A rational solution to the student debt question

[ganeemead]

This issue scares me. I don't view it as a totally phony issue like abortion and it actually works for the demopoops. But the thing that makes the issue difficult is not complicated, it's the law that disallows bankruptcy proceedings to abolish student loan debt in all cases.

Here is the law we need: AFTER a person has paid as much as the principle of such a loan in constant dollars, it should be legal to eliminate the rest of the loan via bankruptcy.

In other words, we outlawed slavery in 1865; it is way past time that bankers got the word on that...

I know people who have paid two or three times the principle of loans and still owe more than they did originally. That's basically a new version of slavery.

[Tell It Right]

Get rid of all government backed student loans (now government funded student loans) and watch the cost for tuition and books go way down.

The problem is that loans and pell grants and the like are artificially inflating the price for "education". Quit dancing around how to make government "help" do it better when government "help" is the main cause of the problem to begin with.

[nascarnation]

It’s the “big education” cycle, a major Democrat funding source.

make unlimited money available to students to borrow

raise tuition and costs to absorb available funds

pay profs and admins outrageous salaries

profs and admins donate to Democrats

and repeat endlessly

[Phlyer]

The good point: There is a price for defaulting on your loan - a bankruptcy on your record. It may not be enough of a price, but it's better than just 'forgiving' the loan.

The bad point: The root problem is the grossly inflated price of tuition for useless degrees. So any valid solution has to do something about that.

My solution: Any default on the loan results in the university taking the loss, not the banks, and not the taxpayers (even if there is a bankruptcy involved for the student). The university should be required to reimburse the loaning agency (notionally, a bank) for the loss.

If the university had to pay the price, then - even if they didn't reduce tuition to where there were fewer defaults) - they would at least have a strong incentive not to take students into the no-real-prospects-of-professional-employment degree programs.

[E. Pluribus Unum]

A simple, fair solution is to forgive all student loans and take it from the endowments of the “universities” that exploited dumb 18-year olds for their student loans.

[Erik Latranyi]

Exactly. We tolerate the Dems money laundering and look where it got us... Out of power for as far as the eye can see

[Codeflier]

Sorry...were they forced to borrow? If so that is the real story...if not..then well...NOT MY PROBLEM.

[escapefromboston]

Dems never mention how to bring down cost but how to get someone else to pay for it. I agree with you that the Fed should get out of the loan business and colleges would be forced to charge less since now they aren’t being guaranteed money .

[blackdog]

My SIL used to work for the DOE. She was an auditor. I used to ask her why did they keep funding student loans which just raises college costs? She told me that the education department was created by Jimmy Carter as a reward for the support of the schools, colleges, and universities, teachers and faculty. She did not ever deny oversupply of money for college didn't explode tuition.

in 1982 a semester of college at a top tier private college was $2,600. Today it's around $40,000.

She was a classic example of self interested bureaucrats. The impact of her function in the government job never phased her in the least. Disgusting.

[Vermont Lt]

The bankers? There aren’t bankers involved in this.

Taxpayers are the bankers.

[Codeflier]

Good point. This is American tax dollars, not the banking industry.

[DesertRhino]

If student loans were dischargeable in bankruptcy court, lenders would not make crap loans for lesbian basketweaving degrees. Also the lenders would serve as a brake on the tuition universities could charge.

As it stands now, lenders are guaranteed they cannot lose, and schools have zero structural reason not to skyrocket tuition to triple and more the inflation rate.

[stateofit]

And half the courses should go on-line featuring the best of best lecturers. MIT provides many to the whole world for free.

https://ocw.mit.edu/

[beef]

Let’s say this program went into effect 1/1/1980 (when I started paying MY student loan back). What percentage of the student loan recipients would be eligible for this relief? My feeling is that the vast majority would have either paid it all back or paid little or nothing. I think very few would qualify.

It IS a better idea than allowing regular bankruptcy. I we did that, filing for bankruptcy would be as much a part of graduation as ordering a cap and grown.

Also, making suckers out of those that pay their bills like they are supposed to is not a good idea. And, what would come next? The same for mortgages?

[House Atreides]

“… I know people who have paid two or three times the principle of loans and still owe more than they did originally. That’s basically a new version of slavery.”
************************************************************************

I know people whose kids worked throughout school to pay most of their way through school and/or who had parents who had saved for years to help out with their kids’ college expenses and worked extra while the kids were in school. Upon graduation, any residual college expenses that had to be finance was then paid off AS QUICK AS POSSIBLE.

NOW the less energetic college students who took life easy and partied throughout school instead of working want the MORE RESPONSIBLE KIDS to pay off the loans of the lazy through taxes?

Now THAT IS REAL SLAVERY!

[ProtectOurFreedom]

Are you 15 years old? This is the dumbest post so far this week and probably for November. By what stretch of your fevered imagination can you logically connect paying your voluntarily contracted debt to slavery?

I know people who have paid two or three times the principle of loans and still owe more than they did originally.

A little bit of education about how loans work can go a long ways. You would have to be paying very little for a long time to increase your principal due. Not many loans allow for negative amoritization.

If you pay the minimum amount due, you will be paying interest and some principal. The principal will go down. You can use the PMT in any spreadsheet program to figure out all of your payments and the remaining principal.

I just ran out some numbers for a $10,000 loan at 4% interest pa and a term of 10 years. You would have to make 209 interest-only payments to get your principal balance up to $20,000. That's 17-1/2 years of paying $33 per month interest.

You would have to make 331 interest-only payments to get your principal balance up to $30,000. That's 27-1/2 years of making interesting only payments of $33/month.

Anybody who voluntarily takes out a loan and pays only the interest each month is an idiot.

[krizzy]

It is my belief the entire purpose of the student load forgiveness program was to give Future democrat voters a reason to go to the web site, sign up for 10,000 forgiveness, and then get a ballot in the mail suggesting that without voting for the democrat, they will not get forgiveness.

Makes me think that the RNC / Trump could offer a significant sum of money if the form of a lottery just to collect addresses. Then we have a base of addresses to start sending ballots to.

[dblshot]

Let the universities pay off the debt out of their tax exempt endowments, they have billions to spread their liberal doctrine.

[muir_redwoods]

If they can bill big Parma for opiate addiction, they can force the colleges to pay off the loans. No school is worth even $20,000/year let alone $80,000/ yr.

[MV=PY]

"Sorry...were they forced to borrow? If so that is the real story...if not..then well...NOT MY PROBLEM."

Are you a taxpayer?

(There is no such thing as "loan forgiveness." Biden's plan only shifts the debt to US taxpayers.)