Comment by danaris | Hacker News Reader

Comment by danaris | Hacker News Reader

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> I'd expect college graduates to be able to pull off an income stream sufficient to pay down the student loans.

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.

> Based on what?

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.

"The college degree is thus worth, on average, $1 million in lifetime earnings."

Only if you attribute 100% of the difference to the college degree, and ignore selection bias.

> No matter how you slice it, that would be a redistribution of wealth from the uneducated to the educated.

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.

> It would be perfectly straightforward to fund that entirely by raising income taxes on the highest earners.

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.

The idea that reducing inequality by redistributing the massive gains of the very wealthy to those who actually produced them will raise inflation by a degree that makes it hurt people more than it helps is propaganda with no basis in fact.

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.

> 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.

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.

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