Student college loan forgiveness would turn citizens into zombies

American Thinker ^ | 12/01/2020 | John Merrifield and Barry Poulson

[SeekAndFind]

Millions of borrowers in the federal student loan program are defaulting on their loans. The Education Department now estimates the cost of student loan losses at more than $400 billion. That exceeds the losses of banks during the sub-prime mortgage crisis. As such, progressives are now pressuring Joe Biden to forgive student debt entirely. The losses in the student loan crisis increase the federal deficit, imposing heavier tax burdens on current as well as future generations. Citizens need to understand why the federal student loan program failed, and what impact this failure has on our society.

The federal student loan program was originally defended on the grounds of efficiency. It was argued that private student loan programs were inefficient because students could not collateralize their future earnings. This argument has proven to be false, as colleges have extended loans to students using income-based repayment schemes. Private lending institutions are in fact efficient in allocating loans to students. They have an incentive to practice due diligence, selecting borrowers who are likely to repay their loans. Potential default on the loans sends the right signals. Private lenders assume the risk when the loans are in default. Credit agencies assign lower credit scores for lending institutions that extend loans to students who are not creditworthy.

During the financial crisis in 2008, some lending institutions with a risky portfolio of student loans in default went into bankruptcy. Students who default on loans bear some of the cost of non-repayment, in the form of low credit scores that preclude them from borrowing for homes, cars, and other loans.

The private student loan program has been largely displaced by the federal program extending loans to college students directly. The rationale for the federal student loan program was to extend loans to a broader group of students.

[SeekAndFind]

The federal student loan program sends all the wrong signals. Students have an incentive to take out loans they can't repay in order to capture the federal subsidy. This incentive increases when students anticipate a federal bailout when they default on the loan. The highest default rate is for students who take out loans but never finish a degree. Many of these students are from low-income families, attending community colleges and private or for-profit institutions. But most of the loans in the federal student loan program are extended to students from more affluent families. The cost of these loans, both in the form of federal subsidies and loan default, is borne by all taxpayers. Colleges have captured much of the benefit from the federal student loan program by boosting tuition more rapidly than the rate of inflation.

[FreedomPoster]

Hard-Working Plumber Looking Forward To Paying For His Neighbor’s Gender Studies Degree
https://babylonbee.com/news/hard-working-plumber-looking-forward-to-paying-his-for-his-neighbors-gender-studies-degree

[HangnJudge]

OK, clawback University incomes,
this is not the fault of the general taxpaying public...

[1Old Pro]

99.9% of colleges are staffed by 99% liberals who provide a liberal indoctrination. And they want Americans to finance our own destruction of our country with the bailouts.

[Shadow44]

I support debt relief by making the universities have to pay from their endownents.

[Rurudyne]

No forgiveness of student loan debt. It’s okay if their lives suck because they made poor career choices.

[Clemenza]

Zombies? It’s the time of the season...but she’s not there...tell her no (student debt forgiveness). You don’t need an Odyssey and Oracle to figure that out.

[max americana]

“I support debt relief by making the universities have to pay from their endownents.”

Every state college in America has at LEAST 250 million in endowments. I dont even know why the feds give money to Harvard when they have more than $2 billion cash.

[ronniesgal]

YES!!! the Universities have scads of donor $$, let them eat the loans.

[dsrtsage]

Instead of spewing tax dollars at ever more expensive and useless degrees, perhaps their time would be better spent figuring out why these degrees are so expensive in the first place

[StAnDeliver]

"As such, progressives are now pressuring Joe Biden to forgive student debt entirely. The losses in the student loan crisis increase the federal deficit, imposing heavier tax burdens on current as well as future generations. Citizens need to understand why the federal student loan program failed, and what impact this failure has on our society."

Man, they are gaslighting the BernBros on this. You'd create a righteous army of people who paid off their loans. I did, and I take great pride in that.

[max americana]

I paid off my student loan in 2 years by WORKING part time EVEN when I had a half scholarship at an NCAA-1 sport. Effing lazy-ass weak generation.

[Macoozie]

Bring back Bankruptcy for Student Loans.
Have BANKS & SCHOOLS lend the money.

You’ll see prices come down, less student debt, less indoctrination and more valuable skills being taught.

Ooops, I’m sorry.

Logic & reason intruding again.

[PanzerKardinal]

Tax funded loan forgiveness is nothing but the taking of money for workers to give to the rich.

[pepsionice]

You could see this landslide back in the late 1990s, and how people were getting degrees that would never earn them more than $35k to $45k a year, for the next 30 years.

I ended up one night at a airport....trying to get my rental car, and the only one left was the ‘boss’ (a young lady, 23, just out of college, with a general business degree). This was the type of position that you would have hired a retired Army/Navy vet (without a degree), and probably paid around $30k a year as the rental shop ‘boss’. It made no sense for her to occupy this job, but no one else needed someone with her limited skills and background.

That’s our problem today....too many idiots with degrees and no real necessity for them.

[FormerFRLurker]

Unless “zombie” is code for something the headline is misleading. I don’t think student loan forgiveness is a good idea either but this kind of hyperbole just makes our side look stupid and emotional.

[tarpit]

Universities have turned into a big business whose sole purpose is to monetize the students future earnings. The rise in a cost of education has far exceeded the increase in the cost of healthcare. At least healthcare has improved. Education is still the same model it has always been.

Subsidizing with tax payer money is not really about the student, it is to help the universities maintain their hold. The covid-19 pandemic is simply accelerating the inevitable restructuring of academia.

[econjack]

From my earlier post:

This program should require a payback of all sums with interest. My daughter-in-law was a nurse by training but then decided to go to law school, using a student loan to pay for it. She specializes in health law. In her first case, she won and her share of the settlement was more than I earned in my last 6 years of college-level teaching. Even though she is family, why should my tax dollars pay for her education when she reaps the financial rewards?

She has already repaid her loan.

It also seems there is a scam afoot where "agents" sell minorities on student loans. There was a recent post on this, but I can't find it. Some other statistics confirm the higher ratio.

https://www.savingforcollege.com/article/racial-disparities-in-student-loan-debt

[EEGator]

For fun, what about the poor choices made by the lenders?

How about the poor choices made by education “leaders” in preparing students for the market?

How about large corporations having retards from HR require a degree in anything to get a job?

How about the poor choices by bankers that led to the subprime mortgage debacle?