Posted on 02/14/2020 6:49:21 AM PST by karpov
If banks reported their liabilities using the same fictitious accounting that the federal government does for student loans, they’d be charged with fraud. Behold the Congressional Budget Office’s latest restatement of the cost for income-based repayment plans.
The Obama Administration promoted these plans as a way to reduce student loan defaults. Borrowers who couldn’t afford their monthly payments could refinance their loans for free. They merely had to agree to pay 10% of their discretionary income for 20 years—10 years for those who work in “public service”—after which their balance would be forgiven.
The number of borrowers who have enrolled in these plans has blown away forecasts. From 2010 to 2017, the share of all borrowers repaying direct loans through these plans increased to 27% from 10%. The plans have especially caught on with graduate students with large balances. About 56% of debt disbursed to graduate students is being repaid through these plans.
CBO estimates that the government will wind up forgiving $167 billion of graduate debt in these plans over the next decade. The write-down for undergraduate loans is less—$40 billion—but the budget gnomes have repeatedly underestimated loan costs only to revise them upward later.
In 2012 the agency forecast that student loans would turn a $219 billion profit for the government over 10 years. Now it projects they will cost the government $11 billion through 2029—using the government’s fictitious accounting that doesn’t consider borrower risk. Under fair-value accounting standards that businesses use, loans are forecast to cost taxpayers $263 billion.
(Excerpt) Read more at wsj.com ...
*** GIMME FREE STUFF ***
How is 10% of “discretionary” income cakculated?
Claw back the forgive debt from the schools that took the money in the first place. Go after their endowments.
Why doesn’t Barry and the rest of the libs who passed the stupid student law act pay off the student loans.
If this keeps up, Mrs rktman is gonna want her money back that she paid off 30 or so years ago.
All they ant for Winter Festival is free money!
Take it out of the endowments of the universities that gleefully exploited dumb 18-year olds so they could hire affirmative action “perfessers” of imaginary subjects.
Exactly, the colleges that took their money have billions in endowments.
Those owed money will either make an arrangement with the debtor to repay with no interest constantly being added, accept a reduced total amount owed to some level the debtor can handle, or just accept the bankruptcy and move one.
JMHo
President Trump has started getting some money back via the large endowments. This should all be privatized with colleges accepting 30% of a bankruptcy loss. If they still want to accept iffy students, then that is what a school scholarship is all about.
Here is the problem:
We somehow had a usurper in the White House for eight years who not only doubled our national debt from the previous 200 years but he was allowed to place student loans- the student loan industry- not just the health care industry- in the hands of the government
We allowed our government to take advantage of our kids
Most kids get out of college wth high tens of thousands
And way into hundreds of thousands for masters and professional degrees
We have a damned hell of a nerve making fun of these kids for wanting a break
Look around. They can’t get married and have families
Why anyone would blame them for this mess and call them freeloaders is
Pure insanity
Stop
Here is the problem:
We somehow had a usurper in the White House for eight years who not only doubled our national debt from the previous 200 years but he was allowed to place student loans- the student loan industry- not just the health care industry- in the hands of the government
We allowed our government to take advantage of our kids
Most kids get out of college wth high tens of thousands
And way into hundreds of thousands for masters and professional degrees
We have a damned hell of a nerve making fun of these kids for wanting a break
Look around. They can’t get married and have families
Why anyone would blame them for this mess and call them freeloaders is
Pure insanity
Stop
I guess it needed to be said twice
Oh I’m in for a couple of hundred.
We’re not looking for forgiveness but a roll back from what Obama did. This is a mess. Blaming the kids is completely illogical
One answer is make sure there’s a job security at the end of that. Diversify, as many majors as they can fit in and keep a decent GPA with
Partying to the degree I’ve witnessed vicariously is also complete insanity. Those days should be over. We got away with that barely in the ‘70s
The problem is that the kids are wanting to vote for more of the same in order to get ‘debt forgiveness.’
I find it hard to blame them because they haven’t attended the class of experience yet, but it’s still enraging to watch the leftists exploit them again and again.
Who got the money from the students? That is who should pay.
Confiscate college endowments to forgive the loans. If more money is needed, go after the pensions/401k funds of the professors and university staff. And if even more is needed, force the universities to trans out a loan for the balance.
These debts must be written off in ordinary bankruptcy proceedings. That is the entire purpose of such provisions and student loans should not be exempt. Moreover, the loan balance write-downs must not be considered "taxable income" to the individuals.
To the greatest extent possible, the losses should be clawed back from University endowment funds. The Universities were the principle beneficiaries of these scams.
And, except for Medical and Engineering degrees, we should not be making student loans any more. The other fields of "education" simply are not worth the investment or risk.
Much of our "higher education" system should be scrapped. Something else needs to replace it.
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