These are genuine questions I’m trying to understand the thinking I see on here and Reddit about this issue
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.
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.
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...
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?