on in life. Not saying we shouldn't teach people budgeting, just that I doubt that it will fix the number of kids that go to college when high schools also want people to go to college.
I didn't go. Could have went for free even, still didn't go.
During interviews for my current position as an L6 in the AV space I wasn't asked until a degree until post offer, and even that was a recruiter asking in passing.
Turns out you can just... not go to college and learn things on your own.
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I don't necessarily agree that people with bad loans should hang out to dry, but in my opinion this mess should fall on schools first.
They got to use 18 year olds to cosign unsecured loans. Simple as that.
A school can't ask a bank for a $500 million dollar unsecured loan. But it can ask tens of thousands of kids to each bring back 50k.
Now that the jig is up I want to see for-profit schools held accountable for the practice.
The class of people affected by this are not the worse off in this country. There are a lot of places where trillions of tax dollars could be a bigger help than college grads.
During interviews for my current position as an L6 in the AV space I wasn't asked until a degree until post offer, and even that was a recruiter asking in passing.
Turns out you can just... not go to college and learn things on your own.
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I don't necessarily agree that people with bad loans should hang out to dry, but in my opinion this mess should fall on schools first.
They got to use 18 year olds to cosign unsecured loans. Simple as that.
A school can't ask a bank for a $500 million dollar unsecured loan. But it can ask tens of thousands of kids to each bring back 50k.
Now that the jig is up I want to see for-profit schools held accountable for the practice.
The class of people affected by this are not the worse off in this country. There are a lot of places where trillions of tax dollars could be a bigger help than college grads.
Just because I've paid for healthcare my entire life (including bills owed to the hospital) doesn't mean other people should have to. And just because anyone has to do something that is terrible, doesn't mean that everyone else should be required to go through that terrible experience.
Your reasoning is incredibly shortsighted and selfish.
Your reasoning is incredibly shortsighted and selfish.
No one is stopping you from engaging in private charity. I'm just asking you not to vote for men to come with guns to enforce your charitable endeavors.
Right now the Amish are able to 'opt out of social security.' Very much this were an option for atheists and those outside of these religious exceptions. I'd agree to sign my death warrant and never be bailed out by society if they agree to let me opt out of the insurance plan.
Right now the Amish are able to 'opt out of social security.' Very much this were an option for atheists and those outside of these religious exceptions. I'd agree to sign my death warrant and never be bailed out by society if they agree to let me opt out of the insurance plan.
Single payer healthcare isn't considered charity in any other civilized country, its a government service and our private system is bloated in the first place. I'd rather have single payer over having a bunch of middle men leeching
I'm fine with some consensual system where those who opt in to it can engage in it. So long as I can opt out (of both liabilities and benefits), even if it means forever signing my rights away to public healthcare, it's all good to me. Consent about your health care decisions is important in my opinion.
>bunch of middle men leeching
Hopefully attempt here won't merely substitute administrators and insurance leeches for government bureaucrat leeches. I'm all for tossing out the leeches. Concierge / cash only medical offices are one way to do this, but a well run single payer system could probably achieve it as well.
>bunch of middle men leeching
Hopefully attempt here won't merely substitute administrators and insurance leeches for government bureaucrat leeches. I'm all for tossing out the leeches. Concierge / cash only medical offices are one way to do this, but a well run single payer system could probably achieve it as well.
I absolutely understand your concern about government leech's as well, I'm in the same boat. Too often do politicians just go with their friends or donors to supply services and contracts. Its a big problem that wastes a ton of money and time.
I also think your idea of being able to opt out is interesting, I think this could be a viable concept but I don't know how it would be implemented. It would seem that there might be two parallel systems if that were to happen.
I also think your idea of being able to opt out is interesting, I think this could be a viable concept but I don't know how it would be implemented. It would seem that there might be two parallel systems if that were to happen.
I have absolutely no idea what my comment had to do with charity and have no idea what you're responding to.
> Just because I've paid for healthcare my entire life (including bills owed to the hospital) doesn't mean other people should have to
You indicate other people shouldn't have to pay for their healthcare. How were you proposing it be paid? The main options I think of are the ones I mention, either charity or men with guns to enforce payment (taxes) of this charitable endeavor. Unless you are a doctor and you'll be performing this directly for these people.
Of course, it would be incredibly shortsighted and selfish to use violence to enforce ideals of charity.
>no idea what you're responding to.
Now you know. I'm responding to you.
You indicate other people shouldn't have to pay for their healthcare. How were you proposing it be paid? The main options I think of are the ones I mention, either charity or men with guns to enforce payment (taxes) of this charitable endeavor. Unless you are a doctor and you'll be performing this directly for these people.
Of course, it would be incredibly shortsighted and selfish to use violence to enforce ideals of charity.
>no idea what you're responding to.
Now you know. I'm responding to you.
I agree but should there be some kind of repercussion? It isn't like the loan amount is hidden from you. If you have never had more than 1,000 in your savings account doesn't taking out a 6 figure loan trigger some alarm bells? This stuff kinda hits me in a similar manner to rehabilitation for violent offenders. It is the obvious ideal but my faith in humanity makes me skeptical of it working well.
I know if I had a loan right now I would be biden my time until it got forgiven.
I know if I had a loan right now I would be biden my time until it got forgiven.
I _just_ got mine paid off. I even went to one of the colleges where debt was forgiven (ITT Tech), but I didn't get one of the bullshit degrees like game design or whatever so I was able to pay mine off.
I don't yet know how I feel about this, but I can't help but think its probably best for humanity that these people can live normal lives now. On the other hand, are these people now who I'm competing with for resources (e.g. housing, etc)
All I really know is that I'm glad I finally paid mine off, at 34yrs old no less..
I don't yet know how I feel about this, but I can't help but think its probably best for humanity that these people can live normal lives now. On the other hand, are these people now who I'm competing with for resources (e.g. housing, etc)
All I really know is that I'm glad I finally paid mine off, at 34yrs old no less..
Huh, That's a sunk-cost fallacy if I've ever seen one.
But also, I love it when people's response to debt forgiveness is "I suffered, so other people should have to suffer too." I guess it's time to start taking people's eyes, it will save us time because we're all going to be blind sooner or later.
But also, I love it when people's response to debt forgiveness is "I suffered, so other people should have to suffer too." I guess it's time to start taking people's eyes, it will save us time because we're all going to be blind sooner or later.
"Things were awful for me and they should be awful for you too"?
Why american taxpayer should pay for someone’s degree in basket weaving?
While doctors and lawyers grind 100 hrs/week like crazy to pay off their college debt?
Thank you for pointing out this insanity, we'd all be better off if doctors didn't have to spend a few years grinding out million-dollar debts, and then go on to print millions over millions over the rest of their career.
I have a radical idea. Make medical school free, and expand residency slots. Whatever this will cost will more than be made up by a dramatic reduction in doctor salaries[1]... And medical costs in this country coming back down to Earth.
We don't charge people for elementary and high school because an educated population is necessary for the well-being of the country. Well, so is the availability of doctors.
[1] The average general practitioner's lifetime earnings are 8.5 million. I'll happily pay a million for their schooling, if that number could be halved.
I have a radical idea. Make medical school free, and expand residency slots. Whatever this will cost will more than be made up by a dramatic reduction in doctor salaries[1]... And medical costs in this country coming back down to Earth.
We don't charge people for elementary and high school because an educated population is necessary for the well-being of the country. Well, so is the availability of doctors.
[1] The average general practitioner's lifetime earnings are 8.5 million. I'll happily pay a million for their schooling, if that number could be halved.
there is nothing free, it is just someone else's money.
the money wasted on bailing out student loans - has already been pocketed by Betsy Devos alike, maybe we should stop funding 18 y.o. for useless degrees from College of Lost Hope, AL.
public schools are funded with housing property taxes, they are NOT free. Compare house prices in good school district vs bad and their tax bills
the money wasted on bailing out student loans - has already been pocketed by Betsy Devos alike, maybe we should stop funding 18 y.o. for useless degrees from College of Lost Hope, AL.
public schools are funded with housing property taxes, they are NOT free. Compare house prices in good school district vs bad and their tax bills
> there is nothing free, it is just someone else's money.
And in the case of doctors, it's my money, and I can either pay now, or pay five times later.
And in the case of doctors, it's my money, and I can either pay now, or pay five times later.
Counter: I worked very hard to minimize my student loans (I had less than 10k, and repaid them within a couple years), and I think they should be forgiven. Or at the very least, discharged with bankruptcy.
How do you feel about golden hammers and toilets?
Some wasteful government spending exists, so we shouldn't worry about any other wasteful government spending?
No, just that being a normal first world country that funds things that return real value, like an educated work force who pay back in higher taxes, is far more useful than fake spending to hide what is being done.
A 1.6 trillion handouts for colleges. It seems its not enough to have licensing, favored immigration laws, continual public subsidies: need to also throw piles of cash at them.
Pretty sure the colleges have already been paid. This would go to the people who can't pay off the mountain of debt they were given while they were still children.
Why federal gov wont claw back these billions from these same colleges that failed struggling students and their shareholders like Betsy Devos?
I think defaulted student loans should be charged back to college to create accountability
I think defaulted student loans should be charged back to college to create accountability
Bad idea. I had student loans up until 2018, and there should be no program that would forgive mine. I paid off $30k in debt because I got a $50k sign on bonus. People in my position absolutely should not have their debt forgiven at taxpayer's expense.
most of the outstanding student debt is held by wealthy people like lawyers and doctors. they don't need a bailout
this is definitely not true
> Accounting correctly for both human capital and effect of subsidies in student lending plans, almost a third of all student debt is owed by the wealthiest 20 percent of households and only 8 percent by the bottom 20 percent. Across-the-board student loan forgiveness is regressive measured by income, family affluence, educational attainment—and also wealth.
https://marginalrevolution.com/marginalrevolution/2022/01/st...
https://marginalrevolution.com/marginalrevolution/2022/01/st...
Over 80% of students have less than $30K of debt.
The highest debt loads obviously go to expensive graduate degrees like lawyers and doctors. Medical school is vastly more expensive than a regular college degree.
That's why none of the proposals would actually wipe all student debt. Plans to pay off the first $10K of debt and such would be far more equitable than just paying off everyone's debt. The latter would vastly benefit graduate degree holders, a cohort which has the highest earnings and lowest unemployment. Would be terribly dumb to do that.
The highest debt loads obviously go to expensive graduate degrees like lawyers and doctors. Medical school is vastly more expensive than a regular college degree.
That's why none of the proposals would actually wipe all student debt. Plans to pay off the first $10K of debt and such would be far more equitable than just paying off everyone's debt. The latter would vastly benefit graduate degree holders, a cohort which has the highest earnings and lowest unemployment. Would be terribly dumb to do that.
Maybe not strictly doctors and lawyers but if you have a college degree then you statistically make more money than if you didnt. Why send money to those people and not to the people who make less money?
The article says this is part of the $16 billion in loan discharges for around 680,000 borrowers since Mr. Biden took office, around $2 billion of which came through the borrower defense program.
These numbers surprised me, I guess I haven't been paying very close attention:
"There are around 43 million Americans with student debt.... All told, Americans owe around $1.6 trillion in federal student loans and more than $130 billion in private student loans, according to the data company MeasureOne. About 5.2 million federal borrowers are in default."
These numbers surprised me, I guess I haven't been paying very close attention:
"There are around 43 million Americans with student debt.... All told, Americans owe around $1.6 trillion in federal student loans and more than $130 billion in private student loans, according to the data company MeasureOne. About 5.2 million federal borrowers are in default."
Approximately 12.1% in default. I wonder what percentage of the $1.73 Trillion in debt that 12% makes up?
Forgiving loans will continue to increase demand (and prices) for housing and other assets, right?
Forgiving loans will continue to increase demand (and prices) for housing and other assets, right?
so the lesson here is, take out a shitload of debt for a relatively worthless degree and get the American taxpayer to bail you out
Awesome
Awesome
That's a problem with many federally-backed student loans out there. The government being in the job of backing student loans is inflating college costs, as there is no factor to stop price increases. They aren't available for bankruptcy. There is no risk analysis for the people being lent the money. There's no balancing between job prospects and the degrees people are earning.
The lesson is to read the article before commenting. Allow me to view source > gather the first visible paragraphs of the WSJ article.
>WASHINGTON—The Education Department will discharge another $415 million in student debt held by borrowers who said they were defrauded by for-profit schools that misrepresented their graduates’ employment prospects or otherwise swindled them, federal officials said Wednesday.
>The loans of nearly 16,000 former students are being forgiven under a legal provision known as borrower defense to repayment, which allows students to have their debts erased if they prove that their schools defrauded them.
This is unrelated to general federal student loan cancellation, which is still a good idea. It isn't as if the debt would be discharged without changes to the loan programs themselves.
But before we get into the discussion regarding cancellation in general it's important to acknowledge this has nothing to do with that.
>WASHINGTON—The Education Department will discharge another $415 million in student debt held by borrowers who said they were defrauded by for-profit schools that misrepresented their graduates’ employment prospects or otherwise swindled them, federal officials said Wednesday.
>The loans of nearly 16,000 former students are being forgiven under a legal provision known as borrower defense to repayment, which allows students to have their debts erased if they prove that their schools defrauded them.
This is unrelated to general federal student loan cancellation, which is still a good idea. It isn't as if the debt would be discharged without changes to the loan programs themselves.
But before we get into the discussion regarding cancellation in general it's important to acknowledge this has nothing to do with that.
I don't see the problem. A huge for-profit organization gets free money in the shape of a student loan, without spending any of it because the degree is allegedly worthless, and then the money gets taxed to pay the loan off? It cancels out.
Far too many people go to college as it is. One simple step we could take is make college loans illegal.
Or make state colleges cheaper and build more of them.
If you pay $250,000 to become a chef/cook - that is insane. That is ONLY possible with federal funding, no private lender would fund that.
I think similar issues exist with a fair number social science / ethnic studies / minor language degrees (greek etc). If you go through to a Master or PhD in ethnomusicology, while very cool (yes, I took a class along these lines I very much liked) -> the market isn't there currently in academia and the private market is to some degrees worse.