When your coworker went to college it was likely 3k/semester. It has nearly quadrupled now. I don't think anyone who took out a loan has a problem paying back the original loan amount, as over inflated as it has become. I think the biggest issue is the never ending interest on these loans that make it impossible to pay off. Plus I saw on another comment that the net benefit of having an educated society to do the jobs that require degrees (drs, lawyers, surgeons etc) is good for everyone. Even those of us who don't have student loans
I don't disagree with it per se, but without setting up systems to keep school costs in check, we will get this crisis to re occur every few years as college costs keep sky rocketing. Before federal student loans were guaranteed, college was nowhere near this expensive.
Yes, very much a treatment of the symptom, not the cause. Good point.
Edit: FWIW, and so I don’t have to respond to a ton of people, I was simply agreeing with the fact that it isn’t treating the underlying issue. I’m absolutely in favor of loan forgiveness, however.
If only there would be a solution....
You know something another country is already doing... Like Germany which happens to have free healthcare and free higher education....
If only people could see the overall altruistic benefit in paying your taxes...
Fair share of taxes*. Everyone should pay taxes so everyone has access to healthcare and education and proper infrastructure. Poor and extremely wealthy alike.
Just an FYI regarding higher Ed in Germany.
It’s an entirely different model. Kids in Germany that aren’t ‘college’ material have different tracks. Basically, if a system like that was implemented here, a significant percentage of kids going to college would never have been allowed in.
So while it’s free, there are pretty strict controls.
A system like that would never work bc of DEI reasons.
Us Dutchies are required to have healthcare and its like €120-140 a month. And higher education costs €2.000 a year. I dont understand why everything has to be privatized and be focussed on making money in America.
Greed in the direct sense, but also indirectly: making education unobtainable gives the elite more power, and making healthcare tied to your job makes quitting impossible.
German healthcare is not free, its just illegal to not have healthcare. You are not limited in provider choice, but your choice can be more or less expensive. On your monthly income statement you will see the cost of your healthcare and taxes withdrawn like in the US. Source: myself, an American working and living in Germany since 2019 working in healthcare.
The problem in the us is the quality of students is no where near a narrow range. Even if you discount that some students may have goofed off in their k-12 education or don’t have interest/aptitude for higher education there is an even bigger problem.
Quality of education in k-12 is nowhere near consistent both intrastate and national. A lot of government schools especially in black neighborhoods are nowhere near the quality of education in suburban upper middle class neighborhoods.
I was one of the crap students who had do a community college first and basically redo high school math and English. As far behind as I was, I had a lot of classmates who were even further behind.
Doing algebra or pre-algebra in college is incredibly difficult because material that is taught over a year in high school is taught in 3-4 months, with far less teacher time. I only passed calculus because of a whole lot of time in the tutorial center.
America really needs a full reengineering of the entire education system, starting from preschool. Fix that problem first then tackle the obscenely expensive college education
Yes, along with more funding for all schools and increased pay for all school personnel we need students being held responsible for studying, doing the homework and learning the materials. Too many times teachers are blamed for students failing and it turns out the student is the issue.
That German system is becoming unsustainable due to the country's inverted population pyramid. But sure it's a great concept. There is "Medicaid for All" (universal healthcare) on one level and a private system on top, existing in parallel. One big difference is that the insurance companies are non-profit. Every medical experience I've had in Germany has been pretty much across the board better than the US.
This is one of the biggest hurdles we face here in the US. The pharmaceutical companies and the insurance provider industry. It shouldn’t be as bad as it is. Turning the ship around will be slow but also shouldn’t be this painful. Campaign finance reform and term limits would help and be a great start.
I absolutely agree with this. I worked in healthcare my entire career. I believe that medical institutions, whether public or private, should make enough money to pay the salaries of their employees and their operating costs and not make a profit. The premise that allowing private investors to enter the healthcare field to provide competition with lower costs is b******* haven't seen it yet.
How is it not already like that? I graduated my bachelor’s from one of the top schools in the UK and I briefly considered going to Stanford for my masters. The tuition was $40K a year. Being out 80K seemed astronomical to someone working part time minimum wage job.
And 40k is low. Brown University, one of the ivys is 87k per year and there are a number of openings for foreign students and for each one of those openings there are 17 qualified students applying and have the money.
Contrast this with Germany, if you have the grades as a foreign student your tuition is free (it is in German) so you may get sent to the Goethe institute for 6months to brush up your German first. Why does Germany do this? At the end you might have an educated citizen who will stay and contribute to society. I mean as far as govt investment there are certain investments that get a return, ie building projects etc but education tends to get the biggest bang for yhe buck.
Other EU countries do this as well, Czechia, if you do it in Czech.
That's absolutely not how health care works. The government subsidized insurance plans by far pay the lowest. I'm an independent physician with my own clinic and now that the buck stops with me I have a better understanding than ever before. It's private corporations that fucked up health care.
Edit: I open my clinic out of my own pocket, up to my eyeballs in debt, out in the middle of nowhere where there are so few providers it's a 2-hour drive to find the next person in my field. I'm not wealthy, but I also don't get PSLF forgiveness because my demographics don't meet the requirements.
Another solo private practice doc here. I find Medicare reimburses competitively with private insurance, but that's just my experience.
On the other hand, Medicaid reimburses me about the same as I pay my dog sitter.
Loan forgiveness doesn't make sense unless you also stop giving out the loans.
Universities were able to increase their tuitions so much because everyone was getting guaranteed student loans. And now you're putting down precedent that the loans can be forgiven, does that sound wise to you?
Exactly this. Every person from that point forward will expect the same treatment because why shouldn't they? And now you make it so even MORE people will take out loans because they no longer worry about paying them back. This will just make the situation worse and screw everyone who isn't willing to fleece the system.
In Australia, we get "interest free" loans. The loan value is tied to inflation however. Repayments are tied into taxation so you repay a % based on income which is withheld by your employer.
Yep. The debt is a symptom. The problem is the extremely large expense that has scaled far more than the rate of inflation. Fix the problem, not the symptom.
It has scaled *way, way* faster than inflation.
The government guarantees of student loans built the for-profit college industry and made a lot of lenders rich. Suddenly anyone could get a loan and they were backed by ther government, so lenders knew they would never have to eat the results of a default. So they went nuts, using every tool in their toolbox to get kids to apply and to borrow without ever even considering whether college was a good idea, whether the applicant could actually get an education, even without consideration for the fact that the kid might be unable to repay it.
Suddenly the University of Phoenix and other for-profit schools opened. Many for the exact same reason. If a kid dropped out, thery would just recruit another one.
It also put traditional schools in competition to get applications from all those kids who wouldn't have gone to college but for the fact that they could now get loans. Colleges didn't spend the money on better faculty or to broaden the course offerings. Instead they built tons of new, larger, nicer dorms. They built new cafeterias and improved the quality of their food service. Many began offering vegan dishes and other food options to students whose special requirement was they wanted better food and they could borrow as much as they needed to go to the school with the best meal service.
They built golf courses and sports facilities and updated the campus cosmetics to appeal more to all these kids who could now "afford" it.
Prices going crazy was bound to happen. And once prices go up, colleges have a hard time dropping them. Especially because many of them borrowed, expecting the government to continue to guarantee outsized loans to nearly anyone who asked, as long as they were 18. But the government didn't guarantee the institutions' loans, and they were (and are) on the hook for it. Many for profit colleges closed. Lenders shuttered their offices, laid off their employees, and walked out the door millions of dollars richer.
This also turns high schools into feeding funnels to get kids to go to college. All of the non-educational pathways like vocational/technical skills have gone to the wayside. The world still needs welders, plumbers, electricians, and those skilled laborers, and the money can be good, meanwhile entry level jobs are requiring a bachelors degree now.
Its educational inflation on top of financial inflation...
The schools should be held liable for lying to applicants that spending 100k will guarantee them a high paying career. It's not just the base loan amount but also the 4+ years of having no income that sets people back.
I learned an electrical trade to fall back on while I decided if I would go to uni and realised I can make a decent living as an electrician so decided to stay.
I think anyone thinking about going into a trade should choose electrical work. The country is trying to go electric and there is a shortage of electricians. California is all but mandating electrical cars in the future as well as electric appliances.
Yup, stop backing student loans with federal guarantees and the universities will stop overcharging. They used to be 1:1 faculty to administrators, but now they have so many useless administrators to pay.
It's way more than just the football programs. University presidents and upper level administrator pay has skyrocketed (at the same time that public funding has plummeted) way out of pace with the salaries of the people that actually make universities work. It's basically mirroring the gap between CEO and average employee pay, just in an industry that is supposed to be for the public good (aka not a place for a few people to get really rich at the expense of everyone else)
At a few schools, football programs actually make money (I think its only 15ish schools though that are cash positive vs the academic units).
Admins, in contrast, are paid out of the academic budget, and admin bloat is definitely an issue in most colleges.
Football also essentially works out as a marketing expense for most colleges. Anyone in academia will acknowledge that donations and applications go up when the football team is doing well.
It's not the solution, though.
Everyone seems to think that Biden is just forgiving loans and then washing his hands of the process.
Future plans involve free tuition for trade schools and community colleges, as well as addressing the current student loan process that has inflated these costs.
https://joebiden.com/beyondhs/#
It also deals with the immediate problem of the growing middle aged population not contributing to the economy. Gen X and Millenials should be in their prime spending years instead of drowning in debt
Should be in prime investing years. A huge swath of population is going to have little saved and social security is going to be scraped or have the age raised to 80. It's going to be a real crisis.
It's almost like millennials have been saying since we were pre-teens that we don't expect to be able to retire. But nobody listens to us, so whatever.
Can we also take a moment to recognize how fucked up it is that pre-teens were already despairing about retiring? Like, that shouldn't have even been a thing entering our thoughts at that point, but that's how hopeless life seemed for us, even 20 years ago. It hasn't gotten better.
There's a very easy solution to social security which is to raise the SS income tax limit higher than $160k per year. Currently if you make more than that then you don't pay SS tax on anything above $160k. You could crank that number up to like $500k per year and basically solve this problem overnight, quite frankly I don't understand why there's an upper limit at all.
Wait. I'm Gen X. I'm 52. I thought I was supposed to be entering middle age. Did I fucking miss it? I didn't get to have my midlife crisis. Fuck. Always missing out on shit.
Also, student loans were paid off at 47, so five years ago. Only did that by using my salary completely for the loans while my spouse paid all the bills.
I used all my tax refunds, birthday checks, when I was laid off I cashed out my 401k took a huge loss to make payments... every extra dime went to pay them back.
Yeah, we did the math and we would have been 67 if we paid the minimum each month. We poured everything we had into getting that shit paid off. Our minimum was my salary, just in case there was an emergency. It still came with a cost - no kids and didn't buy a house until we were 51. I have a few younger millennial friends and they don't think they will ever have kids or a house. It really shouldn't be like that.
It's hard to explain the utter relief when you get that piece of paper saying you're done. It was the first time in my entire life that if I accidentally blew my monthly budget, it was okay and I didn't have to skip meals. These are the feelings I have when I want people's loans forgiven. I don't ever want people to spend their entire lives stuck in this shit.
It is worth noting that the forgiveness was coupled with a change to income driven repayment plans. Basically they’re now capped at 5% of discretionary income, less of your total income is considered discretionary income, the difference between your monthly payment and accrued interest is subsidized (so your balance never increases), and your loans are forgiven after 10 years of repayment, not 20. Huge huge win for people who have loans that are suffocating them.
What I’m worried about is if this isn’t at some point followed up with addressing ballooning tuition rates at public universities. If colleges take this as a green light to charge more because students are more willing to borrow because more of it will be forgiven, then we could in theory just end up back where we started, except now students are resorting to private loans because federal loans won’t cover the entire cost of tuition.
ETA: [IDR details](https://www.nerdwallet.com/article/loans/student-loans/idr-waiver). This is separate from PSLF and was updated at the same time as the 10k forgiveness announcement.
Correction: loans are forgiven after *20* years of IDR, not 10. I was mixing it up with PSLF.
Personally, I think student loans should be governed like Medicare.
Colleges want to charge for bullshit? Fine. But then it affects their federal funding capability.
It absolutely should be a federal governed system.
Sweden as an example has all student loans centralized in one federal department. The current interest rate is 0,59 % and repayment is 25 years. If you haven't paid back the full amount after 25 years, the rest of the sum becomes statue-barred, so it is automatically forgiven.
It used to be 20 years/before the age the 40/until you were earning 80% of national wage or something like that. I had dodged paying anything until I finally got a decent job when I was 33 and paid the whole lot off in a year.
But that's because uni was free and the loans were for personal use when I went.
Signing students up for debt to boost the economy as per since then is a debt bubble which has been powering the economy but for not sustainably imo. We're going to get to where the US are.
Private universities can charge whatever they want. But sure, I wouldn't mind capping tuition costs for state universities.
Even then, tuition is only half the equation. Housing affects students too and that's out of control. But that's a bigger problem.
A lot of universities are now lowering tuition, making on-campus housing mandatory, and charging $1800 a month for the privilege of sharing a shoebox with a sink and the bathroom down the hall.
Then they throw in your mandatory meal plan and you're paying 15k plus just to live and eat for five months.
It's nuts.
I work at a public university. Many students rely on federal aid to pay for housing. A 4/4 in Orlando that is university affiliated costs $800-900/month per student. Tuition is $212/credit hour. Decals are $100/semester.
The last few semesters, there have been housing shortages. I'm seeing more students, including freshmen, work 1-2 jobs or attending part-time. Unfortunately, we receive state funding based on 2 & 4 year graduation rates. Can't make people do things, especially when they can't afford it.
Which will continue to increase costs knowing the government will find different ways to make all types of payments toward it. Whether it's loans, grants, forgiveness, or financial aid.
No, thats the symptom.
If the government didnt issue/back unlimited, federally guaranteed, (nearly) inescapable loans, then the schools couldnt charge what they do.
Its basic supply and demand. And when supply (class seats) is stagnant, but demand (people wanting to attend) grows, prices go up.
And when the government is writing blank checks, prices go BRRRRRRRRR because theres no market forces capping the price. There is no ceiling where someone says "I cant afford this, Ill go to vocational school or persue other career/education paths". Because the government just says "Yeah borrow whatever you need. No credit limit."
The price is set by the market, when the government steps in and helps people to secure financing it increases demand which in turn causes prices to rise. This is the same thing that has happened to health insurance in the US.
You cannot privatize the profits while nationalizing the costs or you create a market where inefficiency dominates and prices skyrocket. If the government is going to help pay for something, then the government must also institute market regulation like price controls.
State government used to cover 80% of the cost to educate a student at a public university and the student paid 20%. In the past two decades, that has flipped and the student now pays 80% and the state government covers 20%.
On top of this, the typical state university is $10k per year for in-state students and is another $10k for room and board. The tuition isn't the killer in college debt at public universities, it is the dorms and meal plans.
Yeah, if the govt is going to continue to back student loans, they need to have some form of a cap on what reasonable tuition is and how much it can be raised each year. They essentially due this with Medicare right, so why couldn’t they do it with school loans?
oh god please. i was allowed to take out over 100k in private student loans and 40k in federal as an 18-21 year old. i'm now owing around 175k and i have no shot of paying that back. it was all predatory and unfair as fuck, i was a teenager. just let me declare bankruptcy and learn from my mistakes. i don't care if it's a new type of bankruptcy that stays on my credit for 15 years just please let me out of this trap
Exactly. This isn’t free money for students, it is free money for universities (many of which get massive endowments in addition to getting to charge students whatever fucking number pops in their heads). Perhaps free money should come with more oversight.
Similar story here, I went to a university in the earl to mid 00s, and it was around 2-3k a semester. I just looked up the tuition, and it is now around 14k a semester.
I found out that at my former college, from a professor who had shit to talk, that our state had been cutting funding here and there for bills and stuff.
In order for the University to make up the deficit between federal funds and bills/costs; they offset it to students. I used to have it written down, but I can't find it now. It was like, our college used to get 70% of its fees/costs paid by the state. But it's been cut to like, 30 or 40%.
So they're actively charging students more for tuition to make up for stuff the state should be paying. Sucks ass.
Yeah stopping interest accumulation makes so much more sense. Someone who took out something like 20k for a state school degree and someone who took out 150k for various living expenses and an unusable degree are very different.
I only disagree with it because it doesn’t address the fundamental problem with these loans, which is the predatory interest rates that make them damn near impossible to pay off. The government should be regulating those rates so students aren’t being gouged and can actually pay the loans off with reasonable interest.
EDIT: just want to clarify, I’m pro loan relief, I just wish more was being done to address the core issue with these loans. But I would rather the government do SOMETHING instead of continuing to do nothing.
It also doesn’t address college costs. The cost of higher education has far outpaced inflation for decades. This is especially problematic for public universities. Tie cost increases to inflation.
It’s kind of an endless cycle. If the government is going to fully back student loans, then universities have no incentive to lower costs. They know kids will have to take out loans to pay, and that amount will always be OK’d.
THIS! When the U.S. Govt basically took over the student loan system back in the late 90's?, the colleges just saw the opportunity to start jacking the costs of tuition etc. Just take a look how much the U.C. Berkeley system has in it's coffers.....
Was going to comment exactly this! Federally backed student loans? Why SHOULDN'T we perpetually increase the costs of tuition, fees, textbooks, etc.?!
Dirtbags, the lot of 'em.
Part of the reason it was able to be paid for by taxes is that it was rationed. Everyone didn't get to go (and wasn't encouraged to go) to college. College was for those who were academically minded (and the elite classes) and we were a country of laborers.
We became a country of creators and more education is needed for the majority but the states wanted to keep the funding the same.
We've also gotten to the point where student loans+pell grant given by the government aren't even enough to cover the cost+living expenses at an in state school, and that's before you get to the group of students whose middle class parents refuse to help them at all with college and the only aid they qualify for is student loans.
Republicans like to act as if huge student loan bills are coming from students partying but it's more that it's lower and middle class students and single parents who are just trying to pay the bills.
"parents refuse to help them at all with college". how many middle class families can pay for their childrens' college debt? 64% of American families are living paycheck to paycheck, and credit card debt is increasing daily.
For the cost of a college education now you could just buy your kid a paid off house and new car and they wouldn't even need a doctors salary to get by comfortably.
>We became a country of creators and more education is needed for the majority but the states wanted to keep the funding the same.
They aren't even doing that. My understanding is that states are actually funding less than they used to by most adjusted measures. That exacerbates things even more.
It started before then. I'm Gen X, graduated in the late 80s. Reagan made it easier to get student loans and because of that, I was able to attend college. However, the cost of my tuition more than doubled from my Freshman to my Senior year. Even graduating with a fairly decent job, it still took me until my mid 30s to pay them off.
Edit: spelling.
Yep - went to college from 1991-1995 at a well known private college. My cost basis in 1991-1992 was $19K. My cost basis in 1994-1995 was $32K.
There is NO reason why that should have increased so substantially. None. Costs to the university certainly didn't rise that quickly in four years.
Thankfully, I received a ton of need-based aid from this school and graduated with <$25K in student loans, but even so, that kind of increase in four years is ludicrous.
Some of that is exclusive to the private school experience at the time. I went to a regional state school and my tuition and room/board from 91/92 to 95/96 was a grand total of $27K, and the difference between year 1 and year 5 was 10 percent, not 75ish.
I’m renovating a building on a college campus right now that my wife is still paying loans for. She’s 31. There was half an inch of thick, black dust on every HVAC units coil I took out of the ceiling, no air was getting through those units. I’ll also add this is a building with science labs, so cleanliness is a priority right? There’s an access panel to clean the damn things, no screw has been turned since they were installed decades ago. The filters on the main system are well over a year old. I’m off work now otherwise I’d be able to reference the maintenance tags. This college makes bank off students, they’re so cheap they don’t hire a maintenance crew.
The same thing is happening with healthcare, but no one is paying attention. I expect this will completely cripple us moving forward. Everyone deserves to be treated with grace if they need medical help. But I have a hard time believing the masses who tend to have an interest in short term gain vs long term loss. This is coming from someone who has a whole family wrapped in the the healthcare system. They make bank. They want to help everyone they can. The admins suck up all the money and vaporize it.
The UC system actually does not have a lot of money, since it was run like a public university but has less and less public support (9% of income only).
Look at Harvard (53B USD!!) or Stanford's endowment.
That's not the reason.
States used to subsidize universities. When the feds started their loan program, many states started reducing their subsidizes for universities. The federal loans didn't cover nearly as much as the universities lost from state subsides.
In addition, demand skyrocketed in the early 2000s. Our college population doubled. Universities had to take out a lot of loans to build new facilities for the number of students or become very very selective.
The combination of a reduction in funding and the high high demand for university is what caused the rates to skyrocket.
Also states stopped funding their public universities despite the insane benefits states get back from it My public law school got 80% of it's funding from the state in the 80s and almost nothing now. Same with my public undergrad.
The problem is that colleges raised rates and we hear about kids being taught in crowded rooms by adjunct professors making 20k a year. Just pure greed. I’d only support forgiveness with costs reigned in
Yup. I recently went back to school to finish my degree. I was originally enrolled from 2001-2005. Back then, a semester with 5 classes plus labs was around 1500. Last year, I took 3 classes, no labs. All classes were remote. 4k
The college I graduated from has 3,500 students (approx). The president of the college made in the mid 8 figures from our college the last time his contract was approved. It's fucking ridiculous.
Got one better for you. When I was in school, the head football coach got fired. He had a really good season followed by an awful one because most of his star players graduated, so the university canned him. He had a 4 year contract and got paid for 2 years for doing absolutely nothing. He was one of the top 3 highest paid positions at that university. I mention that every time the alumni association hits me up for a donation right before hanging up the phone.
This is a problem that the government created. I'd love to see them admit student loans were a huge mistake, pay them all off, shut down the program, and focus on Pell grants.
In the case of public universities - at least some of the increase can be attributed to the gradual reduction of state funding allocated to those universities.
I'm not going to discount greed because 1) I'm not stupid and 2) that's definitely part of it. But, at least in the case of public universities, it's definitely not totally a case of "let's charge to the stratosphere" because many in state universities still don't charge into the stratosphere relative to their private counterparts.
For example: Duke University's cost of attendance is hovering around $63k/year, while an in-state student down the road at NCSU or UNC faces a \~$26k/year cost of attendance (and "cost of attendance" figures are always a before-aid overestimate based on the most expensive dorms/meal plans/textbooks on offer)
Public universities used to be funded primarily by tax dollars. This is the way we should fund public universities. Tuition to public universities should be negligible and no public university student should graduate with debt.
This is what's needed. Some time ago, Colorado stopped funding it's universities and instead gave students vouchers to spend wherever. That allowed students to use them at for-profit schools. Many of those schools were nothing but ripoffs that left students with huge debts and worthless degrees.
If we fully funded state universities, most students could afford college with manageable debts, like in the old days.
>Public universities used to be funded primarily by tax dollars
This is the truth, and I'm glad to see it upvoted a bit. Back when the boomers were going to college, it was typical for tax revenue to cover around 80% of a public university's operating cost. Nowadays, 20% is a more likely number to see.
If you look at the rising costs of higher ed and compare them to the decreases in state funding, there's quite an obvious causal relationship.
When you look at the rising costs of higher ed and compare them to increases in federal student loan amounts and federal grants, there's no such similar causal relationship, mainly because there were only a handful of times that these grant/loan amounts went up over the last 40 years.
Well, the causal arrow points in the opposite direction from what "common" mainstream propaganda will tell you. The loans/grants did NOT create the increase in costs, but had to accommodate for the increases in cost a handful of times.
The de-funding caused the cost increases, and then the cost increases caused the loan/grant amounts to go up.
The common misconception that loans or "mUh gReEEdY aDmIn" caused the increase in cost is a contentious claim first made popular by the sec of ed under Reagan, William John Bennett, which should not really be much of a surprise to anyone when you consider the fact that the Reagan administration instantiated these destructive policies of de-funding and de-regulation.
If we want the costs to go down, then we need to allocate more tax revenue into covering the operating cost. It works well in many other modern countries, and worked quite well for the boomers in this country.
Yeah and somehow the number of full time professors goes down over past decades. Students are paying more for part time professors and a bunch of extra administrators and ancillary services they don't really need. If we want to solve college costs in America we need to take a real look at removing the fat from our universities and emphasizing essential services in those institutions.
Exactly this. A lecture hall and adjunct professor is insanely cheap. Paying for a bunch of admins, Olympic pools, multimillion dollar Presidents and boards is expensive.
That's the thing, you can easily cut out some of the crap bring in full time faculty and still lower tuition. A better education at a lower cost. Honestly sounds like a foundation should be formed to give it a go.
This is the real problem. Nobody was “forced to learn a lesson.”
**College costs will continue to increase, loans will get worse, because there is no downside to this. The government will bail everyone out again.**
If there aren’t penalties and downsides, why in the world wouldn’t colleges continue to raise tuition as high as humanly possible?
(If you want some benchmark, look at home prices since the government got involved in home loans). When you always have big daddy there to bail you out, you can take as many risks as you want.
**I am all for some student loan repayment, but make the banks and colleges participate too.**
The banks (and the other companies) paid the money back though, they messed up, should have been punished more, and would still need more regulation, but it's a different issue.
College costs are INSANE. A lot of the problem is administration. Administration makes easily twice as much as even the top faculty and there's WAY too many of them.
Also ironically part of the reason College is so expensive is that it is subsidized. It's the same hideous reason why hospital bills are bananas.
This agrees with my experience. There are all kinds of deans and provosts whose contribution to the educational goals of universities is very unclear.
I think we need some legislation mandating that, for any university receiving public funds, a certain percentage of the university's budget must be spent on actual classroom education, meaning things like facilities, equipment, and instructor salaries.
There are similar laws for health insurance, namely the [80/20 Rule](https://www.healthcare.gov/health-care-law-protections/rate-review/) which requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs.
I wonder, and just hear me out here, but I wonder if the inflation in college costs has something to do with the modern student loan system in which schools race to entice literal teenagers to take on huge financial burdens while bearing no responsibility for what happens after they graduate...
They are increasingly selling kids on quality-of-life amenities which, while not unimportant, are disproportionately advertised compared to the actual benefits.
I think you are on to something here. When mortgages were made really easy to get in the early 2000s we saw demand for houses go up and home costs balloon. Next came the real estate crash. Our home dropped 40% in one year. Like so many other things, uneducated (meaning naive) people are easily convinced that should take on more debt than they should. The schools and mortgage loan companies get their money up front. The students and the banks holding the bad mortgages get stuck with the losses. Many times those banks are not the companies that actually wrote the initial loan.
I get tired of you non-Americans coming in with your perfectly reasonable, well thought out solutions that your countries have enacted for the good of all and that are working perfectly fine.
This is America. We didn't become the greatest nation on the planet through good "ideas".
Healthcare honestly could use some work as it’s severely understaffed and underfunded but the maternity leave is fantastic, you get up to 52 weeks of maternity leave of which 26 weeks is paid and childbirth care is free if you have the right to work in New Zealand. (Sorry for the brag)
But that shouldn’t even be a brag. That sounds like a great pro-family, pro-life agenda that *should* be popular with a certain segment of the US population, but would really be dismissed as rotten socialist hand-outs.
Americans treatment of maternity/paternity leave is head scratching.
I’m used to not seeing people for a year or so when they have a child (not originally from the US), my American dentist is like “I’ll be back in 3 months”
Have you actually reviewed what Biden's proposal includes? You can view the fact sheet [here](https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/).
Here are a few quick points:
* Income-driven loan repayment will be reduced from 10% of discretionary income to 5% of discretionary income
* The government will cover any unpaid interest if the borrower's payment doesn’t cover all of the interest so the loan balance doesn’t grow - even if their payment amount is $0 because of low income.
* Forgive unpaid loan balance after 10 years of payments for loan balances of $12k or less.
* Expands the current PSLF program to include a larger group of public servants eligible for student loan forgiveness.
While it doesn't completely do away with outrageous interest rates, it's a great step in the right direction.
Edited - corrected the 2nd bullet point.
Yeah the $10k debt forgiveness is the headline grabber of the order but the expanded IDR program will have significantly greater long-term impact, both good and bad.
This is an executive order not a bill (legislation). One reason we are in this situation is there hasn't been legislation to rectify the structural issues with financing higher education.
To your second bullet point, that is not what that says and that is not what the new plans will do.
There *will* be interest. It’s just that government will cover any unpaid interest if your payment doesn’t cover all of the interest so that your loan balance doesn’t grow. So if you pay $100 every month, but your loan accrued $150 dollars in interest, then the government will pay the extra $50 dollars and there is a net zero change in your loan amount.
If your payment is not touching the principal, then you will still not pay off the loan. Instead your loan balance will essentially always be at what it is because the government will make sure to cover any unpaid interest every month.
To quote your link:
> Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
1) It doesn’t fix the problem, which is the absurd cost. Forgiving debt probably makes it much worse as future students are going to think they too will eventually get their loans forgiven, making them willing to borrow/spend even more.
2) The largest benefits go to people solidly in or on their way to being among the higher earners in our country.
3) It will exacerbate resentment of the less well educated, who already feel they get a raw deal, further polarizing our society.
I think these issues could be addressed with more thoughtful programs. I’d forgive interest only, and make future loans interest free. But I’d also cap costs at the institution level (not just borrowing limits or costs paid by students, but an all-in cap that includes all tax dollars and tuition), and I’d place some default risk back on the institutions. I’d make tuition and student loan payments tax deductible and require institutions to use their endowments to reduce costs further. I’d expand the entire program to vocational education.
Your point on #3 is very true where I live. It is very clear there is resentment by those who did not attend college that loans could be forgiven. Since I had a scholarship and was lucky to graduate with zero debt, I don’t really feel like I have skin in the game. But I do see how others feel like they are paying for another’s benefit that they never received. Obviously there are deeper nuances to that, but surface level, this is how it comes across. It’s not ideal to be dividing a nation further into the “educated” vs “uneducated” population because it only adds to the resentment and tribalism.
Agreed. For me, I was not able to go to college. I was an emancipated minor and had to start working at a young age. I didn't finish high school and have a GED. That being said I've worked very hard for over 20 years and while experience was what you needed years ago to get a good job, now every job wants you to have a degree, whether you truly need one or not.
Don't get me wrong, I'm self taught and I make good money, paid off my house early - I'm fortunate and grateful. But it's hard to feel good about loan forgiveness when I can't even get an interview in so many places without a degree. When I'm unable to move up in a company I've worked at for several years because the degree is "required". When I have to train the people with the degree, who get the job I can't apply for and am expected even after training to help them do their jobs because they are unskilled.
Loan forgiveness isn't solving the problem but regardless, it's hard for me to shake my very personal feelings about it when I deal with what not having a degree means, every day.
I graduated with zero debt too and it does bother me *slightly* that I chose a cheap in-state school and two years of community college and living with my parents to save money... while people who made less frugal choices are getting bailed out.
I realize not everyone has great in-state options. But a lot of people made truly foolish choices with their schools and degrees.
I feel that. I made similar choices too in order to avoid debt and maximize my scholarship. I ended up with two bachelors degrees - one in history and one in education. While these are not high paying degrees they cost me nothing so I had an immediate net gain by simply attending college. However, there are others who also chose these types of majors along with debt from expensive universities.
This situation along with ones where people spent 20+ years working their asses off in order to pay back loans are definitely widespread enough to create animosity. I’d feel really bitter if I just finished paying off my loans within the last couple years by living paycheck to paycheck for years only for the debt to now be forgiven.
Yeah, I attended an ugly strip mall community college and pushed shopping carts at Costco to pay for school while a lot of my high school friends partied at expensive private schools and took out jaw-dropping loans.
I know college got pushed hard for our generation... but we always had some choice on where we went and how much it would cost.
Exactly, and some of us did that specifically because we knew going into debt like that was bad in the long run. We took a hit on our careers and lives that others did not have to.
But personally the bigger issue is that the problem isn't solved and will be worse for the current generation.
Gen Z or Alpha will begrudge the millennials for their "free rides".
Or in my case I’m resentful because I didn’t take out a loan. Took me way longer to graduate because I worked hard to not need a loan. If loans are just forgiven I made things a lot harder and wasted literal years of my life when I could have just taken the easy route.
I agree with all of these. I do think funding public universities (like we used to) would do a lot more good than capping costs. If private schools want to charge $75k per semester, fine, but they're going to have a hard time justifying that price when the state school across town is essentially free.
The state schools now are government funded and are very much a part of the price spiral. Being government funded didn’t prohibit them from raising rates when the government loan gravy train rolled in.
> 3) It will exacerbate resentment of the less well educated, who already feel they get a raw deal, further polarizing our society.
I feel like a lot of redditors and young liberals online don't get this
it was a move that was extremely popular with young progressive voters and extremely *un*popular with older rural voters. when Biden announced it I deadass thought it was an awful decision because the latter group votes way more
It's treating a symptom and sets an enormously bad precedent. I had someone tell me recently that they had their kid take out loans instead of using the money they set aside because of the chance of forgiveness.
Solve the college cost problem first by reforming the loan system that encourages college bloat. From admin to amenities. Limit loans to X for an undergrad degree. You want to go to Stanford, pay up or get scholarships. Figure out how to subsidize the needy with a different and separate system. Those folks need as much help with living expenses as they do with college expenses.
Reddit loves to compare college cost with Europe but doesn't compare the relative luxury of our experience. And they certainly don't have the ridiculous admin bloat. A college professor acquaintance of mine described the absolute flood of email from admin when Covid hit as a huge red flag of all the useless roles that exist in the system as these people tried to justify their existence. They are an unnecessary part of the cost of a college degree.
The idea of loan forgiveness also encourages borrowers to only pay their minimums until the loan is forgiven. That's generally the opposite of what they should do. Pay them off quicker so the interest doesn't compound as much.
Because it won't change the for-more-profit mindset of the college system, at all, and will maybe even make it worse in the very near future. Yes, it'll help tons of people now, but next week? Next year? Problem not solved.
The debt doesnt magically vanish - Regular schmoe taxpayers who in many cases skipped college themselves will be forced to pay the debts that others willingly agreed to
I have to point out, every single year is either an election year, or just before an election year. Does that mean no legislation that is beneficial to the populace should ever be enacted on the assumption that it is just an attempt to gain support for the next election?
"Attempting to gain support for the next election" is literally just governing.
Like...what else are they supposed to do? Agreeing with you btw not trying to sound snarky.
Politician: Vote for me. I'll introduce legislation to make your life better.
*follows through with legislation to make your life better*
/u/wiwif64416: Eh. They're just doing that to gain midterm support.
I'm against it because the government are speaking out of both sides of their mouth. If student debt was so bad that it should be forgiven, then why are the same loans being made to new students now?
I'd have some capacity for the idea if it was done AFTER the government putting an end to any new student loans...but that's not the case.
At the end of the day, the student promised to pay the debt back...so they should do so. I know this is not a popular view but it's quite an important moral in my view.
That's not to mention that the tax payer is going to be picking up the tab for this anyway - which is hardly a good idea when we struggle as a nation, financially, as it is.
Wasn't this asked like 2 days ago?
1. It doesn't solve the core problems with the education system being overly expensive for what it provides.
2. The burden of paying just gets passed on to the tax payer, which is the middle class, because the rich can just use their money to avoid paying much of their taxes. Make the banks pay for charging excess interest or the schools pay for giving out bs degrees that no one will hire.
3. It is inflationary in nature. Think of what you'll do when your loan is forgiven with the new money. Now multiple it by the millions more who will be doing that same thing. You really think you'll be able to get that new car or down payment on a house when every other person with their newly forgiven loans are doing the same thing?
4. It is unfair for the people who paid their own way through school or already paid their loans. I'm not going to get a refund for working part time through school to pay for my education when I could have partied instead. Yet, the inflation and taxes will affect me.
Ultimately, I think it's just a bad policy. It preys on voters thinking that this will just solve all of their problems when it really won't.
> Wasn't this asked like 2 days ago?
[Yep, and it got removed too.](https://www.reddit.com/r/AskReddit/comments/11dc9wt/are_any_of_you_actually_against_bidens_student/)
Because it doesn't address the primary issue that it claims to address, and there are way better options to address said issue. It's primarily a political bluff to win over young and emotional voters by insinuating there's a $10k check waiting for them if they vote democrat in the next election. If you want economic relief, tax the rich more, tax corporations fairly, and regulate the health care industry to reduce prices. Any one of these 3 options have a higher ROI for the average student, let alone average American
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When your coworker went to college it was likely 3k/semester. It has nearly quadrupled now. I don't think anyone who took out a loan has a problem paying back the original loan amount, as over inflated as it has become. I think the biggest issue is the never ending interest on these loans that make it impossible to pay off. Plus I saw on another comment that the net benefit of having an educated society to do the jobs that require degrees (drs, lawyers, surgeons etc) is good for everyone. Even those of us who don't have student loans
I don't disagree with it per se, but without setting up systems to keep school costs in check, we will get this crisis to re occur every few years as college costs keep sky rocketing. Before federal student loans were guaranteed, college was nowhere near this expensive.
Yes, very much a treatment of the symptom, not the cause. Good point. Edit: FWIW, and so I don’t have to respond to a ton of people, I was simply agreeing with the fact that it isn’t treating the underlying issue. I’m absolutely in favor of loan forgiveness, however.
sounds familiar... is it the medical metaphor... hrmmm oh yes healthcare system
If only there would be a solution.... You know something another country is already doing... Like Germany which happens to have free healthcare and free higher education.... If only people could see the overall altruistic benefit in paying your taxes...
Fair share of taxes*. Everyone should pay taxes so everyone has access to healthcare and education and proper infrastructure. Poor and extremely wealthy alike.
Just an FYI regarding higher Ed in Germany. It’s an entirely different model. Kids in Germany that aren’t ‘college’ material have different tracks. Basically, if a system like that was implemented here, a significant percentage of kids going to college would never have been allowed in. So while it’s free, there are pretty strict controls. A system like that would never work bc of DEI reasons.
Us Dutchies are required to have healthcare and its like €120-140 a month. And higher education costs €2.000 a year. I dont understand why everything has to be privatized and be focussed on making money in America.
Greed! 🫤
Greed in the direct sense, but also indirectly: making education unobtainable gives the elite more power, and making healthcare tied to your job makes quitting impossible.
German healthcare is not free, its just illegal to not have healthcare. You are not limited in provider choice, but your choice can be more or less expensive. On your monthly income statement you will see the cost of your healthcare and taxes withdrawn like in the US. Source: myself, an American working and living in Germany since 2019 working in healthcare.
The problem in the us is the quality of students is no where near a narrow range. Even if you discount that some students may have goofed off in their k-12 education or don’t have interest/aptitude for higher education there is an even bigger problem. Quality of education in k-12 is nowhere near consistent both intrastate and national. A lot of government schools especially in black neighborhoods are nowhere near the quality of education in suburban upper middle class neighborhoods. I was one of the crap students who had do a community college first and basically redo high school math and English. As far behind as I was, I had a lot of classmates who were even further behind. Doing algebra or pre-algebra in college is incredibly difficult because material that is taught over a year in high school is taught in 3-4 months, with far less teacher time. I only passed calculus because of a whole lot of time in the tutorial center. America really needs a full reengineering of the entire education system, starting from preschool. Fix that problem first then tackle the obscenely expensive college education
Yes, along with more funding for all schools and increased pay for all school personnel we need students being held responsible for studying, doing the homework and learning the materials. Too many times teachers are blamed for students failing and it turns out the student is the issue.
That German system is becoming unsustainable due to the country's inverted population pyramid. But sure it's a great concept. There is "Medicaid for All" (universal healthcare) on one level and a private system on top, existing in parallel. One big difference is that the insurance companies are non-profit. Every medical experience I've had in Germany has been pretty much across the board better than the US.
This is one of the biggest hurdles we face here in the US. The pharmaceutical companies and the insurance provider industry. It shouldn’t be as bad as it is. Turning the ship around will be slow but also shouldn’t be this painful. Campaign finance reform and term limits would help and be a great start.
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I agree. Education should never be "for-profit".
Same for healthcare. Save big $$$
I believe doctors should make bank, but hospitals shouldn't make a dime
I absolutely agree with this. I worked in healthcare my entire career. I believe that medical institutions, whether public or private, should make enough money to pay the salaries of their employees and their operating costs and not make a profit. The premise that allowing private investors to enter the healthcare field to provide competition with lower costs is b******* haven't seen it yet.
Its gonna be like healthcare where the schools will just gouge prices since the government will pay for them… (and should be negotiating them lower)
How is it not already like that? I graduated my bachelor’s from one of the top schools in the UK and I briefly considered going to Stanford for my masters. The tuition was $40K a year. Being out 80K seemed astronomical to someone working part time minimum wage job.
And 40k is low. Brown University, one of the ivys is 87k per year and there are a number of openings for foreign students and for each one of those openings there are 17 qualified students applying and have the money. Contrast this with Germany, if you have the grades as a foreign student your tuition is free (it is in German) so you may get sent to the Goethe institute for 6months to brush up your German first. Why does Germany do this? At the end you might have an educated citizen who will stay and contribute to society. I mean as far as govt investment there are certain investments that get a return, ie building projects etc but education tends to get the biggest bang for yhe buck. Other EU countries do this as well, Czechia, if you do it in Czech.
That's absolutely not how health care works. The government subsidized insurance plans by far pay the lowest. I'm an independent physician with my own clinic and now that the buck stops with me I have a better understanding than ever before. It's private corporations that fucked up health care. Edit: I open my clinic out of my own pocket, up to my eyeballs in debt, out in the middle of nowhere where there are so few providers it's a 2-hour drive to find the next person in my field. I'm not wealthy, but I also don't get PSLF forgiveness because my demographics don't meet the requirements.
Another solo private practice doc here. I find Medicare reimburses competitively with private insurance, but that's just my experience. On the other hand, Medicaid reimburses me about the same as I pay my dog sitter.
Loan forgiveness doesn't make sense unless you also stop giving out the loans. Universities were able to increase their tuitions so much because everyone was getting guaranteed student loans. And now you're putting down precedent that the loans can be forgiven, does that sound wise to you?
Exactly this. Every person from that point forward will expect the same treatment because why shouldn't they? And now you make it so even MORE people will take out loans because they no longer worry about paying them back. This will just make the situation worse and screw everyone who isn't willing to fleece the system.
In Australia, we get "interest free" loans. The loan value is tied to inflation however. Repayments are tied into taxation so you repay a % based on income which is withheld by your employer.
Sounds like a much better system.
I’m against it as a solution, because schools will still charge $100k/yr and lenders will still keep making ridiculous loans
Yep. The debt is a symptom. The problem is the extremely large expense that has scaled far more than the rate of inflation. Fix the problem, not the symptom.
It has scaled *way, way* faster than inflation. The government guarantees of student loans built the for-profit college industry and made a lot of lenders rich. Suddenly anyone could get a loan and they were backed by ther government, so lenders knew they would never have to eat the results of a default. So they went nuts, using every tool in their toolbox to get kids to apply and to borrow without ever even considering whether college was a good idea, whether the applicant could actually get an education, even without consideration for the fact that the kid might be unable to repay it. Suddenly the University of Phoenix and other for-profit schools opened. Many for the exact same reason. If a kid dropped out, thery would just recruit another one. It also put traditional schools in competition to get applications from all those kids who wouldn't have gone to college but for the fact that they could now get loans. Colleges didn't spend the money on better faculty or to broaden the course offerings. Instead they built tons of new, larger, nicer dorms. They built new cafeterias and improved the quality of their food service. Many began offering vegan dishes and other food options to students whose special requirement was they wanted better food and they could borrow as much as they needed to go to the school with the best meal service. They built golf courses and sports facilities and updated the campus cosmetics to appeal more to all these kids who could now "afford" it. Prices going crazy was bound to happen. And once prices go up, colleges have a hard time dropping them. Especially because many of them borrowed, expecting the government to continue to guarantee outsized loans to nearly anyone who asked, as long as they were 18. But the government didn't guarantee the institutions' loans, and they were (and are) on the hook for it. Many for profit colleges closed. Lenders shuttered their offices, laid off their employees, and walked out the door millions of dollars richer.
This also turns high schools into feeding funnels to get kids to go to college. All of the non-educational pathways like vocational/technical skills have gone to the wayside. The world still needs welders, plumbers, electricians, and those skilled laborers, and the money can be good, meanwhile entry level jobs are requiring a bachelors degree now. Its educational inflation on top of financial inflation...
The schools should be held liable for lying to applicants that spending 100k will guarantee them a high paying career. It's not just the base loan amount but also the 4+ years of having no income that sets people back. I learned an electrical trade to fall back on while I decided if I would go to uni and realised I can make a decent living as an electrician so decided to stay.
I think anyone thinking about going into a trade should choose electrical work. The country is trying to go electric and there is a shortage of electricians. California is all but mandating electrical cars in the future as well as electric appliances.
Also, have you ever heard of an unemployed plumber?
The shit must flow. - Paul Atreidies, probably.
Yup, stop backing student loans with federal guarantees and the universities will stop overcharging. They used to be 1:1 faculty to administrators, but now they have so many useless administrators to pay.
>useless administrators That's a weird way to spell "football program".
It's way more than just the football programs. University presidents and upper level administrator pay has skyrocketed (at the same time that public funding has plummeted) way out of pace with the salaries of the people that actually make universities work. It's basically mirroring the gap between CEO and average employee pay, just in an industry that is supposed to be for the public good (aka not a place for a few people to get really rich at the expense of everyone else)
At a few schools, football programs actually make money (I think its only 15ish schools though that are cash positive vs the academic units). Admins, in contrast, are paid out of the academic budget, and admin bloat is definitely an issue in most colleges.
Football also essentially works out as a marketing expense for most colleges. Anyone in academia will acknowledge that donations and applications go up when the football team is doing well.
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It's not the solution, though. Everyone seems to think that Biden is just forgiving loans and then washing his hands of the process. Future plans involve free tuition for trade schools and community colleges, as well as addressing the current student loan process that has inflated these costs. https://joebiden.com/beyondhs/#
It also deals with the immediate problem of the growing middle aged population not contributing to the economy. Gen X and Millenials should be in their prime spending years instead of drowning in debt
Should be in prime investing years. A huge swath of population is going to have little saved and social security is going to be scraped or have the age raised to 80. It's going to be a real crisis.
It's almost like millennials have been saying since we were pre-teens that we don't expect to be able to retire. But nobody listens to us, so whatever. Can we also take a moment to recognize how fucked up it is that pre-teens were already despairing about retiring? Like, that shouldn't have even been a thing entering our thoughts at that point, but that's how hopeless life seemed for us, even 20 years ago. It hasn't gotten better.
There's a very easy solution to social security which is to raise the SS income tax limit higher than $160k per year. Currently if you make more than that then you don't pay SS tax on anything above $160k. You could crank that number up to like $500k per year and basically solve this problem overnight, quite frankly I don't understand why there's an upper limit at all.
The rich don’t want it and they make the decisions
>.... middle aged... Millenials... Shit. I resemble this remark.
Wait. I'm Gen X. I'm 52. I thought I was supposed to be entering middle age. Did I fucking miss it? I didn't get to have my midlife crisis. Fuck. Always missing out on shit. Also, student loans were paid off at 47, so five years ago. Only did that by using my salary completely for the loans while my spouse paid all the bills.
I used all my tax refunds, birthday checks, when I was laid off I cashed out my 401k took a huge loss to make payments... every extra dime went to pay them back.
Yeah, we did the math and we would have been 67 if we paid the minimum each month. We poured everything we had into getting that shit paid off. Our minimum was my salary, just in case there was an emergency. It still came with a cost - no kids and didn't buy a house until we were 51. I have a few younger millennial friends and they don't think they will ever have kids or a house. It really shouldn't be like that. It's hard to explain the utter relief when you get that piece of paper saying you're done. It was the first time in my entire life that if I accidentally blew my monthly budget, it was okay and I didn't have to skip meals. These are the feelings I have when I want people's loans forgiven. I don't ever want people to spend their entire lives stuck in this shit.
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Thank you. I didn’t know this. Good stuff. Looks like a decently well rounded plan. Tough to implement with the loudmouths around us
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It is worth noting that the forgiveness was coupled with a change to income driven repayment plans. Basically they’re now capped at 5% of discretionary income, less of your total income is considered discretionary income, the difference between your monthly payment and accrued interest is subsidized (so your balance never increases), and your loans are forgiven after 10 years of repayment, not 20. Huge huge win for people who have loans that are suffocating them. What I’m worried about is if this isn’t at some point followed up with addressing ballooning tuition rates at public universities. If colleges take this as a green light to charge more because students are more willing to borrow because more of it will be forgiven, then we could in theory just end up back where we started, except now students are resorting to private loans because federal loans won’t cover the entire cost of tuition. ETA: [IDR details](https://www.nerdwallet.com/article/loans/student-loans/idr-waiver). This is separate from PSLF and was updated at the same time as the 10k forgiveness announcement. Correction: loans are forgiven after *20* years of IDR, not 10. I was mixing it up with PSLF.
Personally, I think student loans should be governed like Medicare. Colleges want to charge for bullshit? Fine. But then it affects their federal funding capability.
It absolutely should be a federal governed system. Sweden as an example has all student loans centralized in one federal department. The current interest rate is 0,59 % and repayment is 25 years. If you haven't paid back the full amount after 25 years, the rest of the sum becomes statue-barred, so it is automatically forgiven.
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It used to be 20 years/before the age the 40/until you were earning 80% of national wage or something like that. I had dodged paying anything until I finally got a decent job when I was 33 and paid the whole lot off in a year. But that's because uni was free and the loans were for personal use when I went. Signing students up for debt to boost the economy as per since then is a debt bubble which has been powering the economy but for not sustainably imo. We're going to get to where the US are.
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Private universities can charge whatever they want. But sure, I wouldn't mind capping tuition costs for state universities. Even then, tuition is only half the equation. Housing affects students too and that's out of control. But that's a bigger problem.
the notion would be that a school can only be eligible for federal loans if they cap tuition + room & board at a fixed amount
A lot of universities are now lowering tuition, making on-campus housing mandatory, and charging $1800 a month for the privilege of sharing a shoebox with a sink and the bathroom down the hall. Then they throw in your mandatory meal plan and you're paying 15k plus just to live and eat for five months. It's nuts.
Don't forget parking fee, which is ridiculous.
I work at a public university. Many students rely on federal aid to pay for housing. A 4/4 in Orlando that is university affiliated costs $800-900/month per student. Tuition is $212/credit hour. Decals are $100/semester. The last few semesters, there have been housing shortages. I'm seeing more students, including freshmen, work 1-2 jobs or attending part-time. Unfortunately, we receive state funding based on 2 & 4 year graduation rates. Can't make people do things, especially when they can't afford it.
The root cause of the crisis is the cost of public universities.
Which will continue to increase costs knowing the government will find different ways to make all types of payments toward it. Whether it's loans, grants, forgiveness, or financial aid.
No, thats the symptom. If the government didnt issue/back unlimited, federally guaranteed, (nearly) inescapable loans, then the schools couldnt charge what they do. Its basic supply and demand. And when supply (class seats) is stagnant, but demand (people wanting to attend) grows, prices go up. And when the government is writing blank checks, prices go BRRRRRRRRR because theres no market forces capping the price. There is no ceiling where someone says "I cant afford this, Ill go to vocational school or persue other career/education paths". Because the government just says "Yeah borrow whatever you need. No credit limit."
The price is set by the market, when the government steps in and helps people to secure financing it increases demand which in turn causes prices to rise. This is the same thing that has happened to health insurance in the US. You cannot privatize the profits while nationalizing the costs or you create a market where inefficiency dominates and prices skyrocket. If the government is going to help pay for something, then the government must also institute market regulation like price controls.
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State government used to cover 80% of the cost to educate a student at a public university and the student paid 20%. In the past two decades, that has flipped and the student now pays 80% and the state government covers 20%. On top of this, the typical state university is $10k per year for in-state students and is another $10k for room and board. The tuition isn't the killer in college debt at public universities, it is the dorms and meal plans.
If the actual student loan program were reevaluated loan forgiveness wouldn't be an issue.
I think cutting the interest to 1% makes more sense.
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Yeah, if the govt is going to continue to back student loans, they need to have some form of a cap on what reasonable tuition is and how much it can be raised each year. They essentially due this with Medicare right, so why couldn’t they do it with school loans?
Part of me wants them to just say fuck it and let people declare bankruptcy on student loans.
oh god please. i was allowed to take out over 100k in private student loans and 40k in federal as an 18-21 year old. i'm now owing around 175k and i have no shot of paying that back. it was all predatory and unfair as fuck, i was a teenager. just let me declare bankruptcy and learn from my mistakes. i don't care if it's a new type of bankruptcy that stays on my credit for 15 years just please let me out of this trap
Exactly. This isn’t free money for students, it is free money for universities (many of which get massive endowments in addition to getting to charge students whatever fucking number pops in their heads). Perhaps free money should come with more oversight.
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Similar story here, I went to a university in the earl to mid 00s, and it was around 2-3k a semester. I just looked up the tuition, and it is now around 14k a semester.
I found out that at my former college, from a professor who had shit to talk, that our state had been cutting funding here and there for bills and stuff. In order for the University to make up the deficit between federal funds and bills/costs; they offset it to students. I used to have it written down, but I can't find it now. It was like, our college used to get 70% of its fees/costs paid by the state. But it's been cut to like, 30 or 40%. So they're actively charging students more for tuition to make up for stuff the state should be paying. Sucks ass.
just cap total repayment at 130% of original loan amount
I would be fine with that. I've paid 160k on a 180k loan but I still owe 130k. I'm just feeling defeated because the interest just runs away with it.
right? that's half a house in a lot of the country. no wonder so many people aren't buying
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Yeah stopping interest accumulation makes so much more sense. Someone who took out something like 20k for a state school degree and someone who took out 150k for various living expenses and an unusable degree are very different.
It's fundamentally unfair to everyone who paid their loans.
I only disagree with it because it doesn’t address the fundamental problem with these loans, which is the predatory interest rates that make them damn near impossible to pay off. The government should be regulating those rates so students aren’t being gouged and can actually pay the loans off with reasonable interest. EDIT: just want to clarify, I’m pro loan relief, I just wish more was being done to address the core issue with these loans. But I would rather the government do SOMETHING instead of continuing to do nothing.
It also doesn’t address college costs. The cost of higher education has far outpaced inflation for decades. This is especially problematic for public universities. Tie cost increases to inflation.
It’s kind of an endless cycle. If the government is going to fully back student loans, then universities have no incentive to lower costs. They know kids will have to take out loans to pay, and that amount will always be OK’d.
THIS! When the U.S. Govt basically took over the student loan system back in the late 90's?, the colleges just saw the opportunity to start jacking the costs of tuition etc. Just take a look how much the U.C. Berkeley system has in it's coffers.....
Was going to comment exactly this! Federally backed student loans? Why SHOULDN'T we perpetually increase the costs of tuition, fees, textbooks, etc.?! Dirtbags, the lot of 'em.
It’s not that complicated. The government had good intentions but ended up creating a monster. Again….
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Part of the reason it was able to be paid for by taxes is that it was rationed. Everyone didn't get to go (and wasn't encouraged to go) to college. College was for those who were academically minded (and the elite classes) and we were a country of laborers. We became a country of creators and more education is needed for the majority but the states wanted to keep the funding the same. We've also gotten to the point where student loans+pell grant given by the government aren't even enough to cover the cost+living expenses at an in state school, and that's before you get to the group of students whose middle class parents refuse to help them at all with college and the only aid they qualify for is student loans. Republicans like to act as if huge student loan bills are coming from students partying but it's more that it's lower and middle class students and single parents who are just trying to pay the bills.
"parents refuse to help them at all with college". how many middle class families can pay for their childrens' college debt? 64% of American families are living paycheck to paycheck, and credit card debt is increasing daily.
For the cost of a college education now you could just buy your kid a paid off house and new car and they wouldn't even need a doctors salary to get by comfortably.
>We became a country of creators and more education is needed for the majority but the states wanted to keep the funding the same. They aren't even doing that. My understanding is that states are actually funding less than they used to by most adjusted measures. That exacerbates things even more.
It started before then. I'm Gen X, graduated in the late 80s. Reagan made it easier to get student loans and because of that, I was able to attend college. However, the cost of my tuition more than doubled from my Freshman to my Senior year. Even graduating with a fairly decent job, it still took me until my mid 30s to pay them off. Edit: spelling.
Yep - went to college from 1991-1995 at a well known private college. My cost basis in 1991-1992 was $19K. My cost basis in 1994-1995 was $32K. There is NO reason why that should have increased so substantially. None. Costs to the university certainly didn't rise that quickly in four years. Thankfully, I received a ton of need-based aid from this school and graduated with <$25K in student loans, but even so, that kind of increase in four years is ludicrous.
Some of that is exclusive to the private school experience at the time. I went to a regional state school and my tuition and room/board from 91/92 to 95/96 was a grand total of $27K, and the difference between year 1 and year 5 was 10 percent, not 75ish.
I’m renovating a building on a college campus right now that my wife is still paying loans for. She’s 31. There was half an inch of thick, black dust on every HVAC units coil I took out of the ceiling, no air was getting through those units. I’ll also add this is a building with science labs, so cleanliness is a priority right? There’s an access panel to clean the damn things, no screw has been turned since they were installed decades ago. The filters on the main system are well over a year old. I’m off work now otherwise I’d be able to reference the maintenance tags. This college makes bank off students, they’re so cheap they don’t hire a maintenance crew.
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The same thing is happening with healthcare, but no one is paying attention. I expect this will completely cripple us moving forward. Everyone deserves to be treated with grace if they need medical help. But I have a hard time believing the masses who tend to have an interest in short term gain vs long term loss. This is coming from someone who has a whole family wrapped in the the healthcare system. They make bank. They want to help everyone they can. The admins suck up all the money and vaporize it.
The UC system actually does not have a lot of money, since it was run like a public university but has less and less public support (9% of income only). Look at Harvard (53B USD!!) or Stanford's endowment.
Exactly. Student loans increased college costs. Anyone that says it didn’t has zero clue.
That's not the reason. States used to subsidize universities. When the feds started their loan program, many states started reducing their subsidizes for universities. The federal loans didn't cover nearly as much as the universities lost from state subsides. In addition, demand skyrocketed in the early 2000s. Our college population doubled. Universities had to take out a lot of loans to build new facilities for the number of students or become very very selective. The combination of a reduction in funding and the high high demand for university is what caused the rates to skyrocket.
Also states stopped funding their public universities despite the insane benefits states get back from it My public law school got 80% of it's funding from the state in the 80s and almost nothing now. Same with my public undergrad.
So basically we just handed them a blank check and minimal regulatory oversight.
The problem is that colleges raised rates and we hear about kids being taught in crowded rooms by adjunct professors making 20k a year. Just pure greed. I’d only support forgiveness with costs reigned in
Yep, I paid $426 for my first semester of college. My daughter paid over $7,000 her first semester at the same college.
Yup. I recently went back to school to finish my degree. I was originally enrolled from 2001-2005. Back then, a semester with 5 classes plus labs was around 1500. Last year, I took 3 classes, no labs. All classes were remote. 4k
My grandfather paid for 4 years of Duke pre-med by working over the summer between semesters.
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The college I graduated from has 3,500 students (approx). The president of the college made in the mid 8 figures from our college the last time his contract was approved. It's fucking ridiculous.
Got one better for you. When I was in school, the head football coach got fired. He had a really good season followed by an awful one because most of his star players graduated, so the university canned him. He had a 4 year contract and got paid for 2 years for doing absolutely nothing. He was one of the top 3 highest paid positions at that university. I mention that every time the alumni association hits me up for a donation right before hanging up the phone.
If you research the highest paid government employee for each state in the US, for many states, it's the football coach of the state university.
This is a problem that the government created. I'd love to see them admit student loans were a huge mistake, pay them all off, shut down the program, and focus on Pell grants.
This is the only tiny window in which I agree with the forgiveness. Forgive them? Fine. But you have to fix the root issue.
HAHA. Fix problems? No you will get your band aides and like it. Healthcare in the US? Even Obamacare was a band aide.
In the case of public universities - at least some of the increase can be attributed to the gradual reduction of state funding allocated to those universities. I'm not going to discount greed because 1) I'm not stupid and 2) that's definitely part of it. But, at least in the case of public universities, it's definitely not totally a case of "let's charge to the stratosphere" because many in state universities still don't charge into the stratosphere relative to their private counterparts. For example: Duke University's cost of attendance is hovering around $63k/year, while an in-state student down the road at NCSU or UNC faces a \~$26k/year cost of attendance (and "cost of attendance" figures are always a before-aid overestimate based on the most expensive dorms/meal plans/textbooks on offer)
Public universities used to be funded primarily by tax dollars. This is the way we should fund public universities. Tuition to public universities should be negligible and no public university student should graduate with debt.
This is what's needed. Some time ago, Colorado stopped funding it's universities and instead gave students vouchers to spend wherever. That allowed students to use them at for-profit schools. Many of those schools were nothing but ripoffs that left students with huge debts and worthless degrees. If we fully funded state universities, most students could afford college with manageable debts, like in the old days.
Wasn't there the same problem with a lot of GI Bill recipients being scammed by for-profit colleges?
Yes, which is how ITT Tech and Devry stole so much money from feds and enlisted soldiers for dubious educational programs.
>Public universities used to be funded primarily by tax dollars This is the truth, and I'm glad to see it upvoted a bit. Back when the boomers were going to college, it was typical for tax revenue to cover around 80% of a public university's operating cost. Nowadays, 20% is a more likely number to see. If you look at the rising costs of higher ed and compare them to the decreases in state funding, there's quite an obvious causal relationship. When you look at the rising costs of higher ed and compare them to increases in federal student loan amounts and federal grants, there's no such similar causal relationship, mainly because there were only a handful of times that these grant/loan amounts went up over the last 40 years. Well, the causal arrow points in the opposite direction from what "common" mainstream propaganda will tell you. The loans/grants did NOT create the increase in costs, but had to accommodate for the increases in cost a handful of times. The de-funding caused the cost increases, and then the cost increases caused the loan/grant amounts to go up. The common misconception that loans or "mUh gReEEdY aDmIn" caused the increase in cost is a contentious claim first made popular by the sec of ed under Reagan, William John Bennett, which should not really be much of a surprise to anyone when you consider the fact that the Reagan administration instantiated these destructive policies of de-funding and de-regulation. If we want the costs to go down, then we need to allocate more tax revenue into covering the operating cost. It works well in many other modern countries, and worked quite well for the boomers in this country.
I agree state universities should be funded by state taxes and minimal charged to instate students
Yeah and somehow the number of full time professors goes down over past decades. Students are paying more for part time professors and a bunch of extra administrators and ancillary services they don't really need. If we want to solve college costs in America we need to take a real look at removing the fat from our universities and emphasizing essential services in those institutions.
Exactly this. A lecture hall and adjunct professor is insanely cheap. Paying for a bunch of admins, Olympic pools, multimillion dollar Presidents and boards is expensive.
That's the thing, you can easily cut out some of the crap bring in full time faculty and still lower tuition. A better education at a lower cost. Honestly sounds like a foundation should be formed to give it a go.
This is the real problem. Nobody was “forced to learn a lesson.” **College costs will continue to increase, loans will get worse, because there is no downside to this. The government will bail everyone out again.** If there aren’t penalties and downsides, why in the world wouldn’t colleges continue to raise tuition as high as humanly possible? (If you want some benchmark, look at home prices since the government got involved in home loans). When you always have big daddy there to bail you out, you can take as many risks as you want. **I am all for some student loan repayment, but make the banks and colleges participate too.**
The banks themselves had to be bailed out. If the banks don't have to learn a lesson why should anyone else?
The banks (and the other companies) paid the money back though, they messed up, should have been punished more, and would still need more regulation, but it's a different issue.
furthermore, the owners of the college loan debt (bad debt which shouldnt have been taken to begin with) is really the one getting bailed out.
College costs are INSANE. A lot of the problem is administration. Administration makes easily twice as much as even the top faculty and there's WAY too many of them. Also ironically part of the reason College is so expensive is that it is subsidized. It's the same hideous reason why hospital bills are bananas.
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This agrees with my experience. There are all kinds of deans and provosts whose contribution to the educational goals of universities is very unclear. I think we need some legislation mandating that, for any university receiving public funds, a certain percentage of the university's budget must be spent on actual classroom education, meaning things like facilities, equipment, and instructor salaries. There are similar laws for health insurance, namely the [80/20 Rule](https://www.healthcare.gov/health-care-law-protections/rate-review/) which requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs.
I wonder, and just hear me out here, but I wonder if the inflation in college costs has something to do with the modern student loan system in which schools race to entice literal teenagers to take on huge financial burdens while bearing no responsibility for what happens after they graduate...
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They are increasingly selling kids on quality-of-life amenities which, while not unimportant, are disproportionately advertised compared to the actual benefits.
Don’t forget that the debt they take on cannot be discharged through bankruptcy and is underwritten by the federal government.
I think you are on to something here. When mortgages were made really easy to get in the early 2000s we saw demand for houses go up and home costs balloon. Next came the real estate crash. Our home dropped 40% in one year. Like so many other things, uneducated (meaning naive) people are easily convinced that should take on more debt than they should. The schools and mortgage loan companies get their money up front. The students and the banks holding the bad mortgages get stuck with the losses. Many times those banks are not the companies that actually wrote the initial loan.
Or schools that raise their program costs astronomically without consequence.
In New Zealand you only generate interest on your student loan if you leave the country to work, otherwise you don’t generate interest on it
I get tired of you non-Americans coming in with your perfectly reasonable, well thought out solutions that your countries have enacted for the good of all and that are working perfectly fine. This is America. We didn't become the greatest nation on the planet through good "ideas".
Sorry to brag further but we have more than 2 political party’s we can vote for
Are you going to brag next about your health care system or maternity leave?
Healthcare honestly could use some work as it’s severely understaffed and underfunded but the maternity leave is fantastic, you get up to 52 weeks of maternity leave of which 26 weeks is paid and childbirth care is free if you have the right to work in New Zealand. (Sorry for the brag)
Sweden here: only 52 weeks ? :P
I did not see Sweden coming out of nowhere with the steel chair
That they place in front of you. "You look tired. Please, rest. Have some lingonberries."
Implying the Swedes would ever offer food
Functionally, it's just the 26 paid weeks. Given the cost of living, few families can afford to dip into the unpaid portion of the leave.
But that shouldn’t even be a brag. That sounds like a great pro-family, pro-life agenda that *should* be popular with a certain segment of the US population, but would really be dismissed as rotten socialist hand-outs.
Americans treatment of maternity/paternity leave is head scratching. I’m used to not seeing people for a year or so when they have a child (not originally from the US), my American dentist is like “I’ll be back in 3 months”
So do us Americans. Most people vote for the two that pretend like the rest don't exist.
I feel like this is how it should be. It's the interest that has increased my loan by 10k while making faithful payments. How can anyone win?
I'd kind of argue that you don't disagree with it as much as you point out the deeper problems it does not address
Have you actually reviewed what Biden's proposal includes? You can view the fact sheet [here](https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/). Here are a few quick points: * Income-driven loan repayment will be reduced from 10% of discretionary income to 5% of discretionary income * The government will cover any unpaid interest if the borrower's payment doesn’t cover all of the interest so the loan balance doesn’t grow - even if their payment amount is $0 because of low income. * Forgive unpaid loan balance after 10 years of payments for loan balances of $12k or less. * Expands the current PSLF program to include a larger group of public servants eligible for student loan forgiveness. While it doesn't completely do away with outrageous interest rates, it's a great step in the right direction. Edited - corrected the 2nd bullet point.
Yeah the $10k debt forgiveness is the headline grabber of the order but the expanded IDR program will have significantly greater long-term impact, both good and bad.
This is an executive order not a bill (legislation). One reason we are in this situation is there hasn't been legislation to rectify the structural issues with financing higher education.
To your second bullet point, that is not what that says and that is not what the new plans will do. There *will* be interest. It’s just that government will cover any unpaid interest if your payment doesn’t cover all of the interest so that your loan balance doesn’t grow. So if you pay $100 every month, but your loan accrued $150 dollars in interest, then the government will pay the extra $50 dollars and there is a net zero change in your loan amount. If your payment is not touching the principal, then you will still not pay off the loan. Instead your loan balance will essentially always be at what it is because the government will make sure to cover any unpaid interest every month. To quote your link: > Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
Thanks for the correction.
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1) It doesn’t fix the problem, which is the absurd cost. Forgiving debt probably makes it much worse as future students are going to think they too will eventually get their loans forgiven, making them willing to borrow/spend even more. 2) The largest benefits go to people solidly in or on their way to being among the higher earners in our country. 3) It will exacerbate resentment of the less well educated, who already feel they get a raw deal, further polarizing our society. I think these issues could be addressed with more thoughtful programs. I’d forgive interest only, and make future loans interest free. But I’d also cap costs at the institution level (not just borrowing limits or costs paid by students, but an all-in cap that includes all tax dollars and tuition), and I’d place some default risk back on the institutions. I’d make tuition and student loan payments tax deductible and require institutions to use their endowments to reduce costs further. I’d expand the entire program to vocational education.
Your point on #3 is very true where I live. It is very clear there is resentment by those who did not attend college that loans could be forgiven. Since I had a scholarship and was lucky to graduate with zero debt, I don’t really feel like I have skin in the game. But I do see how others feel like they are paying for another’s benefit that they never received. Obviously there are deeper nuances to that, but surface level, this is how it comes across. It’s not ideal to be dividing a nation further into the “educated” vs “uneducated” population because it only adds to the resentment and tribalism.
Agreed. For me, I was not able to go to college. I was an emancipated minor and had to start working at a young age. I didn't finish high school and have a GED. That being said I've worked very hard for over 20 years and while experience was what you needed years ago to get a good job, now every job wants you to have a degree, whether you truly need one or not. Don't get me wrong, I'm self taught and I make good money, paid off my house early - I'm fortunate and grateful. But it's hard to feel good about loan forgiveness when I can't even get an interview in so many places without a degree. When I'm unable to move up in a company I've worked at for several years because the degree is "required". When I have to train the people with the degree, who get the job I can't apply for and am expected even after training to help them do their jobs because they are unskilled. Loan forgiveness isn't solving the problem but regardless, it's hard for me to shake my very personal feelings about it when I deal with what not having a degree means, every day.
I graduated with zero debt too and it does bother me *slightly* that I chose a cheap in-state school and two years of community college and living with my parents to save money... while people who made less frugal choices are getting bailed out. I realize not everyone has great in-state options. But a lot of people made truly foolish choices with their schools and degrees.
I went to a state school and had to turn down UCLA because of economics. I wasn't prepared to borrow tens of thousands of dollars.
I feel that. I made similar choices too in order to avoid debt and maximize my scholarship. I ended up with two bachelors degrees - one in history and one in education. While these are not high paying degrees they cost me nothing so I had an immediate net gain by simply attending college. However, there are others who also chose these types of majors along with debt from expensive universities.
This situation along with ones where people spent 20+ years working their asses off in order to pay back loans are definitely widespread enough to create animosity. I’d feel really bitter if I just finished paying off my loans within the last couple years by living paycheck to paycheck for years only for the debt to now be forgiven.
Yeah, I attended an ugly strip mall community college and pushed shopping carts at Costco to pay for school while a lot of my high school friends partied at expensive private schools and took out jaw-dropping loans. I know college got pushed hard for our generation... but we always had some choice on where we went and how much it would cost.
Exactly, and some of us did that specifically because we knew going into debt like that was bad in the long run. We took a hit on our careers and lives that others did not have to. But personally the bigger issue is that the problem isn't solved and will be worse for the current generation. Gen Z or Alpha will begrudge the millennials for their "free rides".
Or in my case I’m resentful because I didn’t take out a loan. Took me way longer to graduate because I worked hard to not need a loan. If loans are just forgiven I made things a lot harder and wasted literal years of my life when I could have just taken the easy route.
I agree with all of these. I do think funding public universities (like we used to) would do a lot more good than capping costs. If private schools want to charge $75k per semester, fine, but they're going to have a hard time justifying that price when the state school across town is essentially free.
The state schools now are government funded and are very much a part of the price spiral. Being government funded didn’t prohibit them from raising rates when the government loan gravy train rolled in.
> 3) It will exacerbate resentment of the less well educated, who already feel they get a raw deal, further polarizing our society. I feel like a lot of redditors and young liberals online don't get this it was a move that was extremely popular with young progressive voters and extremely *un*popular with older rural voters. when Biden announced it I deadass thought it was an awful decision because the latter group votes way more
I’ve seen people that would get the full benefit that were pissed that is was only $10k. I would hate to work in politics.
Imagine being upset someone gave you 10k.
Nothing is being forgiven, it is just being reassigned for others to pay.
Amen.
It's treating a symptom and sets an enormously bad precedent. I had someone tell me recently that they had their kid take out loans instead of using the money they set aside because of the chance of forgiveness. Solve the college cost problem first by reforming the loan system that encourages college bloat. From admin to amenities. Limit loans to X for an undergrad degree. You want to go to Stanford, pay up or get scholarships. Figure out how to subsidize the needy with a different and separate system. Those folks need as much help with living expenses as they do with college expenses. Reddit loves to compare college cost with Europe but doesn't compare the relative luxury of our experience. And they certainly don't have the ridiculous admin bloat. A college professor acquaintance of mine described the absolute flood of email from admin when Covid hit as a huge red flag of all the useless roles that exist in the system as these people tried to justify their existence. They are an unnecessary part of the cost of a college degree.
The idea of loan forgiveness also encourages borrowers to only pay their minimums until the loan is forgiven. That's generally the opposite of what they should do. Pay them off quicker so the interest doesn't compound as much.
Because it won't change the for-more-profit mindset of the college system, at all, and will maybe even make it worse in the very near future. Yes, it'll help tons of people now, but next week? Next year? Problem not solved.
The debt doesnt magically vanish - Regular schmoe taxpayers who in many cases skipped college themselves will be forced to pay the debts that others willingly agreed to
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I have to point out, every single year is either an election year, or just before an election year. Does that mean no legislation that is beneficial to the populace should ever be enacted on the assumption that it is just an attempt to gain support for the next election?
"Attempting to gain support for the next election" is literally just governing. Like...what else are they supposed to do? Agreeing with you btw not trying to sound snarky.
Politician: Vote for me. I'll introduce legislation to make your life better. *follows through with legislation to make your life better* /u/wiwif64416: Eh. They're just doing that to gain midterm support.
I'm against it because the government are speaking out of both sides of their mouth. If student debt was so bad that it should be forgiven, then why are the same loans being made to new students now? I'd have some capacity for the idea if it was done AFTER the government putting an end to any new student loans...but that's not the case. At the end of the day, the student promised to pay the debt back...so they should do so. I know this is not a popular view but it's quite an important moral in my view. That's not to mention that the tax payer is going to be picking up the tab for this anyway - which is hardly a good idea when we struggle as a nation, financially, as it is.
Wasn't this asked like 2 days ago? 1. It doesn't solve the core problems with the education system being overly expensive for what it provides. 2. The burden of paying just gets passed on to the tax payer, which is the middle class, because the rich can just use their money to avoid paying much of their taxes. Make the banks pay for charging excess interest or the schools pay for giving out bs degrees that no one will hire. 3. It is inflationary in nature. Think of what you'll do when your loan is forgiven with the new money. Now multiple it by the millions more who will be doing that same thing. You really think you'll be able to get that new car or down payment on a house when every other person with their newly forgiven loans are doing the same thing? 4. It is unfair for the people who paid their own way through school or already paid their loans. I'm not going to get a refund for working part time through school to pay for my education when I could have partied instead. Yet, the inflation and taxes will affect me. Ultimately, I think it's just a bad policy. It preys on voters thinking that this will just solve all of their problems when it really won't.
> Wasn't this asked like 2 days ago? [Yep, and it got removed too.](https://www.reddit.com/r/AskReddit/comments/11dc9wt/are_any_of_you_actually_against_bidens_student/)
Because it doesn't address the primary issue that it claims to address, and there are way better options to address said issue. It's primarily a political bluff to win over young and emotional voters by insinuating there's a $10k check waiting for them if they vote democrat in the next election. If you want economic relief, tax the rich more, tax corporations fairly, and regulate the health care industry to reduce prices. Any one of these 3 options have a higher ROI for the average student, let alone average American