Comment by anonymouskimmer | Hacker News Reader

Comment by anonymouskimmer | Hacker News Reader

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anonymouskimmer

The Biden plan has cutoffs of $125k for singles, and $250k for married couples. As income thresholds these are just too high. Even in urban California. A 20-something couple from an upper-middle-class background with $200k in salary could get $20k forgiven. That's ridiculous. And inflationary, especially on things such as house prices.

https://www.whitehouse.gov/briefing-room/statements-releases...

> The Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action.

Yeah. These numbers should be reduced by 50% at least, meaning maximum 60k for individuals and 125k for couples. That would be generous enough to not miss some HCOL middle class folks. And it shouldn’t apply to graduate school debt at all.

I also question the need for full forgiveness, and wonder what the inflationary impact would be on something like “everyone’s student loans from the federal government are now 0%. Your minimum payment is 5% of your AGI and your tax returns will be used to pay down the balance until it’s paid off. future loans will be capped at prime rate +.% fixed at time of borrowing”. Leave private loans untouched, but dischargeable at bankruptcy. This would pressure on student loan private lenders to lend based on certain conditions (I.e, grades and academic progress) with a minimum amount lent by the federal government. It would result in a lot of withholding changes, but I think that’s a good thing.

I don't like the idea of a flat tax. Or giving 0% rates to the wealthy (which would encourage the abuse of student loans by people who do not need the loans to attend school).

That’s a good point. Perhaps the interest rate could remain the same for people making over $60k and reduced for those making less, with none of the “capping at x% AGI” for those above $60k either. This would make it more dynamic for, I.e, a person who takes time off because of illness, caring for a family member, or having a child.

More complicated and potentially more room for fraud.

Overall, I think we ought to do something for people struggling. But I agree that nothing should be done for the wealthy.

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