Obama Forgives Student Debt Of 400,000 Americans

Government-guaranteed loans are a fantastic way to force prices to spiral out of control. The way student loans were before income-based repayment, we&#x27;d have expected college cost to rise until it meets the lifetime expected benefit of college discounted to the present.<p>With income-based repayment, where your loan balance is forgiven after 20 years, there is no limit to how high it can go.<p>Government-subsidized mortages and mortgage interest deductions have a similarly terrible effect on housing, a basic good that government policy should try to make as cheap as possible. Instead, government policy is to make it as expensive as possible.

As with medicine, college is now an industry with third-party payment and no third-party control.<p>In other words, the student (patient) and the university (doctor&#x2F;hospital&#x2F;pharmacy) agree to do business, and the government (insurance company) pays regardless of the price.<p>That obviously creates major price distortions. Expect college to get a lot more expensive before it gets cheaper.

This title is incredibly misleading. All the Obama administration is doing is providing a streamlined process to people who are already eligible to have their debt forgiven.<p>For the people moaning about &quot;wealth redistribution&quot; or wasting taxpayer money: These are people who are already unable to repay their loans. If anything this will save money since it will cut down the overhead from the government garnishing social security checks to repay its self (which would be laughable if it wasn&#x27;t happening to real people).

Education is cheap. Teachers aren&#x27;t often paid very much, good books and other materials are usually not very expensive, and a building is just a building. Labs can be pricey, but only required for some subjects.<p>So universities are like expensive social clubs that build your network and enhance your social standing, and they also happen to teach. Remember that when it becomes a &quot;need&quot; that should be &quot;accessible to everyone&quot;.<p>The community college system is great. Cheap, available to everyone, and high quality teaching (in my experience). Why not allow them to handle education up to a bachelor&#x27;s degree and universities can handle the functions of research and undergraduate social club for people who can pay?<p>One compromise approach would be to deny federal loans (or undischargable private student loans) for university until they have completed all the relevant classes at a community college (possibly with loans).<p>(And no, I don&#x27;t think community college should be free. I think that will destroy them.)

Boy are those debtors going to get a surprise when the 1099 comes for forgiven debt. (they mention trying to eliminate the tax burden for the disability folks, but no mention of anybody else.)<p>Edit: Or in plain english- the IRS thinks forgiven debt is income.

Glad to see our government reaching out to folks eligible for help that may not realize it. If anything, this doesn&#x27;t go far enough. Student loan debt should be able to be discharged in bankruptcies!

I have a theory that a properly functioning &quot;mercantile capitalist&quot; system requires debt jubilees at regular intervals. Hammurabi was on to something with debt jubilees and writing the law in the common tongue instead of the priests tongue.

Translation: money got redistributed from net tax payers to net tax non-payers.

Who is eating this loss? Government? Individual tax payers? Someone or some entity must be losing this $7.7 billion.

There should never have been any debt in the first place. Most of Western Europe provides education for free. Those societies understand that a lifetime of taxes more than adequately repays any debt. Little of the rorting from &quot;education providers&quot; we see her in Australia as well.<p>If fascist corporatism didn&#x27;t ruin capitalism things may have been different. But as it stands governments have a much better track record to deliver good education outcomes than corporates. And that&#x27;s saying much.

There are laws in some countries barring governments from declaring welfare schemes in an election year. I hope this is not Election year pandering.

Misleading title per usual. The program to discharge loans of disabled people has always been there. Just made the process easier so more people are aware of the program.

Makes more sense to me to allow bankruptcy to apply to student loan debt than to add even more rules and and exceptions to the laws.

There should be a cap on goverment guaranteed loan, perhaps $20k.

Everyone is created equal, and for those who aren&#x27;t, the government will make it so.

I don&#x27;t have a problem with forgiveness for people who are actually disabled. The problem is that in modern America, disability has become a catch-all for anyone who can&#x27;t find a job they want. With the right lawyer, minor inconveniences will get you classified as disabled.<p>NPR did a great feature explaining the rise of disability as a catch-all welfare tool: <a href="http:&#x2F;&#x2F;apps.npr.org&#x2F;unfit-for-work&#x2F;" rel="nofollow">http:&#x2F;&#x2F;apps.npr.org&#x2F;unfit-for-work&#x2F;</a>

It&#x27;s nice to see the paperwork hassle removed for something like this, but the cynic in me can&#x27;t help but think of the bank executives all across the country popping corks on champagne over the multibillion dollar lump sum settlement on loans that would have otherwise only trickled repayments in as people manually filed paperwork. Essentially this means they&#x27;re earning millions on the billions that they can now reinvest immediately.

I am glad this measure exists for the disabled Americans being shaken down to pay down loans they cannot pay or have dissolved in bankruptcy.<p>However, as a professional with student loans, I will be furious until the day I pay off my final loan at the 6.55% I am paying. I could get a car for cheaper. And it is doubly ridiculous that federal loans can be farmed out to private companies, which, spoiler alert, exist to make profits, not an educated workforce!<p>As much as I would love to stop paying $300 every month (and every tax refund till 2020), I am not that distressed about paying back an expensive and lucrative education. However, the use of private companies charging usurious rates is simply wrong.

WTF. What ever happened to if your able, then you can work. Wow.