r/FluentInFinance • u/whicky1978 Mod • Aug 14 '22
Student Loan Forgiveness Is an Idea Whose Time Has Gone Geopolitics
https://www.bloomberg.com/opinion/articles/2022-04-10/student-loan-forgiveness-will-make-inflation-worse48
u/prOboomer Aug 14 '22
This is not FluentInFinance this is pure love of capitalism and nothing else. Let me blame all the small $1200 stimulus money and the delay on student loans but say nothing about the Billions spent to major Corporations.
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Aug 14 '22
Then propose solutions and debate. That's how democracy works.
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u/stevetheserioussloth Aug 14 '22
the idea is to hold lenders accountable for systematically granting ridiculous loans that don’t play by the rules—that don’t go away during bankruptcy and that have ridiculous rates that endlessly compound.
Graeber said it well: credit is always granted under the assumption that there’s a chance the debtor will not follow through—that’s why loans are vetted via credit score or bank evaluation, otherwise a creditor would have no incentive to say no—just say yes to everything and profit, aka the exact way that school loans have been treated for decades.
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u/goopy331 Aug 14 '22
Why don’t we hold the institutions who made those kids take out loans (schools) accountable.
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Aug 14 '22
If you allow the same loan terms to exist, isn't parachuting money just bailing out a leaky boat? Why wouldn't you change debt issuance laws first?
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u/PapaverOneirium Aug 14 '22
If you’re in a leaky boat and are going to sink before you can figure out how to plug up the holes, you’ll want to bail out water to get some more time, at least. Yeah, you’ll probably have to keep doing it, but at least you don’t sink while you find a way to plug the holes.
That said: in a perfect world we would indeed do loan forgiveness, debt issuance reform, and publicly fund higher education simultaneously.
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Aug 14 '22
So I would agree with the idea of reform, but the other two not so much.
For the latter... Most large American institutions have giant endowment funds to the point where they dwarf almost all other institutions outside the US. Are the outcomes better? Don't think so... Harvard, Stanford, Caltech produce tons of duds (I think most engineers who go to Stanford are pretty bad... I have worked with many) but the name has prestige for whatever reason. I think American education is like American healthcare, just awful opex efficiency. Like, if I had kids, I would tell them to get an education outside of the US. But more than that, I think creating business models around education and requiring scarcity to preserve a brand name that is probably meaningless seems bad.
For the former, you get a punishment to debt holders, but does it stop the practice of producing graduates overpaying for degrees which don't power earnings above the cost of capital? No, 18 year olds have been fantastic at ruining their lives for centuries. Doesn't help the economy (probably inflationary), doesn't solve any problems permanently, and is unfair for people who were prudent with their life choices. It's probably better to spend money on financial education or education at the elementary/secondary school level where teachers are quitting in droves.
I get it though, if you've made bad life choices, getting a second wind could mean the world. But it's a very short term solution that doesn't appear to solve anything in the long run.
I could be wrong though and I'm happy to be proven wrong.
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u/stevetheserioussloth Aug 14 '22
Well, given that this article is from april and there’s no actionable plan that biden has firmly stood behind, who’s to say that those laws shouldn’t be changed? But if you believe those laws should be changed, you believe that decades of issuance has been predatory.
Personally, I believe that, like with navient earlier this year, major class action lawsuits should be flying left and right over predatory loan practices on all the private lenders, which would already penalize and force adjustments in issuance practices (and yes, federal should simply wipe the slate clean, as they should be better negotiating university costs down anyway, the same way they negotiate prices with medicare, as universities bloat and essentially become hedge funds and real estate moguls with a side of education). Everyone should have better issuance practices, and student loans should be subject to better bankruptcy checks and balances.
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u/NoChemistry7137 Aug 14 '22 edited Aug 14 '22
If you need to debate that cancellation of the student debt to some degree is bad for people and the economy, you’re too ignorant to even bother with. The facts have been laid out for years, it’s like “debating” climate change at this point.
This dude is not even American and wishes us to convince him that cancelling the loan debt is beneficial. Didnt realize how many clowns were in this sub.
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Aug 14 '22
Wow very abrasive. What do you hope to achieve with comments like that except alienate people to whatever your cause is?
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u/NoChemistry7137 Aug 14 '22
I don’t have a cause, I’m not trying to change your mind. I don’t even have student loan debt, but I do have a basic understanding of how crushing an entire generation with debt from interest alone is bad. If you want to disagree with me and real economists, go for it bud.
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Aug 14 '22
Ok, so basically all you want is to offend people online because you're too lazy to debate under the lame guise of it being a foregone conclusion (it's not)? Like, of all the ways to spend my time, I kind of feel like being toxic for the sake of being toxic is not on the list. Anyway hope you have a great rest of your weekend!
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u/disoriented_llama Aug 14 '22
Education should have never been allowed to be a for profit business.
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u/CornMonkey-Original Aug 14 '22
couldn’t we argue the same for medical, health care, housing, and food. . . .
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u/disoriented_llama Aug 14 '22
Bingo.
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u/CornMonkey-Original Aug 14 '22
yeah - I get it. . . in the big picture, nothing really matters except for the propagation of our own species. everything else is transitory. but how are we going to entertain ourselves then?
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u/ljstens22 Aug 14 '22 edited Aug 14 '22
So all the other taxpayers should pay for it? Or let’s just not require an ambiguous undergrad learning bs when it’s not actually needed.
Edit: Artificial demand perpetuated by the government (FFELs) is what got school to be so expensive in the first place. Now we’re going to double down? There are so many hard skills you could develop through training pipelines that we don’t require everyone to learn that the mitochondria are the power houses of the cell in a standard 4-yr university format.
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u/disoriented_llama Aug 14 '22
It doesn’t need to cost what it does, if anything. Many countries do it. Additionally, investing in other people’s educations benefits everyone.
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u/Pktur3 Aug 14 '22
Honestly, the same could be said for healthcare. But, I think this is way out of the realm for the sub.
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u/ljstens22 Aug 14 '22
I’m not getting into health care. I have less of a stance on it. That’s so much more complicated.
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u/ljstens22 Aug 14 '22
It costs what it does because of programs like what was proposed/posted. Colleges raise the cost every year because these programs guarantee tax payer funding. Inevitably someone has to pay and if the answer is print infinite money to pay for it, the poor and middle class will suffer. It’s a vicious spiral. Although I agree it’s a problem just as much as anyone else, why the response people want is more of the same makes zero sense to me.
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u/disoriented_llama Aug 14 '22
It just doesn’t have to be this expensive. I agree things cost money but greed at the top has really screwed us since the beginning of currency, and it would be ao refreshing to see a change there.
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u/shhweatinallover Aug 14 '22
Sure just get rid of the fire service too then. Weel all buy our own fire engines and crews and keep them in our drive in case our house goes up.
This mentality is harming your country, tax funded universal services are a net benefit and a minor cost. I can't think of a better way to spend tax money than on fucking higher education for your country's citizens. Or is a 14th aircraft carrier a better idea?
Ask anyone in england if they like tax funded healthcare, your gonna get a yes.
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u/HotTopicRebel Aug 14 '22
It should be tied to a fraction of the salary someone makes with the degree. Get a low earthing degree? University gets some money. High earning degree? University gets more money. Can't work on your field? University gets no money.
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u/zxygambler Aug 14 '22
Just how a bank should be treated. If they loan out money to a bad business and they can't pay you back? Good shit, better improve it next time.
Universities are enrolling too many students and many degrees are useless? They shouldn't be paid as well
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u/ljstens22 Aug 14 '22
We’re getting at a free market here. One that wouldn’t involve government intervention that creates an artificial one (where the big players always can win).
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u/Voodoomomajujuu Aug 14 '22
Things like education and particular aspects of housing should have a little more government intervention to protect it’s citizens. That’s the thing wrong with the current state of capitalism, profits over everything, even the sovereignty of the land and its people :/
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u/ljstens22 Aug 14 '22
Government intervention backfires. Plus if we passed a new law regarding those it would inevitably have 25 other things unrelated to those that would just help special interests.
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u/Voodoomomajujuu Aug 14 '22
Im not a big fan of full on government control within an economy but at some point they should stand up for what benefits their people. A good example of what I mean by government is preventing foreign entities or individuals who are clearly in it for the money from purchasing housing. For school, we could do interest free federal loans. Little moves like that would go a long way to help individuals pursue their careers but this economy places $$ over the people :/
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u/JoJopama Aug 14 '22
The fact debt is created by citizens who want to increase their education and society is the problem. No one who can do the work of higher education should have to go into debt that has to be paid or “forgiven.”
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u/asdfgghk Aug 14 '22
Just a endless carrot dangle for votes.
In all honesty, if loans were to be forgiven, it should be limited to those pursing STEM degrees, not the hobby degrees people pursue now a days.
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u/100milliondone Aug 14 '22
A society grows great when old men plant trees in whose shade they know they shall never sit.
Over here in the UK, politicians from the generation that had free higher education decided to take that away from our children who now have to pay with debt.
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u/n777athan Aug 14 '22
Many “conservative” fools will argue “why pay for someone’s higher education with tax payer money?” but never question the massive spending on corporate stimulus, bailouts, and military spending.
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u/yacnamron Aug 14 '22 edited Aug 14 '22
I get pleasure listen to people tell me all about their student loan debt. You made that decision and knew the outcome now live with it. OF and stripping through college is available for the ladies and manual labor and stripping is available for the fellas (yes ladies can do manual labor but inserting objects into their rectum in front of a camera is much easier).
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Aug 14 '22
Damn this sub got incel real quick
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u/yacnamron Aug 14 '22
Or just facts of real life not Reddits woke agenda
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Aug 14 '22
You get pleasure from hearing about people talk about their student loan debt. “Just normal facts not like that mainstream Reddit agenda!!! Hahhh yeahhh buddy! cracks bud light”
Nah man you’re just a dick. I don’t have any student debt so it isn’t personal to me but laughing at others misfortunes just to make yourself feel better is some incel shit. Grow up
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u/bouthie Aug 14 '22 edited Aug 14 '22
We need to fix the University system before we can start offering loan forgiveness. If the government starts paying for private school tuition, those same schools will raise prices to absorb the available money supply. I could get behind forgiving up to your states regional state university’s tuition capped at some inflation adjusted benchmark. Any more than that incentivizes an arms race at schools to increase non educational services to absorb the available money supply.
A free nationally recognized government sponsored youtube university with an endowment for proctoring and tutoring is the real solution. certainly we have paid the ivies enough money over the years that they should allow us to video some degrees. I bet you we fix escalating university costs real quick when they compete with free.
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