Inequality of student loan debt underscores possible Biden policy shift

The Hill ^ | November 28, 2020 | Marty Johnson

[karpov]

The potential forgiveness of student loan debt could be one of the biggest policy shifts in the first months of the incoming Biden administration.

President-elect Joe Biden has said that student debt forgiveness will be a key part of his economic agenda, though how and to what extent the loans will be forgiven has become a point of debate among Democrats.

...

It’s not known what percentage of that belongs to students of color, but a study from the Consumer Financial Protection Bureau in 2016 showed that 90 percent of Black students and 72 percent of Latino students take out federal loans when paying for college, compared with 66 percent of white students.

A 2019 analysis from the Federal Reserve Bank of New York showed that the default rate on student loans majority-Black or majority-Latino zip codes were 17.7 percent and 13 percent, respectively, both higher than the 9 percent default rate in majority-white zip codes.

And a study from Brandeis University’s Institute on Assets and Social Policy found that “twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent—with almost half holding no student debt—whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total.”

All of this, coupled with the fact that amid the pandemic, unemployment rates for Black and Latino Americans remain higher than the national average, could see the student loan debt crisis snowball come January.

Approximately “22 million borrowers will have to resume their payments,” Andrew Pentis, a certified student loan counselor who writes for Student Loan Hero, told The Hill. “The vast majority of the eligible federal loan borrowers did take advantage of this break in the sense that they did not make payments.”

[Sooth2222]

What are their college majors?

I doubt very many STEM majors have a lot of trouble paying back their school loans, no matter what color God made them.

[Alberta's Child]

“And a study from Brandeis University’s Institute on Assets and Social Policy found that “twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent—with almost half holding no student debt—whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total.”

Notice the word I highlighted here. There’s a reason why these numbers are tied to the START date of a student’s college education in the statistics cited here. What these figures don’t tell you is that so many black and Hispanic students still owe huge amounts of money on their college loans years after they started college because they never finished school.

In other words ... many of these black and Hispanic students were extended loans to pay their expenses at schools where they never should have been admitted in the first place. As I’ve said for years, student loans were never intended to actually help students at all. They were just a scam to help subsidize the SCHOOLS.

[Obadiah]

Yep, frame it as student loan racism. That shuts down all discussion.

Because of preferences these kids probably got a lot of loans that non-minorities probably wouldn’t qualify for. So to offset racism their was leniency in granting the loans, and now of course is racist to require the terms of the loan be upheld.

Who is going to pay for these loans. Ah, evil Whitey, right?

[FMBass]

If anything is to be done, consideration should be given to cutting interest rates for school loans. Perhaps some ratio, dependent upon the viability of the Major or perceived payback.

Also, if anyone is going to forgive loans, it should begin with colleges and their tuition.

[CurlyDave]

...I doubt very many STEM majors have a lot of trouble paying back their school loans, no matter what color God made them...

I would like to see the whole student loan program, along with the budget for it, transferred to DOD. The entire purpose of the program should be shifted to encouraging and subsidizing students in courses which will increase the strength of the US on the world stage.

You might think this would be mostly STEM, but not completely. There is a strong case to be made for the importance of studying foreign languages and cultures. And even other subcultures in the US. Think about the Navajo code talkers in WWII. As much as I shudder at the idea, hip-hop code talkers might be a future development.

[GOPJ]

... “twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent—with almost half holding no student debt—whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total.”

The real scam here isn't colleges and Universities. It's ghetto companies that offer 'student loans' for things like 'Learn how to be a Truck Driver'... "Beautician"... a "Programmer".

"Job Training" is big con in the black communities... by profit and non-profit rip off artists. There are few jobs available at the end of training but LOTS OF DEBT...

Cumming's district was receiving $26,000 a year for every man woman and child that lived there... most of went to 'non-profits' that didn't do crap other than provide jobs for Cummings' cronies...

Of course we don't get the numbers of these 'give-a-ways because it be obvious Biden ONLY wants to reward the irresponsible - those who prop up the democrat party.

[Taxman]

No problem!

Sloe Joe will NEVER be POTUS!

[GOPJ]

... “twenty years after starting college, the median debt of White borrowing students has been reduced by 94 percent—with almost half holding no student debt—whereas Black borrowers at the median still owe 95 percent of their cumulative borrowing total.”

The real scam here isn't colleges and Universities. It's ghetto companies offering 'student loans' for things like 'Learn how to be a Truck Driver'... "Beautician"... a "Programmer".

"Job Training" is big con in the black communities... by profit and non-profit rip off artists. There are few jobs available at the end of training but LOTS OF DEBT...

Cumming's district was receiving $26,000 a year for every man woman and child that lived there... most went to 'non-profits' that didn't do crap other than provide jobs for Cummings' cronies... most were part of the 'training scam'..

Of course we don't get the truth about these 'give-a-ways because it be obvious Biden ONLY wants to reward the irresponsible: those who prop up the democrat party.

Even in this piece it say's STUDENT LOANS - it does not say COLLEGE LOANS.

[E. Pluribus Unum]

I am all for student loan forgiveness as long as it comes out of the endowments of the universities that received the money from the loans, knowing full well the students were burying themselves in debt for worthless degrees.

[17th Miss Regt]

You have a good point. If I were her and won a large amount like that I would use a large chunk to pay down my student debt. But I am not her.

[Tejas Rob]

>>Here’s an idea: have the government seize the endowments of these schools to pay back the amount the schools overcharged on tuition.

That’s exactly what should be done, not make taxpayers foot the bill.

I don’t know if there was such a thing as “student loans” when I graduated from high school, don’t remember any mention of it.

But I do remember they had already started the “you have to go to college if you are ever going to amount to anything” BS, so I can’t help but feel like a lot of these are kids who got conned by the education system into taking out loans they were never going to be able pay back.

[Gene Eric]

I’m game for the long odds, but the unis are definitely culpable when the excess permits egregious, partisan outcomes.

[rlmorel]

Good catch. That makes sense. A lot of black students make it into colleges they aren’t qualfied to be in, and they cannot keep up. That isn’t a racist statement, that is truth.

[JudgemAll]

I know a few people who have slowed their payments in anticipation of the forgiveness possibility

The question is since the forgiveness is income, then they will have to pay tax on it... how are they going to pay the tax when they default in the first place?

[Dilbert San Diego]

That’s one of the details of this loan forgiveness idea which the liberals haven’t thought through. Debt relief, or forgiveness of a debt, is considered taxable income under our tax laws.

Some might think it’s great to get their loans wiped out, until they find out that they get a 1099 form with that debt relief amount as income.

I’m thinking that all of this would require an act of Congress, as opposed to Biden having a pen and a phone and doing an executive order to forgive student loans. The tax impact is just one detail which people haven’t thought through.

[Vlad The Inhaler]

So Joe The Plumber and Willy The Welder will be taxed to pay off the college debt of kids who spent their loan money
to party, buy cars, travel the world and pursue useless degrees.

If they borrowed money they should pay it back.

That includes those with serious degrees who are gainfully employed in their fields.
They can and should pay off their own debt too.

[Chode]

i’d like to see the top 20 career field openings per year vs job applicants...

that would be a good to know before starting school, are you going to graduate into a flooded career field job market?

i tried searching but must not be using the right terminology

[ronnie raygun]

People of color, thier debt will be paid with OUR tax dollars while white kids and thier parents will not only pay for others but pay for thier won as well, we need to crush these bastards where they stand, raid the college endowments

[Nifster]

They get crap social justice degrees and then go work for 30k or less a year

What do you expect? They also probably take out more money than they actually need

[Starcitizen]

STEN graduates are likely not to repay their student loans as all jobs are now given to foreign trash, with the American graduate stuck working at Walmart or Starbucks.