The Beast With a Billion Bucks
August 16, 2022 6:32 PM Subscribe
The Department of Education said Tuesday that it will cancel $3.9 billion in student loan debt for 208,000 students who attended the now-defunct for-profit ITT Technical Institute – bringing the total amount of loan discharges approved under President Joe Biden to nearly $32 billion.
Not quite enough to buy a tin of anchovies in the year 3000, but still! (Previously.)
Not quite enough to buy a tin of anchovies in the year 3000, but still! (Previously.)
it’s getting dangerously close to sept 1, when loan repayments are supposed to start again after 2 years of not paying. joe better have a plan !
posted by dis_integration at 7:08 PM on August 16, 2022 [10 favorites]
posted by dis_integration at 7:08 PM on August 16, 2022 [10 favorites]
Student debt is obviously a dystopian concept on its face, but given where we are in the real world I have a genuine question and I'd love to hear takes and read up if I'm missing something:
Do the calls to cancel student debt intrinsically include or result in some systemic fix? Of all the political fights to pick, I'm reluctant to pick this if it's going to relieve the political pressure, while leaving current teens subject to the same horrible system.
posted by Riki tiki at 7:25 PM on August 16, 2022 [10 favorites]
Do the calls to cancel student debt intrinsically include or result in some systemic fix? Of all the political fights to pick, I'm reluctant to pick this if it's going to relieve the political pressure, while leaving current teens subject to the same horrible system.
posted by Riki tiki at 7:25 PM on August 16, 2022 [10 favorites]
Now cancel ALL student debt.
I get that things are bad, but when you see your team putting guys on base don't boo them for not hitting homers.
posted by mhoye at 7:32 PM on August 16, 2022 [99 favorites]
I get that things are bad, but when you see your team putting guys on base don't boo them for not hitting homers.
posted by mhoye at 7:32 PM on August 16, 2022 [99 favorites]
It pisses me off that for-profit schools rip off students, abuse student loans, then bail. But this is especially good for students who are more likely to be lower or middle income.
In many cases, I'd like to see loans re-financed at much lower rates, and that refinancing backdated. It's disgusting for the government to profit from student loans. Set the rate at prime +1%. Why should banks get a much better deal than students?
I don't disagree with forgiving all student debt, but this is a good thing.
posted by theora55 at 7:36 PM on August 16, 2022 [12 favorites]
In many cases, I'd like to see loans re-financed at much lower rates, and that refinancing backdated. It's disgusting for the government to profit from student loans. Set the rate at prime +1%. Why should banks get a much better deal than students?
I don't disagree with forgiving all student debt, but this is a good thing.
posted by theora55 at 7:36 PM on August 16, 2022 [12 favorites]
Now cancel ALL student debt.
I dunno, I might not include private schools. Or, honestly, even certain expensive non-private schools.
I mean, if someone wants to pay Vanderbilt their going rate, well, uhhh, good luck I guess? Only the failson chumps pay going rate, and in that case they're pretty much skimming off their 1% parents, and maybe I don't really care about them? Student debt, mathematically, makes financial sense for a lot of people who could fully afford to pay cash.
...for an unrelated example, you'd be appalled at the rate I got for my extremely large mortgage. Cheapest financial leverage I ever got, absolutely zero reason for me to pay it off when I can put that money to better (more profitable) use. I could afford to pay off my mortgage, but there is no fucking way I'm stupid enough to do that, because that cash earns me money elsewhere, and even better I'm in a no-recourse state! Same for student loans with the wealthy; maybe let's take care to avoid subsidizing rich assholes like myself?
Or don't. That's OK too -- my current laissez-faire attitude toward the US is pretty highly biased by the fact that poor idiots keep voting to give me more money at their own expense. I mean, if you offer me free money at the cost of your own blood, well, I'm not gonna say no. I'm gonna say thanks to the chumps, and move my money offshore.
posted by aramaic at 7:38 PM on August 16, 2022 [5 favorites]
I dunno, I might not include private schools. Or, honestly, even certain expensive non-private schools.
I mean, if someone wants to pay Vanderbilt their going rate, well, uhhh, good luck I guess? Only the failson chumps pay going rate, and in that case they're pretty much skimming off their 1% parents, and maybe I don't really care about them? Student debt, mathematically, makes financial sense for a lot of people who could fully afford to pay cash.
...for an unrelated example, you'd be appalled at the rate I got for my extremely large mortgage. Cheapest financial leverage I ever got, absolutely zero reason for me to pay it off when I can put that money to better (more profitable) use. I could afford to pay off my mortgage, but there is no fucking way I'm stupid enough to do that, because that cash earns me money elsewhere, and even better I'm in a no-recourse state! Same for student loans with the wealthy; maybe let's take care to avoid subsidizing rich assholes like myself?
Or don't. That's OK too -- my current laissez-faire attitude toward the US is pretty highly biased by the fact that poor idiots keep voting to give me more money at their own expense. I mean, if you offer me free money at the cost of your own blood, well, I'm not gonna say no. I'm gonna say thanks to the chumps, and move my money offshore.
posted by aramaic at 7:38 PM on August 16, 2022 [5 favorites]
I signed on to the Sweet Vs Devos a longish while back. I think my debt is gone. However, this is my life, and probably whoever services my supposedly defunct debt, will hire Jimmy The Hammer to collect. Seriously, I think mine are gone.
posted by Oyéah at 7:49 PM on August 16, 2022
posted by Oyéah at 7:49 PM on August 16, 2022
I get that things are bad, but when you see your team putting guys on base don't boo them for not hitting homers.
Perhaps, but if my team has a horrible record of stranding runners I'd start calling for more aggressive base running and more batting depth in the lineup. Wait are we talking about my Mariners or my Democrats?
posted by traveler_ at 7:57 PM on August 16, 2022 [28 favorites]
Perhaps, but if my team has a horrible record of stranding runners I'd start calling for more aggressive base running and more batting depth in the lineup. Wait are we talking about my Mariners or my Democrats?
posted by traveler_ at 7:57 PM on August 16, 2022 [28 favorites]
I get that things are bad, but when you see your team putting guys on base don't boo them for not hitting homers.
There’s someone standing on third base, refusing to take the easy score.
It’s a 200 yard par 4 and our player walked up to the tee with a wedge.
The star shooter keeps insisting on using their off hand on the free throw line.
The quarterback refuses to run because a psychic said it was bad luck.
There’s no end of sports analogies for this.
posted by Revvy at 8:42 PM on August 16, 2022 [17 favorites]
There’s someone standing on third base, refusing to take the easy score.
It’s a 200 yard par 4 and our player walked up to the tee with a wedge.
The star shooter keeps insisting on using their off hand on the free throw line.
The quarterback refuses to run because a psychic said it was bad luck.
There’s no end of sports analogies for this.
posted by Revvy at 8:42 PM on August 16, 2022 [17 favorites]
I dunno, I might not include private schools. Or, honestly, even certain expensive non-private schools.
Frankly, it'll be easier, cheaper and more just to just cancel it all rather than make judgements about who should be deemed worthy.
I've forgotten the stats, but cancelling even 10k of debt makes a large dent in the debt of a huge percentage of people with student loans and you cover a large fraction of the more marginalized people with student debt.
posted by hoyland at 8:52 PM on August 16, 2022 [36 favorites]
Frankly, it'll be easier, cheaper and more just to just cancel it all rather than make judgements about who should be deemed worthy.
I've forgotten the stats, but cancelling even 10k of debt makes a large dent in the debt of a huge percentage of people with student loans and you cover a large fraction of the more marginalized people with student debt.
posted by hoyland at 8:52 PM on August 16, 2022 [36 favorites]
Frankly, it'll be easier, cheaper and more just to just cancel it all rather than make judgements about who should be deemed worthy.
For me it was cheaper to go to a local private school no one has heard of, live at home and work then it was to go to a state school, stay in a dorm and not work. I know I was not the only one. I also took as many credits at a community college as I could to keep costs down. I don't have debt anymore but would you cancel it?
Also if people didn't pay debts and it went to collections what happens to that debt?
posted by geoff. at 9:48 PM on August 16, 2022 [6 favorites]
For me it was cheaper to go to a local private school no one has heard of, live at home and work then it was to go to a state school, stay in a dorm and not work. I know I was not the only one. I also took as many credits at a community college as I could to keep costs down. I don't have debt anymore but would you cancel it?
Also if people didn't pay debts and it went to collections what happens to that debt?
posted by geoff. at 9:48 PM on August 16, 2022 [6 favorites]
My Take on this... I graduated Corinthian College Arizona Campus Online. Sadly I'd paid off my loans before the big shut down, and the big loan pay off. I am the proud owner of a $60K piece of paper. My School no longer exist. No Registrars Office. No place to verify my transcripts. Nothing to prove my Degree is real, other than my Diploma. When going through my last job interview; I was asked about my degree. I provided a copy of my Diploma. My Employee came back and asked me if I had additional proof of my Degree. Sadly all I can do is point to the News Stories about the Collapse of the School, and offer up my physical Diploma. I feel for all these people, getting out of their loans. Good for them. The sucky part is that they're losing all the money they'd paid in advance, and on top of that; they're losing the productive years of their lives. At least they are not (also) the proud owners of a $60K piece of paper.
posted by CygnusXII at 9:53 PM on August 16, 2022 [32 favorites]
posted by CygnusXII at 9:53 PM on August 16, 2022 [32 favorites]
From what I've read, The Department of Education is prepared to move on Biden's campaign promise to cancel 10,000 dollars in debt, and the lenders and servicers expect the repayment pause to be continued because they were told not to contact borrowers. Restarting the repayments will be a clusterfuck without advance notice, which the administration promised to give.
Still, Biden originally promised to make the decision in April. The delay makes me think there is disagreement surrounding how to proceed. My sense is that Biden's advisers want him to keep his campaign promise to help Democrats in the midterms but that Biden is hesitating.
Regarding ITT tech, I remember their commercials watching afternoon cartoons in the 90's. The sad thing is you could get a similar much less expensive education from the local community colleges.
Also, Republicans have been running a right shift since the 90's, but the Democrats keep hitting ground outs to the shortstop and second basemen because they try to aim at center field instead of the left field hole vacated by the shortstop and third basement.
I think the implication is obvious.
posted by eagles123 at 9:58 PM on August 16, 2022 [14 favorites]
Still, Biden originally promised to make the decision in April. The delay makes me think there is disagreement surrounding how to proceed. My sense is that Biden's advisers want him to keep his campaign promise to help Democrats in the midterms but that Biden is hesitating.
Regarding ITT tech, I remember their commercials watching afternoon cartoons in the 90's. The sad thing is you could get a similar much less expensive education from the local community colleges.
Also, Republicans have been running a right shift since the 90's, but the Democrats keep hitting ground outs to the shortstop and second basemen because they try to aim at center field instead of the left field hole vacated by the shortstop and third basement.
I think the implication is obvious.
posted by eagles123 at 9:58 PM on August 16, 2022 [14 favorites]
People talking about excluding those who took out loans for private schools: you do realize that some of the poorest and most badly treated student debt holders are the ones who attended private for-profit institutions? Like ITT Tech, which is the exact institution that this whole news article is about?
posted by splitpeasoup at 10:05 PM on August 16, 2022 [29 favorites]
posted by splitpeasoup at 10:05 PM on August 16, 2022 [29 favorites]
Debt cancellation up to a threshold amount, e.g. $10k or whatever, makes a lot of sense to me. It seems like that would help a lot of students, without unfairly subsidizing people who took out massive loans for "elite" schools that basically exist to help you play a zero-sum game against other students.
I feel like I could even sell that to my old-school paleoconservative family members (as in: 'conservative' but not Trumpy), who these days I guess are... moderates? I don't even know. But I'm fairly sure that if you can't sell a plan to someone like them with a 30 second elevator pitch, it's not going anywhere.
I share the concerns some others have voiced about the go-forward plan, though. Let's say we cancel outstanding student debt held by the Government today: what does that do for Joe Student, Dead President High class of 2022 or 2023? Do they just get the shaft, and have to take out loans anyway? Or are we going to give every student $10k in funding? That seems like the only fair thing. And what happens to the poor SOBs who refinanced into private loans? Some of those companies are just as predatory in their strategies as the worst for-profit colleges.
We need to keep in mind the unfortunate fact that higher ed in the US isn't just about education. It's also a marker that you use to get into jobs that you'd otherwise be barred from. It's the thing employers use to make a first cut on resumes (or even just use to keep you from applying at all). I know a lot of people, particularly on the left, don't like the zero-sum-game aspect of higher ed, where you're essentially buying an expensive piece of paper so you can get a job that lets you make enough money to pay back the cost of the paper (and then hopefully feed yourself), but it's there and can't be ignored. A policy that rewards the people who took out huge loans for a really expensive piece of paper by zeroing-out those loans is going to provide them a leg up over someone who went to a less-ritzy school, potentially for the rest of their lives, and it might encourage more people to make the same (unwise, IMO) decision, figuring that in time their loans will get canceled as well. That just ends up being a straight handout to those very expensive schools, most of which don't offer an education that's much better than the cheaper alternatives. And that's... not great, systemically.
Frankly, it'll be easier, cheaper and more just to just cancel it all rather than make judgements about who should be deemed worthy.
I see the point, but wouldn't it follow that it would be even better, then, just to give everyone ten grand, regardless of whether they have outstanding student debt or not? Why should the people who went to college, instead of a trade, or the military, or some crapass minimum-wage job as soon as they graduated highschool, get the ten kilobucks? We're already making a value judgement in deciding to cancel student debt (and likely only government-held student debt) preferentially to, I dunno, any other type of debt. And once you start picking and choosing who gets to benefit, you might as well try to do it intelligently, or at least do it in a way that's not going to further entrench social classism and decrease mobility.
posted by Kadin2048 at 10:25 PM on August 16, 2022 [22 favorites]
I feel like I could even sell that to my old-school paleoconservative family members (as in: 'conservative' but not Trumpy), who these days I guess are... moderates? I don't even know. But I'm fairly sure that if you can't sell a plan to someone like them with a 30 second elevator pitch, it's not going anywhere.
I share the concerns some others have voiced about the go-forward plan, though. Let's say we cancel outstanding student debt held by the Government today: what does that do for Joe Student, Dead President High class of 2022 or 2023? Do they just get the shaft, and have to take out loans anyway? Or are we going to give every student $10k in funding? That seems like the only fair thing. And what happens to the poor SOBs who refinanced into private loans? Some of those companies are just as predatory in their strategies as the worst for-profit colleges.
We need to keep in mind the unfortunate fact that higher ed in the US isn't just about education. It's also a marker that you use to get into jobs that you'd otherwise be barred from. It's the thing employers use to make a first cut on resumes (or even just use to keep you from applying at all). I know a lot of people, particularly on the left, don't like the zero-sum-game aspect of higher ed, where you're essentially buying an expensive piece of paper so you can get a job that lets you make enough money to pay back the cost of the paper (and then hopefully feed yourself), but it's there and can't be ignored. A policy that rewards the people who took out huge loans for a really expensive piece of paper by zeroing-out those loans is going to provide them a leg up over someone who went to a less-ritzy school, potentially for the rest of their lives, and it might encourage more people to make the same (unwise, IMO) decision, figuring that in time their loans will get canceled as well. That just ends up being a straight handout to those very expensive schools, most of which don't offer an education that's much better than the cheaper alternatives. And that's... not great, systemically.
Frankly, it'll be easier, cheaper and more just to just cancel it all rather than make judgements about who should be deemed worthy.
I see the point, but wouldn't it follow that it would be even better, then, just to give everyone ten grand, regardless of whether they have outstanding student debt or not? Why should the people who went to college, instead of a trade, or the military, or some crapass minimum-wage job as soon as they graduated highschool, get the ten kilobucks? We're already making a value judgement in deciding to cancel student debt (and likely only government-held student debt) preferentially to, I dunno, any other type of debt. And once you start picking and choosing who gets to benefit, you might as well try to do it intelligently, or at least do it in a way that's not going to further entrench social classism and decrease mobility.
posted by Kadin2048 at 10:25 PM on August 16, 2022 [22 favorites]
The sad thing is you could get a similar much less expensive education from the local community colleges.
PREACH!
Honestly, the community colleges are some of the most economical education you can get, if you want actual, transferable course credit. Smaller class sizes, more interaction with the faculty, a focus on teaching, local so you can live at home, etc.
Here in the Maricopa County system, we have ten colleges around the metro Phoenix area, plus multiple additional campuses, and the in-state tuition is less than $100 per credit hour. And students are reaping the rewards of an aggressive campaign to shift to low-cost/no-cost instructional materials. In my courses, the textbook is free, as is the online homework server (I wrote both). Also, the state just voted to allow us to start offering Bachelor’s degrees.
This doesn’t help folks already with mountains of debt, but community colleges are a great way to earn quality, lower-division academic credits for way, way less cost than other institutions can deliver them. And if you really want, after you finish your first two years in a CC, you can transfer to a 4-year and still get that degree from a prestigious university. I regularly write letters of recommendation for exceptional students who get in at top 4-years.
posted by darkstar at 10:26 PM on August 16, 2022 [22 favorites]
PREACH!
Honestly, the community colleges are some of the most economical education you can get, if you want actual, transferable course credit. Smaller class sizes, more interaction with the faculty, a focus on teaching, local so you can live at home, etc.
Here in the Maricopa County system, we have ten colleges around the metro Phoenix area, plus multiple additional campuses, and the in-state tuition is less than $100 per credit hour. And students are reaping the rewards of an aggressive campaign to shift to low-cost/no-cost instructional materials. In my courses, the textbook is free, as is the online homework server (I wrote both). Also, the state just voted to allow us to start offering Bachelor’s degrees.
This doesn’t help folks already with mountains of debt, but community colleges are a great way to earn quality, lower-division academic credits for way, way less cost than other institutions can deliver them. And if you really want, after you finish your first two years in a CC, you can transfer to a 4-year and still get that degree from a prestigious university. I regularly write letters of recommendation for exceptional students who get in at top 4-years.
posted by darkstar at 10:26 PM on August 16, 2022 [22 favorites]
I too remember ITT Tech commercials from watching too much TV in the 1990s. I support forgiving for those who went to cruddy for profit schools, and I think up to 10,000. I do know doctors, dentists and the like with $100k+ in debt and am certainly understand this disequity of giving doctors a bunch of money.
posted by CostcoCultist at 10:30 PM on August 16, 2022 [1 favorite]
posted by CostcoCultist at 10:30 PM on August 16, 2022 [1 favorite]
Also if people didn't pay debts and it went to collections what happens to that debt?
Federally-backed student loans don't go into collections quite the same way other consumer debt was, with the issuer eventually selling the debt entirely to a collections agency. The federal government doesn't sell Direct loans to collections agencies. (It doesn't need to, its powers of debt collection are so vast.) For the older FFEL loans not already held by the federal government (or assigned to the federal government after extended delinquency as uncollectible), upon a determination of unenforceability, the Secretary is authorized to pay the corresponding claim to the guaranty agency that will have been assigned the loan from the holder after default.
posted by praemunire at 10:42 PM on August 16, 2022 [2 favorites]
Federally-backed student loans don't go into collections quite the same way other consumer debt was, with the issuer eventually selling the debt entirely to a collections agency. The federal government doesn't sell Direct loans to collections agencies. (It doesn't need to, its powers of debt collection are so vast.) For the older FFEL loans not already held by the federal government (or assigned to the federal government after extended delinquency as uncollectible), upon a determination of unenforceability, the Secretary is authorized to pay the corresponding claim to the guaranty agency that will have been assigned the loan from the holder after default.
posted by praemunire at 10:42 PM on August 16, 2022 [2 favorites]
We're already making a value judgement in deciding to cancel student debt (and likely only government-held student debt) preferentially to, I dunno, any other type of debt. And once you start picking and choosing who gets to benefit, you might as well try to do it intelligently, or at least do it in a way that's not going to further entrench social classism and decrease mobility.
Do you...think the government is not already picking and choosing, every single day? God forbid we spend money on student loan debt relief alongside subsidizing residential mortgage interest.
posted by praemunire at 10:45 PM on August 16, 2022 [16 favorites]
Do you...think the government is not already picking and choosing, every single day? God forbid we spend money on student loan debt relief alongside subsidizing residential mortgage interest.
posted by praemunire at 10:45 PM on August 16, 2022 [16 favorites]
Mod note: One deleted (along with responses). Aramaic, take a week off for trolling. Whatever point you think you are making is totally lost in your supercilious Patrick Bateman impression. This is not how to participate in a discussion.
posted by taz (staff) at 11:49 PM on August 16, 2022 [11 favorites]
posted by taz (staff) at 11:49 PM on August 16, 2022 [11 favorites]
Joking aside, I can definitely see how people would see just cancelling any amount of debt as unfair if they already repaid their loans, have private loans that wouldn't qualify, or will have to take out new loans that won't be cancelled for their own education. It's an incomplete band-aid solution to a wider systemic problem that prevents people from buying homes, starting families, starting businesses, and even retraining into new careers in fields that are in-demand.
That last point is critical when, for example, considering the doctor with a six figure salary who also has six figure debt. For years we've been seeing a growing shortage in primary care because MDs seek more lucrative specialties to defray education costs. Beyond that, education costs also contribute to shortages in PA's and nurses as well. Of course, the AMA and other professional organizations contribute to the problem because they try to restrict supply to buttress salaries, but in the end they feel justified in doing so partly by the high costs to train for the fields. It's a vicious cycle, and in the end everyone feels the impact in the form of increased costs for medical care as well as diminished quality and access to medical services. Post COVID, education also is experiencing shortages because of the costs to train to be a teacher.
Overall, loans people need to take out for higher education affect everyone regardless of whether or not they are a student. It's a constant drag on our economy over and above the impacts on students who need to take on the debt.
posted by eagles123 at 12:01 AM on August 17, 2022 [9 favorites]
That last point is critical when, for example, considering the doctor with a six figure salary who also has six figure debt. For years we've been seeing a growing shortage in primary care because MDs seek more lucrative specialties to defray education costs. Beyond that, education costs also contribute to shortages in PA's and nurses as well. Of course, the AMA and other professional organizations contribute to the problem because they try to restrict supply to buttress salaries, but in the end they feel justified in doing so partly by the high costs to train for the fields. It's a vicious cycle, and in the end everyone feels the impact in the form of increased costs for medical care as well as diminished quality and access to medical services. Post COVID, education also is experiencing shortages because of the costs to train to be a teacher.
Overall, loans people need to take out for higher education affect everyone regardless of whether or not they are a student. It's a constant drag on our economy over and above the impacts on students who need to take on the debt.
posted by eagles123 at 12:01 AM on August 17, 2022 [9 favorites]
I wonder if part of the reluctance to cancel any amount of debt is also connected to the current inflation - whether to the actual effect it might have, or to the optics of doing it now.
posted by trig at 12:43 AM on August 17, 2022
posted by trig at 12:43 AM on August 17, 2022
Just cancel it all. It doesn't matter if some rich people also have their debt for attending Fancy Ass School cancelled. It really doesn't. Those types are going to receive a disproportionate amount of Government Handouts just by virtue of being wealthy in a system that is designed to benefit the wealthy. Screw means testing or targeting or whatever, just cancel all student debt.
That's my two cents anyway.
posted by lazaruslong at 1:02 AM on August 17, 2022 [36 favorites]
That's my two cents anyway.
posted by lazaruslong at 1:02 AM on August 17, 2022 [36 favorites]
More I think about it more I think that the way Biden is currently going about it is best. ITT was a shitty school taking advantage of college loan loopholes. People who went to ITT were not the Winklevoss twins but likely first generation college students.
Furthermore federal student loans, if I remember correctly, depended on how much your parents made. Which is mind blowing because at 18 you're an adult and your parents are not legally obligated to take care of you yet your ability to finance your education is dependent on your relationship with them? This trickles all the way back to admissions, visiting colleges and extracurriculars too. But I'm older now and I realize especially after the Lori Laughlin scandal that the whole admission system is designed that way for a reason.
In any case I bet any blanket forgiveness will probably help a lot of people, but probably not the people who need the help most. I don't care about the Ivy Leagues, but the new Ivies like Northwestern or WashU which were good regional schools 30 years ago are now as expensive as the rest. If your aspirational and a good student, test well, you're shut down pretty hard at 18 if you can't afford to play the college game.
I think going forward as a society we won't see much gain giving away $10k or whatever in forgiveness but we will pay dividends if we make peg colleges to the average wages or even minimum wages. If the tuition exceeds that put on a heavy regressive luxury tax. Turn community colleges as the affordable viable option for 2 years and promote a program where the last two years can be taken at a local city college. Don't make it just seem as community colleges are for those not ready for college, mine was actually really, really good.
posted by geoff. at 2:49 AM on August 17, 2022 [6 favorites]
Furthermore federal student loans, if I remember correctly, depended on how much your parents made. Which is mind blowing because at 18 you're an adult and your parents are not legally obligated to take care of you yet your ability to finance your education is dependent on your relationship with them? This trickles all the way back to admissions, visiting colleges and extracurriculars too. But I'm older now and I realize especially after the Lori Laughlin scandal that the whole admission system is designed that way for a reason.
In any case I bet any blanket forgiveness will probably help a lot of people, but probably not the people who need the help most. I don't care about the Ivy Leagues, but the new Ivies like Northwestern or WashU which were good regional schools 30 years ago are now as expensive as the rest. If your aspirational and a good student, test well, you're shut down pretty hard at 18 if you can't afford to play the college game.
I think going forward as a society we won't see much gain giving away $10k or whatever in forgiveness but we will pay dividends if we make peg colleges to the average wages or even minimum wages. If the tuition exceeds that put on a heavy regressive luxury tax. Turn community colleges as the affordable viable option for 2 years and promote a program where the last two years can be taken at a local city college. Don't make it just seem as community colleges are for those not ready for college, mine was actually really, really good.
posted by geoff. at 2:49 AM on August 17, 2022 [6 favorites]
Good news for property prices, which will increase to absorb the extra buying power of reduced-debt young people?
posted by one more day at 2:58 AM on August 17, 2022
posted by one more day at 2:58 AM on August 17, 2022
Good news for property prices, which will increase to absorb the extra buying power of reduced-debt young people?
You joke but that's the next tax loophole that will hopefully fail. Lot of mid-late 20s AirBnB types buying houses and not legally registering them as rentals, buying them over market price and renting them out around here. Big limos in front of the houses on weird nights, late night parties. I thought it was exaggerated but someone pointed out the number of AirBnBs in my old, sleepy inner-loop neighborhood. Usually mid-size post-starter home kind of places. Probably valued right but cheap in comparison to flashier neighborhoods. They said 20-somethings show up, do drone shots, and next thing you know they'll have a couple ragers that pay the mortgage that someone probably cosigned on and they probably take as a tax write-off. Almost worse than slumlords because they just need to keep it working and looking okay until the next party and no one lives in it.
I don't know what type of people rent out a house for a big party but I'm guessing 20 somethings who have small apartments? And can't afford to rent out a party room at a bar or something.
posted by geoff. at 3:21 AM on August 17, 2022 [2 favorites]
You joke but that's the next tax loophole that will hopefully fail. Lot of mid-late 20s AirBnB types buying houses and not legally registering them as rentals, buying them over market price and renting them out around here. Big limos in front of the houses on weird nights, late night parties. I thought it was exaggerated but someone pointed out the number of AirBnBs in my old, sleepy inner-loop neighborhood. Usually mid-size post-starter home kind of places. Probably valued right but cheap in comparison to flashier neighborhoods. They said 20-somethings show up, do drone shots, and next thing you know they'll have a couple ragers that pay the mortgage that someone probably cosigned on and they probably take as a tax write-off. Almost worse than slumlords because they just need to keep it working and looking okay until the next party and no one lives in it.
I don't know what type of people rent out a house for a big party but I'm guessing 20 somethings who have small apartments? And can't afford to rent out a party room at a bar or something.
posted by geoff. at 3:21 AM on August 17, 2022 [2 favorites]
Gosh, how interesting! Thanks geoff.
posted by one more day at 3:51 AM on August 17, 2022
posted by one more day at 3:51 AM on August 17, 2022
Over here getting an Air BnB for the weekend is a popular way of celebrating your stag/hen (bachelor/bachelorette) party or a 30th, 40th or 50th birthday. It was what I did for my very tame hen party, because it was the easiest way of providing a base for a reasonably large group of people from different locations. It cost about the same as a cheap hotel but we had a kitchen and living room as well as enough bedrooms for us all. We didn't need to spend money on taxis and everyone could drink without driving.
posted by plonkee at 4:36 AM on August 17, 2022 [5 favorites]
posted by plonkee at 4:36 AM on August 17, 2022 [5 favorites]
I fully expect Biden to keep up the payment pause until after Election Day, maybe do some more of these cancellations for egregious for-profit bad actors (your Kaplans and ITTs), and to announce $10,000 of forgiveness at some moment, between now and then, that's deemed politically expedient.
It won't be as popular as forgiving a larger amount of debt, but then maybe it won't be as unpopular, either. If that even make sense.
Come Election Day, I hope people will still be angry about Roe.
posted by box at 4:56 AM on August 17, 2022 [3 favorites]
It won't be as popular as forgiving a larger amount of debt, but then maybe it won't be as unpopular, either. If that even make sense.
Come Election Day, I hope people will still be angry about Roe.
posted by box at 4:56 AM on August 17, 2022 [3 favorites]
I don’t have the stats in front of me but student debt holders aren’t necessarily ‘young people.’
posted by aspersioncast at 4:56 AM on August 17, 2022 [15 favorites]
posted by aspersioncast at 4:56 AM on August 17, 2022 [15 favorites]
Does anyone have any links to proposals about how these cancellations would work? Like serious, costed, eligibility-defining proposals? Preferably with answers to (presumably) FAQs, such as "what about students who are incurring debt right now - or plan to, next year?"
posted by lalochezia at 5:20 AM on August 17, 2022
posted by lalochezia at 5:20 AM on August 17, 2022
It would be great if someone were to run paid political advertisements to publicize this and get the word out in the same way as those "Did you drink the water at Camp Lejune? You may be entitled to compensation!" spots that keep running.
I think something like:
"Did you attend Corinthian College or ITT Technical Institute? Under President Biden, the U.S. Department of Education has cancelled all student debt for these institutions because of predatory behavior and lack of accredation. You may be entitled to a refund or complete debt elimination."
is a much more direct and personal way of touting the administration's accomplishments than:
"The Inflation Reduction act will lower prescription drug prices [at some point in the future, once it takes effect]"
posted by RonButNotStupid at 5:33 AM on August 17, 2022 [6 favorites]
I think something like:
"Did you attend Corinthian College or ITT Technical Institute? Under President Biden, the U.S. Department of Education has cancelled all student debt for these institutions because of predatory behavior and lack of accredation. You may be entitled to a refund or complete debt elimination."
is a much more direct and personal way of touting the administration's accomplishments than:
"The Inflation Reduction act will lower prescription drug prices [at some point in the future, once it takes effect]"
posted by RonButNotStupid at 5:33 AM on August 17, 2022 [6 favorites]
Like serious, costed, eligibility-defining proposals? Preferably with answers to (presumably) FAQs, such as "what about students who are incurring debt right now - or plan to, next year?"
This is exactly why they're not doing it and why they're focusing on places like ITT which closed in 2016. No future debt, it has been closed long enough that the debt is known. If you were to propose all debt cancellation now there's a host of things to consider. The least of which is students running up as much debt as they can.
posted by geoff. at 5:36 AM on August 17, 2022 [3 favorites]
This is exactly why they're not doing it and why they're focusing on places like ITT which closed in 2016. No future debt, it has been closed long enough that the debt is known. If you were to propose all debt cancellation now there's a host of things to consider. The least of which is students running up as much debt as they can.
posted by geoff. at 5:36 AM on August 17, 2022 [3 favorites]
I see the point, but wouldn't it follow that it would be even better, then, just to give everyone ten grand, regardless of whether they have outstanding student debt or not?
Yes. Why not give everyone ten grand in addition to cancelling debt?
If the goal is to win elections, I don't see why Democrats keep handicapping themselves by not doing more things like this debt cancellation.
Republicans make no bones about rewarding their donor base with tax cuts, which they only started doing because they realized that giving people stuff is what wins elections and tax cuts are technically "stuff".
posted by RonButNotStupid at 5:40 AM on August 17, 2022 [6 favorites]
Yes. Why not give everyone ten grand in addition to cancelling debt?
If the goal is to win elections, I don't see why Democrats keep handicapping themselves by not doing more things like this debt cancellation.
Republicans make no bones about rewarding their donor base with tax cuts, which they only started doing because they realized that giving people stuff is what wins elections and tax cuts are technically "stuff".
posted by RonButNotStupid at 5:40 AM on August 17, 2022 [6 favorites]
Even if Joe doesn’t cancel everyone’s debt, imagine how helpful it would be to retroactively change interest on these loans to 0%? An insane amount of our loans are just accrued interest.
The loan processing is so awful, to boot. After 10 years of federal service I applied for forgiveness. They took months to tell me “not yet”. When I followed up, they suddenly (and by suddenly I mean another 3-4 months of waiting) told me “oh yeah, we miscounted, you’re eligible for forgiveness and you were eligible over a year ago.” Now I’m waiting AGAIN for them to process the request, because being eligible means you have to ASK them and then wait for months on end while they get around to writing it off. It’s ridiculous. But as ridiculous as it is, it’s an option far too few people even have to begin with…
posted by caution live frogs at 6:36 AM on August 17, 2022 [23 favorites]
The loan processing is so awful, to boot. After 10 years of federal service I applied for forgiveness. They took months to tell me “not yet”. When I followed up, they suddenly (and by suddenly I mean another 3-4 months of waiting) told me “oh yeah, we miscounted, you’re eligible for forgiveness and you were eligible over a year ago.” Now I’m waiting AGAIN for them to process the request, because being eligible means you have to ASK them and then wait for months on end while they get around to writing it off. It’s ridiculous. But as ridiculous as it is, it’s an option far too few people even have to begin with…
posted by caution live frogs at 6:36 AM on August 17, 2022 [23 favorites]
Corinthian: a college that actually eats eyeballs.
posted by dances_with_sneetches at 6:43 AM on August 17, 2022 [8 favorites]
posted by dances_with_sneetches at 6:43 AM on August 17, 2022 [8 favorites]
I went to a private college because they offered me more financial aid than the public university and it was overall less expensive. I couldn’t go to a community college because the ones near me didn’t have dorms and I was a homeless 19 yr old who faced many barriers to getting an apartment.
There were a lot of very low income students there for the same reason. I was considered the rich kid in my friend group because I had a grant for $2k a semester, which was the only money I had to cover meds, supplies, textbooks, etc. I bought food for friends who were staying in the dorms over break when the cafeterias were closed. Otherwise they just wouldn’t have been able to eat.
“Private school” doesn’t mean nearly what you think it means about the students who choose to go there.
posted by brook horse at 6:58 AM on August 17, 2022 [24 favorites]
There were a lot of very low income students there for the same reason. I was considered the rich kid in my friend group because I had a grant for $2k a semester, which was the only money I had to cover meds, supplies, textbooks, etc. I bought food for friends who were staying in the dorms over break when the cafeterias were closed. Otherwise they just wouldn’t have been able to eat.
“Private school” doesn’t mean nearly what you think it means about the students who choose to go there.
posted by brook horse at 6:58 AM on August 17, 2022 [24 favorites]
The least of which is students running up as much debt as they can.
That's not how it works. You don't get to just choose a number. In fact, all of the facile objections to changes to student loans (eg. "If we set the interest rate to zero, won't people just enroll and invest the money ") are too similar to "we need to drug test and means test everything and, also, people who receive EBT shouldn't be able to buy cake" and need to step back.
posted by DeepSeaHaggis at 6:58 AM on August 17, 2022 [12 favorites]
That's not how it works. You don't get to just choose a number. In fact, all of the facile objections to changes to student loans (eg. "If we set the interest rate to zero, won't people just enroll and invest the money ") are too similar to "we need to drug test and means test everything and, also, people who receive EBT shouldn't be able to buy cake" and need to step back.
posted by DeepSeaHaggis at 6:58 AM on August 17, 2022 [12 favorites]
Regarding student loan repayments starting up -- both my and my wife's student loan processors have been emailing us weekly, reminding us payments start up, that we may want to reevaluate income-based repayment, make sure our personal info is correct, etc., so I don't think they're hedging for Biden to continue to put off student loan payments. I'm also not holding my breath for the $10,000 forgiveness; given everything else that needs to be done I don't think this is high priority for anyone and they don't think there's political favor to lose by forgetting these promises.
My wife's also one of those who got large loans in the 1990s, and her balance is about the same today as it was when she graduated thirty years ago due to quite a few forebearances and income based payments barely/not covering interest -- my argument is that they should forgive interest and fees; the people hit the worst get the most help, and the argument "but I paid my loans" is handled by saying, no, their loans are still being paid off by the borrower, and compare this government interest/fees to taxes and the government 'making money' off us (those opposed to 'handouts' hate the government making money off us). Heck, for people who did pay off their loans write them a check for their interest and fees too. Writing checks to citizens is a huge economic boon.
posted by AzraelBrown at 7:12 AM on August 17, 2022 [13 favorites]
My wife's also one of those who got large loans in the 1990s, and her balance is about the same today as it was when she graduated thirty years ago due to quite a few forebearances and income based payments barely/not covering interest -- my argument is that they should forgive interest and fees; the people hit the worst get the most help, and the argument "but I paid my loans" is handled by saying, no, their loans are still being paid off by the borrower, and compare this government interest/fees to taxes and the government 'making money' off us (those opposed to 'handouts' hate the government making money off us). Heck, for people who did pay off their loans write them a check for their interest and fees too. Writing checks to citizens is a huge economic boon.
posted by AzraelBrown at 7:12 AM on August 17, 2022 [13 favorites]
I’m not in favor of cancelling all student debt. I think it creates all kind of perverse incentives for institutions in the future, such as accelerating the already insane acceleration of all costs related to the business model, from tuition to textbooks. Not to mention further incentivizing bad student choices to attend college when a trade school or apprenticeship might be a better option. Yes, there are “yeah, but” counterarguments, I readily admit. But our thin control of Congress is not likely to permit the kind of overhaul in the system moving forward that would prevent all this from being a problem again in ten years.
So I like the targeted cancellations for students who were scammed as the first component in a larger plan.
In addition, I’m also in favor of suggestions that target the interest accrual burden — past, present and future — by reducing interest on student loans to zero, or nearly so. I also like the idea of a blanket forgiveness/refund of interest paid for student loans in the last, say, ten years which would pick up a lot of those folks who argue “but I paid my loans!”
I also like a blanket/universal cancellation of some amount for all student loan debt holders as a way to get really struggling, less affluent folks out from under the burden.The average student loan debt for Bachelor’s graduates in 2022 is about $29k. Wiping out 1/3 of that, or perhaps just $10k, would be a huge help for struggling folks, especially with the reduction/elimination of the interest.
I’d also be in favor of some system allowing people who took out private loans for school to be able to show documentation to apply for a similar reduction. And perhaps more latitude in being able to defer payments or strike off the debt over time.
None of this solves the ongoing problem of insane inflation in education costs, or the drive to be degree-credentialed as an entry ticket for the job force. But it at least deals with helping folks who need the relief now. Hell, if we can bail out banks and businesses, the moral/reasonable argument has already been made.
posted by darkstar at 7:43 AM on August 17, 2022 [7 favorites]
So I like the targeted cancellations for students who were scammed as the first component in a larger plan.
In addition, I’m also in favor of suggestions that target the interest accrual burden — past, present and future — by reducing interest on student loans to zero, or nearly so. I also like the idea of a blanket forgiveness/refund of interest paid for student loans in the last, say, ten years which would pick up a lot of those folks who argue “but I paid my loans!”
I also like a blanket/universal cancellation of some amount for all student loan debt holders as a way to get really struggling, less affluent folks out from under the burden.The average student loan debt for Bachelor’s graduates in 2022 is about $29k. Wiping out 1/3 of that, or perhaps just $10k, would be a huge help for struggling folks, especially with the reduction/elimination of the interest.
I’d also be in favor of some system allowing people who took out private loans for school to be able to show documentation to apply for a similar reduction. And perhaps more latitude in being able to defer payments or strike off the debt over time.
None of this solves the ongoing problem of insane inflation in education costs, or the drive to be degree-credentialed as an entry ticket for the job force. But it at least deals with helping folks who need the relief now. Hell, if we can bail out banks and businesses, the moral/reasonable argument has already been made.
posted by darkstar at 7:43 AM on August 17, 2022 [7 favorites]
I've been thinking that just allowing people to declare bankruptcy the way they could for other debts would help. Not a great solution, but it least it's fairly simple.
Also, debts to fraudulent universities should definitely be cancelled, at least.
posted by Nancy Lebovitz at 7:56 AM on August 17, 2022 [6 favorites]
Also, debts to fraudulent universities should definitely be cancelled, at least.
posted by Nancy Lebovitz at 7:56 AM on August 17, 2022 [6 favorites]
I too remember ITT Tech commercials from watching too much TV in the 1990s.
ITT Tech was actually a legitimate technical school up until around the ~80s. They may have been having some trouble, but then the sweet sweet temptation of federally-backed loans was too much to pass up, and they got swallowed by the for-profit demon.
The feds try so hard to do the right thing sometimes, but people keep getting in the way.
posted by Melismata at 8:03 AM on August 17, 2022 [1 favorite]
ITT Tech was actually a legitimate technical school up until around the ~80s. They may have been having some trouble, but then the sweet sweet temptation of federally-backed loans was too much to pass up, and they got swallowed by the for-profit demon.
The feds try so hard to do the right thing sometimes, but people keep getting in the way.
posted by Melismata at 8:03 AM on August 17, 2022 [1 favorite]
Those are all good points, darkstar.
I see "Cancel Student Debt" in the same way I view "Defund the Police"--it's a position that is deliberately reductivist (it's a rallying cry!) which exists in order to create lots of room for solutions that can be sold as a "reasonable" alternative while still maintaining enough rhetorical leverage in case that compromise doesn't go far enough.
If interest rates were reduced to zero, bad debt from predatory lenders was forgiven, and some largish amount of debt was cancelled through a needs-based program, I'd be happy even if all debt wasn't cancelled. But if any one of those things was offered as a complete "fix" for the problem of student debt, I'd demand more.
And also, it's not for politicians to declare victory over a crisis, it's for us to decide whether or not they can do more.
posted by RonButNotStupid at 8:18 AM on August 17, 2022 [6 favorites]
I see "Cancel Student Debt" in the same way I view "Defund the Police"--it's a position that is deliberately reductivist (it's a rallying cry!) which exists in order to create lots of room for solutions that can be sold as a "reasonable" alternative while still maintaining enough rhetorical leverage in case that compromise doesn't go far enough.
If interest rates were reduced to zero, bad debt from predatory lenders was forgiven, and some largish amount of debt was cancelled through a needs-based program, I'd be happy even if all debt wasn't cancelled. But if any one of those things was offered as a complete "fix" for the problem of student debt, I'd demand more.
And also, it's not for politicians to declare victory over a crisis, it's for us to decide whether or not they can do more.
posted by RonButNotStupid at 8:18 AM on August 17, 2022 [6 favorites]
When I went to college, there were need-based grants and low-interest loans, plus work-study. My private college was pretty affordable, and my family was able to cover the cost. My Dad died when I was in my 2nd year, and back then, I got Soc. Sec. payments while I was enrolled, until the semester I turned 22, which was shortly after my 22nd birthday. My roommate was from a family with less money, but with grants, work study, and summer work, she graduated with minimal debt. My point being that we used to make it easy and affordable for everybody to go to college. We can easily afford it. I don't understand why colleges have gotten expensive well beyond inflation.
There's been this disinformation campaign about how education is bad, college is useless, etc. Even middling schools end up with some terrific faculty, and people really expand horizons and gain critical thinking, and meet different people. A friend is on the education faculty at a small state university in Maine. She tries to get all her students into overseas travel/study programs, because many of them are unlikely to get the chance again, or are from a culture where it's not typical, though everybody goes to Canada because it's closer than other US states. The students really grow and value the experience.
GOPers understand that education, liberal education, makes you more liberal in some broad sense, but also makes you less likely to be a MAGA-voting dope. Education also helps people innovate, use better business (art, education, etc.) practices. It's great for people, and GOPers just want to mow it down because they have a scorched earth, win at any cost approach.
I'd love Biden and the Dems to do more, faster, better. I'll push them to do that, but I enjoy even imperfect gains, esp. as they make people's lives a little better.
posted by theora55 at 8:28 AM on August 17, 2022 [7 favorites]
There's been this disinformation campaign about how education is bad, college is useless, etc. Even middling schools end up with some terrific faculty, and people really expand horizons and gain critical thinking, and meet different people. A friend is on the education faculty at a small state university in Maine. She tries to get all her students into overseas travel/study programs, because many of them are unlikely to get the chance again, or are from a culture where it's not typical, though everybody goes to Canada because it's closer than other US states. The students really grow and value the experience.
GOPers understand that education, liberal education, makes you more liberal in some broad sense, but also makes you less likely to be a MAGA-voting dope. Education also helps people innovate, use better business (art, education, etc.) practices. It's great for people, and GOPers just want to mow it down because they have a scorched earth, win at any cost approach.
I'd love Biden and the Dems to do more, faster, better. I'll push them to do that, but I enjoy even imperfect gains, esp. as they make people's lives a little better.
posted by theora55 at 8:28 AM on August 17, 2022 [7 favorites]
If you're worried about helping the kids of the rich, consider that rich people can also be terrible parents who use their money to control their kids, tell them what education they can get, threaten to cut them off for being gay and so on. You can't create any program that tries to help only the "deserving" that works, because you will always end up excluding someone unfairly. Easier and more fair (and cheaper) to just give to all.
Higher ed should ultimately be well funded and free for everyone. This isn't that, but it rectifies one injustice.
posted by emjaybee at 8:59 AM on August 17, 2022 [15 favorites]
Higher ed should ultimately be well funded and free for everyone. This isn't that, but it rectifies one injustice.
posted by emjaybee at 8:59 AM on August 17, 2022 [15 favorites]
Maybe cancel student loan debt so my kids can go to college.
posted by zenon at 9:33 AM on August 17, 2022 [1 favorite]
posted by zenon at 9:33 AM on August 17, 2022 [1 favorite]
In any case I bet any blanket forgiveness will probably help a lot of people, but probably not the people who need the help most.
I promise you that blanket forgiveness will help the people who need the help the most.
posted by Gadarene at 10:07 AM on August 17, 2022 [15 favorites]
I promise you that blanket forgiveness will help the people who need the help the most.
posted by Gadarene at 10:07 AM on August 17, 2022 [15 favorites]
I don’t have the stats in front of me but student debt holders aren’t necessarily ‘young people.’
In fact, the vast majority are not!
posted by Gadarene at 10:08 AM on August 17, 2022 [5 favorites]
In fact, the vast majority are not!
posted by Gadarene at 10:08 AM on August 17, 2022 [5 favorites]
I've been thinking that just allowing people to declare bankruptcy the way they could for other debts would help. Not a great solution, but it least it's fairly simple.
Guess which now-U.S. president helped ensure that student loan debt was not dischargeable through bankruptcy?
Yep, that one.
posted by Gadarene at 10:10 AM on August 17, 2022 [12 favorites]
Guess which now-U.S. president helped ensure that student loan debt was not dischargeable through bankruptcy?
Yep, that one.
posted by Gadarene at 10:10 AM on August 17, 2022 [12 favorites]
We're already making a value judgement in deciding to cancel student debt (and likely only government-held student debt) preferentially to, I dunno, any other type of debt.
Echoing Gadarene, we already made that value judgement when then-Senator Biden crafted a bill to make all debt dischargeable via bankruptcy except student loan debt. That's a) how you know that they knew years ago that the value of a college diploma was inflated, and b) why this is such a big issue now.
If I could declare bankruptcy and get rid of my college debt? I'd do it today. I suspect a bunch of other people would as well. Maybe this causes a problem for the education industry, but somehow every other industry has figured out how to deal with bankruptcies, I don't see why the education industry can't.
posted by nushustu at 10:17 AM on August 17, 2022 [12 favorites]
Echoing Gadarene, we already made that value judgement when then-Senator Biden crafted a bill to make all debt dischargeable via bankruptcy except student loan debt. That's a) how you know that they knew years ago that the value of a college diploma was inflated, and b) why this is such a big issue now.
If I could declare bankruptcy and get rid of my college debt? I'd do it today. I suspect a bunch of other people would as well. Maybe this causes a problem for the education industry, but somehow every other industry has figured out how to deal with bankruptcies, I don't see why the education industry can't.
posted by nushustu at 10:17 AM on August 17, 2022 [12 favorites]
If I could declare bankruptcy and get rid of my college debt? I'd do it today. I suspect a bunch of other people would as well. Maybe this causes a problem for the education industry, but somehow every other industry has figured out how to deal with bankruptcies, I don't see why the education industry can't.
My understanding (which may be wrong) is that if student loan debt is dischargeable in bankruptcy then people are perceived to be reasonably likely to declare bankruptcy immediately on graduating when they have minimal assets and a relatively low income. Whether or not that would actually happen, it is likely to mean that organisations are unwilling to lend money to students at all, and so in many cases they would not be able to afford college. This does not mean that student loan debt must never be dischargeable in bankruptcy, just that you may need to create some different rules about when it can be done.
A system that is closer to a graduate tax, or max overall loan burdens being really low, or just free public education is probably more sensible overall. For example if community college were free for the say first 60 credits, that would benefit a huge number of people, particularly those on low incomes. Funding the final two years of college through a combination of work and loans might then be achievable without debt being as burdensome.
posted by plonkee at 12:23 PM on August 17, 2022 [2 favorites]
My understanding (which may be wrong) is that if student loan debt is dischargeable in bankruptcy then people are perceived to be reasonably likely to declare bankruptcy immediately on graduating when they have minimal assets and a relatively low income. Whether or not that would actually happen, it is likely to mean that organisations are unwilling to lend money to students at all, and so in many cases they would not be able to afford college. This does not mean that student loan debt must never be dischargeable in bankruptcy, just that you may need to create some different rules about when it can be done.
A system that is closer to a graduate tax, or max overall loan burdens being really low, or just free public education is probably more sensible overall. For example if community college were free for the say first 60 credits, that would benefit a huge number of people, particularly those on low incomes. Funding the final two years of college through a combination of work and loans might then be achievable without debt being as burdensome.
posted by plonkee at 12:23 PM on August 17, 2022 [2 favorites]
refinanced into private loans? Some of those companies are just as predatory in their strategies as the worst for-profit colleges.
I have a friend who took out a large student debt loan with her father, a supermarket worker. As an unsophisticated 19 year old, she was seduced by one of these companies as their pitch to her was "wouldn't you like to save money and remove your poor Dad from your loan note?".
In fact, the cost of that decision ended up vastly increasing her student loan debt.
I'd be in favor of a program which helped wipe out 100% the interest charged by predatory companies, of which there is a LOT.
posted by chaz at 12:29 PM on August 17, 2022 [4 favorites]
I have a friend who took out a large student debt loan with her father, a supermarket worker. As an unsophisticated 19 year old, she was seduced by one of these companies as their pitch to her was "wouldn't you like to save money and remove your poor Dad from your loan note?".
In fact, the cost of that decision ended up vastly increasing her student loan debt.
I'd be in favor of a program which helped wipe out 100% the interest charged by predatory companies, of which there is a LOT.
posted by chaz at 12:29 PM on August 17, 2022 [4 favorites]
Whether or not that would actually happen, it is likely to mean that organisations are unwilling to lend money to students at all,
Well, no, and you can tell because lenders were making those loans prior to their not being dischargeable in bankruptcy. (Seriously, they have perfectly good capacity to estimate the risk of bankruptcy and price the debt accordingly, just as they do with all other unsecured debt that they issue. It was only in 2006 that private loans became undischargeable in bankruptcy.) Also, since the major lender to students is now the US government, this is a much less pressing concern. Totally a case where one or two abuses (IIRC doctors) were used in bad faith as an excuse to torture a large group of people.
posted by praemunire at 12:29 PM on August 17, 2022 [5 favorites]
Well, no, and you can tell because lenders were making those loans prior to their not being dischargeable in bankruptcy. (Seriously, they have perfectly good capacity to estimate the risk of bankruptcy and price the debt accordingly, just as they do with all other unsecured debt that they issue. It was only in 2006 that private loans became undischargeable in bankruptcy.) Also, since the major lender to students is now the US government, this is a much less pressing concern. Totally a case where one or two abuses (IIRC doctors) were used in bad faith as an excuse to torture a large group of people.
posted by praemunire at 12:29 PM on August 17, 2022 [5 favorites]
This is my takeaway. I feel like if the system wants to say "students are bad bets for loans" then the response should be "then a system based on loans is a bad idea" not "We will wring every drop of sweat out of those fuckers until they die". If education paid for with loans creates instability for the entire system then let's just give them the money they need from the system. That's supposed to be the trade off for submitting to society's requirements from us. That we get shit in return. Like education. Every human is entitled to everything humanity has discovered.
posted by bleep at 12:30 PM on August 17, 2022 [10 favorites]
posted by bleep at 12:30 PM on August 17, 2022 [10 favorites]
I was so excited to see that it was ITT Tech, then I read the article, and it was for people who were there after Jan 2005. My husband graduated Dec 2004, and still owes $47k. We've been paying $316 every month even through the pandemic, and it's barely budged, because of the interest. We could use that $300 to help us get our own house (we moved in with my father-in-law in 2012, so he could keep the house after my mother-in-law unexpectedly died, and he went onto disability).
So I'm very bummed, but still, Biden and the Dept of Education should expand it to everyone who went there. Cancelling interest rates would help loads, too, and making zero percent loans both undergraduate and graduate, that can be forgiven or discharged in bankruptcy. Of course universal healthcare should be in there too, for it's health bills that are doing people in as well, not just student loans.
posted by tlwright at 1:14 PM on August 17, 2022 [13 favorites]
So I'm very bummed, but still, Biden and the Dept of Education should expand it to everyone who went there. Cancelling interest rates would help loads, too, and making zero percent loans both undergraduate and graduate, that can be forgiven or discharged in bankruptcy. Of course universal healthcare should be in there too, for it's health bills that are doing people in as well, not just student loans.
posted by tlwright at 1:14 PM on August 17, 2022 [13 favorites]
RE the idea suggested above on free community college for the first 60 credit hours, I’m totally in favor.
In a recent leadership email in our District, a suggestion was to provide a “completion bonus” sort of rebate for students. That incentivizes certificate or degree completion, and can be scalable for any amount of rebate, up to and including possible 100% of tuition cost, or student loan amount, or some fixed-dollar-amount rebate.
posted by darkstar at 4:23 PM on August 17, 2022 [1 favorite]
In a recent leadership email in our District, a suggestion was to provide a “completion bonus” sort of rebate for students. That incentivizes certificate or degree completion, and can be scalable for any amount of rebate, up to and including possible 100% of tuition cost, or student loan amount, or some fixed-dollar-amount rebate.
posted by darkstar at 4:23 PM on August 17, 2022 [1 favorite]
Honestly confused - Are student loans dischargeable in bankruptcy?
I had thought 100% "no", but googling suggest "actually yes, but it's really difficult".
Does anyone have an explainer? Is there a call to action we can press our politicians for?
posted by soylent00FF00 at 4:49 PM on August 17, 2022
I had thought 100% "no", but googling suggest "actually yes, but it's really difficult".
Does anyone have an explainer? Is there a call to action we can press our politicians for?
posted by soylent00FF00 at 4:49 PM on August 17, 2022
Even if Joe doesn’t cancel everyone’s debt, imagine how helpful it would be to retroactively change interest on these loans to 0%?
Making it impossible for banks to make any profit on student loans seems like a great way to incentivize them never to make any student loans again.
Like so many of the proposals around this subject, this doesn't seem to do anything to change the system going forward.
posted by Artifice_Eternity at 5:52 PM on August 17, 2022
Making it impossible for banks to make any profit on student loans seems like a great way to incentivize them never to make any student loans again.
Like so many of the proposals around this subject, this doesn't seem to do anything to change the system going forward.
posted by Artifice_Eternity at 5:52 PM on August 17, 2022
Like so many of the proposals around this subject, this doesn't seem to do anything to change the system going forward.
As someone who just paid my kid's first semester bill, this is an aspect of the issue that looms large for me. I agree the cost of college is out of control, that student debt is one of the worst kinds of debt, and that people with student debt should get relief. But what does that mean for students in college now?
posted by mollweide at 6:14 PM on August 17, 2022 [3 favorites]
As someone who just paid my kid's first semester bill, this is an aspect of the issue that looms large for me. I agree the cost of college is out of control, that student debt is one of the worst kinds of debt, and that people with student debt should get relief. But what does that mean for students in college now?
posted by mollweide at 6:14 PM on August 17, 2022 [3 favorites]
Making it impossible for banks to make any profit on student loans seems like a great way to incentivize them never to make any student loans again.
All of this conversation is about federal student loans. The bank is the federal government. As far as I know the executive office has pretty limited regulatory power over private loans.
posted by aspersioncast at 7:04 PM on August 17, 2022 [1 favorite]
All of this conversation is about federal student loans. The bank is the federal government. As far as I know the executive office has pretty limited regulatory power over private loans.
posted by aspersioncast at 7:04 PM on August 17, 2022 [1 favorite]
And I’m not sure I see the immediate downside to removing banks from the equation.
posted by aspersioncast at 7:05 PM on August 17, 2022 [2 favorites]
posted by aspersioncast at 7:05 PM on August 17, 2022 [2 favorites]
I would say the immediate downside would presumably be far less loan money available to students.
To be clear, I'd much prefer that higher education not be financed so heavily by loans. But if we're going to move away from that, we probably should work out another system of financing it before we demolish the existing one.
posted by Artifice_Eternity at 8:35 PM on August 17, 2022 [1 favorite]
To be clear, I'd much prefer that higher education not be financed so heavily by loans. But if we're going to move away from that, we probably should work out another system of financing it before we demolish the existing one.
posted by Artifice_Eternity at 8:35 PM on August 17, 2022 [1 favorite]
Now cancel ALL student debt.
Maybe cancel student loan debt so my kids can go to college.
I promise you that blanket forgiveness will help the people who need the help the most.
i dont get this at all. what do you all believe? that all current student debt should be cancelled... but next year's grads should still accrue it? or that all education, public, private, or otherwise, should be free by law forever from now on... and paid for by... who exactly? who pays the educators' salaries? what are you saying?
Every human is entitled to everything humanity has discovered.
ok, sure, but they are absolutely not entitled to have someone else pay for a person to teach them those discoveries for free.
posted by wibari at 9:46 PM on August 17, 2022 [1 favorite]
Maybe cancel student loan debt so my kids can go to college.
I promise you that blanket forgiveness will help the people who need the help the most.
i dont get this at all. what do you all believe? that all current student debt should be cancelled... but next year's grads should still accrue it? or that all education, public, private, or otherwise, should be free by law forever from now on... and paid for by... who exactly? who pays the educators' salaries? what are you saying?
Every human is entitled to everything humanity has discovered.
ok, sure, but they are absolutely not entitled to have someone else pay for a person to teach them those discoveries for free.
posted by wibari at 9:46 PM on August 17, 2022 [1 favorite]
or that all education, public, private, or otherwise, should be free by law forever from now on... and paid for by... who exactly?
By taxpayers.
There are a few countries (Germany, for example) where undergraduate education is actually fully subsidized by the government and free to students. There are many countries where undergraduate education is not fully but largely subsidized, such that costs are a joke compared to the US. Even in the US, kindergarten through 12th grade are fully subsidized and free, though using a terrible system heavily reliant on local taxes that ensures that wealthy districts are well funded and poor districts are not, and teaching is not a lucrative career for most. Some places, even in the US, have chosen to fully subsidize pre-K education too.
Freely accessible education is real, it's possible, it's currently a reality in places that made it so. It can be done well or badly or somewhere in between. It's a question of budget and social priorities.
(Incidentally, I would be interested to see how administration costs for, say, German universities compare to American ones. I know in the US much of the way-faster-than-inflation rise in costs is attributed to ballooning management levels and equipment costs, and I wonder what part those two factors play in universities in other countries.)
posted by trig at 10:42 PM on August 17, 2022 [7 favorites]
By taxpayers.
There are a few countries (Germany, for example) where undergraduate education is actually fully subsidized by the government and free to students. There are many countries where undergraduate education is not fully but largely subsidized, such that costs are a joke compared to the US. Even in the US, kindergarten through 12th grade are fully subsidized and free, though using a terrible system heavily reliant on local taxes that ensures that wealthy districts are well funded and poor districts are not, and teaching is not a lucrative career for most. Some places, even in the US, have chosen to fully subsidize pre-K education too.
Freely accessible education is real, it's possible, it's currently a reality in places that made it so. It can be done well or badly or somewhere in between. It's a question of budget and social priorities.
(Incidentally, I would be interested to see how administration costs for, say, German universities compare to American ones. I know in the US much of the way-faster-than-inflation rise in costs is attributed to ballooning management levels and equipment costs, and I wonder what part those two factors play in universities in other countries.)
posted by trig at 10:42 PM on August 17, 2022 [7 favorites]
We used to pay for higher education in the US out of taxes until people realized people who weren't white were benefiting. Like most things it's not impossible we are just very committed to cutting off our nose to spite our face.
posted by bleep at 12:13 AM on August 18, 2022 [2 favorites]
posted by bleep at 12:13 AM on August 18, 2022 [2 favorites]
We used to pay for higher education in the US out of taxes until people realized people who weren't white were benefiting.
So children who aren't white and who are kindergarteners through twelfth graders don't actually benefit from attending public schools, is what I'm inferring from this.
posted by cinchona at 10:39 AM on August 18, 2022
So children who aren't white and who are kindergarteners through twelfth graders don't actually benefit from attending public schools, is what I'm inferring from this.
posted by cinchona at 10:39 AM on August 18, 2022
I had thought 100% "no", but googling suggest "actually yes, but it's really difficult".
It is technically possible, but so difficult it is almost never accomplished.
So children who aren't white and who are kindergarteners through twelfth graders don't actually benefit from attending public schools, is what I'm inferring from this.
Well, in majority-nonwhite districts, conservatives have done the best they can to make sure that that is true, and, given their druthers, they would eliminate public school altogether.
posted by praemunire at 11:43 AM on August 18, 2022 [1 favorite]
It is technically possible, but so difficult it is almost never accomplished.
So children who aren't white and who are kindergarteners through twelfth graders don't actually benefit from attending public schools, is what I'm inferring from this.
Well, in majority-nonwhite districts, conservatives have done the best they can to make sure that that is true, and, given their druthers, they would eliminate public school altogether.
posted by praemunire at 11:43 AM on August 18, 2022 [1 favorite]
As far as I know the executive office has pretty limited regulatory power over private loans.
Depending on who the lender is, either the OCC or the CFPB (usually the latter, given the current group of lenders) does exercise jurisdiction over private student lenders. However, as it doesn't own that debt, the federal government is not in a position to cancel such debt with the stroke of a pen. When you hear about loan forgiveness in that context, it's usually because of egregious violations of law which led (usually years later) to a settlement with the lender (which was often in cahoots with the school to avoid the 90/10 rule).
posted by praemunire at 11:48 AM on August 18, 2022 [2 favorites]
Depending on who the lender is, either the OCC or the CFPB (usually the latter, given the current group of lenders) does exercise jurisdiction over private student lenders. However, as it doesn't own that debt, the federal government is not in a position to cancel such debt with the stroke of a pen. When you hear about loan forgiveness in that context, it's usually because of egregious violations of law which led (usually years later) to a settlement with the lender (which was often in cahoots with the school to avoid the 90/10 rule).
posted by praemunire at 11:48 AM on August 18, 2022 [2 favorites]
So children who aren't white and who are kindergarteners through twelfth graders don't actually benefit from attending public schools, is what I'm inferring from this.
I was shocked to discover years ago that my Fox News-watching relatives, who all attended and sent their kids to public schools, had a whole list of talking points about how public education was bad and shouldn't exist...
posted by trig at 11:48 AM on August 18, 2022 [1 favorite]
I was shocked to discover years ago that my Fox News-watching relatives, who all attended and sent their kids to public schools, had a whole list of talking points about how public education was bad and shouldn't exist...
posted by trig at 11:48 AM on August 18, 2022 [1 favorite]
I came in for the bad 90s style ITT commercials and I was disappointed. :(
"You can't get the jobs of tomorrow ... until you get the skills of today."
"I bet the guys who run this stuff spent YEARS in school."
"Have you worked with anything... high tech?"
"If there's a barrier there, you knock it down."
"When we're hiring, ITT is the first place we call."
"Education for the future."
posted by mrgrimm at 5:49 PM on August 18, 2022 [1 favorite]
"You can't get the jobs of tomorrow ... until you get the skills of today."
"I bet the guys who run this stuff spent YEARS in school."
"Have you worked with anything... high tech?"
"If there's a barrier there, you knock it down."
"When we're hiring, ITT is the first place we call."
"Education for the future."
posted by mrgrimm at 5:49 PM on August 18, 2022 [1 favorite]
Yeah, conservatives are hard at work trying to destroy public schools too, don't worry.
posted by brook horse at 7:44 PM on August 18, 2022 [2 favorites]
posted by brook horse at 7:44 PM on August 18, 2022 [2 favorites]
Good article summarizing the broader issue and some of the factors and reporting involved:
Finding the Sweet Spot on Student Loan Forgiveness
posted by darkstar at 1:40 AM on August 19, 2022
Finding the Sweet Spot on Student Loan Forgiveness
posted by darkstar at 1:40 AM on August 19, 2022
I’m not clear on all the details but I thought CFPB was under legislative rather than executive control, by virtue of being under the federal reserve. Do I have that wrong?
posted by aspersioncast at 8:41 PM on August 19, 2022
posted by aspersioncast at 8:41 PM on August 19, 2022
Just to close the loop, here is the link to the more recent MeFi FPP thread celebrating/critiquing Biden’s long-awaited, broader student loan forgiveness program announcement. Huzzah!/That Bastard!
posted by darkstar at 8:28 PM on August 27, 2022 [1 favorite]
posted by darkstar at 8:28 PM on August 27, 2022 [1 favorite]
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