Bernie Sanders to unveil plan to cancel all $1.6T of student loan debt | Hacker News Reader

Bernie Sanders to unveil plan to cancel all $1.6T of student loan debt

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50 pointsxivzgrev85 comments

This is welfare for upper middle class people. https://www.nytimes.com/2018/11/18/opinion/student-debt-forg...

> “Education debt,” as Sandy Baum and Victoria Lee of the Urban Institute have written, “is disproportionately concentrated among the well-off.” The highest-earning quarter of the population holds more than a third of all student debt, while the lowest-earning quarter holds only 12 percent, according to Baum and Lee.

Less than 40% of those 18-29 have student loan debt: https://www.pewresearch.org/fact-tank/2017/08/24/5-facts-abo.... Almost by definition, these are disproportionately the folks who were privileged enough to go to college to begin with. Moreover, the total debt is skewed towards the people with the highest income potential. The median debt for someone who doesn't attain a college degree is $10,000. Versus $45,000 for someone who attains a post-graduate degree.

The existing system we have is fine. Obama's PAY-E caps student loan payments at 10% of income. That means the people who end up with good jobs end up subsidizing everyone else. (The government kicks some money in too, but PAYE will only cost $180 billion over 10 years, instead of more than then times that in one shot.) If we need to fix the loopholes in that, let's do it. But under the current system, I as a private practice lawyer pay thousands of dollars a month to the government. Under Bernie's plan, I'd get a small mortgage worth of a windfall.

If we're going to raise taxes $2.2 trillion, it's criminal to not spend it on the people who need that money the most.

We could just rollback the recent tax cuts and have a much more progressive tax policy than a student loan forgiveness program for all.

That said one of the arguments for universal forgiveness is that it’s the only way to get major reform in the space. That seems like a crazy expensive premium to pay to me but maybe I’m naive about the appetite for improving others lives.

The recent tax cuts are a side show. The main effect was to bring U.S. corporate tax rates in line with Randian hell-holes like... Sweden: https://tradingeconomics.com/sweden/corporate-tax-rate; https://www.oecd.org/tax/revenue-statistics-sweden.pdf (Sweden - 6% of revenue from corporate taxes); https://www.oecd.org/tax/revenue-statistics-united-states.pd... (US - 8% of revenue from corporate taxes).

If we want to help people, we need to raise taxes on the middle and upper middle class and spend it on safety net services, like everyone else in the developed world: https://taxfoundation.org/how-scandinavian-countries-pay-the...; https://www.oecd.org/tax/revenue-statistics-sweden.pdf (Sweden - 61 % of revenue from from middle class taxes: payroll, social insurance, and goods and services); https://www.oecd.org/tax/revenue-statistics-united-states.pd... (USA - 41% of revenue from same sources).

I don’t disagree my point is student loan debt forgiveness is an extremely regressive tax policy. That the left most of the Democratic Party is arguing for it is pretty concerning. Especially when the right most of the Republican Party is coming after the social safety net.

Doing this fairly seems really difficult, when there are people who didn't go to college (but may have wanted to), and people who did go and paid off their debt.

>This is welfare for upper middle class people.

Maybe more lower class people would go into this if they could afford it?

We don’t need to do debt forgiveness to do that. We could just fund future tuition.

One of the selling points of the universal policy is that it’s the only way to get the votes of the well off but resentful, even if it’s staggeringly inefficient.

>We don’t need to do debt forgiveness to do that. We could just fund future tuition.

I agree

I'd kind of expect richer people to be more likely to go to college, and also be more likely to have the contacts to get a well paying job.

On that basis I would expect this to benefit the lower middle class, they accrued the debt without accruing the earning potential.

Sort of the point is that it’s not needs based. It doesn’t matter if you make 400k with 100k of debt or 36k with 6k of debt.

Fairly clear one of those 2 is getting a much better deal.

If you borrow 100k graduate, earn 400k and pay off your loan in a year you wont be benefitting from this. Its those taking 90k in loans and only earning 36k that's the problem as I see it.

All that said I'm not from the US, so didn't expect fees to vary so much. (do they?)

The first is a common doctor situation in the USA. The second is a common paralegal. Both were taken from people I know.

The interest rate environment right now means that many of my high earner friends are not in a hurry to pay more than the minimum on their loans. Debt forgiveness for them will be a straight cash infusion against their net worth.

No idea what the percentage of each is.

This plan cancels all student loan debt; It does not matter what percentage of income-earners hold the debt. God forbid something nice happen for the middle class. It's really tiring to have scraped by, worked hard to get where I am, and be told I'm JUST privileged (white, male, income) enough to not qualify for any sort of government assistance.

Why just student debt though? People have a right to complain. Someone has no student debt but credit card debt.

What is so baffling is that much of that debt was accrued as basic living expenses with extremely low interest rates, where the poor have to rely on 20% interest cards, but no bailout?

Why does it have to be a competition of loss? The student loan issue is something that should be addressed in and of itself. The constant whatabout-ism when it comes to the less privileged/wealthy (and especially when it comes to being a white male versus a PoC) is exactly what I am complaining about. It feels as if the middle class is constantly being told that our problems don't matter because we have just enough to do OK for ourselves.

If the government sent everyone a check for $20k, this would be more fair regarding your concerns and the concerns of those of us who are against forgiving student debt for the reasons in this thread.

It's not about a competition of loss; you're correct. But it's simply an expensive and unfair plan to forgive the debt of those who have it, without regarding why they have it. Either we take a more refined plan about how we forgive student debt, or we simplify even further and just give stimulus checks to everyone without any conditions.

>>Why does it have to be a competition of loss? The student loan issue is something that should be addressed in and of itself.

Because the money comes out of everyone's pocket. How about free healthcare for more people, free child care so people can go to work etc etc? The govt can't just issue new dollars indefinitely, so there's a cost. I understand that colleges are very expensive and loans have made it even more expensive--just sign here and see you in 4 years. But since the money is coming out of the pooled money we have to think twice and consider everyone's problems.

No. It's also not fair to raise taxes (on rich and middle class) to pay college for poor kids.

It is fine to have certain amount of transfer from the rich and middle class to the poor to pay for basic things, but pay for college should not be part of it. College is not crucial for living a good life.

I would agree with proposal to support pay for vocational / professional training. But college? No.

The system we have is not fine. Tuition has no downward price pressure and is rising way too fast.

10% cap is nice and all, but not if you’re going to be paying it through middle age. Blunt loan forgiveness is not the answer, but reform is needed.

> but reform is needed.

Sanders is the last person to do any reform ( real reform would come most likely from somebody like Andrew Yang ).

Education is first and foremost extremely political, almost everywhere and every country.

Milton Friedman knew it 40 years ago.

Letting a free market in education to exist would put a lot of service jobs at risk.

Education is how people who support a candidate get a job after elections are over.

Many prominent lieutenant and donors in the Democratic party end up in the educational sector, same applies in every other party in so many other countries it's unreal.

In Islamic countries, trying to reform education is much much harder than other areas. Everybody wants a say in what goes in the heads of other people's kids.

So true, these clowns made the rules we currently abide by. College being a requirement for middle management positions etc. Only those with a stable upbringing (not the majority) have the options to play by those rules, now they want to change them to bail out the upper middle class?

I'm a Bernie supporter and I agree. Make free college available to anyone and provide a path to discharge overly burdensome student debt via bankruptcy, but forgiving everything is a waste of resources and political capital. Though, I have to say, one of the things I like about Bernie is he doesn't start with half measures. He starts with the ideal vision, which is probably necessary to even get close to something reasonable in the end. If you start with a compromise position, you end up with a compromised compromise like ObamaCare.

Vacating existing debt it wrong headed and relies on ignorance to even be considered. Politicians know the idea of paying off college debt sounds good and that is all they want you to do, think it sounds good instead of thinking about what it really means.

Not only is this welfare to the upper middle and upper classes it is the big wealth transfer to colleges. Colleges who have no reason to keep costs down. Plus they also have the benefit not having to steer people to viable careers and can instead sell them on many cost increasing courses which are more padding for the college bottom line.

If the politicians were serious about education they would lock colleges into rates set by government for any education guaranteed part or in full by government. People fall all over themselves demanding that the medical costs be regulated, where are the screams for colleges to do the same when it comes to costs.

Simply put. A degree cost X dollars. Each course credit is Y. The college that wants their students to receive loans or partial to full payment must offer degrees and courses conforming to the cost the government assigns to that degree. The college must make a good faith effort to see the student graduates with the degree or pay a penalty.

They would fall over themselves to comply

This kind of excessive fixation on perfect fairness is exactly what got us into this mess. They thought they could help the poor attend college by giving them grants, then the middle class would have loans, and the rich had to pay their own way. Then it turned out that both the poor and the middle class had to take out loans because grants were too expensive, and the "rich" were fine anyway. Here's a crazy thought: if these debt holders are so well-off, why haven't they paid off their debts yet? Being in debt is a huge psychological burden, and forces people to choose high-paying jobs in expensive areas (which makes them appear to be well-off), instead of doing work that is more meaningful and socially beneficial.

It's good to remember in these situations that the perfect is the enemy of the good, and what Sanders is proposing has the advantage of maximum simplicity. If you listen to the advice of perfectionists like David Leonhardt, you're going to neither eat nor have your cake.

It's not a matter of "perfect fairness" versus "workable compromise." Sanders' proposal epitomizes everything that's wrong with progressive liberals' attempts to implement a welfare state. While everyone else in the developed world treats middle and upper middle class people as the benefactor class, people like Sanders are convinced that the kid who took $150,000 in loans to attend a liberal arts college and now makes $80,000 a year as a journalist is the one entitled to welfare. This is a fundamentally flawed, unfair, and unprecedented approach to building a welfare state.

That is why you hear about free college, like Germany, and not one peep about what Germany's income tax brackets look like: http://www.worldwide-tax.com/germany/germany_tax.asp

  Tax %  Tax Base (EUR)
  0      Up to 9,000
  14%    9,001-54,949
  42%    54,950-260,532
  45%    260,533 and over

You see, in Germany, the guy making $80,000 is treated as a benefactor. He pays the 42% marginal income tax, 19% VAT, 7.5% social insurance contribution, etc. He doesn't get a $2.2 trillion windfall.

Is it the case that you are coming at this from a point of view that is opposed to progressive liberalism in general? That would have been helpful to mention up front, because the article you cite is actually arguing from the view of Sanders' proposal being insufficiently progressive. It seems disingenuous to me to cite it without clarifying that your own reasons for opposing the proposal are completely different.

The article criticizes Sanders' proposal for allocating a large government benefit disproportionately to the middle class. I'm criticizing the proposal for the same reason.

My point about taxes is the flip side of the same criticism. "Progressive liberals" view the upper middle class as a marginalized class that should receive government benefits, not a privileged class that should pay for them. That's why Sanders' proposed tax brackets are the same as Trump's until above $250,000.

> Income bracket Tax

  Lower limit Upper limit Rate 
    $0 – $18,450              10% 
    $18,451 – $74,900         15%   <--- German 42% rate starts here
    $74,901 – $151,200        25% 
    $151,201 – $230,450       28%  
    $230,451 – $250,000       33% 
    $250,001 – $500,000       37% 
    $500,001 – $2,000,000     43%
    $2,000,001 – $10,000,000  48%
    $10,000,001 –             52%

Put differently, upper middle class "progressive liberals" only believe in a progressive system to the extent they are on the receiving end of the welfare system. So that someone who paid $100,000 for college and has a $100,000 job in New York is treated as the proper recipient of government welfare, at the expense of those above them. But taxing that guy like the privileged class, to support the people at the bottom who truly need it, is off the table.

Your example of the guy who has $100K in student loans and is making a $100K salary in New York is a good example, but I think we very much disagree on how he should be treated. If he's living in NYC, his take-home is about $68k after taxes and he's laying out $3500/month in rent for a one bedroom and paying $1k/month for the loans. That leaves him $1100/month for utilities, medical, and, you know, food if he wants to eat. I know there are plenty of people who are worse off, but this guy is working a non-trivial job just to tread water. Why do you have so little sympathy for him?

Because (1) he's objectively well off, having a one bedroom apartment to himself in New York itself being a sign of prosperity and privilege; and (2) because he's around the 90th percentile income level, and if we don't tax him heavily we cannot afford an expansive welfare state.

People in the top 25% but outside the top 1% earn half of all income, $5 trillion, 2.5x as much as the top 1%. You need high taxes on that group to support an expansive welfare state. In Germany, Mr. NYC would be taking home $57,000, and he'd pay 19% VAT on cocktails in Munich.

Living in a high cost of living area is voluntary consumption just as much as leasing a new BMW or going on European vacations twice a year. If he wants to stop "just treading water", then he can move somewhere else, such as a place that's not in the top 3 most expensive areas in the country; just like the guy with the BMW can buy a used Honda instead.

That's a common fallacy. Places that have high paying jobs usually have high cost of living. You can't typically command high salaries in cheaper areas, but people seem to think that just by virtue of living in a certain area you are defacto well-off.

Anyway, this hypothetical guy isn't helping my case, because we can either add or subtract virtues to make him more or less sympathetic. As someone who matched this description personally, I can tell you I did not feel "upper middle class" by any stretch of the imagination, which is what I was responding to.

Just imagine if that amount of money was spent on updated infrastructure. Effective country wide mass transit, better ports and airports. And the money spent would flow right into the economy and circulate over and over, would push construction companies and techniques forward.

Or towards clean energy generation, storage, and use. How fast would oil and coal be completely replaced? And again, money pumped into the economy to do so.

Or scientific research, space projects, could make large leaps, and again, that money flows back into the economy and multiplies.

Instead we want to make it so the people who hustled through college, picked a cheaper school, worked on the side, paid down their debt if they got any as soon as possible, that those people get the same outcome as someone who got a huge loan and played video games and got drunk every weekend, and spent $200,000 on a degree that only gets you a $50,000/year job?

All those things you mentioned are worthwhile investments. Erasing student debt is also a good investment. It's a bubble waiting to burst and wreak havoc on the economy. We should do both.

Please show your work that infrastructure spending would generate more growth than forgiving over a trillion dollars of student loan debt.

I don't discount it might be possible, but I am asking you to prove it if you're stating it as fact. No imagining.

I "hustled" like you said. I have no debt and better paying job than my partner, who has a masters degree in education and is a primary school teacher. As we're starting a family, we are considering that our savings will pay that debt.

This is a good proposal for everyone overall, even if you don't think it impacts you personally since you don't have a student loan yourself.

Incredible how people like you consistently think high student loan debt is exclusively due to immoral choices.

No one once in this topic has said "exclusively due to immoral choices".

You framed it as people who don't deserve a break--for reasons related to values like prudence and thrift--getting a break anyway. Fine. If some people did act virtuously but are still in tons of debt, in what way do they not deserve a break? Why bring up the Goofus and Gallant scenario at all? The question isn't whether people deserve loan forgiveness, it's a question of what's good for society as a whole.

"You framed it as people who don't deserve a break".

I'm quite sure you can't find a quote where I did this.

But anyway, you're focusing on this from a different point of view from the people you're arguing against. It's important to take note that there are (at least) 3 groups of people with interest in this conversation: people who've paid off their debt, people who have not paid off their debt because they've been unable to, and people who've not paid off their debt because they did not want to.

Those who've paid their debt are pointing out that it's unfair to retroactively support those who did not make the same frugal choices. (This is sort of what you're arguing against)

Those who are in debt because they are hard up for reasons beyond their control are arguing for paying off debt for anyone who has it.

I understand your interest at stake in saying we should forgive the debt. But you're being disingenuous if you ignore the point of the first group of people.

Instead of hashing out what's fair, let's give tax progressively and give a stimulus to everyone. This has the same benefit to those in debt, but avoids both the unfairness we're talking about and requires less government expense in paying accountants to determine who should get the benefit (because everyone gets it automatically).

Just too many questions at this point.

what about the ones who have already paid the entirety of its loan?

How about a federal loan structure? with very minimal interest?

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.

The plan is part of a more comprehensive "college for all" program that Sanders has already released in pieces and includes free tuition at all four-year public colleges and universities, as well as community colleges. The broader proposal also includes subsidies to reduce the cost of tuition and fees for low income students at private colleges that historically serve underrepresented communities. "We will make a full and complete education a human right in America, to which all of our people are entitled," Sanders said on Monday. "This means making public colleges, universities and HBCUs tuition-free and debt-free by tripling the work study program, expanding Pell grants and other financial incentives."

This seems like it would only make the student loan situation worse over time. Tuition is inflated because student loans are easy to get, so students are not very price-sensitive and are willing to go to expensive schools over much cheaper options. Forgiving student loan debt helps current students, but just encourages future students to accept even more debt with the hope that it will be forgiven.

We should be encouraging students to go to cheaper schools (state schools are far cheaper that out of state, and out of state schools are still cheaper than private schools), and bringing in legislation which reduces tuition. The US could bring in legislation to lower tuition at public schools (they are doing this in Ontario right now, which has a similar system), although this might have to be a per-state issue rather than national issue.

"We will make a full and complete education a human right in America, to which all of our people are entitled," Sanders said on Monday. "This means making public colleges, universities and HBCUs tuition-free and debt-free by tripling the work study program, expanding Pell grants and other financial incentives."

I get helping those who are legitimately low income. But this is much broader than that.

Please explain how this is not rewarding those who chose to spend their money on luxuries instead of paying their debt. What about those of us who paid off our debt by living frugally?

As someone in favor of universal health care, subsidizing college, etc, I'm still against this particular policy decision. It's badly-thought-out populist candy.

What ABOUT you? Is your objection that something good is happening to someone suffering under student loan debt? What is the disconnect? "I suffered so they should suffer, too" is not a meaningful objection. Freedom that only affects some and doesn't somehow compensate people who are already free is still freedom.

Moreover the insinuation that the only people in student loan debt are irresponsible is nonsense.

It doesn't make right everyone who lost lifetime income to student loans. It doesn't bring people to life who died in car accidents, and it doesn't give me money back that I spent on a comparatively slow computer 10 years ago. It's still good.

"Moreover the insinuation that the only people in student loan debt are irresponsible is nonsense."

This isn't what I said. If you want to twist other people's words, I can do that too: "There are unfair things in life therefore we should not put any effort into trying to make our own policies fair".

“Sanders will also release a detailed roadmap -- centered on new taxes on Wall Street -- to raise the $2.2 trillion dollars necessary to pay for this program and his other college funding plans. It will include a 0.5% tax on stock trades (or 50 cents for every $100 worth of stock), a 0.1% fee on bonds, and a 0.005% fee on derivatives. Sanders believes that could raise more than $2.4 trillion dollars over the next ten years.”

Sure hope “stock trades” doesn’t include retirement contributions or rollovers. I just rolled over 90k - that would’ve cost me $900 (sell, then buy).

Today we have hyper globalized financial systems and if a country implements taxes like this the big players just move their money elsewhere. This only ends up hurting middle class folks who are playing by the books. I think it would make much more sense to have a very simple tax system (a few percent on every capital gain or income, wether corporate or personal) and get rid of every other complexity and loophole. If America had one of the lowest corporate tax rates many companies would locate headquarters here and bring that few percent of billions of dollar we wouldn't have otherwise.

I also think we could create a special administrative and economic zone (without minimum wage) in the first 50 miles of southern border and allow anyone to come work there from all over the world. This would create a pathway for people to come here legally and have civic and language classes to help integrate. We could pick the best and brightest from this zone for citizenship which I think is a more fair system. Before you dismiss this idea as colonial consider that this area would have the same human rights and laws as the rest of the US just with low wages, this would be better working conditions than most places on earth with similar wages while also providing a defined channel to gain US citizenship.

I like your ideas. However, I don't fully follow the the low corporate taxes one though. Is the idea to compete in a race-to-the-bottom with corporate taxes and profit from trickle-down economics? I think the popular critique of trickle-down is fair.

Corporation tax does not tax (rich) individuals

It's not a race to the bottom, for a number of reasons America is a good place already for international corporations to have headquarters. We have a strong and mostly fair legal system, and rule of law that many countries do not have. We have a world class workforce. But by having high corporate income tax you are driving away companies that would otherwise HQ here and bring money and taxes. I see benefits and no downsides to making the environment here even more appealing to corportations.

Race to the bottom was not a clear expression of what I meant. I meant that US would compete with other tax environments for lowest corporate taxes, which would drive down corporate taxes globally. The obvious implication is that the corporations then contribute even less to the governmental budgets. In terms of foreign policy, this has the problem of breaking solidarity with other countries. Actually, it seems that the whole idea is based on competition instead of cooperation, but given US policies today, that would be normal. What I'm wondering is would this pay off to the winner that would attract many corporations, but derive minimal taxes from them. What's the mechanism to profit from their operating within your administrative unit in that case?

Corporations don't exist in a vacuum, they are organizations of people working and recieving salaries. I would argue that by having corporate headquarters located somewhere you are bringing massive net benefit if you only look at salary. The corporate income tax is just extra that the government can squeeze out of them and its become apparent that the biggest corporations can get out of most of that anyways in the US by careful gaming of the tax code. Thus my proposal to lower the rate to a more realistic amount and simplify the tax code. Amazon paid $0 corporate income tax last year on $11 billion in income, they structure the company around reinvesting all the profit for the exact reason of not paying taxes. 2% flat rate for everyone is much better than 0% for the most cunning.

I'll focus on the initial part of your post to point out that you _cannot_ trivially avoid taxes for operating in the largest economy in the world while operating in the largest economy in the world.

Sure it's possible under certain aspects (like Facebook et al. paying nearly zero under being "mutlinational" and even that relies on the will of the government to allow it) but that does not apply to the US stock market, does it?

Unless someone knows something I don't I can't be convinced financial players would stop trading in the US because of taxes unless they are really, really abusive.

Some evasion to other markets, perhaps, but how much "down" to developing nations are large funds willing to go?

You can't just seamlessly move the entire thing elsewhere. No other country has the economy and international (military) presence. Do we all agree that makes a difference?

I can't see this level of taxation changing things at all

Its sort of amazing that anyone can still openly advocate that raising taxes on the rich "only ends up hurting middle class" or for "no minimum wage" slavery, without getting the shit kicked out of them. The really crazy thing is they think they are good people, not at all rotten and viscous as they truly are. The cliff between rich and poor is ever more increasing, and you think giving the rich more is going to stop this, you deserve whatever is coming to you when the poor have reached their limit and come knocking on your door.

Maybe at least you will realize, that the poor that is going to kick your head in, is not reading Hacker News.

> Its sort of amazing that anyone can still openly advocate that raising taxes on the rich "only ends up hurting middle class" or for "no minimum wage" slavery, without getting the shit kicked out of them.

Luckily we still live in a civil society where most people understand violence isn't an acceptable response to political disagreement.

Would you please stop posting ideological and political battle comments to HN? It's not what this site is for.

https://news.ycombinator.com/newsguidelines.html

I understand you are upset but I ask you to please consider this briefly. If you change conditions to make a specific place more appealing to the rich this does not in any way hurt the poor in that area. If having rich people around was bad for the lower income citizens then people with low income in Monaco would be worse off than people with low income in Africa.

> If America had one of the lowest corporate tax rates many companies would locate headquarters here and bring that few percent of billions of dollar we wouldn't have otherwise.

I think the reality is that while corporations do some jurisdiction shopping, it's pretty clear that low taxes are only one part of the equation of where HQ locations are chosen.

It's amazing how politicians like this propose these types of things and never look to see if anyone else has tried it because we have the perfect example, Sweden: "In January 1984, Sweden introduced a 0.5% tax on the purchase or sale of an equity security. Hence, a round trip (purchase and sale) transaction resulted in a 1% tax. The tax applied to all equity security trades in Sweden using local brokerage services as well as to stock options."

As for the results: "revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988" [0].

[0]: https://en.wikipedia.org/wiki/Swedish_financial_transaction_...

You know that the London Stock Exchange currently implements transaction taxes and that it generates billions (€3.8bn per year) yearly in revenue? [1]

How about all these other countries that have implemented or are currently implementing them? [2]

Looks like this clause is why the UK was successful while Sweden may not have been: "The tax is charged whether the transaction takes place in the UK or overseas, and whether either party is resident of the UK or not."

Clearly the UK being a much larger securities market is a much better parallel to the US than Sweden. It all probably comes down to the implementation.

[1] https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit... [2] https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit...

This is a slap in the face to anyone who made prudent financial decisions to get themselves through college without debt, and even more so to those who recognized they couldn't afford it and didn't go. Now they get to fund a bail out for the managerial class they couldn't afford to join and spend the rest of their life working for.

Let's see a plan to fix the system for everyone, not populist handouts for people who are already ahead.

This is also fixing the wrong problem. It removes the pain that generates pressure for real reform. Without addressing the ridiculous costs, this just props up the problem.

So, in summary, incentivize colleges to create even more worthles or overpriced degrees and education programs to vacuum free money from the federal government up.

How about everyone gets free money, and the student loan holders can use it to pay off their degrees?

I personally am not a fan of canceling student loan debt. However what I am a fan of is lowering the interest rate to nearly 0.

I still have some of my student loans left and most of them at at 1.8%. However I have some friends who went to college after me and theirs are at nearly 7%. That just doesn't seem fair.

This is spot on. The interest paid to the government can be thought of as a tax whereas the principal is what was spent on the education.

Main discussion (over 200 comments): https://news.ycombinator.com/item?id=20260014

So what about the moral hazard in this.

This doesn't seem to solve anything for prospective students, except to suggest they too may get their debt cleared, so load em up?

Surely you should be looking at future rules, then retroactively applying them if appropriate, rather than bailing out a cohort.

Yes college is like crack cocaine. The lives I have seen wrecked by it is amazing. Just the other day a good friend of mine was talking about getting his hundredth PHD. He was looking into possibly Quantum Mechanics next. Such a powerfully addiction. We need to make sure education is incredibly expensive if we want to keep our young kids safe from it. /S/S/S

How does that relate to my comment?

What about the people who dodged paying student loans? What about the people who didn't have the opportunity to go to college because of growing up in abject poverty? These people had a choice to not do the research and take on massive loans.

Any time there's a proposal like this, it's disappointing to see the conversation gravitate towards tit-for-tat zero-sum appeals to fairness, instead of asking: how can we spend money in ways that will create wealth and other less tangible benefits for society? Making education accessible to everyone is one of the best things we can do.

"It's a regressive giveaway that primarily benefits upper middle class people who attended elite four year colleges"

Seems about right. For those that don't get accepted to the expensive colleges, it's a lifetime of higher taxes to fund their upwardly mobile peer's lifestyle.

Finally, a clear idiot proof, transparent policy proposal. I love it.

I can't find this mentioned, is this only federal loans held by the government or would this involve forgiving privately held debts.

The first seems reasonable. The second seems terrifying.

The full plan isn’t out but they’ve implied it would be public & private debt as well as making community & public colleges tuition free going forward.

"Forgiving privately held debts" sounds an awful lot like "taking (stealing) from the lender". That probably would not pass a Supreme Court review. (No taking without just compensation.)

No major or even minor political party is talking about just "canceling" the debt without paying the lenders. The lenders are still going to get paid so this isn't a "taking". The debt is just transferred to the the US balance sheet instead of being held by the student.

I would entirely agree but I'm not sure the average Bernie, Cortez, or Warren supporter would.

I have definitely heard people advocate for a total jubilee on student loan debt.

I do agree that the current Supreme Court probably wouldn't let it happen.

Well, in fairness, Bernie is not responsible for everything every one of his supporters say. (He is responsible for making it clear when what he means is different from what his supporters think.)

This will not fix the problem with colleges pumping out useless degrees. They got their money up-front, don't have any consequences, and the taxpayers get to foot the bill.

Why not fix the root of the problem? This solution will only serve to enrich the universities and not get them to change their behavior.

What policy change that could be implemented would do anything about the societal belief of college = job?

Even something as extreme as outlawing job listings from listing college degrees as a requirement probably wouldn't do it. It'd just become a "soft" requirement.

"What policy change that could be implemented would do anything about the societal belief of college = job?"

We stop federally subsidizing student loans. This will reduce the overall cost of universities, because they won't be relying on instant government money and the universities will be responsible if the student defaults.

It will be in their best interest to push out students that actually succeed and have a chance at paying the money back.

How is this not another $1.6T bank bailout?

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