Actually, student debt forgiveness is not new spending. The money for it went out the door years ago in most cases. Some of it back to Reagan days since he started the whole mess by cutting student aid and replacing the system with loans.
It is more similar economically to a tax cut than to war spending, I agree.
It didn't resolve the underlying problem, but it affected some of the follow-on problems. People who would struggle to get small business loans, car loans, etc. People working jobs they hated (and probably weren't good at for that reason) because they could barely keep up with their interest payments.
Reagan cut student aid my sophomore year of college. It was a big cut. The thing is, the baby boomers got much more help with college than post Reagan generations. As a general rule, I would not be for forgiveness of anything. But yet the real question is just how much aid should the government be doing in the first place?
Of course we are probably doing exactly what the contrarian doofus wants us to do by burrowing down a different rabbit hole, but at the risk of that I'll just say you could say the same thing for lots of debt or programs. Forgiving credit card debt would free up people to spend on other things and lots of small business owners use credit cards to get their businesses off the ground. Funding child care would free up money and unlock additional productive workforce. There are multiples of examples and many of those don't also come with the problem that the average college graduate has more earning potential than a non-graduate, so it's regressive in that sense. It's been a while since I've checked these figures, but the average and median monthly payment on student debt in this country is something like $400, so it's not as crippling as people make it out to be for the vast majority of people. Of course there are outliers that make the news, but that's not what we should base policy on.
Well, the thing that complicates the whole issue is the non-dischargeability of student loans in bankruptcy.
1. Student loan debt cannot easily be discharged in bankruptcy. That's what makes it unlike other forms of debt.
another important question is how do with deal with this debt for folks who simply can't pay? It's quite hard to go through an adversary proceeding to prove hardship under our system. the end result is perpetual debt. I guess we could bring back debtors prisons.
please tell me I'm not aligned with anything that guy says
Um. I guess we know that you don't work in banking, lol. I ain't taking this bait. If you honestly believe this, then it's too bad that so many people failed you in life.
1. I agree with this and am open to making changes in this aspect of student debt. It would also serve to make lenders more apt to fully underwrite the debt they are providing, but that also comes with likely making it harder to get. So there is a trade-off. Some kids might get left out.
Exactly. The loans that financially crippling are not federal loans for undergraduates. You can barely buy a new car with all the federal loans an undergrad can take on. The loans that are really problematic are the ones from private lenders, many of which engage in predatory practices. Why should they be protected from outrageous lending risks?
As usual, you miss the forest for the trees.
Banking? The government handed out money and then decided not to make millions of people repay hundreds of billions. If that isn't adding to the debt, then someone is redefining "debt".
I predict half of law schools will close by the end of the decade. And a lot of fringey colleges, especially private colleges, will also fall. It's already happening. Just read about it in the NY Times yesterday.
I figured you meant from the student's point of view.