If you just allow bankruptcy student loans basically cease to exist. Strategic bankruptcy upon graduation is simply too inviting an option.
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US student loans grotesquely high
- Thread starter lpetrich
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If you just allow bankruptcy student loans basically cease to exist. Strategic bankruptcy upon graduation is simply too inviting an option.
laughing dog
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That is an excellent example of a non-sequitur.
I would like to see an interest rate cap on student loans. Many of these worst cases would be mitigated by not having usurious rates.
I would like to see better support for trades education, as well. Indeed, I would like to see that support first.
I would like to see better support for trades education, as well. Indeed, I would like to see that support first.
Derec
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[citation needed]
Derec
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She is right there (for a change). It's pure pandering. What is Biden's plan? Keep extending the moratorium indefinitely? The ostensible reason for the moratorium - economic disruption due to the pandemic - is long gone. And college graduates have been better equipped to weather the disruption than the population at large anyway.
That's where she is wrong. Taxpayers should not be bailing out people like her who went to fancy private colleges and are making six figures.
People who despite their college degrees struggle financially already have income based repayment plants.
But there is no reason to cancel - or pause - student loans for people who like AOC make six figures. And even less so for lawyers and doctors who tend to make six figures a few times over!
Oh please! If you have a $1000 dollar student loan payment than a) you took out a positively massive loan and b) are making $100k. Play with this IBR calculator.
That's more than most people in the US. They do not need this special treatment.
Derec
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It's not a bad argument. And making student loan payments again is a good way too cool down the inflation too. There has been too much stimulus in the last two years and this student loan pause is another stimulus and a very poorly targeted one. You have doctors and lawyers making $200-500k not having to pay their loans and have their interest paid for by the taxpayers.What an argument.
I do not know who this Leona Helmsley is exactly, but who does she (and you) think are the ~47% who pay zero (or negative) federal income taxes exactly? Also tax policy and student loans are two different topics. And I do not quite get what you mean? Do you think people with massive student loans are "little people"?
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The absolute audacity of people who think student loans should just be cancelled.
People entered in to that debt with a promise to pay it back.
The government loaned you money so that you could build your personal capital.
If instead the government had given $100,000 as a loan to you, and you put it in stocks that went south, would we be asking the government to cancel that debt, too?
People entered in to that debt with a promise to pay it back.
The government loaned you money so that you could build your personal capital.
If instead the government had given $100,000 as a loan to you, and you put it in stocks that went south, would we be asking the government to cancel that debt, too?
Derec
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Hell, they are even demanding their student loans be cancelled if the investment in their education pays off. When it doesn't there are already programs to help you. You can get your loan cancelled outright if your college was a fraudulent one, and if you got a legit degree and still don't make much money, there are income based repayment plans that can trim your payments quite a bit - even to zero in many cases!
lpetrich
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How is that supposed to be the case?
If that is such a great strategy, then it should be applied more broadly. That means huge tax hikes for everybody. I'm sure that everybody concerned about inflation would be glad to pay extra in taxes. A lot extra.
I know who proposed that, and I know that when Barack Obama chose him as an economic adviser, that president was showing that he was something other than some horrible left-wing ogre.
Too much stimulus? What would be too little?
Pseudo-left-wing nonsense. It amuses me when right-wingers agree with AOC that we must tax the rich.
I do not know who this Leona Helmsley is exactly
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It should be easy to demonstrate one's work ethic and find out who she was.
That's because of their low incomes.
Derec
Contributor
People (including well-paid professionals) not having to pay their student loan payments frees more money for them to spend it on something else. More money chasing same amount of goods and services => inflation.
Taxation would be one way to remove excess liquidity, yes. However, that is not necessary (certainly not "huge tax hikes") as long as there are stimulatory policies like this payment/interest freeze.
Don't left us hanging. Who was it?
Note that Obama did not have a high inflation as one of his problems. In fact, we have not had high inflation in decades.
It's neither "pseudo-left-wing" nor is it nonsense.
I think everybody should pay their fair share in taxes, including the rich. Dems like to focus on billionaires (even going as far as proposing novel taxes like those on paper gains) while ignoring those who are merely rich - even wanting to lower their taxes via increasing the regressive SALT deduction.
This is not even about taxes though. It is about a benefit (student loan freeze and possible cancellation/forgiveness) that would mostly benefit those who are already well-off.
Why do you think rich doctors and lawyers should not pay their student loans exactly? Why do you think it is "pseudo-left-wing nonsense"?
Behind on responding to these threads as it is.
Not exactly. People making as little as $25k can have significant federal income tax liability. But if you have 3 or 4 kids, you can make $40k and have zero or negative federal income taxes due to all the tax credits and other benefits that benefit certain people. Hell, with Dems $300-360 per child "expanded child tax credit" people making six figures were still eligible for that benefit.
Toni
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Well, we had no problem bailing out all kinds of businesses.
Canceling student debut, generally entered into by persons not legally old enough to consume alcoholic beverages, rent a hotel room, gamble at a casino, or rent a car or adopt a child, seems much more ethical than forgiving the debt.
As it stands now there is no way to legally discharge that debt aside from paying it off. If you become seriously I’ll or disabled from a car accident, and unable to work: you still have to pay.
As for benefiting tax payers: those overburdened by student debt do not purchase homes, marry or have a family, all of which benefit society. Student debt is a huge drag on the economy.
The government imposed the lockdowns that caused the bailouts to be needed.
I agree that student debt being immune to the usual bankruptcy laws might be problematic, but I assume there is a history there that I am ignorant of.
Then why not give every adult $50,000? Why tie it to people who chose to incur debt?
When you claim student debt is a 'huge drag' on the economy, what you are saying is that you want to the benefits of tertiary education but you don't want to pay for them.
Toni
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Not at all. Aside from COVID, the US has a long history of bailing out various industries. Some industries benefit tremendously from the use of public lands, especially the oil industry abs the cattle industry. They are leased public lands at exceptionally favorable rates.
The US as a nation benefits in accordance with the educational level of its populace. Everyone benefits from having more doctors and nurses and teachers and lawyers, architects, engineers, etc. also from trained plumbers, electricians, pipe fitters , carpenters, etc. yes, those holding such degrees and certificates stand to benefit financially in a direct way—but do dies the nation. We need well educated and well trained people to help our economy abd our society flourish.
Moreover, public universities are much more expensive compared with when I was young because state governments have dramatically pulled back in their financial support of universities, colleges and tech schools, leaving young people not old enough to purchase alcohol to incur debt they have no meaningful experience with which to understand the implications.
It’s simply wrong from a moral standpoint and wrong frim an economic stand point.
Well perhaps the US should stop bailing out various industries?
I should note that the US alcohol age of consent is very high compared to the rest of the world. Even your North American cousins the Canadians don't have it that high.
It is wrong from a moral standpoint to cancel debt using other people's money, a debt that was voluntarily entered into and from which the debtor benefitted, and especially when other people did honour their obligations and pay back the debt.
Toni
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Nonetheless, that is the legal drinking age. In the US, one is allowed to obtain a drivers’ license at an earlier age compared with many/most other countries.
Student loans are typically federal loans, meaning that they are borrowing from themselves and are paying —or not paying themselves back.
Arguing that other people had to pay is about as sensible as saying that people used to die of polio so why do kids today deserve to be vaccinated? Or much more aptly: students in my generation could mostly pay for college by money earned on summer jobs, maybe with their parents kicking in a little. But states have abandoned their duty ( in some cases constitutional duty) to fund education at the same level they funded education when I was first a university student. If states would step up and meet their obligations, then students would be far less burdened by student loans. The entire country would benefit.
No, it is nothing like that. If you and I took out a loan in 2000, and I paid it back over ten years and you didn't pay any of it back, why should you get your debt forgiven? Why should your education and living costs effectively be free but mine not, because you didn't pay back your debt?
Do you realise how perverse that is?
Toni
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I realize that you are opining about things that happen in the US that you neither understand nor are affected by.
The greater perversion is the fact that we have allowed people who are not capable of understanding fully the implications for the loans they take out to take on an extremely burdensome amount of debt—a burden that will cripple them for their entire lives while simultaneously telling them their futures depend upon incurring those debts.
For my own kids, my husband and I were both willing and able to pay almost the entire cost of our kids’ university education. Yes, it meant delaying and even foregoing a lot of things we wanted to do but it was our responsibility to give our kids the best start in life we could. I feel bad that we were not in a position to pay for post graduate education.
So, outrageous kids got that advantage—compared with some of their parents who couldn’t or would not cover the costs for their kids.
Unfortunately, a bunch of those parents failed to comprehend just how high those costs would be or the implications for their kids. I’ve listened to parents half a generation or a generation younger than I am talk about how they were able to pay fir their own school abd their kids should too. Except that the cost of education today has risen far, far faster than minimum wage which until very recently was about the same as when the parents were 18.
How is that fair to those kids?
Well, it’s not fair that anyone is unable to afford to pursue university or trade-school if they want to go and are qualified to do so.
Loans should be forgiven AND universities, colleges and trade schools should be tax supported to a level that ours higher education abs grade school within reach due all without the need to assume a crippling debt burden.
All of my kids are grown and graduated abs living independently. I’m retired; my husband will be in a few years. We will be on a fixed income. I would welcome an increase in our taxes to better position this generations and those to come to pursue their educational dreams without being crippled by debt.
I well understand the implications of forgiving student debt.
It means tax payers will be giving lots of free money to people who incurred debt and didn't pay it back, whilst the people who did pay it back are given nothing. It is screamingly perverse.
Why not let tax payers pay half the mortgage of people who bought a house that was too costly for them to manage on their own?
Toni
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No one can qualify for a mortgage at age 18.
What is extremely perverse is someone from halfway around the world, who resides in a country where a university education costs a small fraction of what it does in the US and whose country’s students incur far, far, far less student debt compared with US students believes that he can lecture about what is and is not fair in a country he’s only read about on right wing media outlets.
Thank heavens you live in Australia and are not subjected to the potential of student debt relief!