Say Hi to SoFi. It’s Suing to Force You to Repay Student Loans Faster
nytimes.com
nytimes.com
Sadly, the predictably insufferable editorial bias of this article prevents the interesting questions from being asked/answered. It's unlikely that SoFi's lawsuit is premised on a "right to be profitable", but instead on actual legal arguments concerning the never-ending moratorium on loan repayment. What are these legal arguments? Guess I'll have to Google it.
[Edit] Looking to other sources, I guess there are actual legal questions regarding who has standing to sue the government for student loan extension. IANAL but having standing to sue and a "right to be profitable" is pretty different..
An ironic claim about bias. Also, do you have evidence of the bias you claim, or are you just biased?
I think that claim is your bias or just misinformation talking. One reason is that it's a common bias of the right - they say liberals think this way, but I never hear actual liberals saying that. Do you have evidence of it?
> I mean, maybe not "mass transit" in the abstract but a lot of specific mass transit policies that directly impact their business? Absolutely.
That's absurd on the face of it, and people are trying to gently point that out to you. Consider that sometimes, when "everyone else is wrong and you're right", it's because you're actually driving down the wrong side of the freeway. Shouting "You're just driving on the wrong side of the freeway because of tribal sentiments!!" isn't a magic phrase that will prevent you from hitting another car.
EDIT: I think you think this situation is akin to "well even bad people should get lawyers so that we know the rule of law is upheld". It's not. You're arguing for something closer to "well the murderer should've just murdered the witness that's testifying, and then the case would be dropped". In other words, you're arguing for something obviously unethical. Even if you believe you technically have a point, it's not a point that you should be telling other people that you want to have respect for you.
Yes, this is trivially true. Let's say there's a mass transit policy that said that ethanol fuel would be subsidized for the next 12 months, to help out local producers. Then after the 12 months the government just simply continues to provide those subsidies. Surely someone has standing to sue here, right? Why not oil companies? etc.
If that's more of an "energy policy" and less of a "mass transit" policy, then fine you can replace ethanol subsidies with high speed rail subsidies or something, though I think that gives you a less-tight analogy with the student loan subsidization scenario where you're illegally subsidizing a direct substitute for a company's product.
The implicit logic that I've seen every now and then is "if the government is doing something nice for someone, then no one has standing to sue to stop it." To me that's the more obviously absurd position. If the government illegally subsidizes student loans, who has standing if not the companies that are trying to provide competing student loans? If the government illegally subsidizes ethanol, who has standing if not oil companies?
Standing requires injury, causation, and redressability. Which do you dispute the existence of in these scenarios?
Again, I'm not saying that oil companies should actually be able to stop mass transportation policies. But to claim that a mass transportation policy cannot causally injure an oil company? Wild. Why are people using this as an example if they can't imagine how an oil company might take some sort of interest in stopping a mass transportation policy?
On the Internet, these are always ironic words.
well said.
As a side note, I'm not a fan of this new trend where papers publish articles that are clearly op-eds without labeling them as such.
These are genuine questions I’m trying to understand the thinking I see on here and Reddit about this issue
Why is college so damn expensive, why are people getting useless degrees, etc…
If you believe the loans are predatory, some things one could do instead that might be considered moral:
1. Raid college endowments to pay down student debt
2. Allow bankruptcy for student debt
3. Allow refinancing at generous rates for student debt
But mug the public?
Your mortgage interest is tax deductible.
Mortgage interest deduction does not have an income threshold.
is there option where instead of “forgiveness”, government help part of interest payment, but if borrower makes principal payment?
discussion often no actual detail or nuance. my issue is people who irresponsible..do not own irresponsible behavior..and say someone else should pay 100% of their debt. no absolutely not.
And, quite frankly, I'd gravitate towards a "no" on this. When taken as a group, I'd expect college graduates to be able to pull off an income stream sufficient to pay down the student loans.
Of course there are individuals for whom student loans pose a real problem. There should be some realistic provisions for discharge in bankruptcy.
Considering our recent/current environment of low unemployment and high inflation, broad-based loan forgiveness is simply the wrong choice from a Keynesian economics perspective. The same is true of continuing the payment pause.
Based on what?
The way it worked 40 years ago? Or even 20?
Costs—for college, but also for other very essential things like healthcare and housing—have ballooned extravagantly for some time, while pay has remained relatively stagnant.
Or is this just based on some kind of just-world theory? "People who go to college are educated; education deserves better pay; therefore, people who go to college are well-paid"? It's a nice thought, but it's not reality.
The fact is, a huge number of people have staggering amounts of student loan debt, and very little ability to repay that debt—and a legal prohibition on discharging it.
What does this situation gain us that would be lost if we simply cancelled all that student loan debt? Some very wealthy companies that made these loans would be somewhat less wealthy. The horror. How could we ever recover.
Someone with a high school diploma will earn on average $1.3 million over their lifetime. Someone with a B.S. averages $2.3 million. The college degree is thus worth, on average, $1 million in lifetime earnings.
Source: https://cewgeorgetown.wpenginepowered.com/wp-content/uploads...
> The fact is, a huge number of people have staggering amounts of student loan debt, and very little ability to repay that debt—and a legal prohibition on discharging it.
I believe I acknowledged that. Making provisions for discharging student loans via bankruptcy would be a really good idea. Much better at targeting student loan relief to those who need it.
> What does this situation gain us that would be lost if we simply cancelled all that student loan debt?
Cancelling all student loan debt would lead to some combination of higher taxes and inflation. No matter how you slice it, that would be a redistribution of wealth from the uneducated to the educated. That redistribution of wealth therefore goes the wrong way -- the uneducated are more likely to be poor, and the educated more likely to be rich.
Only if you attribute 100% of the difference to the college degree, and ignore selection bias.
That's simply not true, at least not in any meaningful sense.
It would be perfectly straightforward to fund that entirely by raising income taxes on the highest earners.
I'm sure some of them count as "uneducated", in the technical "did not go to (or dropped out of) college" sense, but once you're selecting specifically for the highest earners, that ceases to actually matter.
Even if you do that, you're still getting inflation. That'll hit everyone -- not just high earners. Loan forgiveness and payment pauses free up a fair bit of middle class budget and therefore increase the velocity of money.
So sure, maybe there will be some inflation. But having a $150,000 debt canceled, while seeing 0.03% additional inflation, still nets out positive.
It is reality. Those with college degrees earn more.
> The fact is, a huge number of people have staggering amounts of student loan debt, and very little ability to repay that debt—and a legal prohibition on discharging it.
Student debt for undergrad is capped at around $10k per year (depending on which year the student is in). As a result, universities tend to offer generous scholarships that put the total amount students have to spend within that limit.
The only people with staggering amounts of student loan debt are people who take out uncapped loans for a graduate programme in film studies at Columbia.
Fundamental to extortion and exploitation is that the buyer has no choice. If you are dying of thirst, someone can charge you whatever they want for water. If you have no rights (e.g., you are undocumented) and have no job prospects, someone can pay you whatever they want. You must have water, you must have the job.
What does that mean? There are many careers that be attained without a home, without literacy, without healthcare. Heck, you could be a hunter-gatherer.
And the idea that college is for career is a fallacy, a framing of the issue that suits the reactionary, don't-want-to-pay taxes crowd. Life is so much more than career; our country and communities are so much more, have so many more challenges, than careers; education benefits all of that.
(For example, reasoning about public affairs benefits from education.)
> many careers that can be attained after college that will easily pay for the loans that were taken
Could you provide evidence? I'm not sure that's the case.
Also, we need lots of people to do work that doesn't happen to pay especially well.
Also, I greatly value freedom and opportunity and believe everyone should have it, not just the wealthy.
> I don’t see why that burden should be placed in the taxpayer
What is the basis for what we do or don't want to fund collectively? As a taxpayer, I absolutely want to invest in education - for the welfare of the people being educated, for the welfare of our country and communities and the world, for my welfare. You don't have to agree, but on what basis do you make this analysis?
There’s a pair of pending Supreme Court cases on the Biden administration loan forgiveness that may validate or reject this theory within the next couple months[2].
[1] https://en.wikipedia.org/wiki/Higher_Education_Relief_Opport...
[2] https://www.scotusblog.com/2023/02/bidens-student-loan-forgi...
If we're going to have a society which all but requires a higher education, then tuition needs to be made free. Doing it with loans just ensures that the costs will inflate until they're unbearable for most people.
So many businesses in this country arise because of these "quirks", which are really big f*cking mistakes, and then entrench themselves and the problems fester. The U.S. government treating a $100,000 loan for an English lit degree and a civil engineering degree the same is silly. Student loans should be dischargeable in bankruptcy so market forces can act to keep things sane.
Personally, I believe that, generally, the former is more valuable - the problems in our society are not from a lack of engineering, but a lack of understanding the world and basic humanities. But regardless, should your or my opinions be imposed on the free choice of the students? I believe in freedom, in free choice, and that they should decide.
Why are these important?
> actuarially-fair risk assessments
This seems to show that it's not about freedom, but greed. Utter selfishness is not freedom, though people are free to be utterly selfish (to a point). Any freedom that's meaningful is freedom for others; everyone wants 'freedom' for themselves.
Hospitals, feeding the unfed, housing the unhoused, freedom for the oppressed - all probably have poor actuarial risk assessments relative to other investments, on purely financial terms used by Wall Street. Yet they offer tremendous return on investment in welfare of individuals, which is the purpose of an economy and society.
Money itself is not value, and it's a poor metric of value to the world. English literature (and other humanities) study provides the most value to our society, IMHO, however they are paid.
I don't want the arbiters of money to be the arbiters of education and free choice of people. Not only does it stagnate our society and economy, it's not a free society if we can only do what wealthy entities allow.
It is if the person therefore lacks the ability to borrow, and lacks the freedom to study and make the most of their life. Trapping people in ignorance and poverty is quite a blow to their freedom.
This particularly perturbed me with the implication that "ruining" a few people is fine as long as a few other people are made wealthier.
Greatest country etc.
This isn't true. If you go to a state school and work part time to cover your living expenses, you can get an undergrad degree very cheap. And the most prestigious of private schools (e.g. Ivy league) offer very generous needs-based scholarships, so if you come from a poor family you don't have to pay.
You "have to" get a huge loan if you choose to attend a very expensive private school that won't give you a needs-based scholarship. But nobody has to do that, it's a choice some people make. It's a decision made by naive kids straight out of highschool so I still have some sympathy, but this narrative of necessarily having to take huge loans is part of the problem and helps to normalize this. The belief that huge loans are necessary in America is wrong and contributes to the real problem.
From: https://www.forbes.com/sites/michaeltnietzel/2021/11/01/whic...
> The 2021-22 average tuition and fees sticker price for full-time, in-state students at public four-year colleges ranged from a low of $6,100 in Wyoming to a high of $17,750 in Vermont.
> Following Wyoming, the least expensive states were Florida ($6,370), Montana ($7,265), Utah ($7,387), and North Carolina ($7,389).
> After Vermont, the most expensive states for four-year universities were New Hampshire ($17,040), Pennsylvania ($15,312), New Jersey ($14,963), and Illinois ($14,667).
> Over the past five years, average in-state tuition and fees at public four-year institutions fell in 18 states after adjusting for inflation. During that same time period, only six states (Alaska, Connecticut, Nevada, North Dakota, Oregon and Rhode Island) saw their average in-state tuition increase by 10% or more.
> According to the report, in 2019-20, 75% of first-time, full-time students attending public two-year colleges received federal, state or institutional grant aid. At public four-year universities, 78% of students were awarded such aid.
> The average net tuition and fees paid by first-time, full-time in-state students at public four-year institutions was estimated to be $2,640, the lowest it’s been since 2006-07, down more than a $1,000 from a peak in 2012-13 of $3,720 (in 2021 dollars).
> The average net tuition and fees paid by first-time, full-time in-state students at public four-year institutions was estimated to be $2,640, the lowest it’s been since 2006-07, down more than a $1,000 from a peak in 2012-13 of $3,720 (in 2021 dollars).
Even if you have to take out a loan while attending a state school, it doesn't have to be a huge loan. And even a crappy part-time job will reduce that burden, even if it doesn't cover your tuition fully.
Anyone who went to community college and makes the median wage ($69,717) in America is doing way better financially than someone who went school for free in France and makes median wage (€22,140). There's really no contest on prosperity for college grads even when you include ridiculous student loans (median for US: $22K).
Many schools require students to pay for room and board even if they live nearby. Schools are hiding tuition costs in those fees and really need people to pay them.
Finding for state schools has dropped so low many private schools are cheaper than state schools. That doesn’t mean all schools are unaffordable without loans, living at home while going to school can make a huge difference.
But scool for some doesn’t mean there’s no problem.
> summer expenses
Cost of living expenses will be incurred whether you go to college or not. Regardless, most people go home for the summer and 'mooch' off their parents. Summer is also a good time to find an internship. With good internships you can pay off much of your debt before you even graduate. If good internships don't exist for whatever you're studying, that should be taken as a warning..
I actually applied for VT years ago and the only thing they offered was student loans making many private schools far more affordable. Further unless something changed they don’t let freshman figure out their own accommodation. So our hypothetical recent graduate has to actually spend roughly that much money even if they happen to live next to campus.
> Cost of living expenses will be incurred whether you go to college or not.
Again sure, but they impact how much money someone can save from a summer job. If you’re making 15$ an hour while living at home with free room and board then you can save quite a bit. However, that’s far from universal for most people trying to make it on with a high school diploma alone they simply don’t generate a significant surplus every week.
Schools include loans in that financial assistance category. So sure most revive “assistance” but that bill comes due. VT under grads can’t actually come up with that kind of money thus the loans. ~30k of loans * 4 years = 120K which isn’t extreme for undergraduate, but ignores interest which will greatly compound if someone seeks further education.
Thus why actual college affordability is important rather than just loans. Failing to become a doctor is financial suicide for most people in the US. Which plays a huge role in our ruinous healthcare costs.
Probably universities or departments as a whole should be sued.
I don't want to counter your strawman with another, but not everyone needs to get an engineering degree.
We're in this mess because federal student loans live in a bizarro world where they're not subject to any of the normal market forces, checks, and balances that make regular debt work well for society. They are handed out without any kind of real due-diligence, and have absolutely no incentive to be good investments.
If we want to redistribute wealth to invest in education, that's fantastic, but we should just give it in the form of grants, scholarships, or (only in my dreams) some free regional federal universities and technical colleges. Instead we tried to play with the market and got burned, which isn't surprising to anyone with who has studied economics.
it still make zero sense to me why student loan payments on hold. should we also put car loan payment on hold? credit card payments?
yes..people took loans without thinking if they pay off debt. is it every borrower? No.
easy scheme for political party to get votes. make perfect sense to me why sofi would sue.
i always think to my home country. being born in USA like winning lottery. just green card and no citizenship is like lottery. endless opportunity to do something in USA. no mentally and physically ok adult in USA have reason to be in poverty.
but of course USA people thinking government magically solve all of it. true irony that developed country fall into our third world thinking mindset.
constant load shedding? parliaments job to fix.
people dont want to obey traffic rule? could it be something with our culture? of course not. government problem to fix.
Ok..trash everywhere in street? government problem to fix. i will say government should fix it, ignoring that it is myself throwing that trash out on the street instead of in bin even when rubbish bin is right there at hand distance.
not enough jobs? government should fix by hiring everyone.
do we trust government, no. but my party is good and yours corrupt. if my prime minister favorite actually shoots child it is okay and i will justify it.
thats the type of mindset. every problem i have.. it is someone else’s fault. i have zero responsibility.
Joe Biden was the driving force behind student loans being a debtors prison, and i guarantee in a recession this kind of market debt haunts the man nightly. privatizing and profiteering from higher education doesnt somehow enrich or advance your society or its people. it literally discourages the higher education necessary to maintain your position as a driving force of innovation and market leadership. it decays your position as a superpower faster than nearly anything else you could do.
First, a goal of any talking point, which the reactionaries construct at a very sophisticated level (a skill of the humanities, which they want to deny to everyone else), is to frame the question. By making it a question of purely economic value, that would seem to attack liberalism and education at their weakest point - kind of like wanting to take down Tom Brady's reputation and so defining quarterbacks by their running ability. Again, understanding that is a product of humanities education.
Life, freedom, the welfare of the nation, depend on far more than economic output. That's just one element of many.
And also, we have very strong evidence that college degrees do have great economic value: The people whose economic success depends on it will pay people with college degrees far more. Where is your evidence otherwise?
My personal experience, and current experience with someone currently in college, is the education is invaluable. It's transformative. I can't imagine who I would be without what the knowledge and especially the thinking that I learned in college.
Yes. Which is why it's absurd for for people who obtained this valuable asset to demand handouts from people who didn't.
In aggregate, having an educated populace is hugely beneficial to society as a whole, which includes economic benefits.
This does not translate to commensurate economic benefits to all the individuals who get that education.
Our society benefits from these people having an education; therefore, our society should pay for it.
We also should do it because people deserve freedom and opportunity. It's the Land of Opportunity, not the land of rapacious capitalism; it's the Land of Hope and Dreams, not of self-dealing.
The last big legislative reform of anything in the US was the Affordable Care Act, which, despite being a relatively modest reform by the standards of any country with a functional political system, was a once-in-a-generation effort requiring huge amounts of political capital and luck. Any serious reform to higher education would dwarf that.
When I said I wasn’t aware of any serious proposals for education reform, I didn’t mean because politicians (like Sanders) don’t want them. I meant because such a reform is impossible.
From my perspective the fact that so many people think exactly like you do is why those proposals don't have any chance of being treated seriously.
If you all treated them seriously, they would immediately become serious and therefore possible.
Cynical realism ensures that we can never solve any problems.
No, they’re impossible because the US political system is deadlocked by design and not conducive to controversial reforms, not just because not enough people believe in them.
In fact I’d argue most people believe reform in various areas is possible, as evidenced by the fact that they continue bothering to vote for congress.
Biden, the only one elected nationally, proposed it to Congress but it was killed off by the GOP. Someone I was taking to at the time laughed about it and said to me, 'no way was I going to pay for the blacks to go to college!' (they were elderly and white). A shocking, revelatory moment for me. Sample size of 1 in that case, but that's widely theorized to be the basis of conservative rejection of providing any such benefits to Americans.
But the idea that nobody is working on it is a great exaggeration.
The government created this situation and is now essentially buying votes by stepping in to distort the market with this continued debt pause (which solves nothing, just kicks the can a little further down the road). No one on either side is attempting to do anything remotely rational about the situation and I'm not sure what you'd expect a company who had its business model turned on its head by questionable executive action to do except fight that executive action.
What does this mean? No one forced them to take these loans out. A fool and his money are soon parted.
As someone with student loans who remembers my thinking when taking them out, I can assure you that almost every 17-18 year old who is accessing a student loan meets your definition of a fool. There's simply no way for anyone to expect someone at that age to understand what they're doing, especially when there's such societal pressure to signal success in your age cohort by going to school.
The societal expectation of "successful kids go to college" mixed with the shortsighted government intervention of making these loans available to basically everyone is an absolute recipe for disaster.
I am against forgiveness of student loans but I think they should be dischargeable in bankruptcy. The idea that you can make such disastrous decisions so early in your life that you can never opt out of is patently unfair, but there needs to be a high personal cost to ejecting from the situation.