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Comment by rectang | Hacker News Reader

Skyrocketing student debt like you see in this chart does not arise because students today are less virtuous or moral than their predecessors:

https://pixel.nymag.com/imgs/daily/intelligencer/2018/02/09/...

It is the result of deliberate policy decisions, such as excluding student debt from being cleared through personal bankruptcy.

These deliberate policy decisions magnify the advantage that accumulated wealth has on success. Deserving outsiders are thwarted from fulfilling their potential in the so-called "meritocracy", so that by and large social mobility is stilled and American "meritocracy" becomes a first-order approximation of aristocracy.

When the policy decisions which have led to this crisis are so vast and immoral, why not consider an action as dramatic as forgiving all student debt?

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> why not consider an action as dramatic as forgiving all student debt?

What about folks who couldn't afford college because they actually had to work to make money? The ones who were busting their ass 60 hours/week while their better off (and less financially responsible) peers partied on cheap government money in college? If you don't think there is already a huge amount of resentment in a sizable minority of the "working underclass" on this point you are mistaken.

As one of those guys who had to forego college in favor of starting a career I'd be absolutely livid. A relatively spoon-feed population gets yet another handout? The below market rate debt that you could only get due to taxpayer guarantee wasn't enough? That's what the optics will look like to the vast majority of the country. Most of the country will never have the privilege that a kid with a 4 year college degree already has had in their life - debt or not.

Talk about creating winners and losers. Reading comments like this on HN (and other places with similar demographics) makes me realize how utterly socially disconnected as a society we are. It's downright scary at this point.

It doesn't seem to make much sense letting sour grapes direct policy.

For example, I eat healthy and exercise every day. I could complain that virtually nobody else does yet I'm effectively stuck in the same insurance pool as them. And I could use this to forever resent a single-payer system as well. But that's just silly.

Or something like "Ugh, I didn't eat pizzas every night because I had no health insurance. It's unfair if everyone gets healthcare for free! Think of all those pizzas I missed out on!"

> Or something like "Ugh, I didn't eat pizzas every night because I had no health insurance. It's unfair if everyone gets healthcare for free! Think of all those pizzas I missed out on!"

Since this proposal is debt-specific and retroactive, the analogy would be something like: "It's unfair if everyone gets all debt for prior health expenses repaid. Not their actual health expenses (however they were paid for), nor a reasonable health expense, but instead, whatever part of their health expenses are currently outstanding as debt."

> Talk about creating winners and losers.

We're fighting over crumbs. The meaningful wealth transfer in this country hasn't gone to the subpopulation with student debt, but to those well above them. I'd be equally supportive of dramatic action which benefits people who did not attend college.

But do you believe me when I say that?

Lots of people who were the intended beneficiaries of Obamacare think it wasn't for them.

> Reading comments like this on HN (and other places with similar demographics) makes me realize how utterly socially disconnected as a society we are.

Right back at you.

> It's downright scary at this point.

Agreed. But it's been scary for out-groups since forever.

> why not consider an action as dramatic as forgiving all student debt?

As someone who would like to see public education be free for future students, I’ll give you 3 great reasons why rewriting the past is an awful idea:

1. It would treat someone who worked throughout college (and possibly learned less and earned worse grades because of it) in order to borrow less - and someone who didn’t even attend because they couldn’t service the debt - the same as someone who borrowed heavily. It rewards a poor decision, one that others handled better.

2. It would treat someone who took on $30k/year in debt for a mediocre private school the same as someone who took on $10k/year to go to an in-state school (or nothing because they worked), or $30k/year to go to a top private school. At least 1 of those choices is a low-return decision.

3. There’s a lender on the other side of every transaction and they may not have had anything to do with the policy decisions you disagree with.

Finally, the paper covers many possible implementations. If by “forgiveness” you mean that the government should negotiate a payment to lenders (so taxpayers are paying off everyone’s loans), here’s why that shouldn’t happen. There’s a much stronger argument that future education from public universities should be free. Until that happens, given finite resources, any money that would go towards debt should go towards future students, not retroactively rewarding what may well have then been a poor decision. Pay/fund public colleges, not lenders.

Basically, any retroactive move rewards a lot of people who made what were then poor choices, and penalizes those who didn’t. Focus on making (public or otherwise verifiably cost-effective) education cheaper or free for future students.

Also, here’s a deep link to the paper PDF: http://www.levyinstitute.org/pubs/rpr_2_6.pdf

the point of this article is that moralizing about who "deserves" it more is a waste of time that is destroying the economy. Is it really worth it to hold back everyone else just so you can finger wag at people that wern't responsible?

> the point of this article is that moralizing about who "deserves" it more is a waste of time that is destroying the economy

That was arguably the point of the NY Mag article, but the paper that the article is based on goes a lot deeper, and doesn't claim that student loan debt is destroying the economy.

> Is it really worth it to hold back everyone else just so you can finger wag at people that wern't responsible?

The last part of my comment addresses that. If you believe that (at least cost-effective) college education can have a net positive impact on the nation's economy, as I also believe, then put the money one would put into eliminating debt into making future public college free (or subsidized in whatever way maximizes impact for the subsidy).

Since they're both very expensive changes, the chances that both can happen is unlikely. Moreover, until at least some college is free, future students would still need to borrow. They'd re-create the same debt problem.

(Less important: it's not "finger-wagging" to not want to change the game underneath someone. It's trying to create a set of circumstances that reward good choices. Large swaths of our society exist to try to make incentives reward good choices.)

Why are student loans special in this regard? Is the reason different than your standard communist/socialist talking points?

Expecting people to honor their debts isn't finger wagging.

The only poor decision made was for the taxpayer to offer student loans in the first place. This necessitated taking the loans in order to be competitive. Canceling existing student debt does not "reward" people who took the loans, it simply nullifies the original exploitation. The only person being "penalized" is the taxpayer who deserves it for handing out $100k loans to 18 year olds.

No, other poor decisions were made. Yes, it rewards people who took out tens of thousands of dollars in loans to prolong adolescence at college when others didn't make that decision or enjoy that experience. You seem to think people with debt are the only ones at a loss here.

> There’s a lender on the other side of every transaction and they may not have had anything to do with the policy decisions you disagree with.

Part of the argument was the government owns 90% of outstanding student loan debt. Don't know how true this figure is but that's their claim.

One would think if this were a viable plan Helicopter Ben would've done it when things were really bad since they were giving away money left and right to "kickstart" the economy -- I personally got like $4200 for nothing due to the way I was discharged from the reserves.

> Part of the argument was the government owns 90% of outstanding student loan debt. Don't know how true this figure is but that's their claim.

At least according to http://money.cnn.com/2017/01/18/pf/college/navient-sallie-ma..., by borrower count, roughly 50% are federally backed and 50% are private.

However, even for the federal loans where taxpayers are the lender[1], there's still a choice whether to retire the debt or leave the debt as-is and fund something else (like tuition for future students).

[1]: More on federal loan funding, ie, which government entities are actually the lenders: https://www.loan.com/student-loans/where-does-funding-for-fe...

The "government owns 90%" statement is in the article, in the first paragraph after the first chart.

Thanks. I just edited my comment.

> It rewards a poor decision, one that others handled better.

Do you believe this about health care as well?

Some people exercise and eat healthy every day yet they share the same scarce medical resources as someone who smokes and is overweight. Those people may be in the same insurance pool and may pay the same for those services.

Aren't we rewarding the poor decision? Why does the guy working his ass off in the gym every morning have to pay for obese people? These questions sound the same to the ones you're asking, except in this case, it's just money and education instead of public health which is far more grave.

Good question. Addressed here: https://news.ycombinator.com/item?id=16347225#16347792

Basically, making changes for the future (a shared healthcare pool, subsidized tuition, or anything else) is different than retroactively adjusting an arbitrary subset (only outstanding debt, only from tuition) of the past.

Student lending wouldn't work if loans were simply dischargeable in bankruptcy. The deliberate policy decision here was to ensure that tuition lending would be available to pretty much everyone regardless of cosigning family wealth.

Before the HEA, loans were dischargeable, but only after being in repayment for 7 years. As a practical matter, young pre-family college graduates in the workforce couldn't discharge loans in bankruptcy.

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