I would not consider that in the same category of “handout” as what we’re referring to here in terms of loan forgiveness (basically, reneging on a contract). This was a group of incredibly generous friends and family! IMHO
If they’re smart and clever, they will find a way. It may take a little longer, but they will get there. You don’t believe that?
It makes no difference if friends/family/gov’t helps someone out. A handout is a handout. Either way, they have a chance to get ahead.
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Is a research grant a handout?
Is a VC investment a handout? No, there always strings attached…
My point is that your 93 y/o grandfather did not default on a contract…
Not for the majority, no. It works for very, very few people, not the “above average” academically, socio-economically poor masses. But in “sink or swim,” many drown and it didn’t have to happen.
Go to work in an average public high school for a few years. It really helps one see reality vs theories.
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Ok, so where do these folks go? Are you saying they end up on welfare?
I will ask @observer33 and @Creekland to take it to PM, if they wish to continue. That way, the rest of us don’t need to slog through the back-and-forth.
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Many around us end up working in retail, restaurants, or factories because those are who hires high school grads. They get an income, but they also often qualify for rent assistance, food stamps, free lunches for their kids, electric help, and other such programs.
When someone isn’t academically capable of doing more, fine. I’m glad there are safety nets for them. When one is academically capable of doing more, it’s sad - and an unnecessary drain on gov’t or state finances (or charities). As I said before, I want to see Trade School assistance too. Autocad workers and hairdressers don’t need to start adult life with debt either.
@Creekland and @observer33 please end this discussion on this thread and communicate through PM if you wish to continue it.
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Just saw this and will stop. Readers can decide for themselves. Like I said, my job has definitely given me strong bias that others probably don’t encounter.
In the spirit of things, we’ll agree to disagree. Always enjoy the levity and banter!
I’d really like opponents of forgiveness to explain the opportunity costs of forgiving every student loan. Issues concerning moral hazard etc. often come across as a combination of sour grapes and a desire to put those snotty kids in their place with consequences. I personally don’t think that allowing loans to be dischargeable in bankruptcy is a great solution since it’s very punitive and doesn’t seem to be much cheaper than forgiveness. On the margin, forgiveness is clearly preferable to bankruptcy.
Two arguments that I think pro-debt posters should make (which I disagree with personally):
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Reforms to the college financing system will reduce per-student spending and erode the college experience.
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Forgiving student debt will create a special class of “losers”, students who refinanced debt with a bank to lower their interest rates. Resolving these debts will require an act of congress which… good luck!
Yeah I think a lot of them would like that tbh.
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It is not reneging on a contract. They are willing to repay, but being told they don’t have to by the lender (US government). It happens all the time that the government gives things to people who don’t expect the tax rebate, the ‘free’ period on public transportation to get people ‘hooked’ on riding the bus, a free day at a municipal zoo. Library fines forgiven? Yea! The government often does that to make a correction to the economy or to get taxpayers to act in a way it wants. Tax rebates to put in solar panels or new windows, a tax break on buying an electric car, the AOTC credit to go to college. The government wants them to buy, replace, invest so rewards the behavior.
As for what can be done for future students, well the govt could say “We won’t be forgiving loans in the future because we are now offering free community colleges, better tax breaks at public schools, etc” so you don’t have to take the loans. Give the students alternatives to taking the loans. Will there still be students (and parents) who borrow $100k to go to a ‘better’ school? Sure, but they did HAVE an alternative.
How many people happily took the $1200/$600/$1400 stimulus checks from the government? Many people didn’t need that money, some even felt guilty about getting it, but they took the money. Many people took the PPE loans even though they didn’t lose one day of work and may even have benefited because they got to WFH and saved all those commuting costs and dollars spent on happy hours and lunches. The government wanted the money in the economy, ‘stimulating’ the economy.
My daughters took the loans and agreed to repay them, and they will, but if there is a forgiveness program they’ll happily take it and not consider it a ‘handout’. One took about $20k in loans and needed every cent. She lived like a poor student and I know there were times she was hungry and probably cold too. She didn’t have a car, didn’t spend spring breaks on a beach, didn’t buy the textbooks new. She picked a very inexpensive college. She’s now a grad student and is not taking any more loans. Her program is funded but she also works 24 hours per week and it’s a tough life (she’s also a TA; she doesn’t have an extra 20 hours per week to work a third job). She lives in a basement, her boyfriend lives 1000 miles away (he’s in the army). Would she like $10k in loan forgiveness? Absolutely. Would it really help her get started on her post grad school life? Yes. She’d still have about $10k to repay, she’d still suffer for all you who feel she should ‘pay’, but the pinch wouldn’t be as bad.
For my other daughter, it would be a pure windfall, just like the increased child credit is a windfall for many. Tax credits and forgiveness work that way sometimes. What would she do with the money? Probably put in new floors in her new house, or put up a fence, or paint a room. Stimulating the economy.
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I don’t understand why we aren’t more focused on reducing the interest rate rather than on principal forgiveness.
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Why do you think the interest rate is too high? What do you think the private lenders would charge for an unsecured loan like this?
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I think I’m looking at it differently than you.
I’m trying to find a middle ground. Because I do generally believe it’s bad precedent to simply forgive principal repayment, and that it’s important for people to adhere to their obligations. But one thing I’ve noticed when I’ve read about some of the cases highlighted by proponents of forgiveness is that many of the folks who are struggling and having such a hard time got into trouble because of how much interest they’ve paid, oftentimes due to deferred interest/penalties arising from typical life bumps such as health issues or job losses.
And as a taxpayer, in thinking of what I think is fair and what I’m willing to do, I personally feel comfortable with, if someone wants to invest in themselves, then I’m willing to invest in them by lending them money on sweet terms, such as the federal funds rate. But that’s just me. We all have our own ideas of what we are willing to fund.
BTW, I do think that since student loans aren’t dischargeable in bankruptcy (except in rare cases), that student loans have a lot less risk than other loans.
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With all do respect, this is such a victim based comment. Being victims of their circumstances.
We all have to deal with the cards we’re dealt. Life isn’t fair or equal. Life is just life and you make of it what you will. There are plenty of poor kids who have gone on to do great things. Plenty of rich kids that have gone on to do nothing. And the reverse of course.
What about the people who took out personal loans so their kid could attend? Should those be forgiven? Or those that tapped the equity of their homes so the kid didn’t need loans? Should those be forgiven?
You sign, you pay. That’s how it works. Are we really at a point where we have to consider that making them pay puts them at a disadvantage that will have them become a detriment to society and cost us more in the long run? That’s like saying criminals shouldn’t be put in jail because that costs us more and doesn’t give them the skills to be productive citizens. Well, they’ve already made the choice to be non-productive (by and large, not all). Are we supposed to be held hostage to that?
Time for this middle class kid who rode his bike to work at 5 am to open a restaurant while in high school (weekends and all summer), attended a state school because he couldn’t afford better and didn’t want debt, and started a business that eventually did well… to go play golf with my son.
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It’s difficult to go to a state school without debt, my husband went to our state flagship and all in paid under $20,000 including housing. That exact same education cost my daughter $120,000. There needs to be a way to make public universities affordable again. My husband had no student loans.
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