LOL. I had to drop out of (MIT, not BU, but w/e) due to not being able to get financial aid (even though I think it was technically during the "we will give you as much financial aid as you need to attend" era), due to parents having income marginally higher than some federal cutoffs but unwilling to provide documentation or loans. Ultimately worked out fine, but I'm pretty unsympathetic to the "soak people for $82k/yr and then offer some discounts" price discrimination lie.
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Similarly, I didn't attend some schools I was accepted to because the debt would have crushed me.
That's why I don't get the big push for canceling student loans. It feels like rewarding people for irresponsible behavior, and ultimately punishing those who acted responsibly.
Further, I expect it would drive tuitions even higher. Who cares what it costs if you don't have to pay...
> Similarly, I didn't attend some schools I was accepted to because the debt would have crushed me.
Same here. However, I don't think other people should have to suffer through what I suffered just because I had to go through it myself. I want society to improve and for others to receive the benefits of those improvements, even if I myself will never get to enjoy them.
It's like getting upset at the development of a cheap cure for cancer, because it would seem like a slap in the face to all of the people who suffered and beat cancer themselves, were bankrupted by it or died because of it. I never smoked cigarettes, for example, am religious about sunscreen, and I take care of my body and health to avoid threats like cancer, and I've lost loved ones to the disease. Just because I "did everything right" and still suffered through the loss of loved ones to cancer, doesn't mean that I'd be upset if there were suddenly a cheap cure for it, and I wouldn't be upset if it benefited everyone who smoked a pack of cigarettes a day for the last 3 decades, either.
> However, I don't think other people should have to suffer through what I suffered just because I had to go through it myself. I want society to improve and for others to receive the benefits of those improvements, even if I myself will never get to enjoy them.
The right way to do this is giving everyone the same amount of cash and increasing marginal income tax rates.
It would be politically stupid to reward a small amount of people who have low voter participation rates and instead earn the ire of many who have high voter participation rates.
Simply stopping government funded higher education loans would be a better move that actually addressed the root problem with higher education costs.
If the goal is to help poor people, then help all poor people. Not just a subsection of the poor that happened to borrow money for overpriced signaling mechanisms.
> The right way to do this is giving everyone the same amount of cash and increasing marginal income tax rates.
And in your system, this counterbalances the natural advantage that children born to wealthy parents have how?
I'm not some sadist who likes watching anyone suffer, but there's no easy way out.
My earnings and earnings potential will likely forever be below someone who graduated from ivy league. My network is also much smaller and less affluent.
Now telling me I have to pay the tuition of folks that went to said schools, via taxes, is a giant slap in the face.
I've not seen this debate contextualized that way. Is it predominately ivy league grads calling to have their debt canceled? If so, I think that really ought to be highlighted.
If it applied to new people making new decisions, it's an improvement. But if it applies retroactively to bad decisions, that's different.
Any "free" money going forward would presumably come with some strings that at least attempt to keep things reasonable. But it just feels wrong to pay off someone's irresponsible private school loan from a few years ago.
Is it more irresponsible for an 18 year-old to take on six figures of debt or for the lending institution to so easily give it out?
> It's like getting upset at the development of a cheap cure for cancer
No, it's like taking my taxes and giving them to someone else instead of services which benefit many people.
I'd also like to eliminate "charitable" tax deductions (handouts to the wealthy) and tax-sheltered retirement accounts with millions in them (like Mitt Romney's Roth IRA), and would support UBI and basic free healthcare (if it came with eliminating a lot of bureaucracy), in case you just think I "hate the little guy".
This analogy doesn't hold up. A cheap new cure doesn't help those who struggled in the past but they can still cut me a fat check for the money I paid back and I will benefit from it all the same.
Getting cancer isn't a decision though, and curing cancer isn't zero-sum. You can argue the schools were predatory, but someone who made the responsible decision to take a scholarship at a state school is footing the bill for someone who made the irresponsible decision to take loans to attend an expensive private school.
Canceling student loans is purely a political play. I agree wholeheartedly with your opinion. I worked my way through school, granted it was 50k all told over 4 years instead of whatever the hell it costs now.
Maybe my ignorance is showing, but putting a cap on loan amounts for undergrad would probably protect the student quite a bit.
I'd rather just make student debt "regular" debt, i.e. dischargeable through bankruptcy. Maybe secured by the actual diploma, so you can't claim to be a graduate if you default on the debt, but you'd obviously have the education.
This changed in 2005, under GWB, and was not the worst thing he did (screwing up Afghanistan, invading Iraq, PATRIOT, TSA, ...) but was still a bad thing he did.
Australia has an interesting system, the government owns the student debt and once you earn above a certain amount it raises your tax rate slightly until the debt is paid off.
Those who can earn enough money eventually pay it off, but they're not worried about debt collectors if they're not earning any money.
People who don't ever earn enough simply don't pay it off and it's not a problem.
To prevent abuse from the universities raising costs too much, if they want to participate they have to adhere to set rates for degrees. There are a couple of universities that don't participate in the system but they're no-ones first choice
The point of a secured loan is that if you don't pay, the creditor can sell whatever is securing it and recover some or all of what is owed to them.
Taking away someone's diploma because they defaulted on their loan would just be destroying value. It's the equivalent of a bank foreclosing on your house and then burning it to the ground.
I really like the diploma idea. Its mostly reasonable to me but not sure its enough. Lots of people leave before getting degree. After first job the degree doesnt really matter that much.
I agree with capping loan amounts on future undergrad loans, but there's a whole generation of people who were encouraged into predatory tuition & loan combos under the promise the degree would get them a job which would make it easy to pay off the loan. This was (and still is, though Gen Z seems to be catching on to the scam) a systemic issue with predatory lending, and since the federal government has control over many of these predatory loans I think the political push to cancel them is entirely understandable. It may be a largely political play, but then again nearly everything the government does seems to be due to largely political reasons.
I understand the idea that these loans are predatory might be controversial, but this idea comes from the fact that going to expensive universities and paying for it with loans is pushed by high schools, parents, universities, and society alike as the sure-fire path to success. To an 18-year-old with no way to really comprehend the amount of money they're spending on education or what life looks like after university, they likely will take much of this at face value.
I distinctly remember back in school one of my friends got a loan check and said “oh wow this is 2.5k more than I need, I’m gonna buy a new (second and unneeded) laptop!”
I was so stunned I couldn’t come up with the words to say. Maybe the real issue is teaching kids the value of money.
I find this "whole generation of people who were encouraged into predatory tuition & loan combos" thing to be incredibly unconvincing. College tuition rates started skyrocketing largely AFTER Google became a thing. There's no excuse for refusing to put in the research into wages and how long it would take to pay off these loans.
There were decades of people before internet searches were available who decided to prioritize a lack of debt over going to the absolute best school they could. The most expensive school any of my classmates went to was Tulane, and the kids who went there almost all went on GI bills. Now, across the river, where the people were more affluent... those folks definitely spent more money on their college educations. Can't say I've seen their investments reflected on their Linkedin profiles, though.
Not cancelling student loans is also a political play, because of the securities that depend on this unpayable debt (SLABs).
https://www.natlawreview.com/article/rmbs-to-slabs-history-r...
So right now we are prioritizing SLAB investors' profits over giving consumers more spending power. If college graduates suddenly could spend their loan payment money on other goods and services, it would be great for the economy. Loan repayments have been frozen for years now and nothing bad economically has happened.
But instead we're just protecting the rent seeking of the wealthy, which isn't really worthwhile economic activity.
Personally I think SLABs are extremely unethical, but even if you disagree with that, SLABs are unsustainable and look a lot like the subprime mortgage bubble.
I agree that there needs to be something to drive the cost of education down, but I don't know if a tuition price ceiling is the way to go. I think a good start would be punishing schools that spend elaborately on buildings, athletics and excess/overpaid administrators while also paying their grad students doing a lot of the teaching work starvation wages (or if you're UCLA, don't even pay them at all!) and neglect spending directly on education and tuition. I think an endowment cap is a great idea in this area, to force schools to lower tuition by having to spend a certain part of their endowment, rather than letting them hoard money.
Some other things that are extremely good ideas is letting the interest rate be renegotiable/refinancible. For example, why did I have to continue paying 6.5% on my loan when rates everywhere else were near zero? And also letting people discharge loans in bankruptcy like pretty much every other debt.
The bubble will burst any day now, since enrollments have been declining for years at this point. Until then, the only people benefiting are student loan servicers, useless and overpaid administrators, plutocratic athletics departments, and investment bankers, NOT students or people doing the actual educating.
You need something SLAB-like because otherwise everyone declares bankruptcy between finishing their degree and getting a first job. Congratulations you just cancelled all new student loans.
Something like dischargeable in bankruptcy after 15 years could work though.
I agree with capping costs. However, not cancelling loans for a small sum of, say, 5-10k per person wouldn't be so bad. Just as you or I had to work through school and scrimp and save doesn't mean we should make others suffer that same way. The logic seems reminiscent of hazing to me.
I know someone who attended the public university in Mass for English. They graduated in 2010 with 100k in loans as the first college graduate in their family. Owing to the job market for the last decade, they primarily worked in the service sector and never made a dent in the student loan principal.
How many decades should we punish people for?
It's a really tricky problem to solve, granted.
I feel like student loans should be treated more like FHA loans, who generally do more to make sure the loan is worth it.
If loan givers had a vested interest in the success of the grantee, they'd do far more due diligence than they do today. They'd not give someone 100k for an English degree, for example.
That said, some of the diligence is expected from the borrower as well, IMO.
Why would you take out 100k in loans for a degree that can’t pay for itself?
The real crime here is charging 100k for an English degree. People should be allowed to pursue whatever interests they want, no question. Why would someone spend 100k on an English degree they can’t possibly hope to have bear financial fruit? The scene from good will hunting comes to mind…
Someone who's only exposure to education included 4 years of English, 3 years of math, and 2 years of science could rationally conclude that English is a valuable skill. Particularly when they don't have familial connections with degrees.
Why would you assume a 17 year old, first generation college student would know that degree wouldn't pay for itself?
Would be better to make the debt dischargeable - it's a form of debt forgiveness that has skin in the game for college graduates, particularly those that didnt do well at all.
100k in loans for an English degree
Demand a refund not a handout
For as long as it takes them to pay their debt? What part of the "you can't discharge this via bankruptcy, and you're actually going to be an ENGLISH major" do you think tripped them up?
A college graduate can get a better job than service sector: HR, teaching, etc. That person isn't trying.
> It feels like rewarding people for irresponsible behavior, and ultimately punishing those who acted responsibly.
Keep in mind that most (nearly all) of the people you're talking about were minors less than a year prior to getting these loans pushed on them by people with a lot of experience convincing very young people to take loans. It's disingenuous to act like they aren't easily preyed on due to their inexperience.
The most likely reason that these tuition costs go so high is because the government is basically willing to give as much money as is needed to get them there. Over the past 50 years, for every dollar given by the government in funding average tuition increased next year by $0.60 [1].
The trouble is, if you take away the student loans the cost of tuition will drop but a lot fewer people will be able to go.
1. https://educationdata.org/average-cost-of-college-by-year
Same boat. I got into CalTech, and instead went to CalPoly SLO because I was afraid of the debt. Things worked out fine tbh.
What year? I went 05-09 and it wasn’t bad but it was getting steep towards the end.
I won’t share my class year, but the tuition definitely spiked towards the end.
Cancelling student debt would only be rewarding irresponsible behavior of the US government by relieving the pressure to change how loans are issued in the first place. The news/ press would mostly stop reporting about it once the initial loans are forgiven since there'd be no pressure anymore to fix the root of the problem which is issuing non-dischargeable unsecured loans in the 10s of to 100s of thousands of dollars. The US allowed those non-dischargeable loans to be issued in the first place with little to no way of knowing if the value provided by the student's desired educational program justified the price it was billing. Students may bare some responsibility here but expecting all 18 year olds who have gone through the traditional US education system to have any resemblance of financial literacy is asking a lot given there seems to be no focus on requiring income management, retirement savings, and debt awareness classes in any US High School tract.
What I'm trying to say ultimately is in my opinion most High School graduates are to naive to actually realize how bad of deal they may be getting themselves into and the US government is actively encouraging that reckless behavior by allowing these federal loans to be issued.
At the very least we need to limit interest rates on loans. Folks shouldn't be debt slaves for the rest of their lives.
Interest rates should depend on the market. Why you want to artificially meddle in everything? Solutions for student loans is simple. Stop government guarantees, and get rid of the government law that makes it not dischargeable. Government caused the problem and you ask for another government “solution”
I'm fine with the federal government servicing 100% of student debt and for that debt to be completely interest free.
But that's as far as I'm willing to go on the issue. If it were up to me, I'd have the feds regulate university expenditures the same way that they regulate insurance companies. You get X% of tuition and fees to go towards construction, overhead, and administration. Everything else is for educator salaries.
Buy the worst house in the best neighborhood and your initial apprehension eventually becomes a valuable asset. I wonder if the same holds true for college. This was certainly my experience.
So many people are screwed by cutoffs and rules. My parents had assets on paper but were going through a messy divorce and bleeding cash; they refused to give me anything at the time I was in need of tuition money. I got two jobs, but that didn't cover it. Many, many visits were made to the financial aid and advising offices -- every time the answer was the same. The only way out of the requirements is to prove you're fully alienated from your parents, and that's really hard to prove.
But if you turn 24, poof, you magically no longer have parents and can get any loans / aid / whatever based on your own income.
I get why the rules exist but still kind of feel like I got scammed, just due to the endless brainwashing kids get that you must graduate from college at any cost. (I ended up taking some 20%+ interest rate loans.)
Damn, yeah I took a full ride instead of paying the 70k back when I was deciding for college…agree would feel a bit miffed if everyone suddenly was forgiven all debt
I never really understood this kind of jealousy because other people are given a break. It doesn't make your situation any worse and it makes theirs better.
I agree with you on an individual level, and that it is unhealthy to care too much about someone around you getting a break that you didn't get yourself... But that breaks down really quickly on a societal level. Our society is organized around at least a semblance of fairness. So for example even if you pay your taxes and you probably wouldn't mind if your neighbor got away with not paying as much as you do... but you'd probably be pretty pissed if every other person you know just does not pay anything and gets away with it. It breaks down confidence in the system.
In morocco for example, that feeling of unfairness just leads to people doing everything to make their situation better when they get the occasion, because everyone does it. It got slowly but surely worse and worse, and we are now left with a population that is much more cynical and disillusioned than it was a few decades ago.
Just as an example, if your building permit is stuck in approval hell and the local official offers you to pay 1000dirhams to speed the process up, does it really hurt anyone? No, but it makes the entire process seem futile for everyone else, even if it maybe shouldn't.
I think that's a bit similar to the student loan debate, and if anything the loan forgiveness looks much much more shameless to me. Because at the end of the day, college graduates are statistically doing better than a lot of the people that are asked to foot the bill. The proposal is also completely self serving, with almost 0 benefits (a supposed cash injection to the economy isn't one) to anyone else. It's so contrary to everything that is being pushed for right now too, because it's just giving an already privileged population another privilege that is usually very rarely granted.
Everbody's paying for it in the form of tax, I would rather not bail out universities/banks that prey on the financial illeteracy of high school graduates.
Agreed. The financial aid also fools people into believing 80k per year is not insanely greedy pricing.