Student Loan Forgiveness (MERGED) (2 Viewers)

[el caliente]

Rumors floating around is that today President Biden will be canceling a portion of student loans. That’s fine and all, but what’s your take on it? If it truly is only $10k in forgiveness, is that enough to make much of an impact? Is student loan forgiveness just tax payer funded student loan bribery?

Should be interesting to see how this plays out.

 

[Bigdaddysaints]

e.

I would also point out that if we send everyone to get a degree in the highest paying jobs, those jobs won't be high paying much longer.

Not even close to being true. So many people don't go to college, just because it isn't what they want. There are plenty of well off families whos children don't go to college, i don't think it'll have that type of flooding.

I was looking at some jobs on indeed one day, there were so many 40k jobs that required at least a Associates degree.. I don't know what world you live in where 40k is a highest paying job...

 

[wardorican]

I would disagree. If I could invest $300k one time to get a $100k per year job, that would likely be a good investment. Let's say you could borrow $300,000 today, and you could invest it in something that would pay you $100,000 a year for the next 40 years (and likely increase fairly regularly), would you take it? I mean, you could comfortably live like someone making $60k per year, and pay the loan back in 8 years.

The bigger problem in a lot of cases (especially with advanced degrees) is that people immediately adopt a lifestyle that goes with that new job, which makes it difficult to pay back the loan rapidly. Take doctors. In 2016, the average medical school debt was $190,000. In 2018, the average salary of a doctor was $299,000 year. If a kid fresh out of medical school was making $200,000 per year as a new doctor, and lived like someone making $70,000 per year, they could pay off their $190,000 student loan in about three years. The problem is when that fresh doctor lives like someone making $200,000 per year, and takes decades to pay off their loans.

I'm not saying that's always the case, but it happens fairly regularly.

I agree about lifestyle choices, but let's also look at repayment plans. Remember, the juice is running while in school. And you have to pay it back in 10 years. Like i said, interest is calculated daily.

I dont think this includes interest accrued during school. But a $3100-3200 a month payment, for 10 years is crushing.

I bet that is above many people's mortgage.

Making 100k/year, after taxes is likely around 70-80k? Now, $36k is off the table. So, worst case is living off of $34k per year for a decade. Not counting paying into benefits like medical, dental, vision, etc..

Take 12k off for rent. You're at 22k. Car, car insurance, food, medical, fun...

That's rough.

 

[B4YOU]

What if I think Pell grants and Stafford loans are a handout? Your opportunity was already balanced at public school. I got academic scholarships directly from the university because I worked hard in high school and they paid for my undergrad.

Your grades and ACT scores weren't good enough to get academic scholarships? Tough shirt.

See, I can play the government handout game, too. Your government handout is no better than this one.

Do you actually believe this or are you being argumentative? I would support a national program similar to LA’s TOPs program that caps tuition and fee increases at participating public schools. This would push states to return to public funding via taxes for higher education.

I believe that we should have systems that account for both need and ability. LA Tops Honors is what kept me from joining the US Army. I view this as the single best piece of LA legislation in my lifetime. The failure to continue funding this at state tuition levels is a mistake.

Not an HR trend. It's a societal need as technology advances. There's simply not enough time to learn in K-12 to learn how to be a structural engineer or a cardiologist.

It’s both. HRs are using master degrees to reduce applicant pools for entry level jobs.

My masters program was through one of my local universities, and it was fully online (except for my final project, where I had to present on campus). I learned quite a bit, it led to a promotion and a pay increase of almost $20k over the next two years. The entire program cost just over $11k, which I paid cash for. The degree has already paid for itself and everything thereafter is profit.

Congrats, sincerely. You also just demonstrated why I believe post-secondary educational loans should not be forgiven.

 

[JimEverett]

They're not just government backed, they're mostly government owned. Which in a way mute JE's overriding concern that he felt was and impediment to any kind of loan cancellation, since most of the loans aren't financed by private lenders. It also creates a different type of impediment to loan forgiveness, because the government can't just cancel out 36.8% of assets, since it would go completely broke. But given that the loans aren't exactly paying for themselves, it also creates and incentive to do something about it.

Just seems like a huge mess, to be honest.

Who Actually Owns Student Loan Debt?

The federal government owns a significant amount of student loans but private companies also own these loans. Learn how to determine who owns your student loan debt.

www.investopedia.com

It really doesn't override the initial issue I had - which was taxpayer's paying for private and for-profit institutional loans, although to the extent that the government outright owns the loans it does diminish the problem of paying private banks.

 

[brandon]

Do you actually believe this or are you being argumentative?

Argumentative. I'm just failing to see the real distinction between a government education handout in the form of a grant versus a government handout in the form of loan forgiveness.

I mean, MAYBE there's a philosophical difference, but in all practical matters, they affect both the one who receives the handout and the amount of debt the government takes on to cover it exactly the same.

 

[reubenray]

It's ok if you don't wish to answer, but I'm curious about how old you are. Just so I can peg the approximate tuition ball park of the era.

And I totally understand that feeling. If it wasn't for my scholarships, I was about to have that same discussion with myself about possibly not going.

I am 68

 

[superchuck500]

 

[brandon]

Congrats, sincerely. You also just demonstrated why I believe post-secondary educational loans should not be forgiven.

But I also demonstrated that online masters degrees are absolutely not a racket if you have a clear plan for what you're getting the degree for and how you're going to pay for it.

 

[zztop]

good he is calling out hypocrisy

Biden offers new student debt relief plan, lashes out at GOP after Supreme Court ruling

President Joe Biden vowed Friday to push ahead with a new plan providing student loan relief for millions of borrowers while blaming Republican “hypocrisy” for triggering the day’s Supreme Court decision that wiped out his original effort.

apnews.com

 

[samiam5211]

Not even close to being true. So many people don't go to college, just because it isn't what they want. There are plenty of well off families whos children don't go to college, i don't think it'll have that type of flooding.

I was looking at some jobs on indeed one day, there were so many 40k jobs that required at least a Associates degree.. I don't know what world you live in where 40k is a highest paying job...

I wasn't talking about just having people with more education. I was mostly responding to the idea that we should only pay for certain degrees, and not let people choose to major in art history or communications. If we start funneling people to specific careers, those careers aren't going to pay as much because they will become less in demand.

Not immediately, but the main reason that jobs pay well is because those jobs are needed.

Certain jobs that create new wealth or things, like Engineers are self sustaining to a certain point.

But let's say we had 10x as many lawyers as we currently do, then lawyers wouldn't be worth as much money.

This isn't a problem that would happen overnight, but it would happen.

To me the main value of having an educated population isn't even economic. We select our own government, if the population is more educated, we will generally do a better job of picking leaders.

 

[Bigdaddysaints]

I wasn't talking about just having people with more education. I was mostly responding to the idea that we should only pay for certain degrees, and not let people choose to major in art history or communications. If we start funneling people to specific careers, those careers aren't going to pay as much because they will become less in demand.

Not immediately, but the main reason that jobs pay well is because those jobs are needed.

Certain jobs that create new wealth or things, like Engineers are self sustaining to a certain point.

But let's say we had 10x as many lawyers as we currently do, then lawyers wouldn't be worth as much money.

This isn't a problem that would happen overnight, but it would happen.

To me the main value of having an educated population isn't even economic. We select our own government, if the population is more educated, we will generally do a better job of picking leaders.

But there are so many corparations that don't really care about what degree you have, but they just want a degree. they want that piece of paper...

 

[B4YOU]

But I also demonstrated that online masters degrees are absolutely not a racket if you have a clear plan for what you're getting the degree for and how you're going to pay for it.

Same for in-person undergrad degrees - have a plan for success and how to pay for it.

My statement about online masters wasn’t a suggestion that they are ALL a racket. Some are. Requiring a masters for entry level work is a real problem. Employers providing job training has disappeared.

 

[brandon]

Same for in-person undergrad degrees - have a plan for success and how to pay for it.

Agreed, but the caveat was that I was much older, more mature, more experienced, and more financially literate when I decided to get my masters at 34 than I was when I was going into college at 17. I was able to make that plan in an informed way. Students at 17 are told by counselors, teachers, college admissions advisors, and their parents to get student loans to pay for college. How are they supposed to make an informed decision when the people who are supposed to know what to do are telling them that student loans are the way to success?

And how to we justify holding the students to account when they were minors and this is the advice they got?

Requiring a masters for entry level work is a real problem.

No arguments there. Masters degrees should be for masters-level work, and should receive professional pay accordingly.

 

[superchuck500]

I think there’s some truth to this.

 

[B4YOU]

Agreed, but the caveat was that I was much older, more mature, more experienced, and more financially literate when I decided to get my masters at 34 than I was when I was going into college at 17. I was able to make that plan in an informed way. Students at 17 are told by counselors, teachers, college admissions advisors, and their parents to get student loans to pay for college. How are they supposed to make an informed decision when the people who are supposed to know what to do are telling them that student loans are the way to success?

And how to we justify holding the students to account when they were minors and this is the advice they got?


No arguments there. Masters degrees should be for masters-level work, and should receive professional pay accordingly.

You are asking about the age of responsibility. Society has set this at 17/18. I believe gap years are a good thing.

I think there’s some truth to this.

Yep! The “I got mine” boomer generation, Reagan era and continuing state tax policies, and the handling of the 07/08 housing crisis screwed GenX and early Millennials. Population can drive politics. Once this large group dies off over the next 5 years, we will see cuts to senior benefits in the form of increased SS ages with reduced benefits to fund GenZ programs.

 

[el caliente]

If you cannot imagine how getting 10-20k in loan forgiveness can be life-changing especially when paired with the measure that will prevent your loans from ballooning again in the future, so that your payments will actually pay down the balance rather than merely partially service the debt, that’s on you.

I know the medical field primarily. Folks who change bed pans at the nursing home, who do the same in the hospital, who take your blood pressure and check you in at your doctor‘s appointment have to have schooling beyond high school. They often take out small loans, in that 10-20k range, to get that schooling. Their pay isn’t great - they often start out at 16-17 an hour, sometimes less in rural areas. When they defer payments or pay the minimum and their balance balloons to 30-40k, yes this will be life changing for them. Their dream is to often continue their schooling and become an RN or X-Ray tech or some other higher paid field. This debt keeps that from happening.

Chuckle away. The inability to imagine how another person is burdened is a modern failing in society in general.

I’m not laughing at the struggles that debt holders are going through, I’m laughing at the people who think that this is some sort of life changing amount.

The average outstanding amount of student loans is $37.6k. Unless $20k of those loans are Pel Grants, a loan holder is still on the hook for $27.6k. You are talking about (on average) a reduction ranging from (at best) 73% to (most likely) 27%. Inflation is about to hit harder now, so that extra $10-$20k is about to be worth less.

For the record I am not against this bailout any more than I was against the Auto, Wall Street, or Farmer bailouts. A bailout was about to happen for someone, I’m just glad it happened to someone I can relate to.

 

[SaulGoodmanEsq]

Yeah, and what's wrong with that? Particularly when the "get nots" are underwriting the "gets".

Taxation is basically taking money at gunpoint. What this boils down to is government taking money at gunpoint and then giving it to someone who made a conscious decision to undertake a financial obligation and, well, just doesn't want to pay it back anymore because they didn't realize their art history degree wasn't going to make them an instant millionaire. Philosophically, I think that's problematic.

Now again, I'm reaping a benefit from this program, so I'm not nearly as broken up about it as I could be.

The whole anti-tax argument ignores the fact that, as the great George Costanza said, we live in a society. You are taxed for a ton of things including military defense, policing, fire protection, public utilities, etc. etc. And while you may realize a more direct benefit from the things that I mention, you can't ignore the benefit you derive from keeping people struggling financially from totally going under. Those with more wealth benefit from a functioning society because they stand to lose the most from societal collapse.

 

[Joan's E]

The whole anti-tax argument ignores the fact that, as the great George Costanza said, we live in a society. You are taxed for a ton of things including military defense, policing, fire protection, public utilities, etc. etc. And while you may realize a more direct benefit from the things that I mention, you can't ignore the benefit you derive from keeping people struggling financially from totally going under. Those with more wealth benefit from a functioning society because they stand to lose the most from societal collapse.

I'd rather they just change the law about student loans not being dischargeable in bankruptcy. That would shift some burden to the lenders to do some due diligence and take on a lot more risk.