In any case, none of that is what the author is really after. This is:
Because any debt cancellation should logically be paired with a new free college policy.
All of a sudden those tidy figures on debt "forgiveness" become a drop in a very large bucket. We'll just have "the government", meaning the taxpayers, assume the entire cost of college and university education in the entire country! Piece of cake.
The difficulties with this sort of utopian policy are the same as any other utopian policy: you don't get to start with a clean slate, you have to get there from here, and you have to do it without wrecking the entire current university system in the process. Sudden debt forgiveness without a new system already in place will kill the oncoming freshman classes for however long that takes, or at least all of them who aren't independently wealthy, because there won't be any loans for the newcomers. Suddenly nationalizing the entire upper division education system will kill the taxpayer. It just isn't that easy.
First thing to do is to eliminate the government guarantee on these debts so that lenders have to be smarter with their loans. A C+ student wanting to major in womyns’ studies is probably not going to repay.
History of student loans and bankruptcy. Lets get past the lies and assumptions given to us.
http://www.rhymerlaw.com/history-of-student-loans-and-bankruptcy.html
Note the following. This student loan thing is NOT what we think it is. Much has been done to address it. Max payments of 10% if discretionary income and max pmts of 25 years after which balance is forgiven. But forgiven debt is income according to IRS which is always a surprise .............
2011: President Obama issues an executive order making the new version of income-based repayment available to borrowers two years earlier. To be eligible, borrowers may not have any loans from before 2008 and must have at least one loan in 2012 or a later year.
2010: The Health Care and Education Reconciliation Act of 2010 (P.L. 111-152, 3/30/2010) created a new version of income-based repayment. The new version cuts the monthly payment by a third, to 10% of discretionary income, and forgives the remaining debt after 20 years in repayment instead of 25 years. The new version is effective for new borrowers as of July 1, 2014. Borrowers with previous federal student loans as of June 30, 2014, are not eligible for the improved income-based repayment terms.
2007: The College Cost Reduction and Access Act of 2007 (P.L. 110-84, 9/27/2007) added income-based repayment as an option within both the FFEL and Direct Loan programs. This repayment plan bases monthly loan payments on 15% of discretionary income, with discretionary income defined as the amount by which adjusted gross income exceeds 150% of the poverty line. After 25 years in repayment, the remaining amount owed is forgiven. This yields a lower monthly payment than the income-contingent repayment plan. The use of 150% of the poverty line as a threshold aligns the repayment plan with standards for bankruptcy fee waivers.
IT WAS DESIGNED TO GET THIS OUTCOME.
Think: “Basketweave majors”
Other worthless majors.
Howsabout all them H1B jobs GOING ELSEWHERE?
ALL leaving to lower incomes for U.S. CITIZENS.
The end result was designed to be: FREE COLLICH FOR ALL THE DEADBEATS (and screw those that paid their $$$$$!)
Ya see, Hillary was SUPPOSED TO WIN!!!!
Student loans is a wealth distribution scheme. From the middle class to the elite.
I held three part time jobs to pay my way through the last two years of university education. When I graduated, I had $1,000 in the bank...
You can make the case that an 18 year isn’t the sharpest tool in the shed monetarily. That why most all these loans were co-signed by a Parent. Too bad so sad, one or the other needs to pay every dime. That or sue the University if they duped.
The reality is that the student loan racket is a payoff to liberal college administrators and professors. Kids borrow more than they should to go to college to pay professors and administrators over-priced salaries and other perks. Then the kids come out and can’t get a job, or one with a sufficient salary, to pay off the debt. The finger should be pointed at colleges. They are the culprit.
I am convinced that this WILL happen.
Some bad ideas have just too much political momentum to be stopped, and this is one of them. Some political party WILL propose this at some point, and when they do they WILL cruise to victory.
It would behoove the GOP to get out in front of this and do something now. Think of it as a punt on 4th. and long.
And free food for life...
And free dope and booze...for all.
Free cars..free love, free...T.V.
Free internet...
Just give everything to everybody!!
That's the ticket!!!
I don’t know about that. Considering the bad return for that investment maybe it is right that it get treated like other bad business deals. In truth many Universities and Colleges ought to be handing out refunds.
Not a single attempted point made in the least convincing.
All it does is reinforce the obvious, which is that we should get the government out of student (grants and) loans. Period.
If poor of any race, with nobody from the private sector rushing to voluntarily fund an extended state at an indoctrination camp, one can always work while taking two courses at a time, three semesters a year.
Not a big deal.
Colleges often sell their degree programs with fabricated earnings projections.
In other words, you first bucko.
Free college, that’s the answer!
Too bad the question is “What’s the fastest way to destroy higher-education?”
According to the geniuses that wrote this paper, “it would be easily affordable and have powerfully positive side effects.”
So, why stop with student loans? If this would be so easy and wonderful, why not extend the program to credit cards, car loans, and mortgages?
Is the problem 1) the student debt, 2) the lack of a job in the field of degree, or 3) the lack of a work ethic once the student graduated?
As someone else pointed out, the student would just get that $30,000 debt back the first time they purchase a new car, so why won't THAT debt be crushing, too?
-PJ
They had the choice to work their way through school and graduate with little or no debt. They made another choice.