Student Loan Forgiveness... how to make it fair.

[WarGamer]

It's obviously and politically dangerous to pick a narrow band of the population and give them $10,000, $25,000 or $50,000??

The other 93% of the population won't be thrilled.

Some paid off their loans prior to today. Some worked their way through college to pay tuition. Some skipped the fancy college and went to Community College.

So do you send a check to EVERY American for the amount of the largest loan forgiveness amount?

Maybe issue Gov't bonds with full redemption value in X years?

Maybe issue a 15% increase in your Social Security payments when you start receiving?

Offer Gov't subsidies for housing?

There can be some flexibility, you can get benefits to all Americans... with an income cap of course.

[aocommunalpunch]

1. It's DOA.

Keeping people in debt slavery is just the American way. The transition back to repayment will be smooth, tho, so there’s that.

[WarGamer]

3. I can't imagine going to college today.

My parents paid for my first degree in the 80's... I'd be surprised if it totaled $10k

My other degrees were paid for by my employers.

I can NOT imagine graduating with $200k in debt today.

[moonscape]

35. Yeah, got mine in the late 60's and

early 70’s. They were manageable for my parents and I worked p/t to pay for my housing. Was able to begin my career with no debt and like you, cannot imagine going through what kids go through today.

[Beartracks]

2. Was there something going on re. this topic today?

Sorry, kind of off the grid today.

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[WarGamer]

4. No, sorry... nothing new today

It's just been on my mind.

I don't think payments can be targeted only to those with SL debt.

[Beartracks]

6. Ah, okay. Was afraid I'd missed a deadline or something!

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[markie]

9. if

the IBR can be tweaked some and be sure it will continue... it is not a bad option

edit to say interest on Student loans should be eliminated

[WarGamer]

13. And like the other poster said...

Retroactively credit back all interest paid.

[Orangepeel]

5. no one will listen to me, but I think

They should:
1. retroactively forgive all interest and make interest paid apply to the principle up to the point where no more is owed, if it works out that way. People refinance all the time and rates aren't equitable anyway, so that seems fair to me
2. cap repayments at some percentage of income
3. be generous with forgiveness plans for years worked in public service -- teacher, nurse, firefighter, etc.

[WarGamer]

7. great points, thank you.

[Celerity]

16. great points on this

Include Biden's 'small' $10K (he can do that via executive order) in forgiveness ($10K subtracted from the principal remaining after the interest refunds (for retro paid interest) and erasure on the rest of the interest).........

and I think that is a more than viable (and fair) compromise.

Something also needs to be done about the insane tertiary educational cost inflation. It now costs (all costs included, on a nationally averaged gross basis) over $100K to get a 4 year degree (at in-state tuition) at a public (not private) university.


https://educationdata.org/average-cost-of-college

[PoindexterOglethorpe]

20. I started college in 1965.

The University of Arizona, which at least then was a very low cost school to attend.

I had two scholarships. One paid my tuition and fees, the other covered my textbooks. I worked at a less than minimum wage job the summer before college, and saved most of my paycheck, so I could buy clothes for school and cover incidental expenses that first semester.

I then dropped out, because I had no idea what I wanted to do or what I should major in. But the important thing is that I had zero debt.

Some years later, when I explained to my son that back when I first started college it was possible to work a minimum wage job and pay for school, he was totally unbelieving. By then he had friends struggling to pay to attend the University of Kansas, where we lived.

I will add that he had the good fortune, which he did appreciate, to have generous grandparents who funded his college years. Had it not been for them I would have made him start college at Johnson County Community College, only transferring to one of the state institutions after taking as much as he could at the community college. I would give that same advice to any young person today who does not have rich grandparents or who cannot get good scholarships.

Oh, and in some cases good scholarships are out there and make a lot of difference.

[Mary in S. Carolina]

21. Orangepeel for Congress!!

Good job Orangepeel!!!

[smirkymonkey]

31. I'm listening!

And I agree!

Here is what a lot of people aren't getting:

Some people, like me, aren't looking for a free ride. I initially borrowed $50k for grad school. My loan came due right after 9/11 when i was laid off (was living and working in NYC) and was unable to find a job for about a year and a half (too qualified, etc.) so I deferred.

When I finally did find a job (and before income sensitive pmts.) I could not pay the full amount and possibly live in a city like NY, and I was not living extravagantly. I had roommates, lived frugally, etc. I offered to pay what I could and they refused to work with me, saying that I needed to pay what they were asking or they would accept nothing. I was also struggling with depression at the time so I just kind of threw up my hands and let it go and kept it in deferrment/forbearance (not sure what the correct term was).

By the time I moved back to Boston, I was in a better position financially and mentally and there was finally an opportunity to pay via the income sensitive plan, so I started paying. By that time - a period of about 11 years, that $50k had ballooned to $136k w/ compounded interest. I was stunned that it could get that out of control. I even contacted an attorney in Boston to confirm that it was correct.

Anyway, I did the right thing and started paying in 2012 via the income sensitive plan, and have never missed a payment. I have now payed them over $90k - well over what I borrowed - and that $136k is now only down to $121k. So I have payed back my loan and they have made a nice tidy profit. Is it fair that I keep paying for the rest of my life (I am 58) where that money could be going toward my retirement just so the government can make even MORE of a profit?

I think what should happen is that if people have paid off their original loan amount, the rest (interest) should be forgiven. I don't see why anyone would argue that is unfair. I don't think people understand how the predatory interest has ruined so many peoples lives.

[WhiskeyGrinder]

8. "Fairness" is a tough thing to factor in when talking about relief.

Worrying about it being "fair" will ultimate keep aid away from those who need it.

[LiberatedUSA]

10. Agreed.

Getting my money back would not change my situation. Might as well help those that it would.

[WarGamer]

12. Then you could check the box on your Gov't form that said "Return to Treasury"

Or donate it yourself?

[WarGamer]

11. Yeah, I think you're right...

But the political blowback from paying off SL debt would be enormous.

And I think rightfully.

Are you rewarding people who went on to a $300k education with no hopes for more than a $40k a year job after graduation?

Rewarding people who maxed out their SL application for extra cash...?

What about the people who paid off $120k in SL last year? 5 years ago?

People understand that the Gov't helps those who have less than they do. That's why you don't need to make Food Assistance "fair" for all Americans because people realize that others may not be able to afford to eat.

This is different... going to have to make it a broad benefit for all.

Make it a choice. A check today, a future dated Bond, increased SS payments, etc...

[WhiskeyGrinder]

15. If it's all wiped out, a person doesn't have to worry about "rewarding" or who "has less or more."

It's just a problem that's gone.

[smirkymonkey]

32. See my post #31 above.

I am advocating for wiping out the usurous interest left over on people's loans who have already paid off what they have initially borrowed.

As usual, WE HAVE LOST CONTROL OF THE NARRATIVE HERE! FFS, I am so tired of this shit!

I am not mad at you, just at the situation in general. I have considered ending my life over this situation. Do people really not get how serious this predatory situation weighs on people?

[WarGamer]

17. In a perfect world... sure.

But you know that's not our culture today.

[dflprincess]

19. Do you know what's not fair?

It's not fair that I'm old enough that I was able to pay for tuition at a state run school working a part time job.

It's not fair that I graduated with $2,000 in loans (a figure I thought was outrageous at the time) & was able to pay it off in 7 years.

I have no problem with forgiving student loan debt. The people with loans will take that payment money & put it back a lot of into the economy where it will do us all some good.

If they want to give a refund to people who paid off their loans in the last 10 years (or whatever time frame), I'm ok with that too.

[ChoppinBroccoli]

22. I Was Always Told LIFE Isn't Fair

Who gives a shit about fair? Since when have we EVER had to consider all the people who came before us when considering a new law to HELP people? I don't recall any women in the early 1900s saying, "Well, what about all the women who came before us? THEY couldn't vote, so why should we?" What about all the slaves that were freed under the 13th Amendment? Was there a lot of debate about all the slaves who died before they could be freed, and that it wouldn't be fair to them if the current slaves were freed? What about all the people who served out their lengthy prison sentences over marijuana convictions? Were THEIR feelings considered when Biden eased sentencing for marijuana crimes? What about all the people who died of diseases before there was mandated vaccination? Shouldn't WE have to die too, because it wouldn't be fair that THEY did? Where does this nonsense all end?

Life isn't fair. Buy a helmet. If life was fair, I wouldn't have $150,000 in student loan debt that will definitely, without a doubt, outlive me. I went to school for 7 years, got 2 degrees, and now have a job and my own business that most people would consider a top-tier career. Guess what? I'm almost 50 years old and haven't made a DENT in my student loans. And the student loan companies want me to pay an amount per month that's more than my mortgage. And I mean, a LOT more. THAT'S not fair. I could give 2 shits about fair.

[WarGamer]

23. I hope you get your 150k...

I'll take MY 150k in 10 Year Treasury Notes.

[smirkymonkey]

33. Thank you, CB!

See my post #31 above.

A little long, but this is what people don't understand about people like us. We aren't looking for a free ride, we are just looking for relief from paying to line other people's pockets now that we have paid our own debts.

[Groundhawg]

24. I would like my house loan paid off for me.

I could put so much money back into the economy if i can just get that.

[madville]

29. Me too, I owe 230k on my house

They should pass a bill to erase that, it would be popular for sure.

[cadoman]

25. give students an opportunity to declare real bankruptcy after X years

It'll keep some amount of accountability on the part of both students and lenders. Students won't keep holding on for someone to bail them out. Lenders will be forced to come to the table and negotiate lower amounts if they don't want to lose their balance.

My partner refrained from paying off their loans for the longest time just because of this. It was utterly ridiculous because they had a good salary. I encouraged them to make it a priority and what do you know it was all gone in one year? That's obviously not the common case but it's an example of how all this distorts good decision making by borrowers.

Also just making the existing public service/loan payoff programs perform as advertised would work some wonders.

[Brainfodder]

26. Basic healthcare for all would be far easier for a solid load off the people's backs!

Imagine all that $ your employer claims as part of your benefits, a much larger portion can go directly to you?

Imagine not sweating healthcare after being laid off?

Imagine not having to pay crazy high pill bills you need to survive?

Many many more I am sure, I know first hand of at least one of those.

Priorities, this helps many more and would continue on helping, instead of this one shot BS, has tuition suddenly gone down?

[TheFarseer]

28. I would be fine with

The government purchasing loans over whatever amount you want to say is a large student loan and stop charging interest on it and capping interest on private student loans retroactively. Something like that.

[madville]

30. The major problem I have with SL forgiveness

Is that it is simply treating a symptom of the much larger disease. It helps some individuals at the moment but in 5 or 10 years we’re right back in the same situation with millions of people drowning in SL debt sticking their hand out again saying “where’s my forgiveness, you paid off all those other peoples’ loans?”

Stop loaning such large amounts of money and people won’t owe such large amounts of money. I also believe that student loans should only be issued in amounts that the education can realistically return the investment on. If a registered nurse can make 75k a year on average, that maybe should be the cap for any loans for example, that’s a realistic amount to repay over 10-15 years.

Or get rid of college tuition entirely and fund it through taxes like K-12 public school, but that’ll never happen.

[MineralMan]

34. It would be much easier if all those student loans had been funded

by the federal government, instead of being farmed out to private lenders. Then, forgiveness would not involve anything but federal funds, which are different from private funds. Then, SL forgiveness would just be write-off like much else the federal government does.

That isn't how it worked, though. Instead, it was more a federal guarantee, like FHA loans. If borrowers defaulted, the private lenders would get reimbursed. So, now, real money is involved, rather than potential money.

So, since it all (or most of it) involves private lenders, they have to be made whole. And there's the rub, really.

The entire higher education system is broken. It costs roughly the same to get a BA or BS degree, regardless of you major. But, if you're a humanities major, your income after graduation is dramatically different from that of someone who majored in Computer Science or some engineering major. The English or History major graduates with no real job opportunities in the field, and ends up in some entry level job for $30k and owns $150k, with interest. Impossible situation, really.

[WarGamer]

37. great points, thank you.

[MineralMan]

38. Like everything, when you look deeply into it,

it's easier to understand, if not to fix. Lenders absolutely love government-backed loans, especially if they come with all sorts of regulations that are harmful to the borrowers. With student loans, they're protected even against bankruptcy as an out for borrowers. Student loans are structured 100% to benefit lenders. Worse, students can borrow far more than they actually need, which is very attractive when you're in your late teens and early 20s. So, they do borrow more than they need. They also borrow far more than the income they will earn after graduation isn't enough to service their loans. It's a terrible trap that has very tasty bait, so it's very effective.

[ForgedCrank]

36. There is a way to assist

without destroying the system and all the people who spend decades paying their own way, but none include loan forgiveness.
It is possible to do the loans @ zero interest, and we should. In addition, dropping all of the stupid contractual rules involved including not allowing people to pay off loans early. Some do that, you pay interest no matter if you pay it off 10 years early or not.
And getting private operators out of that business will also reduce the overhead and profit going to those entities that comes from the pockets of those students. But outright loan forgiveness or cash out payments? No.
We've had programs for years for underprivileged and low income students and we can expand on those as well. Many are simply sloppy with the money they borrow without regard for the future, I can't even count how many fellow students I saw behaving as if the money was growing on a tree in their back yard. The burden it puts on their retiring parents is also brutal in many cases.
And we aren't even considering those middle income folks who completely skipped college because they couldn't afford it, didn't' qualify for any assistance, and didn't want to be strapped with the loan payments for half their lives. What about them? Because they are the ones who generally get the shortest stick out of everyone.
Handing out cash or simply cancelling out loans just doesn't work out at all.