Should student loan debt (USA) be forgiven?

[MollyMalone]

All of these points are valid @MollyMalone but they don't address Ms. Warren's current plan to wipe out debt across the board up to $50K which was the original question. That is not the way to fix all the things you have so eloquently laid out.

True. My response was engendered by the blanket "Hell no, no way should anyone's student loans be forgiven" responses here that did not address any of the problems which have given rise to Ms. Warren's proposal.

 

[redwood66]

True. My response was engendered by the blanket "Hell no, no way should anyone's student loans be forgiven" responses here that did not address any of the problems which have given rise to Ms. Warren's proposal.

She is going about it in a way she believes will get her votes, not the way it should be done to fix problems that exist. This will be an issue for the fence sitters and to @nala's chagrin.

 

[yssie]

I preface this by saying that I haven’t read all the responses yet...

You go to West Point. Your education is “free”, but you are then obligated to either serve for Z amount of time or repay the financial burden.

Why would something like this not work in larger scope?
You go to university for X.
You are then obligated to serve your community in ABC way(s) for Z amount of time... or pay for that schooling out of pocket.
The parents who pay for their kids’ schooling - or the kids who choose to take out loans - are avoiding Z years of service at presumably low-paying or high-risk jobs.

I completely agree with @Karl_K and @msop04 - taxpayers should not be funding society’s next actresses. But society’s next engineers, architects, electricians, linguists, lawyers, medical professionals, photographers, teachers... Absolutely.

I realize everyone will define what is and isn’t “useful to society” differently. My personal opinion is quite conservative.

 

[Dancing Fire]

Was she sold a bill of goods that she would live the American dream and she took out a FHA loan? do she and her spouse make little money? Lots of questions.

Their all working and are able to paid their mortgages. My point was if they aren't able to should the taxpayers paid off their mortgages like student loans?

 

[Tekate]

We bailed out banks during the Great Recession but not individual people so I don't think it would happen.

Their all working and are able to paid their mortgages. My point was if they aren't able to should the taxpayers paid off their mortgages like student loans?

 

[Tekate]

You said I made it a partisan issue and I said I didn't, I dunno why you would think, or feel gaslighted but everyone is different.

I didn't bring any party into anything I posted. Is this what gaslighting is? I already said that the government shouldn't have bailed out anyone.

 

[Dancing Fire]

Did you buy the stone to help you get ahead in life and do you have a government back loan for your stone? Ya gotta stay on topic and quit sequing into another topic.

No but it makes me very happy and I'm entitle to it . I'm trying to come up with excuses for not wanting to pay back my CC co.

 

[MollyMalone]

She is going about it in a way she believes will get her votes, not the way it should be done to fix problems that exist. This will be an issue for the fence sitters and to @nala's chagrin.

At least her plan -- which according to her campaign website looks to be the same as the bill she introduced in Congress last year -- is more nuanced than that of Bernie Sanders. His is wholly unconditional

How Bernie Sanders would cancel all student loan debt

Sanders’ bill would automatically cancel student loans that were made, insured or guaranteed by the federal government.

www.politico.com

whereas Warren's is indexed to household income:

 

[redwood66]

Maybe a sliding scale, forgiveness for teaching, didn't the republicans ensure that the debt will follow even if one declares bankruptcy?

You aren't the only one who has to be fair.

You said I made it a partisan issue and I said I didn't, I dunno why you would think, or feel gaslighted but everyone is different.

 

[redwood66]

At least her plan -- which according to her campaign website looks to be the same as the bill she introduced in Congress last year -- is more nuanced than that of Bernie Sanders. His is wholly unconditional

How Bernie Sanders would cancel all student loan debt

Sanders’ bill would automatically cancel student loans that were made, insured or guaranteed by the federal government.

www.politico.com

whereas Warren's is indexed to household income:

Thanks for this. Neither plan is one I would agree with.

 

[msop04]

The problem with this is that it perpetuates the cycle of poverty. So education is only for the wealthy? For those from stable homes? It dooms those who through no fault of their own we’re not born into wealth. It’s why many countries invest in higher education and subsidize tuition (our universities here are not for profit).

I’m not exactly sure why student loan debt is not considered debt like any other - which is subject to bankruptcy laws. Maybe because most students would qualify to declare bankruptcy upon completion of school? If so isn’t that a problem?

Requiring a borrower to pay back his loan does not perpetuate the cycle of poverty. Loans are available BECAUSE education isn't only for the wealthy. Not everyone can write a check each semester... hence, the loan. Out of my graduating pharmacy class of 122, there was one student who didn't take out any loans. ONE. And we were told that was atypical, as the number is almost always zero.

I can't speak for @kenny, but I believe what he meant was that you shouldn't spend more on an education than your chosen profession's salary will allow you to pay back.

If the entire bill was due immediately after graduation, then yes, all of us would have to declare for bankruptcy, and there would be no point in going to school... but that's not the case. There are laws requiring that certain amounts of student loans be financed for longer periods of time, and how quickly you pay them is up to the borrower (mine was mandatory 30 years). This is done so the borrower will not be as likely to default on said loan.

I get what you're saying, and in a perfect world everyone would live out their dreams at no cost to them. But that's not the reality in which we live. "Helping hands" soon lead to hand outs if we don't teach our children that their choices do actually have consequences... Once student debt was "forgiven", then many, many more would feel entitled to the same, and no one learns anything. It's would be a vicious cycle, at the expense of all.

Millinneals have it tougher than we did, as far as the cost of higher education and interest rates re student loans, with that statement I certainly agree. However, no one made them sign on the dotted line when they agreed to accept and pay back the money loaned to them.

So they were told that they'd be A-ok financially if they just graduated with a 4 year degree... Why would anyone accept this at face value and not find out what to expect their salary to be for their chosen field of study?? These are kids that grew up with Google and are highly keen on how to use the internet. Why would those who are seeking higher education not grasp the concept that money borrowed must be paid back?? These aren't college, or even high school level, concepts...

 

[MollyMalone]

Their all working and are able to paid their mortgages. My point was if they aren't able to should the taxpayers paid off their mortgages like student loans?

Guess you didn't see my observations in response to your earlier comments about mortgage and credit card debts.
We US taxpayers are helping to pay off your daughters' mortgages courtesy of the home mortgage interest federal tax deduction.

To make more concrete what that means: in federal fiscal year 2019 (after the 2017 Tax Cuts & Jobs Act took effect, and reduced the qualifying mortgage ceiling from $1 million to 3/4 million), homeowners in the aggregate were still able to deduct nearly $40 billion dollars.

If you get in over your head due to credit card, you can declare bankruptcy. Bankruptcy doesn't wipe out student loan indebtedness.

 

[MollyMalone]

Thanks for this. Neither plan is one I would agree with.

Gotcha

 

[MakingTheGrade]

I’m curious what the “I did it, they can too” folk think about universal income in the face of potentially horrific unemployment numbers if (more likely “when”) automation takes giant chunks out of jobs available to current humans.

At some point we may be looking at very drastic changes to the economy which is why I never really put too much stock in the mindset that uses personal history as a yardstick. The comparison isn’t always actually comparable.

“I worked part time as a cashier/barista/waitress/temp”.
“Cool mom. Those jobs don’t really exist anymore..”. Or if they do the wage isn’t comparable in terms of having kept up with cost of living/loans inflations. Employment numbers don’t mean much if the paycheck isn’t enough to support a person.

Funnily enough trade jobs/manually skilled jobs may be the safest from automation as software is able to learn better and better but trying to get a robot to mimic fine motor movements like fingers is still really inefficient. (Have friends in both AI machine learning and robotics.)

The argument to repay loans may morph into the argument over government subsidies for retraining chunks of the work force.

 

[diamondseeker2006]

I haven't caught up with all the responses, but I wanted to comment on one thing since I've seen several comments regarding things being so much harder for young people today versus in the past. I will say that jobs for college graduates may have been more plentiful back when we finished college in the late 70's. However, at that time, half or more of the high school graduates were not going on to a 4 year college, either. There were no student loans, so the people whose parents couldn't pay for it had to work while going to college. They learned self-discipline, were hard working, and had great determination and responsibility. Those virtues take one a long way in life.

Anyway, as for the easy times financially, when we were in our mid-20's and moved to VA for my husband's job, the interest rate to buy a house was 15%!!!! So please, it wasn't all that easy financially for us. We saw rates go down over time...we had 10% after that and down to our current house at 3.5% 30 years later!!! Our kids are fortunate to get home loans at 4-5% today compared to what we had for maybe our first 20-25 years of home ownership. Rates were, of course, high for car loans, too, so we determined that we'd have a car savings account instead of a car loan and we saved to buy all our cars in cash, not credit. I wasn't buying diamonds and jewelry, I assure you. We were doing as well as we could with the economic situation at the time and put priority on saving and not going into debt other than a mortgage. The reward of doing things that way is a secure retirement.

We HAVE taught our children these principles, and while they may not be as rigid as we were, I think they are doing quite well overall with no consumer debt except mortgage and one car payment. The son-in-laws do have some student loans they are paying, though, and that definitely means less to spend on a home.

 

[Bonfire]

I’m curious what the “I did it, they can too” folk think about universal income in the face of potentially horrific unemployment numbers if (more likely “when”) automation takes giant chunks out of jobs available to current humans.

At some point we may be looking at very drastic changes to the economy which is why I never really put too much stock in the mindset that uses personal history as a yardstick. The comparison isn’t always actually comparable.

“I worked part time as a cashier/barista/waitress/temp”.
“Cool mom. Those jobs don’t really exist anymore..”. Or if they do the wage isn’t comparable in terms of having kept up with cost of living/loans inflations. Employment numbers don’t mean much if the paycheck isn’t enough to support a person.

Funnily enough trade jobs/manually skilled jobs may be the safest from automation as software is able to learn better and better but trying to get a robot to mimic fine motor movements like fingers is still really inefficient. (Have friends in both AI machine learning and robotics.)

The argument to repay loans may morph into the argument over government subsidies for retraining chunks of the work force.

You make some good points. Automation/software will continue to replace skilled workers. However, we will continue to need plumbers, electricians, welders, etc. Trade and vocational schools are a good option for some. It’s not elitist or discriminatory to suggest these trades. They are some of the most recession proof jobs also. Union scale plumbers and electricians make a living wage. No career path is a one size fits all. More freebees on the backs of the already burdened taxpayers is not the answer, nor is kicking the can down the road. Eventually SOMEONE has to pay. As they say, “there is no free lunch.”

 

[Bonfire]

To say this generation has it the toughest. Hardly. My parents generation came up during the depression and fought in a world war. Does this generation have it’s challenges, most certainly.

 

[diamondseeker2006]

I want to agree that this in no way should be considered a partisan issue. Being a responsible, hardworking citizen has no political affiliation. It's just good character and something every person needs to learn. Sometimes we learn the hard way.

(...and yes to Bonfire's last post...my parents' generation certainly had it hard and their parents even harder. My kids are far better off financially even though none are highly paid by today's standards.)

 

[nala]

I want to agree that this in no way should be considered a partisan issue. Being a responsible, hardworking citizen has no political affiliation. It's just good character and something every person needs to learn. Sometimes we learn the hard way.

(...and yes to Bonfire's last post...my parents' generation certainly had it hard and their parents even harder. My kids are far better off financially even though none are highly paid by today's standards.)

For republicans it isn’t a deciding factor. For liberals it is. Therefore it’s a partisan issue. Liberals don’t you usually have the
“I did it so can you” mentality. They are more progressive thinking and show empathy to the poor. Welfare. Etc. republicans don’t support welfare bc you know, you had your kids, feed them the way I fed mine.

 

[Bonfire]

@MakingTheGrade your video is very provocative. We are making ourselves irrelevant and extinct. Technology will take over.

 

[Arcadian]

Another problem....freshman arrive at mediocre schools academically unprepared for college. The schools then test these kids to see what kind of remediation is needed. That translates into a 5 year bachelors degree, or a useless degree. Really? If they can’t perform at college level, they shouldn’t be there.

This. OMG this!!! This is why Community College can be worth its weight in gold! Its the tie in between highschool and 4 year college. Why people don't see this is beyond me. and honestly more kids should be going this route. If they did they would and could decide if going further is actually worth it.

 

[Elizabeth35]

Education costs have sky-rocketed along with health care costs relative to wages.
Every generation has it's challenges, whether boomers, millennials or Post WWII parents.

DH and I paid $50K+ for health care in 2019. When millennials complain about how horrible boomers are--I am a little taken aback because ALL of us have financial disadvantages. Yes, we had better job prospects and had many advantages in the 1980's. We also watched our 401K's get decimated in the last recession, many lost their homes and many lost their jobs.
Life is often hard. Economies are cyclical and we now have a global economy. My parents were of the generation that had low mortgage and federal income tax rates and cheap health insurance. And I don't hold it against them---it is simply that times change and things are aways evolving.

I do think in the US we should move towards government subsidized secondary education.
However, in the US we have a built-in snobbery towards 'ranking' our schools. And those with money and influence attend better schools which can afford better opportunity.

I don't think forgiving any/all student debt is the answer. But we do need to make education affordable to all, based on ability to qualify for the educational program. Similar to non-US education.
We are already (thankfully) seeing some crumbling of the pay for play system. But willl it ever go away at private colleges via donations and endowments--not likely with the current system.

 

[Karl_K]

I really do feel for them because I fell for the there will be a shortage of EET graduates and millions of jobs.
Which was true but in China not the US.
Within days of me graduating the bottom fell out of the market with people with 10+ years experience willing to take entry level positions.
I struggled for years to pay off my loans on jobs that paid far less than I was expecting to be making.
In all honesty I never recovered financially from it.

Today the same BS is going on with coding.
Coding jobs can pay well because people capable of being great coders are rare. Everyone else who is not near the top is competing with India for the crumbs. Big tech wants cheaper coders so they can pit them against each other so they are pushing the big lie.
Coding is today's big lie just like EET was in my time.

 

[yssie]

Today the same BS is going on with coding.
Coding jobs can pay well because people capable of being great coders are rare. Everyone else who is not near the top is competing with India for the crumbs. Big tech wants cheaper coders so they can pit them against each other so they are pushing the big lie.
Coding is today's big lie just like EET was in my time.

Agreed.
Any job takes discipline and study to learn to do well.
Programming included.
These “coding bootcamps” that promise the world after just a few weeks of introductory concepts and syntax composition dilute the entry-level workforce, but skilled software and systems engineers continue to be very highly paid in terms of return on education investment... If they can break in in the first place; that part, unfortunately, actually does take some plain ol’ dumb luck - pulling yourself up by your bootstraps increases your odds tremendously, but it isn’t the guarantee it should be.

I’ve never subscribed to the “you’ve got to love your job” way of thinking. I believe you have to love your life - maybe that means loving your job, maybe it means doing a job you don’t love that enables you (with money and time) to do what you love.

 

[msop04]

I’ve never subscribed to the “you’ve got to love your job” way of thinking. I believe you have to love your life - maybe that means loving your job, maybe it means doing a job you don’t love that enables you (with money and time) to do what you love.

There is so much truth in this.

 

[AV_]

There were no student loans

There are none around here [parts of Europe,] university costs some stamp duty, it often pays, in fact - for good reason.

Prices are the tail that wags the dog ,(

 

[cmd2014]

Requiring a borrower to pay back his loan does not perpetuate the cycle of poverty. Loans are available BECAUSE education isn't only for the wealthy. Not everyone can write a check each semester... hence, the loan. Out of my graduating pharmacy class of 122, there was one student who didn't take out any loans. ONE. And we were told that was atypical, as the number is almost always zero.

I can't speak for @kenny, but I believe what he meant was that you shouldn't spend more on an education than your chosen profession's salary will allow you to pay back.

If the entire bill was due immediately after graduation, then yes, all of us would have to declare for bankruptcy, and there would be no point in going to school... but that's not the case. There are laws requiring that certain amounts of student loans be financed for longer periods of time, and how quickly you pay them is up to the borrower (mine was mandatory 30 years). This is done so the borrower will not be as likely to default on said loan.

I get what you're saying, and in a perfect world everyone would live out their dreams at no cost to them. But that's not the reality in which we live. "Helping hands" soon lead to hand outs if we don't teach our children that their choices do actually have consequences... Once student debt was "forgiven", then many, many more would feel entitled to the same, and no one learns anything. It's would be a vicious cycle, at the expense of all.

Millinneals have it tougher than we did, as far as the cost of higher education and interest rates re student loans, with that statement I certainly agree. However, no one made them sign on the dotted line when they agreed to accept and pay back the money loaned to them.

So they were told that they'd be A-ok financially if they just graduated with a 4 year degree... Why would anyone accept this at face value and not find out what to expect their salary to be for their chosen field of study?? These are kids that grew up with Google and are highly keen on how to use the internet. Why would those who are seeking higher education not grasp the concept that money borrowed must be paid back?? These aren't college, or even high school level, concepts...

I didn't interpret Kenny's remark the way that you did. My interpretation was that you should only go to school if you can afford to do so. This disproportionately penalizes the poor and perpetuates the cycle of poverty. Countries *should* be investing in those who are born poor and who have the ability and the will to work towards a better life for themselves and their children. It saves billions on the back end of tax dollars that would otherwise be paid out in welfare, medicare, police, and the human costs associated with intractable poverty.

Student loans are intended to borrow against an anticipated future. But what happens if you get sick? Or injured? Or the job market dries up? Or through no fault of your own you get laid off. For houses, cars, credit card debt...you name it for any of the less important things that people spend money on, if you can't pay, the bank takes back any assets you have and you declare bankruptcy. Not so for student loans. I'm not sure that's right or fair.

Also, students graduating in many fields are graduating with student loan debt that greatly exceeds their ability to repay it. Professional training programs (including law and medicine now), not a BA or a BSc. Especially those who don't have parents who can help or who can offer somewhere they can live while going to school. Many training programs require students to relocate at least once and often twice for school, again for residency/articling/internship, and again for fellowship/post-doctoral training. I moved four times by the time my training program was done, and five if you count moving again to find work. Again, this is hardest on those who are not from families who can help. And the for profit schools make this exponentially worse.

I do think that loan forgiveness maybe should be done after a deferral period (maybe of 10 years to give people a chance to get on their feet post-graduation and find a job) and based on income. And come with the same consequences as personal bankruptcy. I don't think a blanket forgiveness program is the answer.

 

[diamondseeker2006]

.

I didn't interpret Kenny's remark the way that you did. My interpretation was that you should only go to school if you can afford to do so. This disproportionately penalizes the poor and perpetuates the cycle of poverty. Countries *should* be investing in those who are born poor and who have the ability and the will to work towards a better life for themselves and their children. It saves billions on the back end of tax dollars that would otherwise be paid out in welfare, medicare, police, and the human costs associated with intractable poverty.

Student loans are intended to borrow against an anticipated future. But what happens if you get sick? Or injured? Or the job market dries up? Or through no fault of your own you get laid off. For houses, cars, credit card debt...you name it for any of the less important things that people spend money on, if you can't pay, the bank takes back any assets you have and you declare bankruptcy. Not so for student loans. I'm not sure that's right or fair.

Also, students graduating in many fields are graduating with student loan debt that greatly exceeds their ability to repay it. Professional training programs (including law and medicine now), not a BA or a BSc. Especially those who don't have parents who can help or who can offer somewhere they can live while going to school. Many training programs require students to relocate at least once and often twice for school, again for residency/articling/internship, and again for fellowship/post-doctoral training. I moved four times by the time my training program was done, and five if you count moving again to find work. Again, this is hardest on those who are not from families who can help. And the for profit schools make this exponentially worse.

I do think that loan forgiveness maybe should be done after a deferral period (maybe of 10 years to give people a chance to get on their feet post-graduation and find a job) and based on income. And come with the same consequences as personal bankruptcy. I don't think a blanket forgiveness program is the answer.

One of my relatives is a chiropractor with high student loans and his loan repayment amount is based on his income. So when he first started and had high overhead his payments were very small. As he built his business and increased income, the payments increased. So maybe there are different kinds of student loan repayment contracts, but I do know that some are definitely adjusted based on income which should help prevent defaults.

 

[Tekate]

i'd love to not pay mine back either but I like my credit score.

No but it makes me very happy and I'm entitle to it . I'm trying to come up with excuses for not wanting to pay back my CC co.

 

[Tekate]

I never said this generation of millenials had it tougher than my grandparents, both my grandfather's were able to keep their jobs during the great depression, what I said was these kids have it tougher in the getting ahead department compared to boomers.

People saddled with debt after a college education start off at a distinct disadvantage compared to rich kids. When my son was looking for a job in 14 with a degree in Comp Sci and a minor in math but NO internships he was offered his first job at a very low salary compared to what my husband earned when he graduated in 74 with a degree in math and a minor in computer science because at the time there was no 4 year degree at the University of Illinois in comp sci. My son went to Texas State University - the job my son was offered was 10K less than what he should have started out with, the hiring company - HP - said because he went to 'lower' end college that they start out people who go to those schools less than they do say kids who went to UT Austin which is highly rated..was this fair? is calculus different at Yale than at Texas State? I thought it grossly unfair but he took it, but he did despise HP forever after. So my son, who's a math whiz and a great programmer was discriminated against (IMHO) because he went to a tier 2 state college, instead of A&M or UT. So what happens when one graduates from Cal Tech? or Morehouse? I guess this is a part of life, but money begets money is this fair? is any of it fair.. naw, but that's life. I'm not a big believer in inherited wealth.

To say this generation has it the toughest. Hardly. My parents generation came up during the depression and fought in a world war. Does this generation have it’s challenges, most certainly.