My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans.<p>Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year.<p>As soon as you let borrowers default, the math starts to make sense again. Lenders will have to evaluate how much they are willing to lend a student based on their expected earnings post-graduation. Universities won't be able to increase tuition at such an inflated rate since there wouldn't be infinite money being pumped into the system. College may actually become affordable again over time.<p>It's not a mystery what the actual problem is here.<p>edit: corrected "lenders" to "borrowers"
At least this loan forgiveness seems to be targeted at low-income people. That’s much better than the government’s blanket pause on student loan payments for almost two years, which saved many rich people tens of thousands of dollars in interest.
It's hard to imagine a worse policy. It penalizes responsible behavior while doing nothing at all to address the root causes. Are we stopping making more of these loans? Of course not!
Schools are not getting the feedback they need to be useful and political tricks like this further distorts the feedback loop.<p>We should really take a few minutes to consider what this means for not just our future but our future generations.<p>I think arguments that go along the lines of "I worked extremely hard to minimize my loans and now I felt betrayed" is missing the bigger evil lurking in the shadows: schools in the U.S. don't teach what really needs to be taught and political tricks like this further distort the feedback loop.<p>Schools should teach logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?"<p>"Follow your passion" worked when the U.S. was enjoying extreme wealth growth right off WWII - at that time you could shine shoes and own a single bedroom house away from the city. Weaving baskets and selling them could be the only thing you did and rent half a home for the rest of your life.<p>This is a cheap political trick that makes things worse. This is a perfect example of why a government shouldn't be trusted to allocate resources efficiently.<p>I am also concerned that this now opens an expectation that this current party will periodically forgive loans in the future - so, as long as you keep voting them into power, it doesn't matter what decisions you make, you won't have to suffer too terribly for them.<p>The right call would have been to invest these dollars in reworking education and schooling so that our future generations don't repeat the same mistakes we did and end up looking for handouts because we failed to learn how to make the right decisions.<p>While the intentions for this might not be evil, the effect is terribly so and disempowering for future generations.<p>To those who got some relief from this subsidy - I hope this helps you feel a bit better but hold those who put you in this situation accountable. Don't let politicians take advantage of you like this. Take a few minutes to write a letter to your school and college and tell them how they failed you and what you wish they had done instead.<p>The future of our country depends on your feedback
I remember my Father, working 80 hours a week, to put his 4 kids through college. We all also worked at least 20 hours a week while going to college. And I remember my mother squeezing every nickel until 6 cents dripped out of it. JUST so we wouldn't be burdened with debt after we graduated.<p>I know that some people weren't as "lucky" as we were, and couldn't pay for college without debt. I don't begrudge them getting their subsidized loans. Or their ability to actually put full effort into learning, instead of hitting the books after an 8-hour shift on your feet.<p>But...taking my taxes, and giving them a government handout--because they mismanaged their previous government handout.... Not gunna lie, that's pretty hard to take.<p>Where's my Dad's $20,000 compensation? Make that $80,000 compensation, because he put 4 kids through? Where's my compensation for getting B's in some classes instead of A's, because I just couldn't study enough after working all week?<p>I know that some might find it "hard" or "inconvenient" to pay back these student loans....but guys, you already got your government subsidy. You are supposed to be putting money back in to help the next generation, not just soaking us all for another round of money, because <i>you</i> <i>blew</i> <i>it</i>.<p>This kind of taking money from people who managed their finances well, and giving it to those who didn't, is what gives liberalism a bad name....
There’s a sentiment which isn’t really being expressed here so far.<p>I don’t begrudge people who are less fortunate and need help.<p>I don’t enjoy my food any less because someone who is hungry can get free food from a food bank.<p>There are so many ways that the government has helped the more successful. I for one was a beneficiary of PPP loan forgiveness (not by my choice but an election of my managing partner).<p>This attempts to balance the scales of what type of support people get who are going through different situations and at different times with different needs isn’t particularly productive. It might feel good in some self centered bitter way, but it doesn’t speak to whether this is a policy measure that has a positive effect on many people and is a net benefit to the economy as a whole.
Two things on this one that I don't see elsewhere in the comments.<p>1) This is both a grab bag of many different forms of debt cancellation (automatically applying it to people who would qualify for programs that have complicated requirements otherwise, like public service which requires a lot of documentation to prove all the necessary years that may have been overly burdensome in some cases, largely worthwhile in my opinion since I support that underlying program anyway and support simplifying its formerly crazy complicated requirements vs for instance cancelling interest on loans that people didn't put a lot of effort into repaying, since most educational loans are at much lower interest rates than other loans to begin with). Not all of these can be discussed in the same terms and part of the "messaging" of the program is that they got to large numbers through many programs and many different avenues.<p>2) Notice that most of the wording of this press release is "if implemented", "if implemented" because this isn't a program that _has already happened_, it's a bunch of programs that have to individually go through Administrative Procedures Act notice-and-comment rulemaking. Interestingly, notice and comment has a <i>lot</i> of trivial pitfalls that block implementation, lead to litigation, etc, so on average for programs that do get implemented it takes something like 1000 days to implement (most of a presidential term). Further, there's a special period at the end of a legislative term where APA rules can be summarily overturned or cancelled mid-process by the incoming new Congress, and routinely are, particularly when there's a change of party either by Congress or in the Whitehouse. Which is all to say, this is a fun press release amounting to vaporware until 2027, assuming Biden gets re-elected <i>and</i> doesn't have a much stronger Republican majority in one or both chambers of Congress.<p>I approve of parts, I disapprove of parts, it's all very complicated, but I expect a very small part of this to actually happen, and that to mostly be the easier parts that I like more. <i>shrug</i> Bureaucracy delenda est.
Some thoughts:<p>1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election.<p>2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.