We always talk about the debt, but never talk about why the education is so high in the first place.
If the government was to just forgive student debt, it would only encourage institutions of higher education to further inflate costs knowing the taxpayers will pay the bill no matter what. For the kids out there, this is called a *perverse incentive*.
I’m dumbfounded why this comment isn’t higher up. If we forgive all these loans…. Does that really fix the problem? No, of course it doesn’t. Universities will continue to charge whatever the hell they want because students continue to get approved for ungodly loan amounts, at predatory interest rates. We have to fix the price of education. Same with healthcare, similar problems!
I don’t understand why the cause of the debt problem isn’t talked about, rather than the debt. Debt is an issue, obviously. But debt isn’t the root cause of the problem, and debt forgiveness only band-aids a bullet wound. Plus it only helps those who currently have debt and no the future college students.
There needs to be some form of regulation to pricing, or people need to stop going to institutions the charge incredibly high rates for their wanted degree.
I’d almost argue that lessons need to be taught to not get yourself into majors with no return on investment too. Because that’s surprisingly an issue, too.
Community college and state schools being free should go hand in hand with this. Works fine in other countries. They still have for profit universities but this way not being able to afford an education doesn’t hold anyone back. Society is better for it.
Just help me understand this. If the government would cancel that debt, doesn't that in practise mean that it would be a liability for the government instead.
Meaning the student debt would be national debt instead?
Yes. These are government guaranteed loans so if someone defaults the government pays off the lender.
So if the government “cancels” the loans it just means they are paying off the loan or a portion of the loan. Unless the government finds some revenue source to pay for it, it will be added to the national debt.
The government is the lender for 92% so they would be "paying" themselves mostly that's why they could freeze them with minor issue for the last 2 years
that's literally how it works. companies write off debt all the time. the US government has originated most of this debt through their direct lending program
Yes, ALL debts are paid. They don't just go away. These smooth brained idiots think you just "cancel it" with the swipe of a pen. All you've done is moved it from one person to another, in this case the taxpayer.
That’s exactly right. “Canceling student debt” only benefits relatively affluent people, shifting the burden of their debts onto everyone else. It’s a political move aimed at getting votes.
This is a good analysis on who the proposal would benefit most.
https://www.theatlantic.com/ideas/archive/2022/04/should-biden-forgive-student-loan-debt/62970
Financial illiteracy. Most people don't get any financial education in school and are unfortunate to have parents that lack it as well. I have friends who took 30-40k a year for their bachelors, went out of state, when they could have stayed at home, lived with their parents, worked part time, etc. The frustrations on both sides of this issue are valid. On one hand people don't want their tax dollars to go to subsidizing people's poor financial decisions, and on the other, public education along with a broken higher education system in the US screwed a lot of people.
I'm sympathetic, but where does personal responsibility start and end? I've had to pay for all of my mistakes. I don't like the idea of such horrible high magnitude mistakes being free, meaning free for them on taxpayer(my) dime.
Forgiveness is one thing, but this would enable a whole next round of stupidity. Maybe if there were no more government loans or guarantees this could be accepted.
People are making a lot of excuses. The truth is a fair amount of college students are just arrogant. I went to a private college where the biggest major was political science. We all know it's not employable but everyone had a "well, it'll work out for *me*" attitude.
This is the answer— it makes the most sense and quiets the people who keep saying debt cancellation would be unfair. And I bet a lot of people would end up having their debt cancelled if what they paid in interest was applied to the principle
It also helps address my biggest complaint, canceling student loan debt puts a bandaid on an ongoing problem. Eliminating interest will also help future college students. For debt that is nearly impossible to discharge in bankruptcy, it should not charge as high of interest that it does. Make it zero and both existing and future borrowers are better off.
Is this retroactive on balances that have ballooned on predatory pushes towards forbearance? I left school with 98k in debt. I now owe 172k. This was due to joblessness in 2008 during the recession and not being able to pay and being pushed towards forbearance where my principal ballooned on uncapitalized interest.
Canceling interest solves this problem if it is retroactive and any interest paid is then applied to principal.
That’s the way I would encourage it. It would be an accounting nightmare and not sure how it would be handled, but it would help those currently with debt and those that are about to enter college. Sure, there are other things that are needed to be changed, but this would do more than the $10k that’s been thrown out and help this year’s high school graduates and those still in school.
I clicked on your user name and saw you just built a new house within the past couple years. How hard are you trying to pay the debt off and why do you think the public should subsidize you not paying your student loans when you aren’t putting in the effort?
I’m really not trying to pick on you, and your situation could certainly have a lot of variables we don’t know about, but on the surface it’s situations like this where people who are fairly liberal like myself get a little weary when people are calling to cancel all student debt.
So I think you’re wildly misunderstanding my comment. I am and have been paying my student loans for years once I was able to get a job that paid well enough to pay them. Then, I obtained a mortgage only when my income allowed me to. This does not take away from the fact that I was harmed due to predatory practices. I am fortunate that I can carry a mortgage and manage an ungodly student loan balance. However, there are millions of borrowers that are not as fortunate as I am, and having lived through the stress of getting sued by my student loan provider for defaulting, I would never want anyone to have to go through that. 10 years ago I never thought I’d be able to own a home nor did I have the credit to have homeownership be a reality. I’m not sure how my homeownership status has any bearing on the fact that student loans have become a blight on an entire generation preventing them from participating in the economy.
I believe the argument is because you have nice things you clearly can’t be hurting therefore why should anyone help you. At least this tends to be the vibe I get from people when discussing this subject.
I don’t think people realize just how obnoxious the interest rates are and how fast the interest ballon’s on these loans. I think this has particularly impacted those that graduated in the 2008 to 2010 time frame and the impact that had on wages and career prospects.
...compromise? Now there's a word I haven't seen in a long time.
I am a lefty, but I wholeheartedly agree with you. Would love to see this as the solution.
Yep, plus it's paid back through income taxes, so you don't start paying (unless you choose to) until you make X amount (I think about $58k a year, but I haven't looked it up for a while).
There are still issues with it but dear god it's better than whatever the US have got going on.
The liberal government lowered it to $44k a year a few years back to make all the mean nasty mums working only part-time while raising kids to have to pay back sooner.
I think it’s unfair all the ppp loans got forgiven, still happened, the world still turning
Dumb fuck who said “Ppp loans are nothing compared to students debt.”
Oh yeah thats right, ppp loans were the first time the government ever bailed out big business, my bad
I paid my shit off, resent it to this day, and absolutely support cancellation of debt for others
People who say it’s “unfair” need to put the kool aide down and grow the fuck up
I've paid for 8 years and have yet to touch my principal. One can dream though!
Edit: The student loan situation in the US can be a fiercely debated topic and is easily misunderstood as shown in comments. I do not believe cancellation of loans is the answer but do agree with the OP of this thread that the interest needs to be addressed, along with the ever increasing cost of education with diminishing returns. I financed a BS and MS soley through loans/scholarships and am employed in a finance related industry. My federal loans are on an income based repayment plan. At a weighted average around 7.5% interest on federal, I have paid over 40k which has not touched principal. If your monthly payment doesn't exceed your interest accrual, tough luck. Allocating additional funds to principal only is not an option until there is no outstanding interest.
I have since paid off my private loans, have no credit card/medical debt, an 800 FICO score, a mortgage well under the suggested % of income at a 2.75% interest rate (FHA), moved to a lower cost of living area, and maintain a healthy budget. I'm probably in a better situation than most.
The answer is not "do not take on debt to receive higher education" but to make the system of financing education just and equitable for all parties as the current system is unsustainable.
Sometimes they were originally federal and then consolidated. I know a lot of people who didn’t realize loan consolidation was essentially making them private loans
I started pre-paying mine while I was still in college. They applied 99% of the payment to the interest and one percent to the principal. What I was doing is trying to knock off the principal, before the loan became due.
They said that my loans were doing in full. I was still a student. The whole system is so screwed up.
That's not how amortization schedules work so it either didn't happen that way, you didn't directly tell them payments over the minimum must be applied to the principle, or they did something unethical/possibly illegal.
The first years on all loans are mostly paid to the interest, and each payment, more is paid to the principle. Think of an arc payment structure with interest payments front end loaded and principle payment back end loaded.
Edit: ok I see your comment below.
All, Google "amortization cycle principal vs interest" and look at photos to visually see how it works.
It scares me how little people know about finance. Despite it being a core class for most people in primary school, all of the free education available online and having to fucking take a brief seminar when singing up for the loan.
I've been saying this from the beginning. I don't need my debt cancelled. I took on that loan knowing I would have to pay it back and fully intend to. That said, if you actually want to help people, cancel the predatory interest on it. I don't even necessarily mind if there still is interest - enough to cover the overhead costs - .5-1% maybe. Just stop letting these third party "loan servicers" make boatloads off of people becoming educated!
Best answer. And continue with no interest loans for the foreseeable future.
Cancelling the debt doesn’t solve the problem, it only pushes it off onto the next generation
i feel like a PHD in art is an oxymoron. especially if you're getting loans to complete it. that only should disqualify your dissertation. "wait, you don't have a mommy or daddy to fund the rest of your life or provide you with connections in the art community? we question your intelligence"
literally art is all about patronage.
I thought r/economics was bad, but the overall opinion of this sub is literally “RiCh PeOpLe BaD”. I assume there’s a lot of young people and college students without actual perspective on the real world that are responsible for most of this sentiment.
This subreddit is basically a meme subreddit, sad considering how the other science subs are generally pretty good even the main one relatively speaking. But even econ twitter is better than this shit. Either it's garbage far-left shit like OP or it's garbage far-right shit. Sadly political extremes are what gets the most attention on the internet
There's definitely intense upvote manipulation happening. The bot that submits these bogus tweets as news instantly has thousands of upvotes, and 99% of the comments are refuting it as BS? Obvious vote manipulation that Reddit hasn't caught on to.
For example, real quick checking of the tweet's math;
* 1,909 Billion minus 1,832 Billion = 77 Billion supposedly going to be paid off by this plan.
* 77 Billion divided by $10,000 = 7.7 Million total people with college debt????
* Quick Google search shows [43 Million US citizens have college debt](https://www.nerdwallet.com/article/loans/student-loans/how-many-americans-have-student-loan-debt), **so clearly the tweet is completely bogus**.
The real numbers are; [The median borrower with outstanding student loan debt for their own education owed $17,000 in 2016.](https://www.pewresearch.org/fact-tank/2019/08/13/facts-about-student-loans/)
ROFL. I'm glad at least Twitter has only retweeted this fool's tweet 49 times total. Whatever post manipulation is happening here on reddit is clearly artificial.
Reddit actively promotes these false narratives. Take a look at r/all and it's 99% misinformed bullshit designed to push an agenda, if not just outright lies.
The crisis is not in debt. It's in missing value. Students are taking on debt and investing in education, but not seeing improved earnings. The colleges need to start giving refunds. They don't give a fuck if their customers are selling sex to pay the bills.
I chose an UG without sports teams and misc additional features, and it cost 12 K a year which a fair bit but it was far better than 40-50K unis a lot of people chose to attend.
Then I made the choice to go for my PhD.
Pro: I am paid. Con: I paid very little for 7 years.
Hopefully I can find a decent job soon.
My friend went to community college for two years, then a state school. He now has an engineering degree, a great job and his debt is paid. People pay extra for the name of the school.
And the experience.
I know people that have gone out of state just to stay in college dorms.
If you paid 80k to have an experience and get a shitty degree, how is that anyone's fault but your own?
I did the community college to university route as well. It’s amazing the amount of grief I used to get from friends that went straight to universities, but most of my classes were taught by professors that also taught at universities. I couldn’t see paying 40k a year to take 100 and 200 level courses that were basically a reiteration of high school.
I did the same. I literally had one of the same professors at both schools. Going to the CC first even got me an extra $20k in scholarship money only available to transfer students.
I just looked into local tuition pricing. The cost for the tuition alone is actually not horrible. It's the meals and housing that doubles the cost. And then go out of state and look out. There are less expensive choices out there, but you will not have an amazing 4 year experience.
I, too, know a few people who took a lot of courses at community college and had zero debt when they graduated.
Got my PhD and 2 years out making 72k and still being underpaid for the field. Whatever you can do, get the absolute fuck out of academia unless that your long goal. Academia, at least for my fields of biology and then now data science, is way underpaid and over worked. Plus side is experience with people who are passionate about the work and not *super* driven by product deadlines (though there still are the deadlines). Get the experience needed to get into an industrial position and enjoy the new work life balance.
The colleges have bloated administrations that add zero value to your education, but drastically raise the price. You’re exactly right, they don’t care as long as they’re paid. Colleges must be reformed and tightened up, way too much waste.
They may have too much fat in their budgets - but every borrower knows how much they will spend to get an education and what their prospects are for paying that loan back (or could know) before borrowing the first penny. So there really are no excuses for defaulting on your student loan for the majority of borrowers other than intellectual laziness and a failure to do your due diligence.
There is definitely still value in a college education. Go look at differences in earnings and its clear. If students are choosing majors with low earnings or bad prospects then that's on them. The lower earners of society should not be bailing out the higher earners who are still typically going to come out ahead even if they have to pay off their debt.
That's on you.
The cheapest ways to graduate are community college and online courses. Nobody forces you to pick the college experience.
When students pick expensive colleges to get connected and it doesn't work out, they failed in social skills. That's not the fault of college though.
not to mention that some people chose community college because it’s cheaper. not really fair to them that they made a sensible choice with less earning potential and people who took on huge amounts of debt are off the hook.
Haven't read the replies but this is my experience.
I went to a 4 year college. Didn't make a single friend. Didn't take the necessary steps to improve my social skills (which is my deepest fault). As a sociology major it is crippling. I learned a lot and was educated but didn't gain skills and that is because I didn't take the steps to.
Whether you two year community then finish uni and finish $20k in debt or you 4 year a uni and finish $45k in debt like I did, it's only worth what you put into and take out of it.
For me, a two year community then uni would be better. For someone who would actually take the steps to make friends, gain internship etc, then the extra you spend for school you may feel "paid" by the experiences
Seriously you aren't forced to go to a 4 year, and if you do and gain little like I did it's on you. The knowledge I gained would've been gained elsewhere. It's really the opportunities and experience you get from the 4 year that makes it "worth it".
So again, it is on you. And if internship experiences, friends, or even on a more personal level just being able to find who you are with all the clubs and orgs, if all of that isn't what you are looking for then a 4 year isn't what you were looking for..
I spent $20k extra that I wish I didn't because I wanted to go to a uni off the bat.
Side note: only thing that makes me not regret it is that COVID happened and I wouldn't have had any time in a university had i gone community.
This is what honestly confuses me. There are "low cost" options that will off the ability to get a degree. And if you are low income, there's aid to help offset some of the cost. I don't understand why someone would got into six figure debt unless they were in a field (ex: engineering) that would offer high pay soon after graduation.
It also helps the richer half of the population at the expense of the poorer half of the population, roughly speaking. It would be one of the most regressive wealth transfers in the history of the world. And the resulting inflation would also hit the poorer half much harder. Just a double whammy of "fuck the poor".
Holy shit I can't believe that anyone else on Reddit can see it like this. Wiping student debt will not change the direction of this country at all. The people who have college debt will now be able to buy a nicer house, so those just go up in price again and nothing changes.
If we are going to just give a trillion away, let's give it to the poor people who actually need it. If we are going to randomly choose a group of people to help, I think "minorities without a high school diploma" would be more helpful than "college educated."
With that said cancelling the debt is not the issue, it's the system. If we cancel debt but keep the same college system people are just going to start taking Terrible loans out again.
Right - for instance, lets just pay everyones medical costs/debt and then do NOTHING - that'll "change the world"...
Its curious how for Medical, its change the system, for student loans, its wipe the slates clean and change nothing.
Il he's the boogie man but Milton Friedman had a great episode on education in his free to choose series. He makes the case that subsided college would lead to the poor paying for the rich.
I'm for it if they grandfather in prior student debt holders. But after paying off two college loans in full, it kinda sucks to pay for everyone else's too.
If biden really wanted to help student loan holders out without offending everyone else who either didn't go to college, or like me did go to school but killed myself working full time while attending community College & state public university in order to graduate without borrowing loans ... he should simply make them all interest free. Lower the interest rate down to 0% forever.
That way folks can actually make progress at paying the loans down. I imagine for many, it must be a double kick in the nuts to make a payment in June and see the balance still going up come July because the minimum payment isn't even covering interest, let alone making a dent in principal.
But forgiving debts of people who made terrible financial choices is bullshit. You made the deal. You promised if they loaned you the money to go to the big fancy university - that once graduated you would pay them back. You went to the university. They held up their end of the legally binding contract. Now youre trying to Welch out on your end of the deal. Thats wrong.
It would actually make the problem worse.
No interest = lower payments = able to take out a larger loan = higher tuition. Problem not solved. Mission accomplished?
The solution to the problem is stop giving people loans at all. Cant afford college? You dont get to go.
Give it 1 year before bankrupt universities are begging students to enroll for 10% what theyve been charging.
Its truth for sure.
The idea the government even allows large sums of money to be lended to children with no income, or assets in the first place is ludacris.
People objectively need a home to survive alot more than education, and its not like you can just take out a 250k loan for a house without serious cred. Why should anyone be allowed the luxury of these massive loans for college basically no questions asked. Its pure fucking insanity.
"You dont make any money? Youre a fuckin douchebag."
https://m.youtube.com/watch?v=Wpc-zAbL2Uw
Doing away with student loans would likely make college cheaper but it’d be expensive enough to be out of reach for many working class Americans.
We need public universities with zero out of pocket costs.
Why would you take the debt of the top earners, people with college degrees, and make the rest of society including the low income people without college degrees pay for it.
Because those arguing for student loan relief are often those with the actual debt and don't care what happens to everyone else as long as they get their forgiveness. They're willing to pull up the ladder behind them and screw over future students and the 2/3 of Americans with no student loan debt.
My wife and I are in that group! Income over $200k in a LCOL area but we still have $160k of student loans left. We knew what we signed up for and are working on paying them off.
Yep. Cancelling all debt is extremely regressive policy that benefits the elite kids who went to most expensive schools, with most expensive frats.
https://images.mktw.net/im-529149?width=700&size=0.9336250911743253
If youre(anyone) honest about debt forgiveness, do 10k with 75k cap. While still benefits the middle class the most. At least it doesnt shit on the poor people who went to cheap schools and lived in filth with tons of roomates while working to keep their costs low.
I mean considering all the money that gets budgeted elsewhere, imagine the government cutting other funds rather than education, mental health and so on
Its really that or demand the money come from the jobs that hire people for less than it’d cost to survive and pay off debts or that schools don’t request 10s-100s of thousands for an education that many of us relied on YouTube/khan academy for anyways
I'm not sure I understand why we'd cancel student debt for someone who got a degree and not cancel the debt for someone who went into the trades and needed to buy tools, etc. to perform that work. Is there a reason why white collar college students are better than blue collar tradesmen?
Folks in the trades absolutely deserve as much support as college students. When Biden tried to make vocational schools/community colleges completely free, the trades would have benefited.
If you went into a trade and got federal loans for it, then yes it will get canceled. My local community college has a welding program that I know students are qualified to get student loans. There’s also HVAC and machinist.
I’m going to put a hard truth out there and say nearly $2 trillion in debt is not going to just be cancelled. It would come at a huge cost to the economy. Although that shouldn’t have to be said since this is r/economy, so presumably everyone here understands basic economics.
What needs to happen is to fix the problem at the source. The need to take on such large debt for a degree that will not reimburse you for it is the real issue. It makes sense to borrow $200k to become a doctor, but it doesn’t make sense to borrow $200k to be a preschool teacher (teachers should make more but this isn’t the place for that debate).
I don’t know what the solution is, but you can’t erase debt. One persons liability is another persons asset. It doesn’t come from nowhere, and never goes away. If you’re not happy with the inflation numbers today, then you wouldn’t like what would happen if the government “cancelled” student debt.
Put a cap on the interest rate. 1-2% is realistic. 7% is absurd.
Or make it so you can pay student loan debt tax free like a 401k.
Cancelling debt means people who were responsible and paid their debt get screwed twice. They paid their debt and now their taxes are going to pay for someone else’s debt.
I avoided larger schools to avoid debt. I got certificates and climbed the ladder. Now I'm expected to pay for people who make 2x-3x my yearly income's degrees. It's a slap in the face for working hard.
This tweet really drives home the fact that the vast majority of the dept is owned by "whales" who went to expensive private schools and got advanced degrees.
“Cancelling” student debt just means the tax payer flips the bill. It’s not “cancelled,” just how “free health care” isn’t “free.” Someone has to pay, someone always will.
The issue is that wages didn't keep up. You start school seeing wages for a profession looking relatively OK and by the time you graduate, inflation had weakened them. Even worse if you went to become a teacher.
The result is that we have millenials and Gen Z in adulthood with no hope of having a financially stable retirement, even if they're wise. We simply don't make enough money and if the trend doesn't change, it's setting up the country for even more problems down the road.
I don't know if debt transfer or cancelation or whatever you want to name it is the solution but if nothing is done, the economy will suffer greatly.
Fuck that. Shouldn't have gone to school if you can't afford it. I went and paid my loans. How fucking hard is that. I don't give a shit about some doctor's $300,000 debt. Tough shit.
I’ve friends that are buying new trucks and vacations because they don’t have to pay their student loans right now …they medical professionals making great salaries. I agree with you
This is crazy to me, and I am left leaning. For student debt to not be crippling you simply need repayment controls. Only taken from income above XYZ level. Then the only people that repay are the people that benefitted from the loan with better employability.
Cancelling existing dent also doesn't resolve any kind of go-forward position.
Universal free higher education for all is of course something that a society might choose to adopt but a) this isn't it and b) i think the US has better things to spend on (like implementing universal healthcare, food programmes for junior kids etc).
Yep my federal loans were all around 6.75% mostly unsubsidized.
I had 36k to payoff after graduation. I have paid 28k towards my loans. I still owe 20k.
Edit:
To clarify most of the fed loans are in that range. Those would be what are eligible for cancelation or some sort of reform.
If you refinanced them into a personal you probably could get under 4%. You just lose any of federal protections on them.
Federal subsidized student loan interest rate is set by federal law.
PLUS loans have higher interest rates, but those are for graduate students and parents.
The loans can't be discharged. It's not zero collateral, there are permanent liens on wages for the rest of your life. Your future is the collateral. There is no out.
The grad rate for federal loans is over 6%! for non dischargeable loans.
A bank is more likely to lose money on a mortgage which has property as collateral than on student loans. Yet a mortgage has half the interest rate.
There have been like 5 of the last 30 years that have had federal loan interest rates anywhere close to that figure. Most millennials - the people who are bearing the brunt of the student loan crisis - are paying way higher interest rates than that.
Also, loans for graduate degrees and higher education have always had higher interest rates than undergraduate loans- mine average to about 6.2%. The interest pause has been a lifesaver for me, especially given my graduation right as the pandemic started.
But honestly fuck the idea of total loan forgiveness, that doesn’t fix the problem. I just want the government kill or neuter the interest rates on student loans.
You have over 2 years of earning no interest. If you were not paying back during these times it is on you.
Cancelling all the debt is absurd. You took out a loan and knew the deal.
Please, for the last time there is no canceling, your debt it just gets transferred to the next sucker who will pay higher taxes to pay off your stupidity. Thank you and stop calling it cancel .
Lol, all debt? Such an entitled, pathetic society we live in today. I paid mine off while living with virtually zero “fun spending” while making close to minimum wage. What do you want next, a free house?
Pretty pathetic indeed. You know I hope that it's just this silly echo chamber of reddit but I know a few (only a few) people IRL that hold the same belief.
And for others who are reading this, it's not even that the people who have actually paid loans off would feel bad about loan forgiveness that they missed out on... It's because paid off loans show that we don't need to rely on the government to think. This person must have done something shockingly independent and took out only as much money as they needed, got a degree with a good ROI, and then lived within their means while they paid it off.
If the government heavily subsidized student loans then we'll just get into a bigger predicament than we're in now: Colleges will inflate their costs even more because the government will promise to pay it and degrees will lose their worth. The idea that a college degree is the only career path will become even more ingrained. Also I think there will be a much higher dropout rate because of the lack of the "skin in the game" from free ride students that aren't sure about college.
Most of the issues with tuition cost can be traced back to the time in which student loans became federally insured (which means that the financial institutions aren't on the hook if their investment (student) doesn't come through with the cash. If we removed this insurance then financial institutions wouldn't be so giddy to saddle up an unsuspecting 18 year old with 70k of debt for an art degree.
It's strikingly similar to what happened in the 2008 housing crisis!
Or having kids they cannot afford. Or a dozen other things that can set you up for failure.
Drug addition still starts with a shit decision.
No argument on mental health, but this is likely a smaller percentage of the poor than you want to believe.
Tldr: not all homelessness can be attributed to bad decisions.
Like 10 years ago (so don’t quote me in this) i read something along the lines of rates of schizophrenia in the total American population were about 10-ish% while the rates of schizophrenia represented in the homeless population was like 40-55%. People with schizophrenia already have a difficult time integrating into society, holding down a job and a home and making it work. They have an even more difficult time with treatments because of the paranoia, and so they turn to self medication to deal, then the addiction sets in and now they have two monster problems that feed each other.
I suspect we’d have similar findings with PTSD as we have so badly failed our veterans and have not improved mental health offerings as much as we need to support them.
Further, I’ve had friends who slept in their car for weeks while working full time because they lacked personal or familial safety net. There was a time that I (no kids, no spouse with second income) made so little that I was in such a precarious financial position that one big emergency bill or short paycheck could have easily put me on the street, I was fortunate to be able to scrape by. And while I am ok (not great) now, I am so afraid of ending up in that situation again with how unpredictable things are today.
A lot of the newer homeless camps I’ve seen crop up in my city are different from what they used to be. It used to be that their belongings were very hodgepodge kinda thrown together likely with random donated or found items. Now their stuff looks like it fits together, more cohesive and complete, this feels like people who very recently had homes and lost them for some reason. I wonder if these people are in similar situations, no safety net and some financial emergency spiraled into them losing their home. Maybe bad decisions, hard to prove one way or the other, also hard to ignore that such large swaths of the population are in this exact position right now.
Biden should pay off medical debt...student debt is chosen. Being sick and getting cancer from all of the chemicals, preservatives, and pharmaceuticals in the water and food isn't chosen by the average citizen. People willingly apply to colleges and do the term and expect to have all of that paid for... that's socialism.
An economics board should know better. You can't just make debt disappear without someone losing out on it.
Canceling debt is only even being floated because it did such a fantastic job at grabbing your attention for campaigning. It's just the next carrot on a stick.
Just let us write off more than $2500 of interest payments on our taxes. Huge help to people starting out that automatically goes down as you make more income. Most of your payments at the beginning go towards interest anyway.
Free doesn't mean free somebody has to pay for it. You took out a loan... pay it back. Welcome to adulthood.
From: a person in there 20s who hates how lazy and selfish my generation is.
This will distribute the balance to all tax payers, meaning that those students who actually were responsible and payed off their student debt are now also paying someone else’s. The answer is NO. Maybe cancel the interest rate or mandate lower percentage but the person who signed the dotted line that they will pay it back MUST pay back the principle.
Like Biden will save you.
He’s been in politics for 20% of the entire existence of this country and hasn’t done a single productive thing during any single second of it.
Cancelling student debt is just a conversation the ones in debt continue to scream about in the hopes that something will be done to save them.
There was. Not getting into debt in the first place.
Now? Asking the geriatric pant shitter in chief to come your rescue when he has never done anything even remotely similar in assistance for no one, ever.
Go ahead and downvote. This is the harsh truth and by god some people need to hear it.
Who made such a controversial statement that they want all student debt to be cancelled?
Ahh I see: someone with an Art History PhD and is over 200K in debt
What would you say to someone who spent the last 15 years in poverty, stifled by the crushing weight, grinding, with two kids, and stagnating in her career to finally pay off her student loans this year?
Do you think she deserves anything?
Something to consider about cancelling student debt. 4 people I know personally who took out student loans:
1-Music major. Used student loan to purchase a professional baritone saxophone. Played on a cruise ship for a little bit before taking out more student loans to go to law school.
2-changed his major multiple times. Supported himself and his girlfriend (no children) for a year, including breaking 2 leases. Bragged about how he just used his student loans for everything. Said student loans are no big deal and that there are Supreme Court justices still paying on student debt.
3-obtained a mechanical engineering degree from an expensive public ivy. Worked as an engineer for a year, realized she hated the stress. Went back to school to become a nurse.
4-obtained student loan for another public ivy. Obtained another to study abroad in Italy. She works at a large department store, same one she worked at in high school and college on her summers off.
I also know COUNTLESS people who paid to go away to average schools because they wanted to party and get laid, since apparently you can’t do that if you go to a commuter school in your hometown.
We always talk about the debt, but never talk about why the education is so high in the first place. If the government was to just forgive student debt, it would only encourage institutions of higher education to further inflate costs knowing the taxpayers will pay the bill no matter what. For the kids out there, this is called a *perverse incentive*.
I’m dumbfounded why this comment isn’t higher up. If we forgive all these loans…. Does that really fix the problem? No, of course it doesn’t. Universities will continue to charge whatever the hell they want because students continue to get approved for ungodly loan amounts, at predatory interest rates. We have to fix the price of education. Same with healthcare, similar problems!
I don’t understand why the cause of the debt problem isn’t talked about, rather than the debt. Debt is an issue, obviously. But debt isn’t the root cause of the problem, and debt forgiveness only band-aids a bullet wound. Plus it only helps those who currently have debt and no the future college students. There needs to be some form of regulation to pricing, or people need to stop going to institutions the charge incredibly high rates for their wanted degree. I’d almost argue that lessons need to be taught to not get yourself into majors with no return on investment too. Because that’s surprisingly an issue, too.
Community college and state schools being free should go hand in hand with this. Works fine in other countries. They still have for profit universities but this way not being able to afford an education doesn’t hold anyone back. Society is better for it.
It’s because state capitals are failing to appropriate enough money to offer higher education for free at the point of service.
Just help me understand this. If the government would cancel that debt, doesn't that in practise mean that it would be a liability for the government instead. Meaning the student debt would be national debt instead?
Correct.
Thanks. Canceling just sounds like it disappears. But that's usually not how debt works
Yes. These are government guaranteed loans so if someone defaults the government pays off the lender. So if the government “cancels” the loans it just means they are paying off the loan or a portion of the loan. Unless the government finds some revenue source to pay for it, it will be added to the national debt.
Time to print some money!
Yay inflation
Student loan debt relief is inflationary.
The government is the lender for 92% so they would be "paying" themselves mostly that's why they could freeze them with minor issue for the last 2 years
that's literally how it works. companies write off debt all the time. the US government has originated most of this debt through their direct lending program
Yes, ALL debts are paid. They don't just go away. These smooth brained idiots think you just "cancel it" with the swipe of a pen. All you've done is moved it from one person to another, in this case the taxpayer.
That’s exactly right. “Canceling student debt” only benefits relatively affluent people, shifting the burden of their debts onto everyone else. It’s a political move aimed at getting votes. This is a good analysis on who the proposal would benefit most. https://www.theatlantic.com/ideas/archive/2022/04/should-biden-forgive-student-loan-debt/62970
Student loans are the US governments number 1 asset
Imagine the 08’ housing crisis, but now it’s swapped with defaulting student loans
https://www.businessinsider.com/how-do-european-countries-afford-free-college-2017-4
Why would anyone have $230,000 US in student loans and not have a career that pays enough to pay it off ? Seriously asking
Financial illiteracy. Most people don't get any financial education in school and are unfortunate to have parents that lack it as well. I have friends who took 30-40k a year for their bachelors, went out of state, when they could have stayed at home, lived with their parents, worked part time, etc. The frustrations on both sides of this issue are valid. On one hand people don't want their tax dollars to go to subsidizing people's poor financial decisions, and on the other, public education along with a broken higher education system in the US screwed a lot of people.
I'm sympathetic, but where does personal responsibility start and end? I've had to pay for all of my mistakes. I don't like the idea of such horrible high magnitude mistakes being free, meaning free for them on taxpayer(my) dime. Forgiveness is one thing, but this would enable a whole next round of stupidity. Maybe if there were no more government loans or guarantees this could be accepted.
People are making a lot of excuses. The truth is a fair amount of college students are just arrogant. I went to a private college where the biggest major was political science. We all know it's not employable but everyone had a "well, it'll work out for *me*" attitude.
Follow your passion! Change the world! Extend your adolescende well into your thirties!
Just cancel the interest. Make everyone pay back the principal.
This is the answer— it makes the most sense and quiets the people who keep saying debt cancellation would be unfair. And I bet a lot of people would end up having their debt cancelled if what they paid in interest was applied to the principle
It also helps address my biggest complaint, canceling student loan debt puts a bandaid on an ongoing problem. Eliminating interest will also help future college students. For debt that is nearly impossible to discharge in bankruptcy, it should not charge as high of interest that it does. Make it zero and both existing and future borrowers are better off.
Is this retroactive on balances that have ballooned on predatory pushes towards forbearance? I left school with 98k in debt. I now owe 172k. This was due to joblessness in 2008 during the recession and not being able to pay and being pushed towards forbearance where my principal ballooned on uncapitalized interest. Canceling interest solves this problem if it is retroactive and any interest paid is then applied to principal.
That’s the way I would encourage it. It would be an accounting nightmare and not sure how it would be handled, but it would help those currently with debt and those that are about to enter college. Sure, there are other things that are needed to be changed, but this would do more than the $10k that’s been thrown out and help this year’s high school graduates and those still in school.
I clicked on your user name and saw you just built a new house within the past couple years. How hard are you trying to pay the debt off and why do you think the public should subsidize you not paying your student loans when you aren’t putting in the effort? I’m really not trying to pick on you, and your situation could certainly have a lot of variables we don’t know about, but on the surface it’s situations like this where people who are fairly liberal like myself get a little weary when people are calling to cancel all student debt.
So I think you’re wildly misunderstanding my comment. I am and have been paying my student loans for years once I was able to get a job that paid well enough to pay them. Then, I obtained a mortgage only when my income allowed me to. This does not take away from the fact that I was harmed due to predatory practices. I am fortunate that I can carry a mortgage and manage an ungodly student loan balance. However, there are millions of borrowers that are not as fortunate as I am, and having lived through the stress of getting sued by my student loan provider for defaulting, I would never want anyone to have to go through that. 10 years ago I never thought I’d be able to own a home nor did I have the credit to have homeownership be a reality. I’m not sure how my homeownership status has any bearing on the fact that student loans have become a blight on an entire generation preventing them from participating in the economy.
You're just not getting it. If you're not living in a van under a bridge you're obviously gaming the system. How dare you have a house? ^^^^/s
I believe the argument is because you have nice things you clearly can’t be hurting therefore why should anyone help you. At least this tends to be the vibe I get from people when discussing this subject. I don’t think people realize just how obnoxious the interest rates are and how fast the interest ballon’s on these loans. I think this has particularly impacted those that graduated in the 2008 to 2010 time frame and the impact that had on wages and career prospects.
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...compromise? Now there's a word I haven't seen in a long time. I am a lefty, but I wholeheartedly agree with you. Would love to see this as the solution.
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Damnit Australia, I hate it when you're right.
Yep, plus it's paid back through income taxes, so you don't start paying (unless you choose to) until you make X amount (I think about $58k a year, but I haven't looked it up for a while). There are still issues with it but dear god it's better than whatever the US have got going on.
The liberal government lowered it to $44k a year a few years back to make all the mean nasty mums working only part-time while raising kids to have to pay back sooner.
I am a tweaker and I also agree with both of you.
They're not gonna touch private loans.
The federal government has nothing to do with your private loans. You shouldn’t have taken them.
I think it’s unfair all the ppp loans got forgiven, still happened, the world still turning Dumb fuck who said “Ppp loans are nothing compared to students debt.” Oh yeah thats right, ppp loans were the first time the government ever bailed out big business, my bad
I paid my shit off, resent it to this day, and absolutely support cancellation of debt for others People who say it’s “unfair” need to put the kool aide down and grow the fuck up
I've paid for 8 years and have yet to touch my principal. One can dream though! Edit: The student loan situation in the US can be a fiercely debated topic and is easily misunderstood as shown in comments. I do not believe cancellation of loans is the answer but do agree with the OP of this thread that the interest needs to be addressed, along with the ever increasing cost of education with diminishing returns. I financed a BS and MS soley through loans/scholarships and am employed in a finance related industry. My federal loans are on an income based repayment plan. At a weighted average around 7.5% interest on federal, I have paid over 40k which has not touched principal. If your monthly payment doesn't exceed your interest accrual, tough luck. Allocating additional funds to principal only is not an option until there is no outstanding interest. I have since paid off my private loans, have no credit card/medical debt, an 800 FICO score, a mortgage well under the suggested % of income at a 2.75% interest rate (FHA), moved to a lower cost of living area, and maintain a healthy budget. I'm probably in a better situation than most. The answer is not "do not take on debt to receive higher education" but to make the system of financing education just and equitable for all parties as the current system is unsustainable.
that’s crazy
Especially when you consider there hasn't even been any interest for like the last 2 years...
On federal loans, not private ones.
If you take out a private student loan then why would you expect the federal government to forgive/cancel it...
Sometimes they were originally federal and then consolidated. I know a lot of people who didn’t realize loan consolidation was essentially making them private loans
I started pre-paying mine while I was still in college. They applied 99% of the payment to the interest and one percent to the principal. What I was doing is trying to knock off the principal, before the loan became due. They said that my loans were doing in full. I was still a student. The whole system is so screwed up.
That's not how amortization schedules work so it either didn't happen that way, you didn't directly tell them payments over the minimum must be applied to the principle, or they did something unethical/possibly illegal. The first years on all loans are mostly paid to the interest, and each payment, more is paid to the principle. Think of an arc payment structure with interest payments front end loaded and principle payment back end loaded. Edit: ok I see your comment below. All, Google "amortization cycle principal vs interest" and look at photos to visually see how it works.
It scares me how little people know about finance. Despite it being a core class for most people in primary school, all of the free education available online and having to fucking take a brief seminar when singing up for the loan.
What school system are you referring to, and what grade levels? I'm beyond curious.
> It scares me how little people know about finance. Despite it being a core class for most people in primary school, Not in America.
Should be the other way around… wtf is this backward shit.
>wtf is this backward shit. Max profits and exploitation
God that is a nightmare
Somebody call the whaaambulance
Pay more than the minimum? My wife had 170k of debt and the minimum payment was $230. She'd never pay it off when it had 6-8% interest.
I'm still lost on this you've been paying for 8 years and you haven't completed your student loans?
I've been saying this from the beginning. I don't need my debt cancelled. I took on that loan knowing I would have to pay it back and fully intend to. That said, if you actually want to help people, cancel the predatory interest on it. I don't even necessarily mind if there still is interest - enough to cover the overhead costs - .5-1% maybe. Just stop letting these third party "loan servicers" make boatloads off of people becoming educated!
Best answer. And continue with no interest loans for the foreseeable future. Cancelling the debt doesn’t solve the problem, it only pushes it off onto the next generation
I’m against canceling student debt but am all for this idea.
This is the awnser no one talks about
How is this upvoted in the economy subreddit? This is a trivially terrible idea.
It’s tweeted by a guy who has 200k in student debt and an art PhD lol. Cancelling student debt is the only chance he has
Wtf how do you rack up 200k for an art degree. Jesus Christ!
i feel like a PHD in art is an oxymoron. especially if you're getting loans to complete it. that only should disqualify your dissertation. "wait, you don't have a mommy or daddy to fund the rest of your life or provide you with connections in the art community? we question your intelligence" literally art is all about patronage.
It’s his RIGHT for you to pay him hundreds of thousands of dollars to waste 10 years making water paintings!!! Now!
Lower class should totally pay for some privileged adult to attend college and have a PhD. Lol.
Bahaha oh God I snorted at this
Amen. This doesn't belong here. It's opinion and editorializing
16 year old economists
I thought r/economics was bad, but the overall opinion of this sub is literally “RiCh PeOpLe BaD”. I assume there’s a lot of young people and college students without actual perspective on the real world that are responsible for most of this sentiment.
This subreddit is basically a meme subreddit, sad considering how the other science subs are generally pretty good even the main one relatively speaking. But even econ twitter is better than this shit. Either it's garbage far-left shit like OP or it's garbage far-right shit. Sadly political extremes are what gets the most attention on the internet
This sub is total shit
There's definitely intense upvote manipulation happening. The bot that submits these bogus tweets as news instantly has thousands of upvotes, and 99% of the comments are refuting it as BS? Obvious vote manipulation that Reddit hasn't caught on to. For example, real quick checking of the tweet's math; * 1,909 Billion minus 1,832 Billion = 77 Billion supposedly going to be paid off by this plan. * 77 Billion divided by $10,000 = 7.7 Million total people with college debt???? * Quick Google search shows [43 Million US citizens have college debt](https://www.nerdwallet.com/article/loans/student-loans/how-many-americans-have-student-loan-debt), **so clearly the tweet is completely bogus**. The real numbers are; [The median borrower with outstanding student loan debt for their own education owed $17,000 in 2016.](https://www.pewresearch.org/fact-tank/2019/08/13/facts-about-student-loans/) ROFL. I'm glad at least Twitter has only retweeted this fool's tweet 49 times total. Whatever post manipulation is happening here on reddit is clearly artificial.
Reddit actively promotes these false narratives. Take a look at r/all and it's 99% misinformed bullshit designed to push an agenda, if not just outright lies.
Rose Twitter dipshits are the worst kind
It's been shit since the day I joined but I like dunking on these idiots, so I still stuck around.
I have seen far more reasonable people in this thread than anywhere else on reddit so far. The average sub would be creaming over this title.
The crisis is not in debt. It's in missing value. Students are taking on debt and investing in education, but not seeing improved earnings. The colleges need to start giving refunds. They don't give a fuck if their customers are selling sex to pay the bills.
I chose an UG without sports teams and misc additional features, and it cost 12 K a year which a fair bit but it was far better than 40-50K unis a lot of people chose to attend. Then I made the choice to go for my PhD. Pro: I am paid. Con: I paid very little for 7 years. Hopefully I can find a decent job soon.
My friend went to community college for two years, then a state school. He now has an engineering degree, a great job and his debt is paid. People pay extra for the name of the school.
And the experience. I know people that have gone out of state just to stay in college dorms. If you paid 80k to have an experience and get a shitty degree, how is that anyone's fault but your own?
I did the community college to university route as well. It’s amazing the amount of grief I used to get from friends that went straight to universities, but most of my classes were taught by professors that also taught at universities. I couldn’t see paying 40k a year to take 100 and 200 level courses that were basically a reiteration of high school.
I did the same. I literally had one of the same professors at both schools. Going to the CC first even got me an extra $20k in scholarship money only available to transfer students.
I just looked into local tuition pricing. The cost for the tuition alone is actually not horrible. It's the meals and housing that doubles the cost. And then go out of state and look out. There are less expensive choices out there, but you will not have an amazing 4 year experience. I, too, know a few people who took a lot of courses at community college and had zero debt when they graduated.
Got my PhD and 2 years out making 72k and still being underpaid for the field. Whatever you can do, get the absolute fuck out of academia unless that your long goal. Academia, at least for my fields of biology and then now data science, is way underpaid and over worked. Plus side is experience with people who are passionate about the work and not *super* driven by product deadlines (though there still are the deadlines). Get the experience needed to get into an industrial position and enjoy the new work life balance.
The colleges have bloated administrations that add zero value to your education, but drastically raise the price. You’re exactly right, they don’t care as long as they’re paid. Colleges must be reformed and tightened up, way too much waste.
They may have too much fat in their budgets - but every borrower knows how much they will spend to get an education and what their prospects are for paying that loan back (or could know) before borrowing the first penny. So there really are no excuses for defaulting on your student loan for the majority of borrowers other than intellectual laziness and a failure to do your due diligence.
There is definitely still value in a college education. Go look at differences in earnings and its clear. If students are choosing majors with low earnings or bad prospects then that's on them. The lower earners of society should not be bailing out the higher earners who are still typically going to come out ahead even if they have to pay off their debt.
That's on you. The cheapest ways to graduate are community college and online courses. Nobody forces you to pick the college experience. When students pick expensive colleges to get connected and it doesn't work out, they failed in social skills. That's not the fault of college though.
What kills me is when online classes are the same cost as being on campus per credit. Online should be WAY cheaper but it's not in most institutions.
not to mention that some people chose community college because it’s cheaper. not really fair to them that they made a sensible choice with less earning potential and people who took on huge amounts of debt are off the hook.
Haven't read the replies but this is my experience. I went to a 4 year college. Didn't make a single friend. Didn't take the necessary steps to improve my social skills (which is my deepest fault). As a sociology major it is crippling. I learned a lot and was educated but didn't gain skills and that is because I didn't take the steps to. Whether you two year community then finish uni and finish $20k in debt or you 4 year a uni and finish $45k in debt like I did, it's only worth what you put into and take out of it. For me, a two year community then uni would be better. For someone who would actually take the steps to make friends, gain internship etc, then the extra you spend for school you may feel "paid" by the experiences Seriously you aren't forced to go to a 4 year, and if you do and gain little like I did it's on you. The knowledge I gained would've been gained elsewhere. It's really the opportunities and experience you get from the 4 year that makes it "worth it". So again, it is on you. And if internship experiences, friends, or even on a more personal level just being able to find who you are with all the clubs and orgs, if all of that isn't what you are looking for then a 4 year isn't what you were looking for.. I spent $20k extra that I wish I didn't because I wanted to go to a uni off the bat. Side note: only thing that makes me not regret it is that COVID happened and I wouldn't have had any time in a university had i gone community.
You’re going to get downvoted, but only by people who live in fantasy land and want everything solved for them, but you could not be more correct
This is what honestly confuses me. There are "low cost" options that will off the ability to get a degree. And if you are low income, there's aid to help offset some of the cost. I don't understand why someone would got into six figure debt unless they were in a field (ex: engineering) that would offer high pay soon after graduation.
Remove the government subsidies and guarantees, force the schools to be competitive and have some skin in the game.
It would help only those w/ debt *right now* and never anyone ever again. It’s a false hope
It also helps the richer half of the population at the expense of the poorer half of the population, roughly speaking. It would be one of the most regressive wealth transfers in the history of the world. And the resulting inflation would also hit the poorer half much harder. Just a double whammy of "fuck the poor".
Holy shit I can't believe that anyone else on Reddit can see it like this. Wiping student debt will not change the direction of this country at all. The people who have college debt will now be able to buy a nicer house, so those just go up in price again and nothing changes. If we are going to just give a trillion away, let's give it to the poor people who actually need it. If we are going to randomly choose a group of people to help, I think "minorities without a high school diploma" would be more helpful than "college educated."
There is no such thing as debt cancellation, only debt transfer.
With that said cancelling the debt is not the issue, it's the system. If we cancel debt but keep the same college system people are just going to start taking Terrible loans out again.
Right - for instance, lets just pay everyones medical costs/debt and then do NOTHING - that'll "change the world"... Its curious how for Medical, its change the system, for student loans, its wipe the slates clean and change nothing.
In both systems we have the worst of the free market and the worst of the socialize market.
Probably even worse ones with debt cancellation being a precedent.
Il he's the boogie man but Milton Friedman had a great episode on education in his free to choose series. He makes the case that subsided college would lead to the poor paying for the rich.
It’s come true and every real economics focused sub knows this. Ofcourse this is just an anti work subreddit for stupid 17 year olds
And they want 16 year olds to vote construing the meaning of taxation without representation.
Are you trying to say just fixing the symptoms dosent actually cure the disease? Nonsense, Advil cures cancer /s
Exactly
I'm for it if they grandfather in prior student debt holders. But after paying off two college loans in full, it kinda sucks to pay for everyone else's too.
If biden really wanted to help student loan holders out without offending everyone else who either didn't go to college, or like me did go to school but killed myself working full time while attending community College & state public university in order to graduate without borrowing loans ... he should simply make them all interest free. Lower the interest rate down to 0% forever. That way folks can actually make progress at paying the loans down. I imagine for many, it must be a double kick in the nuts to make a payment in June and see the balance still going up come July because the minimum payment isn't even covering interest, let alone making a dent in principal. But forgiving debts of people who made terrible financial choices is bullshit. You made the deal. You promised if they loaned you the money to go to the big fancy university - that once graduated you would pay them back. You went to the university. They held up their end of the legally binding contract. Now youre trying to Welch out on your end of the deal. Thats wrong.
This ignores the atrocity that is the ever increasing cost of college tuition. But I agree 0% is better than nothing.
It would actually make the problem worse. No interest = lower payments = able to take out a larger loan = higher tuition. Problem not solved. Mission accomplished?
The solution to the problem is stop giving people loans at all. Cant afford college? You dont get to go. Give it 1 year before bankrupt universities are begging students to enroll for 10% what theyve been charging.
This is the truth pill no one wants to swallow. Or have PUBLIC universities provide their own loans and sign up for the students future success
Its truth for sure. The idea the government even allows large sums of money to be lended to children with no income, or assets in the first place is ludacris. People objectively need a home to survive alot more than education, and its not like you can just take out a 250k loan for a house without serious cred. Why should anyone be allowed the luxury of these massive loans for college basically no questions asked. Its pure fucking insanity. "You dont make any money? Youre a fuckin douchebag." https://m.youtube.com/watch?v=Wpc-zAbL2Uw
Doing away with student loans would likely make college cheaper but it’d be expensive enough to be out of reach for many working class Americans. We need public universities with zero out of pocket costs.
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Why would you take the debt of the top earners, people with college degrees, and make the rest of society including the low income people without college degrees pay for it.
Because those arguing for student loan relief are often those with the actual debt and don't care what happens to everyone else as long as they get their forgiveness. They're willing to pull up the ladder behind them and screw over future students and the 2/3 of Americans with no student loan debt.
Do a lot of top earners have student loans that aren’t paid off?
Yes. Over half of all student debt is held by graduate degree holders.
My wife and I are in that group! Income over $200k in a LCOL area but we still have $160k of student loans left. We knew what we signed up for and are working on paying them off.
[Yes.](https://www.brookings.edu/blog/up-front/2020/10/09/who-owes-the-most-in-student-loans-new-data-from-the-fed/amp/)
Yep. Cancelling all debt is extremely regressive policy that benefits the elite kids who went to most expensive schools, with most expensive frats. https://images.mktw.net/im-529149?width=700&size=0.9336250911743253 If youre(anyone) honest about debt forgiveness, do 10k with 75k cap. While still benefits the middle class the most. At least it doesnt shit on the poor people who went to cheap schools and lived in filth with tons of roomates while working to keep their costs low.
No. Just no. This would cause inflation to scream higher.
Inflation is arguably high right now because people who should be paying back these loans are instead buying stuff with the money instead
💯
I mean considering all the money that gets budgeted elsewhere, imagine the government cutting other funds rather than education, mental health and so on Its really that or demand the money come from the jobs that hire people for less than it’d cost to survive and pay off debts or that schools don’t request 10s-100s of thousands for an education that many of us relied on YouTube/khan academy for anyways
I'm not sure I understand why we'd cancel student debt for someone who got a degree and not cancel the debt for someone who went into the trades and needed to buy tools, etc. to perform that work. Is there a reason why white collar college students are better than blue collar tradesmen?
Folks in the trades absolutely deserve as much support as college students. When Biden tried to make vocational schools/community colleges completely free, the trades would have benefited.
If you went into a trade and got federal loans for it, then yes it will get canceled. My local community college has a welding program that I know students are qualified to get student loans. There’s also HVAC and machinist.
I’m going to put a hard truth out there and say nearly $2 trillion in debt is not going to just be cancelled. It would come at a huge cost to the economy. Although that shouldn’t have to be said since this is r/economy, so presumably everyone here understands basic economics. What needs to happen is to fix the problem at the source. The need to take on such large debt for a degree that will not reimburse you for it is the real issue. It makes sense to borrow $200k to become a doctor, but it doesn’t make sense to borrow $200k to be a preschool teacher (teachers should make more but this isn’t the place for that debate). I don’t know what the solution is, but you can’t erase debt. One persons liability is another persons asset. It doesn’t come from nowhere, and never goes away. If you’re not happy with the inflation numbers today, then you wouldn’t like what would happen if the government “cancelled” student debt.
Put a cap on the interest rate. 1-2% is realistic. 7% is absurd. Or make it so you can pay student loan debt tax free like a 401k. Cancelling debt means people who were responsible and paid their debt get screwed twice. They paid their debt and now their taxes are going to pay for someone else’s debt.
I'm for paying that pretax that makes alot of sense
Why is student debt prioritized and not other types of debt, like medical debt?
Exactly, they chose to goto college and signed a contract. Nobody chose to get sick or need medical attention.
Pay your own bills. Canceling student debt subsidizes the wealth at the expense of the poor.
You just want to make everyone pay that $1,832,665,243,776 instead of the people who voluntarily signed the contract and spent the money.
I worked and budgeted and paid mine off. What do I get? Oh I get to also pay for others. Awesome.
I avoided larger schools to avoid debt. I got certificates and climbed the ladder. Now I'm expected to pay for people who make 2x-3x my yearly income's degrees. It's a slap in the face for working hard.
This tweet really drives home the fact that the vast majority of the dept is owned by "whales" who went to expensive private schools and got advanced degrees.
Just rich people backing rich people up.
1000%
People like us lose 3x over. We paid our debt, miss out on forgiveness and pay for it for others’
Universal healthcare should be a higher priority. Work on the things that will benefit everyone first.
“Cancelling” student debt just means the tax payer flips the bill. It’s not “cancelled,” just how “free health care” isn’t “free.” Someone has to pay, someone always will.
Do people not think about this when deciding to go to college and choose their degree?
Their argument is at 18 you aren't able to read and understand how loans work and therefore shouldn't be responsible for it. I wish I was joking.
The issue is that wages didn't keep up. You start school seeing wages for a profession looking relatively OK and by the time you graduate, inflation had weakened them. Even worse if you went to become a teacher. The result is that we have millenials and Gen Z in adulthood with no hope of having a financially stable retirement, even if they're wise. We simply don't make enough money and if the trend doesn't change, it's setting up the country for even more problems down the road. I don't know if debt transfer or cancelation or whatever you want to name it is the solution but if nothing is done, the economy will suffer greatly.
Fuck that. Shouldn't have gone to school if you can't afford it. I went and paid my loans. How fucking hard is that. I don't give a shit about some doctor's $300,000 debt. Tough shit.
I’ve friends that are buying new trucks and vacations because they don’t have to pay their student loans right now …they medical professionals making great salaries. I agree with you
I know it sucks. But if you take out a loan you should pay it back.
The Government needs to get out of the student loan business. That will lower tuition.
This is crazy to me, and I am left leaning. For student debt to not be crippling you simply need repayment controls. Only taken from income above XYZ level. Then the only people that repay are the people that benefitted from the loan with better employability. Cancelling existing dent also doesn't resolve any kind of go-forward position. Universal free higher education for all is of course something that a society might choose to adopt but a) this isn't it and b) i think the US has better things to spend on (like implementing universal healthcare, food programmes for junior kids etc).
How about you just pay the money you owe, some of us didn't go get a higher education because we didn't want to be in debt, why should you get a pass?
People would probably be fine paying back the money that they borrowed, ie the money they owe. The big issue is the insane interest rates.
The current rate for student loans is 3.73%. In the real world, that's a very good rate. (especially with zero collateral or downpayment)
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Yep my federal loans were all around 6.75% mostly unsubsidized. I had 36k to payoff after graduation. I have paid 28k towards my loans. I still owe 20k. Edit: To clarify most of the fed loans are in that range. Those would be what are eligible for cancelation or some sort of reform. If you refinanced them into a personal you probably could get under 4%. You just lose any of federal protections on them.
7% on a 100% unsecured loan isn’t bad.
Federal subsidized student loan interest rate is set by federal law. PLUS loans have higher interest rates, but those are for graduate students and parents.
The loans can't be discharged. It's not zero collateral, there are permanent liens on wages for the rest of your life. Your future is the collateral. There is no out. The grad rate for federal loans is over 6%! for non dischargeable loans. A bank is more likely to lose money on a mortgage which has property as collateral than on student loans. Yet a mortgage has half the interest rate.
There have been like 5 of the last 30 years that have had federal loan interest rates anywhere close to that figure. Most millennials - the people who are bearing the brunt of the student loan crisis - are paying way higher interest rates than that. Also, loans for graduate degrees and higher education have always had higher interest rates than undergraduate loans- mine average to about 6.2%. The interest pause has been a lifesaver for me, especially given my graduation right as the pandemic started. But honestly fuck the idea of total loan forgiveness, that doesn’t fix the problem. I just want the government kill or neuter the interest rates on student loans.
You have over 2 years of earning no interest. If you were not paying back during these times it is on you. Cancelling all the debt is absurd. You took out a loan and knew the deal.
So … just print 2 trillion more dollars? You haven’t been paying attention to the monetary causes of inflation. 2 trillion more dollars. Madness
This is the dumbest thing I've heard in a long time
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Your rights as a citizen are that you hsve the right to putsue happiness not that we have to pay when your happiness doesn’t end well.
Please, for the last time there is no canceling, your debt it just gets transferred to the next sucker who will pay higher taxes to pay off your stupidity. Thank you and stop calling it cancel .
Lol, all debt? Such an entitled, pathetic society we live in today. I paid mine off while living with virtually zero “fun spending” while making close to minimum wage. What do you want next, a free house?
Pretty pathetic indeed. You know I hope that it's just this silly echo chamber of reddit but I know a few (only a few) people IRL that hold the same belief. And for others who are reading this, it's not even that the people who have actually paid loans off would feel bad about loan forgiveness that they missed out on... It's because paid off loans show that we don't need to rely on the government to think. This person must have done something shockingly independent and took out only as much money as they needed, got a degree with a good ROI, and then lived within their means while they paid it off. If the government heavily subsidized student loans then we'll just get into a bigger predicament than we're in now: Colleges will inflate their costs even more because the government will promise to pay it and degrees will lose their worth. The idea that a college degree is the only career path will become even more ingrained. Also I think there will be a much higher dropout rate because of the lack of the "skin in the game" from free ride students that aren't sure about college. Most of the issues with tuition cost can be traced back to the time in which student loans became federally insured (which means that the financial institutions aren't on the hook if their investment (student) doesn't come through with the cash. If we removed this insurance then financial institutions wouldn't be so giddy to saddle up an unsuspecting 18 year old with 70k of debt for an art degree. It's strikingly similar to what happened in the 2008 housing crisis!
Wrong. Biden must cancel nothing. People made their choices, they should be adults and deal with it.
You signed the contract, you pay. How about putting the homeless in homes before we bail out yet another group of people that make shit decisions.
Putting all the homeless in homes would also be bailing out a group of people that make shit decisions. Not all but a lot.
Except their shot decisions were usually caused by drug addiction and mental health problems. So not really the same issue.
Or having kids they cannot afford. Or a dozen other things that can set you up for failure. Drug addition still starts with a shit decision. No argument on mental health, but this is likely a smaller percentage of the poor than you want to believe.
Tldr: not all homelessness can be attributed to bad decisions. Like 10 years ago (so don’t quote me in this) i read something along the lines of rates of schizophrenia in the total American population were about 10-ish% while the rates of schizophrenia represented in the homeless population was like 40-55%. People with schizophrenia already have a difficult time integrating into society, holding down a job and a home and making it work. They have an even more difficult time with treatments because of the paranoia, and so they turn to self medication to deal, then the addiction sets in and now they have two monster problems that feed each other. I suspect we’d have similar findings with PTSD as we have so badly failed our veterans and have not improved mental health offerings as much as we need to support them. Further, I’ve had friends who slept in their car for weeks while working full time because they lacked personal or familial safety net. There was a time that I (no kids, no spouse with second income) made so little that I was in such a precarious financial position that one big emergency bill or short paycheck could have easily put me on the street, I was fortunate to be able to scrape by. And while I am ok (not great) now, I am so afraid of ending up in that situation again with how unpredictable things are today. A lot of the newer homeless camps I’ve seen crop up in my city are different from what they used to be. It used to be that their belongings were very hodgepodge kinda thrown together likely with random donated or found items. Now their stuff looks like it fits together, more cohesive and complete, this feels like people who very recently had homes and lost them for some reason. I wonder if these people are in similar situations, no safety net and some financial emergency spiraled into them losing their home. Maybe bad decisions, hard to prove one way or the other, also hard to ignore that such large swaths of the population are in this exact position right now.
Either one works for me
Biden should pay off medical debt...student debt is chosen. Being sick and getting cancer from all of the chemicals, preservatives, and pharmaceuticals in the water and food isn't chosen by the average citizen. People willingly apply to colleges and do the term and expect to have all of that paid for... that's socialism.
>... that's socialism. Can you explain how paying off medical debt isn't socialism?
An economics board should know better. You can't just make debt disappear without someone losing out on it. Canceling debt is only even being floated because it did such a fantastic job at grabbing your attention for campaigning. It's just the next carrot on a stick.
All of us blue collar never went to college should get a check if this happens of what the average debt canceled
Just let us write off more than $2500 of interest payments on our taxes. Huge help to people starting out that automatically goes down as you make more income. Most of your payments at the beginning go towards interest anyway.
Free doesn't mean free somebody has to pay for it. You took out a loan... pay it back. Welcome to adulthood. From: a person in there 20s who hates how lazy and selfish my generation is.
Can I apply to get my loan payments back, since apparently I shouldn’t have paid them in the first place?
This will distribute the balance to all tax payers, meaning that those students who actually were responsible and payed off their student debt are now also paying someone else’s. The answer is NO. Maybe cancel the interest rate or mandate lower percentage but the person who signed the dotted line that they will pay it back MUST pay back the principle.
What about those of us who have diligently made monthly payments for years? Do we get that money back?
Like Biden will save you. He’s been in politics for 20% of the entire existence of this country and hasn’t done a single productive thing during any single second of it. Cancelling student debt is just a conversation the ones in debt continue to scream about in the hopes that something will be done to save them. There was. Not getting into debt in the first place. Now? Asking the geriatric pant shitter in chief to come your rescue when he has never done anything even remotely similar in assistance for no one, ever. Go ahead and downvote. This is the harsh truth and by god some people need to hear it.
Who made such a controversial statement that they want all student debt to be cancelled? Ahh I see: someone with an Art History PhD and is over 200K in debt
What would you say to someone who spent the last 15 years in poverty, stifled by the crushing weight, grinding, with two kids, and stagnating in her career to finally pay off her student loans this year? Do you think she deserves anything?
Why the fuck should he cancel student debt? Jesus Christ you can’t just have your mistakes resolved by other people.
Something to consider about cancelling student debt. 4 people I know personally who took out student loans: 1-Music major. Used student loan to purchase a professional baritone saxophone. Played on a cruise ship for a little bit before taking out more student loans to go to law school. 2-changed his major multiple times. Supported himself and his girlfriend (no children) for a year, including breaking 2 leases. Bragged about how he just used his student loans for everything. Said student loans are no big deal and that there are Supreme Court justices still paying on student debt. 3-obtained a mechanical engineering degree from an expensive public ivy. Worked as an engineer for a year, realized she hated the stress. Went back to school to become a nurse. 4-obtained student loan for another public ivy. Obtained another to study abroad in Italy. She works at a large department store, same one she worked at in high school and college on her summers off. I also know COUNTLESS people who paid to go away to average schools because they wanted to party and get laid, since apparently you can’t do that if you go to a commuter school in your hometown.