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Is Student Loan Debt Forgiveness A Good Idea?
The short answer, despite the pleadings of an over-stuffed body of ex-students facing inexorable debt loads, is "no". However, as Professor Daniel Lin notes in this brief clip, debt forgiveness does not resolve the underlying causes of rising student debt, and therefore cannot prevent future debt problems. Instead of debt forgiveness, he suggests making student loans like other types of loans: dischargeable in bankruptcy. This places the burden on lenders to ensure that students are not taking on more debt than they can handle. While it would lead to a reduction in the amount of loan dollars awarded and theoretically increase interest rates (as 'risk' is priced in from the current no collateral, no underwriting, no credit check idiocy currently), these are good things - naturally incentivizing borrowers to be more careful right now, and in the future, which puts pressure on colleges and universities to control their costs.
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How about all debt forgiveness for giving up your guns? I will bet all of the young children losers will take that? I went to night school for 9 years to get my BBA and worked full time paying every credit out of my pocket while raising a family. Thereafter, got my Masters in a Saturday evening program while everyone’s was out having fun and you know why? Because I wanted a goddamn education and mommy and daddy didn’t care if I had one or not, had no money and I would never borrow anything I did not have the ability to pay for, then or in the future. So, they went to college, have 4 years of sex, drugs and alcohol and now you and I will pay for it. Fuck all of you, I say no, make them earn something, lien their future earnings. Most of them voted for Obama, how about he explains to them where the jobs are he promised all of us or is the war that is right around the corner the answer to his incompetence?
Who cares really. If it will lower college tuition for the remaining slaves I am all for it. Even though I paid mine off long ago. Higher education is a fucking racket because the govenment has your back and you cannot discharge said debt unless you do some time in the military service. Why not allow them to discharge the debt and get these institutions under control. Tuition only increases because the government makes the loans to begin with.
I am ole fart and got a good education and was in debt for 10k when it was all said and done. Why? Because at one time in this country you did not get the loan from the gov! Fucking colleges get tax payer dollars to begin with and then charge outrageous prices to mind fuck most people. Free thinking got me in trouble but then I still made it. About to retire in June and no I am not on the government dole.
All this education debt is nothing more then some digital number sitting in a computer somewhere it is time to zero it out. It is time to evaluate students and tell them, "hey your too stupid to be here to begin with." My neice is an admin director for a large college and 80% of the idiots that will later be slaves need remedial training right out of high school to even take college level courses.
My kid is a freshman in one of the country's top schools for medicine and he assures me that at least half of the kids have no business being there because they are almost illiterate.
His Chem And Micro-Biology classes have already thinned out.
How did they get there in the first place?
Guess.
I'm guessing -- socioeconomic victims. Maybe someday doctors will be immune from malpractice and we won't have the problem of "competency". Oops, when doctors carry out government prescribed healthcare rationing, I guess they will be immune from malpractice because they will have a form of sovereign immunity.
There's your government healthcare. A government solution for everything in the new utopia.
The loans would be easier to pay off if the whole cost structure weren't just another Wall St. Ponzi, as a senior investment adviser at Morgan Stanley had recently admitted to me. He confirmed my suspicions on what's really going on:
1. The academia market is now an Edu-Business. It's a business, in spite of proclamations to the contrary.
2. As a business, it is willing to "Charge anything the market will bear". Thus they are ratcheting up the costs, to have students and their (often affluent) Boomer grand-parents pony up as much as possible. Using the slow-boil method.
3. The real costs of the university (overhead/fixed costs, and the salaries of the profs and admins) are not rising nearly as fast as the fees. Nor are they creating Olympic-scale facilities. Unless it's football related, and then it's part of the football-business. So where is all this money going? Into two areas: 1. Increasing head-count of careerist bureaucrats ("Managers" and "Directors"), and 2. 'Rainy Day' funds, i.e. to Wall St.
While most people (including an article on ZH) focus on the growing army of careerist managers at the colleges, few if any realize that the lion's share of the money goes to "investments": it goes to Wall St! Often via people like my friend (to help his milestones & bonuses). Boo-yah!
And just like during the housing bubble era, when few could resist the siren song or endanger their career on a missed opportunity, so too we have the college bean counters and finance people under pressure today, to raise and "invest" ever more. And alumni & rich prospects are under pressure to 'donate the cause': the Bubble.
It does not take a genius to figure out who makes out like a bandit in this Ponzi game. As I said, this was confirmed by my senior financial adviser friend at MS... somewhere in FL. In a fun social setting, after food and drinks.
So, when I hear about ballooning college costs, I just roll my eyes and think: "When are these dumb-ass*, gullible people and the MSM going to start thinking for themselves, and start addressing the real issues of college debt: COST! Then, when the Ponzi of line-item costs and Wall St investments are exposed, then maybe the debt/slave load will not be so onerous for future students!" Good grief!
* Since 'ass' is the traditional word for 'donkey', does this mean we are talking about a really dumb & stubborn person -- even by donkey standards? ;-)
Don't forget the other super growth industry. CORRECTIONS! Lobbyists for corporationos with hands full of cash beating on the doors of legislators wanting a piece of the pie that years ago Gen. McCaffery referred to as the American Gulag. With the recent NIC push for the TCPI program I look to the Universities branching out.
Yabut,
If you got guys like Larry Summers losing 1.8 Billion of Harvard's money, somebody has got to make up the difference.
Moar KIDZ.
Yeah, I got my degree and worked my ass off to pay it all off in 1998. I had two jobs, working 60 hours a week. One of them was waiting tables! Pay up fuckers! What makes you think you're so God damn special?
What is wrong with today's education system?
Some fuckwit thinks b/c he didn't pay for his uni education that it was "Free."
Goes to show- you get what you paid for... hahhahahhhahahahahha
Seriously, wake the hell up
Wtf is wrong with someone really, actually, paying the fucking debt back? Are we now a nation so stoooopid we cannot fathom the last decades of student loans that got paid in full?
A bunch of pansy ass everyone gets a fucking trophy debt serfs do not mean society bends over for them. Fuck that. You took the debt knowing good and well you took a risk. Welcome to real adult land of finance. And no, no fucking trophies or gold stars if you really do pay off your debt. It is what is expected. Stop blaming the banks and colleges and look in the mirror. You're a fucking adult and you have obligations to actually fucking think with your brain now. Grow the fuck up and make better choices and live with those you made. Maybe $150K for that lesbian poets major with the minor in hemp consumption was a bad choice? I. Don't. Fucking. Care.
Dumb question. Of course student loan forgiveness is a good idea. In fact, it is not good, it is great! How else can we keep the obvious benefit of college education available to the greater populace. Do we want a society of people ignorant of the implications of transgender repression? Would we want our children to be bereft of the knowledge bestowed upon them by the study of post orientalism? This is self evident. If we do not bail out the students, obviously deprived of a fulfilling career by the narrow mindedness of a capitalist structure and a economy destroyed by those seeking selfish gain, we need to continue the promise that a college education provides. If we do not, we risk suffering the same fate that would have been forced upon us if the banks were not saved from the financial crisis. Anyone that cannot see this simple truth is not recognizing the dire implications. We must continue to support the college education system. If future prospective students forego the opportunity of intellectual advancement due to fear, the nation will suffer a terrible loss. All of those young and impressionable minds will be forced to seek out a thought of their own. The implications of such a scenario, given that talented students have not yet completed their rite of passage without attending a fully accredited school of higher learning, portends a disaster that is epic. If you think the country is at a competitive disadvantage now, wait until the benefit of a quality college education is out of reach for the average American!
Yeah things are pretty screwed up. Quite the shame.
The student debt isn't really going to be paid back. It's just meant to churn through the system so bankers can make fake money.
When the debt goes bad, the bankers get more fake money.
If you complain or threaten to do something about it, the bankers respond by threatening to stop the flow of money, causing chaos.
How does this end? Hard to say. Probably in ruinous inflation and/or civil war.
"puts pressure on colleges and universities to control their costs"
Krugman would have a heart attack over this. Of course he deserves MOAR. /s
More seriously, where are the drivers of these costs...my understanding is the unprecedented facilities building that has occurred over the last decade is a key driver. And thus, the debt and interest to pay for these facilities.
In other words, gotta pay the banks.
Yet again.
Go figure.
All the building is in fact a RESULT, not a CAUSE.
Easy, guaranteed money promotes ever growing campuses to attract ever increasing numbers of students bringing their guaranteed money with them. There is ZERO incentive to; ...be frugal...be competitive on a cost basis...be selective as to quality of incoming students...be excellent. There is EVERY incentive to; ...promote the status quo of the loan environment...be profligate in campus spending...ignore normal competitive ques...lower your entrance requirements...attempt to be all things to all students.
A friend of mine is a Harvard Graduate. I showed him the Harvard **entrance** exam from 1898. He doubted there was a Harvard **graduate** alive today that could pass the 1898 **entrance** exam.
Maybe college isn't a good option for a kid that doesn't understand 1) how to pay for said education and 2) believes a socialized option is a good one.
Just like healthcare isn't a right, neither is education, or clean water or...
What is bankruptcy if not forgiveness? How does dischargeability encourage cost control by colleges, unless there is vendor financing? This seems to assume lenders are sensitive to whether they'll be paid back. But gov doesn't give a shit how much taxpayer money it wastes. And they're practically the only lender left.
Seems you need to get gov out of student loans altogether.
Tyler,
Volume is, not necessarily, a good thing.
Might I suggest you cherry pick the articles you publish?
When I don't have enough hours in the day to read all of the words of the articles that do interest me, let alone the articles which do not, I can truly testify that I am being overloaded by to much, questionable, information. Please be a good editor and cherry pick what you publish instead of publishing all of the low hanging, as well as high hanging, fruit.
LESS IS MORE