I remember my Father, working 80 hours a week, to put his 4 kids through college. We all also worked at least 20 hours a week while going to college. And I remember my mother squeezing every nickel until 6 cents dripped out of it. JUST so we wouldn't be burdened with debt after we graduated.
I know that some people weren't as "lucky" as we were, and couldn't pay for college without debt. I don't begrudge them getting their subsidized loans. Or their ability to actually put full effort into learning, instead of hitting the books after an 8-hour shift on your feet.
But...taking my taxes, and giving them a government handout--because they mismanaged their previous government handout.... Not gunna lie, that's pretty hard to take.
Where's my Dad's $20,000 compensation? Make that $80,000 compensation, because he put 4 kids through? Where's my compensation for getting B's in some classes instead of A's, because I just couldn't study enough after working all week?
I know that some might find it "hard" or "inconvenient" to pay back these student loans....but guys, you already got your government subsidy. You are supposed to be putting money back in to help the next generation, not just soaking us all for another round of money, because youblewit.
This kind of taking money from people who managed their finances well, and giving it to those who didn't, is what gives liberalism a bad name....
Exactly where is my reimbursement. I was not super wealthy but I prioritized my kids college education and made sure to pay for it to avoid them having to go into debt over it. This produced a, not insignificant hardship, to the family but it was worth it. How do I apply for some of this money?
Is this more of the lazy people get free stuff and responsible people who contribute to society gets screwed again? People wonder why there's such a political divide and I'm telling you that political divide is largely around whose hand is in your wallet. We need to cut this entire welfare state off at the knees. If you wanted a free education you could have scraped together a few thousand dollars and gone to Germany and got your free education. Don't expect the average taxpayer to pay for it.
Just be glad the President can grant free money so that he can be reelected. You wouldn't want the other guy to be in office would you? It's a small price to pay...
sigh it would pain me. But let's face it: if the survival of our democracy depends on the votes of people whose votes can be bought and sold, it's already gone.
Agree with the sentiment as I was also raised on a household where both my parents worked and (while we were not frugal) we took care of every $, and I learned at a young age not to get myself into deals that I could not honor, including, of course, not asking for money you can't or don't know how you'll pay back.
I don't think this is constitutional, in the sense that it really is unfair to some people who made the extra effort to fulfill their financial obligations, they should also get something back.
Also, the elephant in the room is dropping this a few months before the election definitely looks like a political move, but let's not devolve the conversation into that ...
I think this is sending the absolute worst message you can to both sides of people involved here:
* To the ones who paid their debt, it tells them "sorry, sucker, thanks for the $$$"; not explicitly, but that's definitely how I would feel about it.
* To the ones who didn't pay, it could create the impression that debt is forgivable. You do not want this message to spread, particularly in a country like the US where debt is so fundamental for pretty much everything. You do not want more people taking on debt with a more careless approach. You also definitely do not want to do that in this particular moment where there's a lot of uncertainty about the US hegemony over the rest of the world. $7B is nothing for a country like the US; but this will create a sentiment that could cripple the economy for years on end.
There's a third group of people as well, what about those who decided not to study, or to attend some small community college, because they couldn't afford a more expensive alternative? Now it turns out it was free all the time? Dang.
"I didn't have it good so the next generation shouldn't either."
Student loans in the US are very predatory. This is a good step towards student loan reform, hopefully, and definitely a welcome boom for many struggling americans. Much better than tax cuts for people who have high incomes, for sure!
Right. Until the schools start losing money, there is zero incentive for them to reign in costs. That doesn't mean I want to see people suffer under the burden of their loans but this program isn't solving the right problem.
Investigate the schools. What claims were made in the advertising? What did they know about the economic realities of graduates and when? Some of this was probably fraud. If you are telling kids "come have a bright future at my college" and statistically, that isn't happening, you probably should have to give the money back.
Do you mean the loans are predatory, or the people who sell them? Like any financial product, they have at times been sold fraudulently--but this is already illegal and you can get remedy through the courts.
I've heard the loans being called predatory because they are interest-only loans. But, if you have the discipline, interest-only loans are an excellent tool for managing risk.
For example, I got an interest-only mortgage on my house when I moved to the valley. I felt better about joining a startup, because I knew I could ratchet down my monthly spend if I had to do an extended job search.
Of course, this means that you have to have the discipline to pay more than the minimum each month when you are getting a paycheck. Ideally, you should pay until it hurts, because the faster you pay down the principle the sooner you are free.
Yes, this means you'll have to buy fewer SUV's, or no SUVs at all and take the bus. Yes, you won't be able to eat out every meal--or perhaps any meal. I feel for you, I've been there, but that's life. Welcome to the wonderful world of being an adult.
If, after graduating from high school, you can't do enough math to compare the monthly student loan payments with the monthly income of your chosen major, well, that's on you. You should have payed more attention in school.
If, after graduating from college, you don't have the critical thinking skills to know that you need to pay down the principle on your loan--or it will eventually explode, well, that's on you too.
In either case, if you don't have the self-discipline to manage your money effectively, it doesn't matter how much money the government gives you.
At least this loan forgiveness seems to be targeted at low-income people. That’s much better than the government’s blanket pause on student loan payments for almost two years, which saved many rich people tens of thousands of dollars in interest.
Your intelligent career decisions won't insulate you from the under-educated voters putting a despot and charlatan into power. An educated populace is better for everyone.
Russia has 54% of people with higher education, compared to us at 44%. In fact, it's the most "educated" country in the world. Bet you didn't know that...
Look at how that worked out for them.
The value of education is greatly overstated. (and on the other hand people who claim education is soooo important for a good society conveniently pretend things like culture, religion, morals, etc don't exist).
You need quality education not just quantity. Degrees from some universities in some countries might not be worth anything because anyone can get them and many do just because they've been conditioned that having that piece of paper changes your life for the best, and so No-Name universities appear to cater to that market creating a "degree inflation" where too many people have degrees but they're worthless.
True, we need quality education. But efforts to expand the quantity of education and educators here in the US have resulted in lower quality everywhere. Look at the steep degradation of NYC public schools over the last hundred years despite receiving ever increasing funds and benefits. See Harvard and other higher ed dropping merit requirements at all levels and being embroiled in plagiarism scandals.
Sometimes less is more. What was originally meant to help the <5% of the non-elite youth who were intellectually gifted or uniquely driven has mutated into a destructive-for-all-parties incentive pushed on 50+% of the population to follow. Quality of output requires quality of input, so returning to merit standards is a must.
A handful of top universities in US are better than top universities in Russia, but I seriously doubt that there's a significant difference between average university in Russia and average one in US when it comes to quality. If you are believe that US does not have a problem with crap universities awarding worthless diplomas, you are very wrong.
That story seems like a smokescreen for a straightforward economic conflict: people with college degrees that don’t lead to valuable jobs want the government to take public money and give it to them. They vote for the guy who promises to do that. Voters without college degrees—who will pay for that policy one way or the other, either directly or through inflation—vote for the guy who promises not to do that. Marx would say that this is about class and economics.
I got a quote recently from a plumber that drove to my house in a $90,000 BMW. If he doesn’t want to pay off the student loans of some Starbucks barista with an ethnic studies degree, that’s entirely in his rational self interest. Just as it is in the interest of the barista to seek that policy. It’s pure self-flattery to pretend it’s about anything more than that.
Do you think anyone in the US acts in the interest of the country as a whole? I have very little problem with my tax dollars going to this as opposed to dropping bombs on some hapless country.
> Do you think anyone in the US acts in the interest of the country as a whole
No, but that’s my point. It’s a basic economic issue between voters with different economic interests. Cash-poor college educated people want government subsidies, and non-college educated people with money don’t want to pay for that. People who make their living doing knowledge work see the value in subsidizing college, people who don’t do knowledge work often don’t see the value and don’t think the government should subsidize it. As Marx would say, each group votes according to its class and economic interests. It’s self-indulgent in the extreme to try and dress that up with some narrative about despotism.
Do you know any proles and how they think? For the most part, they don’t expect to become rich themselves some day. Rather, they have low confidence in the ability of government to improve anything, and high confidence that the government will make life harder for small business owners, or cause inflation, or other things that affect them.
Again, circle back to my plumber. He pays enough taxes to care what the government does with the money. And he’s quite reasonably persuaded that whatever the government does won’t help him, but will probably make his life harder.
The comparison was specifically to the last attempt which was just scattershot. Radiologist who just paid off you loans: no soup for you! Radiologist who still has loans but will soon also be rich: have a bunch of free money.
This new loan forgiveness (which as a loan-less dropout I’m not crazy about either) at least seems directed as a handout to poorer loan holders. If I’m going to be screwed, it’s slightly nicer knowing it’s not to a give-away to the tax brackets above me.
It's hard to imagine a worse policy. It penalizes responsible behavior while doing nothing at all to address the root causes. Are we stopping making more of these loans? Of course not!
Of course root causes should be addressed (chiefly, I believe that tuition should be gratis for public universities), but in the meantime I think this is a perfectly fine policy. It achieves three goals:
• Gets people talking about higher education payments.
• Eases the financial burden of higher education for some. It should be all, but this is still objectively better than none, provisionally.
• Provides good publicity for the political party more inclined to do anything about the root causes (Democrats).
I disagree — enacting a policy people like and find useful is inherently good publicity.
If your city mayors’ initiatives improve your local library, this will make people who visit the library like the mayor more. This doesn’t make improving the library immoral or unethical.
No problem with having good publicity as a consequence of, but as a root cause is what makes it morally incorrect since the political party per se shouldn't be an end in itself. Your words, not mine.
I think this will go over poorly in some parts of the democratic coalition. I don’t know that blue collar workers including blacks and hispanics will care for this much, or that centrist suburbanites will like it either. Continuing to loose support in the first group or slowing/receding support in the second could be a serious problem.
So only the wealthy get to receive higher education. Good one! I know this is HN but this take goes beyond the typical level of unhinged. Honestly it seems like straight up trolling.
Someone who received public loans to attend university and who spent 10, 20, or 25 years paying them off at which point the rest was cancelled isn't really irresponsible.
The original mission of aid has been overrun to the point of being self-defeating. Higher ed is an inflated, bloated mess with a steep opportunity cost measured in time, money, and mindset. There are drawbacks to the narrow white-collar expectations and self-sabotaging ideologies (ie degrowth, critical theory). Why not a sensible in-between?
Aid should be merit-based. Both statistically and in my experience growing up at average and poor public schools <5% of the population is gifted and talented at the level where going to college would be a value gain for both them and society. Giving ~50% of youth a perverse incentive towards higher ed is obviously turning out to be destructive for both them and the institutions.
If you think that stating that you should not go to a college that you can't afford is "beyond the typical level of unhinged," you must be from a very sheltered corner of the internet. It strikes me as a very common sense and mainstream opinion indeed.
Saying only the wealthy and top 5% of students should receive higher education is unhinged. That might be a popular opinion on HN and libertarian land but no one can seriously argue that with a straight face lol.
Not in the US. As far as I know it is one of the very few forms of debt that cannot be discharged due to bankruptcy. If you're rich, you can run business after business into the ground and use bankruptcy to avoid paying your debts. Just want an education? Sorry, chum, you're on the hook forever.
You'll quickly get responses like "That was their moral failing for majoring in _____ which got replaced by _____, but if we made it dischargeable then banks would never give out money"
Of course if you really want to get the HN crowd up in arms fill in the blanks with "programming" and "AI".
The public service loan discharge “used” to be broken and people were always rejected, but they made significant overhauls a few years back. My father for example, had his loans forgiven for working at a public library for a decade or so.
I took the question to ask whether or not the debt was susceptible to discharge under the Bankruptcy Code. Public service forgiveness is a different beast that doesn't flow through the bankruptcy system.
Taking out a bad loan is not smart. Not being able to pay it back is not smart. We can argue whether this is good or not, but certainly these people are not smart or they would have solved the problem or avoided it in the first place.
See, the problem with successful people is they confuse intelligence for luck. And I'm sure you're a very lucky person yourself.
If you were smart, you would have seen the financial crash of year 2XXX. If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow. If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half.
And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are...
But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?
> If you were smart, you would have seen the financial crash of year 2XXX
Makes sense
> If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow
Makes sense
> If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half
Makes sense
> And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are...
Doesn't make sense and then there's unhelpful sarcasm at the end
> But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?
Providing direct value to society and getting rewarded for doing so has been an evergreen suggestion that has always worked well.
This works well for the Chinese immigrant with literally no money and no grasp of English who starts off selling takeout and grows the business, as it does to the person who starts driving taxi cabs, again, with no money to start off at all and then saves some to lease their first taxi and hire their first employee and then the second taxi and then the second employee.
A morally just society should reward, not punish these people. We need to have more, not less of them and that happens my incentivizing the right behaviors and disincentivizing the wrong behaviors.
It's all about the mindset and taking responsibility for your own future. You can complain and blame your fate or you can give it the middle finger and grow.
But, what are some suggestions you have to lift people out of a pit of debt or crime?
Says every smart person before they end up in a situation they cannot respect their financial commitments...
Of course, it's easy for you just to take anyone that does out of the smart pool and put them in the dumb pool. The problem is this is in no way a predictive measure. With the rules you have henceforth set you will be unable to classify that a person is smart before any trouble occurs.
This is how the rules you setup look like
You: This person is smart because they put X money in savings and have a backup fund.
[nothing interesting happens to this person]
You: See they were smart...
----
You: This person is smart because they put X money in savings and have a backup fund.
[person gets crashed into and injured, then a poorly timed market crash eliminates 70% of their savings driving them into bankruptcy]
You: This person was obviously dumb...
---
See, the thing is you, and the vast majority of US on HN are far closer to that second person then we'd like to admin (well short of some of the multi-millionaires that post here). We can just make ourselves feel better by saying we're smart instead of lucky.
> person gets crashed into and injured, then a poorly timed market crash eliminates 70% of their savings driving them into bankruptcy
I think you need to collide your imagination with reality by asking whether majority of the recipients of this subsidy ended up there due to these terrible situations outside their control similar to what you suggest.
The crash, injury, market crash are all events that have happened to everyone and sure, it does affect a few people worse than others, but, for the problem at hand, are those the root cause, or something else entirely?
and should society as a whole ensure people have the training and skills to be more resilient to impacts from crashes, injuries, market crashes?
Extrapolating exceptional situations and weaving them into a story that feels good and fits an evil narrative that will have a terrible impact on future generations to come isn't a step in the right direction.
This is a political trick that exploits people in bad situations and does nothing to ensure that future generations don't end up in similar bad situations.
My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans.
Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year.
As soon as you let borrowers default, the math starts to make sense again. Lenders will have to evaluate how much they are willing to lend a student based on their expected earnings post-graduation. Universities won't be able to increase tuition at such an inflated rate since there wouldn't be infinite money being pumped into the system. College may actually become affordable again over time.
It's not a mystery what the actual problem is here.
The issue is that universities are a huge block of democratic support. If you allow people to default on student loans, then banks are going to be much more hesitant to issue them. That, in turn, will reduce universities' revenues.
Furthermore, the entire premise of federal student loans is that they're not technically spending. Of course if they allow these loads to be defaulted, then this is ultimately a spending program.
The easiest solution here is to compare data to countries that allow student loan defaults. AFAIK this is most of countries. There should be good data if the issue is real, or hypothetical, or political lobby based.
Cross-country comparisons like that tend to be hard. It's hard to isolate whether the metrics you're analyzing are because student loan defaults aren't allowed, because of the student selection pressure from an oversized military, because of a culture which views responsibilities and cohesiveness differently, because of secondary funding options, ....
There are many such factors, all of which plausibly matter as much as loan defaults, and since the vast majority of the country you'd like to compare to will tend to be homogeneous with respect to those confounders you often can't find many (if any) actual alternatives to compare to. Statistical approaches to appropriately tease out signal from noise in the larger data set are easy to get wrong, even if you get lucky and actually have comparable data in the first place (e.g., including trade schools or not in the metrics, similarly with associate degrees, counting "in-progress" loans with different payment timelines (treating a truncation bias differently), ...).
> don't seem to be fixing the underlying issue at all
Rollback higher-ed policy changes since the 70s. (h/t Gov Reagan, James Calhoun)
Restore govt subsidizes of higher ed, govt issues loans and financial aid, bankruptcy protections, etc.
I'd hope treating higher ed as a public hood, instead of business focused on wealth extraction and hoarding, would help address some of the other "greed is good" pathologies too. Grade inflation, credentialism, focus on STEM at expense of trades and liberal arts, anti labor strategies like reduction of tenture, etc.
To describe the subsidy policy fully, there's on-demand immediate guaranteed federal reimbursement of 97+% of the loan's entire projected value. The DOE brags at the top of its annual letter about the $120+ billion in new loans issued under the policy every year. It's no wonder after many decades of this that colleges are bloated with non-educational excess and tuitions have risen exponentially.
Prospective students are not shopping with real prices in mind - if there is a choice between a university with big names, shiny amenities, and attractive dorms the sticker price difference doesn't mean much. Gradually, all schools give up their frugality and delude themselves into mission drift. Arbitrarily cancelling loans now without scaling down new loans is multiplying the subsidy distortion effect, as new borrowers are increasingly convinced they too may not have to pay back the loans they're freely given.
In my opinion, subsidized loans need to stop entirely for a period of back-to-essentials relative austerity for university budgets before we bail out and calcify the current bloat with a new benefit. Then if we really need a new benefit it can look like a leaner amount-capped voucher and not a state inflated debt balance that may or may not go away. The voucher could scale on merit, a guaranteed partial scholarship as long as you meet certain standardized test/grade levels (without the need to apply and be chosen amongst a limited pool).
> My biggest issue with these cancellations is that they don't seem to be fixing the underlying issue at all — that you can't default on your student loans
Lenders being selective about student loans is part of a larger feedback loop. That you can't default on your student loans removes a strong signal for a student to realize what they are planning to do isn't deemed productive by society, but that doesn't mean a well educated student won't figure this out on their own even in the lack of this strong signal.
A well educated person shouldn't need a lot of external feedback to figure out if you spend more than you earn, bad things will happen.
The root cause is schools are completely failing at their job of laying good foundations for generations of tomorrow and are not getting the feedback they need to be useful and political tricks like this further distorts the feedback loop.
This means students are not well educated - they might be able to recite Shakespeare or vomit out coding algorithms from a book but most of them lack logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?"
So they go and land themselves in a mess and then politicians exploit them by digging a deeper hole for them and their children.
Since Obama federalized the student loan system, 92% of student loans are federal. So there’s no meaningful difference between default and loan forgiveness—it’s the public’s money either way. And the government will never impose creditworthiness checks on borrowers.
I don't think this is about fixing the underlying issue.
If you cancel debt and effectively put money into the hands of people with college degrees, theoretically, they will spend it on more intelligent things.
Or at least have a burden off their shoulders so that they can focus their careers.
Schools are not getting the feedback they need to be useful and political tricks like this further distorts the feedback loop.
We should really take a few minutes to consider what this means for not just our future but our future generations.
I think arguments that go along the lines of "I worked extremely hard to minimize my loans and now I felt betrayed" is missing the bigger evil lurking in the shadows: schools in the U.S. don't teach what really needs to be taught and political tricks like this further distort the feedback loop.
Schools should teach logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?"
"Follow your passion" worked when the U.S. was enjoying extreme wealth growth right off WWII - at that time you could shine shoes and own a single bedroom house away from the city. Weaving baskets and selling them could be the only thing you did and rent half a home for the rest of your life.
This is a cheap political trick that makes things worse. This is a perfect example of why a government shouldn't be trusted to allocate resources efficiently.
I am also concerned that this now opens an expectation that this current party will periodically forgive loans in the future - so, as long as you keep voting them into power, it doesn't matter what decisions you make, you won't have to suffer too terribly for them.
The right call would have been to invest these dollars in reworking education and schooling so that our future generations don't repeat the same mistakes we did and end up looking for handouts because we failed to learn how to make the right decisions.
While the intentions for this might not be evil, the effect is terribly so and disempowering for future generations.
To those who got some relief from this subsidy - I hope this helps you feel a bit better but hold those who put you in this situation accountable. Don't let politicians take advantage of you like this. Take a few minutes to write a letter to your school and college and tell them how they failed you and what you wish they had done instead.
The future of our country depends on your feedback
> "out of all the things I can do, what should I be doing right now?"
I mean aren't you really asking "What should I be doing X years from now"?
If you're looking at your feet you're only going to notice you've walked up to the edge of a cliff moments before you get there. I mean, even with re-education you're taking long term training now in hopes it will work out in the future.
So, pretty much you've said nothing interesting here other than survival of the fittest, which didn't work out great in the past when the unfit were destitute but still alive to cause problems like crime and vagrancy. Is part of your great plan in making things better just unaliving these people?
> I mean aren't you really asking "What should I be doing X years from now"?
For a person to answer what they should be doing X years from now, well, they first, need to be able to answer what they should be doing right now, very well.
> Is part of your great plan in making things better just unaliving these people?
That is quite a stretch.
Let us simplify things down a bit: on an individual basis, these subsidies are a few hundred dollars a month - which means that while that's nothing to scoff at, the recepients already have something else going on and making a living already. It might not be a great living but this subsidy isnt going to, for example, take someone destitute and homeless and put them in a position to become financially independent.
What would have stopped destitution and homeless would have been a better education. Now yes, there are well educated people who due to bad luck have become destitute and homeless but those are the exception, not the norm for well educated people to end up in.
> when the U.S. was enjoying extreme wealth growth right off WWII
So I don't really believe in economics anymore, but wouldn't they say that we are actually much wealthier per capita and more much productive than we were back then?
> wouldn't they say that we are actually much wealthier per capita and more much productive than we were back then?
Wealthier (higher QoL, longer life expectancy etc) and more much productive, yes. However, affordability is lower precisely because everyone is more wealthy, so they demand more compensation (incentive to work), so every person has to now earn even more to afford to pay someone else more.
Globalization has put an upward pressure on wealth globally and has a deflating impact on affordability, which is in contrast to the unique position the U.S. was in allowing its citizens to enjoy extreme wealth growth right off WWII.
So yes, people are wealthier and more much productive, but they can afford less because everyone else are wealthier and more much productive as well and can compete for the same resources better than they were able to before (it's not that exciting to be a millionaire if everyone is also a millionaire).
1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election.
2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.
>1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election.
What do you mean? This has been an ongoing thing throughout this term so it is weird to try and link it to poll numbers or the election.
>2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.
You are right that it doesn't fix the main problem but it addresses a very real problem that millions of Americans are facing. We shouldn't put off addressing the latter because the former is still a problem.
There’s a sentiment which isn’t really being expressed here so far.
I don’t begrudge people who are less fortunate and need help.
I don’t enjoy my food any less because someone who is hungry can get free food from a food bank.
There are so many ways that the government has helped the more successful. I for one was a beneficiary of PPP loan forgiveness (not by my choice but an election of my managing partner).
This attempts to balance the scales of what type of support people get who are going through different situations and at different times with different needs isn’t particularly productive. It might feel good in some self centered bitter way, but it doesn’t speak to whether this is a policy measure that has a positive effect on many people and is a net benefit to the economy as a whole.
Especially since a) college didn't start getting so expensive until the government got involved in loans and grants, and 2) none of these people were forced at gunpoint to take these loans. By law, every little detail had to be disclosed to them prior to signing of docs and disbursement.
Two things on this one that I don't see elsewhere in the comments.
1) This is both a grab bag of many different forms of debt cancellation (automatically applying it to people who would qualify for programs that have complicated requirements otherwise, like public service which requires a lot of documentation to prove all the necessary years that may have been overly burdensome in some cases, largely worthwhile in my opinion since I support that underlying program anyway and support simplifying its formerly crazy complicated requirements vs for instance cancelling interest on loans that people didn't put a lot of effort into repaying, since most educational loans are at much lower interest rates than other loans to begin with). Not all of these can be discussed in the same terms and part of the "messaging" of the program is that they got to large numbers through many programs and many different avenues.
2) Notice that most of the wording of this press release is "if implemented", "if implemented" because this isn't a program that _has already happened_, it's a bunch of programs that have to individually go through Administrative Procedures Act notice-and-comment rulemaking. Interestingly, notice and comment has a lot of trivial pitfalls that block implementation, lead to litigation, etc, so on average for programs that do get implemented it takes something like 1000 days to implement (most of a presidential term). Further, there's a special period at the end of a legislative term where APA rules can be summarily overturned or cancelled mid-process by the incoming new Congress, and routinely are, particularly when there's a change of party either by Congress or in the Whitehouse. Which is all to say, this is a fun press release amounting to vaporware until 2027, assuming Biden gets re-elected and doesn't have a much stronger Republican majority in one or both chambers of Congress.
I approve of parts, I disapprove of parts, it's all very complicated, but I expect a very small part of this to actually happen, and that to mostly be the easier parts that I like more. shrug Bureaucracy delenda est.
Not really - banks would have made money on something else instead.
The real problem is that universities are making money off selling trash to children not old enough to drink yet.
Before loans were guaranteed, there were some checks and balances for how much trash universities could sell and at what price, but now that politicians have figured out there's nothing stopping them from taking money that's not theirs and paying it off to universities, the only losers are those who consume the trash and destroy their lives and their descendants.
That is ok. Those same people will now have more money to spend on the businesses you are building.
Your comment goes against your original point. You went from saying that it is politicians trying to benefit, to saying that you are upset that you have to support your fellow humans. Which is it?
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[ 2.2 ms ] story [ 168 ms ] threadI know that some people weren't as "lucky" as we were, and couldn't pay for college without debt. I don't begrudge them getting their subsidized loans. Or their ability to actually put full effort into learning, instead of hitting the books after an 8-hour shift on your feet.
But...taking my taxes, and giving them a government handout--because they mismanaged their previous government handout.... Not gunna lie, that's pretty hard to take.
Where's my Dad's $20,000 compensation? Make that $80,000 compensation, because he put 4 kids through? Where's my compensation for getting B's in some classes instead of A's, because I just couldn't study enough after working all week?
I know that some might find it "hard" or "inconvenient" to pay back these student loans....but guys, you already got your government subsidy. You are supposed to be putting money back in to help the next generation, not just soaking us all for another round of money, because you blew it.
This kind of taking money from people who managed their finances well, and giving it to those who didn't, is what gives liberalism a bad name....
Is this more of the lazy people get free stuff and responsible people who contribute to society gets screwed again? People wonder why there's such a political divide and I'm telling you that political divide is largely around whose hand is in your wallet. We need to cut this entire welfare state off at the knees. If you wanted a free education you could have scraped together a few thousand dollars and gone to Germany and got your free education. Don't expect the average taxpayer to pay for it.
Perfect solution, US citizens should burden the German taxpayer to pay for their education, instead of their own country. /s
I don't think this is constitutional, in the sense that it really is unfair to some people who made the extra effort to fulfill their financial obligations, they should also get something back.
Also, the elephant in the room is dropping this a few months before the election definitely looks like a political move, but let's not devolve the conversation into that ...
I think this is sending the absolute worst message you can to both sides of people involved here:
There's a third group of people as well, what about those who decided not to study, or to attend some small community college, because they couldn't afford a more expensive alternative? Now it turns out it was free all the time? Dang.Student loans in the US are very predatory. This is a good step towards student loan reform, hopefully, and definitely a welcome boom for many struggling americans. Much better than tax cuts for people who have high incomes, for sure!
I'd argue quite the opposite. By "fixing" the problem with half measures like this ensures the problem will continue.
Investigate the schools. What claims were made in the advertising? What did they know about the economic realities of graduates and when? Some of this was probably fraud. If you are telling kids "come have a bright future at my college" and statistically, that isn't happening, you probably should have to give the money back.
Do you mean the loans are predatory, or the people who sell them? Like any financial product, they have at times been sold fraudulently--but this is already illegal and you can get remedy through the courts.
I've heard the loans being called predatory because they are interest-only loans. But, if you have the discipline, interest-only loans are an excellent tool for managing risk.
For example, I got an interest-only mortgage on my house when I moved to the valley. I felt better about joining a startup, because I knew I could ratchet down my monthly spend if I had to do an extended job search.
Of course, this means that you have to have the discipline to pay more than the minimum each month when you are getting a paycheck. Ideally, you should pay until it hurts, because the faster you pay down the principle the sooner you are free.
Yes, this means you'll have to buy fewer SUV's, or no SUVs at all and take the bus. Yes, you won't be able to eat out every meal--or perhaps any meal. I feel for you, I've been there, but that's life. Welcome to the wonderful world of being an adult.
If, after graduating from high school, you can't do enough math to compare the monthly student loan payments with the monthly income of your chosen major, well, that's on you. You should have payed more attention in school.
If, after graduating from college, you don't have the critical thinking skills to know that you need to pay down the principle on your loan--or it will eventually explode, well, that's on you too.
In either case, if you don't have the self-discipline to manage your money effectively, it doesn't matter how much money the government gives you.
Yay equity.
Russia has 54% of people with higher education, compared to us at 44%. In fact, it's the most "educated" country in the world. Bet you didn't know that...
Look at how that worked out for them.
The value of education is greatly overstated. (and on the other hand people who claim education is soooo important for a good society conveniently pretend things like culture, religion, morals, etc don't exist).
Sometimes less is more. What was originally meant to help the <5% of the non-elite youth who were intellectually gifted or uniquely driven has mutated into a destructive-for-all-parties incentive pushed on 50+% of the population to follow. Quality of output requires quality of input, so returning to merit standards is a must.
I got a quote recently from a plumber that drove to my house in a $90,000 BMW. If he doesn’t want to pay off the student loans of some Starbucks barista with an ethnic studies degree, that’s entirely in his rational self interest. Just as it is in the interest of the barista to seek that policy. It’s pure self-flattery to pretend it’s about anything more than that.
No, but that’s my point. It’s a basic economic issue between voters with different economic interests. Cash-poor college educated people want government subsidies, and non-college educated people with money don’t want to pay for that. People who make their living doing knowledge work see the value in subsidizing college, people who don’t do knowledge work often don’t see the value and don’t think the government should subsidize it. As Marx would say, each group votes according to its class and economic interests. It’s self-indulgent in the extreme to try and dress that up with some narrative about despotism.
Given the ever increasing concentration of wealth towards the top, either Marx was wrong about this or the proles value something more than money.
Again, circle back to my plumber. He pays enough taxes to care what the government does with the money. And he’s quite reasonably persuaded that whatever the government does won’t help him, but will probably make his life harder.
This new loan forgiveness (which as a loan-less dropout I’m not crazy about either) at least seems directed as a handout to poorer loan holders. If I’m going to be screwed, it’s slightly nicer knowing it’s not to a give-away to the tax brackets above me.
• Gets people talking about higher education payments.
• Eases the financial burden of higher education for some. It should be all, but this is still objectively better than none, provisionally.
• Provides good publicity for the political party more inclined to do anything about the root causes (Democrats).
This is not only illegal but morally wrong, though.
If your city mayors’ initiatives improve your local library, this will make people who visit the library like the mayor more. This doesn’t make improving the library immoral or unethical.
No it doesn't. That is a ridiculous thing to say.
The people who received the cancellation have been paying on their loans for either 10, 20, or 25 years (depending on the degree type).
Someone who received public loans to attend university and who spent 10, 20, or 25 years paying them off at which point the rest was cancelled isn't really irresponsible.
Aid should be merit-based. Both statistically and in my experience growing up at average and poor public schools <5% of the population is gifted and talented at the level where going to college would be a value gain for both them and society. Giving ~50% of youth a perverse incentive towards higher ed is obviously turning out to be destructive for both them and the institutions.
Of course if you really want to get the HN crowd up in arms fill in the blanks with "programming" and "AI".
If you were smart, you would have seen the financial crash of year 2XXX. If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow. If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half.
And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are...
But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?
Makes sense
> If you were smart you'd have seen that a foreign market for X would have opened up draining out all funding in the US and leaving that portion of the job market hollow
Makes sense
> If you were smart you'd have seen that bill that allowed X thousand more people in the country in this job dropping pay rates by half
Makes sense
> And I'm sure you are smart for having been born in a family that was somewhere near middle class and didn't have crippingling addictions or otherwise have issues that would put education somewhere not number 1 on the priority list. I'll clap my hands at how brilliant you are...
Doesn't make sense and then there's unhelpful sarcasm at the end
> But, what we're talking about here is those not born with all these gifts can lift themselves out of a pit of debt or worse a life that would lead to crime, so that all of us live in a better place. You have any suggestions on that. Or are you just going to lock yourself up in a gated community and not worry about that kind of thing?
Providing direct value to society and getting rewarded for doing so has been an evergreen suggestion that has always worked well.
This works well for the Chinese immigrant with literally no money and no grasp of English who starts off selling takeout and grows the business, as it does to the person who starts driving taxi cabs, again, with no money to start off at all and then saves some to lease their first taxi and hire their first employee and then the second taxi and then the second employee.
A morally just society should reward, not punish these people. We need to have more, not less of them and that happens my incentivizing the right behaviors and disincentivizing the wrong behaviors.
It's all about the mindset and taking responsibility for your own future. You can complain and blame your fate or you can give it the middle finger and grow.
But, what are some suggestions you have to lift people out of a pit of debt or crime?
smart people don't typically land themselves in a situation where they cannot respect their financial commitments.
Of course, it's easy for you just to take anyone that does out of the smart pool and put them in the dumb pool. The problem is this is in no way a predictive measure. With the rules you have henceforth set you will be unable to classify that a person is smart before any trouble occurs.
This is how the rules you setup look like
You: This person is smart because they put X money in savings and have a backup fund.
[nothing interesting happens to this person]
You: See they were smart...
----
You: This person is smart because they put X money in savings and have a backup fund.
[person gets crashed into and injured, then a poorly timed market crash eliminates 70% of their savings driving them into bankruptcy]
You: This person was obviously dumb...
---
See, the thing is you, and the vast majority of US on HN are far closer to that second person then we'd like to admin (well short of some of the multi-millionaires that post here). We can just make ourselves feel better by saying we're smart instead of lucky.
I think you need to collide your imagination with reality by asking whether majority of the recipients of this subsidy ended up there due to these terrible situations outside their control similar to what you suggest.
The crash, injury, market crash are all events that have happened to everyone and sure, it does affect a few people worse than others, but, for the problem at hand, are those the root cause, or something else entirely?
and should society as a whole ensure people have the training and skills to be more resilient to impacts from crashes, injuries, market crashes?
Extrapolating exceptional situations and weaving them into a story that feels good and fits an evil narrative that will have a terrible impact on future generations to come isn't a step in the right direction.
This is a political trick that exploits people in bad situations and does nothing to ensure that future generations don't end up in similar bad situations.
Lenders are incentivized to loan as much out as possible because their risk is so low, and so there is no reason to NOT approve a $150,000 loan to a student earning a degree which will realistically net them $40,000 a year.
As soon as you let borrowers default, the math starts to make sense again. Lenders will have to evaluate how much they are willing to lend a student based on their expected earnings post-graduation. Universities won't be able to increase tuition at such an inflated rate since there wouldn't be infinite money being pumped into the system. College may actually become affordable again over time.
It's not a mystery what the actual problem is here.
edit: corrected "lenders" to "borrowers"
Furthermore, the entire premise of federal student loans is that they're not technically spending. Of course if they allow these loads to be defaulted, then this is ultimately a spending program.
There are many such factors, all of which plausibly matter as much as loan defaults, and since the vast majority of the country you'd like to compare to will tend to be homogeneous with respect to those confounders you often can't find many (if any) actual alternatives to compare to. Statistical approaches to appropriately tease out signal from noise in the larger data set are easy to get wrong, even if you get lucky and actually have comparable data in the first place (e.g., including trade schools or not in the metrics, similarly with associate degrees, counting "in-progress" loans with different payment timelines (treating a truncation bias differently), ...).
Rollback higher-ed policy changes since the 70s. (h/t Gov Reagan, James Calhoun)
Restore govt subsidizes of higher ed, govt issues loans and financial aid, bankruptcy protections, etc.
I'd hope treating higher ed as a public hood, instead of business focused on wealth extraction and hoarding, would help address some of the other "greed is good" pathologies too. Grade inflation, credentialism, focus on STEM at expense of trades and liberal arts, anti labor strategies like reduction of tenture, etc.
Prospective students are not shopping with real prices in mind - if there is a choice between a university with big names, shiny amenities, and attractive dorms the sticker price difference doesn't mean much. Gradually, all schools give up their frugality and delude themselves into mission drift. Arbitrarily cancelling loans now without scaling down new loans is multiplying the subsidy distortion effect, as new borrowers are increasingly convinced they too may not have to pay back the loans they're freely given.
In my opinion, subsidized loans need to stop entirely for a period of back-to-essentials relative austerity for university budgets before we bail out and calcify the current bloat with a new benefit. Then if we really need a new benefit it can look like a leaner amount-capped voucher and not a state inflated debt balance that may or may not go away. The voucher could scale on merit, a guaranteed partial scholarship as long as you meet certain standardized test/grade levels (without the need to apply and be chosen amongst a limited pool).
Lenders being selective about student loans is part of a larger feedback loop. That you can't default on your student loans removes a strong signal for a student to realize what they are planning to do isn't deemed productive by society, but that doesn't mean a well educated student won't figure this out on their own even in the lack of this strong signal.
A well educated person shouldn't need a lot of external feedback to figure out if you spend more than you earn, bad things will happen.
The root cause is schools are completely failing at their job of laying good foundations for generations of tomorrow and are not getting the feedback they need to be useful and political tricks like this further distorts the feedback loop.
This means students are not well educated - they might be able to recite Shakespeare or vomit out coding algorithms from a book but most of them lack logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?"
So they go and land themselves in a mess and then politicians exploit them by digging a deeper hole for them and their children.
If you cancel debt and effectively put money into the hands of people with college degrees, theoretically, they will spend it on more intelligent things.
Or at least have a burden off their shoulders so that they can focus their careers.
We should really take a few minutes to consider what this means for not just our future but our future generations.
I think arguments that go along the lines of "I worked extremely hard to minimize my loans and now I felt betrayed" is missing the bigger evil lurking in the shadows: schools in the U.S. don't teach what really needs to be taught and political tricks like this further distort the feedback loop.
Schools should teach logical thinking, clarity of mind, decision making that includes knowledge of finances and projections so you can answer the question "out of all the things I can do, what should I be doing right now?"
"Follow your passion" worked when the U.S. was enjoying extreme wealth growth right off WWII - at that time you could shine shoes and own a single bedroom house away from the city. Weaving baskets and selling them could be the only thing you did and rent half a home for the rest of your life.
This is a cheap political trick that makes things worse. This is a perfect example of why a government shouldn't be trusted to allocate resources efficiently.
I am also concerned that this now opens an expectation that this current party will periodically forgive loans in the future - so, as long as you keep voting them into power, it doesn't matter what decisions you make, you won't have to suffer too terribly for them.
The right call would have been to invest these dollars in reworking education and schooling so that our future generations don't repeat the same mistakes we did and end up looking for handouts because we failed to learn how to make the right decisions.
While the intentions for this might not be evil, the effect is terribly so and disempowering for future generations.
To those who got some relief from this subsidy - I hope this helps you feel a bit better but hold those who put you in this situation accountable. Don't let politicians take advantage of you like this. Take a few minutes to write a letter to your school and college and tell them how they failed you and what you wish they had done instead.
The future of our country depends on your feedback
I mean aren't you really asking "What should I be doing X years from now"?
If you're looking at your feet you're only going to notice you've walked up to the edge of a cliff moments before you get there. I mean, even with re-education you're taking long term training now in hopes it will work out in the future.
So, pretty much you've said nothing interesting here other than survival of the fittest, which didn't work out great in the past when the unfit were destitute but still alive to cause problems like crime and vagrancy. Is part of your great plan in making things better just unaliving these people?
For a person to answer what they should be doing X years from now, well, they first, need to be able to answer what they should be doing right now, very well.
> Is part of your great plan in making things better just unaliving these people?
That is quite a stretch.
Let us simplify things down a bit: on an individual basis, these subsidies are a few hundred dollars a month - which means that while that's nothing to scoff at, the recepients already have something else going on and making a living already. It might not be a great living but this subsidy isnt going to, for example, take someone destitute and homeless and put them in a position to become financially independent.
What would have stopped destitution and homeless would have been a better education. Now yes, there are well educated people who due to bad luck have become destitute and homeless but those are the exception, not the norm for well educated people to end up in.
So I don't really believe in economics anymore, but wouldn't they say that we are actually much wealthier per capita and more much productive than we were back then?
Wealthier (higher QoL, longer life expectancy etc) and more much productive, yes. However, affordability is lower precisely because everyone is more wealthy, so they demand more compensation (incentive to work), so every person has to now earn even more to afford to pay someone else more.
Globalization has put an upward pressure on wealth globally and has a deflating impact on affordability, which is in contrast to the unique position the U.S. was in allowing its citizens to enjoy extreme wealth growth right off WWII.
So yes, people are wealthier and more much productive, but they can afford less because everyone else are wealthier and more much productive as well and can compete for the same resources better than they were able to before (it's not that exciting to be a millionaire if everyone is also a millionaire).
1) Biden's polling numbers must be abysmal with key demographics if he's doing this 7 months out from the election.
2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.
What do you mean? This has been an ongoing thing throughout this term so it is weird to try and link it to poll numbers or the election.
>2) This does nothing to solve the underlying problems which are that loans are handed out with absolutely zero check to see if they'll get paid back, and that they aren't dischargable in bankruptcy.
You are right that it doesn't fix the main problem but it addresses a very real problem that millions of Americans are facing. We shouldn't put off addressing the latter because the former is still a problem.
I don’t begrudge people who are less fortunate and need help.
I don’t enjoy my food any less because someone who is hungry can get free food from a food bank.
There are so many ways that the government has helped the more successful. I for one was a beneficiary of PPP loan forgiveness (not by my choice but an election of my managing partner).
This attempts to balance the scales of what type of support people get who are going through different situations and at different times with different needs isn’t particularly productive. It might feel good in some self centered bitter way, but it doesn’t speak to whether this is a policy measure that has a positive effect on many people and is a net benefit to the economy as a whole.
How ver (D)emocratic of him.
1) This is both a grab bag of many different forms of debt cancellation (automatically applying it to people who would qualify for programs that have complicated requirements otherwise, like public service which requires a lot of documentation to prove all the necessary years that may have been overly burdensome in some cases, largely worthwhile in my opinion since I support that underlying program anyway and support simplifying its formerly crazy complicated requirements vs for instance cancelling interest on loans that people didn't put a lot of effort into repaying, since most educational loans are at much lower interest rates than other loans to begin with). Not all of these can be discussed in the same terms and part of the "messaging" of the program is that they got to large numbers through many programs and many different avenues.
2) Notice that most of the wording of this press release is "if implemented", "if implemented" because this isn't a program that _has already happened_, it's a bunch of programs that have to individually go through Administrative Procedures Act notice-and-comment rulemaking. Interestingly, notice and comment has a lot of trivial pitfalls that block implementation, lead to litigation, etc, so on average for programs that do get implemented it takes something like 1000 days to implement (most of a presidential term). Further, there's a special period at the end of a legislative term where APA rules can be summarily overturned or cancelled mid-process by the incoming new Congress, and routinely are, particularly when there's a change of party either by Congress or in the Whitehouse. Which is all to say, this is a fun press release amounting to vaporware until 2027, assuming Biden gets re-elected and doesn't have a much stronger Republican majority in one or both chambers of Congress.
I approve of parts, I disapprove of parts, it's all very complicated, but I expect a very small part of this to actually happen, and that to mostly be the easier parts that I like more. shrug Bureaucracy delenda est.
Not really - banks would have made money on something else instead.
The real problem is that universities are making money off selling trash to children not old enough to drink yet.
Before loans were guaranteed, there were some checks and balances for how much trash universities could sell and at what price, but now that politicians have figured out there's nothing stopping them from taking money that's not theirs and paying it off to universities, the only losers are those who consume the trash and destroy their lives and their descendants.
Agreed.
Your comment goes against your original point. You went from saying that it is politicians trying to benefit, to saying that you are upset that you have to support your fellow humans. Which is it?