Biden administration announces partial student loan forgiveness

[southernhybrid]

https://wapo.st/3jWxRcF

People who have been paying down their student loans for decades will get a better chance at debt cancellation, as the Biden administration temporarily relaxes the rules of certain repayment plans.
On Tuesday, the Education Department said it will grant federal student loan borrowers additional credit toward loan forgiveness under what is known as income-driven repayment plans. The move will bring more than 3.6 million people closer to debt cancellation, including 40,000 who will be immediately eligible, according to the department.

About half of the more than $1 trillion in outstanding student loans made directly by the federal government are being repaid through one of the four income-driven plans. The plans cap monthly payments at a given percentage of earnings, with the promise that the balance will be forgiven after 20 or 25 years of payments.

I've never supported blanket student loan forgiveness, but this seems like a reasonable plan. Some of the details are absent from this article, but it appears as if it will help those who have been paying on their loans for many years, especially those who barely make enough income to afford their monthly payments. The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

The trouble is that decades of poor communication between the Education Department, its loan servicers and borrowers have made the program difficult to navigate. Now, Education Secretary Miguel Cardona says the agency will remedy years of administrative failures that effectively denied loan forgiveness to some borrowers enrolled in income-driven plans.
“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” Cardona said Tuesday.
Congress created the first income-driven plan in the 1990s, but few people took advantage until the Obama administration expanded eligibility, lowered monthly payments and shaved years off the path to forgiveness. The goal was to help more people manage their debt and avoid default.

Will this help or hurt the Democrats in November is anybody's guess. I would never vote for a Republican, regardless if I support all or most of the Democratic plans, and since I paid off my student loans decades ago, I have no iron in this pot.

 

[Playball40]

After 20-25 years of payments, you aren't really 'forgiving' anything. All this is effectively doing is reducing the already ridiculously high interest rate. Still, better than nothing I guess.

 

[Loren Pechtel]

I'd prefer to simply cap repayment at some percentage of income above the poverty line rather than just a percentage of income.

 

[Trausti]

Still think we should tax university endowments - progressively, of course - to fund any student loan write off. The universities know their students can get large loans and exploit them.

 

[southernhybrid]

After 20-25 years of payments, you aren't really 'forgiving' anything. All this is effectively doing is reducing the already ridiculously high interest rate. Still, better than nothing I guess.

So, if I have a 30 year mortgage and the bank decides to cancel the rest of my payments after 20 years, I'm getting nothing?

I think the article lacks a lot of details, so it's a bit difficult to understand how much this will help. I think the idea is to help people who are overwhelmed with high loan payments.

I agree that the interest rate should be lowered to close to zero. Maybe that will come later. Still, making the loan payments affordable is a good start.

Apparently, the federal program that was supposed to help people get help with their loan payments was poorly managed.

I'd like to see it become very easy to obtain loan forgiveness in exchange for working in areas where certain professionals are badly needed. Such programs are too complicated. That needs to change.

 

[Jimmy Higgins]

I'd prefer to simply cap repayment at some percentage of income above the poverty line rather than just a percentage of income.

And an inverse proportional percentage related to the endowment size of the school, being paid for with an endowment tax.

 

[bigfield]

The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

Includes a bit of resentment from people who endured crippling student debt and don't like the thought of other people getting out easy.

 

[Gospel]

Still think we should tax university endowments - progressively, of course - to fund any student loan write off. The universities know their students can get large loans and exploit them.

I still don't understand how they can charge so much for an education that students couldn't make a profit off of. I mean shouldn't the market dictate the value of the knowledge? If I'm paying a school to become a burger flipper and the market has no need for burger flippers at the time I enrolled you'd think I'd pay less for the education than someone who enrolled when burger flippers were in high demand.


These schools really ought to be left holding the bag on these loans with limits to their powers like any credit agency. This way they can write off their own make-believe losses.

Edit: And by holding the bag I mean the School borrows the money and lends it to the student. The students pay the school and the school pays back the loan. If the student defaults the school is left holding the bag.

The way the system is set up now gives the school no incentive to handle pricing responsibly since the students deal directly with the lender and the school gets the money no matter what (unless I'm mistaken).

 

[Jimmy Higgins]

The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

Includes a bit of resentment from people who endured crippling student debt and don't like the thought of other people getting out easy.

To be fair, these people are also online whining about the Indians becoming the Guardians and promise to always call them The Tribe in some sort of protest.

Is it fair that I had to pay back my student loans? Well, it cost about $40k total for four years to go to a private school back when a degree had more value. What are they paying today for a lesser valued (in general) degree?

If they aren't paying loans, they are pumping money into the economy. That isn't a bad thing. After all, it isn't like they can afford to buy a house anyway even without the loans.

 

[Metaphor]

The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

Includes a bit of resentment from people who endured crippling student debt and don't like the thought of other people getting out easy.

To be fair, these people are also online whining about the Indians becoming the Guardians and promise to always call them The Tribe in some sort of protest.

Is it fair that I had to pay back my student loans? Well, it cost about $40k total for four years to go to a private school back when a degree had more value. What are they paying today for a lesser valued (in general) degree?

If they aren't paying loans, they are pumping money into the economy. That isn't a bad thing. After all, it isn't like they can afford to buy a house anyway even without the loans.

How on earth does that work?

If federal loans are being forgiven, that means the federal government has either less money to spend, or needs to tax taxpayers more to get to the same amount. Either way the total spend in the economy is the same.

 

[bigfield]

If federal loans are being forgiven, that means the federal government has either less money to spend, or needs to tax taxpayers more to get to the same amount.

Or the federal government needs to issue bonds to compensate for spending more money.

 

[Gospel]

If federal loans are being forgiven, that means the federal government has either less money to spend, or needs to tax taxpayers more to get to the same amount.

Or the federal government needs to issue bonds to compensate for spending more money.

Or the federal government can issue the loan to the school, not the student, and the school is left holding the bag if the student defaults on the loan. The school will be left with the tools to collect like any other credit agency.

 

[Worldtraveller]

Or, just make state and community college free, like it is in most civilized countries.

...and forgive all student loans. Hell, pay them back some portion if they've paid in the last 5 years.

 

[Politesse]

Or, just make state and community college free, like it is in most civilized countries

Thank you! Unfortunately we have been marching in the opposite direction for the past fifteen years. As other sources of funding fail to keep up with increasing costs, student tuition has skyrocketed to help schools make up the difference. Since this also means hiring fewer and less qualified staff and cutting programs, students are getting a worse product at greater personal cost with every passing year.

 

[bilby]

An educated population is an asset to the nation, not just to the individual clutching a degree certificate.

If you view the entirety of human existence through the Reagan-Thatcher 'Economic Rationalism' lens, in which the only value anything has is determined by its ability to make money, you lose a vast swathe of reality.

In order to get the massive societal benefit of a tiny handful of geniuses, it is necessary to teach a vast army of students, many of whom will never make very much of themselves financially.

Even if it were not the case that financial success and genius are rarely correlated, it would be massively counterproductive to expect students to fund their education by borrowing against its anticipated future monetary value.

Lots of things are valuable, but cannot be monetised. Such things should be funded from progressive taxation of income, because income is a fairly good measure of the benefit a person is deriving from society. Education is one of those things; The employer of a well educated person likely benefits more financially from his degree, than the degree holder himself does. Let him pay his share. That employer's customers also benefit financially. Let them too pay their share. All of society benefits, to a greater or lesser extent, from the existence in that society of educated people.

Education is infrastructure. It allows society to grow. It should therefore be made as attractive as possible to obtain. Making it free at point of use, and funding it via general taxation, rather than by billing the recipient (who is far from being the only, or even major, beneficiary) is one effective way to make it more attractive.

Nobody should resile from getting an education because of financial worries, if we want the best for our society's future.

 

[Loren Pechtel]

The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

Includes a bit of resentment from people who endured crippling student debt and don't like the thought of other people getting out easy.

The problem is people who suffered being responsible dislike seeing others get rewarded for irresponsibility.

 

[Loren Pechtel]

Or, just make state and community college free, like it is in most civilized countries.

...and forgive all student loans. Hell, pay them back some portion if they've paid in the last 5 years.

I dislike free. Make it affordable.

 

[bilby]

The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

Includes a bit of resentment from people who endured crippling student debt and don't like the thought of other people getting out easy.

The problem is people who suffered being responsible dislike seeing others get rewarded for irresponsibility.

The problem is that misery loves company.

There's exactly nothing irresponsible about being given assistance, even if others in similar situations in the past were forced to extricate themselves, or go under.

Comes to that, there's nothing particularly responsible about helping yourself, when you have no other good options.

You appear to be using "responsible" to mean "allowing others to feel good about being selfish cunts who won't lift a finger to help someone who is struggling".

 

[bilby]

Or, just make state and community college free, like it is in most civilized countries.

...and forgive all student loans. Hell, pay them back some portion if they've paid in the last 5 years.

I dislike free. Make it affordable.

Who gives a crap that you dislike free?

Free IS affordable. Anything more is unaffordable to someone.

You are seeking to justify being kind only to people above a certain level of wealth. Fuck that bullshit.

If I am charitable, I might forgive your inhumanity on the grounds of your being abjectly ignorant that there exist people for whom any cost greater than zero is unaffordable.

 

[Politesse]

The comment section is full of a lot of angry people who don't want anyone to have loan forgiveness. I find that surprising since most surveys claims there is over 50% support for student loan forgiveness. The article should be available for anyone to read for at least two weeks, according to WaPo's gifting rules.

Includes a bit of resentment from people who endured crippling student debt and don't like the thought of other people getting out easy.

The problem is people who suffered being responsible dislike seeing others get rewarded for irresponsibility.

Childish of them.