Author Topic: Senator Warren called out about paying off student loans  (Read 20890 times)

iris lily

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Re: Senator Warren called out about paying off student loans
« Reply #50 on: January 24, 2020, 06:57:05 PM »
That 3/4 amount would probably make me happy as a parent shelling our $40,000+ annually, who knows.

use2betrix

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Re: Senator Warren called out about paying off student loans
« Reply #51 on: January 24, 2020, 07:12:41 PM »
Why do I feel like I am the only person who feels like the money I BORROWED and was OBLIGATED to pay back, was a fantastic life lesson for me that built a shit ton of character, work ethic, and responsibility that has transferred into adulthood?

I have a hard time believing that so many people smart enough to get college degrees, did not understand that the money they borrowed was required to be paid back, and it would involve making sacrifices to pay it back.

I think it has mostly to do with that last sentence.. “sacrifice” and the entitlement of “my generation.” So many people think “Hey, 40 years ago college and life was dirt cheap!” Well you know what? The average house used to be half the size it is now, yet larger family sizes. Owning two cars was a luxury. The majority of houses never had AC’s. They didn’t “need” $1000 cell phones, laptops, or all the luxuries we have today.

Virtually every single person could do more to pay their loans back. I had over $48k in student loan/parent loan debt when I finished my TECH school, and I am not sure how I could have ever fathomed thinking it was anyone’s fault, or responsibility, other than my own..

FrugalToque

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Re: Senator Warren called out about paying off student loans
« Reply #52 on: January 24, 2020, 07:14:22 PM »
https://www.youtube.com/watch?v=62i2feu9fxk

I'm certainly in this same situation, I'm paying my daughters dental school tuition.
My wife and I have never earned over $71k inflation adjusted over the last 38 years.
 Yet I will be forced to pay for other peoples education and not get any help on the tuition I paid.


Personally, I think it's a fucking travesty that education is so expensive.

Second, it's fucking ridiculous that a 16 year old, who has to ask permission to go pee, is instructed by adults that it's okay to take on massive debt to secure a bright future, and is then saddled with a bunch of debt and becomes a 21 year old who is told they were stupid for taking on all that debt.

Third, if you want to live in a society, part of your obligation as a person who succeeded with the help of that framework and stability in one generation is to pay it forward, put something back into that society, so the next person to come along can make it, too.

Fourth, it's especially sad when people who are miserable (with debt, for instance) demand that the next generation be forced to be just as miserable.  This started when the boomers took their cheap access to education and pulled the ladder up after them.  And now everyone thinks massive student debt is normal, and wants to punish the next generation with the same suffering.

Toque.

FrugalToque

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Re: Senator Warren called out about paying off student loans
« Reply #53 on: January 24, 2020, 07:23:25 PM »
Why do I feel like I am the only person who feels like the money I BORROWED and was OBLIGATED to pay back, was a fantastic life lesson for me that built a shit ton of character, work ethic, and responsibility that has transferred into adulthood?
When I went to university, my tuition was the equivalent of $3800/a in today's money, for a computer engineering degree.  That's money I could earn over a summer, working minimum wage.  I learned enough of a lesson from that responsibility.  You don't need to charge poor kids $10k or $15k/a to "teach them a lesson"

Quote
I have a hard time believing that so many people smart enough to get college degrees, did not understand that the money they borrowed was required to be paid back, and it would involve making sacrifices to pay it back.
They knew it had to be paid back, but they may have received terrible "guidance" about the probable economic value of the degrees they were getting.  We should remember that we tell these kids they don't even know if they really need to use a toilet, while also telling them it's okay to take on all that debt because their degree will get them enough of a salary to make it worthwhile.

Quote
I think it has mostly to do with that last sentence.. “sacrifice” and the entitlement of “my generation.” So many people think “Hey, 40 years ago college and life was dirt cheap!” Well you know what? The average house used to be half the size it is now, yet larger family sizes. Owning two cars was a luxury. The majority of houses never had AC’s. They didn’t “need” $1000 cell phones, laptops, or all the luxuries we have today.

Virtually every single person could do more to pay their loans back. I had over $48k in student loan/parent loan debt when I finished my TECH school, and I am not sure how I could have ever fathomed thinking it was anyone’s fault, or responsibility, other than my own..
Well, yes, people can suck at their personal finances, too.
That's a separate issue we can address elsewhere.
We shouldn't mix it up with the stupid way we fund universities.

Toque.

FrugalToque

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Re: Senator Warren called out about paying off student loans
« Reply #54 on: January 24, 2020, 07:34:20 PM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

use2betrix

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Re: Senator Warren called out about paying off student loans
« Reply #55 on: January 24, 2020, 09:24:56 PM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

And what about the mindset of, “I worked through this, and it built work ethic, taught me character, sacrifice, and was a positive contribution as to who I am today.”

Telecaster

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Re: Senator Warren called out about paying off student loans
« Reply #56 on: January 24, 2020, 09:31:52 PM »

And what about the mindset of, “I worked through this, and it built work ethic, taught me character, sacrifice, and was a positive contribution as to who I am today.”

Is the only way to develop that mindset to take out student loans? 

Boofinator

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Re: Senator Warren called out about paying off student loans
« Reply #57 on: January 24, 2020, 10:11:26 PM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

I see things differently:
"Whine all you want, but taking out a loan is making an obligation to pay it back."
vs.
"Whine all you want, and Uncle Sam just might bail you out (in exchange for your vote)."

The biggest complaint about Warren's proposal isn't the free education, it's the populist bullshit Warren is peddling in order to buy votes. But Trump did the same thing, so I guess anything goes in politics, right?

Paul der Krake

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Re: Senator Warren called out about paying off student loans
« Reply #58 on: January 24, 2020, 10:24:31 PM »
If rates
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.
Alternative mindset:
https://en.wikipedia.org/wiki/Moral_hazard

I'm not vehemently opposed to forgiveness, just forgiveness that doesn't hurt.

use2betrix

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Re: Senator Warren called out about paying off student loans
« Reply #59 on: January 25, 2020, 09:13:40 AM »

And what about the mindset of, “I worked through this, and it built work ethic, taught me character, sacrifice, and was a positive contribution as to who I am today.”

Is the only way to develop that mindset to take out student loans?

Well - clearly college didn’t work for many to develop this mindset. I’m still amazed that people seem confused by the concept of borrowing money and having to pay it back.

If people can’t grasp that for student loans, how should they ever be allowed to borrow money for a house or car? What kind of message does that send?

I don’t understand this “all or nothing” concept of college assistance either. Why does it have to be “zero regulation of costs” vs “100% free college for everyone.”

Why not instead provide stronger regulations on community colleges and universities, limiting the cost of tuition?

Also - if college becomes free - military salaries will have to rise, as the GI Bill will no longer be applicable.

Wrenchturner

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Re: Senator Warren called out about paying off student loans
« Reply #60 on: January 25, 2020, 09:45:19 AM »
My thoughts:

-Kids need to have more life experience in late high school.  Should be more apprenticeship-style.  Academics like to think that dispensing information is a good substitute for actually doing stuff.  I don't think this works well and it leads kids in late high school to remain children for longer than they should be.  This leads them badly prepared for:

-Borrowing a huge pile of money to pursue a thing.  I knew the pitfalls of this type of strategy and I'm generally a low-risk person so I didn't go down this road.  But if it is done with care and with good strategy it can result in very good yields for the individual, and therefore the debt burden on the individual is mostly acceptable.  This carefulness is also needed for:

-Price discovery.  Post-sec needs more of it, not less.  Blank cheques that can't be discharged motivate these institutions to make bad investment in the wrong places.  We already know this happens.  Making tuition publicly-funded(not free!) will not resolve this.


dividendman

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Re: Senator Warren called out about paying off student loans
« Reply #61 on: January 25, 2020, 09:40:07 PM »

I see things differently:
"Whine all you want, but taking out a loan is making an obligation to pay it back."
vs.
"Whine all you want, and Uncle Sam just might bail you out (in exchange for your vote)."

The biggest complaint about Warren's proposal isn't the free education, it's the populist bullshit Warren is peddling in order to buy votes. But Trump did the same thing, so I guess anything goes in politics, right?

The unfortunate part is Warren's populist bullshit is much worse than Trump's with regard to politics. The young folks with student debt don't vote.

What she should be doing is saying we're going to increase the loans on students and give it to social security recipients. That's how you win elections.

soccerluvof4

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Re: Senator Warren called out about paying off student loans
« Reply #62 on: January 26, 2020, 04:27:36 AM »
I think this argument will be Warrens demise . Obviously this is a huge issue in our country right now and the price of tuition is insane. Part of it can be avoided by people making better decisions on going to schools that are more affordable and a major part of it that should be addressed is keeping the costs down. I dont know how that can be done but I think if someone can figure that out then it would be a more realistic platform then the one she is trying to run on.

pegleglolita

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Re: Senator Warren called out about paying off student loans
« Reply #63 on: January 26, 2020, 02:27:28 PM »
What boggles my mind is that so many people think it's normal and ok to get into student loan debt.

It all depends on how much, right? I got a BS with $11K of debt, and my starting salary was $60K.

The real problem is that people are debt financing unaffordable educations. In the past these costs were held down by state financing of universities.


We're twinsies, just about. I graduated with a little over $10k in debt. And the first thing I did after getting my $10k signing bonus was to pay off that albatross.

States still finance universities. The problem, in my opinion, is threefold: 1) students have too easy access to loans, flooding the system with cash, and 2) there is no apparent risk to the loan companies for loaning out as much as they can, and 3) students of course are not the most consumer-savvy individuals.

Rather than pay off the loans, there should instead be an outcry as to why these students are being allowed to take up these kinds of loans in the first place, and encouragement toward the attendance of a community college for a couple of years and getting a job to offset most of the tuition. Oh, and ride your damn bike if you're a college student.

Yes, states still provide funding for public universities. They just provide less than they used to. The difference in funding is made up by tuition increases.

https://www.cbpp.org/research/state-budget-and-tax/a-lost-decade-in-higher-education-funding

University professor here.  30 years ago, state funding was ~60% of our budget.  This year?  19%.  I live in a garbage-brained red state with the lowest taxes and correspondingly highest (insert pretty much any bad thing here, infant mortality, opioid deaths, teen pregnancy...). SMH.  Students get hit with the difference.

roomtempmayo

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Re: Senator Warren called out about paying off student loans
« Reply #64 on: January 26, 2020, 04:53:05 PM »
@pegleglolita I agree, but even in blue states facilities and student services are eating us alive.

The problem is that every administration knows that new dorms, gourmet food, and a small army of people working in student life/health/mental health/learning support both recruit and retain students.

We could offer very high quality educations in most conventional academic fields for very low prices.  The problem we face, especially in my area, is that the students aren't interested in that model.

BlueHouse

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Re: Senator Warren called out about paying off student loans
« Reply #65 on: January 26, 2020, 05:15:13 PM »

You know what's fucked about that guy?  That he's so angry.  He should be grateful that he's been in a position to help his daughter out. 

How about the pat answer to these guys is "worry about yourself". 

I have no problem with loan forgiveness (especially if we don't pay back crooked companies like Liberty or Corinthian College)

You must be joking. He should be grateful for working overtime and living below his means?
No I'm not kidding.  I have advocated for years that I (and others in my position) should pay more in taxes for things that matter.  And educated people matter.  I've never said free ride for everything.  I paid my way through college, had loans, and paid them back in full.

I also received SSI benefits as a child.  Are you mad that I got money that I never earned and you didn't? 

Life isn't fair.  There are winners and losers and there are things in between that aren't fair.  How many people on this earth would you trade places with?  I mean 100% trade.  Not parts, but the whole.  If you wouldn't trade with the majority of people, then what are you really complaining about?

roomtempmayo

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Re: Senator Warren called out about paying off student loans
« Reply #66 on: January 26, 2020, 06:05:49 PM »
Very hard to break something like this out. But let's give it a shot. WashU's annual budget is about $2.3B. They spend about $1.5B on total compensation, of which about $650M/year goes to faculty salaries. Let's assume the average faculty member as a 60/40 research/teaching split: so about $260M in direct spending on classroom instruction (and activities like grading papers, designing examples, preparing lectures). That is 11.3% of total spending. Which sounds bad. Until you realize only $340M/year of WashU's budget comes from tuition.*

So handwavey back of the envelope estimate, WashU probably spends  about 3/4s of its total tuition revenue (76%) on direct class room instruction. Which seems pretty good to me considering some amount of overhead is clearly needed to do things like provide physical class rooms in which to teach, pay people to help with registration, provide academic advising, and so on.

Not to nitpick, but I expect WashU's contract terms are lower than 40% teaching.  I would guess 60 research/25 teaching/15 service would be likely, but I don't know.

The math also depends on teaching loads remaining constant up the salary distribution, but realized teaching loads tend to be inversely related to salary as senior people negotiate releases.

But, if WashU spends 75% of tuition revenue on direct teaching, I think their provost is doing extremely well.

The issue I see, as I mentioned above, isn't that the academic side has great waste, it's that the surrounding and supporting apparatus has become bloated beyond recognition.  Average tuition after discounting at WashU is likely in the $25-30k range (average discount topped 50% nationally a few years ago).  The remaining stated room/board/fees/costs are $22,660, and those costs are rarely discounted.  And who knows what all student services are buried in other parts of the budget (security, health services, grounds, tech support, etcetera).  So, the student life side has become nearly as large as the teaching side, if not larger in practice for many institutions, potentially including WashU.

maizefolk

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Re: Senator Warren called out about paying off student loans
« Reply #67 on: January 26, 2020, 06:38:04 PM »
Not to nitpick, but I expect WashU's contract terms are lower than 40% teaching.  I would guess 60 research/25 teaching/15 service would be likely, but I don't know.

The math also depends on teaching loads remaining constant up the salary distribution, but realized teaching loads tend to be inversely related to salary as senior people negotiate releases.

But, if WashU spends 75% of tuition revenue on direct teaching, I think their provost is doing extremely well.

Yeah that is the hardest part to calculate. Also do we look at contractual splits or actual time breakdowns?

In my experience 15% of time spent on service is quite plausible, but a contract that split 15% of time out for service would be exceptional. I don't teach somewhere like WashU but my contract stipulates 2% service time, or 48 minutes a week if I worked a 40 hour week. That's completely unrealistic (one committee meeting a week would put me over my supposed ceiling), but that's what it says.

But research could certainly be significantly more than 60% of total budgeted faculty FTE. Particularly because as you point out, and I agree now that you mention it, higher paid faculty tend to be the ones with higher research and lower teaching appointments. So that would push the percent of tuition going to teaching lower.

On the other side of the equation, my original math made no allowance for paying TAs who do a lot of teaching. Their pay is ridiculously low, but in aggregate it is a nontrivial amount of money, and wouldn't be part of the "faculty salaries" line item in WashU's budget.

Anyway, the true percentage could easily be lower than 75%, perhaps 60%, or 50%, or even 40% depending on what assumptions we make But I cannot see any plausible way to get it down into the high or low single digits as a percentage of total tuition revenue.

Freedom2016

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Re: Senator Warren called out about paying off student loans
« Reply #68 on: January 26, 2020, 06:46:11 PM »
For anyone who knows systems thinking, Warren's proposal smacks of being a "quick fix" rather than a fundamental solution.

As far as I understand it (correct me if I'm wrong), at some point the federal government decided it would be happy to provide as much cash as higher ed institutions might ever want, via student loans signed by naive young adults. With virtually no limits on their federal cash cow, higher ed institutions have gone hog wild on posh facilities and bloated administrative hires. (And for someone who has built a reputation on rooting out corporate corruption and greed, Warren sure seems to be looking the other way when it comes to higher ed institutions.)

Forgiving the loans of those students does nothing to stem that tide; it merely shifts the cost burden to a class of tax payers... (the 1% ers) whose money I would frankly rather use for something actually worthwhile.

I say this as an otherwise very liberal voter. But also as a (highly rated by students) adjunct professor who gets paid jack shit. And also as someone who went to one of these posh higher ed institutions.

roomtempmayo

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Re: Senator Warren called out about paying off student loans
« Reply #69 on: January 27, 2020, 08:05:09 AM »
Anyway, the true percentage could easily be lower than 75%, perhaps 60%, or 50%, or even 40% depending on what assumptions we make But I cannot see any plausible way to get it down into the high or low single digits as a percentage of total tuition revenue.

I'm not sure how I phrased it earlier, but I was thinking of teaching as a percentage of the total institutional budget.

I can't give specifics, and all of my (admittedly limited) experiences are from teaching-heavy institutions, but seeing around 10% of the budget falling under the provost is pretty common.

How grant aid is accounted will make a huge difference in these numbers.  If it's accounted for as real money entering the tuition stream, tuition revenues about double.  However, if what isn't being drawn from the endowment (i.e. endowed scholarships) is treated as a pure price discount and written off, the efficiency numbers look much better.

Citing the 10% figure above, that's when discounts are accounted under financial aid, and only real tuition dollars are accounted for in the provost's budget.

roomtempmayo

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Re: Senator Warren called out about paying off student loans
« Reply #70 on: January 27, 2020, 08:24:36 AM »
Maybe we should vote for state legislators who will go back to fulling funding in state tuition at public universities.
Perhaps we could refrain from the trophy buildings they think they need to attract students, and focus tax dollars on the items that directly affect the educational experience. You know, kinda like when I went to college decades ago.

When people talk about not wanting to pay for others' educations, it's worth keeping in mind that many of the costs incurred today necessarily pay for the students of tomorrow, just as the students of today are using the facilities built by tuition dollars from decades ago.

Of course, if facilities are debt financed rather than paid with cash (normal), that's the students of tomorrow paying for the students of today.

The point is that the costs are intergenerationally shuffled by either being spent today on durable goods like buildings, or borrowed from future generations either by literal borrowing or through deferred maintenance. 

If anyone went to class in a debt financed building, they're already in the red to future students.  Truth is, nobody really pays entirely for their own education.

Boofinator

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Re: Senator Warren called out about paying off student loans
« Reply #71 on: January 27, 2020, 09:24:07 AM »

I see things differently:
"Whine all you want, but taking out a loan is making an obligation to pay it back."
vs.
"Whine all you want, and Uncle Sam just might bail you out (in exchange for your vote)."

The biggest complaint about Warren's proposal isn't the free education, it's the populist bullshit Warren is peddling in order to buy votes. But Trump did the same thing, so I guess anything goes in politics, right?

The unfortunate part is Warren's populist bullshit is much worse than Trump's with regard to politics. The young folks with student debt don't vote.

What she should be doing is saying we're going to increase the loans on students and give it to social security recipients. That's how you win elections.

Consider the different constituencies, and the logic behind the gambit will make better sense.

slow hand slow plan

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Re: Senator Warren called out about paying off student loans
« Reply #72 on: January 27, 2020, 09:36:16 AM »

Why not fully fund community college and trade school 2 year programs completely.

Make all loans for schools at a low fixed rate.
 
Allow Bankruptcy to apply to student loans

Create an online community college that is free to all US citizens.


roomtempmayo

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Re: Senator Warren called out about paying off student loans
« Reply #73 on: January 27, 2020, 10:54:48 AM »
@slow hand slow plan I agree that there are any number of good incremental steps that, had we started taking them 10 or 15 years ago, student debt wouldn't have become the major issue it now is.

- Free community and tech school seems obvious.  It's been a clear success in Tennessee, with a clear net ROI to the community.  Any benefits to the student individually are just a bonus.

Given that a significant portion of the CC benefit appears to come from the transfer of cultural capital, I'd be leery of a fully online model.

- Loan rates have been allowed to become historically high, and they're currently about 200% of a prime 15 year mortgage.  For reference, the DoE was issuing loans during the late 70s and early 80s well below the rate of inflation, forget the rate of a mortgage.  The Federal government was literally paying students to take their money, rather than charging them for it.

Given that the DOE is currently running the student loan program with a large positive balance, there's no reason they shouldn't reduce rates.  Some states have stepped in to offer their own refinancing programs with rates around mortgage rates.  And of course there's private refinancing.  But there's no good reason to keep rates at 6%+.

- As for bankruptcy, this is before my time, but I have some vague recollection that before loans were made nondischargable (itself a misnomer, but that's the common knowledge) there was a seven year period before the loans could be discharged.  That strikes me as a reasonable compromise that keeps students from declaring bankruptcy on graduation day, but also keeps people from being buried for life.

Here are a few more incremental ideas, mostly focused on getting rid of current bad practices:

- Stop taxing tuition or student loan payments.  If we want to get people to dig out of a hole, why would we systematically make that hole deeper?

- Require states to match Pell grants.  If states want Federal money, they shouldn't be able to systematically divest themselves from their universities.

- Cap the percentage of an institution's budget that can go to non-academic expenditures.  Stop the competitive mission creep that's turning campuses into gated country clubs.

- Eliminate co-signed student loans. If mom/dad/grandparents want the loan to be issued and they're the ones with the credit, they need to be on the hook for the loan.  No more using the parents' credit to bury the next generation in debt.

- Eliminate all Federal graduate student loans. If going to grad school is a good financial bet, let private banks and/or institutions fund them and bear the risk with no special loan terms. The unlimited GradPlus loan is providing a perverse incentive right now for institutions to proliferate master's degrees of questionable value and driving the number of people with very high balances.

But we've done none of that.  Even the Obama administration failed to use the rule making process to drive down debt numbers.  And, of course, the current admin has acted in naked bad faith as they try to actively subvert the Borrow Defense Rule, as well as Public Service Loan Forgiveness.

Given that no incremental steps have been taken, it doesn't surprise me that the "burn it all down and start over" mentality has gotten traction.  I highly doubt anything approaching the Warren or Bernie plans will ever become reality, but maybe the next Congress will at least be jarred into making some meaningful reforms.

The Australian system is often held out as a good funding model where tuition is a significant source of funding.  I don't recall all the details, but it's something to the tune of graduates pay 7% of their salary as a direct payroll deduction for 7 years.  I believe there's an opt-out option where you pay a fixed tuition price in cash up front, but I've heard it's really uncommon for people to take it.  That's pretty much everything I think I might know about the Australian system, but some version of an income-based repayment model for a fixed period might be worth exploring.

J Boogie

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Re: Senator Warren called out about paying off student loans
« Reply #74 on: January 27, 2020, 11:27:59 AM »
For anyone who knows systems thinking, Warren's proposal smacks of being a "quick fix" rather than a fundamental solution.

As far as I understand it (correct me if I'm wrong), at some point the federal government decided it would be happy to provide as much cash as higher ed institutions might ever want, via student loans signed by naive young adults. With virtually no limits on their federal cash cow, higher ed institutions have gone hog wild on posh facilities and bloated administrative hires. (And for someone who has built a reputation on rooting out corporate corruption and greed, Warren sure seems to be looking the other way when it comes to higher ed institutions.)

Forgiving the loans of those students does nothing to stem that tide; it merely shifts the cost burden to a class of tax payers... (the 1% ers) whose money I would frankly rather use for something actually worthwhile.

I say this as an otherwise very liberal voter. But also as a (highly rated by students) adjunct professor who gets paid jack shit. And also as someone who went to one of these posh higher ed institutions.

Nailed it.


DarkandStormy

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Re: Senator Warren called out about paying off student loans
« Reply #75 on: January 27, 2020, 11:50:24 AM »
Why did we start distributing vaccines?  People should have produced those anti-bodies themselves!

-People complaining about any student loan debt cancellation proposals

GuitarStv

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Re: Senator Warren called out about paying off student loans
« Reply #76 on: January 27, 2020, 11:56:17 AM »
For anyone who knows systems thinking, Warren's proposal smacks of being a "quick fix" rather than a fundamental solution.

As far as I understand it (correct me if I'm wrong), at some point the federal government decided it would be happy to provide as much cash as higher ed institutions might ever want, via student loans signed by naive young adults. With virtually no limits on their federal cash cow, higher ed institutions have gone hog wild on posh facilities and bloated administrative hires. (And for someone who has built a reputation on rooting out corporate corruption and greed, Warren sure seems to be looking the other way when it comes to higher ed institutions.)

Forgiving the loans of those students does nothing to stem that tide; it merely shifts the cost burden to a class of tax payers... (the 1% ers) whose money I would frankly rather use for something actually worthwhile.

I say this as an otherwise very liberal voter. But also as a (highly rated by students) adjunct professor who gets paid jack shit. And also as someone who went to one of these posh higher ed institutions.

Nailed it.

I agree with much of the description of the problem . . . but don't see any kind of solution presented.  Is maintaining the status quo better than providing relief for people now?

Boofinator

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Re: Senator Warren called out about paying off student loans
« Reply #77 on: January 27, 2020, 12:40:33 PM »
Why did we start distributing vaccines?  People should have produced those anti-bodies themselves!

-People complaining about any student loan debt cancellation proposals

Could you perhaps walk us through your analogy?

A deadly infectious noncontact disease is like a loan taken on by free will in order to improve one's future in what way exactly?

When you mention "any student loan debt cancellation proposals", are you referring to cancellation of the entire debt (which I think most people would balk at), or a cancellation of some small part of the debt in order to make payoff manageable for those who apparently learned nothing about personal finance in college?

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What's funny is that, as Mustachians, we don't balk about putting aside a large chunk of our salary for retirement, which is not to be spent for decades, potentially. But putting aside a large part of our salary to reimburse those people who paid for our college education? Preposterous! The only reason we went to college was to earn more money so as to retire early, and those pesky loans are getting in the way! I might even have to work as long as those working class stiffs!

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Re: Senator Warren called out about paying off student loans
« Reply #78 on: January 27, 2020, 12:44:37 PM »
Why did we start distributing vaccines?  People should have produced those anti-bodies themselves!

-People complaining about any student loan debt cancellation proposals

That analogy seems a bit of a stretch, lol.

In typical discussions of policy, the people proposing the policy kind of should be the ones to explain how and why they want to do it. With that in mind, I posted a lengthy explanation of why this completel loan forgiveness didn't make sense that didn't have any rebuttals except one that compared it to the cost of wars, which was ultimately a deflection, because we're talking about why to forgive a certain type of debt not what other kind of big expenses does the government waste on (i.e. it's a deflection because the list of things we could cut back of government waste are a mile long and using that to justify paying for something just because there is waste somewhere else is simply a deflection).

I and others have put out questions that simply haven't been answered as to why to specifically just erase student loan debt. So feel free to reference my post above for more details but TLDR:

Why is student loan debt special in that it should be forgiven when other debts are not mentioned?
What rationale is there to jump to immediate forgiveness of student loan debt instead of changes in how the debt is handled (reducing interest rates, forgivable in bankruptcy, etc.)?

Wolfpack Mustachian

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Re: Senator Warren called out about paying off student loans
« Reply #79 on: January 27, 2020, 12:53:02 PM »
For anyone who knows systems thinking, Warren's proposal smacks of being a "quick fix" rather than a fundamental solution.

As far as I understand it (correct me if I'm wrong), at some point the federal government decided it would be happy to provide as much cash as higher ed institutions might ever want, via student loans signed by naive young adults. With virtually no limits on their federal cash cow, higher ed institutions have gone hog wild on posh facilities and bloated administrative hires. (And for someone who has built a reputation on rooting out corporate corruption and greed, Warren sure seems to be looking the other way when it comes to higher ed institutions.)

Forgiving the loans of those students does nothing to stem that tide; it merely shifts the cost burden to a class of tax payers... (the 1% ers) whose money I would frankly rather use for something actually worthwhile.

I say this as an otherwise very liberal voter. But also as a (highly rated by students) adjunct professor who gets paid jack shit. And also as someone who went to one of these posh higher ed institutions.

Nailed it.

I agree with much of the description of the problem . . . but don't see any kind of solution presented.  Is maintaining the status quo better than providing relief for people now?

Multiple solutions have been proposed that are not maintaining the status quo. Reduce interest rates on existing loans. Allow existing loans to be declared in bankruptcy. Reduce future costs of college for community college or even more.

GuitarStv

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Re: Senator Warren called out about paying off student loans
« Reply #80 on: January 27, 2020, 01:18:10 PM »
Reducing interest loans would probably help.  What would you propose they're reduced to?

The 'no bankruptcy' thing happens because there's little disincentive to declaring bankruptcy immediately out of school.  The market would not load to students, which means far fewer students would go to university - reducing the average educated population in the US.  How do you propose that this would work?

How do you propose that future costs of college are reduced?  This is a goal, not a solution.

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Re: Senator Warren called out about paying off student loans
« Reply #81 on: January 27, 2020, 01:40:16 PM »
I can and do support both A) Trying to bring down the cost of college* B) Subsidize the cost of college more for newly matriculating students. I also would support student loan debt forgiveness for folks taken advantage of by predatory for-profit schools (which should be combined with blocking those schools from being eligible for future student loans, and really revoking their accreditation generally).

But I struggle to see the argument for completely and generally forgiving existing student loans.

1) It would likely encourage new students to take on unsustainable debts for their education because they'd anticipate future forgiveness. <-- The same way the international tax holidays offered years ago have encouraged US corporations to stash more and more earnings overseas waiting for the next one.

2) Loan forgiveness a financial boost specifically targeted at the middle class and upper middle class. The bottom 41% of americans by educational attainment don't even have a single college credit and only the top 1/3 or so have a four year degree (many more have associates degrees, but those tend to be offered at schools with much lower tuition rates). Lots of folks from low income backgrounds DO get four year degrees, but they tend to either go to state schools (lower tuition) or get a lot more need-based-aid at private schools (a big chunk of the higher tuition rates at private schools gets plowed back into financial aid for low income students).

Why not focus spending either programs targeted at the people who are the least financially secure (Earned Income Tax Credit, Pell Grants), or programs that help all americans equally (i.e. UBI/Freedom Dividend), instead of spending on programs that will will primarily help folks in to top 20-30%?

Does that view make me an evil "hahaha, everyone else should suffer because I have suffered" person? I don't think it should, but obviously very few people advocate for positions that they personally think are evil or cruel.

*Note this would almost certainly be financially bad for me personally, but the great thing about FI is one has more freedom to advocate for positions that are bad for ones own earning potential.
« Last Edit: January 27, 2020, 01:42:04 PM by maizeman »

Wolfpack Mustachian

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Re: Senator Warren called out about paying off student loans
« Reply #82 on: January 27, 2020, 01:45:28 PM »
Reducing interest loans would probably help.  What would you propose they're reduced to?

The 'no bankruptcy' thing happens because there's little disincentive to declaring bankruptcy immediately out of school.  The market would not load to students, which means far fewer students would go to university - reducing the average educated population in the US.  How do you propose that this would work?

How do you propose that future costs of college are reduced?  This is a goal, not a solution.

For interest rates,I'd have to think on it. Off the cuff, we could perhaps reduce them to 2%? I have not thought about the exact number, so I'd be open to ideas.

For bankruptcy, you're combining a future problem with a current problem. Make it allowable to be cleared in bankruptcy now. If people were willing to tank their credit to absolve themselves of the debt, that would be their deal. I think less people would up and declare it than you think. If it became an issue, you could require a certain period of time before they could declare bankruptcy with requirements of some sort for payments made in the mean time before it happened.

For the future aspect, perhaps make community colleges/trade schools free with restrictions. Reverse some of the defunding of universities with requirements as to how much they would charge for tuition or where their money would go to in regards to waste. If you're going to have the government meddle though, which I don't like, I'd at least incentivize what makes more sense. That is a preference to community colleges/trade schools. We've got plenty of people with BS/BA degrees that got them without a plan as to what they were going to do with it, and the government interference with loans has exacerbated this issue. I'm still fine with universities needing to cost more money and people being able to go into stupid debt over it, because there's more of a problem than just student debt, and it's at the root of the issue of why let's make all colleges free, yay, has its own issues. The problem is people spending 4 or more years of college, wasting it. This is not just the stereotypical partying, although there was plenty of that when I was in school at least. It's also just going to college for some random degree and putting in no effort before hand or while there to make connections or pursue a future job. It's a huge waste of resources itself.

RangerOne

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Re: Senator Warren called out about paying off student loans
« Reply #83 on: January 27, 2020, 01:57:02 PM »
I would say the majority of legislative actions and executive order changes are not fair to someone.

I don't personally like any of the loan forgiveness plans I have heard. Primarily for the selfish reason that it doesn't help me or any of my friends and doesn't seem to address any of the systemic issues that put people in debt who couldn't repay that debt.

1. Because none of us directly benifit.
2. Because doing something like forgiving 50k debt for lower income people doesn't change the competitive landscape at the higher income levels.
3. Those with 6 figure debt and low incomes are still kind of screwed even after having 50k lopped off.

So I think that part of Warren's plan is mostly a wash and not that big of a deal for higher income individuals. What I think we will see in addition which I believe will be helpful is the following.

1. I want to see them once again honor their promise to forgive debt after 10 years for public servants. This is a benefit that was promised to people who are not summarily getting screwed over for wasting their time and lots of money.

2. Make sure the 20 year debt forgiveness + income based repayment is equitable for everyone else.

3. For those deeply in private debt with no hope of meeting the income requirements to pay it off, laws need to be revamped to allow bankruptcy to clear that debt in more cases. ( This can happen already, but I suspect the rules are too narrow right now to give people an escape hatch if things went totally wrong).

4. Propose revamps or use executive orders to revamp lending laws to better pair loan amounts with projected career paths.

ReadySetMillionaire

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Re: Senator Warren called out about paying off student loans
« Reply #84 on: January 27, 2020, 02:16:14 PM »
IMO, before we forgive all debt, I have two proposals that I think would have bipartisan support:

1.  I think the federal government should wipe out all capitalized interest.  If you're not sure what capitalized interest is in the student loan context, basically, interest accrues from the time you take out your loan until you graduate, and then that interest becomes your principal.  So, say I took out a $6,000 loan freshman year.  That loan is at 7%, and I didn't pay on it for seven years, so by the time I graduate, it's $9,000.  Now that $9,000 is my principal.  Do this every year, and especially on grad school loans, and $50,000 in loans can quickly turn into $80,000.

This is pure greed by the federal government; interest should be 0% while you are in school and accrue at a reasonable rate when you graduate.  I think all portions of capitalized interest should be forgiven. 

2. I also think interest rates should be substantially lowered for all past and future loans.  Much more of my payments would go to principal if rates were lowered just down to 4 percent.

TVRodriguez

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Re: Senator Warren called out about paying off student loans
« Reply #85 on: January 27, 2020, 02:36:52 PM »
People get lost in the weeds sometimes.  Specifics are worked out down the road.

None of a candidate's plans are likely to become legislation in anything close to the form proposed on a campaign trail.  That never happens, even when a candidate has a full congress of the same party.

I do like to see a candidate's approach to a plan, rather than just saying "this thing is bad" or "something should be done." 

The overall themes of "college is too expensive and there is way too much student loan debt and we need to do something about it" is what I see here.  That's not unique to Warren.  What is unique is the quantity and depth of her attempts to approach multiple problems, as laid out on her website. 

I like that she is trying to work on some way to approach the problem, even if her plan is not what will end up viable.

The detail of subsidized vs. unsubsidized loans is just that: a detail.  (I mean, it's a huge detail that ended up adding tens of thousands of dollars to DH's loans, but it's still a detail.)

What I actually see is Warren being the one candidate who tries to put together plans for addressing issues and then getting roasted for them, when other candidates just stand up and say, well, not much, and then avoid getting their plans picked on by not having plans.

Wolfpack Mustachian

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Re: Senator Warren called out about paying off student loans
« Reply #86 on: January 27, 2020, 02:52:54 PM »
People get lost in the weeds sometimes.  Specifics are worked out down the road.

None of a candidate's plans are likely to become legislation in anything close to the form proposed on a campaign trail.  That never happens, even when a candidate has a full congress of the same party.

I do like to see a candidate's approach to a plan, rather than just saying "this thing is bad" or "something should be done." 

The overall themes of "college is too expensive and there is way too much student loan debt and we need to do something about it" is what I see here.  That's not unique to Warren.  What is unique is the quantity and depth of her attempts to approach multiple problems, as laid out on her website. 

I like that she is trying to work on some way to approach the problem, even if her plan is not what will end up viable.

The detail of subsidized vs. unsubsidized loans is just that: a detail.  (I mean, it's a huge detail that ended up adding tens of thousands of dollars to DH's loans, but it's still a detail.)

What I actually see is Warren being the one candidate who tries to put together plans for addressing issues and then getting roasted for them, when other candidates just stand up and say, well, not much, and then avoid getting their plans picked on by not having plans.

This situation is different if for no other reason than Warren's pledging to use executive power to enact most if not all of the student loan forgiveness. This means that the whole they won't actually do it argument is moot. It is already not a great argument, because you often give people a pass to say whatever they like by dismissing it with this argument, but in this instance it really isn't applicable because of how Warren's planning on implementing this.

I guess her fleshing out her plan is better than not, so I'm not criticizing her for doing that. However, it is certainly a calculated decision to get *cough* buy votes. I've seen anecdotally some of the excitement it's generated for her campaign by young voting age people, an area the Dems very much need to energize. She's energizing them specifically because she's fleshing out how she's going to give them free money, so I see no issues with specifically being against her because of issues with how she's fleshing them out.

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Re: Senator Warren called out about paying off student loans
« Reply #87 on: January 28, 2020, 03:46:32 AM »
People get lost in the weeds sometimes.  Specifics are worked out down the road.

None of a candidate's plans are likely to become legislation in anything close to the form proposed on a campaign trail.  That never happens, even when a candidate has a full congress of the same party.

I do like to see a candidate's approach to a plan, rather than just saying "this thing is bad" or "something should be done." 

The overall themes of "college is too expensive and there is way too much student loan debt and we need to do something about it" is what I see here.  That's not unique to Warren.  What is unique is the quantity and depth of her attempts to approach multiple problems, as laid out on her website. 

I like that she is trying to work on some way to approach the problem, even if her plan is not what will end up viable.

The detail of subsidized vs. unsubsidized loans is just that: a detail.  (I mean, it's a huge detail that ended up adding tens of thousands of dollars to DH's loans, but it's still a detail.)

What I actually see is Warren being the one candidate who tries to put together plans for addressing issues and then getting roasted for them, when other candidates just stand up and say, well, not much, and then avoid getting their plans picked on by not having plans.

This situation is different if for no other reason than Warren's pledging to use executive power to enact most if not all of the student loan forgiveness. This means that the whole they won't actually do it argument is moot. It is already not a great argument, because you often give people a pass to say whatever they like by dismissing it with this argument, but in this instance it really isn't applicable because of how Warren's planning on implementing this.

I guess her fleshing out her plan is better than not, so I'm not criticizing her for doing that. However, it is certainly a calculated decision to get *cough* buy votes. I've seen anecdotally some of the excitement it's generated for her campaign by young voting age people, an area the Dems very much need to energize. She's energizing them specifically because she's fleshing out how she's going to give them free money, so I see no issues with specifically being against her because of issues with how she's fleshing them out.


I think your right in your opinion of the problem with Warrens proposal  and whos to say you should have the solutions. If it was that easy to come up with a solution than perhaps more substance would be put out there. And to your point based on all the last polls she seems to have dipped perhaps because of it. Still anyones game but she is going to have to keep answering to her position on this with more specifics and thats imo.

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Re: Senator Warren called out about paying off student loans
« Reply #88 on: January 28, 2020, 05:26:24 AM »
We could start by actually underwriting student loans.  I bet GPA, SAT, proposed major, school graduation rates, job placement rates, starting salaries, etc, could tell us a lot about a person's ability to repay student debt and how much they should be allowed to borrow.  It would actually help place students in high demand, high paying, fields.  Imagine that.

MasterStache

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Re: Senator Warren called out about paying off student loans
« Reply #89 on: January 28, 2020, 06:23:20 AM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

+1

I am of the latter. My story is a bit unique but not unheard of. I tried college a couple years after High School. Got tired of working shitty jobs. But I couldn't afford college and struggled because I also had to work a full time job to support myself. So I lasted one semester and quit. About a year later of working another yet shitty job, I decided the only way I could afford college was with assistance, so I enlisted in the military (against one of my parent's wishes). 4 years later and now in my mid 20's I headed off to Engineering school. About 3 years into a 5 year program I noticed my tuition was increasing exponentially faster than my GI BIll raises. I ended up with about 20K+ in student loan debt. I paid every single bit of it back.   

I wish people wouldn't have to take the route I did just to afford a higher education. Education should be cheaper and it should be subsidized. I watched a show the other day that explained the rising need for family doctors in less wealthy areas. There is a huge shortage and it's getting worse. Literally we are getting to the point where only the wealthy are getting the best and easiest access to healthcare. It's all directly correlated with massive student loan debt. When a newly minted doctor leaves medical school with hundred of thousands in debt, they aren't going to seek out typically lower paying family practices in less wealthy areas. They will never get their loans paid back. They tend to go into specialties that pay substantially more.

This isn't just about people mooching off the government. This is about making society better for everyone. We need more engineers, educators and doctors. Not less. This isn't about me or you. This isn't about the parent working 2 jobs to pay for their kids college. That's your choice and a noble choice at that. But that doesn't mean everyone can and should do the same. There are so many things that are much more worthy to complain about our tax dollars being used for (wars, fossil fuels, etc.). Education is what I prefer they be used for. Seems far more worthwhile and beneficial for everyone   

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Re: Senator Warren called out about paying off student loans
« Reply #90 on: January 28, 2020, 07:44:46 AM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

+1

I am of the latter. My story is a bit unique but not unheard of. I tried college a couple years after High School. Got tired of working shitty jobs. But I couldn't afford college and struggled because I also had to work a full time job to support myself. So I lasted one semester and quit. About a year later of working another yet shitty job, I decided the only way I could afford college was with assistance, so I enlisted in the military (against one of my parent's wishes). 4 years later and now in my mid 20's I headed off to Engineering school. About 3 years into a 5 year program I noticed my tuition was increasing exponentially faster than my GI BIll raises. I ended up with about 20K+ in student loan debt. I paid every single bit of it back.   

I wish people wouldn't have to take the route I did just to afford a higher education. Education should be cheaper and it should be subsidized. I watched a show the other day that explained the rising need for family doctors in less wealthy areas. There is a huge shortage and it's getting worse. Literally we are getting to the point where only the wealthy are getting the best and easiest access to healthcare. It's all directly correlated with massive student loan debt. When a newly minted doctor leaves medical school with hundred of thousands in debt, they aren't going to seek out typically lower paying family practices in less wealthy areas. They will never get their loans paid back. They tend to go into specialties that pay substantially more.

This isn't just about people mooching off the government. This is about making society better for everyone. We need more engineers, educators and doctors. Not less. This isn't about me or you. This isn't about the parent working 2 jobs to pay for their kids college. That's your choice and a noble choice at that. But that doesn't mean everyone can and should do the same. There are so many things that are much more worthy to complain about our tax dollars being used for (wars, fossil fuels, etc.). Education is what I prefer they be used for. Seems far more worthwhile and beneficial for everyone

But the thing is, Toque is absolutely not correct. There are certainly people that are motivated by their personal feelings of whether or not they went through it and want others to have to or not because they did. However, this false dichotomy presented by him implies the people promoting college loan forgiveness are the white knights with empathy where the rest want others to suffer belies the numerous facts/options that have been presented against the idea that have not been refuted by anyone. If the discussion on this thread is any indication of the full extent of the arguments on both side, the side promoting student loan forgiveness seems to mainly be emotionally driven without clear answers as to why this specific thing should be done.

Chris22

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Re: Senator Warren called out about paying off student loans
« Reply #91 on: January 28, 2020, 08:21:24 AM »
Reducing interest loans would probably help.  What would you propose they're reduced to?

The 'no bankruptcy' thing happens because there's little disincentive to declaring bankruptcy immediately out of school.  The market would not load to students, which means far fewer students would go to university - reducing the average educated population in the US.  How do you propose that this would work?

How do you propose that future costs of college are reduced?  This is a goal, not a solution.

For interest rates,I'd have to think on it. Off the cuff, we could perhaps reduce them to 2%? I have not thought about the exact number, so I'd be open to ideas.

For bankruptcy, you're combining a future problem with a current problem. Make it allowable to be cleared in bankruptcy now. If people were willing to tank their credit to absolve themselves of the debt, that would be their deal. I think less people would up and declare it than you think. If it became an issue, you could require a certain period of time before they could declare bankruptcy with requirements of some sort for payments made in the mean time before it happened.

I think you are dealing with two sides of the same coin with bankruptcy and interest rates.  Remember that aside from any government backing, student loans are essentially unsecured.  If you go get a secured loan (mortgage, car, etc), it’s a low interest rate because it is backed by an asset a creditor can seize and sell to recoup some of the loan, and the threat of losing your car/house/etc is generally enough to keep most people paying as long as they can scrape together the cash.

Unsecured loans, on the other hand, like credit cards and personal loans, are much higher interest, because there’s little recourse a bank has aside from trashing your credit and/or suing you if you don’t pay.  You can run up $20k on a credit card and then walk away and declare bankruptcy, and the bank will get pennies on the dollar maybe if you don’t have any assets to seize.  They compensate for this risk with higher interest rates, just like you would demand a higher interest rate on a riskier investment.

So student loans are similar to unsecured loans, so you would expect to see similar interest rates in the 10-20% range, except they are non-dischargeable which keeps rates somewhat lower.  I have no idea why they are currently at 6-7-8% versus the 1% or less (my wife consolidated at 0.5% in 2005) they used to be, that is an argument worth having, but basically if you make loans dischargable, you are inviting much higher interest rates.

What do I think needs to be done to address the issue?

I think a few things.  First of all, we need data.  We need to understand where the debt is highest, which degree fields are best and worst at paying back, and we also need to understand the percent of student debt that is tuition related versus room and board, what is for-profit college versus not, etc.  “Student loans” is a much broader umbrella then we often consider.

Once we understand that, I think there are a few possible solutions that will help:


-Require some sort of “truth in lending” statement to be prepared for borrowers.  Make schools give (independently audited) statistics on cost of degree, range and median of career earnings for graduates of that institution at 1, 5, 10, 15, 20 years out, job placement percentages, how likely they will need to go on and get a graduate degree and what that costs, etc etc etc. Give an amortization table, including what the loan will be worth at graduation (I wouldn’t be opposed to freezing interest while the student is in school).  Just like your credit card bill, put the little box “if you pay the minimum it will cost X and take this long, pay $200 more and it is $Y” etc.  Make this required to be signed before disbursing funds.  Make it reqired borrowers receive updated numbers each semester.  Make sure numbers are updated if the borrower changes their major.  Etc etc etc.  “I didn’t know” won’t be an acceptable answer anymore on “how did you get into this mess.”
 
-Uncap the tax deduction on student loan interest.  I think it’s like $2500 now?  That’s nothing.

-Require tighter control around how funds are disbursed.  I’d like to see payment go directly to the school and not stop in student accounts (maybe that’s how it works now?)  I’d also like to see reform around how student loans treat room and board.  I’m not sure mechanically how to do it, because I don’t want to lock students into having to use premium-priced on-campus living arrangements, but I also want to avoid kids racking up “student loans” that stemmed from financing spring break trips and nights at the bar and such.  Handing an 18-22y/o thousands of dollars a semester that they have to pay back “some day” is an invitation for that.  Maybe there needs to be some kind of enforced affordable housing so student loans only cover “reasonable” housing and not luxury apartments.  I don’t know how exactly to fix it, but it needs addressing.
 
-Encourage expanded loan payback programs from private employers.  Give them a big tax credit or something, I don’t know.  I would like to see it portable across employers, because otherwise it invites abuse.  Maybe something like “after your first year of work at MegaCorp we will pay 50% of your student loan each month, scaling up to 100% after 5 years” or something.  Or a fixed dollar amount, “up to $500/mo towards a loan, increasing to $1000”.  That’s not perfect but something along those lines.  I don’t want to see “work here 10 years and we’ll pay 100%” because people will be trapped.  Again, give employers big ass incentives to do this, maybe for every 50 people whose loans they are paying you knock $1M off their tax bill, I dunno.  Something.  Make participation mandatory for every company with over (1000?  5000?  I dunno) employees.  Make this a “protected class” so employers can’t ask about it during the hiring process.
 
-Finally, I think schools need some sort of pain too.  I wouldn’t be opposed to capping the rate at which they can increase tuition (all in, including “fees”).  I wouldn’t be opposed to requiring them to freeze tuition at the price you pay when you entered for the average length of time it takes to get a degree (if a BA/BS takes 4 years on average to get at the school, you have a locked in price for 4 years upon starting, if you screw up and it takes 5 years, too bad for you.  If you can’t finish in 4 because the school screwed you with scheduling, there would be an appeals process or something).  I would require audited, easy to understand financial statements be delivered to the student or family at the beginning of every semester showing the breakdown of costs, % to administration, teachers, sports programs, building programs, etc etc, cash reserves, all that stuff.  I’d also be receptive to hearing a creative way to tie the school getting paid to student success; put the student loans into escrow and instead of the school getting paid as soon as the student signs up for classes, the school doesn’t get paid until the student starts repaying, and if 10% of the students from that school default, the school gets 90% of the payments it was promised or something.  And make sure admissions, etc are need blind so the school can’t hold this against students.  I dunno, that’s off the top of my head and probably has a lot of holes, but you get the idea, a school is somehow penalized when its former students are ill-equipped to repay the loans they took out.
 
So those are my thoughts.  Overall, I certainly want to help people who are burdened by student loans, but I really don’t think a mass pay-off is the right idea, it incentivizes bad behavior and creates a moral hazard.  If you tie repayment to working, you avoid the whole “free ride” problem.  And I think this puts the burden on all parties, the borrower who has to know what he/she is getting into, and is more restricted on what they can borrow for, the employer who benefits from an educated workforce and now has to have some skin in that game, and the school who can no longer jerk everyone around with crazy prices and has to be accountable for how the money is spent.  I look forward to hearing why all of those ideas are terrible and stupid.  I’m sure they need tweaks, but you get the spirit of them.

Freedom2016

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Re: Senator Warren called out about paying off student loans
« Reply #92 on: January 28, 2020, 08:54:34 AM »
IMO, before we forgive all debt, I have two proposals that I think would have bipartisan support:

1.  I think the federal government should wipe out all capitalized interest.  If you're not sure what capitalized interest is in the student loan context, basically, interest accrues from the time you take out your loan until you graduate, and then that interest becomes your principal.  So, say I took out a $6,000 loan freshman year.  That loan is at 7%, and I didn't pay on it for seven years, so by the time I graduate, it's $9,000.  Now that $9,000 is my principal.  Do this every year, and especially on grad school loans, and $50,000 in loans can quickly turn into $80,000.

This is pure greed by the federal government; interest should be 0% while you are in school and accrue at a reasonable rate when you graduate.  I think all portions of capitalized interest should be forgiven. 

2. I also think interest rates should be substantially lowered for all past and future loans.  Much more of my payments would go to principal if rates were lowered just down to 4 percent.

These seem like really good ideas to me.

Someone else posted about underwriting loans. I do get it, it does make sense in terms of limiting people borrowing $100k for an underwater knitting degree. I would worry about the unintended impacts of doing that, though. It would mean that the gov't incentivizes young adults to go in the direction of lucrative corporate jobs (right? those that show the brightest economic prospects / best ROI)... at the expense of incentivizing people to go into less lucrative, but definitely valuable fields that benefit society: teaching, for example, or history or psychology or social work or... you get the idea. So I think that that would create a perverse incentive that doubles down on what the 'free market economy' is already producing and we'll wind up with an oversupply of MBA bankers and software engineers.


MasterStache

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Re: Senator Warren called out about paying off student loans
« Reply #93 on: January 28, 2020, 08:58:45 AM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

+1

I am of the latter. My story is a bit unique but not unheard of. I tried college a couple years after High School. Got tired of working shitty jobs. But I couldn't afford college and struggled because I also had to work a full time job to support myself. So I lasted one semester and quit. About a year later of working another yet shitty job, I decided the only way I could afford college was with assistance, so I enlisted in the military (against one of my parent's wishes). 4 years later and now in my mid 20's I headed off to Engineering school. About 3 years into a 5 year program I noticed my tuition was increasing exponentially faster than my GI BIll raises. I ended up with about 20K+ in student loan debt. I paid every single bit of it back.   

I wish people wouldn't have to take the route I did just to afford a higher education. Education should be cheaper and it should be subsidized. I watched a show the other day that explained the rising need for family doctors in less wealthy areas. There is a huge shortage and it's getting worse. Literally we are getting to the point where only the wealthy are getting the best and easiest access to healthcare. It's all directly correlated with massive student loan debt. When a newly minted doctor leaves medical school with hundred of thousands in debt, they aren't going to seek out typically lower paying family practices in less wealthy areas. They will never get their loans paid back. They tend to go into specialties that pay substantially more.

This isn't just about people mooching off the government. This is about making society better for everyone. We need more engineers, educators and doctors. Not less. This isn't about me or you. This isn't about the parent working 2 jobs to pay for their kids college. That's your choice and a noble choice at that. But that doesn't mean everyone can and should do the same. There are so many things that are much more worthy to complain about our tax dollars being used for (wars, fossil fuels, etc.). Education is what I prefer they be used for. Seems far more worthwhile and beneficial for everyone

But the thing is, Toque is absolutely not correct. There are certainly people that are motivated by their personal feelings of whether or not they went through it and want others to have to or not because they did. However, this false dichotomy presented by him implies the people promoting college loan forgiveness are the white knights with empathy where the rest want others to suffer belies the numerous facts/options that have been presented against the idea that have not been refuted by anyone. If the discussion on this thread is any indication of the full extent of the arguments on both side, the side promoting student loan forgiveness seems to mainly be emotionally driven without clear answers as to why this specific thing should be done.

Hmm, I was pretty clear and even provided a real world example for why I believe student loan forgiveness is a good thing.
https://www.businessinsider.com/home-depot-co-founder-ken-langone-paid-nyu-med-school-tuition-2019-4

You can follow up on this story as well and see the affects it has had on applications, admissions and even the diversity of the students themselves. I watched a much longer version with interviews of the students. The positive affects ranged from better grades (no more having to work multiple jobs to get by), which of course means smarter doctors, an increase in the desire to open family practices in much needed areas, the list goes on and on. Notably absent was a single student who took the attitude of "well this isn't fair I already paid for 3 years of medical school."

FIPurpose

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Re: Senator Warren called out about paying off student loans
« Reply #94 on: January 28, 2020, 09:07:22 AM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

+1

I am of the latter. My story is a bit unique but not unheard of. I tried college a couple years after High School. Got tired of working shitty jobs. But I couldn't afford college and struggled because I also had to work a full time job to support myself. So I lasted one semester and quit. About a year later of working another yet shitty job, I decided the only way I could afford college was with assistance, so I enlisted in the military (against one of my parent's wishes). 4 years later and now in my mid 20's I headed off to Engineering school. About 3 years into a 5 year program I noticed my tuition was increasing exponentially faster than my GI BIll raises. I ended up with about 20K+ in student loan debt. I paid every single bit of it back.   

I wish people wouldn't have to take the route I did just to afford a higher education. Education should be cheaper and it should be subsidized. I watched a show the other day that explained the rising need for family doctors in less wealthy areas. There is a huge shortage and it's getting worse. Literally we are getting to the point where only the wealthy are getting the best and easiest access to healthcare. It's all directly correlated with massive student loan debt. When a newly minted doctor leaves medical school with hundred of thousands in debt, they aren't going to seek out typically lower paying family practices in less wealthy areas. They will never get their loans paid back. They tend to go into specialties that pay substantially more.

This isn't just about people mooching off the government. This is about making society better for everyone. We need more engineers, educators and doctors. Not less. This isn't about me or you. This isn't about the parent working 2 jobs to pay for their kids college. That's your choice and a noble choice at that. But that doesn't mean everyone can and should do the same. There are so many things that are much more worthy to complain about our tax dollars being used for (wars, fossil fuels, etc.). Education is what I prefer they be used for. Seems far more worthwhile and beneficial for everyone

But the thing is, Toque is absolutely not correct. There are certainly people that are motivated by their personal feelings of whether or not they went through it and want others to have to or not because they did. However, this false dichotomy presented by him implies the people promoting college loan forgiveness are the white knights with empathy where the rest want others to suffer belies the numerous facts/options that have been presented against the idea that have not been refuted by anyone. If the discussion on this thread is any indication of the full extent of the arguments on both side, the side promoting student loan forgiveness seems to mainly be emotionally driven without clear answers as to why this specific thing should be done.

Hmm, I was pretty clear and even provided a real world example for why I believe student loan forgiveness is a good thing.
https://www.businessinsider.com/home-depot-co-founder-ken-langone-paid-nyu-med-school-tuition-2019-4

You can follow up on this story as well and see the affects it has had on applications, admissions and even the diversity of the students themselves. I watched a much longer version with interviews of the students. The positive affects ranged from better grades (no more having to work multiple jobs to get by), which of course means smarter doctors, an increase in the desire to open family practices in much needed areas, the list goes on and on. Notably absent was a single student who took the attitude of "well this isn't fair I already paid for 3 years of medical school."

Your quote reminded me of this.

Matthew 20:1-16
Quote
“For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. He agreed to pay them a denarius[a] for the day and sent them into his vineyard.

“About nine in the morning he went out and saw others standing in the marketplace doing nothing. He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ So they went.

“He went out again about noon and about three in the afternoon and did the same thing. About five in the afternoon he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’

“‘Because no one has hired us,’ they answered.

“He said to them, ‘You also go and work in my vineyard.’

“When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’

“The workers who were hired about five in the afternoon came and each received a denarius. So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. When they received it, they began to grumble against the landowner. ‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’

“But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’

“So the last will be first, and the first will be last.”

Wolfpack Mustachian

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Re: Senator Warren called out about paying off student loans
« Reply #95 on: January 28, 2020, 09:24:41 AM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

+1

I am of the latter. My story is a bit unique but not unheard of. I tried college a couple years after High School. Got tired of working shitty jobs. But I couldn't afford college and struggled because I also had to work a full time job to support myself. So I lasted one semester and quit. About a year later of working another yet shitty job, I decided the only way I could afford college was with assistance, so I enlisted in the military (against one of my parent's wishes). 4 years later and now in my mid 20's I headed off to Engineering school. About 3 years into a 5 year program I noticed my tuition was increasing exponentially faster than my GI BIll raises. I ended up with about 20K+ in student loan debt. I paid every single bit of it back.   

I wish people wouldn't have to take the route I did just to afford a higher education. Education should be cheaper and it should be subsidized. I watched a show the other day that explained the rising need for family doctors in less wealthy areas. There is a huge shortage and it's getting worse. Literally we are getting to the point where only the wealthy are getting the best and easiest access to healthcare. It's all directly correlated with massive student loan debt. When a newly minted doctor leaves medical school with hundred of thousands in debt, they aren't going to seek out typically lower paying family practices in less wealthy areas. They will never get their loans paid back. They tend to go into specialties that pay substantially more.

This isn't just about people mooching off the government. This is about making society better for everyone. We need more engineers, educators and doctors. Not less. This isn't about me or you. This isn't about the parent working 2 jobs to pay for their kids college. That's your choice and a noble choice at that. But that doesn't mean everyone can and should do the same. There are so many things that are much more worthy to complain about our tax dollars being used for (wars, fossil fuels, etc.). Education is what I prefer they be used for. Seems far more worthwhile and beneficial for everyone

But the thing is, Toque is absolutely not correct. There are certainly people that are motivated by their personal feelings of whether or not they went through it and want others to have to or not because they did. However, this false dichotomy presented by him implies the people promoting college loan forgiveness are the white knights with empathy where the rest want others to suffer belies the numerous facts/options that have been presented against the idea that have not been refuted by anyone. If the discussion on this thread is any indication of the full extent of the arguments on both side, the side promoting student loan forgiveness seems to mainly be emotionally driven without clear answers as to why this specific thing should be done.

Hmm, I was pretty clear and even provided a real world example for why I believe student loan forgiveness is a good thing.
https://www.businessinsider.com/home-depot-co-founder-ken-langone-paid-nyu-med-school-tuition-2019-4

You can follow up on this story as well and see the affects it has had on applications, admissions and even the diversity of the students themselves. I watched a much longer version with interviews of the students. The positive affects ranged from better grades (no more having to work multiple jobs to get by), which of course means smarter doctors, an increase in the desire to open family practices in much needed areas, the list goes on and on. Notably absent was a single student who took the attitude of "well this isn't fair I already paid for 3 years of medical school."

That was partially my bad. I was really annoyed at Toque's comment and attached some of the annoyance to you because you +1'd it and I had to read it again, lol. I fully stand by my critique of his comment but shouldn't have assigned it to you as much.

Additionally, I did read your article, but it's not applicable to the discussion as I read it. It's talking about future free student tuition, not existing student loan forgiveness. I've already mentioned that we can address future issues with tuition changes for future students.

Finally, I stand by my emotional comment of the general emotionality as opposed to rationality of the people for student loan forgiveness, because numerous ideas have been brought up to address the problem besides full forgiveness and questions have been brought up as to why specifically student loan debt forgiveness that have not been answered or addressed. These are straightforward logial questions, and the lack of response would seem that people don't have the answers for them.

Blueberries

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Re: Senator Warren called out about paying off student loans
« Reply #96 on: January 28, 2020, 09:57:42 AM »
I'll be voting Democrat, but I don't love this idea.  I think there are a few solutions that make more sense than paying off all student loan debt - making community college free, lowering interest rates on student loans, easier/allowable consolidations with much lower rates, removing interest payments while you're in university, and providing a rebate similar to the homebuyer credit.  A one-time credit paid towards student loans, based on a scale of the amount owed, makes a lot more sense to me than completely wiping away student loan debt. 

I don't think it has to be all or nothing.

Edited to change my wording.
« Last Edit: January 28, 2020, 10:05:36 AM by Blueberries »

J Boogie

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Re: Senator Warren called out about paying off student loans
« Reply #97 on: January 28, 2020, 10:03:43 AM »

Hmm, I was pretty clear and even provided a real world example for why I believe student loan forgiveness is a good thing.
https://www.businessinsider.com/home-depot-co-founder-ken-langone-paid-nyu-med-school-tuition-2019-4

You can follow up on this story as well and see the affects it has had on applications, admissions and even the diversity of the students themselves. I watched a much longer version with interviews of the students. The positive affects ranged from better grades (no more having to work multiple jobs to get by), which of course means smarter doctors, an increase in the desire to open family practices in much needed areas, the list goes on and on. Notably absent was a single student who took the attitude of "well this isn't fair I already paid for 3 years of medical school."

But this is regarding high-conviction students who were willing to take on the loans to study medicine, a lucrative field, in the first place.

This does not address the blank check mentality that can occur when things that used to be hard (but not impossible) and require sacrifice now become artificially easy and painless.

We are far more likely to properly value the things we have worked hard for rather than the things that society collectively allocates to us.


Searching for a long term solution should look more like asking what could get us back to a time where a significant portion of tuition could be paid for with a summer's worth of savings or a scholarship.

Searching for a short term solution should look more like incentivizing universities to offer extremely discounted tuition to dropout students who have SL debt from their school but no degree. After all, these are the ones struggling the worst and there would be little moral hazard created (provided the dropout occurred prior this policy being proposed).




FrugalToque

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Re: Senator Warren called out about paying off student loans
« Reply #98 on: January 28, 2020, 11:20:20 AM »
If rates
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.
Alternative mindset:
https://en.wikipedia.org/wiki/Moral_hazard

I'm not vehemently opposed to forgiveness, just forgiveness that doesn't hurt.


Moral Hazard?  That's a reach. 
You want Moral Hazard: take it out on the guidance counsellors who told the kids to get those loans.
Those are the sharks.
They're the ones who get to brag about their percentage of students who go to college while dumping all the risk on the kids.

The 16 year olds who were told to take on those loans were led to believe this was a worthwhile long term investment.
Evidently, it is not.

Toque.

FrugalToque

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Re: Senator Warren called out about paying off student loans
« Reply #99 on: January 28, 2020, 11:23:37 AM »
DH and I took out and paid back over $320,000 in student loans.  We worked hard to be able to pay them off ourselves. 

We've prepaid our own kids' tuition for 4 years of public university so they don't have to have the student loan burdens we had. 

And both of us still would be happy to see today's student loan borrowers get some loan forgiveness.  Because it's not about us in particular.


Not every new law has to benefit everyone individually to benefit society as a whole.

There are two clear mindsets here:
"I suffered through this, so I don't want anyone else to suffer through it"
And:
"I suffered through this, therefore I want everyone else to suffer through it"

I guess we know which side you and I are on.

Toque.

I see things differently:
"Whine all you want, but taking out a loan is making an obligation to pay it back."
vs.
"Whine all you want, and Uncle Sam just might bail you out (in exchange for your vote)."

The biggest complaint about Warren's proposal isn't the free education, it's the populist bullshit Warren is peddling in order to buy votes. But Trump did the same thing, so I guess anything goes in politics, right?

What about "Complain if you will, we're trying to make the world a better place for the next generation".

If you're going to be mired in "My life was difficult, I demand that everyone's life be just as difficult in all the same ways", then I don't think society will progress.

I mean, your great-grandfather probably didn't have a car.
Only pansy-ass kids today can't walk 10 miles every day to a job in a dangerous factory that routinely chops off people's arms.
If that was good enough for great-grandpa, what's your problem?
Almost getting your arm chopped off every day is the only way to build character, obviously.

Toque.

 

Wow, a phone plan for fifteen bucks!