Will Joe Biden cancel student loans?

[pmv]

The reason you can’t discharge student loans in bankruptcy is that if you could no bank would offer student loans. I mean why would banks give tens of thousands of dollars in unsecured loans to people who generally have no assets or income?

Student loans are a bad idea and should be done away with entirely, replaced with public funding of universities.

I'd like to agree, except that we had exactly that system here, and have gone the other way - introducing loans and fees. Because the old system could only be afforded when university admission was restricted to a minority of a cohort, those who did exceptionally-well at school. Which was open to attack as being unfair on the majority who didn't get to go but had to pay for the system through their taxes.

Moving to a system of university-education for the masses meant finding other ways to fund it, hence the introduction of loans. But that doesn't seem to have worked out all that well either. It's clear now that most graduates will never earn enough to repay those loans. The loan system was sold on the basis of figures for "additional lifetime earnings" for graduates over non-graduates, that were derived from the pre-loan days, when university degrees were rare, and thus commanded a big salary premium. Quite predictably, as soon as everyone started going to university the value of a degree in terms of additional earning capacity dropped. Because it was always largely a positional-good, rather than an absolute one. All that happened was that the entry-requirements for jobs went up, obliging people to go to university and get into debt just to get the same jobs, at the same pay, they would previously have gotten without a degree.
One younger person I know was _in_ a decent job, quit to go to university, failed to complete the degree, and then found their old job had in the meantime raised its entry requirements to require a degree - so they couldn't go back to doing it.

I really don't know what the solution is.

As I understand it, from what people from that country have told me, in Sri Lanka they massively expanded the university intake, and produced a generation of graduates who found the only jobs were as rice farmers or rickshaw drivers. Some of them then put their new technical engineering skills to work in making bombs as part of a violent insurrection. At least if your indebted and frustrated graduates all have degrees in golf-course-management or fine art, there won't be so many explosions.

 

[Greenman]

They read the loan docs, they signed the loan docs, they accepted the money, they spent the money, most earned a degree. Now after the purchase some have decided it was a bad investment, I feel sorry for those folks, as I've made bad decisions in the past as well. While I wouldn't be opposed to some relief in the form of very low or zero interest, simply calling it square isn't the answer.

 

[SteveGrabowski]

Nope. Only a moron would. Thankfully, Biden isn't that stupid.

It is essentially attempting to buy votes in a nut-shell. The problem is - that morons don't understand - is that it will piss off a much larger majority. I sincerely don't think Biden is stupid enough to randomly forgive loans.

Boy did he pick a stupid time to buy votes. Should have done it a month ago, maybe we could have flipped the senate then.

 

[SteveGrabowski]

Or we could do both.

He means 'or we could do neither.'

 

[nickqt]

What long term problem is actually fixed by it? That's the problem. It does literally nothing to address school costs or the next underlying issues with student loans.

Long-term problem?

How about millions of people unable to get out from under the debt to take part in the economy?

That not enough?

We don't have to put out a house fire before we save the fucking people burning to death inside.

 

[brycejones]

Long-term problem?

How about millions of people unable to get out from under the debt to take part in the economy?

That not enough?

We don't have to put out a house fire before we save the fucking people burning to death inside.

Instead it’s much better to talk about how the fire is bad and people are burning to death inside but we should debate if the water is to expensive and if we save these people from a fire they won’t learn a lesson.

 

[MrSquished]

When the Fed has injected trillions into the stock market, whether back in 2008 or this year due to coronavirus, nobody blinks an eye.

 

[nickqt]

Instead it’s much better to talk about how the fire is bad and people are burning to death inside but we should debate if the water is to expensive and if we save these people from a fire they won’t learn a lesson.

Easiest thing would be to forgive all student loan debt, give everyone else a tax credit (if paid off student loan debt, or tax credit for equal amount for whatever they want.

Then make community colleges and trade schools free if you meet criteria for it.

Of course, as you say, this brings in MoralHazard™ the most serious and most feeble philosophies that we have to worry about instead of worrying about our society, our culture, our country, and our fellow people.

 

[TheVrolok]

They read the loan docs, they signed the loan docs, they accepted the money, they spent the money, most earned a degree. Now after the purchase some have decided it was a bad investment, I feel sorry for those folks, as I've made bad decisions in the past as well. While I wouldn't be opposed to some relief in the form of very low or zero interest, simply calling it square isn't the answer.

So I assume you oppose discharging debt through bankruptcy?

Should we allow bankruptcy to discharge debt for previous student loan borrowers, or should we get rid of discharge of other types of debt through bankruptcy?

Why should we treat these "bad decisions" differently?

(I'm not arguing the premise of the change in 76, just following this poster's logic).

 

[s0me0nesmind1]

So I assume you oppose discharging debt through bankruptcy?

Should we allow bankruptcy to discharge debt for previous student loan borrowers, or should we get rid of discharge of other types of debt through bankruptcy?

Why should we treat these "bad decisions" differently?

(I'm not arguing the premise of the change in 76, just following this poster's logic).

See my original post above. I fully support discharging student loans via bankruptcy - but only if we fix the problem before that - which essentially boils down to not giving loans to morons.

The reason why other debt is dischargeable is because they had to have some kind of credit or trust that they would pay back the loan. That doesn't exist with student loans.

 

[TheVrolok]

See my original post above. I fully support discharging student loans via bankruptcy - but only if we fix the problem before that - which essentially boils down to not giving loans to morons.

Sorta. Obviously we have different ideas about how to solve the financing of higher education.

The reason why other debt is dischargeable is because they had to have some kind of credit or trust that they would pay back the loan. That doesn't exist with student loans.

... I know that was the argument, that's what I was referring to in the parenthetical.


I was simply addressing Greenman's train of thought.

 

[GoPackGo]

See my original post above. I fully support discharging student loans via bankruptcy - but only if we fix the problem before that - which essentially boils down to not giving loans to morons.

The reason why other debt is dischargeable is because they had to have some kind of credit or trust that they would pay back the loan. That doesn't exist with student loans.

The whole reason student loan debt is not dischargeable was based on lies.

 

[MrSquished]

Great amazing businessmen can declare bankruptcy when building casinos that fail but god forbid a kid gets in over their head with student debt and they are non-forgivable. I mean college needs to be reformed but really the discrepancies between the two systems are nuts. What a country.

 

[ultimatebob]

Boy did he pick a stupid time to buy votes. Should have done it a month ago, maybe we could have flipped the senate then.

I'm not so sure about that... if Biden pushes student loan forgiveness now, it might help the Dems get some Senate votes in Georgia.

 

[TheVrolok]

Great amazing businessmen can declare bankruptcy when building casinos that fail but god forbid a kid gets in over their head with student debt and they are non-forgivable. I mean college needs to be reformed but really the discrepancies between the two systems are nuts. What a country.

Declaring bankruptcy isn't just an out, it's the "smart move" amirite?

 

[Aikouka]

One thing that sometimes rubs me the wrong way in regard to Democrat policies is that they love to focus on the surface level results of an issue, but generally don't tackle the problems well if it at all. For example, student debt is a problem and it is something that we need to take care of; however, we also need to tackle the reason why we have so much student debt to begin with. Now, to be fair, Biden has also suggested plans to tackle the cost of college, but I think those have problems too. If I recall, Biden's plan is that college is free if your family makes less than $120,000 per year. However, I think this points to a large issue that comes up in regard to college... the expectation that family will pay/contribute toward tuition costs.

I think we can also look at the cost of college, and consider one very easy fix... stop the incessant pushing of out-of-major electives that literally just pad the student's time with useless drivel. These are typically 100-level, intro courses that may provide some insight into the topic at hand, but they're typically not worthwhile in the grand scheme (hence them being out of your major). Honestly, I wouldn't be surprised if my four-year degree could've been shortened to a two-year degree just by removing all of these electives, and if you think about it that way... that's halving the cost of college.

Another problem is that we push kids to go to college as a necessary next step after secondary education, but I'm not quite sure if secondary education necessarily provides adequate preparation to make these decisions. Also, there should be an acceptance that some kids may not be ready either due to not knowing what they want to do, or simply not being emotionally mature enough. (I think the latter is more of a product of how people treat childhood as a period of fun and eschew aspects such as learning responsibility.) I think I was fortunate in that I knew what I wanted to do when I was around 14, but not everyone really knows. Also, I would be remiss to not mention the trades, as I think we as a society tend to look down upon them. Although, I can tell you that if I look back upon my time spent in high school, I wish I would've done more and learned more in our shop electives (wood shop, metal shop, etc.).

 

[MrSquished]

One thing that sometimes rubs me the wrong way in regard to Democrat policies is that they love to focus on the surface level results of an issue, but generally don't tackle the problems well if it at all. For example, student debt is a problem and it is something that we need to take care of; however, we also need to tackle the reason why we have so much student debt to begin with. Now, to be fair, Biden has also suggested plans to tackle the cost of college, but I think those have problems too. If I recall, Biden's plan is that college is free if your family makes less than $120,000 per year. However, I think this points to a large issue that comes up in regard to college... the expectation that family will pay/contribute toward tuition costs.

I think we can also look at the cost of college, and consider one very easy fix... stop the incessant pushing of out-of-major electives that literally just pad the student's time with useless drivel. These are typically 100-level, intro courses that may provide some insight into the topic at hand, but they're typically not worthwhile in the grand scheme (hence them being out of your major). Honestly, I wouldn't be surprised if my four-year degree could've been shortened to a two-year degree just by removing all of these electives, and if you think about it that way... that's halving the cost of college.

Another problem is that we push kids to go to college as a necessary next step after secondary education, but I'm not quite sure if secondary education necessarily provides adequate preparation to make these decisions. Also, there should be an acceptance that some kids may not be ready either due to not knowing what they want to do, or simply not being emotionally mature enough. (I think the latter is more of a product of how people treat childhood as a period of fun and eschew aspects such as learning responsibility.) I think I was fortunate in that I knew what I wanted to do when I was around 14, but not everyone really knows. Also, I would be remiss to not mention the trades, as I think we as a society tend to look down upon them. Although, I can tell you that if I look back upon my time spent in high school, I wish I would've done more and learned more in our shop electives (wood shop, metal shop, etc.).

The Biden plan is for free college in a PUBLIC setting, something you don't differentiate here. Also, just calling elective courses as drivel is simply shortsighted. I mean sure we can examine curriculum and streamline and stuff, but to dismiss all non-major courses as fluff is simply stupid. A well rounded and educated individual is a good thing for society. The whole reason we have taken so long to evolve as a species is because people were so uneducated about shit they didn't have to know in order to function economically. So now just throw out all that education as drivel? Absolutely going backwards here.

I am all for trade schools being more prominently selected and admired, but even there perhaps a few basic civics courses would be commendable and appropriate.

Secondary education is not for everyone, we should be encouraging time off between high school and your next step, but we also need to make general jobs pay better with easier access to healthcare. I mean honestly, I would not give two shits if the full time stockboy at my local grocery made a living wage and had full healthcare benefits. It's hard work, wacky hours, repetitive, not stimulating, it is worthy of a decent living. But in this country we are all fucked up about regular menial jobs.

 

[Zorba]

Long-term problem?

How about millions of people unable to get out from under the debt to take part in the economy?

That not enough?

We don't have to put out a house fire before we save the fucking people burning to death inside.

It would make the problem even worse in 10 years. I already had a long form post above about what time I'd do. But wholesale, across the board forgiveness will help a bunch of current individuals and make things even worse for the next set of individuals.

 

[Greenman]

So I assume you oppose discharging debt through bankruptcy?

Should we allow bankruptcy to discharge debt for previous student loan borrowers, or should we get rid of discharge of other types of debt through bankruptcy?

Why should we treat these "bad decisions" differently?

(I'm not arguing the premise of the change in 76, just following this poster's logic).

Because they knew the loans weren't dischargeable before they signed. No one was tricked into borrowing the money, no one was guaranteed a result. It was the only mechanism that allowed those loans to be made.
The entire student loan program is, was, and ever shall be, a joke. Any idiot can borrow tens of thousands of dollars with no income and no skills. The schools saw an enormous influx of cash and raised prices accordingly, many of the students saw it as purchasing a ticket to success. It was always destined to be a debacle, and right now, years after everyone knows that it's a disaster, people are still borrowing a 100k for a degree that will net them 40k a year out in the real world.

 

[MrSquished]

Because they knew the loans weren't dischargeable before they signed. No one was tricked into borrowing the money, no one was guaranteed a result. It was the only mechanism that allowed those loans to be made.
The entire student loan program is, was, and ever shall be, a joke. Any idiot can borrow tens of thousands of dollars with no income and no skills. The schools saw an enormous influx of cash and raised prices accordingly, many of the students saw it as purchasing a ticket to success. It was always destined to be a debacle, and right now, years after everyone knows that it's a disaster, people are still borrowing a 100k for a degree that will net them 40k a year out in the real world.

By your definition most 18 year olds fresh out of high school have no or virtually no income and no skills, what do you propose they all do?

 

[brycejones]

Because they knew the loans weren't dischargeable before they signed. No one was tricked into borrowing the money, no one was guaranteed a result. It was the only mechanism that allowed those loans to
everyone knows that it's a disaster, people are still borrowing a 100k for a degree that will net them 40k a year out in the real world.

Link up where 18 year olds are told in the loan docs they are not dischargable in bankruptcy.

 

[TheVrolok]

Because they knew the loans weren't dischargeable before they signed. No one was tricked into borrowing the money, no one was guaranteed a result. It was the only mechanism that allowed those loans to be made.
The entire student loan program is, was, and ever shall be, a joke. Any idiot can borrow tens of thousands of dollars with no income and no skills. The schools saw an enormous influx of cash and raised prices accordingly, many of the students saw it as purchasing a ticket to success. It was always destined to be a debacle, and right now, years after everyone knows that it's a disaster, people are still borrowing a 100k for a degree that will net them 40k a year out in the real world.

You have MPNs that detail how these loans were not dischargeable in bankruptcy? I'll bet you don't.

These loans were also made before congress decide the banks needed more protection (on fairly baseless assertions for that matter).

 

[fskimospy]

What long term problem is actually fixed by it? That's the problem. It does literally nothing to address school costs or the next underlying issues with student loans.

This is true but giving every American $50,000 is probably good policy even if we didn’t change anything else.

 

[K1052]

This is true but giving every American $50,000 is probably good policy even if we didn’t change anything else.

A considerable stimulus for many Americans in debt is a not bad thing especially if the GOP is going to block structural reforms. It is certainly good politics to boot.

 

[fskimospy]

They read the loan docs, they signed the loan docs, they accepted the money, they spent the money, most earned a degree. Now after the purchase some have decided it was a bad investment, I feel sorry for those folks, as I've made bad decisions in the past as well. While I wouldn't be opposed to some relief in the form of very low or zero interest, simply calling it square isn't the answer.

Why not? Economics is not a morality play.

People make mistakes and land themselves in unsustainable debt all the time. That’s literally what bankruptcy is for. I see little reason why if someone takes out debt they can’t afford at 35 to start a business they should have those debts forgiven but if someone takes out debt they can’t afford at 18 to get an education that this mistake should follow them for life. Just a dumb idea from an economics perspective.

Again, I think the right move is to eliminate student loans entirely and shift to public funding of education but the idea that we should financially ruin people for life over dumb decisions they made at 18 is silly.