US student loans grotesquely high

[Derec]

As overlawyered as US is, the job market for lawyers can't absorb all the law school graduates.

It really depends on what kind of law you intend to practice---or if you decide to practice law.

First of all, you really took your sweet time responding to this one.
Second, my point is that overall law schools are graduating more lawyers that can be absorbed by the lawyer job market even in the US, which has one of the highest numbers of lawyers per capita in the world.</Clarkson>

Please note: public defenders (something I am certain you do not approve of) are generally very overworked, and carry a high case load.

What do you mean? I definitely approve of public defenders. They serve an important purpose. The reason US is so overlawyered is not them, but tort lawyers. And that in turn has its root in overly lawyer-friendly laws like strict liability and unrestricted punitive damages that makes filing lawsuits so lucrative for lawyers and few lucky plaintiffs (lawsuit lottery).

It's less a question of whether or not there is need for more public defenders than why we aren't more dedicated to funding public defenders' offices sufficiently.

How about a tradeoff? Fund PD offices better, but in turn, put real restrictions on punitive damages and strict liability. If you injure yourself because you are too stupid to operate a coffee cup, you and your lawyers should not be able to become millionaires because of it.

And, of course, it is expensive to hire a lawyer and usually not something most people budget for, which is one reason that small town/city lawyers often struggle financially. Lots of DUIs, domestics, etc. and lots of people who don't qualify for public defenders but also don't have the means to pay for their own attorney.

So they struggle financially because they charge too much? Or because payments on that Caddy and the country club memberships are so damn expensive?

 

[Derec]

Derec, I think you took my "don't bash the kids" comment too seriously. That's why I put the smiley after the rest of the statement.

That whole post was a formatting nightmare, so I missed it.

My own son and dil have received the extra money for their two children this past year and my son is a programmer/developer. On the other hand, I suppose part of the reason why the income level was as high as it was, is to include a lot of the middle class families, who often receive little or no federal benefits.

Yes, but people without children receive even less benefits, even when they are making much less.

Anyway, I seriously doubt that 50K in college loan debt is going to pass. It has less than 50% approval from the voters and there is a lot of resentment from people who never had the opportunity to attend college as well as from people who paid off their school loans.

Oh, it has zero chance of passing in Congress. That's why its supporters in the Congress, like Schumer, Warren and AOC want Biden to cancel student loans unilaterally via an executive order.

A person should be willing to put in some effort in exchange for loan forgiveness. That's my point.

Agreed.

 

[Derec]

Your response sounds like a bad Andy Rooney bit from 60 minutes.

Who? I do not speak boomer.

I happen to think that some sort of loan mitigation targeted towards those who are having real issues with repayment is a good idea.

That already exists by the way. Income based repayment plans can reduce your payments to no more than 10% of your discretionary income (which means $0 in some cases) and the remaining balance is forgiven after 20-25 years.
There is no need to forgive $50k to everybody just to provide "some sort of loan mitigation targeted towards those who are having real issues with repayment".

I don't think there ought to be distinctions between the types of debt. Educational loans are partly taken to increase future earnings or returns, just like loans for homes or investment property.

So if I take a mortgage on too much house that I can't repay that should be forgiven me? And I get to keep the mansion or nah?
What about car loans (I have a hankering for a Ferrari, but can't afford the payments)?
Or credit cards?

Pointing out a policy will increase the wealth of Black Americans says nothing about any positive effects on others.

Of course not. But focusing only on how it affects one race speaks volumes about the people making the argument.

It is easier to observe and measure the direct effects of a targeted policy than to observe and measure the direct effects of a more general policy like fighting inflation. In addition, the expense (or foregone tax revenue) or costs of a targeted policy is likely to be much smaller than one for fighting inflation.

So what? It says nothing about whether a particular policy is sensible or not.

 

[thebeave]

If I can take a job making two thirds what I do today simply because I do not have a debt burden, I would take jobs that pay less and contribute more. I would work more readily for start-up companies. I would more readily invest my time and money in personal projects. I would even consider taking a job in academia.

Than go to a relatively affordable state school instead of taking more debt to go to a private one. AOC would not still have a balance had she gone to SUNY.

Or had she not bought a Tesla.

 

[Toni]

To repay the lender? Maybe. To repay the lender and live decently? That’s a bigger question.

Define "decently"? So you drive that 8 year old car a few years longer before you can afford that Benz. Is that such a tragedy?

I know zero people of any income level who drive a Benz. Oh, wait: I forgot--my former neighbor bought a very used Benz and used to drive it around to her many, many student rental properties before she lost it (and the properties and her license to rent) for not paying property taxes, etc. on the properties she owned. She had an LPN. I have no idea what she drives. She pretty much had to leave town after the very public downfall of her rental empire.

I do, however, know some people who are newly minted doctors and lawyers and others who went to professional schools. They don't drive a Benz, either. They drive modest cars, live in modest homes and pretty much live the life you seem to live, without the spite and anger.

 

[Toni]

Your response sounds like a bad Andy Rooney bit from 60 minutes.

Who? I do not speak boomer.

I happen to think that some sort of loan mitigation targeted towards those who are having real issues with repayment is a good idea.

That already exists by the way. Income based repayment plans can reduce your payments to no more than 10% of your discretionary income (which means $0 in some cases) and the remaining balance is forgiven after 20-25 years.
There is no need to forgive $50k to everybody just to provide "some sort of loan mitigation targeted towards those who are having real issues with repayment".

I don't think there ought to be distinctions between the types of debt. Educational loans are partly taken to increase future earnings or returns, just like loans for homes or investment property.

So if I take a mortgage on too much house that I can't repay that should be forgiven me? And I get to keep the mansion or nah?
What about car loans (I have a hankering for a Ferrari, but can't afford the payments)?
Or credit cards?

Pointing out a policy will increase the wealth of Black Americans says nothing about any positive effects on others.

Of course not. But focusing only on how it affects one race speaks volumes about the people making the argument.

It is easier to observe and measure the direct effects of a targeted policy than to observe and measure the direct effects of a more general policy like fighting inflation. In addition, the expense (or foregone tax revenue) or costs of a targeted policy is likely to be much smaller than one for fighting inflation.

So what? It says nothing about whether a particular policy is sensible or not.

Really? Doesn't the effects justify whether or not a policy is sensible?

 

[Jarhyn]

To repay the lender? Maybe. To repay the lender and live decently? That’s a bigger question.

Define "decently"? So you drive that 8 year old car a few years longer before you can afford that Benz. Is that such a tragedy?

I know zero people of any income level who drive a Benz. Oh, wait: I forgot--my former neighbor bought a very used Benz and used to drive it around to her many, many student rental properties before she lost it (and the properties and her license to rent) for not paying property taxes, etc. on the properties she owned. She had an LPN. I have no idea what she drives. She pretty much had to leave town after the very public downfall of her rental empire.

I do, however, know some people who are newly minted doctors and lawyers and others who went to professional schools. They don't drive a Benz, either. They drive modest cars, live in modest homes and pretty much live the life you seem to live, without the spite and anger.

Oh come on, I had a Benz in my driveway for three years myself. Never mind it was as old as I am and was barely capable of starting, incapable of hitting on 2 of it's 6 cylinders, and I never found out of it was capable enough at moving forward to even get where the people who bought it were taking it.

 

[Toni]

There are already programs for loan forgiveness in limited career paths: some areas of medicine, some areas of teaching and some areas of law. If you are willing to practice medicine or teach or serve as a public defender for 10 years (at sub market wages), and if you continue to pay the interest on your student loans, your loans are generally forgiven.

The question is, why should somebody who goes into ortho or plastics or derm at a big city clinic and is making big bucks get student loan forgiveness? Or somebody going into corporate law? The forgiveness is there to serve as an incentive for people to go into rural family medicine so not all doctors there are DOs who could not get any better residency during the Match. Or go be public defenders so not everybody at the PD office got their degree from the University of American Samoa Law School.

Go Land Crabs!

General student loan cancellation would make these incentives meaningless.
Also there is another option for cancellation currently - if you do not make that much compared to your loan payments, you can go on an income-driven repayment plan. If you stick with those for 20-25 years, your remaining balance gets forgiven.

Note: During the Trump administration, he wanted to remove even this limited loan forgiveness. Currently, I know someone who is working as a public defender in a mostly rural county in flyover country who was just relating to me that within his office, among all of them, they knew exactly one person, ever, who managed to stick it out to get loan forgiveness.

What did the rest do? Took well-paying lawyer jobs so they can easily repay their loans anyway?

So, suppose you are one of the lucky kids who graduate from college with minimal student debt (say, only $50K) and an 8 year old car.

$50k is hardly "minimal student debt" for just undergraduate. And an 8 year old car is barely broken in.

You'd really like to go to grad school or law school or med school (pick one) but doing so will mean that you incur at a minimum $100K in additional debt. So, at age 25 or 26, you have a 12 year old car and (minimum) $150K in student debt as you enter the labor market. If you take a job in an underserved area, you will be making under $60K/year, out of which you must pay rent and hope that your car lasts another few years.

Well, sure, during residency. But after a few years of that even rural family medicine pays six figures.

Doctors and lawyers are some of the most handsomely compensated professions. They definitely do not need a blanket student debt forgiveness!

If you are a woman, the earliest you could hope to be able to afford to have a child is your mid-30's. If you are lucky. Or marry/partner up with someone with a more lucrative career or who inherited a big wad of cash.

And if you are a man, you can magically afford a kid at a younger age?

It doesn't take a lot of imagination or high level math skills to see that this will lead to a generation with the well educated adults opting out of childrearing altogether. And it has. Which means that most of the children are being raised by people with less education--and their kids will have the choice of either choosing to be less educated and raise a family or repeat the same cycle as the generation that pursues higher educational/professional levels and... opts out of raising a family because of student debt.

So you are saying we should cancel student debt for extremely well-paid professionals because they might decide to have kids a few years earlier then? With all due respect, that's the silliest arguments for student loan cancellation I have heard since the last time AOC opened her pretty mouth on the issue.

Of course, another path would be to pursue trades: become a plumber, an electrician, a carpenter, etc. Those are fairly lucrative careers but your body is pretty beat up by the time you hit 60.

Trades indeed would be a good option for many. You know, instead of incurring a $50k for an art history degree or something similarly useless.

Do you realize that fewer and fewer people are going into family practice, largely because it is difficult to be able to purchase a home and drive a decent car (not a Benz or a Tesla) AND pay off student loans? Do you realize that to become an orthopedist or a dermatologist or neurologist or any other specialty, one must earn a bachelors, pass medical school, serve a 4 year residency (which, if you are lucky, will cover your rent and let you keep your car) and another year or two fellowship. So 12-14 years of schooling, during which time, you will make very little money and incur a great deal of debt. Which you will have to pay off, no matter what. It's one of the things that is driving more and more people into higher paid specialties than peds or general practice. Sneer all you want at dermatologists and orthopedists but when you need reconstructive surgery because your face was smashed or burned or you need your knee or hip replaced, you'll be extremely grateful for their years of study and their willingness to incur a great deal of debt.

Men can safely postpone fathering a child than a woman can safely postpone becoming pregnant and carrying a child. After 35, becoming pregnant often means expensive medical interventions--another drain on finances, not to mention additional stress on an already stressed person, and without any guarantees of a safe and healthy pregnancy.

What I'm saying is that cancelling student debt might help a lot of educated people better afford and more willing to consider having children during their peak reproductive years, meaning that they are more likely to have healthy (and less expensive) children. If you're concerned that people in well paid professions requiring years of education are getting off too easily, just increase the income tax rate on those of any profession earning higher incomes. That's what we should do anyway. But if we're not going to do that, then we need to make student debt tax deductible at 100%. Which means that a bunch of newly fledged doctors would be getting more money back than they paid in taxes in the first place. I think you'd object to that as well.

Seriously, we need to re-think how education is funded and how expensive it is and how to put it in reach of every person. If the last 4-5 years have taught us nothing, it should be that we really, really need a well educated population.

 

[laughing dog]

I happen to think that some sort of loan mitigation targeted towards those who are having real issues with repayment is a good idea.

That already exists by the way. Income based repayment plans can reduce your payments to no more than 10% of your discretionary income (which means $0 in some cases) and the remaining balance is forgiven after 20-25 years.
There is no need to forgive $50k to everybody just to provide "some sort of loan mitigation targeted towards those who are having real issues with repayment".

Never said everyone should have their debt forgiven. And income-based repayment plans are not as readily available as you seem to believe.

I don't think there ought to be distinctions between the types of debt. Educational loans are partly taken to increase future earnings or returns, just like loans for homes or investment property.

So if I take a mortgage on too much house that I can't repay that should be forgiven me? And I get to keep the mansion or nah?
What about car loans (I have a hankering for a Ferrari, but can't afford the payments)?
Or credit cards?

My point - which you clearly missed - is that debt mitigation policy should treat debtors in similar situations the same regardless of the reason for their legal debt burden. There is no economic rationale for helping someone with $40,000 of student debt while denying someone in the same situation help with $40,000 in some other sort of legal debt.

Pointing out a policy will increase the wealth of Black Americans says nothing about any positive effects on others.

Of course not. But focusing only on how it affects one race speaks volumes about the people making the argument.

Depends on the context.

It is easier to observe and measure the direct effects of a targeted policy than to observe and measure the direct effects of a more general policy like fighting inflation. In addition, the expense (or foregone tax revenue) or costs of a targeted policy is likely to be much smaller than one for fighting inflation.

So what? It says nothing about whether a particular policy is sensible or not.

The determination of the sensibility of a policy ought to be influenced by the costs and the benefits.

 

[southernhybrid]

I did find an article that imo, gave a lot of reasons as to why blanket student loan forgiveness is a bad idea. For one, it would cost over 1. trillion dollars, more money that is spent on most of the social programs for the poor and lower middle class. Imo, it's wrong to spend money by forgiving loans that people agreed to pay back, especially when most of thees people will make much more money over the course of their lives compared to those who lack degrees. The exceptions and/or those who have been scammed by fake schools certainly should be given the opportunity to ask for help or even forgiveness. Those who perpetuated these scams should be sued and prosecuted. Their money could be used to help their victims. But, that's a different subject imo.

I'm going to post a link to the article that gives a lot of detail as to how much money is spent on social programs such as the EIC, food stamps, etc. It's much less than the cost of student loan forgiveness. Imo, it's not fair to give so much monetary relief to a privileged class of people, when we have so many more that are in need of the basics.

I would still lower the interest rates on these loans to zero or something like, .1% and in some cases, allow them to be ended when one declares bankruptcy There are a lot of things that could be done to help people who have been burdened by student loans, without simply having the government be responsible for that huge loss of revenue.

https://www.brookings.edu/blog/up-f...t and,cost on the order of $1.6 trillion. [1]

 

[Metaphor]

To repay the lender? Maybe. To repay the lender and live decently? That’s a bigger question.

Define "decently"? So you drive that 8 year old car a few years longer before you can afford that Benz. Is that such a tragedy?

My car is 16 years old. I could afford to replace it but I also have no compelling reason to replace it.

All the arguments so far appear to be arguments to make tertiary education cheaper or free. They are not arguments to forgive debt that has already accrued.

 

[Rhea]

My thoughts about the problem of student debt are always pre-empted by my thoughts on trade school. So I’d want thinkgs in the following order:

1. Make trade school either free or compensated at min wage - so people can attend trade school and make enough money to not starve while they go. So no one has to say, “I can’t even learn a trade because I have to eat.

then
2. Make student loan debt immediately interest free. Most of the problem here is not about the principle, it’s about the interest.

then
3. Make college lower cost at state institutions. Elite istitutions can still charge whaever they want. But fund state institutions to provide an exceptional education at an affordable rate.

 

[Metaphor]

2. Make student loan debt immediately interest free. Most of the problem here is not about the principle, it’s about the interest.

Australia does not charge interest on student debt, but it does index the balance of debt by inflation each year. That means the real value of the debt is not inflated away by not repaying it over years.

 

[Toni]

To repay the lender? Maybe. To repay the lender and live decently? That’s a bigger question.

Define "decently"? So you drive that 8 year old car a few years longer before you can afford that Benz. Is that such a tragedy?

My car is 16 years old. I could afford to replace it but I also have no compelling reason to replace it.

All the arguments so far appear to be arguments to make tertiary education cheaper or free. They are not arguments to forgive debt that has already accrued.

We tend to drive our cars until they don’t go anymore as well, unless there’s a compelling reason to replace them. Most college kids drive hand me down cars or used cars they purchased for cheap. Depending on the make, the car may be good for 14 or 20 years/300-400K miles. Or longer. Or much less.

Cars were only brought up in response to the allegation that newly minted doctors drive luxury cars. That’s contrary to my observation.

There is simply no good reason not to do both: forgive student loans and make university and professional school less expensive. Make up the loss in student loans by taxing higher incomes at higher rates.

This would encourage —actually make possible—higher attainment of education and professional degrees for all, not just for upper middle class and more wealthy families.

Why is this important: Again, to make it more possible for well educated young professionals to be able to purchase homes and to start families before declining fertility of young female professionals makes it harder and more expensive to carry a healthy child to term. As it is, by postponing child rearing until late 30’s or 40’s, young professionals have to balance their ability to own a home, raise a family abs help their children achieve their educational goals with saving sufficiently fir their own retirements. There’s just not that much wiggle room there.

Derek seems to think that every one who goes to bed school is immediately swimming in money. That’s not actually true.

 

[Metaphor]

There is simply no good reason not to do both: forgive student loans and make university and professional school less expensive. Make up the loss in student loans by taxing higher incomes at higher rates.

There are very good reasons for not forgiving student loans and they've been listed in this thread.

This would encourage —actually make possible—higher attainment of education and professional degrees for all, not just for upper middle class and more wealthy families.

There's already a surplus of some professional degrees. One of my best friends has a masters in law and has never had a law-related job.

America does not need to forgive debt that was entered into voluntarily and resulted in an increase of the human capital of the person who entered the debt. In fact, it would be unfair and unwise for America to do that for all the reasons already espoused.

America could, however, learn from Australia (in a limited way - most Australian universities are public and not private)
* Subsidise degrees according to national need (people doing degrees that are not needed nationally pay for more of their costs than people doing a degree that is in high national need)
* Make repyaments on loans to get through university income-contingent and repayable through the income tax system
* Index the balance of the loans by inflation each year but do not charge interest.

 

[Toni]

There is simply no good reason not to do both: forgive student loans and make university and professional school less expensive. Make up the loss in student loans by taxing higher incomes at higher rates.

There are very good reasons for not forgiving student loans and they've been listed in this thread.

This would encourage —actually make possible—higher attainment of education and professional degrees for all, not just for upper middle class and more wealthy families.

There's already a surplus of some professional degrees. One of my best friends has a masters in law and has never had a law-related job.

America does not need to forgive debt that was entered into voluntarily and resulted in an increase of the human capital of the person who entered the debt. In fact, it would be unfair and unwise for America to do that for all the reasons already espoused.

America could, however, learn from Australia (in a limited way - most Australian universities are public and not private)
* Subsidise degrees according to national need (people doing degrees that are not needed nationally pay for more of their costs than people doing a degree that is in high national need)
* Make repyaments on loans to get through university income-contingent and repayable through the income tax system
* Index the balance of the loans by inflation each year but do not charge interest.

You are not particularly familiar with the US job market or with what America needs in terms of professional preparation, jobs, taxes, social policy or (fill in the blank).

Surplus? Depends on who you ask and what you mean about 'surplus.' I'm sorry for your friend's professional woes but that has zero bearing on this discussion.

Among the issues with making repayment on loans based on inflation is that it is still difficult to qualify for a home mortgage when you have $100K in outstanding student debt.

Subsidizing degrees according to 'national need' is a system rife with political implications that I don't want to start to address here. But let's start that it implies that a centralized federal government determines the future need and by implication, supply of labor needs over the next generation and more---and further implies that such needs can be known and planned for to a much higher degree than is actually possible. If nothing else, one thing we should have learned over the past 30 years or so is that emerging technologies create new types of jobs and make some types of jobs obsolete. It's far better to have a workforce that is well educated than well trained for a specific career or job type.

 

[Metaphor]

There is simply no good reason not to do both: forgive student loans and make university and professional school less expensive. Make up the loss in student loans by taxing higher incomes at higher rates.

There are very good reasons for not forgiving student loans and they've been listed in this thread.

This would encourage —actually make possible—higher attainment of education and professional degrees for all, not just for upper middle class and more wealthy families.

There's already a surplus of some professional degrees. One of my best friends has a masters in law and has never had a law-related job.

America does not need to forgive debt that was entered into voluntarily and resulted in an increase of the human capital of the person who entered the debt. In fact, it would be unfair and unwise for America to do that for all the reasons already espoused.

America could, however, learn from Australia (in a limited way - most Australian universities are public and not private)
* Subsidise degrees according to national need (people doing degrees that are not needed nationally pay for more of their costs than people doing a degree that is in high national need)
* Make repyaments on loans to get through university income-contingent and repayable through the income tax system
* Index the balance of the loans by inflation each year but do not charge interest.

You are not particularly familiar with the US job market or with what America needs in terms of professional preparation, jobs, taxes, social policy or (fill in the blank).

I don't need to be familiar with it. I would assume it would be a function the United States government.

Surplus? Depends on who you ask and what you mean about 'surplus.' I'm sorry for your friend's professional woes but that has zero bearing on this discussion.

I did not claim she had professional woes. I said she had never worked in her field of masters study, though she is working in her field of undergraduate study. There are too many people with law degrees in Australia. Australia doesn't need them all.

Among the issues with making repayment on loans based on inflation is that it is still difficult to qualify for a home mortgage when you have $100K in outstanding student debt.

Well, so what?

Subsidizing degrees according to 'national need' is a system rife with political implications that I don't want to start to address here. But let's start that it implies that a centralized federal government determines the future need and by implication, supply of labor needs over the next generation and more---and further implies that such needs can be known and planned for to a much higher degree than is actually possible.

Governments plan things for the economy all the time. I didn't realise you had become an anarcho-capitalist recently.

If nothing else, one thing we should have learned over the past 30 years or so is that emerging technologies create new types of jobs and make some types of jobs obsolete. It's far better to have a workforce that is well educated than well trained for a specific career or job type.

You just finished saying professional degrees that train for specific job types are too expensive and that's bad, and now you are saying generalist degrees are better.

 

[Loren Pechtel]

People of my generation could pay for state universities on summer wages and after school jobs with maybe a little work study and small student loans thrown in. We paid my husband’s small student loan with ease, even while still in grad school. Now, a student loan payment is more than a car payment, and can rival a months rent or mortgage payment. Not many jobs right out of college will cover two months’ rent plus other living expenses.

The increased cost is because the government is contributing a lot less towards education.

Do you not want people to become teachers? Librarians? Social workers? Nurses?

What will happen to their wages if everyone gets a degree in engineering?

We need a well educated population. Employers can do their own damn job training.

If the state feels certain professions need help then it should help with those professions, not student loans in general.

 

[Loren Pechtel]

Also there is another option for cancellation currently - if you do not make that much compared to your loan payments, you can go on an income-driven repayment plan. If you stick with those for 20-25 years, your remaining balance gets forgiven.

Which is why I favor using the IRS to handle it--there's an automatic cap on the required payment based on your 1040. No plans, no forgiveness applications, it just happens. Likewise, incentives come in the form of a certain amount of paying down per month of employment in jobs that qualify.

Keep the system simple!

 

[Loren Pechtel]

My car is 16 years old. I could afford to replace it but I also have no compelling reason to replace it.

People would be a lot better off if they lived this way. I've only gotten rid of one car that wasn't ready for the wreckers and that was because I no longer trusted it. Otherwise it's been drive it until the repair estimate isn't worth it.