This is a useful article, pointing out how older people, i.e., parents, will also benefit. Plus some useful stats.
1 Like
It will be interesting to see what happens in the legal challenges ahead, specifically, if the proposal fails due to the âmajor questions doctrineâ ( per Pelosi, and likely SCOTUS) or survives due to the HEROES act of 2003 invocation of national emergency ( per White House counsel).
5 Likes
Things usually go wrong in terms of uncontrolled costs when the economic consequences of decisions are removed/shielded from the service/product provider and the consumer. Easy to spend/risk OP money. I am all for government support of education that makes economic prospects better for all or even certain disadvantaged groups â that is an investment in a more prosperous country. But schools and students need to have skin in the game as well. Right now students and families do have skin unless debt forgiveness becomes unlimited, but what about the schools? Too many are charging outrageous amounts for little benefit â the huge number and amount of defaults speak to a broken system. Schools need to share accountability for taking money and providing little to no value for a large number of students.
5 Likes
100% agree. But since those two things are neither legislatively feasible nor legal to enact via executive action, I donât find them relevant to a limited discussion of what was accomplished with this executive order. I get your interest rate argument or even the argument of others that government should do nothing because people took on their own debt, but a broad overhaul of our higher education system isnât a realistic expectation given the current political climate.
Help me understand how you square supporting free community college for future generations with not supporting debt forgiveness that essentially delivers free community college to many in past generations. Is it because people who attended private colleges and grad programs also benefit from the order? Would you support the action if it were more limited in scope?
4 Likes
Like Pelosi, I have doubts as to whether this proposal can be accomplished through executive order, and since all agree that congressional action to do so would be legal, I would prefer that route is taken.
I would have no objection to forgiveness of all community college debt-that seems to be a sound investment in higher education, and if it results in more attending community college, even better. Same with any trade school debt.
I do object to the forgiveness of graduate/professional school debt, or, frankly, forgiveness of private residential college debt. There were almost always cheaper public alternatives, and adults should not be rewarded for making poor decisions about where and how to pursue their education, and the costs/benefits of doing so.
7 Likes
The government isnât âSending Outâ any money. This is general budget money that wonât be repaid, just like the PPE âloansâ wonât be repaid, other forgiven loans (student or foreign aid or others). Taxpayers arenât âpayingâ for these loans, but the budget will be out of balance until they reset it (although no money in student loans has been paid in the last 2 years and the economy is just the same).
Executive Orders have no budget, no money. This EO will be for the Dept of Education to forgive, forego requiring repayment or otherwise get rid of $10k of debt for those making under $125k. The Dept of Ed has that info for some borrowers (mostly those on income based repayment program because they have to certify their income yearly) but they donât have it on others. Ex, they donât have income info for my kids. Iâm not sure they know which students with loans had Pell grants. The Dept said they donât even have emails for 25% of borrowers (mostly those in default).
There was a calculation made when there was rumbling about the forgiveness being for those that made under $150k that it would be more expensive for them to set the income cap than to just do forgiveness for everyone. There are only 3% of borrowers making over $150k, and the administrative costs of processing the applications would be more than the savings in excluding the 3%, The administration decided to take the more expensive route.
2 Likes
Todays NY Times has a demographic profile of student debtors-I was surprised that far more are in the 30-39 age group than those younger, or older. Seems the younger adults have become more debt-savvy.
2 Likes
Probably two things: 20s might be smaller than 30s because the folks with just one or two years of fed loans can often get them paid off in 8 years and the ones that took out the usual $28k in four years rarely get that complete by 30. Also, not every professional graduate degree is sought by 29: a decent amount of the MBA and education masters that are so common donât come right at the start of a career.
3 Likes
Has anyone posted these details yet - website to request loan forgiveness
will go live in October and relief will be automatic for 8 million borrowers for whom the government has sufficient info.
3 Likes
I donât support loan forgiveness for many reasons, but myself and many others I know used the instate uni cost as a budget guideline. Almost every school my kids applied to hit that figure after merit aid. So in your proposed idea they wouldnât have been eligible for forgiveness (theyâre not anyway but thatâs besides the point.) All this to say that going to a private school isnât necessarily more expensive.
2 Likes
This is often true in PA for our top students academically. They pick their cheapest option and itâs not a state school. For two of mine their cheapest option wasnât a state school.
3 Likes
Thatâs fine. And I expect private 4 year universities would object to public only relief. But there were other possible changes-undergrad only, lower or zero interest, etc, which could have been viable
1 Like
Graduating from college is not a requirement. They will be eligible if all other requirements are meet.
1 Like
I donât think you meant to reply to me.
She reversed her previous position on Wednesday.
Not surprising, but her original position was sound legally-it will be interesting to see how it all plays out. It is hard for a chief executive to commit $500 billion without Congress approving it.
2 Likes
The student loan crisis was around before the pandemic and will certainly continue after the pandemic (because nothing in Bidenâs plan would end the crisis). It has nothing to do with the declaration of national emergency due to Covid. Since a President alone can declare a national emergency, wouldnât this allow any President, now and in the future, to seriously abuse her/his authority so any laws on the books can be applied broadly to unintended targets?
5 Likes
The declaration of national emergency (presumably due to covid) or war is what authorizes the President to forgive/alter the terms of federal student debt, per the HEROES Act, and is being used as the primary legal basis for this Exec Order. I agree that it would have been a stronger case in 2020 than now.
1 Like
I wonder if this relief could have been granted in a different way â as in the following hypothetical:
âThe pause was instituted in March 2020 and continued through two administrations. The pause will end in December 2022 and payments will be re-instituted in January 2023. For the year, 2023, no interest will accrue. Please take advantage of this to the extent possible. Loan terms will resume on January 1, 2024.â
What outcomes would we be likely to see? Would this be more âfairâ?
2 Likes