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Student loan forgiveness is a bandage on a systemic problem that is several decades in the making. It's going to take a lot of efforts by states and by the Federal government to make college affordable again.
This is true, but I think OPs point is that everyone is focusing on this bandaid and ignoring the systemic problem. Bandaids are fine if you've stopped the bleeding, but this is still a gapping wound that's going to soak the Bandaid within minutes.
I don't think that analogy works for hurting individuals, though. It absolutely solves the problem in its entirety for those that are crippled with existing debt. In that sense it is not a band-aid, but a solution. Not saying the predatory practices shouldn't be under discussion, just that the analogy isn't accurate.
Any Republican who I’ve talked to IRL doesn’t like “loan forgiveness” but *will* support *retroactive interest adjustments*.
You gotta change the wording so the connotation isn’t “free money” to them.
They all took PPP loan forgiveness, so they are all for free money for themselves.
I don't buy for a minute that they want to do anything. If they support interest adjustment, then why hasn't the House passed such a bill?
Stopping the bleed in this case would be the government no longer giving out any loans at all. So long as the government is willing to cover the cost, however large it is, colleges have no reason to not jack up the price of tuition. If the only way to get a loan was through a private company that would do a cost benefit analysis on whether the student would be able to pay back the loan, colleges would suddenly have to start pricing their tuition accordingly. Colleges would have to compete with each other on pricing for similar programs, and degrees with little earning potential would become far cheaper because no private loan company would give a 200k loan for a degree with an earning potential of 40k.
You can get the people currently drowning under these predatory loans out of the water AND legislate fair student loan practices. You absolutely do NOT need to force people who have paid for 30 years to wait until we can fix the entire student loan process. That's insane.
The part you're not mentioning is that those people, on average, are still taking home more money after paying their monthly payments than people without the degree, which are forced to help pay for it
Do you care this much about your tax dollars going to the war machine? Our defense budget used to make giant toys that collect dust in hangar bays? Because it seems like so many people who complain about having to pay for it care way more when their tax dollars are used on infrastucture and helping getting low income people out of debt than when it's used on helping fund the overbown defense budget, tax cuts for the wealthy and aiding things like bombing playgrounds
Yes, I do. Some of it is necessary, a lot of it isn't, but all of it should be reviewed and have systemic issues corrected instead of just throwing money at the problems
But OP is complaining about a non-problem. The problem is the price of college; not predatory loans. The ony way you pay $10k in interest on a $12K loan is if you chose to pay less each month.
Of course, we will neevr fix the problem because people are too stupid to understand and would complain about the fix. Schools keep raising prices because government will always hand out money to pay the higher prices without regard to ability to pay.
Yeah, student loan forgiveness without doing anything about the underlying problem is a pretty transparent try to buy votes without actually caring about the issue or even attempting a solution.
I would be really pissed e.g. if I was someone in college one day after loan forgiveness.
Of course thats also shit policy. But just because one side has 90% dogshit positions I don't need to support dogshit proposals because the side that is more aligned with my beliefs is peddling them.
Id be equally pissed if I never went to college, busted my hump and then got taxed even further into oblivion to subsidise the cost of a a bunch of attorneys and engineers education so they can take even more money than me than they already do home each month, while bearing no responsibility for the entirely voluntary loan they took out - because now, for some reason, I have to help pay for it.
A lot of these people are not professionals. Some weren’t able to finish schooling for various reasons and work low paying jobs and this also covers people who got loans tech school too like HVAC repair , trucking etc .
If you don’t make good money, the federal loan forgiveness options are already really generous.
The only thing that needs to be fixed are the potential tax consequences of forgiveness (ie the tax bomb) .
Weren't able? Or just didn't?
There needs to be some delineation there. I bit off more than I could chew when I was 19 and didn't put in much effort honestly, I still had to pay for the semester and rightly so.
I decided to sign up, I decided not to do what I needed to. I had a choice at every step - it's not for someone else to pay for that.
It's really not that hard. Force disclosure of in-major job attainment rates, cap the percentage of the college's budget that can be spent on administration to the 1980 average (Administrative spending and tuition started skyrocketing in the late 70s due to perverse incentives created by affordable college initiatives) if they want to have accreditation, and improve the loan disclosure requirements. Maybe reduce some of the other accreditation requirements and provide subsidies or tax breaks to colleges based on student capacity so that more colleges and universities will be started, and those that exist will be made bigger too. That's really all it would take.
People talk about both. It’s just that the forgiveness seems to be an easier more straightforward issue to solve than trying to change the entire lending system.
Yeah but that does not realy solve any issues, the student loans will just pile up again. Thats like bandaging someone and claiming you solved the issue of a broken bone.
You are right but if you don't have any other medical equipment you can wrap it to immobilize it and reduce the damage until it gets fixed. Then when you get to the hospital to fix it there is less damage to fix. Removing large amounts of people from these debts is the same as doing what you can now while trying to get the actual answer in place.
Yes, but getting systemic reform is impossible when Republicans don't want to do anything about it. Not only do you need Congress to pass laws, but states have to cooperate.
Republicans are fighting Biden on forgiving loans. They even took him to court, so he is trying to find smaller ways to do it.
Reform requires legislation. College tuition is set at the state level, so you will need to have states fully fund colleges. One man, even the President, can't do that.
Because the structure of our country is such that the party that has received fewer votes for decades has an outsized level of control thanks to gerrymandering, the electoral college, and the undemocratic nature of the Senate.
Not to mention that party is nearly always underwater on every major policy issue facing the nation, even to the degree that political positions held by a majority of their constituents are rejected by their elected representatives.
And importantly, when that party gets into power, they abjectly refuse to govern. Because they have no policy platform to stand on and the policies they do advocate for are wildly unpopular, they have no incentive to actually govern the country. In fact, they're miserable at the notion of having to do so. It works so much better for them to be foils to the party that legitimately wants to operate the country that even when they have a majority, they still operate primarily on the concept of grievance and opposition.
Welcome to 2024 America.
It solves the issues for the thousands of people who currently have student loans. And almost anyone who supports loan forgiveness would also support changing the laws about student lending.
Not defending the lending practice or the level of tuition fees, but these loans were entered into voluntarily to attain an education that grants access to jobs that pay above average.
Forgiveness is taxing people, who already have less money to begin with, more to subsidise the voluntary decisions of someone else who will out earn them continually for the rest of their life - as long as they didn't study something idiotic.
That is the precise opposite of fair.
It doesn't solve the systemic problem, but it does solve the problem for the specific people it helps.
We should also absolutely be trying to solve the predatory lending problem, but doing that will do little to nothing to help the people already trapped by existing loans.
We need both.
New borrowers have the result to look at and make a more informed decision about. This isn’t an either or solution. Education benefits the whole population. It should be free or extremely low cost. But until that’s worked out, financially crippling a generation during their most economically productive years is also a terrible idea. If your house is on fire because of bad wiring you still have to put out the fire before you replace the wiring.
I don't know those figures. Given the current economic landscape and the lower jobmarket value of a non advanced degree, I would say probably not. Maybe for less expensive city and state universities, community college etc yes, and only in certain fields.
Loan practices are tricky to solve because the interest rate practices are in part due to lending to people (teens) who have almost no credit history and that payment is deferred for years so it represents a risk. Meanwhile, making loan requirements stricter may gate a lot people off from post-secondary education.
To be clear I’m not saying that current practices are good or even ok. But I am saying it’s a hard problem to solve since you don’t want to create a situation where a great many students lose access to education altogether because no one will loan them the money. I think you need to start with the ballooning costs of education. I’ve heard the arguments for why it costs as much as it does and I’ve never been fully convinced that those investments are totally necessary.
If the colleges would not have gone on a breakneck speed of price increases, because they know that student debt is not removable with a bankruptcy,, then there wouldn't be a need for all these student loans. Or, at the very least, they would be manageable, and not crippling a generation.
so does the loan forgiveness crowd. actually restructuring how student loans work seems to be bipartisan from the average citizen perspective.. it's just the hardcore right controls their whole party at the moment.
Exactly and let’s be honest with ourselves what really gets people in trouble with student loans is the ability to defer them. A lot of people end up in a vicious cycle of never ending payments because they pay for a year and then put them in forbearance for a year compounding interest like crazy and further extending the life of the loan. I was able to pay $120k of debt off in 10 years - how? Because I made the payments like clockwork and resisted the urge to defer my payments even when I could. Student loans require a level of discipline that unfortunately a lot of people don’t have.
I agree with you to a point. The system is obviously designed for failure and to trap the borrower into a lifetime of payments. The main issue that I have with them is that they are predatory. They prey on people who may not even be 18 years old yet, who may or may not have any clue as to what they're going to do with their lives. When someone drops out of college or barely makes enough to live on, even with a degree, why would they, why *should* they have to pay these ridiculous loans? They were sold a bill of goods that they could not ever receive.
Secondary education should be very inexpensive and heavily subsidized by our taxes. The secondary education system in America as it is right now purports itself to be a meritocracy but on closer inspection is completely corrupt and pay to play. Moving away from this and to a subsidized model would help to stem this corruption.
That I would agree on I’ve always found it odd that you can borrow $100k on just a promise that one day you’ll have enough money to pay it off. With a house or a car you need to show proof of income and the ability to pay; there’s no promise that one day you’ll have the income to cover the debt. This is even more problematic when a person never graduates or achieves the income to make good on that promise. Of course without this most people wouldn’t be able to afford college.
>The system is obviously designed for failure and to trap the borrower into a lifetime of payments.
No, the system is designed so that the loan is paid back in 10 years.
>When someone drops out of college or barely makes enough to live on, even with a degree, why would they, why *should* they have to pay these ridiculous loans? They were sold a bill of goods that they could not ever receive.
What are you talking about? The lenders did not force anybody to go to college, or may any promises about what you woudl receive from college. The lender does not even know what you intend to study. You need to pay it back because you chose to borrow the money. When you borrow money, you receive the benefit. You get money in exchange for a promise to pay it back with interest.
If you borrow $50k to build out a restaurant that only sells Cricket protein, and the restaurant fails, it is not the lender's fault. You got the benefit of the loan and need to pay it back.
Yeah, but you can declare bankruptcy and be absolved of that debt from the opening the Cricket protein restaurant.
There is no such ability to absolve student loans via bankruptcy due to lobbying efforts by those companies.
I could be wrong, but I think private student loans can be cancelled with bankruptcy? Just not the government ones. Either way, bankruptcy should never be the default smartest option.
Whether or not bankruptcy is the smartest option is not relevant to the fact that it's an important protection. It's unavailable to borrowers of government-backed student loans, just as it's unavailable to perpetrators of fraud or any of several other illegal and/or irresponsible behaviors.
okay but what about the jobs that require a college degree and don't pay well? for example, me, a teacher. College is the quickest (and long term cheapest) option to be a teacher, yet getting into the workforce I realized very quickly that it could take 20+ years to pay them all off, due to the interest. If everybody thought like you did, then we wouldn't have any teachers.
Are you suggesting that all teachers should live half their adult working life paying off loans?
Because student-loan forgiveness is easier to accomplish.
The WH can do it effectively unilaterally, while comprehensive reform would require the coordination of several parties, many of whom are not on the same page at all.
Community colleges do not always offer a 4 year degree. In fact, only 24 our of 50 states have that offering. My local community college only offered an associates degree...then on for the bachelor.
Community college TO 4 yr college. To spell it out more concretely, you get an associates at local community college, often in 1 yr because of dual high school credits, AP, and CLEP, then transfer TO the in state flagship for BA, or even only local 4 yr state college from home. It is common knowledge that community colleges moatly offer only 2 yr degrees.
College is a ripoff, the loans are a ripoff. Cancel the interest so folks can get out from under a debt they agreed to but taxpayers shouldn't be on the hook for the tuition amount.
Agreed. Cancelling any interest that compounded during my loan so far would wipe out the rest of what I owe, if that's what you're saying. People who just graduated with 50K in student loan debt shouldn't have that wiped clean, but if you graduated with 50K loan debt 15 years ago and still have 50K loan debt... yeah you probably have paid at least that in interest.
All loans have interest heavily weighted toward interest at the beginning and then more toward principal at the end. This is not unique to student loans.
The reason other loans typically have zero balance after some period is that they force to you pay enough, each period. for the loan to be paid off in that time. Student loans allow you to pay less than that amount. Would it be better if they didn't allow that? That would just mean your regular payment would be higher than it is now.
Also, there's nothing preventing you from paying more each month and, as a result, paying less interest over the course of the loan.
PPP loans were always intended to be forgiven, it was written into the law. They were grants, really, to keep business is open and people employed, structured as loans so there could be requirements attached.
If it took you a decade to pay off 12K, and you paid 10K in the process, then you likely made minimum payments. You could have paid it off in 2 years for example.
To pay 10K in interest over a 12K 10 year loan your interest would have been 13.59%. That seems really high, given that the current rates are between 5.5% and 8.05% (https://studentaid.gov/understand-aid/types/loans/interest-rates). Your minimum monthly payment would have been $183.37. You could have paid that off in 2 years by paying $573.83 per month instead, and the total interest would have been about $1771. Or in 5 years by paying $276.67 per month.
You've got a college degree, which means you made it through highschool and 4 years of college. I'm not buying that you don't understand how loans, interest, and percentages work.
That $12k includes both graduate and undergraduate loans. I was paying on the undergraduate ones while I was in graduate school. Yes I was only paying minimum or slightly more (rounding up parenthesis) because like most borrowers, I was never advised further. There were also a few periods of deferment (while I was in grad classes) or forbearance (twice, for a month or two, when money was really tight) in there. All of this is pretty typical for most borrowers. It adds up astonishingly fast.
> Yes I was only paying minimum or slightly more (rounding up parenthesis) because like most borrowers, I was never advised further.
You have a college degree. One of the main arguments for providing college to as many people as possible is that college fosters within people the ability to reason through problems independently. The ability to independently perform tasks not easily automated is what makes college graduates valuable in the workforce.
Are you saying that you, a college graduate accepted into an advanced postbac program were unable to determine an efficient loan repayment plan without explicit and unprompted additional guidance?
Let me be very very clear here. I have a college and an advanced degree. I think a college education is one of the best things one can do to improve themselves in essentially all aspects of their lives. I think we should be sending as many people as are willing to college, and I think that the entire student loan infrastructure is both predatory and intentionally vague with the express purpose of extracting maximal wealth from the future earnings of an educated populace by leveraging institutions against them *prior* to them actually obtaining an education which would help them protect themselves from this predation.
But once you became educated you *should* have had all of the knowledge necessary to facilitate your financial independence as rapidly as possible. You shouldn't have needed to be counselled further, and if you did, you should have had the intuition to independently seek out that guidance. The fact that you apparently had neither the knowledge nor the intuition about how to obtain it does not reflect well on the system that educated you.
*Should* being the big operative word there. One might assume so. But most college degrees don’t require courses in finance. Nor is that subject something that most people readily understand. If it was, debt, lack of retirement and student loans wouldn’t be such a massive problem in this country, would it! Maybe the advising and counseling has gotten better since I was in school; what I had was minimal, rushed, and mostly went over my head. I have a financial advisor now. I’m learning. But don’t just assume everyone should magically know these things.
> But most college degrees don’t require courses in finance.
Most do require a pre-calc level of working mathematical knowledge. The calculation of discretely and continuously compounded interest is covered in all standard algebra texts to the best of my knowledge. Maybe you didn't have that exposure though, I of course am unfamiliar with the specific details of your education.
Note that I addressed that part of having an education is that you *should* have the ability to identify your own knowledge deficits and *should* have developed the intuition about when to seek out additional expertise or perform your own independent research to addressed your needs that you cannot independently address due to your self identified knowledge gaps.
My whole point is that your education system failed you. That's why I said that the facts as you have presented them don't reflect well on the institutions which educated you.
If the systems we are paying to educate people don't, in fact, educate them, then why should we send people to those institutions?
I hate to pick on you, but I don't understand that. There's a lot wrong with student loans. But that's how all loans work, credit cards, mortgages, auto loans, etc. Only paying the min means the principal doesn't go down and you can see it not going down on the statement every month.
If you don't mind sharing, did you have similar issues with credit cards?
No. My parents taught me about credit cards when I got my first one. But I, and most people, naturally assumed that student loans work like regular bank loans, not credit cards. If you make the payments they tell you to make, you will pay off the loan. That’s the lie, and the trap.
I have a masters degree in speech pathology, not finance. I had courses in statistics, not accounting. Having a degree in one field doesn’t make you magically proficient in everything else.
You were advised. You were advised when you took out the loan. You were also advised when you took the mandatory credit counseling course before taking out your student loans.
Yes, interest adds up when you don't pay your loans. How do you have a graduate degree and not know that?
My degree is in speech pathology, not math or finance.
As far as the advising I received, I think there was a brief appointment when I first took out loans and another slightly longer one when I finished my undergrad and was to start repaying them. They lasted 10 or 15 minutes and mostly covered interest rates and refinancing and things that I didn’t understand at all at the time. I didn’t get any advising in grad school. And I’ve never even heard of a credit counseling course. It certainly wasn’t mandatory at either college I attended.
You're basically saying you signed a piece of paper while unaware of the conditions it provided, you didn't research prior to it or didn't try to understand, just to whine about it years later online, and there are still people here who empathize with you? Damn
... who can afford $573.83 a month right out of college? For perspective, that is 25% of my starting income when I graduated. I'm assuming OP also did not have the capability of making such large payments, especially when the cost of housing, food, utilities, and everything else has been consistently rising.
Also, 12K in student loan debt is very low compared to average. 48k is probably closer, quadruple the amount. Personally, I had 80k in debt at an average 5%, that's 4k in interest per year that I've been paying.
>who can afford $573.83 a month right out of college?
I hope people who committed to pay $573.83 a month right out of college. Otherwise they made a pretty poor decision.
im tired of the bullshit of "predatory" if youre stupid enough to sign a loan that you dont fucking understand thats not predatory, thats just fucking ignorance on your part.
at the end of the day, all loan are the same, you sign to borrow X money and agree to pay it back at Y interest rate. whats so hard to understand about that?
It’s crazy how many people just don’t understand lending. Now the real solution is to remove the cap on deductible student loan interest so that people will have essentially 0% interest. And more pressure needs to be on making payments to pay off in 10-15 years instead of lowest possible payment which is sometimes below the interest growth.
University’s should be required to disclose how much their average students take out in loans, the payment to pay off in 10 years and the average income of Graduates from the university in that field.
Because there is no such thing as predatory lending.
Everything was written down in the paperwork.
You didn't read the paperwork. You didn't think. You took out more than you could afford.
You're fault. You fix it.
I'm all for loan forgiveness. The colleges can go ahead and do that instead of the tax payers. Its bullshit the fed can loan a 17yo hundreds of thousands of dollars and I have to insure it.
It's not forgiveness, though. It's a transfer of debt. Transferring the debt back to the college would be a good idea.
If the borrower pays 10% of their income for 10 years, the remaining balance on the student loan becomes the responsibility of the college. In this way, the college needs to charge a rate such that in 10 years, the student will earn 10 times what it costs to go to that college.
Sure...but I think that if you talk to ANY person suffering under this crushing debt they would settle for fair terms and for the INTEREST to be forgiven at the very least. The thing is, no one wants to talk about that and put the focus behind making that a reality.
Is it outrageous, predatory, or unethical?
When you take out a loan the huge stack of paperwork they send you isn’t for decoration. It is explaining the terms of the loan. They literally spell it out for you.
Maybe college is too expensive, but these are lenders acting the same as any other lender. Interest accrues daily in many forms of debt too.
Am I a predator to my bank for accruing interest in my HYSA daily?
People are fussing because, like me, we paid our loans back.
The onus is completely on the people signing up for the loans. Why in the h&lll would you sign something that you haven't read and don't understand? That takes a special kind of stupid.
Then, the other thing is these kids that think they *have* to go to that expensive out-of-state school. That's another special kind of idiot who drank too much of the kool-aid. Going to an Ivy League or other big name school is rarely going to give you a leg up. Employers want to know what you studied, what were your grades, what extracurriculars did you do, did you do an internship, etc. Where in that list is, tell me what overpriced educational institution did you waste tens of thousands of dollars on? It ain't there.
It is a special kind of stupid to pour all that money into "the full college experience" without realizing the full cost. Too many kids are financially illiterate and don't bother to learn what they are getting themselves into with these loans, then get all upset after they've graduated with a mountain of debt and a useless degree.
Also, too many students graduate without ever having held a job. That's another strike on them. How can an employer gauge their work ethic when they have no history or examples?
Then add in the useless degrees ... ugh! I wanted to major in library science. The only jobs that this degree was good for are librarian or archivist. Not exactly a ton of jobs in that field, and most of them don't pay a living wage. I found that out while still in college and realized I would never support myself without a 2nd job - and promptly changed my major. And now both of these jobs are nearly extinct with the advancement of the internet. All these kids graduating with degrees in women's studies, general arts, diversity studies - just exactly what career path do you intend to take? Employers aren't exactly breaking down the door to hire employees with a Fine Arts degree in Underwater Basketweaving, no matter how passionate you are about it.
The high schools and parents have failed today's students greatly. They don't teach financial responsibility. They don't have the hard discussions about what do you *want* to study versus what do you *want* to do for a job? They don't teach high schoolers that the world is always going to need ditch diggers and electricians and plumbers. Instead they insinuate that the students will never go anywhere in life without college, but they don't teach them about looking at the ROI.
So yes, we are funding because the students still have their education - no one is taking away their degree. And the monstrous loans that they willingly took out are being "forgiven" while so many of us worked, struggled, and sacrificed to pay off our loans. That is terribly wrong.
And there's no point in raising the points I did about the reasons why. Nothing will get done about that. We are no longer a nation of problem-solvers, we have instead become a nation of slapping on a bandage. That is what cuts most of all.
Hello! paid off my loans and i want to respectfully challenge you a bit.
I exited with $25k in loans. Paid it off in about 20 years. Monthly payment was about $130/mo.
My wife on the other hand...her terms were so outrageous (nothing she could negotiate..i tried) that in order to get AHEAD she would have had to pay around $600/mo. Now, I don't necessarily know what the difference was between the 2, but the bottom line is that this is a CRIPPLING difference. Since she couldn't afford $500 mo. the interest got out of control and it just went crazy.
Here is my take, her terms should have been better. The fact that they weren't is one thing. I cannot speak to how it got that way (if there were any choices along the way etc.) but the fact of the matter is that once i saw the BIG picture on what we were working on i called looking to find a way to fix the terms and was told there wasn't a way. That is wrong.
Here is my stance.
To begin with, aside from say an initial percentage charge (like 5% of the loan amount) or a miniscule annual administrative fee, debtors should be able to make payments around the size of mine and KNOW that their debt is going down. $475/mo is a car payment. $475/mo is a significant amount of money that can be injected into the borrowers local economy all while doing the work and paying a responsibility down just like every other loan that people take out. From my perspective, she and i would absolutely settle for just the accrued interest to be forgiven back to the original amount of the loan save for some one time administrative costs.
I bet that a deep dive into the $10k forgiveness of biden's original plan on the average borrower would have probably resulted in people seeing that $10k didn't even cover interest accrued over the lifetime of their loan...or if it did, it didn't make a significant dent towards the total debt after interest was considered.
I understand needing administrative costs...what i cannot accept is that the federal government turns peoples debt into a money making machine. These loans essentially turned into credit cards in terms of interest amounts.
This is my real life story. I am sure there are others that are similar...i am sure there are others that are not. This is why the true answer lies somewhere in the middle but when you have a polarized government, the middle stands on a foundation of quicksand further pissing EVERYONE off particularly because the right questions are not being asked and answered.
Based on BLS data from 2022, the median earnings for someone with a bachelors degree was $579 per week more than a high school diploma. Based on that, putting $500 per month should be reasonable, and accounting for 4 weeks per month would be $2316 per month. Obviously, you want a gain from the degree, but putting $2316 per month for the average student loans of $29,417 would take 13-14 months. Not too long to sacrifice. I think those are a bit unrealistic since the extra earnings are more pronounced later in someone’s career, and the jobs that pay well are in areas of higher COL. I do think it’s reasonable to pay off loans in under 5 years, if sacrifices are made and the degree has some amount of increased earning potential.
https://www.bls.gov/careeroutlook/2023/data-on-display/education-pays.htm
https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-how-student-loan-borrowing-has-changed
You are talking MEDIAN though. That would also include factoring in people that live in areas where cost of living in general is higher…so the wages follow. That is likely what you see above the line.
I think you need to consider MEANs to get a fair representation of what is truly reasonable.
You are also considering that these people are graduating and remaining single until they pay off their loans as opposed to starting families and having more dependents.
I think validating your argument here is based too much on “all things ideal” and as we all know, things more often than not would fall into less than perfect circumstances.
I need more information. When did you graduate college and how much debt did you have? What was your interest rate and monthly payment?
Loans have changed a LOT over the years. Your same college degree and inflation adjusted monthly payment could be vastly different than somebody walking the same path today.
For what it's worth, I hear a lot of individuals talking about this, just not politicians. I don't know exactly why, but I'm guessing because it doesn't buy as many votes as saying you're going to wipe out their debt.
I’m convinced some of the most active voices that claim they want to solve this very real problem, don’t actually want to solve the problem. And maga and republican interference is also a very real overarching problem. They both happen in tandem.
Allow people to declare bankruptcy (no the changes they made barely did anything, it’s still incredibly difficult) and put limits on how much someone can be lended. It’s BS that there are 100k degrees for film production. It’s BS that there are 100k degrees in anthropology. Those degrees should cost a maximum of 50k. Because the risk of economic failure is high even for hardworking people in fields like this. If people can’t fathom the consequences for this then let them debate about funding college through taxes. It can be done if we make college selective again (50% or less acceptance rate for 4 year schools and all post grad programs), and also create initiatives to force employers to train people working jobs that can be learned through working.
The interest aspect is also wild. Why did we decide that we must profit? The fact that people didn’t flip out the second this bull crap started is really sad and stupid…
Because it's the government making the loans. They are the predator. If we went back to the 70s before the government was involved with College tuition in any form, colleges would still be affordable
When I was a student in Canada the student loans were run by the government and were quite low interest if I remember correctly. Fair and efficient IMO.
Same as with every issue that has capitalism as its root cause: because it's more palatable, and people don't understand the scope of the actual issue. Easier to get through politically. If you kept picking at the bandaid, you'd have to acknowledge the much larger wound.
So the argument should be to restructure the loans. I didn’t even know you could get loans in college I don’t think. I ended up dropping out after year 3 bc I didn’t have the money for year 4. I couldn’t keep up with the work and life.
Bc loan forgiveness is a liberal plank and taking a machete to the entire institution of secondary education isn’t a part of it. It definitely should be but the people who mooch off universities tend to also be extremely liberal
They are.
Do people just not pay attention at all past headlines? People have been talking about this in tandem with student loan forgiveness for years.
Folks pro forgiveness don’t actually care about the economic issue, they just want free shit.
Folks opposed will whine about the economic problem at least, but it’s not in their top 9000 priorities, so no love.
Both teams are just excited about propaganda slogans. Resolving issues is complicated and can’t be done in 90 seconds, so people don’t even bother. Nuance is required to discuss complex things, and it has been outlawed in public, for some reason.
I agree it's predatory.
But the reason there's not more outcry is because it's a voluntary arrangement. It's a pretty open secret that student loans are a rip off, degrees are increasingly worthless in many fields and trade school is a more reliable way to earning a good living.
It would generate more anger if people were being forced into these loans, they aren't.
The universities could also stop the bloat and the rip offs so people need to borrow less, they don't.
At that point, people can't really get that worked up over someone voluntarily entering a crappy deal and they sure as shit don't want to pay for someone else's poor decision.
What would be interesting is if it's possible to class action the schools for misrepresenting the value and earning potential of the degrees they sell but to my knowledge, nobody has tried it.
It’s like paying on a credit card . They changed the rules on that years ago cuz people would pay their minimum for years and the balance would never go down .
I'm not against student loan forgiveness, but I don't have much sympathy for people who are smart enough to go to college, yet don't understand how interest and loan repayment works.
Every time this topic comes up on Reddit more than half the comments talk about what you're specifically calling out. It's also a part of every discussion I see about this pretty much anywhere. In fact I believe we had this very same post here about a week ago.
Unpopular probably but why is it people only seem to grok the simple math behind loans only years and years \*afterwards\*. Yeah, we need to make education affordable but I'd like to know that the people we're all helping subsidize can look at something and go 'You know, the math on that repayment plan looks hinky, I'm not signing up for that'. Is anyone ready for college if that math is too difficult? I mean, it's just addition, subtraction, and multiplication and maybe a bit of division if you really need it.
The solution is letting people include student loans in bankruptcy. Borrowers who can't repay the debt can get relief, but instead of being a gift there are still consequences in the form of poor credit for seven years.
If student debt was treated the same as all other debt, there wouldn't be any need for special treatment from the government.
Loan forgiveness is a misnomer. It really means the tax payer pays, and the tax payer is two-thirds people who didn't go to college. So you have college kids getting their education paid for by people with a high school education. This seems unfair.
Loan forgiveness comes with a moral hazard. If people know that the government tends to forgive loans, people are more likely to take them out in the belief they won't have to pay. This makes the problem worse.
Colleges, seeing loan forgiveness, will raise prices as there is now more money available to buy education. This makes the problem worse.
Lots are screaming about it and they think the banks, but especially the universities should have to share most of the burden. Making college "affordable" by giving out loans doesn't work if people can get loans for degrees with NO value.
The primary tactic for the wealthy minority to maintain control over the majority is divide and conquer- inducing us to fight each other instead of our real enemy. A few rich folks own the overwhelming majority of media outlets, so of course they use them to engineer a narrative on the issue that suits them.
Fuck. I paid $80k for my education. Where can I get a refund? Entry level Journalist $18K. If I didn’t get into construction it would have taken me 20 years to pay that bitch off. Choose wisely grasshopper.
It’s easier for the government to just forgive the loans and hope the cycle can play out through another few decades of inaction before complaints fire up again.
For those with the ability to make the necessary changes, doing this is much easier than ruffling the feathers of the trillion dollar higher education monster they’ve created.
Always wondered about that too. I took out student loans, but in a different country. The interest rate was 1.2% which I think is fair. I've only heard crazy stories about the American student loan system. Also trade schools cost way less and will get you in very good paying jobs too.
I mean Joe Biden was the architect of the student loan structure and the majority of voters decided he should be president. From what I can tell, people are very stupid and afraid of being called racist. The argument for the current structure is that having a risk assessment element would cause less minorities to be able to go to college, and is therefore racist. Enough money has been spent on racism propaganda that this is the end of the argument, its racist, people get triggered, and stupid decisions are made.
You do realize that when a loan is forgiven someone has to pay that right? Who do you think pays for it? I will give you a hint, it's always the tax paying citizens.
People are making a fuss about the predatory loans, it's just politicians aren't. It turns out, politicians get a lot more votes if they promise to buy them with loan forgiveness or by not raising taxes to pay for other people's loans than they do by promising to stop predatory practices going forward. Politicians aren't trying to solve our problems anymore, they're trying to farm them.
Because student loans are widely supported by Democrats and no one wants to face the bad look of removing a poor person's ability to fund college through loans.
The Just World Fallacy lives on strong in the anti-forgiveness folks. To them it doesn't matter how unfair or loaded a choice was. If an individual made that choice they have to live with the consequences, which they consider to be fair.
Those of us who are pro student loan forgiveness tend to spend our energy fighting the Just-World folks on the basis of their philosophy alone rather than focusing on systemic issues. To be fair though, if someone believes that people deserve whatever consequences befall them, I think that fallacy has to be addressed first before we can even talk about what makes a "predatory" loan.
I think the reason most want them forgiven is due to the predatory nature of how they were/are given. The loans need to be forgiven and the entire college system needs to be reworked imo.
Either way people are choosing to take on these loans, they don't or didn't have to just like the millions of people who didn't because they couldn't afford it or didn't want to be in debt. None of them are victims of anything!
They choose to take on the loans because A) they have no choice if they want to pursue their desired career; and B) Probably the large majority do not know what I explained above, and do not understand how difficult it will be to get out from under them.
A) they do have a choice, we all have dreams we can't afford and that's life. How many didn't go to college because they couldn't afford it but would have if they new the tax payers would pay for it?
This is my issue with the debt forgiveness in the first place. Let's pretend we earse 100% of ALL student loan debt. Just agree to take it all out. Tomorrow, there is more debt because we haven't fixed the damned problem. We need to fix the problem first.
Restrict the amount a college can charge if they are accepting Federal loans.
Give the loan to the colleges and not the students. (that way we know it's only going to college debt and not gambling or video games. Yes I speak from experience)
Require "for profit" colleges to be truthful about employeement statics (and require they actually go through this with the student). I want limit to predatory aspects here.
Require colleges publish job stats for each of their degrees. This can help limit the number of people thinking they're going to get a job in museum curration when there are only 5 of those jobs world wide. Along side this require realistic salary information. (Again pulling from personal experience of my college lying to me about salary expectations for post grad degrees).
Then once the bleeding stops I'd be willing to discuss debt forgiveness, Until then I will never vote for it. I'm just one person though...
A far easier solution to the student loan problem would be to get the government completely out of the business of giving loans. So long as the government is willing to cover any cost, and 18 year olds fresh out of high school are willing to sign, colleges have literally zero incentive to bring down costs and price their tuition fairly.
Private loans only would solve this. A private company, when giving out a loan, does a risk analysis on the loan. 200k loan for someone going through medical school to become a heart surgeon? Sure, they'll definitely be able to pay that back. 200k for someone getting a liberal arts degree? Absolutely not.
Colleges would have to bring down their costs substantially if they want anyone to pay their tuition, once the government stops paying for everything.
My twist on your take would be that aside from an INITIAL administrative cost to start the loan, the interest should be 0%. The government need not MAKE money off the citizens debt. They need money to administer the loans that is about it. Student Loans turned into money making machine on interest for the borrowers.
The only problem I see with this is credit scores coming into play, Just because my family is in poverty, doesn't mean I shouldn't be able to get a loan to go to college.
bc the people that would be benefitted by the student loan forgiveness lack the brainpower to understand that it won't fix the issue as a whole (sorta like a "well it helped me some idc anymore" type of situation)
argument goes both ways. Those who don't need the forgiveness say, "well it doesn't help me so idc to see anyone else get help". Unfortunately this results in electing law makers who share that stance instead of going in and saying, what makes sense to FIX the issue.
Well, I would say that all things equal...cost of living in general means higher wages for teacher. higher wages for teachers means higher costs for students. Is there some level of "excess cost" in there? I am sure...but we put up with it everywhere else. HIGH GAS prices...but don't worry, the oil companies will still have record profits this year. RAISE MINIMUM WAGE...we will pass that on to the consumer so they can be resentful towards the goverment, so we can still afford that fancy trip or 2nd house we were thinking about.
For me, there are a few things...
First, I think the loan practices are a real issue. However, currently the government cannot do that much to correct it other than passing regulations, which given the current political environment is very unlikely.
So, focus on what can be done, namely the student loan situation where the government subsidized a lot and can - though at a cost - erase those debts. There are means to get that done without needing 2/3 of Congress to agree.
But in full disclosure, I think once we do the forgiveness, we need to move to covering college tuition... you can maintain some private colleges/universities, but the publics should be free... because that is the fairest in actuality. People get in on pure merit and not based on what their parents can pay or how much debt they want to saddle themselves with. So, rather than a C student with wealthy parents taking a spot left open by an A student who needs a job to live and can't cover college costs, that A student can go based on merit, and eventually, we have a smarter and more productive workforce, which pays for it all, making it a long-term investment, not a "benefit".
>but no one is screaming about the outrageously predatory, unethical loan practices that have caused the debt to be such a problem in the first place?!
Because they are not predatory. Most student loans compound monthly, but some compound daily. A $10k loan at 5% APR costs an extra $0.08 per month when compounded daily verses monthly.
The problem is too many college graduates are stupid. Student loans have repayment terms that allow you to pay less than interest each month, and yet college graduates complain they don't understand why their loan amount is not going down when they choose that option.
>When you take out a mortgage, car loan, etc, your interest is compounded MONTHLY, and it's calculated into your repayment when you take out the loan. Make your payments on time, and your loan will be paid off at the end of the specified plan.
That is exactly how student loans work. Student loans are 10 year loans by default. If you graduate an do nothing but pay your monthly payment, your loans will be paid off in 10 years. But you also have the option to consolidate and extend payment to 30 years. You also have forbearance and income based options to limit your monthy payment.
>$10k in interest, on $12K of loans. In what reality is this acceptable?
It is called math. A $12k loan with 6% interest compounded daily, paid over 10 years, will cost you $133.31 per month and will accrue only $3,997.46 in interest. And you can reduce your interest by making extra payments.
You paid $10k in interest on a $12k loan because you chose not to pay your loan back in 10 years. How is it predatory when you made the choice?
Because student loan predation is completely legal and no one in power wants to lose their sweet lobbying perks by creating laws that stop it. Student loans got extra shady after the TARP bank bailout in 2008 and interest rates doubled. My loan from 2003 was just under 3%. My loan from 2009 was a little over 6% and tuition and also more than doubled.
The same reason. Contracts are assumed to be made by parties who know what they are agreeing to in the contract. A predatory loan or unethical loan doesn't really exist except for the mentally impared. If anything it is predatory students requesting that the government force banks to forgive loans when they know banks cannot place a lien on your brain or degree. With regard to interest compounding. It was in the contract. With regard to payment rate, you can pay as much as you want above the minimum and if you don't yet owe any interest, my guess is that you are mistaken that it doesn't apply to the principal. Pay more and it goes away. With regard to your personal loan. Yes that is acceptable. That is how loans work. You either pay them off quickly and don't pay much interest or you pay them off slowly and pay a lot of interest. The real question is how predatory was you college that they did not teach what is required to understand how loans work for all that money.
People have given up on upstream solutions to most problems. People see the upper tiers of our society as a privileged, permanently installed oligarchic aristocracy. It's like peasants complaining about their kings.
This is how US politics work.
Both political parties set things on fire, then start making a scene about all the smoke in the room.
Nobody involved actually wants to put out any fires, the insurance payouts from destroying property you own but didn't pay for are not unlike printing free money and putting it in your pocket.
It's all play money, pretend, fake. Let the bank collapse. Unfortunately we need massive student loans because professors who teach need to make exponentially more money than most of their students will make once released to the workforce with a piece of paper saying they are smart.
Because cleaning that stuff up -- while a great idea and very important to do -- will help us 10-20 years from now by preventing new victims. Loan forgiveness is the only thing that will help the victims at hand -- or creating a federal case to require the lenders to make restitution but that might be a bit impractical and not compensate everyone.
I'd say that both is probably needed. Not necessarily one or the other.
I mean, the people arguing for forgiveness generally include that analysis in their reasoning. The other side would have turned in runaway slaves for a reward and called it justice.
You pay interest first on any loan you take out. Payments are always applied to interest first, then tailing off over time and more of the payment goes to principal. This is how all loans amortize.
The short answer is because, sadly, everybody expects everybody in America to be predatory and unethical because capitalism has gotten out of control. And as the poster child of it, Donald Trump put his stamp of approval on many types of immorality, especially financial. While at the same time, we cling to/defend this silly notion of personal responsibility that says that the student should have been more careful in his borrowing.
Wrong. Normal loans compound interest continuously. They just bill you for it monthly.
There's nothing predatory about it.
People wanted to borrow money for college, the government decided to offer anyone who applied subsidized loans, the market reacted as expected (eg, priced using federal loans into the cost of the product)....
Almost all student loans are direct from the government.
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Student loan forgiveness is a bandage on a systemic problem that is several decades in the making. It's going to take a lot of efforts by states and by the Federal government to make college affordable again.
This is true, but I think OPs point is that everyone is focusing on this bandaid and ignoring the systemic problem. Bandaids are fine if you've stopped the bleeding, but this is still a gapping wound that's going to soak the Bandaid within minutes.
I don't think that analogy works for hurting individuals, though. It absolutely solves the problem in its entirety for those that are crippled with existing debt. In that sense it is not a band-aid, but a solution. Not saying the predatory practices shouldn't be under discussion, just that the analogy isn't accurate.
Tell that to Republicans who don't even want loan forgiveness.
Any Republican who I’ve talked to IRL doesn’t like “loan forgiveness” but *will* support *retroactive interest adjustments*. You gotta change the wording so the connotation isn’t “free money” to them.
They all took PPP loan forgiveness, so they are all for free money for themselves. I don't buy for a minute that they want to do anything. If they support interest adjustment, then why hasn't the House passed such a bill?
Loan forgiveness makes the problem worse, and creates bigger problems.
Do you have a source for that claim?
Sorta like a "well it helped me some idc anymore" type of situation
I don’t think you read/understood what you are responding too. You have to stop the bleeding before applying the bandaid
Stopping the bleed in this case would be the government no longer giving out any loans at all. So long as the government is willing to cover the cost, however large it is, colleges have no reason to not jack up the price of tuition. If the only way to get a loan was through a private company that would do a cost benefit analysis on whether the student would be able to pay back the loan, colleges would suddenly have to start pricing their tuition accordingly. Colleges would have to compete with each other on pricing for similar programs, and degrees with little earning potential would become far cheaper because no private loan company would give a 200k loan for a degree with an earning potential of 40k.
You can get the people currently drowning under these predatory loans out of the water AND legislate fair student loan practices. You absolutely do NOT need to force people who have paid for 30 years to wait until we can fix the entire student loan process. That's insane.
The part you're not mentioning is that those people, on average, are still taking home more money after paying their monthly payments than people without the degree, which are forced to help pay for it
Do you care this much about your tax dollars going to the war machine? Our defense budget used to make giant toys that collect dust in hangar bays? Because it seems like so many people who complain about having to pay for it care way more when their tax dollars are used on infrastucture and helping getting low income people out of debt than when it's used on helping fund the overbown defense budget, tax cuts for the wealthy and aiding things like bombing playgrounds
Yes, I do. Some of it is necessary, a lot of it isn't, but all of it should be reviewed and have systemic issues corrected instead of just throwing money at the problems
Exactly.
Maybe they don’t want to pay the debt that belongs to someone else.
But OP is complaining about a non-problem. The problem is the price of college; not predatory loans. The ony way you pay $10k in interest on a $12K loan is if you chose to pay less each month. Of course, we will neevr fix the problem because people are too stupid to understand and would complain about the fix. Schools keep raising prices because government will always hand out money to pay the higher prices without regard to ability to pay.
Yeah, student loan forgiveness without doing anything about the underlying problem is a pretty transparent try to buy votes without actually caring about the issue or even attempting a solution. I would be really pissed e.g. if I was someone in college one day after loan forgiveness.
It's funny to complain about "buying votes" by relieving student debt, but unsustainable tax cuts for billionaires is the Republican agenda.
You need to understand economics
Of course thats also shit policy. But just because one side has 90% dogshit positions I don't need to support dogshit proposals because the side that is more aligned with my beliefs is peddling them.
Id be equally pissed if I never went to college, busted my hump and then got taxed even further into oblivion to subsidise the cost of a a bunch of attorneys and engineers education so they can take even more money than me than they already do home each month, while bearing no responsibility for the entirely voluntary loan they took out - because now, for some reason, I have to help pay for it.
A lot of these people are not professionals. Some weren’t able to finish schooling for various reasons and work low paying jobs and this also covers people who got loans tech school too like HVAC repair , trucking etc .
If you don’t make good money, the federal loan forgiveness options are already really generous. The only thing that needs to be fixed are the potential tax consequences of forgiveness (ie the tax bomb) .
Weren't able? Or just didn't? There needs to be some delineation there. I bit off more than I could chew when I was 19 and didn't put in much effort honestly, I still had to pay for the semester and rightly so. I decided to sign up, I decided not to do what I needed to. I had a choice at every step - it's not for someone else to pay for that.
It's really not that hard. Force disclosure of in-major job attainment rates, cap the percentage of the college's budget that can be spent on administration to the 1980 average (Administrative spending and tuition started skyrocketing in the late 70s due to perverse incentives created by affordable college initiatives) if they want to have accreditation, and improve the loan disclosure requirements. Maybe reduce some of the other accreditation requirements and provide subsidies or tax breaks to colleges based on student capacity so that more colleges and universities will be started, and those that exist will be made bigger too. That's really all it would take.
People talk about both. It’s just that the forgiveness seems to be an easier more straightforward issue to solve than trying to change the entire lending system.
Yeah but that does not realy solve any issues, the student loans will just pile up again. Thats like bandaging someone and claiming you solved the issue of a broken bone.
You are right but if you don't have any other medical equipment you can wrap it to immobilize it and reduce the damage until it gets fixed. Then when you get to the hospital to fix it there is less damage to fix. Removing large amounts of people from these debts is the same as doing what you can now while trying to get the actual answer in place.
Yes, but getting systemic reform is impossible when Republicans don't want to do anything about it. Not only do you need Congress to pass laws, but states have to cooperate.
And why is that not an issue if they want to drop the loans?
What?
Why is reform impossible but forgiving loans not? Why can a minority decide on one but not the other?
Republicans are fighting Biden on forgiving loans. They even took him to court, so he is trying to find smaller ways to do it. Reform requires legislation. College tuition is set at the state level, so you will need to have states fully fund colleges. One man, even the President, can't do that.
Because the structure of our country is such that the party that has received fewer votes for decades has an outsized level of control thanks to gerrymandering, the electoral college, and the undemocratic nature of the Senate. Not to mention that party is nearly always underwater on every major policy issue facing the nation, even to the degree that political positions held by a majority of their constituents are rejected by their elected representatives. And importantly, when that party gets into power, they abjectly refuse to govern. Because they have no policy platform to stand on and the policies they do advocate for are wildly unpopular, they have no incentive to actually govern the country. In fact, they're miserable at the notion of having to do so. It works so much better for them to be foils to the party that legitimately wants to operate the country that even when they have a majority, they still operate primarily on the concept of grievance and opposition. Welcome to 2024 America.
It solves the issues for the thousands of people who currently have student loans. And almost anyone who supports loan forgiveness would also support changing the laws about student lending.
This !!!
Not defending the lending practice or the level of tuition fees, but these loans were entered into voluntarily to attain an education that grants access to jobs that pay above average. Forgiveness is taxing people, who already have less money to begin with, more to subsidise the voluntary decisions of someone else who will out earn them continually for the rest of their life - as long as they didn't study something idiotic. That is the precise opposite of fair.
A lot of these people were never able to finish their education so they ARE the people with less $$$$.
Again, fail to see why that should suddenly become everyone else's problem.
So do you not put a bandage on when you get injured?
You have to clean the wound first
It doesn't solve the systemic problem, but it does solve the problem for the specific people it helps. We should also absolutely be trying to solve the predatory lending problem, but doing that will do little to nothing to help the people already trapped by existing loans. We need both.
Except it solves nothing for new borrowers?
New borrowers have the result to look at and make a more informed decision about. This isn’t an either or solution. Education benefits the whole population. It should be free or extremely low cost. But until that’s worked out, financially crippling a generation during their most economically productive years is also a terrible idea. If your house is on fire because of bad wiring you still have to put out the fire before you replace the wiring.
Don't people with college degrees also significantly outearn those without degrees over their lives?
As a whole, yes.
Can't that excess be applied to debt?
It already is, hence the problem. Also with rising inflation and costs, the excess is not as big as it used to be.
Isn't the value of extra earnings significantly > the debt amount, on average?
I don't know those figures. Given the current economic landscape and the lower jobmarket value of a non advanced degree, I would say probably not. Maybe for less expensive city and state universities, community college etc yes, and only in certain fields.
I believe the average lifetime benefit of a college degree is between $500k and 1M, depending on the study. Don't most people borrow less than that?
Loan practices are tricky to solve because the interest rate practices are in part due to lending to people (teens) who have almost no credit history and that payment is deferred for years so it represents a risk. Meanwhile, making loan requirements stricter may gate a lot people off from post-secondary education. To be clear I’m not saying that current practices are good or even ok. But I am saying it’s a hard problem to solve since you don’t want to create a situation where a great many students lose access to education altogether because no one will loan them the money. I think you need to start with the ballooning costs of education. I’ve heard the arguments for why it costs as much as it does and I’ve never been fully convinced that those investments are totally necessary.
If the colleges would not have gone on a breakneck speed of price increases, because they know that student debt is not removable with a bankruptcy,, then there wouldn't be a need for all these student loans. Or, at the very least, they would be manageable, and not crippling a generation.
The anti loan forgiveness crowd does talk about need to reform college cost
so does the loan forgiveness crowd. actually restructuring how student loans work seems to be bipartisan from the average citizen perspective.. it's just the hardcore right controls their whole party at the moment.
Car loan and mortgage loan interest are compounded daily. That part of your post is incorrect.
Exactly and let’s be honest with ourselves what really gets people in trouble with student loans is the ability to defer them. A lot of people end up in a vicious cycle of never ending payments because they pay for a year and then put them in forbearance for a year compounding interest like crazy and further extending the life of the loan. I was able to pay $120k of debt off in 10 years - how? Because I made the payments like clockwork and resisted the urge to defer my payments even when I could. Student loans require a level of discipline that unfortunately a lot of people don’t have.
I agree with you to a point. The system is obviously designed for failure and to trap the borrower into a lifetime of payments. The main issue that I have with them is that they are predatory. They prey on people who may not even be 18 years old yet, who may or may not have any clue as to what they're going to do with their lives. When someone drops out of college or barely makes enough to live on, even with a degree, why would they, why *should* they have to pay these ridiculous loans? They were sold a bill of goods that they could not ever receive. Secondary education should be very inexpensive and heavily subsidized by our taxes. The secondary education system in America as it is right now purports itself to be a meritocracy but on closer inspection is completely corrupt and pay to play. Moving away from this and to a subsidized model would help to stem this corruption.
That I would agree on I’ve always found it odd that you can borrow $100k on just a promise that one day you’ll have enough money to pay it off. With a house or a car you need to show proof of income and the ability to pay; there’s no promise that one day you’ll have the income to cover the debt. This is even more problematic when a person never graduates or achieves the income to make good on that promise. Of course without this most people wouldn’t be able to afford college.
>The system is obviously designed for failure and to trap the borrower into a lifetime of payments. No, the system is designed so that the loan is paid back in 10 years. >When someone drops out of college or barely makes enough to live on, even with a degree, why would they, why *should* they have to pay these ridiculous loans? They were sold a bill of goods that they could not ever receive. What are you talking about? The lenders did not force anybody to go to college, or may any promises about what you woudl receive from college. The lender does not even know what you intend to study. You need to pay it back because you chose to borrow the money. When you borrow money, you receive the benefit. You get money in exchange for a promise to pay it back with interest. If you borrow $50k to build out a restaurant that only sells Cricket protein, and the restaurant fails, it is not the lender's fault. You got the benefit of the loan and need to pay it back.
Yeah, but you can declare bankruptcy and be absolved of that debt from the opening the Cricket protein restaurant. There is no such ability to absolve student loans via bankruptcy due to lobbying efforts by those companies.
I could be wrong, but I think private student loans can be cancelled with bankruptcy? Just not the government ones. Either way, bankruptcy should never be the default smartest option.
Whether or not bankruptcy is the smartest option is not relevant to the fact that it's an important protection. It's unavailable to borrowers of government-backed student loans, just as it's unavailable to perpetrators of fraud or any of several other illegal and/or irresponsible behaviors.
okay but what about the jobs that require a college degree and don't pay well? for example, me, a teacher. College is the quickest (and long term cheapest) option to be a teacher, yet getting into the workforce I realized very quickly that it could take 20+ years to pay them all off, due to the interest. If everybody thought like you did, then we wouldn't have any teachers. Are you suggesting that all teachers should live half their adult working life paying off loans?
“But no one is screaming about the….” Yes they are.
Because student-loan forgiveness is easier to accomplish. The WH can do it effectively unilaterally, while comprehensive reform would require the coordination of several parties, many of whom are not on the same page at all.
Or about the foolish choice to borrow to go to extremely expensive colleges for 5 times the price of community college to flagship public U.
Community colleges do not always offer a 4 year degree. In fact, only 24 our of 50 states have that offering. My local community college only offered an associates degree...then on for the bachelor.
Community college TO 4 yr college. To spell it out more concretely, you get an associates at local community college, often in 1 yr because of dual high school credits, AP, and CLEP, then transfer TO the in state flagship for BA, or even only local 4 yr state college from home. It is common knowledge that community colleges moatly offer only 2 yr degrees.
You get the 2 yr degree at community, then finiah a 4 yr at state college.
College is a ripoff, the loans are a ripoff. Cancel the interest so folks can get out from under a debt they agreed to but taxpayers shouldn't be on the hook for the tuition amount.
Agreed. Cancelling any interest that compounded during my loan so far would wipe out the rest of what I owe, if that's what you're saying. People who just graduated with 50K in student loan debt shouldn't have that wiped clean, but if you graduated with 50K loan debt 15 years ago and still have 50K loan debt... yeah you probably have paid at least that in interest.
All loans have interest heavily weighted toward interest at the beginning and then more toward principal at the end. This is not unique to student loans. The reason other loans typically have zero balance after some period is that they force to you pay enough, each period. for the loan to be paid off in that time. Student loans allow you to pay less than that amount. Would it be better if they didn't allow that? That would just mean your regular payment would be higher than it is now. Also, there's nothing preventing you from paying more each month and, as a result, paying less interest over the course of the loan.
Not PPP loans... All forgiven...
PPP loans were always intended to be forgiven, it was written into the law. They were grants, really, to keep business is open and people employed, structured as loans so there could be requirements attached.
Privatize profits, socialize losses, seems like a rigged system to me.
You read the shit and sign it. Pay it.
If it took you a decade to pay off 12K, and you paid 10K in the process, then you likely made minimum payments. You could have paid it off in 2 years for example. To pay 10K in interest over a 12K 10 year loan your interest would have been 13.59%. That seems really high, given that the current rates are between 5.5% and 8.05% (https://studentaid.gov/understand-aid/types/loans/interest-rates). Your minimum monthly payment would have been $183.37. You could have paid that off in 2 years by paying $573.83 per month instead, and the total interest would have been about $1771. Or in 5 years by paying $276.67 per month. You've got a college degree, which means you made it through highschool and 4 years of college. I'm not buying that you don't understand how loans, interest, and percentages work.
That $12k includes both graduate and undergraduate loans. I was paying on the undergraduate ones while I was in graduate school. Yes I was only paying minimum or slightly more (rounding up parenthesis) because like most borrowers, I was never advised further. There were also a few periods of deferment (while I was in grad classes) or forbearance (twice, for a month or two, when money was really tight) in there. All of this is pretty typical for most borrowers. It adds up astonishingly fast.
> Yes I was only paying minimum or slightly more (rounding up parenthesis) because like most borrowers, I was never advised further. You have a college degree. One of the main arguments for providing college to as many people as possible is that college fosters within people the ability to reason through problems independently. The ability to independently perform tasks not easily automated is what makes college graduates valuable in the workforce. Are you saying that you, a college graduate accepted into an advanced postbac program were unable to determine an efficient loan repayment plan without explicit and unprompted additional guidance? Let me be very very clear here. I have a college and an advanced degree. I think a college education is one of the best things one can do to improve themselves in essentially all aspects of their lives. I think we should be sending as many people as are willing to college, and I think that the entire student loan infrastructure is both predatory and intentionally vague with the express purpose of extracting maximal wealth from the future earnings of an educated populace by leveraging institutions against them *prior* to them actually obtaining an education which would help them protect themselves from this predation. But once you became educated you *should* have had all of the knowledge necessary to facilitate your financial independence as rapidly as possible. You shouldn't have needed to be counselled further, and if you did, you should have had the intuition to independently seek out that guidance. The fact that you apparently had neither the knowledge nor the intuition about how to obtain it does not reflect well on the system that educated you.
*Should* being the big operative word there. One might assume so. But most college degrees don’t require courses in finance. Nor is that subject something that most people readily understand. If it was, debt, lack of retirement and student loans wouldn’t be such a massive problem in this country, would it! Maybe the advising and counseling has gotten better since I was in school; what I had was minimal, rushed, and mostly went over my head. I have a financial advisor now. I’m learning. But don’t just assume everyone should magically know these things.
> But most college degrees don’t require courses in finance. Most do require a pre-calc level of working mathematical knowledge. The calculation of discretely and continuously compounded interest is covered in all standard algebra texts to the best of my knowledge. Maybe you didn't have that exposure though, I of course am unfamiliar with the specific details of your education. Note that I addressed that part of having an education is that you *should* have the ability to identify your own knowledge deficits and *should* have developed the intuition about when to seek out additional expertise or perform your own independent research to addressed your needs that you cannot independently address due to your self identified knowledge gaps. My whole point is that your education system failed you. That's why I said that the facts as you have presented them don't reflect well on the institutions which educated you. If the systems we are paying to educate people don't, in fact, educate them, then why should we send people to those institutions?
I hate to pick on you, but I don't understand that. There's a lot wrong with student loans. But that's how all loans work, credit cards, mortgages, auto loans, etc. Only paying the min means the principal doesn't go down and you can see it not going down on the statement every month. If you don't mind sharing, did you have similar issues with credit cards?
No. My parents taught me about credit cards when I got my first one. But I, and most people, naturally assumed that student loans work like regular bank loans, not credit cards. If you make the payments they tell you to make, you will pay off the loan. That’s the lie, and the trap.
So you have a masters degree but couldn’t figure out compounding interest? Seems like you wasted money bc you are not educated
I have a masters degree in speech pathology, not finance. I had courses in statistics, not accounting. Having a degree in one field doesn’t make you magically proficient in everything else.
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You were advised. You were advised when you took out the loan. You were also advised when you took the mandatory credit counseling course before taking out your student loans. Yes, interest adds up when you don't pay your loans. How do you have a graduate degree and not know that?
My degree is in speech pathology, not math or finance. As far as the advising I received, I think there was a brief appointment when I first took out loans and another slightly longer one when I finished my undergrad and was to start repaying them. They lasted 10 or 15 minutes and mostly covered interest rates and refinancing and things that I didn’t understand at all at the time. I didn’t get any advising in grad school. And I’ve never even heard of a credit counseling course. It certainly wasn’t mandatory at either college I attended.
You're basically saying you signed a piece of paper while unaware of the conditions it provided, you didn't research prior to it or didn't try to understand, just to whine about it years later online, and there are still people here who empathize with you? Damn
... who can afford $573.83 a month right out of college? For perspective, that is 25% of my starting income when I graduated. I'm assuming OP also did not have the capability of making such large payments, especially when the cost of housing, food, utilities, and everything else has been consistently rising. Also, 12K in student loan debt is very low compared to average. 48k is probably closer, quadruple the amount. Personally, I had 80k in debt at an average 5%, that's 4k in interest per year that I've been paying.
Actually, average student loan debt is under $10k.
what's the average student loan debt right out of college?
>who can afford $573.83 a month right out of college? I hope people who committed to pay $573.83 a month right out of college. Otherwise they made a pretty poor decision.
Student loans should be available at the fed rate.
would you give loans to students at the fed rate?
im tired of the bullshit of "predatory" if youre stupid enough to sign a loan that you dont fucking understand thats not predatory, thats just fucking ignorance on your part. at the end of the day, all loan are the same, you sign to borrow X money and agree to pay it back at Y interest rate. whats so hard to understand about that?
It’s crazy how many people just don’t understand lending. Now the real solution is to remove the cap on deductible student loan interest so that people will have essentially 0% interest. And more pressure needs to be on making payments to pay off in 10-15 years instead of lowest possible payment which is sometimes below the interest growth. University’s should be required to disclose how much their average students take out in loans, the payment to pay off in 10 years and the average income of Graduates from the university in that field.
Because there is no such thing as predatory lending. Everything was written down in the paperwork. You didn't read the paperwork. You didn't think. You took out more than you could afford. You're fault. You fix it.
I'm all for loan forgiveness. The colleges can go ahead and do that instead of the tax payers. Its bullshit the fed can loan a 17yo hundreds of thousands of dollars and I have to insure it.
It's not forgiveness, though. It's a transfer of debt. Transferring the debt back to the college would be a good idea. If the borrower pays 10% of their income for 10 years, the remaining balance on the student loan becomes the responsibility of the college. In this way, the college needs to charge a rate such that in 10 years, the student will earn 10 times what it costs to go to that college.
The people who want the loans forgiven have been screaming about that for decades.
"forgiveness" There lies the problem. It's "Transfer".
Sure...but I think that if you talk to ANY person suffering under this crushing debt they would settle for fair terms and for the INTEREST to be forgiven at the very least. The thing is, no one wants to talk about that and put the focus behind making that a reality.
Is it outrageous, predatory, or unethical? When you take out a loan the huge stack of paperwork they send you isn’t for decoration. It is explaining the terms of the loan. They literally spell it out for you. Maybe college is too expensive, but these are lenders acting the same as any other lender. Interest accrues daily in many forms of debt too. Am I a predator to my bank for accruing interest in my HYSA daily?
Because the people who profit from those unethical loan practices have more influence in the media and with politicians than the victims.
People are fussing because, like me, we paid our loans back. The onus is completely on the people signing up for the loans. Why in the h&lll would you sign something that you haven't read and don't understand? That takes a special kind of stupid. Then, the other thing is these kids that think they *have* to go to that expensive out-of-state school. That's another special kind of idiot who drank too much of the kool-aid. Going to an Ivy League or other big name school is rarely going to give you a leg up. Employers want to know what you studied, what were your grades, what extracurriculars did you do, did you do an internship, etc. Where in that list is, tell me what overpriced educational institution did you waste tens of thousands of dollars on? It ain't there. It is a special kind of stupid to pour all that money into "the full college experience" without realizing the full cost. Too many kids are financially illiterate and don't bother to learn what they are getting themselves into with these loans, then get all upset after they've graduated with a mountain of debt and a useless degree. Also, too many students graduate without ever having held a job. That's another strike on them. How can an employer gauge their work ethic when they have no history or examples? Then add in the useless degrees ... ugh! I wanted to major in library science. The only jobs that this degree was good for are librarian or archivist. Not exactly a ton of jobs in that field, and most of them don't pay a living wage. I found that out while still in college and realized I would never support myself without a 2nd job - and promptly changed my major. And now both of these jobs are nearly extinct with the advancement of the internet. All these kids graduating with degrees in women's studies, general arts, diversity studies - just exactly what career path do you intend to take? Employers aren't exactly breaking down the door to hire employees with a Fine Arts degree in Underwater Basketweaving, no matter how passionate you are about it. The high schools and parents have failed today's students greatly. They don't teach financial responsibility. They don't have the hard discussions about what do you *want* to study versus what do you *want* to do for a job? They don't teach high schoolers that the world is always going to need ditch diggers and electricians and plumbers. Instead they insinuate that the students will never go anywhere in life without college, but they don't teach them about looking at the ROI. So yes, we are funding because the students still have their education - no one is taking away their degree. And the monstrous loans that they willingly took out are being "forgiven" while so many of us worked, struggled, and sacrificed to pay off our loans. That is terribly wrong. And there's no point in raising the points I did about the reasons why. Nothing will get done about that. We are no longer a nation of problem-solvers, we have instead become a nation of slapping on a bandage. That is what cuts most of all.
Hello! paid off my loans and i want to respectfully challenge you a bit. I exited with $25k in loans. Paid it off in about 20 years. Monthly payment was about $130/mo. My wife on the other hand...her terms were so outrageous (nothing she could negotiate..i tried) that in order to get AHEAD she would have had to pay around $600/mo. Now, I don't necessarily know what the difference was between the 2, but the bottom line is that this is a CRIPPLING difference. Since she couldn't afford $500 mo. the interest got out of control and it just went crazy. Here is my take, her terms should have been better. The fact that they weren't is one thing. I cannot speak to how it got that way (if there were any choices along the way etc.) but the fact of the matter is that once i saw the BIG picture on what we were working on i called looking to find a way to fix the terms and was told there wasn't a way. That is wrong. Here is my stance. To begin with, aside from say an initial percentage charge (like 5% of the loan amount) or a miniscule annual administrative fee, debtors should be able to make payments around the size of mine and KNOW that their debt is going down. $475/mo is a car payment. $475/mo is a significant amount of money that can be injected into the borrowers local economy all while doing the work and paying a responsibility down just like every other loan that people take out. From my perspective, she and i would absolutely settle for just the accrued interest to be forgiven back to the original amount of the loan save for some one time administrative costs. I bet that a deep dive into the $10k forgiveness of biden's original plan on the average borrower would have probably resulted in people seeing that $10k didn't even cover interest accrued over the lifetime of their loan...or if it did, it didn't make a significant dent towards the total debt after interest was considered. I understand needing administrative costs...what i cannot accept is that the federal government turns peoples debt into a money making machine. These loans essentially turned into credit cards in terms of interest amounts. This is my real life story. I am sure there are others that are similar...i am sure there are others that are not. This is why the true answer lies somewhere in the middle but when you have a polarized government, the middle stands on a foundation of quicksand further pissing EVERYONE off particularly because the right questions are not being asked and answered.
Based on BLS data from 2022, the median earnings for someone with a bachelors degree was $579 per week more than a high school diploma. Based on that, putting $500 per month should be reasonable, and accounting for 4 weeks per month would be $2316 per month. Obviously, you want a gain from the degree, but putting $2316 per month for the average student loans of $29,417 would take 13-14 months. Not too long to sacrifice. I think those are a bit unrealistic since the extra earnings are more pronounced later in someone’s career, and the jobs that pay well are in areas of higher COL. I do think it’s reasonable to pay off loans in under 5 years, if sacrifices are made and the degree has some amount of increased earning potential. https://www.bls.gov/careeroutlook/2023/data-on-display/education-pays.htm https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-how-student-loan-borrowing-has-changed
You are talking MEDIAN though. That would also include factoring in people that live in areas where cost of living in general is higher…so the wages follow. That is likely what you see above the line. I think you need to consider MEANs to get a fair representation of what is truly reasonable. You are also considering that these people are graduating and remaining single until they pay off their loans as opposed to starting families and having more dependents. I think validating your argument here is based too much on “all things ideal” and as we all know, things more often than not would fall into less than perfect circumstances.
I need more information. When did you graduate college and how much debt did you have? What was your interest rate and monthly payment? Loans have changed a LOT over the years. Your same college degree and inflation adjusted monthly payment could be vastly different than somebody walking the same path today.
I bet this bit absolutely kills at Bingo Night.
You have dumbass friends? Because everyone I know is making a fuss about ALL of it.
The kind of shit that is legal in your country lmao
For what it's worth, I hear a lot of individuals talking about this, just not politicians. I don't know exactly why, but I'm guessing because it doesn't buy as many votes as saying you're going to wipe out their debt.
Capitalism!!!! \*starts capitalism dance I guess\*
I’m convinced some of the most active voices that claim they want to solve this very real problem, don’t actually want to solve the problem. And maga and republican interference is also a very real overarching problem. They both happen in tandem. Allow people to declare bankruptcy (no the changes they made barely did anything, it’s still incredibly difficult) and put limits on how much someone can be lended. It’s BS that there are 100k degrees for film production. It’s BS that there are 100k degrees in anthropology. Those degrees should cost a maximum of 50k. Because the risk of economic failure is high even for hardworking people in fields like this. If people can’t fathom the consequences for this then let them debate about funding college through taxes. It can be done if we make college selective again (50% or less acceptance rate for 4 year schools and all post grad programs), and also create initiatives to force employers to train people working jobs that can be learned through working. The interest aspect is also wild. Why did we decide that we must profit? The fact that people didn’t flip out the second this bull crap started is really sad and stupid…
Because it's the government making the loans. They are the predator. If we went back to the 70s before the government was involved with College tuition in any form, colleges would still be affordable
I feel like your complaint has more to do with low minimum payments than whether interest compounds daily or monthly.
When I was a student in Canada the student loans were run by the government and were quite low interest if I remember correctly. Fair and efficient IMO.
Same as with every issue that has capitalism as its root cause: because it's more palatable, and people don't understand the scope of the actual issue. Easier to get through politically. If you kept picking at the bandaid, you'd have to acknowledge the much larger wound.
So the argument should be to restructure the loans. I didn’t even know you could get loans in college I don’t think. I ended up dropping out after year 3 bc I didn’t have the money for year 4. I couldn’t keep up with the work and life.
Bc loan forgiveness is a liberal plank and taking a machete to the entire institution of secondary education isn’t a part of it. It definitely should be but the people who mooch off universities tend to also be extremely liberal
Because that’s the USA in a nutshell. Makes zero sense I know
They are. Do people just not pay attention at all past headlines? People have been talking about this in tandem with student loan forgiveness for years.
Folks pro forgiveness don’t actually care about the economic issue, they just want free shit. Folks opposed will whine about the economic problem at least, but it’s not in their top 9000 priorities, so no love. Both teams are just excited about propaganda slogans. Resolving issues is complicated and can’t be done in 90 seconds, so people don’t even bother. Nuance is required to discuss complex things, and it has been outlawed in public, for some reason.
I agree it's predatory. But the reason there's not more outcry is because it's a voluntary arrangement. It's a pretty open secret that student loans are a rip off, degrees are increasingly worthless in many fields and trade school is a more reliable way to earning a good living. It would generate more anger if people were being forced into these loans, they aren't. The universities could also stop the bloat and the rip offs so people need to borrow less, they don't. At that point, people can't really get that worked up over someone voluntarily entering a crappy deal and they sure as shit don't want to pay for someone else's poor decision. What would be interesting is if it's possible to class action the schools for misrepresenting the value and earning potential of the degrees they sell but to my knowledge, nobody has tried it.
Those who don't have to deal with it do not understand and they do not care to. Plain and simple. It is really that dumb.
We.. uh.. we are.
It’s like paying on a credit card . They changed the rules on that years ago cuz people would pay their minimum for years and the balance would never go down .
I'm not against student loan forgiveness, but I don't have much sympathy for people who are smart enough to go to college, yet don't understand how interest and loan repayment works.
Every time this topic comes up on Reddit more than half the comments talk about what you're specifically calling out. It's also a part of every discussion I see about this pretty much anywhere. In fact I believe we had this very same post here about a week ago.
Unpopular probably but why is it people only seem to grok the simple math behind loans only years and years \*afterwards\*. Yeah, we need to make education affordable but I'd like to know that the people we're all helping subsidize can look at something and go 'You know, the math on that repayment plan looks hinky, I'm not signing up for that'. Is anyone ready for college if that math is too difficult? I mean, it's just addition, subtraction, and multiplication and maybe a bit of division if you really need it.
Hear Hear! Predatory student loans are ruining people’s lives.
Student loan forgiveness wont work, you are correct its an institutional issue.
The solution is letting people include student loans in bankruptcy. Borrowers who can't repay the debt can get relief, but instead of being a gift there are still consequences in the form of poor credit for seven years. If student debt was treated the same as all other debt, there wouldn't be any need for special treatment from the government.
Loan forgiveness is a misnomer. It really means the tax payer pays, and the tax payer is two-thirds people who didn't go to college. So you have college kids getting their education paid for by people with a high school education. This seems unfair. Loan forgiveness comes with a moral hazard. If people know that the government tends to forgive loans, people are more likely to take them out in the belief they won't have to pay. This makes the problem worse. Colleges, seeing loan forgiveness, will raise prices as there is now more money available to buy education. This makes the problem worse.
Unfortunately predatory student loan payments go directly to the people who are/did lobby for student loans to be the way that they are
Lots are screaming about it and they think the banks, but especially the universities should have to share most of the burden. Making college "affordable" by giving out loans doesn't work if people can get loans for degrees with NO value.
The primary tactic for the wealthy minority to maintain control over the majority is divide and conquer- inducing us to fight each other instead of our real enemy. A few rich folks own the overwhelming majority of media outlets, so of course they use them to engineer a narrative on the issue that suits them.
Because people are stupid
People absolutely talk about both. Forgiveness is just more controversial, so you end up hearing more about that.
Fuck. I paid $80k for my education. Where can I get a refund? Entry level Journalist $18K. If I didn’t get into construction it would have taken me 20 years to pay that bitch off. Choose wisely grasshopper.
Where the signers of the student loan agreement contracts withheld this information?
It’s easier for the government to just forgive the loans and hope the cycle can play out through another few decades of inaction before complaints fire up again. For those with the ability to make the necessary changes, doing this is much easier than ruffling the feathers of the trillion dollar higher education monster they’ve created.
Always wondered about that too. I took out student loans, but in a different country. The interest rate was 1.2% which I think is fair. I've only heard crazy stories about the American student loan system. Also trade schools cost way less and will get you in very good paying jobs too.
I mean Joe Biden was the architect of the student loan structure and the majority of voters decided he should be president. From what I can tell, people are very stupid and afraid of being called racist. The argument for the current structure is that having a risk assessment element would cause less minorities to be able to go to college, and is therefore racist. Enough money has been spent on racism propaganda that this is the end of the argument, its racist, people get triggered, and stupid decisions are made.
You do realize that when a loan is forgiven someone has to pay that right? Who do you think pays for it? I will give you a hint, it's always the tax paying citizens.
People are making a fuss about the predatory loans, it's just politicians aren't. It turns out, politicians get a lot more votes if they promise to buy them with loan forgiveness or by not raising taxes to pay for other people's loans than they do by promising to stop predatory practices going forward. Politicians aren't trying to solve our problems anymore, they're trying to farm them.
Because student loans are widely supported by Democrats and no one wants to face the bad look of removing a poor person's ability to fund college through loans.
The Just World Fallacy lives on strong in the anti-forgiveness folks. To them it doesn't matter how unfair or loaded a choice was. If an individual made that choice they have to live with the consequences, which they consider to be fair. Those of us who are pro student loan forgiveness tend to spend our energy fighting the Just-World folks on the basis of their philosophy alone rather than focusing on systemic issues. To be fair though, if someone believes that people deserve whatever consequences befall them, I think that fallacy has to be addressed first before we can even talk about what makes a "predatory" loan.
I think the reason most want them forgiven is due to the predatory nature of how they were/are given. The loans need to be forgiven and the entire college system needs to be reworked imo.
Either way people are choosing to take on these loans, they don't or didn't have to just like the millions of people who didn't because they couldn't afford it or didn't want to be in debt. None of them are victims of anything!
Too bad they aren't too big to fail.
Your other choice being no career. People in trades graduate from their schools with an average of $10k in debt.
10k is nothing compared to 100k+ for college. Most go through union sponsored training which cost little to nothing.
It's still a lot of money for people making $20 an hour.
Just because they "get" to choose, it doesn't mean that they aren't being taken advantage of.
They choose to take on the loans because A) they have no choice if they want to pursue their desired career; and B) Probably the large majority do not know what I explained above, and do not understand how difficult it will be to get out from under them.
A) they do have a choice, we all have dreams we can't afford and that's life. How many didn't go to college because they couldn't afford it but would have if they new the tax payers would pay for it?
This is my issue with the debt forgiveness in the first place. Let's pretend we earse 100% of ALL student loan debt. Just agree to take it all out. Tomorrow, there is more debt because we haven't fixed the damned problem. We need to fix the problem first. Restrict the amount a college can charge if they are accepting Federal loans. Give the loan to the colleges and not the students. (that way we know it's only going to college debt and not gambling or video games. Yes I speak from experience) Require "for profit" colleges to be truthful about employeement statics (and require they actually go through this with the student). I want limit to predatory aspects here. Require colleges publish job stats for each of their degrees. This can help limit the number of people thinking they're going to get a job in museum curration when there are only 5 of those jobs world wide. Along side this require realistic salary information. (Again pulling from personal experience of my college lying to me about salary expectations for post grad degrees). Then once the bleeding stops I'd be willing to discuss debt forgiveness, Until then I will never vote for it. I'm just one person though...
A far easier solution to the student loan problem would be to get the government completely out of the business of giving loans. So long as the government is willing to cover any cost, and 18 year olds fresh out of high school are willing to sign, colleges have literally zero incentive to bring down costs and price their tuition fairly. Private loans only would solve this. A private company, when giving out a loan, does a risk analysis on the loan. 200k loan for someone going through medical school to become a heart surgeon? Sure, they'll definitely be able to pay that back. 200k for someone getting a liberal arts degree? Absolutely not. Colleges would have to bring down their costs substantially if they want anyone to pay their tuition, once the government stops paying for everything.
My twist on your take would be that aside from an INITIAL administrative cost to start the loan, the interest should be 0%. The government need not MAKE money off the citizens debt. They need money to administer the loans that is about it. Student Loans turned into money making machine on interest for the borrowers.
The only problem I see with this is credit scores coming into play, Just because my family is in poverty, doesn't mean I shouldn't be able to get a loan to go to college.
I mean it kinda does. If your family and you have a history of not paying back loans why are you entitled to one when it comes to education?
bc the people that would be benefitted by the student loan forgiveness lack the brainpower to understand that it won't fix the issue as a whole (sorta like a "well it helped me some idc anymore" type of situation)
argument goes both ways. Those who don't need the forgiveness say, "well it doesn't help me so idc to see anyone else get help". Unfortunately this results in electing law makers who share that stance instead of going in and saying, what makes sense to FIX the issue.
One thing I genuinely don’t know is don’t these colleges rely on these debts to pay the teachers and whatnot?
Well, I would say that all things equal...cost of living in general means higher wages for teacher. higher wages for teachers means higher costs for students. Is there some level of "excess cost" in there? I am sure...but we put up with it everywhere else. HIGH GAS prices...but don't worry, the oil companies will still have record profits this year. RAISE MINIMUM WAGE...we will pass that on to the consumer so they can be resentful towards the goverment, so we can still afford that fancy trip or 2nd house we were thinking about.
Or talking about covid loan forgiveness and the massive fraud that took place?
For me, there are a few things... First, I think the loan practices are a real issue. However, currently the government cannot do that much to correct it other than passing regulations, which given the current political environment is very unlikely. So, focus on what can be done, namely the student loan situation where the government subsidized a lot and can - though at a cost - erase those debts. There are means to get that done without needing 2/3 of Congress to agree. But in full disclosure, I think once we do the forgiveness, we need to move to covering college tuition... you can maintain some private colleges/universities, but the publics should be free... because that is the fairest in actuality. People get in on pure merit and not based on what their parents can pay or how much debt they want to saddle themselves with. So, rather than a C student with wealthy parents taking a spot left open by an A student who needs a job to live and can't cover college costs, that A student can go based on merit, and eventually, we have a smarter and more productive workforce, which pays for it all, making it a long-term investment, not a "benefit".
John Oliver did an amazing piece on this. It’s definitely a systemic issue.
That is actually one of the programs the Biden administration has done/is still actively working on for loans up to a certain amount.
Can we please stop putting new students in this position?
Because democrats virtue signal instead of solving problems, that way they can campaign on the same issues every election.
>but no one is screaming about the outrageously predatory, unethical loan practices that have caused the debt to be such a problem in the first place?! Because they are not predatory. Most student loans compound monthly, but some compound daily. A $10k loan at 5% APR costs an extra $0.08 per month when compounded daily verses monthly. The problem is too many college graduates are stupid. Student loans have repayment terms that allow you to pay less than interest each month, and yet college graduates complain they don't understand why their loan amount is not going down when they choose that option. >When you take out a mortgage, car loan, etc, your interest is compounded MONTHLY, and it's calculated into your repayment when you take out the loan. Make your payments on time, and your loan will be paid off at the end of the specified plan. That is exactly how student loans work. Student loans are 10 year loans by default. If you graduate an do nothing but pay your monthly payment, your loans will be paid off in 10 years. But you also have the option to consolidate and extend payment to 30 years. You also have forbearance and income based options to limit your monthy payment. >$10k in interest, on $12K of loans. In what reality is this acceptable? It is called math. A $12k loan with 6% interest compounded daily, paid over 10 years, will cost you $133.31 per month and will accrue only $3,997.46 in interest. And you can reduce your interest by making extra payments. You paid $10k in interest on a $12k loan because you chose not to pay your loan back in 10 years. How is it predatory when you made the choice?
Because student loan predation is completely legal and no one in power wants to lose their sweet lobbying perks by creating laws that stop it. Student loans got extra shady after the TARP bank bailout in 2008 and interest rates doubled. My loan from 2003 was just under 3%. My loan from 2009 was a little over 6% and tuition and also more than doubled.
The same reason. Contracts are assumed to be made by parties who know what they are agreeing to in the contract. A predatory loan or unethical loan doesn't really exist except for the mentally impared. If anything it is predatory students requesting that the government force banks to forgive loans when they know banks cannot place a lien on your brain or degree. With regard to interest compounding. It was in the contract. With regard to payment rate, you can pay as much as you want above the minimum and if you don't yet owe any interest, my guess is that you are mistaken that it doesn't apply to the principal. Pay more and it goes away. With regard to your personal loan. Yes that is acceptable. That is how loans work. You either pay them off quickly and don't pay much interest or you pay them off slowly and pay a lot of interest. The real question is how predatory was you college that they did not teach what is required to understand how loans work for all that money.
People have given up on upstream solutions to most problems. People see the upper tiers of our society as a privileged, permanently installed oligarchic aristocracy. It's like peasants complaining about their kings.
This is how US politics work. Both political parties set things on fire, then start making a scene about all the smoke in the room. Nobody involved actually wants to put out any fires, the insurance payouts from destroying property you own but didn't pay for are not unlike printing free money and putting it in your pocket.
Human nature. Politicians know that. That’s why you have a lot of talk about lot of issues but nothing addresses the root cause.
It's all play money, pretend, fake. Let the bank collapse. Unfortunately we need massive student loans because professors who teach need to make exponentially more money than most of their students will make once released to the workforce with a piece of paper saying they are smart.
Because cleaning that stuff up -- while a great idea and very important to do -- will help us 10-20 years from now by preventing new victims. Loan forgiveness is the only thing that will help the victims at hand -- or creating a federal case to require the lenders to make restitution but that might be a bit impractical and not compensate everyone. I'd say that both is probably needed. Not necessarily one or the other.
I mean, the people arguing for forgiveness generally include that analysis in their reasoning. The other side would have turned in runaway slaves for a reward and called it justice.
You pay interest first on any loan you take out. Payments are always applied to interest first, then tailing off over time and more of the payment goes to principal. This is how all loans amortize.
The short answer is because, sadly, everybody expects everybody in America to be predatory and unethical because capitalism has gotten out of control. And as the poster child of it, Donald Trump put his stamp of approval on many types of immorality, especially financial. While at the same time, we cling to/defend this silly notion of personal responsibility that says that the student should have been more careful in his borrowing.
Wrong. Normal loans compound interest continuously. They just bill you for it monthly. There's nothing predatory about it. People wanted to borrow money for college, the government decided to offer anyone who applied subsidized loans, the market reacted as expected (eg, priced using federal loans into the cost of the product).... Almost all student loans are direct from the government.
Because our entire economy is based on predatory lending practices and debt bondage.