Posted on 12/08/2023 5:39:50 AM PST by karpov
The Biden administration has abolished the federal student-loan program, at least if a “student-loan program” is one in which students borrow money and then eventually repay it. What’s being erected in its stead is a scheme that’s rife with moral hazard, seemingly designed to inflate college costs, and best described as a “student-fraud program”—in which students borrow money, promise to repay it, and then … don’t.
Biden’s loan-forgiveness shenanigans leapt into public consciousness when he tried to farcically read the 2003 HEROES Act to allow him to shovel $500 billion in loan “forgiveness” to his highly educated base and stick taxpayers with the tab. When that bit of unconstitutional maneuvering was struck down by the Supreme Court this summer, many observers moved on—imagining that the issue was resolved.
You know who didn’t move on? The Biden administration, which has simply shifted strategy and is continuing with a multi-dimensional effort to warp or break federal rules to give borrowers as much free money as it can. The pattern was clear in Biden’s push to extend the Trump administration’s “temporary” 2020 pandemic freeze into fall 2023, long after Biden had declared the pandemic over, halting both payments and interest accrual—and crediting borrowers for three-plus years of payments they never made. The total cost of the pandemic “pause” on repayments? A cool $238 billion.
Last year, the Biden administration issued new guidelines making it easier to discharge student loans in bankruptcy. The restrictions have historically been exceedingly stringent, given that college graduates anticipate above-average future earnings but have few or no assets currently. That’s why banks are reticent to lend them money. The model collapses if borrowers can game the system by declaring bankruptcy, shrugging off their debt, and then proceeding on their merry way.
(Excerpt) Read more at jamesgmartin.center ...
And it will make a college degree worthless
The “kill the baby boomers” crowd will be able to become “professional students” and it won’t cost them a penny. Just hang around the campii all day until they can get hired as “perfesers.
“And it will make a college degree worthless”
My question is whether the dollar will be worthless before the “free” college degree?
Biden, or any POTUS, could possibly use the ‘Pardon’ clause of the Constitution to ‘forgive’ the loans in total. But it would have to be a ‘blanket pardon’ for everybody...............
Free College , now watch the cost to tax payers go SKY HIGH
Biden’s administration is one big whore.
...or whatever the reverse is called. LOL!
College degrees are already worthless. They were worthless fifteen years ago when I was trying to hire baby engineers. The worst were grads from a major university who wanted starting salaries greater than mine, and couldn't engineer their way to the mens' room and back. The best hires came from a 2-year trade school.
Go back another forty years; my late father-in-law, president of a major Boston bank, simply refused to even interview Harvard Business School grads.
In the '70s I worked under two MIT Masters Degreed engineers who made monumental blunders on a project I was hired in as a site manager for - me, with (at the time) no degree at all, had to clean up their messes.
/rant
If I remember correctly, the federal takeover of the student loan industry was something Obama accomplished while all the attention was focused on Obamacare.
“””If I remember correctly, the federal takeover of the student loan industry was something Obama accomplished while all the attention was focused on Obamacare.””””
My recollection is that Student Loans became Federalized during the 2007-2008 banking crisis during Dubya Bush’s reign.
This situation ended abruptly in mid-2008, when higher credit costs stemming from the financial crisis on top of deep subsidy cuts made the origination of FFEL loans unprofitable. In order to keep student loans flowing, Congress passed a short-term fix that kept the FFEL program viable, providing temporary government funding for private lenders with the ability to sell FFEL loans to the government. In substance, private lenders were originating FFEL loans for a modest fee. Conceived as an interim measure, the legislation was extended for a second year but was set to expire this coming July.
After announcing that he would seek to end the FFEL program in his presidential campaign, President Barack Obama succeeded last month when Congress passed the Health Care and Education Reconciliation Act of 2010 (HCERA). The bill requires that all student loans originated after July 1, 2010 be done via the direct lending program, generating savings of $62 billion over the next 10 years, according to the Congressional Budget Office. The Act also increased Pell Grants by $36 billion and expanded aid to colleges serving minorities.
when somebody trusts you and lends you money, you promise to repay it..... and, barring some very bad unforeseen circumstance, people always had enough self-dignity to honor their word and pay back the funds.
There are many participants here on FR who have paid back student loans, car loans, house loans, personal loans, business loans, you name it.
students enrolled in unmarketable college classes like “TransSexual Perversions in Ancient Persia,” “Social Justice,” or “Lesbian Finger Painting In the Ottoman Empire” should avoid borrowing excessive amounts of student loan funds (and lenders should prudently limit it). Borrow only what you have prospects of repaying. Simple logic, basic ethics.
I am happy students can borrow money they need. I did, and ...you could hear this coming: I repaid my loans, all 11 of them. And I remain to this date very thankful that the bank trusted me to do it. But I didn’t waste my time taking useless bullkrap classes, and upon graduation I was able to secure employment sufficient to repay what I owed.
There’s no reason why a college graduate with a nursing, engineering, medical, or other useful degree can’t repay what s/he owes. No loan “forgiveness” at the taxpayers’ expense (outside of the small number of genuine and unforeseeable tragic situations that prevent the possibility of repayment). Prudent lending practices not just another welfare program....and all deserving students will be able to borrow what funds they actually need.
We had our electric company come out last night for a problem with the electricity. he stepped out of the truck, asked us what was happening to the electric, we told him, and he went right to the problem (corrosion in the main wire), cleaned it up, and now our electricity isn’t bleeding off and causing problems anymore. (This was after several visits last year by new hires who didnt know what they were doing really- they never did find the problem
This fella had gone to trade school, and was praising his education there, and we couldn’t agree more. He lamented however that trade schools are becoming a thing of the past, as more and more kids don’t bother seeking trade education.
Hopefully some time in the new future, people wake up to the fsct that “higher education” is not worth what they thought, and instead seek out trade school learning- not many kids in our area are interested in learning mechanics, plumbing, electricty etc, and our town will be devoid of folks who can do,these jobs pretty soon as the ones doing it now are older and near retirement, with noone to replace them. Certainly noone skilled enough to replace them.
Our electric problem had gone on for several years- noone had an explanation for why- the fella that came out to,the home last night had it solved in under 5 minutes after we explained what was going on (lights flickering when washing machine is on, or when microwave is turned on, quick losses of power, TV, ph9ne and internet connection was affected-los8ng signal etc) turned out the electricity line had corrosion- obvious corrosion, and the electricty was going back down the ground wire as a result, and affecting the cable connections nearby the wire,,causing them to lose connection- (spectrum has just been there last week to replace the connection for the second time in a year.)
Anyways, was refreshing to see someone who knew what to look for, and not to hear excuses or other explanations which had nothing to do with the issue. (Kinda like calling tech support and them telling you that the solution is to “reformat the computer” when the real issue is a faulty video card or stick of ram or something)
They are already just about there.
I'd be OK with "student loan forgiveness" if the colleges were made to pay it.
They are already just about there.
I'd be OK with "student loan forgiveness" if the colleges were made to pay it.
“””This fella had gone to trade school, and was praising his education there, and we couldn’t agree more. He lamented however that trade schools are becoming a thing of the past, as more and more kids don’t bother seeking trade education.”””
I fully agree. Here is a link to a guy who went to WYoming Tech and he now repairs the mega-expensive John Deere tractors and combines.
https://www.youtube.com/channel/UCp4xj7dAgee-6Hg9qo-R6Og
We’ve certainly come a long long way since the days of the “gentleman farmer” farmall tractors-
I wonder if I should have my son take a loan for his 1.5 years of grad school coming up soon.
Why should I be the schmuck that pays cash if he can take a line that doesn’t need to be paid back?
Deep State hates competition.
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