Honest question here (from someone who paid off my college loans, which were small because I had a large scholarship, and someone who has put two kids through college and currently paying for two more in college.) You're right, I'm not okay with this for a variety of reasons (some fiscal, some political -- i.e. selective "help" to those individuals deemed "worthy" by the Democrats.) But my PRIMARY reason for disliking this loan forgiveness is because there is no incentive for colleges to fix their problems. The price of college has increased exponentially compared to other goods and services. Administration has grown to equal or exceed academics. Colleges encourage kids to take out these loans and have no incentive to provide them with a quality and useful education so they have the resources to pay back the loans. SECONDARILY, the kids who have the loans were the sole beneficiary of the loan, yet the 87% of taxpayers who didn't benefit (and either paid their loans or didn't take loans or didn't go to college) are "paying" for it.
I don't understand finance and economics like you, and I agree (after raising 5 kids!) that something needs to be done about these loans and the push to get kids to take out loans they'll never be able to repay. I think loans should be reserved primarily for advanced degrees (medical school, law school). That said, I would suppose something like forgiving the interest (but not the principle) and also something to make colleges accountable for their actions.
Great comment Allison. I think you just perfectly laid out the shortcomings of this and why it's pretty clearly a political chip being played. I like your suggestions as well. It's excruciating watching the government parade around like it's 'fixing' problems of its creation, especially considering the fixes aren't actually fixes. I think the student loan situation has gotten so far out of control that as someone who didn't pay for his education, I look at it from this vantage; "why are we still even arguing about this, the experiment clearly failed, just write it all off already."
Whether the government actually addresses the underlying issues or not, the day of reckoning is coming for colleges and universities for precisely the reason Pawsative laid out last night. Kids can watch TED talks, lectures, training videos, and tutorials online for free. It's all there. It's actually still one of the great things about YouTube. One way or another, the market will find a way to correct this. For taxpayers, this sucks. Obviously. I didn't pay for my college but now I'm paying for somebody's. I don't like that. But I don't dislike it any more than I dislike paying to bailout Chrysler, Boeing, or Citigroup. I very rarely fly. Like maybe once a year but I bailed out the airlines just like everybody else. All of this is a large scam and I think that's really the point I was trying to get across.
I want to make one more point on this after sleeping on it because I don't think my total intention came across strongly enough in the post; none of this is good. Being okay with something and "liking" it are not the same. The entire situation is a mess. But I want to elaborate on a couple things. I understand the moral hazard of debt forgiveness. The problem is we do it already. How do you think Ford felt when their competition was saved by bailouts from taxpayers? What about taxpayers who don't actually own cars? Why should they have been forced to cover that? My argument isn't that bailouts are good; on the contrary. But this is all by design. It's why the student debt carrot is coming out again. The powers that be are trying to start a class war. Don't fall for it. Assess what is happening fiscally and position yourself to come out on the other side.
When did $10,000 become serfdom? I got loans and worked multiple jobs during college and graduated with $30,000 in debt 40 years ago. I paid it off in five years on a $15,000 salary - with more than half of my paycheck being deducted for taxes, benefits, etc… if I can do it so can the rest. Don’t be a fool and go to your state university for in state tuition and a much reduced overall cost. Tuitions are grossly inflated thanks to the fact that student loans have been made easy to get - they shouldn’t be easy to get. Loans should be needs based and merit based - in more ways than one, from GPA to major. Most people don’t need to get a college degree because most jobs just don’t require a college degree. Employers demanding college degrees for jobs that really don’t need one is just corrupt on many levels.
Exactly. More over its now possible to watch the World’s best lecturers for free via the internet. Dr Jordan Peterson’s college lectures are fantastic. Cost $0
Tell your kid to clean the bathroom and you’ll give him $10. When he’s finished give $5 of the $10 to his sibling who didn’t clean the bathroom and the one who did the work how much he likes socialism now.
Right. The problem is the socialism already exists in numerous other areas of the economy as well. We’ve socialized losses and privatized profits on numerous occasions. Banks and autos during GFC. Airlines and leisure during COVID. For some reason college debt, which has been an utter racket for decades, is the line in the sand.
And another $3 billion for Ukraine. They can’t get us to hyperinflation fast enough!
What’s a few billion among friends?
Wish we actually had some - friends.
Honest question here (from someone who paid off my college loans, which were small because I had a large scholarship, and someone who has put two kids through college and currently paying for two more in college.) You're right, I'm not okay with this for a variety of reasons (some fiscal, some political -- i.e. selective "help" to those individuals deemed "worthy" by the Democrats.) But my PRIMARY reason for disliking this loan forgiveness is because there is no incentive for colleges to fix their problems. The price of college has increased exponentially compared to other goods and services. Administration has grown to equal or exceed academics. Colleges encourage kids to take out these loans and have no incentive to provide them with a quality and useful education so they have the resources to pay back the loans. SECONDARILY, the kids who have the loans were the sole beneficiary of the loan, yet the 87% of taxpayers who didn't benefit (and either paid their loans or didn't take loans or didn't go to college) are "paying" for it.
I don't understand finance and economics like you, and I agree (after raising 5 kids!) that something needs to be done about these loans and the push to get kids to take out loans they'll never be able to repay. I think loans should be reserved primarily for advanced degrees (medical school, law school). That said, I would suppose something like forgiving the interest (but not the principle) and also something to make colleges accountable for their actions.
Great comment Allison. I think you just perfectly laid out the shortcomings of this and why it's pretty clearly a political chip being played. I like your suggestions as well. It's excruciating watching the government parade around like it's 'fixing' problems of its creation, especially considering the fixes aren't actually fixes. I think the student loan situation has gotten so far out of control that as someone who didn't pay for his education, I look at it from this vantage; "why are we still even arguing about this, the experiment clearly failed, just write it all off already."
Whether the government actually addresses the underlying issues or not, the day of reckoning is coming for colleges and universities for precisely the reason Pawsative laid out last night. Kids can watch TED talks, lectures, training videos, and tutorials online for free. It's all there. It's actually still one of the great things about YouTube. One way or another, the market will find a way to correct this. For taxpayers, this sucks. Obviously. I didn't pay for my college but now I'm paying for somebody's. I don't like that. But I don't dislike it any more than I dislike paying to bailout Chrysler, Boeing, or Citigroup. I very rarely fly. Like maybe once a year but I bailed out the airlines just like everybody else. All of this is a large scam and I think that's really the point I was trying to get across.
I agree 100%. Thanks for the additional explanation.
I want to make one more point on this after sleeping on it because I don't think my total intention came across strongly enough in the post; none of this is good. Being okay with something and "liking" it are not the same. The entire situation is a mess. But I want to elaborate on a couple things. I understand the moral hazard of debt forgiveness. The problem is we do it already. How do you think Ford felt when their competition was saved by bailouts from taxpayers? What about taxpayers who don't actually own cars? Why should they have been forced to cover that? My argument isn't that bailouts are good; on the contrary. But this is all by design. It's why the student debt carrot is coming out again. The powers that be are trying to start a class war. Don't fall for it. Assess what is happening fiscally and position yourself to come out on the other side.
When did $10,000 become serfdom? I got loans and worked multiple jobs during college and graduated with $30,000 in debt 40 years ago. I paid it off in five years on a $15,000 salary - with more than half of my paycheck being deducted for taxes, benefits, etc… if I can do it so can the rest. Don’t be a fool and go to your state university for in state tuition and a much reduced overall cost. Tuitions are grossly inflated thanks to the fact that student loans have been made easy to get - they shouldn’t be easy to get. Loans should be needs based and merit based - in more ways than one, from GPA to major. Most people don’t need to get a college degree because most jobs just don’t require a college degree. Employers demanding college degrees for jobs that really don’t need one is just corrupt on many levels.
Bottom line is the federal govt shouldn’t be in this business and we wouldn’t have this problem.
Exactly. More over its now possible to watch the World’s best lecturers for free via the internet. Dr Jordan Peterson’s college lectures are fantastic. Cost $0
Tell your kid to clean the bathroom and you’ll give him $10. When he’s finished give $5 of the $10 to his sibling who didn’t clean the bathroom and the one who did the work how much he likes socialism now.
Right. The problem is the socialism already exists in numerous other areas of the economy as well. We’ve socialized losses and privatized profits on numerous occasions. Banks and autos during GFC. Airlines and leisure during COVID. For some reason college debt, which has been an utter racket for decades, is the line in the sand.