Posted on 12/03/2020 9:10:32 AM PST by SeekAndFind
The question of whether the government should cancel the $1.6 trillion in student debt held by 43 million American adults drifted out of the political debate after the strongest advocates for the idea, Sens. Elizabeth Warren and Bernie Sanders, left the race for the presidential nomination.
It's back. That's because President-elect Joe Biden has endorsed canceling at least $10,000 in federally held loans per borrower as a COVID-19 relief measure (Democrats in Congress want to raise the figure to $50,000).
Biden also proposes easing payment terms for most borrowers and taking other steps to cut the financial burden for low-income college students.
"The relative burden of education debt has long been higher for families with lower net worth, and...this disparity has grown much wider in the past couple decades."
Janet Yellen, then-chair of the Federal Reserve, in 2014
Biden's proposal has also revived the arguments against canceling student debt, which tend to revolve around issues of fairness. Accordingly, it's proper to take a look at the pros and cons. Spoiler alert: Canceling student debt will yield huge benefits for individual borrowers and for the economy at large, and the more the better.
In reality, most student debt is destined to be canceled eventually, observes University of Utah economist Marshal Steinbaum, a senior fellow at the Jain Family Institute, a social science research organization.
That's the harvest of the increased popularity of income-driven repayment programs, which cap annual repayments at a percentage of a borrower's income and forgives any balance remaining after a set period — 20 years for undergraduate loans and 25 for graduate or professional study.
"Cancelation is the thing that everyone's waiting for," Steinbaum told me. "So why are we making them wait? Why don't we just recognize that these are bad loans and eat them now?"
(Excerpt) Read more at finance.yahoo.com ...
Tell them to get a job or start a business abd pay their debts like all honest people do. (Crippled or really sick sick sick excepted )
Send your tuition bill to the Los Angeles Times. They can either pay it or they're hypocrites.
In my day there was no income driven repayment program. You could defer for a brief period but you owed what you owed every month based on what you borrowed. Mine got paid off. Are people really dragging their feet waiting for debt forgiveness for student loans?
There’s no reason to “forgive” student loan debt since that’s in theory how these kids are making the big bucks after college compared to those who didn’t attend. A recent study shows student loan forgiveness would not stimulate the economy. This is all about buying votes.
This give away and debt transference is among the worst kinds of discrimination, fundamentally unfair. These are the same people who complain about income inequality, the wage gap and CEO compensation.
Why are we talking about “low income students” when the point of their college education is for them to rise above?
Can we do that for credit card debt? If anything they need to address interest rates on credit card debt.
I paid my way through college. I paid off my wife’s student loan debt. I paid for 2 kids to go to school. No more debt now. I will be screwed in so many ways.
A kick in the teeth to everyone who worked their way through college, paid back their student loans, or forewent a college education as unaffordable.
It’s almost like they want us at each other’s throats.
I paid my own way through college too. Both times. First time in the 80’s, second time 2004 - 2006.
Forgiving these loans implies that college will be free in the future. If you forgive these loans then you’ll have to forgive all future loans.
How about we "forgive" loans for students who really are in financial straights but require them to either pay back the balance in the future, with accrued interest, or to serve as workers to taxpayers in order to pay off their debts.
I could use some ex college students to help with the yard work while they work off their debt.
Exactly so. Thanks for the checks!
Debts which cannot be repaid will not be repaid. One way or another, most of that 1.6 Trillion dollars will be never be repaid by the students.
We have bankruptcy laws that can deal with this problem, if they are permitted to do so.
Student Loans should be discharged in conventional bankruptcy proceedings - which will deny the deadbeats access to most forms of credit for the next seven years.
And the Government must stop making any more student loans. This will force about half the Universities and Colleges in the country to close their doors. Good riddance!
they do want us at each other’s throats while they steal elections and destroy the constitution.
Let’s dispense with the two most common objections to student-debt forgiveness. The first is that canceling existing debt would be unfair to the millions of borrowers who met their obligations and now would have to sit by and watch deadbeats receive a windfall.
As I’ve observed in the past, it’s hard to imagine a weaker objection or a more crass formula for governmental paralysis. By its logic, we wouldn’t have Social Security or Medicare today. The argument would be: “My great-grandparents starved in old age and died in the street because they couldn’t get healthcare, so why should yours get a break?”
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I hate to break it to this guy, but the “crass formula” he derides forms the very basis of credit integrity. If you can be bailed out for political reasons, then who cares what the interest rate is? Who even cares about credit limits?
It’s amazing to me that people on the political Left are so deficient at looking at issues from a responsibility perspective.
What about car load debt and credit card debt and home mortgage debt?
If student loans are paid off then so should all these other debts.
There’s zero difference in them.
“What about auto debt ?”
What about mortgage debt? Housing is a right!
What about medical debt? Health is a right!
What about credit card debt? Shopping is a right!
Where does this end?
The student loan ‘crisis’ is a result of the liberal financial-academia complex...let the schools and professors refund the da students for shoddy business practices...
In addition, universities are not honest with these kids about the burden the loan debt will be once they graduate. They especially take advantage of kids who are searching and don’t know what field they want to go into or who receive degrees that pay very little in the real world.
Another thing they don’t fully explain is how devastating the interest is on these loans. That is where the real burden lies. I realize that student loans are unsecured resulting in the higher interest rate, but these kids have no idea what that translates into when repaying the loan.
I do not support forgiving loans but I would support eliminating the interest debt on government loans and a law that mandates the student be told what the actual costs of that loan will be.
I say this as one who took out a parent loan for one child and paid it off and has another child who is currently paying off his loans.
Don’t worry about that mortgage. When the great reset happens, you won’t own that house anymore and the one world government will gladly add people to your household who will use their monthly guaranteed income to help with expenses.
The banks and the schools should pay for these predatory lending practices.
There is ZERO underwriting that goes into these loans because the universities make the loans. The more loans they make, the more money they get. They are not the least bit concerned about making bad loans because they are lending other peoples’ money.
When you apply for a mortgage the bank won’t loan you the money if their underwriting software says you won’t be able to pay it back.
Universities should be held to the same standard. If they make loans that aren’t paid back, it should come out of their hides, not somebody elses.’
You’d be amazed at how many fewer student loans would be handed out if it came out of their own pockets.
I just got a robocall on my cell with a recorded message on how to have my student loan debt cancelled. They left a 202 phone number (DC). Looks like the deep state is already working to eliminate college debt.
I never had a loan and I am 60 years old.
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