Sanders to propose canceling entire $1.6T in US student loan debt
m.stamfordadvocate.com
m.stamfordadvocate.com
Bernie essentially wants to forcibly take money from everyone who was financially responsible enough to save and pay off their loans early, or who like me worked their asses off through college to be able to graduate without debt, and use it to pay those who were irresponsible enough to dig themselves into a massive debt hole.
I have little empathy for people with student or credit card debt. You took a deal knowing the terms full well, you have no right to complain that you owe the money you already spent but never earned.
EDIT: Apparently down voters on HN are against financial education in our public schools.
I paid 264k plus interest. It’s bullshit to tax me further to pay off loans for people who can afford to pay it.
And his projections are pants-on-Fire stupid because he doesn’t account for the fact all high freq trading would move offshore if they taxed trades .5%.
Sanders is either an idiot or a bullshitter.
Moreover this logic seems to assume HFT is useless. It's a source of liquidity. Everyone who directly or indirectly invests in the stock market ends up paying for higher liquidity - it's just a case of how easily you can see it.
Except that 99% of the people that attempt to do this via public service are rejected. Effectively, this program does not realistically exist for 99 of 100 people that try to do it.
That's not quite true. The part that gets wiped out counts as taxable income for that year. In other words, if 100k of loans go away you now have a 10-30k tax bill depending on your income and state. I support closing that loophole, but otherwise I agree that it's a pretty fair system.
Of course, then there are the people who chose not to study at university in the first place for financial reasons. I don't think there's a completely fair answer.
A simpler, fairer proposal: give _everyone_ who attended college in the last X years $Y per year attended. At least that way the good actors aren't punished to subsidize the bad ones, and everyone is still drawn towards lower cost programs and valuable degrees.
"Financially responsible" has become a euphemism for "rich and assumed to be responsible".
I know a bunch of people who are not particularly responsible with their money (splurging) but they are beneficiaries of a lot of unearned income (interest, dividends, rent) and I have yet to hear a coherent argument for why this unearned income shouldn't be taken away and used to fund the kind of education that improves the overall wellbeing of society.
This is the point where somebody tells me that those people don't have enough money to fund this kind of thing (bullshit), or that Bernie won't target them he'll target you (bullshit) or that if you tax them they'll just run away to Panama (there was a study that demonstrated that when their taxes are jacked up they didn't even run away from New York to New Jersey).
They don't understand how different the state of primary education in the US is. Two school districts within 20 miles of each other are wildly different.
This us vs them reductionism is seen in the early days of any communist system (the mass killings come a bit later)
This isn't us vs them - this is us vs... us. Everyone should want to allow people to access education.
Emphasis mine
At some point in the past, a person (possibly an ancestor) took risks to create wealth. Part of the motivation is to later have an easy retirement or to support one's children. You'd kill that motivation, causing people to avoid the risks which would no longer create wealth, and thus prevent things like start-ups.
Why?
It's treating the "right to untaxed unearned income entitlements" like interest, dividends and rent as intrinsically more fair ("financially responsible") than free education that bothers me.
While we're on the topic of fairness...what about those people who will not go to college or send their kids there? Is it fair that they're forced to pay for other people's education?
I suspect that many students with less family wealth tend to take on less student loan debt, even if they would be accepted to the same college education opportunities. I would call this “financial responsibility,” and I would consider a blanket student debt forgiveness to be quite unfair to them.
The last thing these people want is meritocracy, because it forces them into competition with poorer people for the most prestigious and high status jobs.
If not having to worry about graduating with a crippling debt load is a privilege everybody has rather than a privileged elite, then the competition that privileged elite faces is greater.
>I suspect that many students with less family wealth tend to take on less student loan debt, even if they would be accepted to the same college education opportunities. I would call this “financial responsibility,”
Then you are also using "financial responsibility" as a euphemism for rich.
I am saying the opposite. The financially responsible ones I was talking about are the less wealthy people who choose to take on less debt because it would be a huge risk.
Just to be clear: 1) college debt is enormous 2) on balance it is worth the risk given future earning potential 3) it's not clear to the average person let alone the average 18 year old whether the gamble is correct.
This is a bailout, and the banks / schools are the beneficiary. No more loans that will never be paid back. Schools get every inflated dollar from the last two decades. Instead of taxing everyone, shouldnt the schools who took the money be paying in for everyone they trained who is underpaid?
https://thehill.com/opinion/education/442497-colleges-need-t...
Bernie wants to take tax money and work out what the best thing to spend it on is. It's disingenuous to imply it's any more taken by force than taxes already are. Significant portions of your taxes already go towards people who have, by your definitions, behaved irresponsibly.
I don't know whether this is the best use of that money -- whether there's something else that would have much better effects on welfare and economics in general.
I also don't have any student loan debt from my university degree, though it's because I grew up in a country that doesn't charge money for education.
The system of being unable to discharge student loan debt via bankruptcy seems brazenly corrupt, though, such that demolishing the whole thing may be an appropriate response.
Your country almost certainly does charge for education, you're just shielded from the immediate cost.
>The system of being unable to discharge student loan debt via bankruptcy seems brazenly corrupt, though, such that demolishing the whole thing may be an appropriate response.
Alternatively, going forward we could allow the discharging of student debt in bankruptcy with the knowledge that this would prevent many useless degrees from being funded and correspondingly would result in a large decrease in higher education spending. I'm fully in favor. For far too many people college is merely an extended adolescence and creates perverse signaling issues when it comes to getting a good job. As a nation, we should be more mindful of the degrees we decide to fund and the amounts dedicated to such degrees. Your nation, which "doesn't charge money for education," is almost certainly doing this.
Looking at it from economical standpoint only is just very narrow view. Education is not training for a job. There is value in knowledge. Even if you think only about economy it's very hard to predict what will be profitable.
Dont forget that if someone is studying "useless degree" than it's enough burden to know you might not get job in that field.
I think it's wonderful if anyone has a chance to have a try at higher education.
Also as many countries show education doesn't have to be expensive and putting financial limits on them keeps them efficient.
Maybe so, but it's also not something I'm willing to pay for or subsidize as a tax payer. Sitting around reading books all day would also be enriching but no one is claiming we should pay people to do that with tax dollars.
Bernie might leave me the money and let me work that out for myself.
I mean, look, I get that we actually need a government, and that we fund it by paying taxes. But every time someone like Bernie comes up with some grand new thing for the government to do, they take more money from me and from you to do it with. (Yeah, I know, "we're only going to take money from other people. That never actually works.)
Government programs aren't free. They cost you money. So the question I have for people, when I hear something like Bernie's grand ideas, is this: Given that you have to pay for it, how much more government do you really want?
Education is in a death spiral where costs increase and effectiveness decreases. Do you think throwing more money at the universities will make that better, or worse?
I agree that whether it's a good idea depends on that answer. I'm rejecting a stronger statement you made, about how any government program is suspect "given you have to pay for it".
In the cases of education and healthcare, it seems to me that there has been a decrease of governmental involvement (compared to other nations, if you like, or even internally to our own nation in the case where bankruptcy discharge became disallowed) that should not have happened, and that decrease is costing dramatic amounts of money. You can't tell whether a policy is a good idea just based on whether it expands or contracts the role of government. We can be suspicious of government under-involvement too.
Back to fixing the education more-cost-less-results spiral. I agree that what this proposal will do will depend on the specifics. But this proposal, if it helps, probably will do so only accidentally, because it doesn't seem to be attempting to do any such thing. It's trying to address the cost to students, and that's all.
To address the overall cost problem, it has to do something to incentivize universities to be more efficient at delivering education to students. If it was something like "If you've got an e-learning way to get to a full diploma, we'll pay you (the university) enough that you should be making decent money at it, and we'll give the student a computer and broadband if they don't have it", that would incentivize the university to have such a program, because money. And it could scale easier than in-person, if implemented well. Even better, you could now have competition between universities based on quality of instruction vs. odds of passing.
I'm sure there are holes in that approach, but I think it's at least somewhat in the right direction...
the issue is that not every student makes the cut and not every university has the same ROI, whether because the degree itself holds little value on the job market or because the degree costs are too high to ever recoup.
another question is do we want to finance liberal arts degrees that traditionally have a bad ROI or do we want only the wealthy to engage in those sectors?
it's not a simple question, and the angle "who pays for it actually" seems reductive.
Is there any chance this will really happen?
If the answer is no, don't waste your precious keystrokes.
If the answer is yes, ask for more: not only they cancel the existing debt, but they also give you your payments back.
Problem solved!! :)
I am no fan of Bernie's but this description is completely wrong. A transaction tax would have little to no impact on ordinary savers/investors. It would have zero to do with credit card debt. It would at most represent a slight redistribution from assets generally controlled by the 0.1% to the top 50%.
The place where that tax would pull from in the financial system is currently mined by HFT bots. To the extent that this impacts you, you are already being skimmed by them, you just don't know it.
The financial system is REALLY REALLY big. Hundreds of $T change hands DAILY.
Right now, Millennials are on the hook (carrying the debt). They're also now the largest voting cohort [1], having edged out Boomers this year [1]. Do you think they're going to stay on the hook? It's unlikely (~1.6 million Boomers die each year, about 1.3 percent of the Boomer cohort); Millennials will continue to reshape state and federal government each election cycle.
I imagine the cohort of voters who took on large amounts of student loan debt and successfully paid it off in a short duration of time is exceedingly small (but vocal!). Life isn't fair.
[1] https://www.pewresearch.org/fact-tank/2018/03/01/millennials...
The amount of wealth- assets- outside of their houses that taxpayers who are not in the .1% hold has become an increasingly tiny fraction of the overall total asset base- which VASTLY exceeds the tax base that people are accustomed to thinking about (taxes on their income).
Taxing the trading of these assets between one huge asset holder and another involves flows of money that generally speaking have nothing to do with most people. An analogy is- you're here in a nearly empty swimming pool a block from the beach and Bernie is talking about bringing in a pipe and a desalination plant to refill it, because there's a lot of water in the ocean.
Regarding the budget, to a first approximation, these loans do not have an impact at all. Where the Govt actually holds the asset, it is merely a fiction on the balance sheet. There is no "student loan interest payments" line item on the Treasury's income statement (https://www.fiscal.treasury.gov/files/reports-statements/mts...). Where the govt is a guarantor, then there are private entities that do expect to be paid, and it would be good for the govt to not be put in the position to have to pay them without another source of revenue.
And it is absolutely true that from a particular perspective a transaction tax can provide an extremely useful source of revenue in the future, perhaps even offsetting personal income taxes.
A transaction tax has been tried before in Sweden[1], had disastrous effects on their stock markets, and had to eventually be repealed.
I don't think most people appreciate how efficient the US markets are today, relative to what they were like 20 years ago. HFTs do make a lot of money, but its a extremely small amount compared to the total size of the financial system [2], and it is decreasing rapidly each year as the competition increases.
If we impose a transaction tax, market makers who are already on razor thing margins will increase bid-offer spreads, volatility will increase, and it will become way more expensive on average to trade. There's a reason why you can trade virtually for free on your personal account today, vanguard is able to offer you 0.1% in management fees, etc. These things did not exist 20 years ago.
Its a common myth that HFT's are "stealing" money from investors, but if these firms were not in the markets, it would almost certainly be detrimental to the ordinary saver/investor.
Bernie definitely wouldn't be able to raise nearly as much money as he would need from this tax, and it would hurt the economy. Him and his advisors know it, but he just wants to pander to the anti-wall street sentiment while also making it seem like his proposal isn't completely fiscally irresponsible, which it is.
[1] https://en.wikipedia.org/wiki/Swedish_financial_transaction_...
[2] https://www.ft.com/content/d81f96ea-d43c-11e7-a303-9060cb1e5...
But these particular counter arguments, such as they are, miss the forest altogether.
Sweden is...not the US. It's basically Ohio. Trying something in an Ohio that is not on the dollar does not tell you anything.
Some kinds of efficiencies in the US system are laudable, others are deeply problematic. Solving for e.g., humans trading on their personal accounts is a demonstrably terrible idea from a retirement savings perspective at scale.
The fundamental point is that in the US and in most of the world there is a deepening imbalance between capital and labor. And labor is going to have its say unless capital figures out how to share.
There are lots of ways this can go horribly wrong. Lots of current events rhyming with bad moments in history. Trump is this gone wrong. Bernie would be too.
A redistribution of wealth is coming, one way or another.
Then there is the issue of creating more imbalances. We send far too many people to college. Germany, for instance, sends 1/3 of its population to college (which lasts only 3 years and is quite strict) and 50% to trade schools. We have no trade school program and tell everyone to go to college, yet we struggle teaching useful skills to people. Something is broken in our college system, costing twice as much as the OECD and yet not doing a good job of producing skilled workers. This is not a system that should be further subsidized, rather we should spend much less on our universities and divert resources to trade schools. A bloated, dysfunctional system is not deserving of a bailout.
Then there is the basic issue of fairness. Colleges have huge endowments, employ excessive number of administrators in make work jobs and hold substantial real estate holdings -- these should be depleted first in any bailout of the system before we start tapping taxpayers. If a college is graduating large numbers of students who can't repay their college loans, that college should be liquidated as it is socially harmful. Liquidate the endowment, sell off the real estate and convert it to trade schools.
Finally, college educated kids are pretty privileged. We should focus on those who did not go to college.
On a personal note, my family did not have a lot of money. I was a decent student and had good SAT scores -- I got lots of brochures for Tulane, Brown, and other universities that I knew I couldn't afford. Instead, I lived at home and worked, and went to a community college on full scholarship. I got good grades and then lived at home and went to the local state school, also on a transfer scholarship. I worked. Then I went to an "elite" grad school, also on scholarship. I graduated with no debt. I could easily have gone to a private uni and been saddled with lots of debt, and then maybe clamoring for a bailout. But that would be irresponsible. There are plenty of low cost community colleges and state schools that offer scholarships to even half decent students. I am not looking to bailout anyone who made worse choices. I understand that people can suffer misfortune, in which case the school they went to should bail them out.
Would a state funded levee system be a "fuck you" to people who lost homes in the flood that prompted them? It's being paid from their taxes, after all.
Is the chicken pox vaccine a "fuck you" to people who had it when they were young before it was available?
Are surgery advances a "fuck you" to people who previously got an amputation?
Was the introduction of the GI Bill a "fuck you" to everyone who served in the armed forces being it? After all, veterans pay taxes.
The idea that people deserve this and it's not fair to those who already made it through seems like a purely emotional reaction, and an extremely reductionist one, considering the dramatic complexity of higher education's actual value and how much risk is "worth it".
It's absolutely possible to pick an economically viable major, go to community college, go to a trade school... It's also absolutely viable to take on loans and pay them off through hard work. How important is that degree to you? If it's very important then expect to sacrifice, almost everyone else is.
I know so many peers with degrees of varying quality that spend their money on international travel, eating out almost every night, living in the most expensive cities in the world yet they complain about their student debt constantly. Now they're presenting themselves as true victims and acting like anyone who doesn't support this bail out is a hateful wretch.
I'm sorry but I worked hard and made good decisions and I absolutely expect the same level of competence from my fellow citizens. People make dumb decisions all of the time and you have to learn the hard way that your life is your's and there's no fairy godmother that will come waive your poor choices away.
MAGA, amirite?
I do want things to be different though, and it starts with people taking on a lot more personal responsibility. Our whole society needs to reintegrate that concept into who we are and how we're raised. A lot of people are very quick to blame others for their mistakes and look to them to fix their problems.
It is, however that may be, fundamental to the modern conservative position on a wide range of issues.
> Otherwise, why not ignore anything that can be placed under the umbrella of personal responsibility?
That is, indeed, the point of the argument. (It is, of course, less consistently applied to corporations and the investor class because “job creators”, but still...)
> The idea that people deserve this and it's not fair to those who already made it through seems like a purely emotional reaction,
It's not, it's cynically manipulating emotional reactions. The motivation is more coldly considered defense of the privileged position of the already successful than any kind of emotional reaction.
GI bill is a disingenuous comparison because those people made pretty tremendous personal sacrifices in service of the country.
Why is the GI bill comparison disingenuous? The veterans who served before the introduction of the GI bill made exactly the same sacrifices as those who were eligible for it, and yet their taxes sponsored it. The fact that one group was put in personal danger doesn't make the comparison invalid.
And the GI bill comparison is disingenuous because it's disgusting to compare the millennial English literature major whining about being unemployable to men who fought and died in Europe and the Pacific. It's not a comparison of pre-GI bill veterans to post-GI bill veterans that you are actually making.
Sorry, is it still "disgusting" to compare those English majors "whining" to American war criminals that murdered 2 dozen Iraqi civilians [1] and then faced no real punishment? Why do they get to reap the benefits of the G.I. bill? That isn't even getting into the dozens, maybe hundreds of war crimes committed by American soldiers that then get to go home and go to college for free. Why do my tax dollars have to pay for some overgrown manchild with the emotional intelligence of an alligator snapping turtle to go to college because he couldn't make it in any other field than killing people? Explain to me why I should support and reward murderers.
By your logic, the GI Bill incentivizes young people going to fight in jingoistic US wars (e.g. Iraq, Afghanistan, and hey look, maybe Iran) and somehow you think that people studying English literature is more morally hazardous?
See how easy it is to derail the discussion when you aren't interested in actually talking about the topic at hand?
That's precisely the comparison. You can't remove something from the argument space simply because it was a worse situation, that's a textbook logical fallacy. The thing being compared here has nothing to do with the sacrifices of soldiers, and everything to do with a specific proposal: a group of people being asked to contribute to the greater good via a benefit they were not able to have.
By the way, reducing this to "millenial english literature majors whining about being unemployable" simply makes people stop listening to you, because you clearly haven't been listening to them. Insulting, belittling, and making assumptions will always harm your point.
We as a society need to push the next generation up, not bitch that they don't have it as hard as we do.
... I have little empathy for people with student or credit card debt. You took a deal knowing the terms full well, you have no right to complain that you owe the money you already spent but never earned.
What a load of horse shit. Once student loan debt couldn't be discharged through bankruptcy it fell to the perils of moral hazard. You want to pursue an English Literature degree at Harvard, by all means proceed, if that person footing the bill[2] then has skin in the game as to whether that debt can be repaid.
My solution to the student loan crisis, federalize all Sallie Mae [1] loans, let the lenders take a bath like when Washington Mutual was federalized during the Recession and then let a real market start underwriting student loans.
[1] https://studentaid.ed.gov/sa/ [2] Edit: original was person/lender
This is some relevant background reading for anyone who thinks Bernie's tax revenue numbers are realistic.
You have to wonder what the second-order effects of the options trading market disappearing (or being severely reduced in volume) would be.
I know there are some pretty important businesses that depend on options to hedge against commodity prices. Airliners and oil come to mind.
https://www.investopedia.com/financial-edge/0210/did-derivat...
https://www.thebalance.com/role-of-derivatives-in-creating-m...
1. According to the article Bernie is proposing a 0.5% tax on trades, and a 1% tax on bonds. Given that ~half of all Americans invest in the stock market[0] (and given how Wall Street has acted) this doesn't seem to be a big issue in my opinion (obviously others will disagree with me).
2. I do have empathy for those who have taken on such debt, because such debt should not in aggregate be so large as to impact the economy adversely (which it has, and will continue to do via consumer spending etc...). Additionally, I know very few, if any teens who are able to understand the intricacies of debts/loans, let alone adults(I'm sure this argument will be mis-characterized).
It may sound grandstanding, but I genuinely believe that we should care more about the medical, financial, and social/political well being of others in this country, and I think this is a good first step for that.
0: https://money.cnn.com/2017/10/20/investing/trump-stock-marke...
And I'm certainly glad you saw that my other points were reasonable and saw fit not to refute them at this point. :)
However, even under this proposal I would be a contributor as I invest in the stock market, which is the entire point of taxes/a community(it's literally giving back to the community/the cost of living in a society). So no, I would contribute my fair share, and arguably get less out(compared to others) since I've already paid $10k+, and I have no problem with that, at all.
Like I said, I'm happy to help others given the position that I'm in, which is better than some and worse than others.
As I argued in my previous post, taxes are not altruism they are a cost of living in society, it's why we have a progressive tax system the more one benefits from society, the more they pay back. I do argue however that I'm more than happy to pay this tax so that current/future generations are better off, which doesn't seem to be a point that you've refuted at all. It seems that your argument is that because you struggled, everyone else should have to as well which seems fairly draconian to me(and ignores a basic sense of fairness, depending on how we want to define fair), and also seems to ignore the potential struggles of others and any questions of why they took on such debt (but that's another question for another time). I have no idea why you keep framing this as a means of "takers" vs everyone else, when I've kept bringing this back to the more nuanced point that yes I would benefit, and yes I would also contribute. It's also strange to me that you haven't seen fit to offer an alternative or any kind of compromise, but rather dismiss the whole proposal out of hand.
I suspect that you're going to come back to the point/continue belaboring the point that "you're a net taker"(while conveniently ignoring any other points) as if somehow: A. The only point of society is for no one to benefit from it. B. The only point of society is to make a profit. Neither of which is true, because frankly everyone "takes" from society in one form or another to varying degrees, we do this because everyone should have a reasonable shot in life. It seems unreasonable to ask people who are just starting out, to be potentially hundreds of thousands of dollars in debt in the hopes of pursing them for the rest of their lives to make money. This is a question of lives/quality of life versus money, you seem to be fairly square on the side of money which is certainly a position one can take. Generally the point of society isn't profit, but to try and make the society a better place, and sometimes that comes at a cost, or with things we disagree with(I disagree with ag subsidies, but it likely helps rural farmers somewhere, so I'm OK with that in the end).
Just because someone has paid off their college debts does not mean that the effects of that debt have ended. Obviously the effects of that opportunity cost still exist. That money could have been spent on other things, like a mortgage. So the idea of forgiving all current student loan debt without any consideration of people who are still living with the effects of their previous student loan debt is pretty crude, and I think there’s a strong argument for calling it blatantly unfair.
> financially responsible enough to save and pay off their loans early
What if you are financially responsible and you don't have enough to save and pay off early?
> like me worked their asses off through college to be able to graduate without debt
I did too. How much debt did you have? As a college student, I could pay off $30k in debt with a few CS internships. No number of Google summer internships could pay off $200k in debt, though. Especially if you tack on more debt for medical school. Do you think it's feasible that there are people who bust their ass and still can't graduate without debt?
> irresponsible enough to dig themselves into a massive debt hole.
This is the real part I question. Who dug themselves into the hole? The parents? The kids? What did you know at 18? If you can barely drive, vote, or drink, how could you possibly predict the future that your financial choices might cause ruin to you and millions of others of your generation?
Can you, at the age of 18, as the world is telling you to go to the best college you possibly can, truly grasp the gravity of the decision you're about to make?
> I have little empathy for people with student or credit card debt.
Then you have little empathy. At 18, you didn't know the terms "full well." Most kids were duped. Most parents were fooled. The news said "if you get a college education, you're going to make more money." It still says that. So they make a connection and they don't question it. Even if you have to go into debt, you still make more money. The problem is, does making more money actually net you more money. Not a lot of people really thought that through.
So that said: is that worth punishing them? Is punishment the right thing? Why can't we look at this from compassion and caring, rather than punishment and justice?
A generation was tricked into a bad ride. My generation. I graduated (with debt paid off in a year) when the economy tanked, in 2009. It couldn't have gotten worse for me. And even though I'm part of the cohort that should most want to have everyone suffer the way I did and pay off debt, I don't.
Cause I don't want suffering. For anyone. Even if they get a better deal than me.
That's how progress goes: we give the younger ones a better chance than we did.
Education shouldn't be slavery. You shouldn't want this for others. This is a way out, and it likely won't come to fruition this way, but it is a way towards compassion.
> That's how progress goes: we give the younger ones a better chance than we did.
Culture matters. Instilling a sense of personal and financial responsibility in the next generation is the best thing we can do to help them. Giving the most irresponsible people of our generation a massive handout is the opposite of that. Think about it, if an entire generation of people who came before you were absolved of tens (or hundreds!) of thousands of dollars of bad debt, why on earth would you think it was a good idea to pay off your debt and instead not just wait around for the same handout?
So, in that light, I would say that I don't think all debts should be cancelled but I do think we should remind ourselves that during the New Deal there were plenty of people who said that it would be unfair for the government to fix jobs and social security for lazy bums. We don't have to go to either extreme, cancelling all debts or showing no sympathy what so ever.
1. Promote vocations and vocational schools (some people are better off here). It could be the traditional HVAC, welder, nurse or new types like front end development, aspects of IT.
2. Price loans according to prospects. Getting a loan for literature or writing should cost more than a loan for biology, informatics or medicine. Obviously predicting future demand is imperfect, but we also know what majors will likely have low demand into the future.
Default rates on student loans are about %40. Home mortgages are about 4% and auto loans are about 6%, for comparison.
I've lived this too. My family was able to send me and my siblings to college on our own dimes. We worked our butts off to help the family pay for our schooling. I spent many hours after school in the family business, and many summers too. I had less of a teenage/childhood due to this. I contributed my income after graduation so my siblings could get through without debt too. I sacrificed my time and money for the betterment of my family. My family did the same for me.
Hopefully, I have proven that I have sacrificed enough to be considered a real voice in this conversation.
I would LOVE to cancel all these debts.
I've seen my friends and other family members struggle with these $800/mo debts for nearly a decade now. It does nothing for nobody but some rich jerk. I'm tired of seeing the people that I love struggle and be punished for trying to help the world. Yes, fine, I'm better off because of my sacrifice and my family's. And yes, fine, wiping out that debt would 'invalidate' that sacrifice, whatever that means. But I'd much rather sit on my porch my friends and drink a beer, rather than sit alone on my porch and drink 2 beers while my friends drive for Uber on the weekends.
Enough is enough. This pain is unnecessary and thus is cruel.
I also take offense to general tone of liberal policy these days of "giving" something away, or making something "free." Someone has to pay for it. There's a lot to be said and agreed upon for the common good, but there's more to be said for just paying your own damn bills and stop waiting for someone else to rescue you.
[1]. https://www.nytimes.com/2010/05/29/your-money/student-loans/...
I didn't get any student loans when I went to college, but I see the economic benefit of freeing up that revenue to be spent else where. This is just an indirect way of saying that turning education into an "investment asset" for banks was a mistake.
Should we wipe out credit card debt next? Surely that's more of a burden than student loans since you can't defer payment and the interest rate is higher. How about mortgages, hundreds of thousands of dollars in debt is definitely "suffering" levels.
Also don't even get me started on how we turned a literal requirement to survive (housing) into a "investment" asset (mortgages).
It's crystal clear right now that "an interdisciplinary degree in religious and women's studies" has little to no economic value. That's always been the case and if you took out a huge loan to get that degree, you made an obviously poor financial decision that you alone should be on the hook for.
Nothing disinenguous about it when 'student loans' can be used for 10s of thousands of dollars worth of 'cost of living' type expenses. I refuse to take any student debt proposals seriously until someone puts forth one that excludes non-tuition expenses.
I agree it's a great question of what should be done but I'm mostly happy to reframe Sanders' proposal as a minimum.
Further reading - I'm a big fan of the schedule idea: https://www.peoplespolicyproject.org/2019/04/23/providing-re...
No, your state tuition doubled because of rampant spending increases underwitten by a limiless supply of student loans. Your state may have reduced funding somewhat, but that's not the primary cause of higher tuition.
Ask your state school system what it's employee:professor:student ratio is now vs 10 years ago. How many new buildings have been built in the past 10 years? And how do the construction costs compare to those built 20 years ago?
I'm not saying you don't have a point (college education has a cost), but on some level it's really just an argument for never making anything better.
I prefer to think, "Are we really so backwards and impoverished as a society that we don't even have the resources to educate our citizens?"
No, they are presumably angry because they are still paying for being responsible enough to pay off their debt in the form of opportunity cost. If they paid 100k off in debt in the past, that's money they don't have now to invest or spend.
Also, having taxes imposed on you for something you didn't get to benefit from at all (but easily could've) is pretty angering.
That's good news! That means the system is improving!
i.e. if two people had identical student loan balances with $500 minimum payment per month and one person decided to pay $1000 monthly to pay it off quickly and the other person paid $500 and YOLO'd the other $500 monthly into instagram vacations, takeout food, Bitcoin at 19k, etc, you are effectively subsidizing the second group of choices.
So the fact that students are not able to repay the loan is telling you something important -- university education is too expensive.
All of this is above and beyond our existing subsidies of 10K/FTE -- which in many OECD nations would be enough to fully fund university education.
So like healthcare, this is a cost crisis rather than a government funding crisis. You do not decrease costs by increasing subsidies. That is not making the situation better for anyone. Subsidies may be part of the solution, but we are already subsidizing enough, what we are not able to do is control costs and increase the value of the education for our students.
And the fact that in the past, students were able to go to university and pay off their loans without it being a national crisis but now they can't does not mean things have gotten better, it means things have gotten worse.
We need to get back to a state where university education can be provided cost effectively, rather than continuously increasing subsidies, because as long as universities can charge whatever they want and know the government will step in and pay for it, then that is a recipe for declining value, not increasing value.
The parents had their children take on student loans, and bought themselves BMWs at the same time.
Now these kids graduated, are (predictably) struggling to make ends meet, and they may not be able to pay back their student loans.
Should the loans be forgiven in these case, as well? Who decides when and when not?
Also, the loan money did not only go to pay for tuition - I saw students doing homework on their top-of-the-line MacBooks sipping their $4 lattes all day long. Expensive vacations in some cases, too.
edit: why does it make sense to be angry about this - it's not about you nor affects you except marginally. i will never understand why people get upset about other people getting lucky. like what a waste of a nice day.
Someone has to pay for that $1.6 trillion. So the GP is going to get it twice. First by having to pay off their loans and then again by having to (help) pay them off for everyone else.
Are these debts using people's ignorance about financial terms to make money? AKA Are they predatory? - If so then that's a bad thing.
You might not care - but I care about the well being for people I'm sharing a society with. I don't want people taken advantage of. I don't want education to have capital associated with it. I want people to be able to get education without "oh will i be able to pay off the loans for this education."
So you might think you did a good job working your ass off affording education. People like Sanders and I think that getting a quality education should be completely unrelated to "working your ass off."
I've also worked my ass off to afford my education. I still think it's a bad system and I don't care if my taxes are rerouted from killing people in foreign countries to helping my society get stronger and better.
Why do we want to preserve this system that doesn't allow everyone to have a fair chance of progressing? Why does education need to be artificially limited?
It's not difficult to imagine a world where education isn't limited by the amount of money in someone's bank. Think about all the possibilities if everyone can go learn whatever their heart desires without worrying about paying something back?
They can do that online and or in a library. Once you start paying someone to teach them, it starts costing money and that money has to come from somewhere.
I think most people who also think they'll have kids would also be fine with a percentage point or two increase if it means there won't be any more loans.
Denmark used 13% of its combined government budget on education in 2017. 44% was used on welfare.
Permille combined public budget of Denmark in 2017 (in Danish): https://www.dst.dk/da/Statistik/bagtal/2017/2017-08-31-hvord...
Translated: https://translate.google.com/translate?sl=da&tl=en&u=https%3...
Imagine asking the tax payers to pay students' Ivy League education tuition fees. Tax raises would be unavoidable.
If any school wants to be free, they need to implement the federal pay bands.
Get rid of subsidized student loans as well. There's no reason we should be subsidizing predatory tuitions.
They are predatory by definition, since they involve interest (usury).
It could be made fair that the debtors only pay back what they owe, without interest.
If it wasn't taxable income, you'd incentive students taking unnecessary loans senior year so they could get tax free income the subsequent one. Which accomplishes nothing but reduced government revenue and additional government money going to loan servicers.
> These would never pass congress, even if Democrats controlled both chambers with super majorities.
Issues with the ACA are hardly limited to the Medicaid expansion. And labeling it as “something to pass quickly” does a disservice to the negotiation involved in the bill and how it almost didn’t become law in the end when the democrats lost their 60 seat majority in the middle of final negotiations and passing.
Not sure how anything new gets passed though. Even if warren or Bernie win, it’s unlikely they get 60 senate seats.
This also assumes that college is necessary at all, and delays workforce entry.
And I have a hard time thinking of someone more qualified to lead the Dems -- you've got the foot-in-the-grave (Biden, Sanders), the foot-in-the-cradle (Harris, Buttigieg, O'Rourke, Castro), the memes (Yang, Gabbard) and the anaesthetic (Hickenlooper, Klobuchar, Delaney etc). That leaves Elizabeth Warren and Cory Booker.
Does she? Because this seems extremely unrealistic:
Single payer healthcare is similar.
I still remember Chilean right wing commentators declaring free tertiary education as unrealistic not that long ago, before it became reality. Once it became reality it was declared "unfair". America will be no different.
It can even be done without Congressional approval.
> "the Higher Education Act in 1965 gives the secretary of education the power to write off federally owned student debt unilaterally, under the “compromise and settlement” provision. Doing so would wipe out an enormous financial burden on the working and middle classes overnight. The Department of Education could also purchase the roughly $64 billion in privately held student debt, then use the same authority to write it off."
https://jacobinmag.com/2019/04/student-loan-debt-forgiveness...
I find this disgraceful. Most of these loans were taken by students and co-signed by parents / guardians. Meaning everyone knew what they were getting into. Presumably, because the parents / guardians are on the line if the students can pay their debt, they would / are providing guidance (i.e. thinking of the long-term impact).
Buying votes is the hallmark of American politics, usually with political favors; but this is a tad more than normal.
I'll take my $70k in loans over selling my soul.
https://en.wikipedia.org/wiki/Moral_hazard
Who would pay toward their current student bill, if there were any chance of this passing? And what is the incentive for anyone to choose a cheaper public school, rather than a more expensive private one?
From the article
> as part of a package that also would make public universities, community colleges and trade schools tuition-free.
There would be no incentive to pick a cheaper school because all schools would have the same price -- $0.00. Students should go to the best school they can get into. Schools should enroll the best students they can attract. It's better for both parties.
I would not have voted for Bernie before this, but it further reaffirms my fears of his election. The fears are probably largely unfounded as he would be likely blocked by the legislature but who knows.
No one cares about that stuff. No one. Everyone wants the government to spend on their priorities. Everyone thinks spending on other people's priorities is wasteful and unsustainable.
Everyone is wrong. The galaxy brain end of things is the realization that, yes, US government debt is almost literally free money in every sense of the word and we're absolutely bonkers not to be spending it on objectively useful junk like education.
I don’t want the government to spend at all. I don’t want a government at all.
Yes, I’d be happy to pay a toll on every other road and every time I cross a bridge. Yes, I’d be happy to carry a firearm at all times (the SCOTUS ruled that the police don’t really have the duty to protect you anyway).
Most ambulances are private already.
How does a perspective like that gel with a state like Texas?
https://www.kff.org/other/state-indicator/per-capita-state-s...
https://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_per...
> The galaxy brain end of things is the realization that, yes, US government debt is almost literally free money in every sense of the word
How does a perspective like this gel with any of the numerous hyperinflation states that have tried this?
None of them were issuing US debt. Have you ever recommended a home purchase as an investment? US bonds are cheaper than mortgage interest.
Unless you believe the US government has absurd returns on its spending which of course doesn't gel with US GDP growth in relation to US spending growth...
Citation needed. In fact US growth relative to revenue has been consistently and considerably higher than the rest of the industrialized world for effectively all of the past century.
But it doesn't really matter, because you're making a tribal point and not an economic one. A year ago, I'm quite certain you were nowhere to be found when the government decided to spend $1T of that same free money and hand it to wealthy taxpayers. But try to do that same thing for recent students and you all lose your fucking minds? Yeah. Tribal.
I said it up thread: no one cares about this stuff. You don't care about this stuff. You just don't want the government spending its free money on the wrong people.
There's no such thing as free money. It's beyond ignorant to say so.
That's just wrong. There's no meaningful economics behind the magic fairy dust notion that tax cuts cause growth. In fact where actual research has been done, the effect more often shows the opposite. Tax cuts go disproportionately into illiquid investment holdings, while spending end up in consumer pockets. Look. It. Up. Or, y'know, keep parroting what you hear on "business news" and FOX.
This is basically a tax cut for the college educated youth to give them more freedom and mobility. After a couple decades of spending on Wars, Banks and Billionaires, why not give handouts to this generation?
According to https://www.nerdwallet.com/blog/loans/student-loans/student-..., $119.31 billion of the debt is private.
>Sanders is proposing to pay for these plans with a tax on Wall Street his campaign says will raise more than $2 trillion over 10 years, though some tax experts give lower revenue estimates.
So, a portion of the tax would go right back to the banks financing that private student loan debt. Interesting!
I actually think the Department of Education's strategy is a good step forward here. By publishing earnings data of grads by major it helps inform prospective students of what would be a prudent major.
My hope is that with the resurgence of the space sector with private space companies and going to Mars, that kids will have a new found interest in the sciences and move into more technical fields.
This is a very bitter pill. But you get to choose how to swallow it.
https://www.biblegateway.com/passage/?search=Matthew+20&vers...
[0] https://en.wikipedia.org/wiki/Parable_of_the_Workers_in_the_...
Along with “son of man”, it’s one of the more undefined but well known phrases from the NT.
I tend to think it’s got vastly more to do with improving the life we know than it does with anything about “getting to go to heaven if you’re good”
Until I was in adulthood I figured it meant “heaven”; that is not at all clear, actually.
https://en.m.wikipedia.org/wiki/Kingship_and_kingdom_of_God#...
[0] https://www.governing.com/topics/public-justice-safety/tns-s...
Fixing poor public policy in this case isn't subsidizing weakness; it's correcting an economic inefficiency. Somewhere between 60-70% of Americans support government funded higher ed; this is simply enacting it a bit later, retroactively (and based on polling, the support is there).
To put this into perspective, it ($1.6T) is less than 3 years of US military spending at current funding levels [1]. Pain is to be expected as the country unwinds poor decisions (education and healthcare in its current forms). Macro economic decisions should not be made emotionally, so squash the desire to argue moral hazard. We've burned up far more dollars as a country on far worse decisions.
Disclaimer: Sanders supporter, no college, no student loans
[1] https://www.thebalance.com/u-s-military-budget-components-ch...
If the government doesn't first fix higher education for people graduating highschool from now into the future, then they're not accomplishing anything. They're just buying votes.
I don't know what the solution to correct the past problem is. But I don't like setting the precedent that if the masses fuck up and make poor choices that they should get a pass later.
I could 100% get behind student lone forgiveness if any degree issued was paid for by debt being forgiven was made null. This protects those who figured out how to pay them off, and those who did not get degrees because of the cost. Each person would be able to chose their degree over debt -- the same decision many of made in the past.
To fix the issue moving forward, guaranteed loans need to be done away with and lenders need to weigh risk and validate loans based off merit and a degree's likelihood produce a job to pay off the loan.
A few people taking out large loans for degrees that didn't end up being worth it is an issue of personal responsibility. When an entire generation does it there's something more systemic going on.
I mean how many people on HN can say in good conscience that their Uni education was worth the money? I think mine had value in a life experiences sense but what actually landed me my first job was a passion for tinkering with code and systems that started in HS. Outside of the "having an impressive sounding degree" to put on my resume there's no way that the actual education dollar for dollar it was worth it. I had a few professors that were actually mind opening but it was the exception rather than the rule.
I realize that University education is super important to a lot of other fields but it seems like a weird argument to make in a forum of people with CS $50k-$200k CS degrees that probably got eclipsed by less than two years of work experience.
Just bailing people out without addressing the systematic problem is the worst possible thing you can do.
Here are just a few systematic problems:
- We send far too many people to universities and have no trade school infrastructure
- Our universities cost double per FTE than what other universities cost (per year). Universities are far too expensive with bloated admin staff.
- Our universities last far too long and are not selective enough
- Our universities allow students to graduate with unmarketable skills.
- Our universities are sitting on huge endowments and possess significant real estate assets yet these are not being tapped for the bailout
- students are given incorrect information or are not given accurate information about their future expected earnings and debt burdens.
- many students choose poor majors
- many students borrow too much, and the Federal government guarantees these debts.
I would be willing to listen to a comprehensive reform program. Clearly there is a problem that should be addressed. But just bailing people out to let this system continue? That's a terrible idea.
The article says yes.
But if we generally improve society in any way, it means that some of the difficulties / obstacles that people have faced so far will be more rarely faced (or maybe eliminated) by people who come after the changes.
It isn't fair any more than it was fair that people who learned to program in the 80s/90s had to buy their compilers and software and didn't have Stack Exchange. Or, more dramatically, it isn't fair any more than it's fair for people who suffered or died from infectious illness before antibiotics.
As the saying goes: we all sit in the shade of trees we did not plant, we all drink from wells we did not dig. If we're bitter about planting trees we don't get to sit under, we break the chain that lets society move forward.
Isn’t this more like Sanders taking a tree I planted and giving it to a treeless person and telling them it’s free?
Now you have a dividing line with some people above it receiving nothing, and a lot pro-rated in the middle. Everyone is jealous of those receiving more than they are. The line that schools are getting more expensive because the free-riders don't pay anything isn't going to sit well with those who failed the means test and feel they are subsidizing.
There is a strong fracture between the two groups and suddenly we're producing a whole new generation of Republicans.
Or nobody takes Warren and Sanders seriously when it comes time to actually elect them outside their echo chamber and this goes nowhere.
According to both liberal and conservative economists making higher education completely free is an awful economic policy. We're already running a deficit. Make it means based.
For those those making less than 100K, for teachers, social workers, working for non-profit give those people a break. We loaned billions to financial institutions at exceptionally low interest rates during the economic crisis, give those same rates for college loans.
But don't just cancel all of it. That's terrible economic policy.
It's been hard to talk about it on this forum, though. Conversations invoked by Bernie Sanders are generally quashed on HN.
This is demonstrably not true.
Would you prefer we just keep going at this pace and hurting future students because in the past people had to pay? Sounds like a pretty shitty future.
In fact a one time cancellation could screw future students because they’ll expect the same. And it might not happen.
You’d probably have to get rid of the government-run student loan program at the same time as making the loans dischargeable in bankruptcy to really get something working properly, I’d think.
We as a society need to push the next generation up, not bitch that they don't have it as hard as we do.
*paid for by our taxes.
https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...
'free market economics'
TARP is also one reason why the US has the world's strongest financial system, ten years post great recession. The major US banks are the marvel of the world in terms of overall health. Meanwhile, the Eurozone's financial system has largely been meandering through disaster for a decade. It's essentially universally agreed by economists - and the actual results easily demonstrate it is true - that what the US Treasury and Fed did, was the right decision. TARP worked and it was repaid.
What's the mechanic being proposed such that "you just 'earned' $60,000 this quarter" doesn't trigger?
[With no comment on the wisdom of the plan itself.]
I don't agree with that one bit.
The US is the richest country in the history of humanity. It owes its citizens a good life - education, health etc - no questions asked. In fact, it owes that to the rest of the world, since so much of the wealth has been created through the hard work of immigrants :)
If I could vote, I would pull the lever for Bernie without hesitation for being the only candidate for the Presidency who truly understands the depth of transformation this economy needs. An America without pain and uncertainty will make the world's problems easier to solve.
Also, this should be the default payment plan instead of the 10-year repayment which is currently the default. For some reason people don’t seem to be aware of income-based repayment and are always talking about how their student loans are holding them back, i’m not sure why but I’d guess like any program, the default settings are what most people stick with.
Either you're an adult at 18 or not. The 18-21 (maybe 25 for rental cars) grey zone is bullshit.
Pretty sure Sanders is also in favor of higher estate taxes. Even Clinton was
what about the ones who have already paid the entirety of its loan?
Isn't this problem a derivative of problem (insert costly higher education) here.
Shouldn't this also mean that education loan will become one of the easy way to get into college even if you dont want to?
What about the future generation? Its good to have free education in first place rather than giving out loans and taking it back.
India took a similar stance on Farmer's loan waivers and it neither fixed the issue nor corrected it.
Time to learn lessons.
College grads do not need an even bigger edge.
The problem is that it is not canceling the debt. It's like if I loan my son a $100 and then instead of saying you don't have to pay it back I raise the rent (taxes) on someone else to pay for it.Yes, it's unfair that it's now decriminalized, you had to either serve partial or full time and suffer, but you probably knew the consequences of your actions. Maybe not fully but you had an idea.
Doing this entire debt forgiveness thing is to level the playing field. It's to unburden the people of the past of their fiscal sentence while unlocking the decriminalizing of college. People in the past would be pissed if they had to keep paying their loans (serving time) if it was all free now. People who already paid (served full) have it rough but it was a different time. You have to make the transition somehow.
Maybe my analogy sucks but I don't see how you can get buy in otherwise.
If the root of the issue is skyrocketing college cost due to lack of supply then this is going to reward all the consumers who weren't financially responsible (i.e. majored in something unprofitable), which in turn alleviates the market pressure on colleges to offer better value.
Note: I don't personally agree that wholesale cancellation of debts is necessarily the right thing to do - but this is the argument I'm seeing in this thread more than anything else.
We can't trust a state that just keeps changing the rules like this.
People who want real change should support him