Supreme Court seems ready to reject student loan forgiveness
apnews.com
apnews.com
Indeed, almost every politician sells their votes to campaign contributors.
The universities were complicit, in that they charged exorbitant amounts of money, ever increasing, for an education that would never pay for itself. They were the adults in the room, and neglected their duty to prepare the next generation.
As a society we should agree that paying for education is absurd, since society benefits as much as the individual. Cancel student debt, make university free, and get rid of bullshit colleges that offer no promise of a bright future.
That's a great idea, but student loan forgiveness doesn't do that! It does nothing to hold the universities accountable. On the contrary, it enables universities to keep doing what they're currently doing!
My view is that _someone_ needs to hold universities accountable:
- Under the current system, students are theoretically holding universities accountable. When students choose a university, they (in theory) consider how valuable the education is to them personally, and balance that against how much they would have to pay. This is a decision that each student makes personally, and they personally pay the costs and personally receive the benefits.
- But if we don't think students are able to make that decision, then someone else (e.g. the government) needs to hold universities accountable instead. For example, the government might put a cap on how much money universities can charge students, or put restrictions on universities offering degrees in fields that society considers less valuable.
The problem with the student loan forgiveness plan is that _nobody_ is holding the universities accountable. Students have no incentive to consider the cost of tuition, if the taxpayer will ultimately foot the bill; but taxpayers won't get any say in whether the degree is worth it or not.
> As a society we should agree that paying for education is absurd
Right now, a lot of the benefits of education go to the student, in the form of higher salaries and higher social status. As long as that continues to be the case, I think it's only fair that students should be expected to pay for it.
> Under the current system... holding universities accountable.
No, universities are not accountable, they have optimized for repeat customers just like books, and now the autograders for the online class systems. There's almost no bargaining power here. Its a take it or leave it system.
> But if we don't think students are able to make that decision.
We already covered this under the previous statement. The decision doesn't do anything.
> The problem with student loan forgiveness...
The problem is there's no risk for the loan originators, you can't discharge the debt in bankruptcy court, even if there's fraud at the university, you are still responsible for paying the enron amounts. Its debt slavery for life until you can pay it off.
> Right now a lot of benefits go to the student.
Have you looked at graduation rates? Some of the better colleges are slightly above 25%, and don't get me started on the weed out/dropout factory classes they allow the teachers to structure.
Ever seen a 3 unit class that requires 30 hours a week of study with a probability of passing that may be 0.3%^25th power, or negative because of defective Pearson Vue autograders... with Khan Academy lectures to the modules linked instead of the teacher actually lecturing? Seriously I can't make this up, just withdrew from it ($1,000 in books/tuition/material at week 4 80% of the class is failing). Absolute ridiculousness. If you want to fix education, you kick them in the gut where it hurts, the money.
I agree! Universities today are dysfunctional, and the current system of "expect students to hold universities accountable by refusing to attend dysfunctional universities" doesn't seem to be working.
My point is that _someone_ needs to be holding universities accountable, but the student loan forgiveness plan effectively means even less accountability for universities than they already have.
I would hope it's not an "I got mine" situation, and the people fighting for cancellation continue the battle towards free education.
It is strange that we say 18 to be too young and stupid to make this type of contract, but not stop them making most other types of contracts. Or signing up for military... If they truly were that stupid, maybe we should significantly increase the age limits for contracts.
This is the point. The military aims to recruit the vulnerable, because hardly anyone in their right mind would sign up to die.
Most contracts won't change your life. They're short-term contracts. Even a car loan is only 4-5 years. Also, the kind of car you drive usually doesn't affect your earnings potential, so going cheaper and buying a used car doesn't hurt you at all. Not to mention, other kinds of loans are not guaranteed by the government, so you can't even get them unless you're credit-worthy, whereas they'll hand out unlimited student loans to any kid.
It takes two sides to sign a contract. Everyone blames the kids, but nobody ever seems to blame those handing out the student loans to people who can't afford the loans. After all, this kind of predatory behavior played a big part in the subprime mortgage crisis.
A few contracts can change your life. A home mortgage, e.g., a 30 year loan. Student loans, which can be almost the equivalent of a home mortgage, in some cases even bigger than a mortgage. Or of course signing up for the military, which could end your life.
18 year olds rarely need to enter into home mortgages. They can rent. Again, renting vs. owning your home usually doesn't have an effect on your earnings potential. And of course 18 year olds rarely even qualify for home mortgages. But society has determined that college degrees are important, and if you don't get one, it can greatly reduce your lifetime earnings. So kids feel extreme pressure to enter into these mortgage-like contracts.
First thing it is not “forgiveness”. That would be telling creditors to take a hike and declare the loan contracts null/void.
Instead, student loan companies are salivating at the opportunity to reap gold mines of taxpayer dollars. They wrote a ton of really bad loans and old uncle Biden wants to reward them for their crappy lending practices.
I certainly understand the sentiment of taking out a loan at 18 years old and not realizing the consequences. But the solution isn’t paying off companies who know better to give you that loan so they can go afford more private jets and yachts for the C Suite.
Let the loans default. These creditors are rich enough already. You made a $250k loan to an 18 year old studying hair design? Tsk. That’s on you.
"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."
- Article I, Section 9, United States Constitution
The money has already been drawn. The loans were disbursed, the colleges paid years ago. The pending student loan payments in question are not in the treasury yet; many never will be regardless of the outcome of this case.
And if it actually goes through? It's not like Pres. Biden has ever concerned himself about increased govt spending.
US gov debt increased by ~$5.0 trillion in the 8 years of the GW Bush administration.
US gov debt increased by ~$9.3 trillion in the 8 years of the Obama administration.
US gov debt increased by ~$7.8 trillion in the 4 years of the Trump administration.
US gov debt seems to have increased by ~$5.0 trillion in the 2 years so far of the Biden administration. (!!)
of course, not all debt can necessarily be attributed to or blamed on a president or a party (congress, force majeure etc), but from a "amount of dollars added to US gov debt during a single 4-year presidential administration" perspective, Mr. Trump comes out as the winner -- so far.
sources for above: waves hands take your pick of outlet/gov agency/etc.
Uhm, so how much were those tax breaks to the wealthy Trump enacted? And, uhm, how much did each of the Iraqi and Afghani wars cost individually? Oh, and how much was the development of that shiny new fighter jet?
So all of those were more necessary than educating our population in a globalized and highly-competitive economy?
Not that I should expect anything more of this supreme court administration.
Edit: forgot poorly planned corporate Covid stimulus
The Supreme Court is supposed to interpret the Constitution and federal laws as they are written, not as people wish they were written. It's not their job to legislate from the bench.
If you want student loan forgiveness, get Congress to do it.
Legislating from the bench is all the Supreme Court does. Their decisions are literally personal interpretations of the Constitution as they wish it was written, because there is no objective interpretation of that document. That's why their decisions include dissenting opinions, and why they undo previous decisions.
Didn't they vote on the HEROES Act? How do you read the relevant sections of the HEROES Act in a way that excludes this?
In many ways I agree with you though. Education for the US population is probably a far better use of that amount of cash
However, we aren’t arguing about making college free or incentivizing colleges to reduce their fees. I can see all your arguments in service of that point.
We are talking about loan forgiveness: Releasing one group of people from fulfilling their part of a financial deal they consciously made to benefit themselves, by using the money of other people. The deal they made was, they borrow funds to pay for a purchase they made, but when it comes time to pay the funds back, they are backing out and want someone else to handle it. And that idea of making others clean up your mess fundamentally bothers me to the core, just as much as when it happens to corporations.
I can even get behind student loan INTEREST forgiveness, let’s ease that. But paying off the principal seems to go too far and teaches the wrong life lesson about not having to keep your end of a deal, to millions of young adults.
I’m not making a political argument. Just one based on the principle of being a responsible adult.
To be clear, nobody else has to handle it. The debt is owed to the federal government, and if forgiven is simply erased.
It would mean that less money will be paid in the future to the federal government from student loan debtors. But the federal budget changes every year due to many different factors. There's no inherent requirement that the federal government has to spend $X rather than $X + Y or $X - Y. And of course general tax income various from year to year due to economic conditions, changing tax rates, etc.
Moreover, a lot of student loan debt never gets paid back anyway, due to default, forbearance, or death of the debtor.
Let me put it this way: if you truly believe that this student loan forgiveness will have a significant effect on the overall inflation rate of the United States, that just proves how incredibly burdensome this student loan debt is on the debtors.
On the other hand, the debt was never going to be all repaid immediately anyway. We're just talking about resuming regular payments, as it was before the pandemic started. If the debt is not forgiven, it would still take many years, even decades, for it to be paid back, and thus wouldn't be a massive contributor to current inflation. Current debtors have only saved a couple years worth of payments. In a sense, the "inflationary damage" has already been done by the pandemic suspension of payments (begun by the previous administration).
Anyway, it's strange to think of something like higher food prices as caused by people having too much money, because food is a necessity, and nobody should go hungry for lack of money.
It is true that the US has an obesity problem, but it's not caused by people having too much money either, otherwise the richest would be the most obese, and the poorest would be the least obese, but that's not the case. Moreover, if "luxury", non-necessary foods were driving inflated food prices, then that would be a kind of self-limiting phenomenon, might even be considered good and healthy. That doesn't seem to be the case either though.
Why couldn’t the loans be significantly reduced then? Don’t most Americans struggle to come up with even a few hundred dollars in an emergency? Why not make their debt repayment a tenth of what it was to “teach the right life lesson”, or demolish entirely any interest they must pay and apply previous interest payments to the principle? Why not restructure plans based on income that would allow those loans to be forgiven assuming an (admittedly shorter) repayment period, whereby if the students made consistent repayments for 3-5 consecutive years the loans could be forgiven. Wouldn’t any of those plans work to “teach them the right life lesson” and also reduce the ridiculous drag on our economy that are these loans?
There are plenty of ways to teach people to be responsible and make these burdens go away for the betterment of society as a whole.
But this kind of loan forgiveness is simply "let's just not obligate you to pay any of it, and in exchange you have to do... nothing" – when did this become an option, let alone official policy?
"the principle alone is worth putting millions of people in cumulative trillions of debt" – the principle didn't do it, the people that made a conscious choice to pick certain schools and degrees did it. Let's not rob them of agency and responsibility, nor should we be patronizing towards many of the borrowers. They knew they would have to pay it off with interest after graduating.
Growing up, it was very clear that my parents were never going to be able to pay for our college. It was just understood given our income levels.
So the expectation was that we would make decisions that match our situation. So we went to a community college (cheap and free in some situations) with the understanding that we would switch to a state school and it wouldn't have mattered, since the degree would just reflect the better known state school's name. So it was a win-win. And our family was generally clueless about the American system, yet we absolutely knew we would have to get college degrees.
I stayed at home to save money instead of staying on campus, and came out with 28k in debt (but that was because I did 6 years of college since I worked all 6 years). It could've ben less. 28k in college loans at 3%. Those were all conscious choices we made. It took me 15 years to pay off my student loans but that's because I had the minimum interest, minimum payment. I probably wasted a lot in interest but the $200/mo barely ever made a dent in my paycheck.
I _know_ this is likely a straw man but have to mention it. I have spoken to a neighbor who literally studied student loan repayment as a policy issue in 2019, and he said nearly half the people asking to have their debts forgiven are grad students. Forgiving grad student loans is simply absurd. Now we are truly subsidizing a privileged few.
I do concur that everyone is told in high school that you need a college degree to survive, and that it is messed up that we mislead children that way.
But as far as I have seen, the advice would've been to go to college, and less about going to expensive colleges. Or to get degrees in fields that will never give them the earning power to pay off their student loans.
You can go to a state school (in-state tuition), be a commuter, attend community college to further save. All those options are there to cut costs. Many students simply didn't want to do that, and are now asking everyone else to pay off their bad financial decision. What's to stop them from doing the same for other financial decisions like car loans, mortgages, etc? You could make the same arguments about being told about the virtues of home ownership.