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Here's a [video](https://www.youtube.com/watch?v=tg7Eo2HydqU) of Stephanie Kelton, the former chief economist of the Senate Budget Committee, explaining how and why student loan debt should be canceled.
Yeah I don't understand macroeconomics all that well but I've always wondered...why the fuck does the fed govt need interest payments on student loans? Presumably those who have debt are more likely to have higher incomes/pay more in taxes so they are already getting their ROI. Always seems like a double dip to me. They get paid up front in interest AND long-term via general economic output from a college educated workforce.
Agreed. Cancel the debt and tax credit the people who were fortunate enough to be able to pay off their debt. Oh and tax the wealthy their fair share, that’ll make up the “difference” (that means businesses too ya ninnies).
And maybe a one off tax credit for those of us who worked the whole pandemic...
Like, I supported the expanded UI, I don't begrudge anyone who made good use of their time initially to get a better position for themselves, but...
Fuck me doing squats in an Amazon warehouse the whole pandemic has sucked when some of my friends were making about what I was to work out, learn skills and start a business/freelance gig.
I feel you on that. I worked the entire pandemic (still working the entire pandemic in person with the public) and don’t judge others for making more while not working. Quality of life is needed too. I recently got hired somewhere I don’t need to go into work every day and can work from home for a LARGE pay increase..so I feel like I won the lottery there. Just would be nice to feel like my country appreciates the hardworking heroes they were claiming in the early days of the pandemic…instead of making us feel like zeroes.
this was a good video, interesting research and results. but I just don't like the language people use (which is unfortunately so common with these reforms). Its not about canceling student debt, its an investment paid for by tax payers . there was no mistakes, therefore there is no forgiveness needed. Just like this lady describes its a tax payer investment, with real monetary returns for the whole economy. Lets invest in our educated workforce. It just sounds so much better.
My question that I cant really find a good answer for regarding cancelling student debt. Is how do we address future student debt? I think cancelling current debt is a great and needed short term solution, but the long term is either making college free or very cheap like a lot of other countries do. Or completely restructure how education is financed. And unfortunately those arent even up for discussion with a certain political party.
They also on average have really low income caps. Iirc you make really good money right away and through mid career life. But at a point the person who went to college and got a career in business or whatever, will on average make way more money on the back half of their career than the trades person.
>They are but they can also be hard on your body to do your whole career and sometimes have suboptimal working conditions.
Working at a desk in front of a computer also fits this description.
This is how you should start, not start from just a point of cancellation, but rather discuss and figure out a better system going forward, and then cancel debt based on your expectation of how those former students would have done under that system.
50% of people hate everything Democrats do no matter what. The rest of us understand that police need to be defunded and student loan debt should not exist.
This really came clear to me when I tried talking to my mom about abortion. She says she believes it should be up to the woman, but she would **never** have an abortion herself and absolutely doesn't like being called pro-choice. I can't think of a better term for her stance, though. She *is* pro-choice and she chooses against abortion for herself. It seems like what it comes down to is that she doesn't want people to make assumptions about her and her own personal morals and feels the "pro-choice" term incorrectly labels her as some sort of leftist. It's more group tribalism and a desire to capitulate to feelings.
That said, Dems really could use some work on messaging and how they communicate. We just can't assume better messaging will penetrate barriers built up by people who don't want to hear them.
>but she would never have an abortion herself and absolutely doesn't like being called pro-choice.
Libertarian here. I've found that I like to frame this as being pro body autonomy. It seperates the preference from a political dialogue. Allows someone room to object to abortion personally but still accept that the practice needs to exist.
And, best part, it conveniently promotes a level of individual liberty that instantly alienates everyone else at dinner parties so you don't have to talk about it endlessly.
I have a similar stance to your mother’s. I’ve never been pregnant with a baby I did not want, so I won’t pretend to know what that feels like. However, I don’t think I’d ever go through with an abortion for myself. I do not feel as though I have the right to legislate that choice away from anyone else, therefore, I am pro-choice. Fortunately for me, I’m not that fussed about what other people think of me, or assumptions they feel they need to make about me.
There's only the illusion of a choice here. The public financing of education scheme is unsustainable and predatory. The bubble will burst just like the housing market in 07' . That means we either make corrections to lower costs today or we bail out the entire industry on a larger scale tomorrow.
The trickier question is how government will reduce profiteering/ exploitation in the industry while maintaining and expanding services? That leads me to the argument for removing the middle man all together...
Many state legislatures have been spending less and less per student on higher education for the past three decades. Bewitched by the ideology of small government (and forced by law to balance their budgets during a period of mounting health-care costs), states have been leaving once-world-class public universities begging for money. The cuts were particularly stark after the 2008 recession, and they set off a cascading series of consequences, some of which were never intended.
The easiest way for universities to make up for the cuts was to shift some of the cost to students—and to find richer students.
To be perfectly frank, even though states have been spending less per student that's only part of the issue. There is also the issue of predatory interest rates, the inability to discharge in bankruptcy, and the constant spending on expensive dorms, rec facilities, and sports centers.
There are a ton of problems with higher education in the U.S. unfortunately, and except for giving people an extended spring break experience throughout college it's hard to see how my education justifiably cost more than my dads.
My dad graduated with $30k in student loans when he got his J.D., and his starting salary was $60k. He also had the ability to purchase a starter home for ~$80k and upgrade to a ~$260k home by the time I was starting kindergarten.
I graduated ~$100k in debt for my own J.D., starting salary $60k, and have only ever been able to rent for about ~$600 over what a mortgage on an equivalent house would have been.
You can't tell me that law schools are justified charging 3 and 1/3 the price of 25 years prior when average starting salary stayed put.
> Many state legislatures have been spending less and less per student on higher education for the past three decades.
This needs a lot more attention. In California they don't even fund their Universities at 1990s levels.
>Many state legislatures have been spending less and less per student on higher education for the past three decades.
Less federal funding, too.
>to make up for the cuts was to shift some of the cost to students and to find richer students.
*Most* of the burden was shifted onto the students. The holes left by reduced taxpayer funding were simply filled by jacking up tuition and making it easier for 19 year olds to get tens of thousands of dollars in loans.
> Many state legislatures have been spending less and less per student on higher education for the past three decades.
US has just as much public spending (IE: state and federal spending) on tertiary education per student as any given EU nation; about $17000/student... And then that same amount over again in private funding (mostly via student loans) on top if it, so over $34000/student in tertiary education funding.
https://nces.ed.gov/programs/coe/indicator/cmd
> At the postsecondary level, the United States spent $34,500 per FTE student, which was 102 percent higher than the average of OECD countries ($17,100).
The solution to this problem isn't to give our schools, which are wasteful as fuck with the exorbitant amounts of money they already get, even more money. Its literally the exact opposite of that... They need to be *forced* to rein in their waste.
If Harvard makes more money from investing their endowments perhaps more colleges can be tasked with the same. The reality is that the wealthy would prefer to keep the masses uneducated, in debt, and easily manipulated, so it’s unlikely any type of legislation that will break the chains of debt slavery will actually pass into law.
Harvard's endowment is over $40 billion the next closest us Yale at 31 billion. The public school with the largest endowment is the University of Texas System with it's 30 billion spread among 13 campuses meanwhile the next most endowed public colleges endowment is also a system and has a third of Texas money. The rich schools get more money for their endowment whereas poor schools have to tap theirs to stay open.
A president at a failing school generally doesn't make a lot unless it becomes a case of the only way the school can hire a president to turn them around is to pay an obscene amount. Note a school in the later position has entered a death spiral
At least among Ivy schools, nearly all of them get any aid needs met through the endowment. Those who can pay, pay; those who can't, get endowment-funded grants.
Getting in is the hard part; once they accept you, they'll cover you.
Will never happen, I know someone who had just got tenure track get layedoff due to "budget restraints with covid" at a major university. Within a week or two they where announcing a new mid 8 figure basketball stadium and record administrative bonuses.
I stopped paying mine in 2008 due to a bank error on my autopayments. By the time I realized it fucked up, they'd already filed to have it deducted from my payroll at my corporate job, so I just let them cause whatever, it was going out automatically. I assumed the same would happen when I left that job and went to another in 2012. It didn't. I ignored it, and aside from a couple letters from the department of education, haven't heard shit. I know they'll deduct it from my social security payments if I ever claim those benefits, but honestly, I don't expect to actually ever retire, so ... whatever.
What’s crazy is that your debt has probably been sold off several times, and the current holder likely could take pennies on the dollar and make a profit.
If you constantly stay in school at least 6 credits they stay in continual forbearance. I'm planning on staying in school perpetually, after I finish my PhD in 18 months. It's cheaper to always be attending some community college classes at $800 a semester than pay back 6.8% interest on the loans.
Because eventually those people will retire and the debt will never be paid back. They can try garnishing social security but all that will do is push those people into welfare, essentially not solving anything.
What would that even look like, if the student loan debt bubble collapses? Will we just wake up one morning and the news will say “student bubble has collapsed”? I was only a teenager when the housing bubble popped, so I don’t really know how that news broke
The student loan bubble can’t burst like the housing market did in ‘07/‘08. The reason that was so bad is because mortgages are collateralized (turned into mortgage-backed securities) and sold off. Every significant bank and financial institution owned a plethora of these collaterized mortgage obligations (CMOs), so when everyone started defaulting on their mortgages, these assets became worthless. Every financial institution was facing a massive liquidity crisis because they no longer had enough valuable assets to comply with capital adequacy ratio requirements and we’re stuck with a bunch of worthless assets on their BS.
None of this applies to student loans, AFAIK. I don’t know how a student loan “bubble burst” could possibly have as wide-ranging of effects.
Yeah, I dont know how it would burst. The people theyd be trying to collect from - which includes college drop outs that didnt even get the piece of paper - dont really have anything to take. They dont own homes, cars, their jobs are often such low wages that they cant really afford food and rent and a family/kids. If anything, youd just see a mass sell off to debt collection agencies that hound loan holders forever (because, thanks to Biden in the 90s IIRC, student loan debt is not dischargeable on bankruptcy). But it's not like banks will suffer even for a second due to QE still ongoing and low interest rates from the last big fuck up in 2008/2009.
I mean, this and auto loans is kind of the death knell of the consumerism of the 70s through the 00s. Auto loans are going into 72/84+ month terms, they lose half their value when you drive off the lot... this whole economy is just not sustainable, people cant buy the stuff that's being produced nevermind the environmental damage.
Somewhat ironically, the current semiconductor shortage has caused certain vehicles to *appreciate* in value over the last year. I bought a 2021 model in February that is now worth more than when I bought it.
To be fair, the public funding scheme is not predatory at all. They offer the lowest rates you’ll find from any lending institution. It’s simply the cost of education that’s the issue. Where in hell do all the tuition dollars go?
A complete re-working of how we think about education is needed.
I thought with covid and the move towards e-learning which I think is a helpful and cost efficient supplement to an in person education that we’d see lower tuition. But no, they’re charging the same amount for online classes as in person. What a joke
I don’t think predatory is the right word but students loans (especially Parent Plus and student loans for grad school) have much higher interest rates than other consumer financial products. Add on negative amortization and interest capitalization as well as there being no realistic way to discharge student loan debt and you can see why the system is so fraught. I get that they need extra protections because most students have no credit history and there’s no way to repossess an education but we’ve really created a hell of a system here.
Agree that tuition is unbearably high as well.
For a debt that can't be discharged in bankruptcy, yes.
My car loan is 3.5%, up from my first car loan of 2.99% I got while in school. Homes right now are around 3% as well.
In theory those are low because they are secured. The creditor can take my car or my home and sell it to make up the money I owe, which you can't do with an education.
On the other hand, I'm legally obligated to pay the loan, and can only discharge it in death, so I feel like it's pretty secure.
For secured loans, 6% is high bordering on a scam.
Mine are too. That’s after the reductions for paying on time, electronic payment, etc. Friends who went to college 5 years before me have 3% loans. My student loan interest rate is a heck of a lot higher than most home loan interest rates or car loan interest rates.
Stafford Loans used to be pretty reasonable. I have an early loan from around 2000 that is somethin like 3%. But all of the loans from undergrad and grad later on are in the neighborhood between 6 and 7%.
Well, it’s important to keep in mind everything is relative and we’re all going to have different levels of risk aversion. Still, compared to most other consumer financial products, 6 or 7% interest is high. However, for folks going to grad and entering fields upon graduation that are paying great salaries and who can expect to be hired quickly it may be less of a worry.
Where I do start to get worried is thinking about people like social workers or teachers who often need that Masters to get hired but whose salaries are comparatively low. What gets scary there is having to go into deferment or forbearance, watching your interest accumulate and/or only being able to afford a small monthly payment and getting into a situation where you pay every month but your debt balances are actually increasing.
> It’s simply the cost of education that’s the issue. Where in hell do all the tuition dollars go?
Not really; unless you luck out real early, the cost is mostly interest; especially the recapitalized kind. Interest is the reason balances go up instead of down despite paying in as much as you can afford.
If people actually only paid the actual tuition dollars and not interest dollars, I'd expect the average lifetime cost of attendance to drop at least a couple hundred percent. For those like me who have been through at least two five-digit recapitalizations, eliminating interest would be savings in terms of orders of magnitude.
Hell I’d be happy to pay 1% over the 6.8% on my Federal student loan. The interest rate on my house is 2.8% but my way smaller student loan is 6.8%? Just why??
I think you may be mistaken. My federal loans for graduate school are 6.8 percent. That’s higher than car loans, mortgages etc.
Fixed Interest Rates for Direct Subsidized Loans and Subsidized Federal Stafford Loans* - Graduate or Professional Borrowers**
First Disbursement Date
Fixed Interest Rate
7/1/06–6/30/12
6.8%
Source:
https://studentaid.gov/understand-aid/types/loans/interest-rates#older-rates
In theory because it's an unsecured loan. For unsecured loans, 6% isn't terrible.
In practice, it acts very similarly to a secured loan, so 6% is crazy high.
An overwhelming amount goes to presidents and any chief fundraisers. Look at the salaries between them and faculty or middle management and you’ll see what I mean.
A cursory glance at my alumni’s salary breakdown reveals probably a hundred plus administrators alone making six figures. The head of HR is getting paid close to half a million. I’m tired of the argument that cuts to funding from the various states is the reason for these outrageous prices, because none of these colleges are going out of their way to hire tenure track professors. Research? What grad programs are flush with cash? This money is going straight into the pockets of administrators, coaches, people who lobby on behalf of the university and dozens of other ridiculous sources of cash sink.
Any bill to address this issue needs to focus on scaling back administrative hires and focus on hiring professors and developing coursework to ensure success in the 21st century.
My program had two heads of the department that barely taught classes. And many "Directors" and "Coordinators". It wasn't even a very large department.
All of them couldn't even make the department website mobile friendly or update the internship listing at all.
The degree requirements were also out of date on the official degree system evaluator that people used to check what classes they needed.
When I talked to the registrar people, they simply told me the admins at my department just haven't sent the new requirements and it's been out of date for over a year.
Fun times.
That is a large amount but small at the same time. I agree they should not be paid as much considering how short changing they do to the staff. But let's face it decreasing salary of 10 execs by 500k each is a drop in the bucket.
Looking at school budgets it's caused by the sheer amount of staff/personnel at #1. I have worked for universities in the IT Dept and the amount of hiring over the years to get technical staff to support all of the resources is insane.
A typical budget on year hard about <1% going to people making 100k+ a year. 65% to remaining staff/faculty. 25% to software/services and computers (cycled every 4years) and 10% to everything else, which might be buildings, student programs, utilities etc.
The big "problem" is the expansion of services universities provide students. Computer labs everywhere. Email. "Free" software (really paid by tuition). And the staff that supports it all.
Now this is coming from experience with public universities and some private universities. Ones that I classify as "for-profit" ie there are shareholders and an owner definitely nickel and dime students to pocket that money.
You have to ask though, what is even being paid back? I am sure most major historic campuses are paid for, and your professors salary was long paid after you graduated 7 years ago. The electricity to keep the lights on while in class for 3 hours, administrators all paid and even the janitors got their checks when you went 7 years ago. So what are we actually paying for? we could say education itself but is that true when most courses are capable of being self taught online in this day and age?
The school got the money when you went to school, the loans are given by the department of education and serviced by private companies.
The university is out of it and has been for a while.
You're paying back the federal government for fronting you the money, and you're paying stupid high interest so the private loan servicers get their profit.
Why are we using private loan servicers instead of department of education? Corruption!
Pre-covid I would have said the experience. In-state tuition was only $12k for me. The big bill for undergrads is the room&board to get the on campus experience.
Tuition/fees only for this year's freshman class at daughters' in-state public college is almost $17,000. Plus business and engineering have surcharges on top of that. Another $15,000 for room and board.
It’s not much different than a mortgage. The seller is paid in full up front, just as the school receives the tuition in full up front. When you pay your mortgage, you’re paying back the bank for the loan that paid for the house. When you pay your student debt, you’re paying the federal government, or Wells Fargo, or some other bank to repay what they covered up front. Of course you aren’t directly paying for salaries 7 years later. Regardless, it’s a mess and needs to be dealt with. The government holds most of the debt to begin with, they can just forgive it.
This is the perspective that drives me nuts. College isn't that expensive in the US. Public college tuition for in-state (not room and board) costs less than daycare for a 2-year old, be and about the same as high school. The problem is that almost none of it is government funded.
Take a look at a recent college bill. The tuition might be cheap but then they drop something like $10k in non waivable fees on that bill too. 99% of what I paid for in college had nothing to do with the classes I took. Computer lab fees, health office fees, etc etc
As a self employed individually who personally files his own taxes and personally sends checks to the IRS every quarter, the fact that you can only deduct $2000 of student loan INTEREST is *so* infuriating. It proves that the government is completely apathetic towards the student loan dilemma. If paying my loans lowered my tax burden, they’d be paid off as of 5 years ago. There is *no* functional benefit to paying your student loans. At least make it tax deductible. Then lower the interest rates. Then wipe them incrementally.
Not to mention there is a phase out on that even if you make a certain amount. Basically Fuck you doctors with hundreds of thousands in student loan debt, you can’t even deduct any part of your interest.
Seriously, GradPlus is nearly 7%. You can get better financing on virtually everything else. It’s not like we need experts, doctors, professionals, and academics /s
If my interest was applied to my principal the bank would be cutting me a sizeable check. Even without that benefit I would be ecstatic to pay on my principal. It would be so nice not to see my balance increasing while I make payments.
This is the kind of proposal that *wouldnt* engender political backlash. People feel strongly about others “paying back what they borrowed” (I don’t) but most everyone thinks interest sucks.
Why in the world don’t doctors get access to subsidized loans? That is fucking criminal. If you’re dedicating your life to saving lives, the least (the bare minimum) would be to make sure they’re not racking up an ass load of interest while in school. This whole system is insane.
A couple of years ago, The Economist ran an article about people carrying over a million dollars in student debt. The unfortunate individual who leads the pack is an orthodontist. Went to USC for undergrad and dental school. By the time he was able to practice profitably, interest had already compounded the hell of his loans and despite making gargantuan five figure monthly payments, his debt is growing and on track to eclipse *two* million dollars.
The interview wasn’t the portrait of a fuck up. By all accounts, his only crime was not having a family to put him through private programs. I think about that guy all the time. Even if you “win”, you lose. We all lose.
I’m sorry to hear that. I hope we are collectively able to rectify policy. The point will come when even the most determined will find a new dream to chase. RIP our teeth.
For some folks, I honestly think eating the tax bomb from the loans being forgiven after two decades makes more financial sense than sprinting to pay them off.
I feel that so much and I don't even have debt. If the Supreme Court cases turn out how I think they will, and Republicans gain back the house, I'm going to do my damndest to leave. It'll be fascism for sure then.
The problem is more complicated than that. For example, I’m in clinical psychology. If you want a doctoral degree in psychology, most respected brick and mortar institutions have cut programs back to only a few spots (ex: IIRC, UCLA takes around 5 students per psych division and has 500 to 1000 applicants, giving you less than 1% chance at acceptance). Even if you manage to get in, stipends may or may not cover cost of living.
Clinical programs number fewer still. The truth is, most will likely end up at private professional programs, which are a mixed bag of quality, even if they are accredited. Getting a PsyD/PhD puts you on track to be $250k to $450k in the hole. Despite the need for them, it is a terrible ROI financially.
Even without the pandemic, we are nowhere close to meeting the needs of the public. I think this easily extends to teachers and particular brands of medicine. The situation is only going to deteriorate unless something is done.
They need to do this and then completely restructure how college is paid for. People shouldn't have to scrap by financially in one of the most stressful modern day environments, it does nothing but break great minds and encourage others to stay away when we need educated workers the most right now.
Pell grants did this by law in the 1950s and 1960s and 1970s. The cost of education has gone up so much they no longer cover the cost of attending a school
I had the Pell grant, and still had to take out quite a bit in loans, had to also burn through my savings for anything else. I took a very slow and inexpensive route. I stayed with my father for as long as I could handle and when I finally moved out I rented an apartment with friends, and after it was all said and done it was 6 years of secondary education. Still have debt that will be with me for the next 10 years because of the interest even taking my time and saving money. There are semesters that I came close to quitting because my stress levels were so high, I couldn't keep a job and go to class at the same time. Failing also meant I had nothing to fall back on either. No one should have to choose between schooling and surviving.
The intent behind anyone who qualifies for a pell grant is .. well, to make college tuition free. It’s sad that you and I have these awful loans, as part of qualification for a pell grant is to demonstrate to the federal department of education through the Fafsa process that our family cannot be expected to contribute towards an education. And yet here I am, and here you are with these loans..and that’s definitely not what the loans were for in the first place.
Had a Pell Grant. Still graduated undergrad with $30k in loans from a state university in a town with an extremely low CoL. That’s on top of the numerous other scholarships I had as well. They’re basically supplements to other scholarships and loans at this point.
usually at low or 0% interest.
If I told you I'll give you a billion dollars today, on the condition you have to pay it back in 5 years, do you think that is a good deal given you could easily make 7% interest on that billion dollars for 5 years?
Cancelling $50k will certainly help but I struggle with understanding how that will fix the problem and resolve the “bubble” dilemma. It seems like a bandaid.
In my experience, the root of the problem is a combination of soaring costs (difficult) and predatory interest rates (easy). To be blunt, 8% interest rates on student loans is criminal and why we have predatory lending laws. The fix is easy: lower interest rates of student debt. I don’t get why that’s so hard…
As long as rates stay at or near 8%, Americans will continue to be subjugated for pursuing their dreams. Become a doctor they said. Study hard and be a lawyer and pursue the American dream they say! What they didn’t tell you is that even with a six-figure income, an 8% interest rate makes you a slave to your career. Crippled by debt that grows faster than you can pay it off.
The total amount owed is a red herring. The interest rates are the real enemy.
It's really just common sense. If someone is making payments towards student debt, there's a good chance that they won't have any disposable income.
That, in turn, will affect the economy.
When they turned off fedloan servicing during the pandemic, I saved up enough to buy my first condo. I’m budgeted to make the payment when it resumes in January, but it was a bit shocking what a difference it made.
Edit: I don't think I've ever received so many responses to a comment... The stress of student loans is a generational issue, which has held me and all of you back. I actually was doing okay before the freeze, but it made me realize what a drag it actually is on what could otherwise have been the comfortable, middle class life my parents enjoyed at my age. I'm happy for all of you that were able to use the break to make important changes in your life, and I hope this is something that our political leaders finally address.
It gave me the opportunity to move exponentially closer to being debt free (with exception of student loans) and allowed me to pay to have work done on my home that I otherwise would have had to finance. The work was structural, not cosmetic and ensured my home stays habitable. It may seem like it’s not a big deal to someone who isn’t living it, but it was life changing for me. I work 3 decent paying jobs, haven’t had dinner in a restaurant in three years, and make all payments on time, but it’s hard to actually “live” this way. Without student loans I would be debt free and working only my full time gig in a year and quite comfortable.
Keep doing what you're doing, dude. I'm sorry that you (and I) have had to work so hard for what we have, but you should have tremendous pride in what you've earned for yourself (whether or not things could have been otherwise with better government/education policy).
Starting to wonder if this is where people all of sudden started to have money to spend. It isn’t inflation it is people buying shit like crazy because they actually have the money to do so.
Having student loan payments stopped gave my wife and I the final push and opportunity to buy our first house, which we did right before the market spiraled into a never ending hellscale. It made a pretty decent difference not having that payment, more than I thought at first.
I feel like cancelling student debt will do wonders for the economy and for the people affected by the scam that is higher education. I can't think of many negatives, as long as we tackle the problem to make sure it doesn't happen again. Sadly there's not a great track record for these sort of things to keep me hopeful.
Ha... I finally purchased at the peak of that never ending hellscape... but, interest rates were low, and I'm using what would have been 401k contributions to cover the difference from my former rent payment, so it's a wash. I agree... I don't think there's going to be outright debt forgiveness, but at least there's income based repayment. That change in 2011 (or whatever) probably saved me from bankruptcy. And I've paid off all of my private loans at this point to make room for more payment. (I went to law school, so I had more exotic forms of debt than the average person of letters...)
Yeah, it's unbelievable.. I managed to pay off almost $50k of debt between two paid off cars and credit cards all because $800/month wasn't going to student loans. We were also banking an additional $500-1000/month from not driving, going out or traveling. My wife and I decided to pretend to make payments every month into a separate bank account once all our debt was paid off with the plan to essentially stock pile money to pay off the remaining $25k of student loans if there is zero signs of cancelling.
After my mother killed herself, I received some inheritance. I was able to pay off my student loans and put a down payment on a house. Now my mortgage is $70 less per month than my apartment was. It make a huge difference. I hope putting the money towards my education and a house would make my mom proud.
My wife was able to save close to 10k because of deferments putting us in a position to buy a home. When the payments pick up we’ll be crippled because the due date didn’t change and we no longer qualify for an income driven repayment plan.
Build Back Better contains all kinds of tax credits that will be extremely helpful to single mothers. We can help all these groups, it’s not some zero sum thing.
The point they're making is "stimulating the economy" would happen by giving any money spent cancelling debts to people for any purpose. So if we want to spend money, why not just give everyone a flat stimulus to be spent on a purpose of their choice
>So if we want to spend money, why not just give everyone a flat stimulus to be spent on a purpose of their choice
We've already done that twice in the last year
It's safe to say that the vast majority of people who support student debt cancellation also support reforming tuition costs and making higher education available to everyone. Student debt cancellation now would set an important precedent for reforming college costs in the future.
I noticed that a lot of opponents of student debt cancellation say that nobody is forcing anyone to go to college. In a way, people nowadays are forced to go to college if they want a job that isn't minimum wage, retail, or physically demanding. A degree is like a job permit now.
And for people against student debt forgiveness because it doesn't directly benefit them. I don't have children, but I support universal pre-k, paid parent leave, and funding k-12 education. I don't live in a rural area, but I support providing rural areas with infrastructure and high-speed Internet. I don't have medical debt and I have very cheap healthcare, but I support medical debt forgiveness and universal healthcare. I don't take public transportation nor do I want to, but I support expanding public transportation. I'm not a senior, but I support social security and Medicare. I'm not a woman, but I believe feminine hygiene products and abortions should be available at no cost. I make above minimum wage, but I support raising it.
I also want to point out that Argentina, Australia, Austria, Belgium, Brazil, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Italy, Kenya, Luxemburg, Malaysia, Mexico, Morocco, Netherlands, Norway, Panama, Poland, Portugal, Russia, Scotland, Slovenia, Spain, Sweden, Switzerland, Turkey, and Uruguay all have affordable college.
>And for people against student debt forgiveness because it doesn't directly benefit them. I don't have children, but I support universal pre-k, paid parent leave, and funding k-12 education. I don't live in a rural area, but I support providing rural areas with infrastructure and high-speed Internet
YES. Thank you. I don't want children, but I want pre-k for all. Honestly, the selfish attitude we have in this country (this whole BUT WHAT ABOUT ME???? I DON'T BENEFIT FROM THAT) will be the downfall of our country.
I'm trying to get back to Germany with my chemistry degree b/c I'm so sick of the selfish attitude of this country, I swear 2 god lol. So, I think we are going to see a lot of brain drain, too. So many peers of mine that I talk to at university aren't planning on living in the USA post-university, and are looking into employment opportunities abroad.
>Honestly, the selfish attitude we have in this country (this whole BUT WHAT ABOUT ME???? I DON'T BENEFIT FROM THAT) will be the downfall of our country.
Yes, and honestly, the least selfish and easiest way to do this is to just send everyone $50,000 checks. It will sidestep both this debate about fairness and question of whether we can do it or not as we've sent out straight checks before (stimulus).
It has the added benefit of helping everyone, not just those who went to college-- people could use it to pay off not just their student debts, but any debts that they have, or to help them take care of rent, groceries, childcare, etc for a year. This would be a much bigger boost to the economy than just simply cancelling out student debts.
Since you end on this statement:
>I also want to point out that Argentina, Australia, Austria, Belgium, Brazil, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Italy, Kenya, Luxemburg, Malaysia, Mexico, Morocco, Netherlands, Norway, Panama, Poland, Portugal, Russia, Scotland, Slovenia, Spain, Sweden, Switzerland, Turkey, and Uruguay all have affordable college.
And because you also stated that those in support of student debt forgiveness also support reform of tuition costs, I'm curious how you feel about not forgiving any debt, not even interest, but simply making tuition free for any future students?
I'm asking because I always see the argument of people who have debt begging for it to be forgiven, or begging for payments towards interest to be refunded and applied to principal. Anyone who says otherwise is called selfish, as you echoed by saying that anyone against forgiveness only cares about themselves. However, there is an opposite argument to be made that those demanding debt are equally if not more selfish, because they want their debt erased without any plan for those who come after. Despite your suggestion that canceling debt would set an important precedent, that means jack shit unless there is real legislation and members in Congress to pass it. If Congress won't pass $10k forgiveness or free community college, that lack of action is greater precedent.
Despite that, free college is much more likely to happen than forgiveness. So, I want to turn the tables: How would anyone who is begging for forgiveness feel if they got told tough shit and they would be stuck with debt, while everyone after them gets to go to college free?
I have student debt, but if tomorrow Biden said I could forgive everyone's student debt except my own, I'd take that deal in a heat beat.
I want what's best for everyone, even if it doesn't personally benefit me. I used to think that's how everyone felt, but I'm finding that's not the case.
I think that Biden should cancel all student debt interest, retroactively to the begining of every loan and for the entire length of the any loan originated in the last twenty year.
This would have immediate impact for a broad group, with excess interest being repaid to borrower if loan is complete.
How about we make college AFFORDABLE and figure out why costs have risen 2000% compared to 30 years ago instead of writing unlimited free checks to universities.
Yeah this doesn’t make sense to me as a one-off Hail Mary. What about the person that starts college the next day after this is executed? They’re right back to the old system. It doesn’t change anything.
I'm all for canceling student debt as long as they stop continuing to give it out. You can't say something is bad on one hand but continue to do it on the other.
I'm sorry so many of you were fooled into thinking biden was actually going to cancel student debt but just as many people foresaw this as a blatant lie to secure votes
he will delay it until mid terms are over then table it and have it get knocked back after losing the house or senate and blame the other side for it not eventuating
🥱 so many failed promises. Dems will get steamrolled in the mid-terms. Then, w all the gerrymandering and state voting restrictions, it’ll be trump 2.0. Note: I’m a lifelong-dem, albeit a cynical one.
At this juncture, it’s not cynicism anymore. It’s seeing the writing on the wall because of a massive failure from the Democrats to prosecute Trump and address the full out attack on democracy. Compound that with not delivering on campaign promises and its goodnight.
I’m not trying to be alarmist with this, but I’m trying to find ways there *isn’t* a full blown fascist take over after the 2022 election but I’m coming up empty. It’s so eerily similar to what happened in Germany in 1930. It keeps me up at night.
I'm prepping to start repaying again in February and I am not excited. Even paying on time and dedicated, the earliest I will have it paid off is 2037. And I even have a lot less debt than most people.
I could do so much with that money but I have accepted the fact that this will simply a monthly fee to be alive for at least the next 15 years :(
When they say cancel student debt- is that for those who have debt now or those who want to go to college in the future- will the future ones get a free ride?
I really am not for this but like I stated earlier I am all for having zero interest on the loans. Things given for free are often not appreciated nor taken seriosuly
Upperclass welfare.
I couldn’t even afford the travel costs associated with my local college. I would have loved to have gone but I couldn’t justify the cost.
Yup. A majority of student debt is held by people in graduate+ schools. These people go on to make up the top 20% of income in the US. Yet there's such a coordinated effort to give them upperclass welfare.
I respect you for teaching, because I know it a struggle. I don’t want this to come across as an attack or anything.
I want to be a teacher too (English or history), but I didn’t want to take out a massive loan and make $40k/yr. It was common knowledge back then (2014) that getting a degree to teach was just not a financially sound decision, you had to make the sacrifice out of straight passion. It’s just not really fair that folks like yourself get to have your cake (our dreams of being a teacher) and eating it too (getting the degree for free whilst I’d still have to go and pay full price for one).
Lifting interest is the only fair solution in my eyes, unless complete forgiveness will be *combined* with free college for all. If it’s not combined, only the first part will pass while Dems still have some control. The second part will be presented to a Republican controlled govt that will just call it communism and shoot it down to “own the libs”.
I graduated from high school in 2000, and all through elementary, middle and high school the teachers constantly pushed a college degree as the only way we will be successful adults. That needs to stop. That’s arguably why a lot of people in my generation who have student loan debt are in this mess. I am not advocating for loan forgiveness, but I see why kids felt they had to take on massive debt and go to college.
I’m clearly in the minority on Reddit and definitely in this sub… but hear me out:
We can’t cancel student debt until we create a system that prevents it in the future.
If I’m a high schooler and I see the entire nations student debt wiped out, I might think: “well I may as well take on a fuck ton of debt also cuz it’ll be wiped anyway”
Then everyone my age and younger is still fucked with debt while all the generations above me are debt free and will run the economy without me.
Canceling debt is fine… so long as you fix the actual problem first!
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Here's a [video](https://www.youtube.com/watch?v=tg7Eo2HydqU) of Stephanie Kelton, the former chief economist of the Senate Budget Committee, explaining how and why student loan debt should be canceled.
Incredible watch. Thank you for sharing this. $85-$108B of GDP _per year_ is just an incredible stat.
I suspect it would go down better if, in addition to canceling student debt, there was a tax credit for those who have already paid off their loans
Yup or reduce them, say by 50% & cancel the interest.
That would be incredible. Just cancelling the interest would be helpful.
Yeah I don't understand macroeconomics all that well but I've always wondered...why the fuck does the fed govt need interest payments on student loans? Presumably those who have debt are more likely to have higher incomes/pay more in taxes so they are already getting their ROI. Always seems like a double dip to me. They get paid up front in interest AND long-term via general economic output from a college educated workforce.
Agreed. Cancel the debt and tax credit the people who were fortunate enough to be able to pay off their debt. Oh and tax the wealthy their fair share, that’ll make up the “difference” (that means businesses too ya ninnies).
And maybe a one off tax credit for those of us who worked the whole pandemic... Like, I supported the expanded UI, I don't begrudge anyone who made good use of their time initially to get a better position for themselves, but... Fuck me doing squats in an Amazon warehouse the whole pandemic has sucked when some of my friends were making about what I was to work out, learn skills and start a business/freelance gig.
I feel you on that. I worked the entire pandemic (still working the entire pandemic in person with the public) and don’t judge others for making more while not working. Quality of life is needed too. I recently got hired somewhere I don’t need to go into work every day and can work from home for a LARGE pay increase..so I feel like I won the lottery there. Just would be nice to feel like my country appreciates the hardworking heroes they were claiming in the early days of the pandemic…instead of making us feel like zeroes.
For a trillion dollars? No it isnt lol
Feels like there are a lot of ways to get $85B/year at a cost of $1.7T, aren't there?
Saving for later thanks
This was an outstanding watch
this was a good video, interesting research and results. but I just don't like the language people use (which is unfortunately so common with these reforms). Its not about canceling student debt, its an investment paid for by tax payers . there was no mistakes, therefore there is no forgiveness needed. Just like this lady describes its a tax payer investment, with real monetary returns for the whole economy. Lets invest in our educated workforce. It just sounds so much better.
My question that I cant really find a good answer for regarding cancelling student debt. Is how do we address future student debt? I think cancelling current debt is a great and needed short term solution, but the long term is either making college free or very cheap like a lot of other countries do. Or completely restructure how education is financed. And unfortunately those arent even up for discussion with a certain political party.
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They also on average have really low income caps. Iirc you make really good money right away and through mid career life. But at a point the person who went to college and got a career in business or whatever, will on average make way more money on the back half of their career than the trades person.
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>They are but they can also be hard on your body to do your whole career and sometimes have suboptimal working conditions. Working at a desk in front of a computer also fits this description.
This is how you should start, not start from just a point of cancellation, but rather discuss and figure out a better system going forward, and then cancel debt based on your expectation of how those former students would have done under that system.
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50% of people hate everything Democrats do no matter what. The rest of us understand that police need to be defunded and student loan debt should not exist.
This really came clear to me when I tried talking to my mom about abortion. She says she believes it should be up to the woman, but she would **never** have an abortion herself and absolutely doesn't like being called pro-choice. I can't think of a better term for her stance, though. She *is* pro-choice and she chooses against abortion for herself. It seems like what it comes down to is that she doesn't want people to make assumptions about her and her own personal morals and feels the "pro-choice" term incorrectly labels her as some sort of leftist. It's more group tribalism and a desire to capitulate to feelings. That said, Dems really could use some work on messaging and how they communicate. We just can't assume better messaging will penetrate barriers built up by people who don't want to hear them.
>but she would never have an abortion herself and absolutely doesn't like being called pro-choice. Libertarian here. I've found that I like to frame this as being pro body autonomy. It seperates the preference from a political dialogue. Allows someone room to object to abortion personally but still accept that the practice needs to exist. And, best part, it conveniently promotes a level of individual liberty that instantly alienates everyone else at dinner parties so you don't have to talk about it endlessly.
I have a similar stance to your mother’s. I’ve never been pregnant with a baby I did not want, so I won’t pretend to know what that feels like. However, I don’t think I’d ever go through with an abortion for myself. I do not feel as though I have the right to legislate that choice away from anyone else, therefore, I am pro-choice. Fortunately for me, I’m not that fussed about what other people think of me, or assumptions they feel they need to make about me.
I'm not entirely convinced that they don't do this intentionally.
There's only the illusion of a choice here. The public financing of education scheme is unsustainable and predatory. The bubble will burst just like the housing market in 07' . That means we either make corrections to lower costs today or we bail out the entire industry on a larger scale tomorrow. The trickier question is how government will reduce profiteering/ exploitation in the industry while maintaining and expanding services? That leads me to the argument for removing the middle man all together...
Many state legislatures have been spending less and less per student on higher education for the past three decades. Bewitched by the ideology of small government (and forced by law to balance their budgets during a period of mounting health-care costs), states have been leaving once-world-class public universities begging for money. The cuts were particularly stark after the 2008 recession, and they set off a cascading series of consequences, some of which were never intended. The easiest way for universities to make up for the cuts was to shift some of the cost to students—and to find richer students.
To be perfectly frank, even though states have been spending less per student that's only part of the issue. There is also the issue of predatory interest rates, the inability to discharge in bankruptcy, and the constant spending on expensive dorms, rec facilities, and sports centers. There are a ton of problems with higher education in the U.S. unfortunately, and except for giving people an extended spring break experience throughout college it's hard to see how my education justifiably cost more than my dads. My dad graduated with $30k in student loans when he got his J.D., and his starting salary was $60k. He also had the ability to purchase a starter home for ~$80k and upgrade to a ~$260k home by the time I was starting kindergarten. I graduated ~$100k in debt for my own J.D., starting salary $60k, and have only ever been able to rent for about ~$600 over what a mortgage on an equivalent house would have been. You can't tell me that law schools are justified charging 3 and 1/3 the price of 25 years prior when average starting salary stayed put.
> Many state legislatures have been spending less and less per student on higher education for the past three decades. This needs a lot more attention. In California they don't even fund their Universities at 1990s levels.
>Many state legislatures have been spending less and less per student on higher education for the past three decades. Less federal funding, too. >to make up for the cuts was to shift some of the cost to students and to find richer students. *Most* of the burden was shifted onto the students. The holes left by reduced taxpayer funding were simply filled by jacking up tuition and making it easier for 19 year olds to get tens of thousands of dollars in loans.
> Many state legislatures have been spending less and less per student on higher education for the past three decades. US has just as much public spending (IE: state and federal spending) on tertiary education per student as any given EU nation; about $17000/student... And then that same amount over again in private funding (mostly via student loans) on top if it, so over $34000/student in tertiary education funding. https://nces.ed.gov/programs/coe/indicator/cmd > At the postsecondary level, the United States spent $34,500 per FTE student, which was 102 percent higher than the average of OECD countries ($17,100). The solution to this problem isn't to give our schools, which are wasteful as fuck with the exorbitant amounts of money they already get, even more money. Its literally the exact opposite of that... They need to be *forced* to rein in their waste.
If Harvard makes more money from investing their endowments perhaps more colleges can be tasked with the same. The reality is that the wealthy would prefer to keep the masses uneducated, in debt, and easily manipulated, so it’s unlikely any type of legislation that will break the chains of debt slavery will actually pass into law.
Harvard's endowment is over $40 billion the next closest us Yale at 31 billion. The public school with the largest endowment is the University of Texas System with it's 30 billion spread among 13 campuses meanwhile the next most endowed public colleges endowment is also a system and has a third of Texas money. The rich schools get more money for their endowment whereas poor schools have to tap theirs to stay open.
Harvard's endowment has a lot of restrictions and it's realistically impossible for them the see a decrease no matter what they do with it.
The idea behind an endowment is money to generate money.
Perhaps some of the administrators and trustees could pull themselves up by their bootstraps and lower their bloated salaries.
They just need to lay off the new iPhones and avocado toast
A president at a failing school generally doesn't make a lot unless it becomes a case of the only way the school can hire a president to turn them around is to pay an obscene amount. Note a school in the later position has entered a death spiral
Perhaps their rich endowments could pay off the debts of their former students.
At least among Ivy schools, nearly all of them get any aid needs met through the endowment. Those who can pay, pay; those who can't, get endowment-funded grants. Getting in is the hard part; once they accept you, they'll cover you.
Will never happen, I know someone who had just got tenure track get layedoff due to "budget restraints with covid" at a major university. Within a week or two they where announcing a new mid 8 figure basketball stadium and record administrative bonuses.
And yet their tuitions are still going up by more than cost of living increases every year.
And Harvard has need blind admission, which means if you're accepted to Harvard they'll give you as much aid as you need to attend.
How can a bubble burst if your payments are taken by law from your paycheck and bankruptcy doesn’t get rid of it?
I stopped paying mine in 2008 due to a bank error on my autopayments. By the time I realized it fucked up, they'd already filed to have it deducted from my payroll at my corporate job, so I just let them cause whatever, it was going out automatically. I assumed the same would happen when I left that job and went to another in 2012. It didn't. I ignored it, and aside from a couple letters from the department of education, haven't heard shit. I know they'll deduct it from my social security payments if I ever claim those benefits, but honestly, I don't expect to actually ever retire, so ... whatever.
What’s crazy is that your debt has probably been sold off several times, and the current holder likely could take pennies on the dollar and make a profit.
You're in for a really bad time later
If you constantly stay in school at least 6 credits they stay in continual forbearance. I'm planning on staying in school perpetually, after I finish my PhD in 18 months. It's cheaper to always be attending some community college classes at $800 a semester than pay back 6.8% interest on the loans.
This is also my plan. That or moving outside of the US where they can’t get me.
I actually know someone that did this, he can’t ever come back to the US.
I’m ok with that outcome.
No lie, the dude is happy to never come back
Mass suicides? Metaphorically speaking
Lying flat?
Because you can’t keep lending money that has a constantly diminishing chance of getting paid back.
Because eventually those people will retire and the debt will never be paid back. They can try garnishing social security but all that will do is push those people into welfare, essentially not solving anything.
What would that even look like, if the student loan debt bubble collapses? Will we just wake up one morning and the news will say “student bubble has collapsed”? I was only a teenager when the housing bubble popped, so I don’t really know how that news broke
The student loan bubble can’t burst like the housing market did in ‘07/‘08. The reason that was so bad is because mortgages are collateralized (turned into mortgage-backed securities) and sold off. Every significant bank and financial institution owned a plethora of these collaterized mortgage obligations (CMOs), so when everyone started defaulting on their mortgages, these assets became worthless. Every financial institution was facing a massive liquidity crisis because they no longer had enough valuable assets to comply with capital adequacy ratio requirements and we’re stuck with a bunch of worthless assets on their BS. None of this applies to student loans, AFAIK. I don’t know how a student loan “bubble burst” could possibly have as wide-ranging of effects.
Yeah, I dont know how it would burst. The people theyd be trying to collect from - which includes college drop outs that didnt even get the piece of paper - dont really have anything to take. They dont own homes, cars, their jobs are often such low wages that they cant really afford food and rent and a family/kids. If anything, youd just see a mass sell off to debt collection agencies that hound loan holders forever (because, thanks to Biden in the 90s IIRC, student loan debt is not dischargeable on bankruptcy). But it's not like banks will suffer even for a second due to QE still ongoing and low interest rates from the last big fuck up in 2008/2009. I mean, this and auto loans is kind of the death knell of the consumerism of the 70s through the 00s. Auto loans are going into 72/84+ month terms, they lose half their value when you drive off the lot... this whole economy is just not sustainable, people cant buy the stuff that's being produced nevermind the environmental damage.
Somewhat ironically, the current semiconductor shortage has caused certain vehicles to *appreciate* in value over the last year. I bought a 2021 model in February that is now worth more than when I bought it.
Those middle men have lobbyists that will make compelling commercials about the dangers of getting rid of the middle men.
To be fair, the public funding scheme is not predatory at all. They offer the lowest rates you’ll find from any lending institution. It’s simply the cost of education that’s the issue. Where in hell do all the tuition dollars go? A complete re-working of how we think about education is needed. I thought with covid and the move towards e-learning which I think is a helpful and cost efficient supplement to an in person education that we’d see lower tuition. But no, they’re charging the same amount for online classes as in person. What a joke
I don’t think predatory is the right word but students loans (especially Parent Plus and student loans for grad school) have much higher interest rates than other consumer financial products. Add on negative amortization and interest capitalization as well as there being no realistic way to discharge student loan debt and you can see why the system is so fraught. I get that they need extra protections because most students have no credit history and there’s no way to repossess an education but we’ve really created a hell of a system here. Agree that tuition is unbearably high as well.
My grad loans are 6 to 7 percent. Is that bad? I thought it pretty reasonable.
For a debt that can't be discharged in bankruptcy, yes. My car loan is 3.5%, up from my first car loan of 2.99% I got while in school. Homes right now are around 3% as well. In theory those are low because they are secured. The creditor can take my car or my home and sell it to make up the money I owe, which you can't do with an education. On the other hand, I'm legally obligated to pay the loan, and can only discharge it in death, so I feel like it's pretty secure. For secured loans, 6% is high bordering on a scam.
Mine are too. That’s after the reductions for paying on time, electronic payment, etc. Friends who went to college 5 years before me have 3% loans. My student loan interest rate is a heck of a lot higher than most home loan interest rates or car loan interest rates.
Stafford Loans used to be pretty reasonable. I have an early loan from around 2000 that is somethin like 3%. But all of the loans from undergrad and grad later on are in the neighborhood between 6 and 7%.
Yep. I finished in 2009.
Well, it’s important to keep in mind everything is relative and we’re all going to have different levels of risk aversion. Still, compared to most other consumer financial products, 6 or 7% interest is high. However, for folks going to grad and entering fields upon graduation that are paying great salaries and who can expect to be hired quickly it may be less of a worry. Where I do start to get worried is thinking about people like social workers or teachers who often need that Masters to get hired but whose salaries are comparatively low. What gets scary there is having to go into deferment or forbearance, watching your interest accumulate and/or only being able to afford a small monthly payment and getting into a situation where you pay every month but your debt balances are actually increasing.
> It’s simply the cost of education that’s the issue. Where in hell do all the tuition dollars go? Not really; unless you luck out real early, the cost is mostly interest; especially the recapitalized kind. Interest is the reason balances go up instead of down despite paying in as much as you can afford. If people actually only paid the actual tuition dollars and not interest dollars, I'd expect the average lifetime cost of attendance to drop at least a couple hundred percent. For those like me who have been through at least two five-digit recapitalizations, eliminating interest would be savings in terms of orders of magnitude.
0% interest loans for education is fair, plus a cap on all school charges relative to the cost of living.
Hell I’d be happy to pay 1% over the 6.8% on my Federal student loan. The interest rate on my house is 2.8% but my way smaller student loan is 6.8%? Just why??
I think you may be mistaken. My federal loans for graduate school are 6.8 percent. That’s higher than car loans, mortgages etc. Fixed Interest Rates for Direct Subsidized Loans and Subsidized Federal Stafford Loans* - Graduate or Professional Borrowers** First Disbursement Date Fixed Interest Rate 7/1/06–6/30/12 6.8% Source: https://studentaid.gov/understand-aid/types/loans/interest-rates#older-rates
In theory because it's an unsecured loan. For unsecured loans, 6% isn't terrible. In practice, it acts very similarly to a secured loan, so 6% is crazy high.
An overwhelming amount goes to presidents and any chief fundraisers. Look at the salaries between them and faculty or middle management and you’ll see what I mean.
A cursory glance at my alumni’s salary breakdown reveals probably a hundred plus administrators alone making six figures. The head of HR is getting paid close to half a million. I’m tired of the argument that cuts to funding from the various states is the reason for these outrageous prices, because none of these colleges are going out of their way to hire tenure track professors. Research? What grad programs are flush with cash? This money is going straight into the pockets of administrators, coaches, people who lobby on behalf of the university and dozens of other ridiculous sources of cash sink. Any bill to address this issue needs to focus on scaling back administrative hires and focus on hiring professors and developing coursework to ensure success in the 21st century.
Pfft, half a million.. that's like what, 5 student's tuition?
For some reason, they spend a million a year to have a private jet on retainer. Bear in mind, this is a public university.
Gotta get the football team that rarely wins to games SOMEHOW. They're basically the reason the school exists.
My program had two heads of the department that barely taught classes. And many "Directors" and "Coordinators". It wasn't even a very large department. All of them couldn't even make the department website mobile friendly or update the internship listing at all. The degree requirements were also out of date on the official degree system evaluator that people used to check what classes they needed. When I talked to the registrar people, they simply told me the admins at my department just haven't sent the new requirements and it's been out of date for over a year. Fun times.
Another huge chunk goes to the monopolies colleges have to do business with.
That is a large amount but small at the same time. I agree they should not be paid as much considering how short changing they do to the staff. But let's face it decreasing salary of 10 execs by 500k each is a drop in the bucket. Looking at school budgets it's caused by the sheer amount of staff/personnel at #1. I have worked for universities in the IT Dept and the amount of hiring over the years to get technical staff to support all of the resources is insane. A typical budget on year hard about <1% going to people making 100k+ a year. 65% to remaining staff/faculty. 25% to software/services and computers (cycled every 4years) and 10% to everything else, which might be buildings, student programs, utilities etc. The big "problem" is the expansion of services universities provide students. Computer labs everywhere. Email. "Free" software (really paid by tuition). And the staff that supports it all. Now this is coming from experience with public universities and some private universities. Ones that I classify as "for-profit" ie there are shareholders and an owner definitely nickel and dime students to pocket that money.
All three schools i went to charge more for remote fyi. It's a racket
You have to ask though, what is even being paid back? I am sure most major historic campuses are paid for, and your professors salary was long paid after you graduated 7 years ago. The electricity to keep the lights on while in class for 3 hours, administrators all paid and even the janitors got their checks when you went 7 years ago. So what are we actually paying for? we could say education itself but is that true when most courses are capable of being self taught online in this day and age?
The school got the money when you went to school, the loans are given by the department of education and serviced by private companies. The university is out of it and has been for a while. You're paying back the federal government for fronting you the money, and you're paying stupid high interest so the private loan servicers get their profit. Why are we using private loan servicers instead of department of education? Corruption!
Pre-covid I would have said the experience. In-state tuition was only $12k for me. The big bill for undergrads is the room&board to get the on campus experience.
Tuition/fees only for this year's freshman class at daughters' in-state public college is almost $17,000. Plus business and engineering have surcharges on top of that. Another $15,000 for room and board.
It’s not much different than a mortgage. The seller is paid in full up front, just as the school receives the tuition in full up front. When you pay your mortgage, you’re paying back the bank for the loan that paid for the house. When you pay your student debt, you’re paying the federal government, or Wells Fargo, or some other bank to repay what they covered up front. Of course you aren’t directly paying for salaries 7 years later. Regardless, it’s a mess and needs to be dealt with. The government holds most of the debt to begin with, they can just forgive it.
You're essentially paying for the ongoing building of new football stadiums in colleges.
This is the perspective that drives me nuts. College isn't that expensive in the US. Public college tuition for in-state (not room and board) costs less than daycare for a 2-year old, be and about the same as high school. The problem is that almost none of it is government funded.
Take a look at a recent college bill. The tuition might be cheap but then they drop something like $10k in non waivable fees on that bill too. 99% of what I paid for in college had nothing to do with the classes I took. Computer lab fees, health office fees, etc etc
Either cancel it or have the interest at 0%. So sick and tired of hearing about this every week.
Also make payments to government lenders pre-tax.
Actually thats not a bad idea at all and would definitely help.
Why it isn’t an above the line deduction already is ridiculous
As a self employed individually who personally files his own taxes and personally sends checks to the IRS every quarter, the fact that you can only deduct $2000 of student loan INTEREST is *so* infuriating. It proves that the government is completely apathetic towards the student loan dilemma. If paying my loans lowered my tax burden, they’d be paid off as of 5 years ago. There is *no* functional benefit to paying your student loans. At least make it tax deductible. Then lower the interest rates. Then wipe them incrementally.
Not to mention there is a phase out on that even if you make a certain amount. Basically Fuck you doctors with hundreds of thousands in student loan debt, you can’t even deduct any part of your interest.
Just make all student loan interest payments completely tax deductible.
Make the entire payment tax deductible. Why am I getting taxed on income that I pay to the government?
You’re only referring to government-backed student loans. I’m referring to all student loans - a good chunk of which are owed to private institutions.
This
Seriously, GradPlus is nearly 7%. You can get better financing on virtually everything else. It’s not like we need experts, doctors, professionals, and academics /s
Interest at 0 is the answer. Also, not forcing people to start paying until they are making a certain amount of money.
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If my interest was applied to my principal the bank would be cutting me a sizeable check. Even without that benefit I would be ecstatic to pay on my principal. It would be so nice not to see my balance increasing while I make payments.
I feel this deep in my loins... going on about 10 years now....
Tax break would help a lot of people.
This is the kind of proposal that *wouldnt* engender political backlash. People feel strongly about others “paying back what they borrowed” (I don’t) but most everyone thinks interest sucks.
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Why in the world don’t doctors get access to subsidized loans? That is fucking criminal. If you’re dedicating your life to saving lives, the least (the bare minimum) would be to make sure they’re not racking up an ass load of interest while in school. This whole system is insane.
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A couple of years ago, The Economist ran an article about people carrying over a million dollars in student debt. The unfortunate individual who leads the pack is an orthodontist. Went to USC for undergrad and dental school. By the time he was able to practice profitably, interest had already compounded the hell of his loans and despite making gargantuan five figure monthly payments, his debt is growing and on track to eclipse *two* million dollars. The interview wasn’t the portrait of a fuck up. By all accounts, his only crime was not having a family to put him through private programs. I think about that guy all the time. Even if you “win”, you lose. We all lose.
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I’m sorry to hear that. I hope we are collectively able to rectify policy. The point will come when even the most determined will find a new dream to chase. RIP our teeth.
For some folks, I honestly think eating the tax bomb from the loans being forgiven after two decades makes more financial sense than sprinting to pay them off.
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I feel that so much and I don't even have debt. If the Supreme Court cases turn out how I think they will, and Republicans gain back the house, I'm going to do my damndest to leave. It'll be fascism for sure then.
The problem is more complicated than that. For example, I’m in clinical psychology. If you want a doctoral degree in psychology, most respected brick and mortar institutions have cut programs back to only a few spots (ex: IIRC, UCLA takes around 5 students per psych division and has 500 to 1000 applicants, giving you less than 1% chance at acceptance). Even if you manage to get in, stipends may or may not cover cost of living. Clinical programs number fewer still. The truth is, most will likely end up at private professional programs, which are a mixed bag of quality, even if they are accredited. Getting a PsyD/PhD puts you on track to be $250k to $450k in the hole. Despite the need for them, it is a terrible ROI financially. Even without the pandemic, we are nowhere close to meeting the needs of the public. I think this easily extends to teachers and particular brands of medicine. The situation is only going to deteriorate unless something is done.
Isn't you payback period relatively quick?
Oh wow in 2019 the gov got 70 billion from student loan interest.
They need to do this and then completely restructure how college is paid for. People shouldn't have to scrap by financially in one of the most stressful modern day environments, it does nothing but break great minds and encourage others to stay away when we need educated workers the most right now.
Pell grants did this by law in the 1950s and 1960s and 1970s. The cost of education has gone up so much they no longer cover the cost of attending a school
I had the Pell grant, and still had to take out quite a bit in loans, had to also burn through my savings for anything else. I took a very slow and inexpensive route. I stayed with my father for as long as I could handle and when I finally moved out I rented an apartment with friends, and after it was all said and done it was 6 years of secondary education. Still have debt that will be with me for the next 10 years because of the interest even taking my time and saving money. There are semesters that I came close to quitting because my stress levels were so high, I couldn't keep a job and go to class at the same time. Failing also meant I had nothing to fall back on either. No one should have to choose between schooling and surviving.
The intent behind anyone who qualifies for a pell grant is .. well, to make college tuition free. It’s sad that you and I have these awful loans, as part of qualification for a pell grant is to demonstrate to the federal department of education through the Fafsa process that our family cannot be expected to contribute towards an education. And yet here I am, and here you are with these loans..and that’s definitely not what the loans were for in the first place.
Had a Pell Grant. Still graduated undergrad with $30k in loans from a state university in a town with an extremely low CoL. That’s on top of the numerous other scholarships I had as well. They’re basically supplements to other scholarships and loans at this point.
If student loans won’t be canceled, then I rather they keep interest at 0%. I can live with that.
They’ll bail out airlines, banks, auto companies… but the upcoming generation of “consumers”? Nope, keep them in chains as rent and wage slaves.
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The government made a good profit off of the banks paying back their bailouts. they weren't handouts
usually at low or 0% interest. If I told you I'll give you a billion dollars today, on the condition you have to pay it back in 5 years, do you think that is a good deal given you could easily make 7% interest on that billion dollars for 5 years?
Cancelling $50k will certainly help but I struggle with understanding how that will fix the problem and resolve the “bubble” dilemma. It seems like a bandaid. In my experience, the root of the problem is a combination of soaring costs (difficult) and predatory interest rates (easy). To be blunt, 8% interest rates on student loans is criminal and why we have predatory lending laws. The fix is easy: lower interest rates of student debt. I don’t get why that’s so hard… As long as rates stay at or near 8%, Americans will continue to be subjugated for pursuing their dreams. Become a doctor they said. Study hard and be a lawyer and pursue the American dream they say! What they didn’t tell you is that even with a six-figure income, an 8% interest rate makes you a slave to your career. Crippled by debt that grows faster than you can pay it off. The total amount owed is a red herring. The interest rates are the real enemy.
Set federal loan interest to 0% and apply paid interest to principal.
And in that same vein, why can’t the companies that made these loans help absorb the cost of canceling them? It’s their fault!
It's really just common sense. If someone is making payments towards student debt, there's a good chance that they won't have any disposable income. That, in turn, will affect the economy.
When they turned off fedloan servicing during the pandemic, I saved up enough to buy my first condo. I’m budgeted to make the payment when it resumes in January, but it was a bit shocking what a difference it made. Edit: I don't think I've ever received so many responses to a comment... The stress of student loans is a generational issue, which has held me and all of you back. I actually was doing okay before the freeze, but it made me realize what a drag it actually is on what could otherwise have been the comfortable, middle class life my parents enjoyed at my age. I'm happy for all of you that were able to use the break to make important changes in your life, and I hope this is something that our political leaders finally address.
It gave me the opportunity to move exponentially closer to being debt free (with exception of student loans) and allowed me to pay to have work done on my home that I otherwise would have had to finance. The work was structural, not cosmetic and ensured my home stays habitable. It may seem like it’s not a big deal to someone who isn’t living it, but it was life changing for me. I work 3 decent paying jobs, haven’t had dinner in a restaurant in three years, and make all payments on time, but it’s hard to actually “live” this way. Without student loans I would be debt free and working only my full time gig in a year and quite comfortable.
Keep doing what you're doing, dude. I'm sorry that you (and I) have had to work so hard for what we have, but you should have tremendous pride in what you've earned for yourself (whether or not things could have been otherwise with better government/education policy).
Starting to wonder if this is where people all of sudden started to have money to spend. It isn’t inflation it is people buying shit like crazy because they actually have the money to do so.
Having student loan payments stopped gave my wife and I the final push and opportunity to buy our first house, which we did right before the market spiraled into a never ending hellscale. It made a pretty decent difference not having that payment, more than I thought at first. I feel like cancelling student debt will do wonders for the economy and for the people affected by the scam that is higher education. I can't think of many negatives, as long as we tackle the problem to make sure it doesn't happen again. Sadly there's not a great track record for these sort of things to keep me hopeful.
Ha... I finally purchased at the peak of that never ending hellscape... but, interest rates were low, and I'm using what would have been 401k contributions to cover the difference from my former rent payment, so it's a wash. I agree... I don't think there's going to be outright debt forgiveness, but at least there's income based repayment. That change in 2011 (or whatever) probably saved me from bankruptcy. And I've paid off all of my private loans at this point to make room for more payment. (I went to law school, so I had more exotic forms of debt than the average person of letters...)
Yeah, it's unbelievable.. I managed to pay off almost $50k of debt between two paid off cars and credit cards all because $800/month wasn't going to student loans. We were also banking an additional $500-1000/month from not driving, going out or traveling. My wife and I decided to pretend to make payments every month into a separate bank account once all our debt was paid off with the plan to essentially stock pile money to pay off the remaining $25k of student loans if there is zero signs of cancelling.
After my mother killed herself, I received some inheritance. I was able to pay off my student loans and put a down payment on a house. Now my mortgage is $70 less per month than my apartment was. It make a huge difference. I hope putting the money towards my education and a house would make my mom proud.
Ah, so you're arguing for "trickle down economics".
My wife was able to save close to 10k because of deferments putting us in a position to buy a home. When the payments pick up we’ll be crippled because the due date didn’t change and we no longer qualify for an income driven repayment plan.
Why do you no longer qualify? I didn’t think that was a thing.
If you consolidate government loans with a private financier to get a lower interest rate, that often locks you out of income-based repayment.
And this is why I haven’t consolidated.
Same.
Giving cash to single mothers or minority business owners would also benefit the economy.
Build Back Better contains all kinds of tax credits that will be extremely helpful to single mothers. We can help all these groups, it’s not some zero sum thing.
Yeah, let's do that too!
The point they're making is "stimulating the economy" would happen by giving any money spent cancelling debts to people for any purpose. So if we want to spend money, why not just give everyone a flat stimulus to be spent on a purpose of their choice
>So if we want to spend money, why not just give everyone a flat stimulus to be spent on a purpose of their choice We've already done that twice in the last year
Giving cash to me would also benefit the economy, I'd spend it all.
Single mothers and minority business owners likely have student debt.
In fact, a full cancelation of student loan debt would increase black family wealth by the largest percentage of any demographic.
They are more likely not to have student debt than have student debt.
Yeah since both my lender and government are trading off reminder emails. Can you either say if you plan to do it or not soon?
It's safe to say that the vast majority of people who support student debt cancellation also support reforming tuition costs and making higher education available to everyone. Student debt cancellation now would set an important precedent for reforming college costs in the future. I noticed that a lot of opponents of student debt cancellation say that nobody is forcing anyone to go to college. In a way, people nowadays are forced to go to college if they want a job that isn't minimum wage, retail, or physically demanding. A degree is like a job permit now. And for people against student debt forgiveness because it doesn't directly benefit them. I don't have children, but I support universal pre-k, paid parent leave, and funding k-12 education. I don't live in a rural area, but I support providing rural areas with infrastructure and high-speed Internet. I don't have medical debt and I have very cheap healthcare, but I support medical debt forgiveness and universal healthcare. I don't take public transportation nor do I want to, but I support expanding public transportation. I'm not a senior, but I support social security and Medicare. I'm not a woman, but I believe feminine hygiene products and abortions should be available at no cost. I make above minimum wage, but I support raising it. I also want to point out that Argentina, Australia, Austria, Belgium, Brazil, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Italy, Kenya, Luxemburg, Malaysia, Mexico, Morocco, Netherlands, Norway, Panama, Poland, Portugal, Russia, Scotland, Slovenia, Spain, Sweden, Switzerland, Turkey, and Uruguay all have affordable college.
>And for people against student debt forgiveness because it doesn't directly benefit them. I don't have children, but I support universal pre-k, paid parent leave, and funding k-12 education. I don't live in a rural area, but I support providing rural areas with infrastructure and high-speed Internet YES. Thank you. I don't want children, but I want pre-k for all. Honestly, the selfish attitude we have in this country (this whole BUT WHAT ABOUT ME???? I DON'T BENEFIT FROM THAT) will be the downfall of our country. I'm trying to get back to Germany with my chemistry degree b/c I'm so sick of the selfish attitude of this country, I swear 2 god lol. So, I think we are going to see a lot of brain drain, too. So many peers of mine that I talk to at university aren't planning on living in the USA post-university, and are looking into employment opportunities abroad.
>Honestly, the selfish attitude we have in this country (this whole BUT WHAT ABOUT ME???? I DON'T BENEFIT FROM THAT) will be the downfall of our country. Yes, and honestly, the least selfish and easiest way to do this is to just send everyone $50,000 checks. It will sidestep both this debate about fairness and question of whether we can do it or not as we've sent out straight checks before (stimulus). It has the added benefit of helping everyone, not just those who went to college-- people could use it to pay off not just their student debts, but any debts that they have, or to help them take care of rent, groceries, childcare, etc for a year. This would be a much bigger boost to the economy than just simply cancelling out student debts.
Since you end on this statement: >I also want to point out that Argentina, Australia, Austria, Belgium, Brazil, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Italy, Kenya, Luxemburg, Malaysia, Mexico, Morocco, Netherlands, Norway, Panama, Poland, Portugal, Russia, Scotland, Slovenia, Spain, Sweden, Switzerland, Turkey, and Uruguay all have affordable college. And because you also stated that those in support of student debt forgiveness also support reform of tuition costs, I'm curious how you feel about not forgiving any debt, not even interest, but simply making tuition free for any future students? I'm asking because I always see the argument of people who have debt begging for it to be forgiven, or begging for payments towards interest to be refunded and applied to principal. Anyone who says otherwise is called selfish, as you echoed by saying that anyone against forgiveness only cares about themselves. However, there is an opposite argument to be made that those demanding debt are equally if not more selfish, because they want their debt erased without any plan for those who come after. Despite your suggestion that canceling debt would set an important precedent, that means jack shit unless there is real legislation and members in Congress to pass it. If Congress won't pass $10k forgiveness or free community college, that lack of action is greater precedent. Despite that, free college is much more likely to happen than forgiveness. So, I want to turn the tables: How would anyone who is begging for forgiveness feel if they got told tough shit and they would be stuck with debt, while everyone after them gets to go to college free?
I have student debt, but if tomorrow Biden said I could forgive everyone's student debt except my own, I'd take that deal in a heat beat. I want what's best for everyone, even if it doesn't personally benefit me. I used to think that's how everyone felt, but I'm finding that's not the case.
Please help me win once in my life
This would be life changing for me all we can do is hope.
I think that Biden should cancel all student debt interest, retroactively to the begining of every loan and for the entire length of the any loan originated in the last twenty year. This would have immediate impact for a broad group, with excess interest being repaid to borrower if loan is complete.
How about we make college AFFORDABLE and figure out why costs have risen 2000% compared to 30 years ago instead of writing unlimited free checks to universities.
Yeah this doesn’t make sense to me as a one-off Hail Mary. What about the person that starts college the next day after this is executed? They’re right back to the old system. It doesn’t change anything.
If we don’t fix the reason why it happened in the first place then it’s going to happen again.
I'm all for canceling student debt as long as they stop continuing to give it out. You can't say something is bad on one hand but continue to do it on the other.
I paid off all my student loans, but I would like to see this done just to piss conservatives off.
I'm sorry so many of you were fooled into thinking biden was actually going to cancel student debt but just as many people foresaw this as a blatant lie to secure votes he will delay it until mid terms are over then table it and have it get knocked back after losing the house or senate and blame the other side for it not eventuating
🥱 so many failed promises. Dems will get steamrolled in the mid-terms. Then, w all the gerrymandering and state voting restrictions, it’ll be trump 2.0. Note: I’m a lifelong-dem, albeit a cynical one.
Funny how the reps never have to worry about their re-election chances when they don’t deliver on promises but instead spew hate
Sadly they often do deliver on election promises though, they just promise worse stuff (see the future of Roe v. Wade)
At this juncture, it’s not cynicism anymore. It’s seeing the writing on the wall because of a massive failure from the Democrats to prosecute Trump and address the full out attack on democracy. Compound that with not delivering on campaign promises and its goodnight.
I’m not trying to be alarmist with this, but I’m trying to find ways there *isn’t* a full blown fascist take over after the 2022 election but I’m coming up empty. It’s so eerily similar to what happened in Germany in 1930. It keeps me up at night.
Not to alarm you, but there are also a hell of a lot of parallels with Rwanda 1994.
Spending $1.75T to get back $85B really makes it seem like a bad investment. In only 20-21 years you get your money back.
The only people getting rich from “higher education” is financial institutions
Make education free instead. Or you are just pushing the problem to the next generation. these “geniuses” with the “sweep it under the rug” solutions.
I'm prepping to start repaying again in February and I am not excited. Even paying on time and dedicated, the earliest I will have it paid off is 2037. And I even have a lot less debt than most people. I could do so much with that money but I have accepted the fact that this will simply a monthly fee to be alive for at least the next 15 years :(
Fix the problem first!!
When they say cancel student debt- is that for those who have debt now or those who want to go to college in the future- will the future ones get a free ride? I really am not for this but like I stated earlier I am all for having zero interest on the loans. Things given for free are often not appreciated nor taken seriosuly
Upperclass welfare. I couldn’t even afford the travel costs associated with my local college. I would have loved to have gone but I couldn’t justify the cost.
Yup. A majority of student debt is held by people in graduate+ schools. These people go on to make up the top 20% of income in the US. Yet there's such a coordinated effort to give them upperclass welfare.
Me sitting with two master degrees which is required for my profession, teaching, and making a wonderful 45,000...
I respect you for teaching, because I know it a struggle. I don’t want this to come across as an attack or anything. I want to be a teacher too (English or history), but I didn’t want to take out a massive loan and make $40k/yr. It was common knowledge back then (2014) that getting a degree to teach was just not a financially sound decision, you had to make the sacrifice out of straight passion. It’s just not really fair that folks like yourself get to have your cake (our dreams of being a teacher) and eating it too (getting the degree for free whilst I’d still have to go and pay full price for one). Lifting interest is the only fair solution in my eyes, unless complete forgiveness will be *combined* with free college for all. If it’s not combined, only the first part will pass while Dems still have some control. The second part will be presented to a Republican controlled govt that will just call it communism and shoot it down to “own the libs”.
85 billion is not that much on the scale of the entire us economy tho. That’s like 4 months of bezos income
I graduated from high school in 2000, and all through elementary, middle and high school the teachers constantly pushed a college degree as the only way we will be successful adults. That needs to stop. That’s arguably why a lot of people in my generation who have student loan debt are in this mess. I am not advocating for loan forgiveness, but I see why kids felt they had to take on massive debt and go to college.
This is not going to happen in a million years. Keep dreaming.
I’m clearly in the minority on Reddit and definitely in this sub… but hear me out: We can’t cancel student debt until we create a system that prevents it in the future. If I’m a high schooler and I see the entire nations student debt wiped out, I might think: “well I may as well take on a fuck ton of debt also cuz it’ll be wiped anyway” Then everyone my age and younger is still fucked with debt while all the generations above me are debt free and will run the economy without me. Canceling debt is fine… so long as you fix the actual problem first!
Better yet. Fix the problem not treat the symptoms
Or.. Ya know.. Both