Student Loans

[wvjules]

Our country is in the middle or the worst inflationary cycle in 4 decades. More spending will only make that worse.

So keep 'em poor to keep inflation in check?

 

[Lumpy1106]

It is interesting that there's an assumption of either/or being made by so many. I don't know a single college student who doesn't work. And I know very few who aren't taking loans. With the cost of college right now, it typically takes both AND help from parents/family or scholarships to get through. Even the two kids I know who have so-called full rides still have to either work or borrow to cover books, personal expenses, and other odds and ends not included in their aid package. One of them is going to graduate with about $20K in loans despite her scholarship covering 100% of her tuition, room & board because her program demands internships and lab experiences (all unpaid, of course) that preclude working during the school year to pay for car insurance and shampoo and ridiculously marked-up science textbooks and lab supplies.

$20k is not the kind of debt people are demanding loan forgiveness on. That's less than a car payment - drive a beat-up used car for a while until you get that paid off - problem solved. If your family really can't afford 4 years of college there is always community college (practically free everywhere I've been). That cuts your cost in half. Then there's the military. Sure, not for everyone, but they'll pay for your college too. Or work - A LOT! That's what I did.

Sure there are private colleges all over the country that demand far too much for tuition. If you can't afford it don't send your kids there. Why does that need to be said? I find it hard to believe that any parent does not know what their kids are getting into financially wherever they chose to go.

 

[CaptainAmerica]

So keep 'em poor to keep inflation in check?

Individuals with student loans have disproportionately high incomes.

"Handouts for high earners" is such a weird position to me.

 

[wvjules]

Individuals with student loans have disproportionately high incomes.

"Handouts for high earners" is such a weird position to me.

What do you consider a high earner?

 

[soccerdad72]

Individuals with student loans have disproportionately high incomes.

"Handouts for high earners" is such a weird position to me.

The proposed debt relief bill is likely to have an income limit ($150,000 is what is usually mentioned)

 

[CaptainAmerica]

What do you consider a high earner?

 

[dreamer17555]

Here’s the even trickier part about all this is that not everybody with student loan debt has actually been able to finish their degree for a myriad of reasons. There are some people who went to school and something in life happened and they could not continue but they are still on the hook for all of that debt without a degree to show for it.

 

[mom2rtk]

So keep 'em poor to keep inflation in check?

People are in all sorts of medical debt as well. Are we going to forgive that? Or should we keep 'em sick to keep inflation in check?

 

[wvjules]

View attachment 690133

That's not even 100K for the highest earner listed.

 

[wvjules]

People are in all sorts of medical debt as well. Are we going to forgive that? Or should we keep 'em sick to keep inflation in check?

There should be no medical debt, but that is another conversation.

 

[Colleen27]

Our country is in the middle or the worst inflationary cycle in 4 decades. More spending will only make that worse.

That is a concern. But on the other side, there's the concern about a looming recession. Tens of millions of borrowers having to restart payments amid historic recession will only make that worse as consumer spending necessarily contracts massively. Particularly since during the pause, one of the largest servicers exited the industry, leaving their borrowers back at square one with applying for income driven repayment or deferrals.

 

[dreamer17555]

People are in all sorts of medical debt as well. Are we going to forgive that? Or should we keep 'em sick to keep inflation in check?

Personally I like a single payer healthcare system but that’s another thread.

 

[mom2rtk]

.

 

[CaptainAmerica]

That's not even 100K for the highest earner listed.

It's a hell of a lot higher than the $35,000 people who didn't go to college in the first place, which is the majority of Americans.

Student loan forgiveness would be the largest wealth transfer from the working class to the professional class in human history. You might say "yep, it is, and I'm good with it," but denying it is head-in-the-sand.

 

[Colleen27]

.You mean the current recession?

I'm in the skeptic camp on that question. GDP in 2021 was so artificially inflated by pent-up demand due to the 2020 shutdowns that I'm unconvinced that the minor contraction of the last two quarters is anything more than a correction/reverting to normal. It would be extremely hard to maintain an upward trend when the starting point was two years of economic activity condensed into one.

 

[mom2rtk]

Personally I like a single payer healthcare system but that’s another thread.

Yet nobody is even looking at that. And illness is something people have no choice in. But we want to bail others out of a choice they willingly made.

 

[mom2rtk]

I'm in the skeptic camp on that question. GDP in 2021 was so artificially inflated by pent-up demand due to the 2020 shutdowns that I'm unconvinced that the minor contraction of the last two quarters is anything more than a correction/reverting to normal. It would be extremely hard to maintain an upward trend when the starting point was two years of economic activity condensed into one.

I decided to delete that (before you even posted) because I thought it was too political.

 

[Colleen27]

It's a hell of a lot higher than the $35,000 people who didn't go to college in the first place, which is the majority of Americans.

Student loan forgiveness would be the largest wealth transfer from the working class to the professional class in human history. You might say "yep, it is, and I'm good with it," but denying it is head-in-the-sand.

I have a hard time with your conclusion there, given the current size of the mortgage interest deduction as an upward transfer of wealth. Speaking from experience, it isn't enough to make it worth itemizing on lower-priced homes; it didn't help us and it won't help my son. It is a benefit for those spending hundreds of thousands of dollars on homes, and no one is railing against that because "homeownership is a social good". Well, so is a society with teachers and social workers and all those other degreed professionals who don't earn a high enough salary to justify the loans it takes for a working class kid to earn a degree.

 

[CaptainAmerica]

I have a hard time with your conclusion there, given the current size of the mortgage interest deduction as an upward transfer of wealth. Speaking from experience, it isn't enough to make it worth itemizing on lower-priced homes; it didn't help us and it won't help my son. It is a benefit for those spending hundreds of thousands of dollars on homes, and no one is railing against that because "homeownership is a social good". Well, so is a society with teachers and social workers and all those other degreed professionals who don't earn a high enough salary to justify the loans it takes for a working class kid to earn a degree.

The Tax Cuts and Jobs Act neutered the home mortgage interest deduction when it doubled the standard deduction and capped the deductibility of interest at loans of $750,000. Very few professional-class homeowners are itemizing these days. There's a very narrow band from about $600,000 to $750,000 of mortgage balance where people are getting benefit.

 

[trainingupmy4princes]

Yet nobody is even looking at that. And illness is something people have no choice in. But we want to bail others out of a choice they willingly made.

True, I have 3 college age sons and because of being part owner in a business, they didn't qualify for any help or even the good loans. They counted the business income as a percentage of ours even though obviously we couldn't touch it, it was used to save for down times in the company to keep the lights on. They had this savings set up because we almost went under after 9/11 so no we couldn't cash it in for college. So my one son went to community college up the road and stayed home to save on cost, one is working and planning on classes around his schedule at community college. The oldest took a ton of college classes in HS and then went instate with an academic scholarship covered tuition so only had room and board took a heavy course load and graduated with a double major in 3 years during Covid. They all made choices around what things cost and our oldest was smart and could have gone Ivy League but didn't even look at it twice due to the cost. People should make choices they are willing to live with and pay. We helped pay in all of these but no way could our size family pay more than in state. We have 2 more and they know what we are able/willing to pay and the rest they would have to cover. Most of my kids understand debt is something that you should avoid having too much so they made the wise less glamorous choices than some in their circle who wanted the fancy schools.