Economists Say Forgiving Student Debt (Warren's/Bernie's Plans) Would Boost the Fuck Out of the Economy

[Massdriver]

The Federal government should regulate and cap tuition rates and costs. As it currently stands, we pay way too much for higher education relative to other developed countries (sounds like healthcare), and I would want to ensure that it was being fully addressed at the Federal level before making everything free and forgiving it all.

 

Once done, I would be okay forgiving  less debt (say ~$25k instead of any amount of $50k like the populists on the left propose) on means tested families and individuals. Perhaps limits on payments can be made for everyone else too by eliminating interest or payments can be limited further based on incomes ( as incomes rise, a greater percentage of it could be taken for loan payments, but less when people make less). 

 

I still have trouble getting on board because I think we need to look at education differently from the high school level forward, but that's not realistic.

[b_m_b_m_b_m]

We already have a means tested program--its called progressive tax rates and they work really well. 

 

There is a lot of room to cut costs in universities though. Why does each one need a police department? Why do we spend more on non teaching staff than teaching staff? Why do we continue to rely on employer provided health insurance, which includes universities? How can universities continue to raise tuition higher and higher? (Actually not an issue in Ohio where the board of regents cap the tuition increases quite low)

[SaysWho?]

I don't get the, "Why not forgive mortgage debt?" argument. Maybe that is a good idea; maybe it isn't, but I don't see how, "Why not this?" is an argument?

 

Was it not worth creating Medicare because, "Why not Medicare-for-All?"

Was it not worth legalizing gay marriage because, "Why not more kinds of marriage?"

Was it not worth eliminating the prohibition of alcohol because, "Why not marijuana, too?"

Was it not worth codifying unpaid leave into law because, "Why not paid leave?"

 

There may be a grander idea or another good idea out there, but that doesn't prohibit idea 1 from being good.

[Alpha1Cowboy]

21 hours ago, SaysWho? said:

 

I graduated with no debt and wouldn't feel insulted at all. Heck, if there was a national forgiveness program in my 20s, more of my friends could have done shit with me since they wouldn't have been buried in student loan payments. And with the candidates proposing student loan forgiveness being more apt to want to make college more affordable in general, perhaps more people who are worried about future debt would see more avenues to afford college.

 

Many who don't graduate with debt are rich, anyway. I knew all too many of them. Me, I was just lucky that my parents wanted me to set up a savings account in 4th grade.

 

One of the biggest things we need to change is the conversation around these issues. It's the same as the #FightFor15. "Why do they deserve $15 an hour when I don't get paid that much?!" The conversation shouldn't revolve around more people suffering with us. The conversation should be, "Why is everyone getting paid so little while there's a political party fighting to death so that rich fuckers get more and more and more with massive, towering tax cuts?"

 

 

Exactly....I graduated right as they rolled out the new MGIBill which straight up pays for a 4 year degree and also gives a stipend of around 1200 a month.   My MGIBill barely covered any of it and I had to take out loans......but that's why I gave testimony to change the MGIBill because even though it wouldn't neccessarily help me I knew it would help tens of thousands of future veterans getting out of the service avoid piling on huge debt.

 

Even with my degree I earn more and pay much higher taxes than I would have without it versus many of my relatives back home in Minnesota who basically work jobs like asphalting and road construction and get most of what they pay in back.  

 

I suggested to my kids they start a business.....take a 60K loan...and if it fails...at least you can walk away with little damage done.

[Dodger]

I imagine you can get out of your 60k bad business loan a hell of a lot easier than 60k in student loan debt. 

[Guest]

Good luck getting a loan to start a business unless you have rich friends or family who will do it.

[legend]

1 hour ago, SaysWho? said:

I don't get the, "Why not forgive mortgage debt?" argument. Maybe that is a good idea; maybe it isn't, but I don't see how, "Why not this?" is an argument?

 

Was it not worth creating Medicare because, "Why not Medicare-for-All?"

Was it not worth legalizing gay marriage because, "Why not more kinds of marriage?"

Was it not worth eliminating the prohibition of alcohol because, "Why not marijuana, too?"

Was it not worth codifying unpaid leave into law because, "Why not paid leave?"

 

There may be a grander idea or another good idea out there, but that doesn't prohibit idea 1 from being good.

 

I agree that mortgage forgiveness seems like a bad alternative, but the reason for highlighting alternatives is that we only have so much budget to make something happen, so we should put the money where it will be most effective and there are doubts that student loan forgiveness is the best use of it, even if it is eventually a net gain.

 

If no one can put something else better on the table and we think student debt forgiveness is a net gain then we should do it. I think people do think there are other better options for our budget though. For example, if I had to pick between which happened first: a good version of M4A becoming reality and student debt forgiveness, I'd probably lean toward a good version of M4A.

[Dodger]

35 minutes ago, sblfilms said:

Good luck getting a loan to start a business unless you have rich friends or family who will do it.

 

 

I might be misrememering but wasn't the start of your theater adventure convincing a bank to lend you like $50000 when you were broke?

[Guest]

13 minutes ago, Dodger said:

 

 

I might be misrememering but wasn't the start of your theater adventure convincing a bank to lend you like $50000 when you were broke?

Not a bank, the landlord of the shopping center fronted cash that got baked into our monthly rent over the initial 3 years of our lease. Not a remotely normal scenario though!

[Massdriver]

1 hour ago, legend said:

 

I agree that mortgage forgiveness seems like a bad alternative, but the reason for highlighting alternatives is that we only have so much budget to make something happen, so we should put the money where it will be most effective and there are doubts that student loan forgiveness is the best use of it, even if it is eventually a net gain.

 

If no one can put something else better on the table and we think student debt forgiveness is a net gain then we should do it. I think people do think there are other better options for our budget though. For example, if I had to pick between which happened first: a good version of M4A becoming reality and student debt forgiveness, I'd probably lean toward a good version of M4A.

There is an opportunity cost in each policy that is enacted in terms of political capital and monetary capital. There is only so much to go around, so when I think about all the policies being proposed by Democrats, I know that they are going to have to choose what they want to fix. It won't all get done. That doesn't mean that they shouldn't campaign on "free X", but people should be sober and realize that it's not all happening. So given the limited funding we have, is this really the best possible way to spend all 1.6 trillion? What if you could relieve most of the distress related to student loans by a more targeted program for 300 billion and use the rest of that money in other ways?

[marioandsonic]

I'm currently stuck paying $500 a month on student loans.  The biggest one is $300 a month, and while that doesn't sound like that much (at least for certain people), that loan is for over $60k and is set to last for at least 25 years, because I can't afford to pay anything higher.  And I already have over $2000 of interest on top of that because I was unemployed for a period of time, so I've just been paying the interest for years now.

 

[Signifyin(g)Monkey]

For the record, I think an even better idea than blanket student loan forgiveness is a program that simply gives each American citizen a certain amount of money earmarked for debt repayment. (perhaps with the amount varying depending on an individual's debt-to-income ratio)

 

That way someone who doesn't have student debt can instead pay off other debts they have, (credit card debts, auto-loans, etc.) making for an even more broad-based (and potentially less divisive) debt amnesty with even greater positive effects.  Call it 'Universal Basic Debt Forgiveness'.

 

But I also know that, however superior an option it might be, such a policy would be a much bigger undertaking than just forgiving student loans, and may not be politically possible in the US.

[CastlevaniaNut18]

8 hours ago, legend said:

 

I "only" had 40k of debt when I left grad school for my post doc, and this is exactly how I felt with even that level of debt. It felt like I was making no progress even though I was paying it. When I left my post doc and starting making much better money, the first thing I did was pay off the entire debt in 1 year, because fuck that shit.

 

I can only imagine how painful it is for someone with even more and who isn't entering a high-paying sector in the near future. The feeling of not making progress even though you're dumping money into it is seriously demoralizing. I'm all on board on at least knee capping the interest rates to inflation or nothing.

This is pretty much the scenario my husband and I faced after our bachelors. I only had to take out a loan for one year at $7500, the rest of our ~$30k debt was his. Still, we were in decent shape. We weren't making bank or anything right out of college, but we had no other debt and lived frugally, because he was like "fuck this." Paid it off in a year.

Start by reducing or even eliminating the interest. It's crazy how much it accumulates, especially while you're still in school and can't pay it off.

[TheBladeRoden]

I'm not totally against the idea of paying back my student loan, I just don't want to be charged $300 a month when all my degree is getting me is the title of "jobless bum"

[b_m_b_m_b_m]

1 hour ago, Signifyin(g)Monkey said:

For the record, I think an even better idea than blanket student loan forgiveness is a program that simply gives each American citizen a certain amount of money earmarked for debt repayment. (perhaps with the amount varying depending on an individual's debt-to-income ratio)

 

That way someone who doesn't have student debt can instead pay off other debts they have, (credit card debts, auto-loans, etc.) making for an even more broad-based (and potentially less divisive) debt amnesty with even greater positive effects.  Call it 'Universal Basic Debt Forgiveness'.

 

But I also know that, however superior an option it might be, such a policy would be a much bigger undertaking than just forgiving student loans, and may not be politically possible in the US.

Your posts are the reason I fully support a student loan debt jubilee (even if that isn't what you may have intended), but I really like this plan

[Massdriver]

3 hours ago, Signifyin(g)Monkey said:

For the record, I think an even better idea than blanket student loan forgiveness is a program that simply gives each American citizen a certain amount of money earmarked for debt repayment. (perhaps with the amount varying depending on an individual's debt-to-income ratio)

 

That way someone who doesn't have student debt can instead pay off other debts they have, (credit card debts, auto-loans, etc.) making for an even more broad-based (and potentially less divisive) debt amnesty with even greater positive effects.  Call it 'Universal Basic Debt Forgiveness'.

 

But I also know that, however superior an option it might be, such a policy would be a much bigger undertaking than just forgiving student loans, and may not be politically possible in the US.

I could go for this. It's essentially a conditional cash transfer which is what I was arguing for.

[Keyser_Soze]

10 hours ago, SaysWho? said:

I don't get the, "Why not forgive mortgage debt?" argument. Maybe that is a good idea; maybe it isn't, but I don't see how, "Why not this?" is an argument?

 

Was it not worth creating Medicare because, "Why not Medicare-for-All?"

Was it not worth legalizing gay marriage because, "Why not more kinds of marriage?"

Was it not worth eliminating the prohibition of alcohol because, "Why not marijuana, too?"

Was it not worth codifying unpaid leave into law because, "Why not paid leave?"

 

There may be a grander idea or another good idea out there, but that doesn't prohibit idea 1 from being good.

 

Remember before they had pull tabs on canned foods? Was there an outrage from people who already paid for can openers calling people who used the tabs lazy or felt they should get refunded the money for the can openers or did they think that it was a good idea and helpful for everyone?

[Dodger]

 

12 hours ago, Keyser_Soze said:

 

Remember before they had pull tabs on canned foods? Was there an outrage from people who already paid for can openers calling people who used the tabs lazy or felt they should get refunded the money for the can openers or did they think that it was a good idea and helpful for everyone?

 

 

Before there was D1P and the great D1P tradition of nearly cutting your finger off, I sliced my thumb down to the bone opening a can of tuna with the new fangled pull tab after the lid went down where my thumb was holding the can. In true American tradition, I didn't go to the ER for stitches because I had no health insurance at the time. Come to think of it, I have a few scars I probably should have gone to the ER for stiches for but didn't because this is America and at the time I couldn't afford it. 

 

 

[Keyser_Soze]

10 minutes ago, Dodger said:

 

 

 

Before there was D1P and the great D1P tradition of nearly cutting your finger off, I sliced my thumb down to the bone opening a can of tuna with the new fangled pull tab after the lid went down where my thumb was holding the can. In true American tradition, I didn't go to the ER for stitches because I had no health insurance at the time. Come to think of it, I have a few scars I probably should have gone to the ER for stiches for but didn't because this is American and at the time I couldn't afford it. 

 

 

 

[TwinIon]

I don't understand how the debate between mortgage debt and college debt has gone on in this thread for so long. I agree that the purely economic effects of eliminating debt for certain people would be roughly equivalent, but that totally ignores all other factors. Education wasn't chosen because it was the best way to stimulate the economy in the short term, it's because there is a larger societal value to having a more capable and educated workforce. It increases economic mobility and has all sorts of positive externalities.

 

Also, and I stressed this previously, despite the headline of this thread, debt forgiveness is only part of (and arguably the far less important part of) Warren/Sanders' plan for college. The larger part is making public college free or nearly free. The core of the issue being addressed here is about who is able to access all the benefits of a college education, and removing those barriers as much as possible.

[Commodore D]

On 11/25/2019 at 1:27 PM, MarSolo said:

You choose to have a car, you choose to buy a house.

 

Not everyone chose to go to college, people were told, as teenagers, that taking loans out to get a better education would get them an amazing job in the field of their choosing if they wanted to make it in this world.

 

Fucking teenagers were told “take this money and repay it later after you choose NOW what you want to do with the rest of your life”.

Going was a choice as well. Sure there might have been pressure, or a potential life style changes, but going and racking up debt was a choice.