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Should they wipe out students loan debts?

Discussion in 'Other Discussions' started by Hobie, Feb 11, 2020.

  1. Hobie

    Hobie Well-Known Member

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    I worked my tail of in college, including working during the summer, and still had to get a student loan. And I paid back every last penny, so it leaves me with mixed feelings with all these ideas of wiping off all the debt for student loans.

    I don't mind helping them, but when I see these students who don't work a day for college and take out a student loan for more than a average teacher makes in a year, it leaves a bad taste in my mouth. I think Bernie is a good man but cant see how he and Elizabeth Warren would think to cancel all the federal student loan debt.

    https://studentloanhero.com/featured/presidential-candidates-student-loans-guide/
     
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  2. StefanM

    StefanM Well-Known Member
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    I don't think massive loan forgiveness is a realistic option, but I don't view the issue in terms of fairness.

    It's not really a question of whether or not any sort of loan forgiveness is fair; it's whether or not the issue is significant enough to the overall economy to warrant some sort of intervention.

    This isn't something the free market created (government-backed or government-issued student loans, primarily), so I think it's something that we can't necessarily expect the free market to solve on its own.

    That being said, any sort of large-scale loan forgiveness would only make macro-level sense if it also came at the same time as significant student loan reform. Simply forgiving loans indiscriminately without dramatically changing the system to prevent future crises will only be skipping back to the first scene and re-watching the same movie. The end result won't change. If anything, it might worsen.

    I do think that allowing student loans to be discharged in bankruptcy could be one useful idea because it would require a significant personal cost (the long-term damage to credit and risk to any existing assets that a bankruptcy produces), which would deter people from choosing that path unless they had no other option. The details would need to be fleshed out, but I would limit the eligibility to people who initially took out student loans prior to a certain date (which would be not long after the passage of the law) and would not apply to anyone who initially took out loans after the passage of the law. This would ensure that no one would be able to start college with the intent to file bankruptcy. It would only be to address existing loans. I would also allow the loans to be included in bankruptcy retroactively for loans disbursed prior to a person's past bankruptcy if filed in the past 20 years or so (the date would need to be analyzed to see what would be the most effective).

    I think any existing income-based plans or loan forgiveness plans should be grandfathered for those who have already taken out loans because decisions to take out loans may have been based on these factors. They should be curtailed, eliminated, or reformed going forward.

    If we are thinking about discussing student loan forgiveness at a large scale without bankruptcy, I think it has to be a question of the effects of the economy as a whole. Student loan debt affects home ownership, consumer spending, etc., and these factors affect the overall economy. Without significant reform, this problem is only going to worsen.

    If (and only if) significant reforms are enacted to prevent a repeat of the student loan debacle, then implementing some level of forgiveness should be considered on the basis of the effects on the overall economy. It's not fair, but bailouts of any sort are almost always inherently unfair.
     
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  3. Revmitchell

    Revmitchell Well-Known Member
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    Guys there is a bigger agenda at work here. Student loan forgiveness is about making college free.
     
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  4. just-want-peace

    just-want-peace Well-Known Member
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    AMEN!!!!

    Just ONE MORE incremental step to the dem's dream of making Uncle Sam your "sugar daddy"!

    I just wonder how many "laws" would be nullified IF all were judged by the constitutionality of said "laws"!? I dare say that a minimum of 90% would be history.
     
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  5. Adonia

    Adonia Well-Known Member
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    No. The whole government student loan business needs to revised. Giving unlimited loans to 18 year olds who want to study Women's Bisexual poetry as a major is completely insane. With the easily available money the colleges and universities have taken advantage of this with raising their prices. Their constant campus upgrades with amenities such as spas and clubs has contributed to the costs and have absolutely nothing to do with getting a good education.
     
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  6. StefanM

    StefanM Well-Known Member
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    Of course it is, and that's one reason why I think it would be a good idea for Republicans to get ahead of this issue while we still have time.

    Massive student loan debt is a very real, very serious issue that affects the entire American economy. No one who seriously looks at the data can draw different conclusions. We can definitely debate the reasons for it, etc., but it exists, and there's no denying that it exists.

    The market has no solutions for this problem because, unlike other loans or business ventures, there is no safety valve for insolvency (bankruptcy). The ethics of bankruptcy can be debated, but bankruptcy does provide a tool in desperate times to financially "restart" from bad investments, bad decisions, etc. But for student loans, it's not like you can structure an LLC and make only business assets at risk if your small business fails. They simply don't go away except in some very specific situations.

    And federal student loans also don't have the market-based risk prevention on the front end that would be able to make lending decisions based on credit risk and ability to repay. This, of course, is why they cannot currently be included in bankruptcy, as that restriction is intended as a backstop to offset the lack of underwriting prior to loan origination.

    Some of that "offset" on the back end is likely based on the accounting rules of the Congressional Budget Office that don't allow for a fully accurate assessment of risk. It looks better on paper than any objective person would expect it to be in reality. So the effect on the budget is masked.

    So we have government-originated loans that have no risk assessment on the front end and illusory risk mitigation on the backend. This is just about as far away from the free market as one can get.

    Maybe there is a greater role for taxation to play in higher education funding. That's a separate discussion. But student loans as they currently exist constitute disastrous policy. And even Trump's proposed reforms are barely more than treating cancer with essential oils.

    The "conservative" case for addressing the student loan crisis is that we need decisive action to get rid of the problem that terrible (albeit possibly well-intentioned) government intervention created. If conservatives don't address the problem in the very near future, we may risk allowing the problem to become so bad that even full-blown socialism would seem appealing to the average American, if only to get relief from this crisis.
     
  7. church mouse guy

    church mouse guy Well-Known Member
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    Bernie is a communist and he is not a good man. Hillary was right when she said that no one likes him. His wife ran a college and she loaded it up with debt and forced it to shut down. Meanwhile, Bernie has three deluxe mansions and tons of money in the bank. He never worked a day in his life.
     
  8. Scott Downey

    Scott Downey Well-Known Member

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    I can imagine if college is free, too many people will go and then complain, the room and board is not free. Could also be too many people will apply and will then be REJECTED, as there are way too many applicants, so the best colleges will get the very cream of the crop students and the lower quality students get inferior schools more so than today, the student population will become even less diverse. Then seeing that, what laws will liberal socialist progressives pass to force the good universities to open the doors to them who will claim they are discriminated against as they dont compete as well against the brilliant students.

    And universities today are loaded with extreme left wing ideas and extreme professors which of course those promoting free universities think is great as more young people are won over to their side.
     
  9. Scott Downey

    Scott Downey Well-Known Member

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    I graduated in 1983 with a $10,000 debt which was about 2 yrs worth of semesters. I took me 10 years to pay it back. Never entered my thinking of getting that debt obligation annulled by government fiat.

    I think the loan was 7% and it was a Virginia student loan program. I also did get about $500 per semester in federal grants.
     
  10. church mouse guy

    church mouse guy Well-Known Member
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    You did it the hard way. But you won. Imagine being in a low-paying dead-end job all your life and having your taxes raised so some upper-class law student could get a free education and then make a thousand dollars an hour upon graduation.
     
  11. Reynolds

    Reynolds Well-Known Member
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    No they shouldnt wipe them out.
     
  12. Wingman68

    Wingman68 Well-Known Member
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    And this is the only fun part of their plan, the promises of free stuff. Once everyone relinquishes all their guns, their private healthcare, all for the common good.......next comes the common bad.......everything will be dependent on what they deem we need. At that point they will have squeezed everything out of industry making it unprofitable as well, which will make your job options pretty dim, & as Obama did, it’s easy for the government to take over any industry at that point.

    Retirement will mean you are out of chips.....so sorry, you do nothing for the common good. Step to the back of the line. You can have healthcare when your turn in the nonproductive line comes up, if it ever does before you die.

    Any time I see someone making a discussion out of the socialist (let’s be real, communist) agenda, I shake my head. Does it mean that person is actually entertaining the idea & just needs a little emotional support to accept it?? Makes me crazy. Even Bernie has no idea how much his programs would cost, leading to question how they would be paid for. I saw him snap out in an interview that no one knows how much his proposals would cost so why would she have the temerity to bring up such a stupid question. Someone here just today was saying what a good guy Bernie is..........& they know this how???
     
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  13. JonC

    JonC Moderator
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    And in a capitalistic system....worthless.
     
  14. Yeshua1

    Yeshua1 Well-Known Member
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    what about those such as you and me that actually paid down their loans, and did not use them to buy cars, appliances, laptops etc?
     
  15. tyndale1946

    tyndale1946 Well-Known Member
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    Then there is the G.I. Bill!... I fought your war in Vietnam and Uncle Sam owes me... And I made sure I got every penny the Government owed me... And I hope every veteran on here got theirs and feels the same!... No shame!... Brother Glen:)
     
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  16. Rob_BW

    Rob_BW Well-Known Member
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    AA/BA/MA, Thanks, Uncle Sam!
    :)
     
  17. tyndale1946

    tyndale1946 Well-Known Member
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    Here is an interesting thought... Serve some time in service to your country and you won't need a student loan!... Thanks Uncle Sam!... Brother Glen:D
     
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  18. Centrist

    Centrist Active Member

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    Uh, has anyone ever considered the expenses one incurs in college? Though I am much older, I did recently attend college. And to see how much they charge for stuff, it's like the books must be gold sheets or something. And the rentals? Ouch. If you wanna make money, go build an apartment complex and rent it out to college students only. A normal 3 bed 2 bath might run you around $900-1200/month. Whatcha do instead is rent them out to the students, and you can squeeze two into each bedroom, and charge only $300/month. You're now making bank reaping $1,800+.
     
  19. Salty

    Salty 20,000 Posts Club
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  20. Wingman68

    Wingman68 Well-Known Member
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    Nothing is too good for the elite educational institutions who have proven themselves as reliable water carriers of the agenda. Cranking out leftist soldiers? Priceless. Cause them to live in the real world? Don't be silly, they have dreams of leftist utopia to sell to our children on our dollar. I guess they must be smarter, because we keep paying it.
     
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