Long ago, a high school education became the norm required of most everybody and publicly financed high schools became available to all. Since then the body of knowledge has increased immensely. I believe it is high time that post secondary education should be available to all in schools that are publicly supported. Of course, private schools would continue and be supported privately.(1)>>Student Loan Forgiveness ?????The CATCH 22!.I think everybody knows that student loan payments starting up again without any word on debt cancelation would have signaled that current admin wouldn't be doing anything with regards to (2)>>blanket cancelation. I don't see anything at all to take out of this statement. Under Biden's loan forgiveness order, individuals earning less than $125K ($250K for married couples) will qualify for $10K in loan forgiveness, plus another $10K if they received a Pell Grant to go to school. Pell grants are financial aid provided to people who display "exceptional financial need and have not already earned an undergraduate degree". Legal scholars broadly seem to agree that this is within the President's executive power, since the forgiveness applies only to federal student loan debt, but there is some disagreement on the subject.Conservative groups have raised concerns about inflation, tuition growth, and (3)>> increased borrowing from students expecting future loan forgiveness, or fundamental fairness issues for people who paid off their loans. Cynics have accused Biden of "buying votes".
The Student Debt Loan "trap".
Let's quickly think here . (4)>>The way Student loans are set up , they are nothing but a debt trap. The idea is that it’s regressive to prove income to pay them off before you are educated, since the point of education is to have higher income, and full time students typically are low income. As a result, if you set income limits for qualifying for student loans, the poor would essentially be denied access to higher ed, worsening the gap between rich and poor. They make money on every purchase, even if you pay it back an hour layer, and they want a stable base of people that are almost zero risk of defaulting in addition to those drowning in interest debt. (5)>>Second, the government’s existing loan forgiveness programs are almost comically evil. If you spend 20 years making less than nothing but still pay the income adjusted monthly amount you MAY get certain loans forgiven, even though if bankruptcy were an option you could likely discharge that loan and be financially free from the consequences within 5-10 years.Actually, Frumy-baby, the loan system is pretty fucked up independent of the high cost of college tuition. First, Congress made student loans almost impossible to discharge in bankruptcy. They did that so that private lenders would enter the marketplace and lend directly to students. However, many private lenders exploited students through unnecessary servicing fees and aggressive collection practices. Obama took over the loan origination process to prevent lenders from exploiting students, but the inability to discharge in bankruptcy remains, and the often higher-than-market interest rates.The other loan forgiveness, public sector employment, may be the greatest single scam the government ever played on taxpayers that it invited to participate in a government program. Instead of making it easy, the government managed to make it almost impossible to qualify, causing some people to spend 10 years of their life making employment decisions that probably lost them substantial income only to find out they couldn’t discharge the loan because of that one summer they spent being a waiter so that they could continue to pay their fucking student loans.Finally, right now the government is earning trillions in income from its direct lending practices to students. Yeah, the cost of college is too high, but for the moment the government is using the high cost of college to help balance the federal budget. Why does that make sense? (6)>>It’s like placing a special tax on 18-30 year olds in order to fund the government’s operating expenses. If the government needs more revenue, then tax those that are actually making money, and disburse these loans interest-free.
Reforming the STUDENT LOAN PROCESS or GET RID OF IT.
(7)>>The economy sucks, we haven’t heard anything because the Fedloan and MOHELA transfer is probably a giant clusterfuck, thanks to the waiver the backlog of forms is months long, and from what I understand the infrastructure on the backend is just so gummed up that restarting payments is a gargantuan task.I’m just guessing here but I suspect the biggest reason it gets extended is that they can’t, there’s just too many administrative tasks they need to get out of the way. The student loan crisis has affected so many people the volume of paperwork we’ve all generated has totally overwhelmed our loan servicers and the DoE. Or at least that’s the reality I choose to live in. ;) (8)>>A lot of people object to student loan forgiveness because they view it as “unfair.” After all, the borrower willingly took out the loan. This is certainly a valid objection. But most people don’t care about your moral scruples. They’ll just call you uncaring and move on.But the economic ramifications are a little harder to ignore – if you understand them. And they will impact everybody whether they think they care now or not.Remember those stimulus checks? (9)>>Everybody was thrilled to get that “free” money. But you’re paying for those stimmy checks today through the inflation tax. Most people seem less than pleased. Forgiving student loan debt doesn't make sense in an economy that is already experiencing high inflation. While definitely not the root cause, the freezing of student loan payments has contributed to the inflation we are seeing. I was listening to a Planet Money that claimed only one in five borrower's made any payments towards their loans during the freeze. This equates to a lot more dollars in the market chasing roughly the same amount of goods/services.I really wish they would also aggressively reform the current system. Loan forgiveness is needed but that can’t be the last step. It’s not good for society when someone wanting to make a better life for themselves has to weigh that against the formidable amount of debt that comes with it, especially when their risk may not pan out but the debt is non bankruptable. (10)>>Student Loans are a economic Government RIP OFF ! Debt forgiveness generally counts as income, making it taxable, but under the American Rescue Plan Act, student loan debt forgiveness between 2021 and 2025 does not count toward federal taxable income, according to the Tax Foundation.Presidents Trump and Biden used emergency executive power to extend the forbearance, which has cost taxpayers about $5 billion a month. What they want everyone to forget is that in 2010 they used the last recession to justify a federal takeover of student loans that have since more than doubled to $1.6 trillion. Now they’re using the pandemic to justify loan write-offs they said would never happen.
NOTES AND COMMENTS:
(1)>>Student Loan Forgiveness ?????The CATCH 22! In terms of its scale in budget and cost to taxpayers, widespread student loan forgiveness would rank among the largest transfer programs in American history. Based on data from the Department of Education, forgiving all federal loans (as Senator Bernie Sanders proposed) would cost on the order of $1.6 trillion. I think most Americans think Joe Biden or Congress can just wave some kind of magic wand and student loan debt will just disappear. Poof! No harm, no foul. In fact, I think a lot of people believe student loan forgiveness will stick it to the evil banks who lent out all of that money.But it doesn’t work that way. Based on my understanding of the White House release, it said that due to the reforms, most borrowers should be able to be debt free in ten years, not that they will forgive all loans left after 10 years."Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department of Education estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years." (2)>>blanket cancelation. Currently, 46 million Americans have outstanding student loans. Of that number, 45.4 million hold federally-backed loans. The total student loan bill stands at $1.75 trillion. The second problem is the US government doesn’t have any money. It will have to borrow billions more to pay for any loan forgiveness scheme. Borrowed money has to be paid back by taxpayers, either in the form of higher taxes or inflation – likely both. But I really want something done to fix the predatory setup we have been subjecting our children to for at least 15 years. Placing tremendous pressure that they attend college, providing loans that are described as the most collectible form of debt that just quietly compound in interest, and minimal education on what the loan actually means.I don’t want to keep adding to the collective of people that get screwed by this. This particular line feels like a step in that direction, as at least the debt should roll off sooner.(3)>> increased borrowing from students expecting future loan forgiveness, The interest is why the student loan crisis exists in the first place. The student loan crisis has many factors, and interest is one of them. But so is giving out loans like candy, as well as schools continuously raising tuition because they have an unlimited supply of people willing to take out loans. It's all connected. Laying the blame on one aspect is shortsighted, and we will still be in the same predicament a few years into the future.People paying thousands towards their debt only to owe more than the initial loan. Or god forbid you have to file a hardship deferment and the debt just keeps growing despite you’re demonstration that you aren’t earning enough to pay it. (4)>>The way Student loans are set up , they are nothing but a debt trap . It’s a fair enough argument that student debt relief only benefits a small percentage of Americans. But two columns ago Frum was arguing for massive relief for people who aren’t Americans at all. Many people make the mistake. In high school we aren't taught to go for a degree that'll make us money, we are taught to go after what looks good to us. So many of my friends are like you. Damn near six figures in student loan debt for a useless business degree that can't land them anything more than 40 or 50k a year.Real money is in the trades. The sort of stuff high school (at least for me) told us to "avoid" because it was dirty, hard work.Well fuck that. I paid less than 6 grand for trade school (most paid by pell grant) and landed a job making damn near 50k a year right outa graduation. Schooling barely lasted a year. Zero student loan debt and already making more than some of my peers with 4 year degrees.High school needs to do a better job educating people on what to expect of a degree in the local area. That liberal arts degree might call to your inner self and sound rewarding on a intellectual level, but outside of certain major cities you ain't gonna get shit job wise with it.(5)>>Second, the government’s existing loan forgiveness programs are almost comically evil. But that just illustrates the increasingly tortured economic paradoxes at the heart of modern higher education, where schools have no incentive to provide affordable prices as long as they can count on federal dollars for making education affordable. Ultimately, Parent PLUS sluices more cash into the college-industrial complex, helping educators jack up their tuitions while pressuring parents to make up the difference with debt, while doing nothing to ensure they’re getting a real return on their investment. It enhances accessibility, but not really affordability, simply giving parents a way to punt the skyrocketing costs into the future. Even some advocates who fiercely defended Parent PLUS during a high-profile controversy in 2011, when the Obama administration briefly reined in loans to parents with sketchy credit histories, told me the program is deeply troubled and inherently flawed. (6)>>It’s like placing a special tax on 18-30 year olds in order to fund the government’s operating expenses.Whenever a debt (including a student loan debt) is forgiven, waived, reduced, or cancelled, a borrower may have to pay taxes on the canceled balance, as if the cancelled debt was “income” earned by the borrower during the year that the cancellation occurred. In such circumstances, the lender would send the borrower a tax document called a Form 1099-C during tax season, showing the exact amount of loan forgiveness and requiring the borrower to report that amount as “income” on their tax return.(7)>>The economy sucks. In the meantime, advocates, students and lawmakers to his left flank have been urging the president to forgive even more — from $50,000 per borrower to total student debt forgiveness, and they seem to be gaining some ground.The wording isn't exactly clear but it appears that whatever you pay, any additional interest is waived. I think more information will come to clarify this."Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low." However, according to higher-education experts, economists and recent research, canceling student debt is likely to bump up inflation only in a minor way. In the grand scheme of the student forgiveness debate, experts told Money that inflation is actually among the least of their worries. (8)>>A lot of people object to student loan forgiveness because they view it as “unfair.” The institution of student lending has given universities free reign to basically charge whatever the hell they want, because the government will pay them, even if the students aren't then able to pay the government. The cost of higher education in America far exceeds the cost anywhere else in the world, and we're not even that much better (if any) than many other developed countries. It's an absolute disgrace.(9)>>Everybody was thrilled to get that “free” money. Forgiving student loans will be another inflationary force. For an Administration theoretically concerned about inflation, the Biden Bunch either has no clue what causes it or only cares about inflation's effects on their political prospects. (10)>>Student Loans are a economic Government RIP OFF ! Universities and colleges need to address spiraling tuition. They're the unrepresented party that gets "rich" on all of this. Why don't we focus on them as well? They overcharge for their services, leaving former students and the US taxpayer to deal with the fallout. Can we hold them accountable on some level of putting the students into this position? (Students who take the loans obviously bear a great deal of the responsibility, they obviously made the choice to attend the school).
