General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBiden shouldn't listen to Schumer and Warren on student loans
Washington PostYes, student loans can heavily burden those who find that their education hasnt translated into a good job. Millions have defaulted on their loans. Many more struggle to repay, hampering their ability to financially prosper. Black, Hispanic, low-income and first-generation students are the most likely to default under crushing debt burdens.
But those experiences arent universal. Many student loan borrowers are advantaged, well-educated high earners. About 56 percent of student debt is owed by those with masters or professional degrees, and almost 35 percent of loan balances are owed by individuals in the top 20 percent of the income distribution. Many student-borrowers need relief, but well-off borrowers who are thriving thanks, no doubt, to their college degrees do not.
Consider the top five degrees responsible for the most student debt: medical and law degrees, masters and bachelors degrees in business, and bachelor of science for nursing. The education financed with those loans makes the debt-holders more likely to increase their earnings.
Thats why the $50,000 across-the-board relief championed by Schumer and Warren is wildly out of synch with the traditional approach of progressive policymaking. Food stamps, for instance, serve households whose median income is about $19,000 a year, and provide $2,300 in value for the average household. Families that claim the Earned Income Tax Credit the largest cash income support for working families earn about $36,500; their average annual benefit is about $2,200. The median income of parents of Pell Grant recipients was about $28,800.
Turin_C3PO
(13,650 posts)should probably look at the income/student loan debt ratio. Or cut everyones loan debt in half. Personally, I dont have a problem with a general student loan amnesty for everyone but I recognize thats expensive and many people are against it.
empedocles
(15,751 posts)OregonBlue
(7,744 posts)Well written and well reasoned.
wishstar
(5,267 posts)His rationale is that for sake of fairness if we provide free community college plus free 2 yrs in state college we should also give a $10000. debt relief for those who already borrowed to pay for their college. That makes a lot of sense and helps relieve some of the inevitable resentment over giving free college while others are stuck with roughly equivalent amount of debt or those who already owe for community college and state university while others could now get free educations.
genxlib
(5,507 posts)It will tee up a backlash that will hammer us for years
Student debt is a problem that needs to be addressed but I would much rather target it to need. Even better would be to find a way to link loan forgiveness to community service.
More importantly, we need to address the cost of higher education. Addressing student debt is just treating the symptom.
PBC_Democrat
(401 posts)It'll hurt us bad with:
Parents who sacrificed and saved so kids wouldn't have to borrow
Students who worked and sacrificed and saved instead of partying and borrowing
People who went straight to work because they couldn't afford college (and now they get to pay for the people that went to college)
People who will hear stories of loans being forgiven for future doctors, lawyers, engineers, and other with high income potential
My suggestion is to fix the state two-year college system and make it affordable, or free, for all students.
Make all student loans federally funded at a low interest rate.
Make the payback schedule a percentage of income and set a max number of payments.
For existing loans - the federal government buys them and refinances them at 2 or 3 % and starts the clock on the number of payments.
Give bigger breaks for public service and work in underprivileged areas.
Much like 'Defund the Police', this is tailor-made for ads against D candidates. Imagine Tyler and Tiffany reminiscing about the spring break parties with the tagline 'I'm glad the Joe Biden forgave the loans I took to go to Cabo'.
Pobeka
(4,999 posts)I could not agree more.
If you are going to hand out $$ for unpaid loans, then also hand out the same $$ to those who sacrificed.
I like your ideas -- especially refinancing those existing loans at a lower interest rate makes a whole lot of sense.
Thanks.
BusyBeingBest
(8,049 posts)Many other ways to make loan repayment more feasible for people who struggle with the debt. Lower interest rates, tying repayment to income, maybe even capping repayment at a certain timeframe or amount or debt forgiveness for certain fields who do needed work. Just waving a wand so that some people basically win a lottery and other people pay for those lottery winners with their tax dollars...that's bullshit.
The Revolution
(763 posts)We already have income based repayment plans, but I would say simplify it down to one such plan. Biden has already suggested lowering the payment down to 5% of income versus the 10-20% currently. I would also base this off the borrower's income rather than household income.
I agree on lowering the interest rates, but my suggestion would be more like 1% or less. The government doesn't really need to make money off this; having a educated population is already a benefit, so it's worth losing a little to inflation.
LostinRed
(840 posts)Is to allow for student debt relief through bankruptcy.
Dr. Strange
(25,898 posts)thinkingagain
(905 posts)Free college be tied to those that receive it give back by working in underserved areas for a time. Low income people often need lawyers for something as simple as a will but cant afford it. Rural areas need doctors etc.
the list could go on. I always think if your givin something you should pay it forward.
Arazi
(6,829 posts)But don't anymore because they're student loans were too onerous and they had to make more $$.
Do they get relief? Susie and Sam worked for 5 years administering work release programs with their graduate level social work degree but couldn't afford to move out of their parent's house so they finally jumped to the lucrative Goldman Sachs gig.
How are you going to measure some of these things? Cause I know plenty of real life examples of folks who desperately wanted to work non-profit gigs but they had to quit for greener pastures because of their student loans
GaYellowDawg
(4,443 posts)Look up the Public Service Forgiveness program. In return for working in an area of need, student loans are cancelled after 120 consecutive, on-time payments. The problem is, DeVoss Education Department has rejected about 99% of applicants to that program.
beachbumbob
(9,263 posts)Fiendish Thingy
(15,367 posts)The bankruptcy part would require a new law.
forthemiddle
(1,373 posts)I keep seeing that he can use executive order, but I havent seen under what authority?
We are talking real money here, no President can wave a magic wand and say, you are now debt fee.
Im honestly curious as too what the executive order would say?
Fiendish Thingy
(15,367 posts)Klaralven
(7,510 posts)Student loans for most private colleges and for most graduate degrees would not be forgiven and there are reasonably low limits on the amounts.
Joe Bidens Student Loan Plan: How It Could Affect Your Financial Future
https://www.nerdwallet.com/article/loans/student-loans/joe-biden-student-loans
Buffy is not going to be forgiven the $220,000 for that PhD in Art History at Bucolic University.
Voltaire2
(12,626 posts)Johnny2X2X
(18,745 posts)You owe $100K, you make $50K in "discretionary" income, you pay $2500 a year, or just over $200 a month. And he wants it all forgiven after 20 years of payments.
This would be life changing for millions of borrowers. And I hope they include loans for graduate degrees in them eventually. Some of the graduate students owe the most and are in the most trouble. It must be income based and be reasonable. 10% of gross income is not reasonable for most people, that's a mortgage payment.
LanternWaste
(37,748 posts)Any objective analysis you can allow us? Or simply more allegations regarding Buffy the Imaginary Tide Pod?
dsc
(52,130 posts)There are thee major problems with college debt as it now stands. 1) there is a considerable amount run up by students going to fraudulent 'universities' that provide no educational value. Those debts, regardless of amount, should be forgiven. 2) college debt is highly disadvantaged under bk laws. That should be revised. 3) students have been locked into interest rates that are entirely too high and an ability to refinance should be offered.
Klaralven
(7,510 posts)It would force lenders to be more careful in evaluating whether the abilities of the student borrower in conjunction with the course of study will result in earnings to pay back the loan.
AmericanCanuck
(1,102 posts)K&R
Doremus
(7,261 posts)Once you start predicating student loan relief/tuition on financial need, the rightwing starts foaming about the welfare state, cradle-to-grave BS and the usual thinly veiled racist dog whistles.
We need tuition and loan relief because its the right thing to do for our citizens and the country. Period. Thats a pretty good defense against the coming barrage which will be coming whether we do it or not.
mtnsnake
(22,236 posts)but I highly doubt he will do anything of the sort when it comes to that idea.
Arazi
(6,829 posts)I recommend a follow over there
Yeehah
(4,524 posts)Now that regular people need help, not so much.
Maven
(10,533 posts)Great way to sap enthusiasm from young voters. Next up: A balanced energy portfolio must include "clean" coal!
Record numbers of new people voted in 2020, trying to take back the government and make it work in their favor for once.
How many of them will EVER come back if they see zero effort being put forth to help them? I know and so do you.
Evergreen Emerald
(13,069 posts)The students need help.
I do not understand the complaints about student loan forgiveness. Are these people complaining about the tax cut for the corporations?
DFW
(54,052 posts)If you're in a secure job and making $300K a year, you can pay it back over time. If you can't find a job and live on $30,000 a year, you can't. The first category shouldn't even apply for relief. The second category should get it without even asking.