Do You think Student Loans Should be Forgiven?

[PinkAndBlueBling]

Who sets the interest rates for mortgages?

Congress sets the rates, unless you go to a private bank. They hold a very small percentage of student loans. Most are offered through the US Department of Education. Before COVID, the rate was between 3%-6%, depending on loan type and when disbursed.

 

[Lookinagain]

Congress set the rates on direct student loan rates made by the Dept. of Education. But not on mortgages as far as I know.

 

[smitcompton]

Hi,

I wish to clarify a point. When I said taking a loan out may have been the easy way, I was certainly not calling anyone lazy. I will give you other ways to have gone to college with less cost.
1. Go to Community colleges for two yrs and then switch to a four yrs college.
2. Work for year or two and save up. At 18 you probably live at home so few expenses. Save, Save , Save.
3. Find a job that pays for your education. Go to college at night. Yes, its what I did for part of my education. I knew many people who did this. Some got their law degrees.

Even those students whose parents paid for their education may have made sacrifices. No vacations. no new cars, smaller house. So many things.

People need a stake in their education. things we get for free are seldom valued as much as they should be. The sacrifices people make aren't viewed as suffering. Those people are proud they did it. And IMO, they ought to be.

Annette
I clutched my pearls. Thank God, they are South Sea.

 

[Dancing Fire]

They just love to get the middle and working class fighting amongst themselves over the crumbs when the money should come out of greedy corporate profits, the bloated military budget and of course, the billionaires who walk on the backs of all and don't pay their fair share of taxes.

Since the top 7% earners in this country are paying most of the taxes. What is fair share to you? 50% of their earned income? 60%? or more?.

 

[PinkAndBlueBling]

Since the top 7% earners in this country are paying most of the taxes. What is fair share to you? 50% of their earned income? 60%? or more?.

They might pay the most in dollars, but not as a percentage of income.

 

[yssie]

I don't even care about the top 2-6%. I'll settle for the top 1% - of people and corporations masquerading as people for tax leniency - paying their fair due.

 

[Dancing Fire]

They might pay the most in dollars, but not as a percentage of income.

The bottom 5% are paying 0%. Are they paying their fair share?

 

[ItsMainelyYou]

The bottom 5% are paying 0%. Are they paying their fair share?

Yes, because their entire paycheck goes straight back into the economy for goods and services.
But lets just ignore the mountains of info. that is the Panama, Paradise, and Pandora papers proving that the rich offshore and hoard their money instead of fairly contributing to the systems that are unfairly geared for their benefit.

 

[Dancing Fire]

Yes, because their entire paycheck goes straight back into the economy for goods and services.

So the top 5% don't spent any of their money?. And how many jobs has the bottom 5% created?

 

[ItsMainelyYou]

So the top 5% don't spent any of their money?. And how many jobs has the bottom 5% created?

Pfft, cut the sh!t. This is one of the oldest lies.
You're not anywhere near as daft or obtuse as you pretend.
Here's a take from some investors.

The Big Fat Lie That Started It All: Investors are Job Creators - Patriotic Millionaires University

Tax Basics The Big Fat Lie That Started It All: Investors are Job Creators (In the words of millionaire, investor, and not-at-all job creator Morris Pearl, Chair of the Patriotic Millionaires) I’m an investor who hasn’t actually worked in years. I have millions of dollars in the stock market, i

pmuniversity.org

And some more from everyone else.

American consumers are the real job creators

How stimulus money may work double toward boosting the economy

theweek.com

Who Are The Real Job Creators?

I am all in favor of government doing less, spending less, and extracting less from the citizenry in taxes. There may be sound rationales for skewing the tax cuts that emerge from such reforms toward the highest earners. Attempting to foster long-term job creation in the economy at large is not...

www.forbes.com

Venture Capitalist Warns Of Job Creation Myths

Bill Frezza, a venture capitalist and a fellow at the Competitive Enterprise Institute says the idea that creating jobs leads to growth and prosperity is a fallacy. He tells Lynn Neary that the jobs myth is at the heart of the nation's unemployment problems.

www.npr.org

Debunking the Myth of Small Business Job Creation

Opinion | Small businesses are not the engine of job growth, but that hasn't stopped small-is-beautiful advocates from continually making the claim.

thereader.mitpress.mit.edu

This concept has been disproven to death over many years.
The 5% are not enough to drive the economy.
Consumers drive the economy. They also create the jobs.

Everybody knows this. Including you.

 

[Dancing Fire]

American consumers are the real job creators

How stimulus money may work double toward boosting the economy

theweek.com

Everybody knows this. Including you.

If that is true then our government should send every citizen $5k per month.

 

[ItsMainelyYou]

If that is true then our government should send every citizen $5k per month.

It is true. There really isn't any disagreement about it at this point.
Read the articles and actually find out how things work- I honestly think it will be eye opening for you. You may be less enthusiastic to defend the uber rich when you find out where you actually slot in the scheme(surprise! It's not in their column) and your ultimate expendability. You're like the chicken defending the fox.
They could do something like that with a reallocation of funds. UBI is coming. I know I've discussed the concept with you before.
Or, they could offer Universal Healthcare to start, which would balance the scales a bit and save trillions in the interim.

22 studies agree: ‘Medicare for All’ saves money

Whether you call it single-payer or “Medicare for All,” it isn’t some socialist pipe dream. It’s a sensible, efficient and effective way to guarantee excellent health insurance to every…

thehill.com

* also in lieu of 5k all we need to do is close the tax loopholes on the rich and corporations and raise the effective rate to 40+%. Easy fix.

 

[Dancing Fire]

* also in lieu of 5k all we need to do is close the tax loopholes on the rich and corporations and raise the effective rate to 40+%. Easy fix.

Hey, why not 50%? and the government should give us $10K per month then the whole country can retire tomorrow.

 

[seaurchin]

...

 

[ItsMainelyYou]

Hey, why not 50%? and the government should give us $10K per month then the whole country can retire tomorrow.

You're showing your a$$, my friend.
It already was 40% effective. From the mid 30's until the 80's...so you benefitted from the overall largess.
Our most profitable period as a country had a top marginal tax rate of 90%. The actual effective rate was around 40%.
So yeah, 50% effective would be better, for everybody. That's just a fact.

The relationship between taxation and U.S. economic growth - Equitable Growth

An examination of empirical evidence linking U.S. economic growth to facets of taxation and income and wealth inequality.

equitablegrowth.org

https://www.washingtonpost.com/news/posteverything/wp/2017/11/30/im-a-depression-historian-the-gop-tax-bill-is-straight-out-of-1929/

snip:
That was more than three decades before the collapse of the economy in 1929. The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007 (when trickle-down economics, tax cuts for the hyper-rich, and deregulation again resulted in another economic collapse).

 

[MountainJuls]

Wow, what a lively discussion! I had hopped on looking for setting inspiration and too easily, got distracted. I've got some thoughts on this topic as I have DD in third year of college, and DS in second year of HS.

I am totally against loan forgiveness except in those rare social work instances discussed above. And even then, there is a process that is agreed to beforehand.

It is not a true helping hand up, being retroactive after a debt has already been incurred. What is being proposed is just a half-hearted attempt of the g'ment to pat themselves on the back like they did something for students, without really solving the problem. It is more akin to a passing a homeless beggar on the street, looking over your shoulder and tossing a few bucks their way. Maybe that will be the very thing that changes that person's life, but more likely than not, a much more comprehensive approach is needed in order to make a substantial impact on that person's life.

Most students and their families make their higher education decisions based on what finances are available to them before they ever make their selection, if they actually apply. The best high schools are helping kids to learn about "fit" rather than brand name. But then they all still like to brag about their acceptance numbers at the hyped schools which perpetuates the perceived eliteness.

If they really wanted to help students, they would absolutely overhaul the entire system. I am such a pessimistic realist, that I don't think that will ever happen. We have seen too many abuses along the entire process, public and private entities alike. When my daughter was in HS, she had friends who had got scores thrown out and had to retake the SAT due to widespread(supposedly international) cheating. Full test sites meant waiting months to retake and delayed results meant missed deadlines for certain schools, some of which were the best options. Then there was the whole Operation Varsity Blues around the same time which proved what we all knew about special treatment for those willing to skirt the rules. We lived in CA at the time, but no luck getting a spot in state, so she's at a private university in Washington. Yes, we could have chosen community college, but that was not the right fit and so we are paying her way. Academic scholarships didn't even bring tuition down to in state levels for year one, and now there have been "due to Covid" increases.

The worst part now is that I have heard my daughter tell of parents who could forgo the newest Mercedes in order to pay for tuition, but are making their children get loans for everything down to paper and pens, in the hopes that by the time the child graduates, the loans will be forgiven. If you can't convince a capable parent to pay for their 18yr olds tuition, do we really think that by the time the child has graduated that they will step up and take on a massive bill for their grown child who will be starting their own independent life, possibly getting married, etc?

When I heard this being done, I was angered at the downright selfish entitlement of these parents. Certainly that isn't everyone's situation, but let's face it-this wouldn't be paid for by the proper taxing of Amazon et al, it's coming from us regular Americans. It also would not be handled in any equitable way. Fraud will be rampant, just like with any other government funded social program.

I was the first in my family to graduate college, and my husband was the first and only one. I had to work one full time job(40 hrs), a part time job(20 hrs), plus a 45 min commute each way and went to school full time at night and weekends. A very few classes were reimbursed by my employer, but I still ended up with loans that impacted our ability to move forward financially. Would I have loved the loans to be forgiven, sure! But we all know there's no free lunch, it all is just robbing Peter to pay Paul. This is one of several reasons why we are rapidly losing ground compared to other nations. Eventually the disparity will become such that funny math and politi-speak can no longer obscure it.

 

[Alybird]

No, student loans should not be forgiven unless in cases involving public service. I see it as a personal choice, similar to how some folks rack up credit card debt through their life choices and spending habits.

I do feel that higher education should be more accessible, but this ought to be achieved through actually challenging the structures that are inflating the costs of education beyond the reach of most Americans versus virtue-signalling and paying lip service without actually changing anything at all.

I am a millennial & paid off all of my student loans in 2.5 years. I do acknowledge that I had some privilege & was fortunate because I had the support of my family later on but I also insisted on taking care of the bulk of my own debt through discipline and an aggressive payment strategy while working several entry-level and/or retail "build your resumé" jobs out of college. Student loans were the only debt I ever incurred - this is because I left home young in order to call my own shots / pave my own way.

Hate to say it but the folks I know who are all about the blanket student loan forgiveness lead rather irresponsible lifestyles; eating out, going out for drinks, conspicuous consumerism, no real financial trajectory, etc.

I believe that every individual deserves the right and the opportunity to attain an education that matches their ambition. There are ways to finance this even in these hostile economic times. However, I am turned off by the attitude of entitlement that people seem to have around student loan forgiveness; there is a sense of reliance on it apart and ahead of their own merits and potential.

 

[Alybird]

Wow, what a lively discussion! I had hopped on looking for setting inspiration and too easily, got distracted. I've got some thoughts on this topic as I have DD in third year of college, and DS in second year of HS.

I am totally against loan forgiveness except in those rare social work instances discussed above. And even then, there is a process that is agreed to beforehand.

It is not a true helping hand up, being retroactive after a debt has already been incurred. What is being proposed is just a half-hearted attempt of the g'ment to pat themselves on the back like they did something for students, without really solving the problem. It is more akin to a passing a homeless beggar on the street, looking over your shoulder and tossing a few bucks their way. Maybe that will be the very thing that changes that person's life, but more likely than not, a much more comprehensive approach is needed in order to make a substantial impact on that person's life.

Most students and their families make their higher education decisions based on what finances are available to them before they ever make their selection, if they actually apply. The best high schools are helping kids to learn about "fit" rather than brand name. But then they all still like to brag about their acceptance numbers at the hyped schools which perpetuates the perceived eliteness.

If they really wanted to help students, they would absolutely overhaul the entire system. I am such a pessimistic realist, that I don't think that will ever happen. We have seen too many abuses along the entire process, public and private entities alike. When my daughter was in HS, she had friends who had got scores thrown out and had to retake the SAT due to widespread(supposedly international) cheating. Full test sites meant waiting months to retake and delayed results meant missed deadlines for certain schools, some of which were the best options. Then there was the whole Operation Varsity Blues around the same time which proved what we all knew about special treatment for those willing to skirt the rules. We lived in CA at the time, but no luck getting a spot in state, so she's at a private university in Washington. Yes, we could have chosen community college, but that was not the right fit and so we are paying her way. Academic scholarships didn't even bring tuition down to in state levels for year one, and now there have been "due to Covid" increases.

The worst part now is that I have heard my daughter tell of parents who could forgo the newest Mercedes in order to pay for tuition, but are making their children get loans for everything down to paper and pens, in the hopes that by the time the child graduates, the loans will be forgiven. If you can't convince a capable parent to pay for their 18yr olds tuition, do we really think that by the time the child has graduated that they will step up and take on a massive bill for their grown child who will be starting their own independent life, possibly getting married, etc?

When I heard this being done, I was angered at the downright selfish entitlement of these parents. Certainly that isn't everyone's situation, but let's face it-this wouldn't be paid for by the proper taxing of Amazon et al, it's coming from us regular Americans. It also would not be handled in any equitable way. Fraud will be rampant, just like with any other government funded social program.

I was the first in my family to graduate college, and my husband was the first and only one. I had to work one full time job(40 hrs), a part time job(20 hrs), plus a 45 min commute each way and went to school full time at night and weekends. A very few classes were reimbursed by my employer, but I still ended up with loans that impacted our ability to move forward financially. Would I have loved the loans to be forgiven, sure! But we all know there's no free lunch, it all is just robbing Peter to pay Paul. This is one of several reasons why we are rapidly losing ground compared to other nations. Eventually the disparity will become such that funny math and politi-speak can no longer obscure it.

I agree with so much of what you've said here and my partner also echoed one of your examples in conversation - that it is likely some people who are able to pay for college are taking out loans so that the government will cover it.

I knew a girl whose parents lived in the Pacific Palisades, both retired marketing executives for prestigious companies. Because their income was 0 at the time she went to college, they were able to sucessfully apply for federal student aid (Pell Grant, etc).

 

[samlarsonns]

I agree with so much of what you've said here and my partner also echoed one of your examples in conversation - that it is likely some people who are able to pay for college are taking out loans so that the government will cover it.

I knew a girl whose parents lived in the Pacific Palisades, both retired marketing executives for prestigious companies. Because their income was 0 at the time she went to college, they were able to sucessfully apply for federal student aid (Pell Grant, etc).

In a matter of fact, a student loan is not such a big burden for some students but there is always a 5% who are struggling and experience great trouble repaying it.

that's why I also think that refinance loans is better way out than forgiving them

 

[EntrancedByOpals]

Higher education is primarily pursued for self advancement, not societal good. You go to college to have better opportunities, opportunities that people who cannot manage to go to college don't have.

On that basis, blanket student loan forgiveness seems deeply unfair.

On the other hand, college costs are definitely too high, and a lot of kids get in over their heads. Expanding our public service student loan forgiveness programs would give those struggling graduates a way to deal with their loans while using their degrees for the public good.

With poorer students, I don't think the problem is expensive schools, but rather not being well prepared and then spending much longer than expected in school or not graduating at all. Most of the truly poor students I know have gone the community college then local state school route, but they often have a lot of educational gaps and not a lot of people to turn to for help, all while holding down a job. Making sure those students are better supported while in school would be far more helpful than forgiving their loans, which are manageable for the ones who graduate on time.

 

[Tekate]

Since the top 7% earners in this country are paying most of the taxes. What is fair share to you? 50% of their earned income? 60%? or more?.

That's because they make the most, it's illogical so say Top 7% without giving their income range. Someone who makes between between say 182K and 540K starting shouldn't have a hard time paying their taxes and can pay more.

 

[Tekate]

I'm for forgiveness, the recession (#1 GREAT recession and the one we experienced during lockdown) encouraged people to get an education, I have a big beef with for profit 'colleges' charging too much. We need to give a helping hand to the young kids, I had helping hands in 1970 when I started college. College loan, Pell loan, work/study and then I had an FHA loan on my first house back in 77. I paid my and my exhusband paid his college loans back. But as a percentage of our income the payments were low compared to today.

 

[Lookinagain]

That's because they make the most, it's illogical so say Top 7% without giving their income range. Someone who makes between between say 182K and 540K starting shouldn't have a hard time paying their taxes and can pay more.

is that after the last tax cut? I actually would have thought that the top 1% paid a smaller % if the data includes corporations and not just individuals. But I'm not well versed in this. I just pay what I owe.

 

[ItsMainelyYou]

is that after the last tax cut? I actually would have thought that the top 1% paid a smaller % if the data includes corporations and not just individuals. But I'm not well versed in this. I just pay what I owe.

Those are individual rates. They pay less in actual effective rate and have over seas/domestic tax shelters on capitol gains and for corporations, stock buybacks. On top of this, corporations pay almost nothing or nothing while collecting our largest outlet/share of welfare even when posting record profit.

 

[vintageinjune]

"I suffered, so you must suffer too" is such a tired mentality that I'm sick of hearing.

Student debt is preventing people from being able to buy homes, start famillies, save for retirement, etc. Think of how much more money would be spent boosting our economy right now if people we able to free up what they are spending on student loans and convert that into money spent on goods, services, property, etc.

That said, I'd be completely fine with zero debt forgiveness if companies were forced to pay liveable wages that include proper benefit packages. Give the tax breaks and incentives to small businesses and make the large ones pay higher rates.

My husband and I are considered "elder millenials", and we've decided against having children due to the cost and lack of support structures that make child rearing in any way appealing. We have four niblings that we adore and have decided to help fund their college educations (or trade schools).

Hopefully, by the time they are headed to higher education, costs will have gotten under control.