Biden cancels $10k in student loan debts
bbc.com
bbc.com
This is egregious vote buying during a period of high inflation!
And who making $125K needs a $10K discount on their loans!? A friend intentionally stopped paying his a while back in anticipation. What a joke.
If 10,000 people pay $1 each, none of them have any problems. If one person pays $10,000, it's a big problem, and possibly even life-ruining or inaccessible. "Making others pay for it" is a skewed perspective on what's really happening when taxes pay for public services, or services that should be public.
Speaking of "should be public" -- who are you to decide whether other people "should have entered trades" instead of attending university? Many people don't attend higher education because they can't afford it, and you're basically saying that means they just should go straight to work and shouldn't even try to get an education?
> And who making $125K needs a $10K discount on their loans!? A friend intentionally stopped paying his a while back in anticipation. What a joke.
If your friend was affording his payments, then it sounds like your friend is a selfish dick.
To answer your question: many people. I'm not at $125k, but I left college with $60k in debt, and I didn't even attend the top tier of costly schools, and I had grants to lower that amount. I'm making $80k now, and if you compare those numbers, it might seem like that's no big deal -- 80 > 60 after all, right? But then you subtract income taxes, and my disposable income is actually closer to $52k. Then you subtract my expenses which are more important than paying off student loan debt -- food, water, electricity, phone bill, mortgage, and internet (which I need for my job at least) -- and account for interest accrual... I'm 7 years out of college and I'll be paying those loans for at least another decade or two.
So the answer is "probably quite a few people", especially when you consider the correlation between better university education (i.e. more expensive) and higher-paying jobs.
It's fallacious to think of this as the full impact being transferred to other people. The cost is being transferred, but it's being spread over many, many people, which lowers the impact on everyone.
The only fair move was to remediate the system, this is only going to exacerbate everything already in motion, worse for me, worse for my peers, worse for those forgiven. It does nothing to improve the outcomes of those in the future and everything to worsen them. It's a stupid move to buy votes.
At least this benefits people directly and is a fraction of the money printed the last few years that went to who knows where.
https://www.cbsnews.com/news/student-loan-forgiveness-10000-...
The next time we question if the science projects are worth the cost…
Webb Telescope cost: $10 billion
CERN particle accelerator cost: $5 billion
Sort of emphasizes the point that the science projects are cheap.
Science pays future dividend.
In other words, if these numbers are all correct, then the cost to each taxpayer is less than the cost of public college, and much less than the cost of private universities. And when you consider that students at more expensive universities are more likely to have larger student loans, it shifts the average costs being paid off higher, meaning taxpayers are paying much less than people going to college would need to pay.
Obviously this is a simplification, and there are things to consider such as how this is covering everyone who's ever been to college in the US before and hasn't finished paying their loans (as opposed to just the people with new loans, which a policy like this would eventually settle into being).
"We estimate that a one-time maximum debt forgiveness of $10,000 per borrower will cost around $300 billion for borrowers with incomes less than $125,000. This cost increases to $330 billion if the program is continued over the standard 10-year budget window. Eliminating the borrower income limit threshold produces a 10-year cost of $344 billion. Increasing the maximum amount forgiven to $50,000 per borrower increases the total cost to as much as $980 billion."
Meaning it's a figure over 10 years. So let's use the main source's numbers instead: $330,000,000,000 / 10 years / 144,300,000 taxpayers = $228 per taxpayer per year. Even better.
And just for fun, let's look at the same calculations using the analysis for "no income cap" and then again for a $50k forgiveness cap:
No income cap: $238 -- only $10 more per person per year.
$50k max forgiveness: $670 per person per year. Obviously more significant, as it's forgiving 1/3 more money on average, but still. Imagine if this policy were put in place for new loans going forward. Everyone in the country could attend college for $670 + tuition excess over $50k, which means most people could do it for $670/year flat.
And of course, these estimates all account for the initial massive cost of existing loans; if it were set in motion to apply to new loans, the cost would decrease over time as those old loans are done and only a smaller number of new loans are created.
Let's be clear what you're suggesting here: universities that are doing well on their current tuition, and would still be making the same money in the case of government subsidies, would spike their tuition costs by $10,000+ / year just for extra profit "because they can", despite not needing to, and screwing over everyone in the process.
I'm not saying it won't happen, I'm just saying that paints a dark picture of humanity and its almost certainly doomed future if it does and isn't corralled.
(BTW, I wonder how the European countries that offer socialized university have countered that effect?)
That's literally why college is so damned expensive to begin with.
Of course they're going to raise prices because they can - that's literally how every business works.
The majority of politicians have connections with people who are highly business-informed who know how to parlay corporate profits into well meaning sounding legislation. That creates a win-win in public perception while simultaneously fleecing the public coffers.
I do not expect this trend to end.
Then perhaps you've hit upon the root of the problem: education shouldn't be run like a business.
Government involvement is part of the reason we're here. A college charging more money isn't 'dark'--they too have bills. Attending a college to major in something is an investment which should include a cost/benefit analysis.
Which they are currently able to pay. Governments subsidizing student loans doesn't increase the bills for the college.
Of course there should be a cost/benefit analysis. There should be a cost/benefit analysis for any decision. That doesn't mean it's right for the costs to be artificially inflated beyond what's necessary.
Much like a house, nobody really cares about the sticker price, at least as long as it doesn't lose a ton of money. They care about the monthly payment. And even if interest is 0%, you still have a monthly payment for the principal.
(in some ways, college is even worse than houses since at the time of the loan you really don't know what the monthly payment will be at all... it's just magic money. And in fact your payments can heavily vary based on your income (although you'll still accrue interest) and how long you want to pay it back over.)
Setting 0% interest without some fundamental reform of college costs just kicks the can down the road and allows colleges to balloon costs even further since welp, payments are lower now, so you can afford more, right? You always still have to pay that principal though, so it really is just can kicking - at some point costs will balloon enough that 0% interest still has unaffordable payments merely on the principal itself.
I disagree that it will be "instantly" raising tuition but in the long term yeah, eventually any money that you throw at students (grants, loans, 0% loans, loan forgiveness, etc) is going to be swallowed up by colleges as long as they can get away with it.
Fundamentally, cost controls at "state universities" (and similar public institutions) have to be instituted at some point. I don't have a magic wand for how to make schools run more efficiently - administrators seem to be a problem, excessive construction and remodeling seems to be a problem, sports programs seem to be a problem (almost all are run at a huge loss except for colleges that can manage top-10 status in whatever sport). But as a more general statement, colleges are responding to what they think the market wants, and responding to the perception that if they don't, their competition will and they'll lose students. So this is a situation that's pretty ripe for some kind of regulation at public institutions - it's a clear "market failure" where the market is not giving the desired outcome. The public institutions will, in turn, keep a ceiling on the private institutions, and provide a reasonable alternative.
Unfortunately that will require congressional action - much like the "retroactive 0% would be better than $X loan forgiveness for current students!" idea, it simply will never actually get passed so it's not really an option within the current Overton window. And even if democrats proposed it, republicans would simply say no, they are in opposition to ANYTHING that democrats could count as a win or achievement regardless of whether it's right/wrong or good policy (see: burn pit disability).
Since my subsidized loans had interest well below inflation, I decided to pay the absolute minimum possible payment on them for last 9 years. In that time, they have lost 37% of their real value just through inflation alone.
I always felt bad for my friends who insisted on paying off their loans as soon as possible. And now, mine are about to disappear completely for free!
The way to a happy and successful life today is to make sure never to work hard at anything so that you qualify for all the goodies
No matter how many threads you say this in, it isn't going to be true.
Governments, businesses, individuals and reckless borrowers of all stripes - not just students - have been massively rewarded by our current policies from both the left and the right where there is no longer accountability. We make money free so the market doesn't crash. This is so sad and leads to the cynicism and distrust so many of us have towards our institutions today.
And even if that were the case, then interest on that debt would easily cancel the effect out, since interest far outstrips inflation on many student loans.
Arguing that student loans are "forgiven" and that no action needs to be taken because deflation is solving the problem, despite the crushing weight of that debt on so many borrowers even when they're trying to work it off, is twisted logic.
Exactly right! A loan is a time capsule of prices. Wouldn't you rather buy a house 30 years ago than right now?
> interest far outstrips inflation on many student loans
Maybe on some, but not on the federally subsidized student loans we are talking about here. My interest is something like 2.25% (not including the 2 years payments have been frozen). Even when inflation was pretty stagnant, you would be hard pressed to find many years below that.
Where does personal responsibly even start anymore? I would like retroactive payment to the tune of $10,000. I delayed buying a house, or a new car, and several other indulge items; so I could be debt free.
Nothing about this is for people. Its deeply political and fails to address any of the actual issues with higher education in the US.
A while ago I worked in retail while going to school. One of my coworkers purposely stayed below the poverty level so she could receive free government support. She also only had another 8 years before her loans would be forgive at the 20 year mark by maintaining a lower income. During the part of the year she wasn't working she would backpack around India on money she saved.
in my country edu is free unless you want to study on weekends (so you can work during the week)
people shouldn't have to get into debt to get higher edu (and very often not even at top1 institutions)
Think of it with this simplified example, using numbers that are easier to grok. Let's say I've got a school where tuition costs $1,000. Alice cannot afford that on her own. But there are 1,000 people in her country, so if taxes paid for that tuition, each person only needs to pay $1 extra in taxes for Alice to get a quality education. Of course, it's not just Alice going to college, but it's also not every person in the country. In fact, at any given time, most taxpaying people in a country are not attending university, since university is usually only 4-6 years and most people live to age 78 or higher.
So to adjust the example to account for that, let's just assume every member of this society of 1,000 people attended or will attend university (an overestimate for sure). Using the ages as a guideline for proportions, if 60% are above age 18, and at most 8% are currently in college (6 years at college / 78 years of life), then we can easily see how much each taxpayer must pay for everyone to get an education: (80 people * $1,000) / 600 taxpayers = $133-ish.
So you tell me which is a better society: one in which everyone gets a good education for about $130, or one in which some people can't afford a good education because it costs about 7.5x as much money?
>No, ...
I rest my defense.
Or you can read a single word, ignore the rest, and tell yourself you're superior without actually knowing what I said shrug
Also, thank you for reminding me that mathematics is "handwaving". It's good to remember that math is useless and doesn't actually show anything real. We may as well not teach it at all in schools, since it's all just "handwaving".
There are 144.3 million taxpayers in the US, and 329.5 million people. Using the still-accurate numbers of 8% of the population being in college at any given time, and the average college tuition in the US of $8,000/year, we can do the same calculation:
(0.08 * 329,500,000 people * $8,000/yr) / (144,300,000 taxpayers) = $1461.40.
In other words, by subsidizing higher education with taxes, every person in the country could attend college for about 1/5 the cost, as opposed to "only people who can afford at least $8,000/year can attend college, and it costs them 5x as much as it otherwise would."
Those are real numbers. Does that make it feel less "hand-waving" to you?
Then I pay $1461.40 in taxes a year for 40 years (we'll control inflation at 0%, otherwise both my income and tuition rises) while I'm working, assuming I retire at ~62 which is fairly typical. I just paid $58,440 for $32000 of college. This is a good deal why? I was better off when no one was helping me.
Why do you live in a society, where you depend on other people, if you're not willing to help those who depend on you?
No this isn't about making college more affordable for the regular working stiff (it actually does the opposite). It's about enforcing your favored version of charity at the gun point of taxes.
>so I actually only paid $26,440 to help
I don't understand, what's stopping you from doing that now? Just go to some university's school tour as part of a group of potential students and offer somebody $26k for tuition. You'll find a taker. Your dream can become a reality and it doesn't even involve you convincing 51% of the population/reps to vote for it.
The US wastes an incredible amount of money though corruption, inefficient budgets, programs, and poor taxing, all while frequently bending to corporate and wealthy individuals’ interests. This forgiveness program is far from perfect but it’s the best attempt in a while of large reaching positive impact for normal people. Nobody should be claiming this solves the underlying issue of the price of education, but it acts as a bandaid for people still suffering from their debt. It is a good first step and shows relatively good faith. The $10k-$20k is great for those that get it, but the big benefit is the limits placed on interest for loans that are otherwise crippling people.
It is clear this is to buy peoples votes for midterms, but it’s also following through on promises made repeatedly to the public. Why would you not wait to make an action as impactful as possible? There are plenty of good faith arguments saying that this action is not enough or doesn’t solve the problem directly, but it’s ridiculous to oppose such an impactful plan that is genuinely giving relief to people that need it. If you’re stuck on how high the limit is (125k single / 250k married), it’s also important to remember that the cost of living varies wildly between different parts of the US.
There are too many arguments in both good and bad faith to refute, but overall this is having a good impact on a lot of people. If this doesn’t affect you, or you just paid off your loans and feel bitter, it’s important to remember that you have overcome an obstacle that many people don’t have the same privilege of overcoming for whatever reason, and just be happy for them to have a win for once.
A review of this appears to state that it will by far benefit the mid-level income/high-income (up to 125k/250k) earners the most.
This puts the burden of this on low income earners and introduces additional income during a time of historic price inflation.
I have no idea what I can say.
$10,000 / 10,000 people is only $1 per person. That illustrates the benefits of shifting costs to "the population at large" from the "individual alone".
In fact, I spend far more than $1 a year doing exactly that. It's called donating to charity.